Article From The Age this evening. Some interesting points to...

Article From The Age this evening. Some interesting points to note.

ROY working on two more uranium projects in the US. Also drilling planned to to start next week with GBG on the Warriedar project next week (subject to govt approvals of course).

I have no doubt that Royal is a great emerging resouce company. A very strong buy at the moment.

Royal Resources sells gold project stake
Email Print Normal font Large font September 3, 2007 - 5:00PM

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AdvertisementJunior explorer Royal Resources Ltd has sold its 85 per cent stake in the Rothsay gold project and surrounding tenements in Western Australia for almost $1 million, freeing it to pursue its uranium exploration program in the United States.

And Silver Lake Resources Ltd, which expects to list on the Australian stock exchange this year, has acquired the gold assets for $935,000.

Royal, a spin-off of Thundelarra Exploration Ltd, will receive cash payments of $680,000 and will be issued with 850,000 ordinary fully paid shares in Silver Lake at 30 cents each, on or before November 30.

In addition, a royalty of $8.50 per ounce of gold extracted from the Rothsay assets will be payable to Royal after the initial production of 10,000 ounces of gold, up to a maximum royalty of $595,000.

The Rothsay project is a joint venture with ASX-listed Central West Gold NL, which holds the remaining 15 per cent.

Royal director Brian Richardson said the company was negotiating for the sale or joint venture of most of its other gold assets.

However, it would keep its iron ore assets including a 40 per cent stake in the Warriedar iron ore joint venture with Gindalbie Metals Ltd where drilling is planned next week.

Mr Richardson said Silver Lake had the in-house underground mining expertise needed for the Rothsay project, which had a reasonably small resource of about 85,000 ounces of contained gold.

"We would have had to put all of our resources into getting that development going," he said.

"There's still a bit of risk in it, but there are gold mills nearby in the area."

He said US uranium opportunities gave Royal a potentially speedier path to growth.

"Unlike in Australia where the (best) uranium projects have gone ... there are incredible opportunities if you have people who know the historical uranium industry in the US - that's what we've done."

To date, the company has secured three uranium projects in the US and is working on two more.

It plans to sell much of its yellowcake to the US market, Mr Richardson said.

Royal chairman Phil Crabb said Australian uranium opportunities did not compare with the company's high-grade US assets.

The US consumes about 23 per cent of the world's uranium but only produces about two per cent, and has plans to build 23 nuclear reactors in coming years in its bid to become more energy self-sufficient.

Royal closed up one cent at 36 cents.