• Eliminates US$2M annual pre-production royalties
• Removes 5% NSR over Esperanza and 3% NSR over Arqueros
• Secures long-term water rights, removing US$0.8M annual payments

Kingsgate Consolidated Limited (ASX: KCN) has announced the acquisition of the royalty and water rights for its Nueva Esperanza Silver-Gold Project in Chile. The acquisition from Inversiones Anglo American Norte SpA (IAAN) removes a key financial and operational constraint, materially improving project economics and advancing Nueva Esperanza towards development. The key highlights of the transaction include the elimination of US$2.0 million per annum in pre-production royalties, the removal of the 5% NSR royalty over Esperanza and the 3% NSR royalty over Arqueros, and the securing of long-term water rights, removing the ongoing payment of approximately US$0.8 million per annum. Kingsgate has entered into definitive legal agreements with IAAN to settle unpaid royalties of US$8.1 million and acquire both the royalty and water rights for a total consideration of US$21.6 million, comprising an upfront cash payment of US$15.6 million and US$6.0 million in contingent payments. The transaction is to be fully funded through Kingsgate's existing group cash reserves of approximately A$139 million. Securing these long-term water rights is critical for the Nueva Esperanza project, given its location in the Atacama region of Chile, which is characterized by extreme aridity and stringent permitting requirements. Concurrent with this acquisition, Kingsgate has initiated targeted technical workstreams aimed at optimizing the project's development strategy, including assessing the potential for heap leach processing, which could materially reduce capital intensity and accelerate the development timeline. The company is also advancing a strategic review of value realization pathways for Nueva Esperanza, including the potential for a separate listing on the Australian Securities Exchange.

Kingsgate believes the acquisition of the royalty and water rights significantly enhances the value and development potential of the Nueva Esperanza project, and the company is focused on accelerating key technical workstreams to optimize the project's development pathway.