07:31 AM EDT, 09/12/2025 (MT Newswires) -- Soma Gold ( SMAGF ) , which fell 4% in the previous session, Friday said it has struck an agreement with Red Rock Resources to acquire in full the net smelter returns royalty on the El Limon gold mine.

Under the terms of the original purchase agreement, made when the property was purchased by Soma subsidiary Colombia Milling Limited in 2015, Red Rock retained a 3% net smelter returns royalty on production revenue from El Limon of up to $2.8 million, followed by a 0.5% royalty on production revenue thereafter of up to $1.4 million.

To enhance the long-term economic profile of the operation, the parties have agreed that Soma will purchase and extinguish the royalty for $1.9 million in cash and 200,000 of Soma common share purchase warrants issued to Red Rock.

Each warrant will entitle the holder to acquire one common share of Soma at an exercise price of $2 for a three-year period starting on the date of issue.

Soma will fund the cash component of the purchase price from existing working capital.

"The agreement not only streamlines the asset's cost structure but also demonstrates the company's commitment to unlocking the full value of its Colombian portfolio for the benefit of all stakeholders," said Soma chief executive Geoff Hampson.

Completion of the transaction and the issuance of warrants are subject to TSXV approval.