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Andacollo

Chilean Flag

Operator: Teck Resources Ltd.

Location: Region IV, Chile

Stream:

100% of Payable Gold until 900,000 ounces delivered, 50% thereafter

Term of Stream: Life of Mine

Andacollo

Andacollo is an open-pit copper mine and milling operation operated by Compañía Minera Teck Carmen de Andacollo, a 90% owned subsidiary of Teck Resources Ltd.; Empresa Nacional de Minería holds the remaining 10%. Gold is produced as a by-product of copper production. The mine is located in central Chile, Region IV in the Coquimbo Province, in the foothills of the Andes Mountains approximately 2 kilometers southwest of the town of Andacollo.

The Andacollo orebody is a porphyry copper deposit consisting of disseminated and fracture-controlled copper mineralization contained within a gently dipping sequence of andesitic to trachytic volcanic rocks and sub-volcanic intrusions. The mineralization is spatially related to a feldspar porphyry intrusion and a series of deeply rooted fault structures. A primary copper-gold sulfide hypogene deposit containing principally disseminated and quartz vein-hosted chalcopyrite mineralization lies beneath the supergene deposit.

Copper concentrate is produced by processing hypogene ore through semi-autogenous grinding and a flotation plant with the capacity to process up to 55,000 tonnes of ore per day depending on ore hardness. Some supergene ore is also mined, which is transported to heap leach pads. Copper-bearing solutions are processed in a solvent extraction and electrowinning (SX-EW) plant to produce grade A copper cathode. The Andacollo mine has been in operation since 1996.

Royal Gold, through its wholly-owned subsidiary RGLD Gold AG, owns the right to purchase 100% of payable gold until 900,000 ounces have been delivered, and 50% thereafter. The cash purchase price equals 15% of the monthly average gold price for the month preceding the delivery date for all gold purchased. Payable gold is calculated as 89% of contained gold in concentrate.

Originally, in January 2010, Royal Gold acquired a royalty interest on Andacollo for $217.9 million in cash and 1,204,136 shares of Royal Gold common stock (valued at approximately $53.4 million on the date of acquisition). Under the agreement, Royal Gold, Inc. was to receive 75% of the gold produced from the sulfide portion of the Andacollo deposit until 910,000 payable ounces of gold were sold, after which Royal Gold was to receive 50% of all future payable gold production from the property.

Later, in July 2015, and after production of over 259,000 ounces of payable gold subject to the royalty, Royal Gold announced it had agreed to sell its royalty interest on Andacollo to Compañía Minera Teck Carmen de Andacollo for $345 million and terminate the royalty agreement. RGLD Gold AG entered into a new gold offtake agreement with Compañía Minera Teck Carmen de Andacollo for the right to purchase 100% of payable gold from Andacollo until 900,000 ounces have been delivered, and 50% thereafter, for $525 million. Importantly, the new stream interest features a larger interest in gold over a longer period and covers an expanded footprint encompassing additional mineral rights relative to the previous stream interest.

*Detailed information on our interest can be found on the Portfolio Asset Summary table