Royal Gold, through its wholly-owned subsidiary RGLD Gold AG, owns the right
to purchase 35% of the payable gold and 18.75% of the payable copper
produced from the Mount Milligan copper-gold mine. The cash purchase price
for gold is equal to the lesser of $435 per ounce, with no inflation
adjustment, or the prevailing market price when purchased. The cash purchase
price for copper is 15% of the spot price.
Royal Gold’s interest in Mount Milligan evolved over time as a result of
adapting the stream to address the needs of its operating partner. Royal
Gold’s original 52.25% gold stream was acquired in three transactions from
Thompson Creek Metals Company, Inc. (Thompson Creek), a base metals-focused
company, as part of the financing for the initial project acquisition and
construction:
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On July 15, 2010, Royal Gold announced the acquisition of a 25% gold
stream interest on the Mount Milligan project from Thompson Creek for
$311.5 million and cash payments equal to the lesser of $400 or the
prevailing market price for each payable ounce of gold until the
delivery of 550,000 ounces to Royal Gold, and the lesser of $450 or the
prevailing market price for each additional ounce thereafter.
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On December 15, 2011, Royal Gold increased its gold stream interest on
the Mount Milligan project for $270 million and cash payments equal to
the lesser of $435 or the prevailing market price for each payable ounce
of gold delivered to Royal Gold (replacing the payment structure of the
July 15, 2010 transaction).
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On August 9, 2012, Royal Gold increased its gold stream interest in the
Mount Milligan project by an additional 12.25% for $200 million and cash
payments equal to the lesser of $435 or the prevailing market price for
each payable ounce of gold delivered to Royal Gold.
Subsequently, on October 20, 2016, after the first few years of operations,
Centerra Gold Inc. (Centerra), a gold-focused company, acquired all of the
issued and outstanding common shares of Thompson Creek. Royal Gold's
streaming interest at Mount Milligan was amended as part of this transaction
to facilitate the acquisition and provide more gold exposure to Centerra.
Under the terms of the amendment, Royal Gold’s 52.25% gold stream at Mount
Milligan was amended to a 35% gold stream and an 18.75% copper stream.
*
Detailed information on our interest can be found on the
Portfolio Asset Summary
table