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Mount Milligan

Canada Flag

Operator: Centerra Gold Inc.

Location: British Columbia, Canada

Stream:

35% of Payable Gold and 18.75% of Payable Copper

Term of Stream: Life of Mine

Mount Milligan

Mount Milligan is a large-scale open-pit copper and gold mine operated by Thompson Creek Metals Company Inc., an indirect subsidiary of Centerra Gold Inc. The mine is located within the Omenica Mining Division in north-central British Columbia, Canada. The mining operation uses conventional truck-shovel, with ore processed through a concentrator with a 60,000 tonne per day capacity copper flotation processing plant, to produce a marketable concentrate containing copper, gold, and silver. The combined concentrate is pressure-filtered to a targeted moisture content of 8.5%, stockpiled, and then trucked to the rail loadout facility in Mackenzie. The concentrate is then railed to North Vancouver where it is loaded onto ships and sent to purchasers located around the Pacific Rim.

The Mount Milligan deposits are categorized as silica-saturated alkalic copper-gold porphyry deposits associated with alkaline monzodioritic-to-syenitic igneous rocks. Construction of the Mount Milligan mine began in June 2010, with commissioning of the mine beginning in August 2013. Commercial production at Mount Milligan was achieved on February 18, 2014.

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:

  1. On July 15, 2010, Royal Gold announced the acquisition of a 25% gold stream interest on the Mount Milligan project from Thompson Creek for $226.5 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.

  2. 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).

  3. 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