DENVER, Feb. 22 /PRNewswire-FirstCall/ -- ROYAL GOLD, INC.
(Nasdaq: RGLD; Toronto: RGL), the leading precious metals royalty company,
today announced that it has completed the acquisition of three royalties from
AngloGold Ashanti (USA) Exploration Inc., a wholly-owned subsidiary of
AngloGold Ashanti North America, for $13.75 million, previously disclosed in
January 2008. The acquisition includes three royalties: 1) a 2.0% net smelter
return ("NSR") royalty on the Marigold mine, located on the Battle Mountain-
Eureka trend in Nevada, and operated by Goldcorp, Inc., 2) a 2.0-4.0% sliding-
scale NSR royalty on the El Chanate mine, located in Sonora, Mexico and
operated by Capital Gold, Inc., and 3) a 10.0% net profits interest ("NPI")
royalty, also on the El Chanate mine.
"This acquisition continues to build our gold royalty portfolio, which at
the end of our second fiscal quarter comprised 82% of our royalty revenues,
and further diversifies our asset base," said Tony Jensen, President and Chief
Executive Officer. "We now own 19 active royalties of which 13 are currently
in production, and six are in development."
The sliding-scale royalty at El Chanate pays at a rate of 2.0% when the
average gold price is below $300 per ounce, 3.0% when the gold price is
between $300 and $350, and 4.0% when the gold price is above $350 per ounce.
The sliding-scale royalty is capped once payments of approximately $17 million
have been received and the 10.0% NPI royalty is capped at $1.0 million. The
El Chanate mine commenced production in mid-2007, and Royal Gold expects to
begin receiving royalty revenue immediately.
The 2.0% NSR royalty interest on Marigold burdens the majority of five
sections of the mine, containing a number of open pits, but does not cover the
current mining in the Basalt/Antler area. Approximately 38% of the current
Marigold mine reserves are covered by this royalty. Based upon its own
internal estimates, Royal Gold expects to begin receiving royalty revenue in
calendar 2010, when mine operations are expected to move into areas covered by
the 2.0% NSR royalty.
Royal Gold is a precious metals royalty company engaged in the acquisition
and management of precious metal royalty interests. Royal Gold is publicly
traded on the NASDAQ Global Select Market under the symbol "RGLD," and on the
Toronto Stock Exchange under the symbol "RGL." The Company's web page is
located at http://www.royalgold.com.
Cautionary "Safe Harbor" Statement Under the Private Securities Litigation
Reform Act of 1995: With the exception of historical matters, the matters
discussed in this press release are forward-looking statements that involve
risks and uncertainties that could cause actual results to differ materially
from projections or estimates contained herein. Such forward-looking
statements include an estimate of when Royal Gold expects to begin receiving
royalty revenue from the El Chanate mine and the Marigold mine. Factors that
could cause actual results to differ materially from projections include,
among others, precious metals prices, decisions and activities of the operator
of the various properties, unanticipated grade, geological, metallurgical,
processing or other problems the operator may encounter, changes in project
parameters as plans continue to be refined, economic and market conditions, as
well as other factors described in our Annual Report on Form 10-K, and other
filings with the Securities and Exchange Commission. In addition, acquired
royalty interests on certain projects are subject to risks associated with
conducting business in a foreign country, including application of foreign
laws to contract and other disputes, foreign environmental laws and
enforcement and uncertain political and economic environments. Most of these
factors are beyond the Company's ability to predict or control. The Company
disclaims any obligation to update any forward-looking statement made herein.
Readers are cautioned not to put undue reliance on forward-looking statements.
SOURCE Royal Gold, Inc.
Feb 22, 2008