DENVER--(BUSINESS WIRE)--
Royal Gold, Inc. (NASDAQ: RGLD; TSX: RGL) (“RGI”) announces that
its wholly owned subsidiary RGLD Gold AG (“Royal Gold” or the “Company”)
entered into a $525 million gold offtake agreement with Compañía Minera
Teck Carmen de Andacollo (“CMCA”), a 90% owned subsidiary of Teck
Resources Limited (“Teck”). The transaction will encompass certain
exploitation concessions by CMCA on the Carmen de Andacollo copper-gold
mine, any mining concessions acquired within a 1.5 kilometer area of
interest, and certain other mining concessions that CMCA may acquire.
The offtake agreement on Carmen de Andacollo is separate and distinct
from the former royalty of Royal Gold Chile Limitada, a wholly owned
subsidiary of RGI (“RG Chile”), on the Carmen de Andacollo mine, which
was terminated with an economic effective date of June 30, 2015.
Tony Jensen, President and Chief Executive Officer of RGI, commented,
“This stream gives Royal Gold a larger interest in gold from Andacollo
for a longer period and increases our optionality to new discoveries
through an expanded area of interest. This transaction is yet another
step towards our goal of adding new business to diversify and balance
our revenue sources, and we are pleased to do so with a high quality
partner such as Teck.”
Transaction Details
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Royal Gold made a $525 million advance payment in cash to CMCA
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CMCA will deliver to Royal Gold 100% of payable gold from Carmen de
Andacollo until 900,000 ounces have been delivered, and 50%
thereafter, subject to a fixed payable percentage of 89%
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Royal Gold will also pay CMCA 15% of the monthly average gold price
for the month preceding the delivery date
Transaction Highlights for Royal Gold
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Larger economic interest in terms of duration and gold interest in
Carmen de Andacollo relative to RG Chile’s prior royalty
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Expanded footprint encompassing additional mineral rights and a 1.5
kilometer area of interest relative to RG Chile’s prior royalty
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Estimated average annual deliveries of approximately 41,000 payable
gross gold ounces over the life of mine (50,000 payable gross ounces
over the first five years)
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Proven and probable reserves of 1.6 million contained gold ounces
grading 0.11 g/t gold and a 22 year mine life reported by Teck as of
December 31, 2014
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Long operating history including 5+ years of concentrator operations
and prior relationship with RG Chile
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Well-respected partner in Teck, Canada’s largest diversified resource
company
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Adds to the Company’s strong geopolitical footprint with another
investment in Chile
About the Offtake Agreement between Royal Gold and CMCA
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The offtake agreement is effective July 1, 2015, and applies to all
final settlements of gold received on or after that date
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Deliveries to Royal Gold will be made monthly
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Royal Gold plans to sell the gold within a few weeks of receiving each
delivery
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Revenue from the delivered gold will be recognized after the sale has
occurred
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Royal Gold expects to begin receiving gold deliveries in its first
fiscal quarter of 2016 (ended September 30, 2015)
About the Carmen de Andacollo Mine
Carmen de Andacollo is located in Region IV in central Chile,
approximately 350 kilometers north of Santiago, near the southern limit
of the Atacama Desert. In operation since 1996, Carmen de Andacollo is
an open pit mine which currently produces primarily copper in
concentrates from the hypogene portion of the orebody. In 2010, the
mine’s life was extended by approximately 20 years with the achievement
of commercial production at its new copper concentrator.
CORPORATE PROFILE
Royal Gold, Inc. is a precious metals royalty and stream company engaged
in the acquisition and management of precious metal royalties, streams,
and similar production based interests. RGI owns interests on 196
properties on six continents, including interests on 37 producing mines
and 24 development stage projects. Royal Gold, Inc. is publicly traded
on the NASDAQ Global Select Market under the symbol “RGLD,” and on the
Toronto Stock Exchange under the symbol “RGL.” RGI’s website is located
at www.royalgold.com.
About Teck
Teck is a diversified resource company committed to responsible mining
and mineral development with major business units focused on copper,
steelmaking coal, zinc and energy. Headquartered in Vancouver, Canada,
its shares are listed on the Toronto Stock Exchange under the symbols
TCK.A and TCK.B and the New York Stock Exchange under the symbol TCK.
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 statements about Royal
Gold’s offtake agreement with CMCA, as well as expectations concerning
development, production and mine life at the Carmen de Andacollo mine.
Factors that could cause actual results to differ materially from the
projections include, among others, precious metals prices; actual tax
rates; performance of and production at the properties subject to our
royalty and stream interests; decisions and activities of the operators
of these properties; operators’ delays in securing or inability to
secure necessary governmental permits; changes in operators’ project
parameters and timelines as plans continue to be refined; economic and
market conditions; unanticipated grade, geological, metallurgical,
processing, regulatory and legal or other problems that the operators of
mining properties may encounter; completion of feasibility studies; the
ability of the various operators to bring projects into production as
expected; and other subsequent events, as well as other factors
described in RGI's Annual Report on Form 10-K, Quarterly Reports on Form
10-Q, and other filings with the Securities and Exchange Commission.
Most of these factors are beyond RGI’s ability to predict or control.
RGI disclaims any obligation to update any forward-looking statement
made herein. Readers are cautioned not to put undue reliance on
forward-looking statements.
Cautionary Note to U.S. Investors Concerning Estimates of Proven and
Probable Mineral Reserves: The mineral reserve estimates reported by
Teck were prepared in accordance with Canadian Institute of Mining,
Metallurgy and Petroleum Definition Standards for Mineral Resources and
Mineral Reserves, as incorporated by reference in National Instrument
43-101. RGI has not reconciled the reserve estimates provided by Teck
with definitions of reserves used by the U.S. Securities and Exchange
Commission.
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Source: Royal Gold, Inc.