DENVER--(BUSINESS WIRE)--
Royal Gold, Inc. (NASDAQ:RGLD; TSX:RGL) (“RGI”) announces that
its wholly owned subsidiary, RGLD Gold AG (“Royal Gold,” “Company”),
closed its previously announced $610 million Precious Metals Purchase
and Sale Agreement with a wholly owned subsidiary of Barrick Gold
Corporation, BGC Holdings Ltd. (“Barrick”), to purchase a quantity of
gold and silver referenced to production from Barrick’s 60% interest in
the Pueblo Viejo mine located in the Dominican Republic (“Pueblo
Viejo”). In addition, the Company also provides updates on its
previously announced gold offtake agreement with Compañía Minera Teck
Carmen de Andacollo (“CMCA”) and its gold stream transaction with a
wholly owned subsidiary of Golden Star Resources Ltd (“Golden Star”).
Royal Gold made a single $610 million advance payment to Barrick as part
of the closing. The transaction is effective July 1, 2015 for the gold
stream and January 1, 2016 for the silver stream. Under the terms of the
Purchase and Sale Agreement, Barrick will deliver to Royal Gold, on a
quarterly basis, an amount of gold equal to 7.50% of Barrick’s interest
in the gold produced at Pueblo Viejo until 990,000 ounces of gold have
been delivered, and 3.75% thereafter; and an amount of silver equal to
75% of Barrick’s interest in the silver produced at Pueblo Viejo (with
silver deliveries based on a fixed 70% recovery rate) until 50.00
million ounces have been delivered, and 37.50% thereafter. Royal Gold
will pay Barrick 30% of the spot price per ounce of gold until 550,000
ounces of gold have been delivered, and 60% of the spot price per ounce
thereafter; and 30% of the spot price per ounce of silver until 23.10
million ounces of silver have been delivered, and 60% of the spot price
per ounce thereafter.
Under the terms of the Purchase and Sale Agreement, Barrick will
maintain a segregated cash collection account for receipt of dividends
and other distributions paid to Barrick by the Pueblo Viejo joint
venture. Funds in the collection account will be used first to fund
deliveries of gold and silver to Royal Gold before any distributions are
made to Barrick Gold Corporation. If cash in the collection account is
not sufficient to fund Barrick’s delivery obligations to Royal Gold, any
unsatisfied delivery obligations will accrue until sufficient cash is
available. If actual silver recoveries in any quarterly delivery period
are below the 70% fixed recovery rate, Barrick will make up any
production shortfall.
Royal Gold will sell the gold and silver after receiving each quarterly
delivery, and will recognize revenue from the sale of delivered gold and
silver after the sale has occurred. Royal Gold expects to receive its
first delivery of gold in respect of Pueblo Viejo on December 15 for the
period July 1 to November 30, 2015. Barrick informed the Company that
the first delivery will include approximately 8,600 ounces relating to
July and August 2015 production, in addition to delivery of gold for the
period including September, October and November 2015.
About CMCA
Royal Gold made a single $525 million advance payment to CMCA as part of
the closing of the Long Term Offtake Agreement dated July 9, 2015. The
agreement is effective July 1, 2015, and applies to all final
settlements of gold received on or after that date. CMCA will deliver to
Royal Gold, on a monthly basis, 100% of payable gold from the Carmen de
Andacollo mine until 900,000 ounces have been delivered, and 50%
thereafter, subject to a fixed payable percentage of 89%. Royal Gold
will pay CMCA 15% of the monthly average gold price for the month
preceding the delivery date for each delivered ounce.
Royal Gold sells the gold from CMCA within weeks after receiving each
monthly delivery, and will recognize revenue from the sale of delivered
gold after the sale has occurred. As of September 29, 2015, Royal Gold
has sold approximately 9,500 ounces of gold delivered by CMCA during the
quarter, and has approximately 300 ounces of gold remaining in inventory
from CMCA deliveries.
About Golden Star
Royal Gold made $55 million in advance payments to Golden Star to date
related to the Gold Purchase and Sale Agreement dated May 6, 2015. Royal
Gold, Inc. also funded a previously announced $20 million term loan to
Golden Star. Royal Gold expects to make additional advance payments
totaling $75 million over the next several quarters. Golden Star will
deliver to Royal Gold 8.50% of the gold produced until 185,000 ounces
have been delivered, 5.00% until an additional 22,500 ounces have been
delivered, and 3.00% thereafter. Royal Gold will pay Golden Star 20% of
the spot price until 207,500 ounces of gold have been delivered, and 30%
of the spot price thereafter for each delivered ounce.
Golden Star delivers gold to us based on each shipment of doré. Royal
Gold sells the gold from Golden Star within weeks after receiving each
delivery, and will recognize revenue from the sale of delivered gold
after the sale has occurred. As of September 29, 2015, Royal Gold has
sold approximately 3,200 ounces of gold delivered by Golden Star during
the quarter, and has approximately 1,100 ounces of gold remaining in
inventory from Golden Star deliveries. The Company also expects to
receive make-whole deliveries of approximately 4,000 ounces of gold
prior to the end of October related to the period from April 1, 2015
through August 14, 2015.
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 198
properties on six continents, including interests on 39 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.
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 our
streaming and offtake agreements with Barrick, CMCA, and Golden Star, as
well as expectations concerning development, ramp-up, production and
mine life at the operations which are subject to these agreements.
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 Pueblo Viejo, Andacollo, and
Golden Star mines subject to our interests; decisions and activities of
the operators of the mine; operators’ delays in securing or inability to
secure necessary governmental permits; political and social risks
inherent in investments in foreign jurisdictions; changes in operators’
project parameters and timelines as operations continue to be refined;
economic and market conditions; unanticipated grade, geological,
metallurgical, processing, regulatory and legal or other problems that
the operators of the mine may encounter; 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.
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Source: Royal Gold, Inc.