DENVER--(BUSINESS WIRE)--
Royal Gold, Inc. (NASDAQ: RGLD; TSX: RGL) (“Royal Gold” or the
“Company”) provides an operational update for its streaming and royalty
interests at Mount Milligan, Phoenix and Voisey’s Bay, as well as an
update on the status of its streaming transaction with Golden Star
Resources Ltd. (“Golden Star”) and its Peak Gold Joint Venture (“Peak
Gold”).
Mount Milligan Mine
For the quarter ended June 30, 2015, the Company’s wholly owned
subsidiary, RGLD Gold AG (“RGLD Gold”), purchased approximately 21,400
ounces of gold from the Mount Milligan mine at a cash price of $435 per
ounce as part of its purchase and sale agreement with Thompson Creek
Metals Company, Inc. (“Thompson Creek”), and sold approximately 23,000
ounces of gold related to Mount Milligan. In addition, RGLD Gold had
approximately 5,300 ounces remaining in inventory as of June 30, 2015.
Phoenix Project
On June 24, 2015, Rubicon Minerals Corporation (“Rubicon”) announced its
first gold pour at the Phoenix Gold Project of approximately 741 ounces.
RGLD Gold will begin receiving deliveries in the current quarter related
to initial commissioning activities and anticipates more substantial
gold deliveries as the mine ramps up to design production.
Rubicon will deliver 6.30% of the gold from the Phoenix mine until
135,000 ounces have been delivered, then 3.15% thereafter. RGLD Gold
will pay 25% of the spot price at the time of delivery.
Voisey’s Bay Mine
We received the first quarterly royalty payment relating to processing
Voisey’s Bay nickel concentrates at Vale’s new Long Harbour
hydrometallurgical plant. In response to questions concerning Vale’s
determination of the Long Harbour smelter and refining charges deducted
from actual proceeds to calculate the net smelter return royalty
payable, Vale recently stated that the charges included “the cost of
product sold, pre-operating costs, depreciation and cost of capital.”
Royal Gold strongly disagrees with Vale’s determination that these
charges are permissible deductions pursuant to the royalty agreement and
is requesting further clarification of the basis for these charges while
aggressively pursuing its legal remedies.
Golden Star Transaction
On May 7, 2015, the Company announced that RGLD Gold entered into a
streaming agreement with Golden Star Resources Limited (“Golden Star”).
The transaction is expected to close soon, upon satisfaction of
remaining closing conditions, with RGLD Gold making an initial upfront
payment at closing of $40 million to Golden Star. Royal Gold will
simultaneously fund a $20 million dollar term loan as part of the
transaction. RGLD Gold expects to make further advance payments totaling
$90 million over the next five quarters. Once the initial upfront
payment has been made, RGLD Gold expects to receive stream deliveries
from Golden Star in the current quarter related to production from and
after April 1, 2015.
Golden Star will deliver to RGLD Gold 8.5% of gold produced from Wassa,
Bogoso and Prestea until 185,000 ounces have been delivered, 5.0% until
an additional 22,500 ounces have been delivered, and 3.0% thereafter.
RGLD Gold will pay Golden Star 20% of the spot price at the time of
delivery until 207,500 ounces have been delivered, and 30% of the spot
price thereafter.
Peak Gold
As described on the Company’s fiscal third quarter conference call,
Royal Gold incurred certain costs associated with the summer exploration
program at Peak Gold. The Company estimates approximately $2 million in
expenditures will be reported in its financial results ended June 30,
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. The Company 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.” The Company’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 the
Company’s receipt of gold from Thompson Creek, Rubicon, and Golden Star
in periods after June 30, 2015, its upfront payment to Golden Star, and
the Company’s receipt of royalty payments from Vale in periods after
June 30, 2015. Factors that could cause actual results to differ
materially from the projections include, among others, the timing of
shipments, disagreements on assays, losses in transport, performance of
and production at Mount Milligan, the Phoenix Gold Project, Golden
Star’s Wassa, Bogoso and Prestea operations and Voisey’s Bay; decisions
and activities of Thompson Creek, Rubicon, Golden Star and Vale; changes
in 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
Thompson Creek, Rubicon, Golden Star and Vale may encounter; changes in
operators’ mining and processing techniques or royalty or stream
calculation methodologies; errors or disputes in calculating royalty
payments or stream deliveries, or payments or deliveries not made in
accordance with royalty and streaming agreements; resolution of legal
proceedings (including with Vale regarding Voisey’s Bay); and other
subsequent events, as well as other factors described in the Company'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 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.
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Source: Royal Gold, Inc.