Amended Streaming Agreement Maintains Royal Gold’s Economic
Interest at Mount Milligan
DENVER--(BUSINESS WIRE)--
Royal Gold, Inc. (NASDAQ: RGLD) (together with its subsidiaries,
“Royal Gold” or the “Company,” “we” or “our”) notes that Centerra Gold
Inc. (“Centerra”) and Thompson Creek Metals Company Inc. (“Thompson
Creek”) have completed the Plan of Arrangement (the “Arrangement”),
pursuant to which Centerra acquired all of the issued and outstanding
common shares of Thompson Creek. As previously announced, Royal Gold’s
streaming interest at Mount Milligan has been amended (the “amendment”)
concurrently with closing of the Arrangement.
Under the terms of the amendment, Royal Gold’s 52.25% gold stream at
Mount Milligan has been converted to a 35% gold stream and 18.75% copper
stream. Royal Gold will continue to pay US$435 per ounce of gold
delivered and will pay 15% of the spot price per metric tonne of copper
delivered. Royal Gold estimates this amendment to be value-neutral on a
discounted cash flow basis.
In conjunction with the amendment, Royal Gold’s first ranking security
over 52.25% of gold produced from the Mount Milligan assets has been
amended to provide for first ranking security over 35% of produced gold
and 18.75% of produced copper. Royal Gold’s other existing security over
the Mount Milligan assets remains unaffected.
Mount Milligan gold in concentrate that is currently in transit will be
delivered to Royal Gold under the current 52.25% stream. Under the terms
of both the original and amended agreements, there is a maximum of five
months between concentrate shipment and final settlement, and Royal Gold
expects to begin receiving gold and copper deliveries reflecting the
amended stream agreement in approximately March 2017.
On October 18, Thompson Creek announced that commissioning of major
equipment and components of the Mount Milligan permanent secondary
crushing circuit had begun. Routine testing and commissioning of all
equipment and process circuits will continue over the next several
weeks, with first feed through the secondary crusher expected by the end
of October. Thompson Creek noted that capital expenditures for the
project are expected to be $50 - $55 million, approximately $10 million
below their prior guidance.
CORPORATE PROFILE
Royal Gold is a precious metals stream and royalty company engaged in
the acquisition and management of precious metal streams, royalties and
similar production based interests. The Company owns interests on 193
properties on six continents, including interests on 38 producing mines
and 24 development stage projects. Royal Gold is publicly traded on the
NASDAQ Global Select Market under the symbol “RGLD.” 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
Centerra’s acquisition of Thompson Creek Metals Company, Royal Gold’s
amended stream agreement, the estimated economic value of the amended
stream agreement, and Royal Gold’s security position related to Mount
Milligan. Factors that could cause actual results to differ materially
from the projections include, among others, precious metals and copper
prices; performance of and production at the Company's stream and
royalty properties, including gold and copper production at Mount
Milligan; Centerra’s operation of Mount Milligan as anticipated; events
that could cause our discounted cash flow analysis of the amended stream
to be inaccurate; the ability of operators of development properties to
finance project construction to completion and bring projects into
production as expected; operators’ delays in securing or inability to
secure necessary governmental permits; decisions and activities of the
operators of the Company's stream and royalty properties; unanticipated
grade, environmental, geological, seismic, metallurgical, processing,
liquidity or other problems the operators of the mining properties may
encounter; changes in operators’ project parameters as plans continue to
be refined; changes in estimates of reserves and mineralization by the
operators of the Company’s stream and royalty properties; contests to
the Company’s stream and royalty interests and title and other defects
to the Company’s stream and royalty properties; errors or disputes in
calculating stream and royalty payments, or payments not made in
accordance with stream and royalty agreements; economic and market
conditions; risks associated with conducting business in foreign
countries; changes in laws governing the Company and its stream and
royalty properties or the operators of such properties, 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.
Statement Regarding Third Party Information: Royal Gold does not
own, develop or mine the properties on which it holds stream or royalty
interests. Certain information has been provided to us by the operators
of those properties or is publicly available information filed by these
operators with applicable securities regulatory bodies, including the
Securities and Exchange Commission. Royal Gold has not verified, and is
not in a position to verify, and expressly disclaims any responsibility
for, the accuracy, completeness or fairness of such third-party
information and refers the reader to the public reports filed by the
operators for information regarding those properties.
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Source: Royal Gold