DENVER--(BUSINESS WIRE)--
Royal Gold, Inc. (NASDAQ: RGLD) (“Royal Gold” or the “Company,”
“we” or “our”) has agreed to acquire a 3.75% Net Value Royalty (“NVR”)
covering a significant area of Barrick Gold Corporation’s (“Barrick”)
Cortez gold mine, including the Crossroads deposit (“Crossroads”) from a
private party seller. The Company will pay consideration of $70 million
to the seller.
With this acquisition, Royal Gold’s interests at Cortez Crossroads
comprise a 4.37% NVR and a 5% sliding scale Gross Smelter Return (“GSR”)
royalty1 at the current gold price. Royal Gold’s interest on
production from Pipeline, South Pipeline and portions of the Gap
deposits are comprised of a 4.76% NVR and a 5% GSR royalty at the
current gold price.
As of December 31, 2015, proven and probable reserves subject to Royal
Gold’s interests at Cortez were estimated at 3.7 million ounces,
including approximately 3 million ounces at Crossroads.2
Waste stripping at Crossroads began in 2015 and production at Crossroads
is estimated to begin in 2018.
“Cortez is where we created our first royalty many years ago, and it’s
always been an important property for us,” stated Tony Jensen, President
and CEO. “We’re pleased to increase our interest at what we believe is
one of the world’s premier gold mines. With the additional contribution
from Crossroads, which has a currently estimated mine life of about 9
years, we expect Cortez to become a significant contributor for Royal
Gold again in the near future.”
The Company plans to fund this acquisition from its revolving credit
facility. After closing of this acquisition, the Company expects that it
will have approximately $305 million available and $345 million
outstanding under the facility.
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
operators’ expectations about development; anticipated production and
returns from our stream and royalty properties, including without
limitation Cortez Crossroads, Pipeline, South Pipeline and portions of
the Gap deposits. Factors that could cause actual results to differ
materially from the projections include, among others, precious metals
prices; performance of and production at the Company's stream and
royalty properties; 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 provided in this press release, including
proven and probable reserves and production estimates, 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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1 GSR sliding-scale schedule (price of gold per ounce –
royalty rate): Below $210 – 0.40%; $210 to $229.99 – 0.50%; $230 to
$249.99 – 0.75%; $250 to $269.99 – 1.30%; $270 to $309.99 – 2.25%; $310
to $329.99 – 2.60%; $330 to $349.99 – 3.00%; $350 to $369.99 – 3.40%;
$370 to $389.99 – $3.75%; $390 to $409.99 – 4.0%; $410 to $429.99 –
4.25%; $430 to $449.99 – 4.50%; $450 to $469.99 – 4.75%; $470 and higher
– 5.00%
2 See Barrick’s technical report 43-101 for
Barrick’s Cortez mine dated March 28, 2016.
View source version on businesswire.com: http://www.businesswire.com/news/home/20160919006340/en/
Source: Royal Gold, Inc.