Operator: Nutrien Ltd.
Location: Saskatchewan, Canada
Royalty: $0.36 to $1.44 per ton potash
$0.25 per ton potash
Term of Royalty: Life of Mine
Allan is an underground potash mine owned and operated by Nutrien Ltd Territories British Columbia (“Nutrien”). Allan is located in central Saskatchewan, approximately 45 kilometers east of Saskatoon near the town of Allan.
The Allan mine is a conventional underground mining operation whereby continuous mining machines are used to excavate potash ore by the stress-relief mining method, with continuous conveyor belt transport of ore from the mining face to the bottom of the production shaft. Raw potash ore is processed and concentrated on surface – both flotation and crystallization methods are used at Allan to produce granular, standard, and suspension-grade potash products, and concentrated finished potash products (near-pure potassium chloride) are sold and shipped to markets in North America and offshore. The Allan mine has an annual nameplate capacity of 4.0 million tonnes of finished product.
Royal Gold holds a 40% interest on a sliding-scale royalty on the Allan potash mine. The royalty rate varies based on annual potash production. The royalty is based on a sliding scale, which caps at $1.44 per ton at prices above $23; note, potash prices have exceeded $200 per ton for more than a decade. The royalty is 100% of the sliding scale for the first 600,000 attributable tons produced during a calendar year. For 600,000 to 800,000 tons, the royalty reduces to 50%. For all additional production during the year, the royalty rate is 25% of the $1.44.
Royal gold holds 40% of an additional royalty, which pays $0.25 per tonne of attributable potash sold for the first 600,000 attributable tons, or a maximum of $150,000 per annum.
Royal Gold acquired these royalty interests effective October 1, 2008, as part of the acquisition of a royalty portfolio from Barrick Gold Corporation.