Royal Gold, Inc. Supports Centerra Gold/Thompson Creek Transaction
July 05 2016 - 3:56PM
Business Wire
Maintains Economic Interest at Mount
Milligan
Commitment Letter Signed with Centerra Gold
Royal Gold, Inc. (NASDAQ:RGLD; TSX:RGL) (together
with its subsidiaries, “Royal Gold” or the “Company”) signed a
commitment letter and binding term sheet with Centerra Gold Inc.
(“Centerra”) related to the Company’s streaming interest at the
Mount Milligan mine that is owned by Thompson Creek Metals Company
Inc. (“Thompson Creek”). Centerra entered into a definitive
arrangement agreement to acquire Thompson Creek and pay its
outstanding bonds.
“Royal Gold has actively engaged with companies regarding Mount
Milligan over the last ten months,” commented Tony Jensen,
President and CEO of Royal Gold. “To broaden interest and maximize
value, we demonstrated some flexibility in amending our gold stream
to generate interest from gold companies. We are extremely pleased
to support Centerra’s acquisition of Thompson Creek which delivers
our two goals we have discussed for some time; namely, the
retention of our economic value at Mount Milligan, without
discount, and the introduction of a financially strong
operator.”
Under the terms of the commitment letter, Royal Gold’s 52.25%
gold streaming interest at Mount Milligan will be amended,
conditional and effective on closing of Centerra’s acquisition of
Thompson Creek, to a 35% gold stream and 18.75% copper stream.
Royal Gold will continue to pay $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, and expects about two-thirds of
its future net revenue from Mount Milligan will be gold related and
one-third copper related over the next ten years. After transition
to the amended stream, Royal Gold expects that approximately 85% of
its total net revenue will come from precious metals and 15% from
base metals.
Royal Gold’s security position related to Mount Milligan will
remain unchanged with respect to gold and will be amended to
include copper.
“Thompson Creek developed Mount Milligan into a world class
asset that attracted interest from several quality operators,”
Jensen stated. “We are especially pleased to welcome Centerra as a
new operator, as we respect their operating and development skills.
We view this overall transaction as favorable for the continued
successful operation of the Mount Milligan mine and to all its
stakeholders, including Royal Gold.”
Centerra’s proposed acquisition of Thompson Creek is subject to
court approval of the Plan of Arrangement as well as approval of
Thompson Creek shareholders and other customary conditions. Final
closing is expected in the fall of 2016.
Royal Gold was advised by Goldman, Sachs & Co. as well as
law firms Kirkland and Ellis, Hogan Lovells, and McCarthy
Tétrault.
The Company will host a conference call to discuss these
developments on Tuesday, July 5, 2016 at 3:00pm Mountain Daylight
Time (5:00pm Eastern Daylight Time) and will be available by
calling (855) 209-8260 (U.S.), (855) 669-9657 (Canada) or (412)
542-4106 (international), conference title “Royal Gold.” The call
will be simultaneously broadcast on the Company’s website at
www.royalgold.com under the “Presentations” section.
About Royal Gold
Royal Gold 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 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,” and until July 8, 2016, 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 proposed acquisition of
Thompson Creek by Centerra, the approvals required to conclude the
transaction, and the timing thereof; Royal Gold’s amended stream
agreement; statements about the estimated economic value of the
amended stream agreement; the approximate mix of revenue from
precious metals and base metals; Royal Gold’s security position
related to Mount Milligan; operators’ expectations about
development, ramp-up, production and mine life; anticipated
production and returns from our stream and royalty properties,
including without limitation 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 royalty and stream
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 royalty and stream properties;
unanticipated grade, environmental, geological, seismic,
metallurgical, processing, liquidity or other problems the
operators of the mining properties may encounter; completion of
feasibility studies; 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 royalty and stream
properties; contests to the Company’s royalty and stream interests
and title and other defects to the Company’s royalty and stream
properties; errors or disputes in calculating royalty and stream
payments, or payments not made in accordance with royalty and
stream agreements; economic and market conditions; risks associated
with conducting business in foreign countries; changes in laws
governing the Company and its royalty and stream 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.
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version on businesswire.com: http://www.businesswire.com/news/home/20160705006116/en/
Royal Gold, Inc.Karli Anderson, 303-575-6517Vice
President Investor Relations
Royal Gold (NASDAQ:RGLD)
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