Royal Gold Provides Operational and Transaction Update
July 23 2015 - 4:00PM
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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version on businesswire.com: http://www.businesswire.com/news/home/20150723006587/en/
Royal Gold, Inc.Karli Anderson, 303-575-6517Vice
President Investor Relations
Royal Gold (NASDAQ:RGLD)
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