Royal Gold Increases Royalty Interests at Cortez Crossroads
September 19 2016 - 4:01PM
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.
___________________________________
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.
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version on businesswire.com: http://www.businesswire.com/news/home/20160919006340/en/
Royal Gold, Inc.Karli Anderson, 303-575-6517Vice
President Investor Relations
Royal Gold (NASDAQ:RGLD)
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