Market Overview

Royal Gold Acquires Gold and Silver Interests on the Tulsequah Chief Project for $60M


Royal Gold, Inc. (NASDAQ: RGLD), today announced it has agreed to acquire, through a wholly-owned subsidiary, 12.5% of the payable gold and 22.5% of the payable silver on the Tulsequah Chief project, located in British Columbia, from Chieftain Metals Inc. (“Chieftain”) (TSX: CFB). Consideration for the transaction is $60 million and, when production is reached, Royal Gold will make cash payments equal to (i) $450 per payable ounce of gold until 48,000 ounces have been delivered, and $500 per ounce thereafter; and (ii) $5.00 per payable ounce of silver until 2.78 million ounces have been delivered, and $7.50 per ounce thereafter, or the prevailing market price of the metals. Once 48,000 ounces of payable gold and 2.78 million ounces of payable silver have been delivered, the interests will convert to 7.5% and 9.75% of the payable gold and silver, respectively, for the remainder of the mine life.

An initial $10 million payment will be made by Royal Gold shortly after closing the transaction, with the remaining $50 million paid over the development period of the project. These payments are conditioned on, among other things, the securing of sufficient financing and permitting. Royal Gold also received a right of first refusal on any future gold or silver production based interests.

Posted-In: News Commodities M&A Markets


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