Transactions & Cases Detail



Transaction/Case Details

Teck announces Carmen de Andacollo Gold Stream

DATE CLOSED

July 9, 2015

BUSINESS SECTOR

Mining & Metals

LEAD OFFICE

Toronto

VALUE

525 Million USD


OVERVIEW

On July 9, 2015, Teck Resources Limited announced that Compañia Minera Teck Carmen de Andacollo ("CDA") entered into a long-term gold offtake agreement with RGLD Gold AG, a wholly owned subsidiary of Royal Gold, Inc ("Royal Gold"). 

Under the terms of the offtake agreement, RGLDAG made an advance payment of US$525 million to CDA, which agreed to sell and deliver, on a monthly basis, an amount of gold equal to 100% of the payable gold produced from the Carmen de Andacollo mine until 900,000 ounces have been delivered, and 50% thereafter. RGLDAG will also pay a cash price of 15% of the monthly average gold price at the time of each delivery. The offtake agreement applies to certain mining exploitation concessions currently owned by CDA, any mining concessions acquired within an approximately 1.5 kilometre area of interest and certain other mining concessions that CDA may acquire.

CDA and Royal Gold have also agreed to terminate an earlier royalty agreement. Pursuant to that termination agreement, CDA paid Royal Gold Chile Limitada a US$345 million fee in order to terminate the royalty agreement with RG Chile entered into in 2010, under which RG Chile was entitled to royalty payments based on 75% of payable gold produced by CDA up to 910,000 ounces and 50% thereafter.

Royal Gold is a global streaming and royalty company.

McCarthy Tétrault LLP advised Royal Gold with a team led by Brian Graves that included Jennifer Organ, Lama Sabbagh, and Claire Gowdy (Mining).

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