FX.co ★ Royal Gold Executes Deal With Centerra Gold To Boost Mine Life Of Mount Milligan

Royal Gold, Inc. announced Wednesday that its subsidiary, RGLD Gold AG, has finalized a new agreement with Centerra Gold Inc. and its affiliate, Thompson Creek Metals Company Inc. This arrangement aims to extend the operational lifespan of the Mount Milligan mine until 2035 and possibly further.

Centerra Gold, the owner of the Mount Milligan Mine, offers a favorable short-term cash and gold package to Royal Gold in exchange for sustained long-term funding.

"There is substantial, enduring potential at Mount Milligan. Our contribution is intended to facilitate Centerra's efforts to prolong the mine's productivity, to the benefit of all stakeholders involved," commented Bill Heissenbuttel, CEO of Royal Gold.

As part of this agreement, Royal Gold will receive an upfront sum of around $125 million, consisting of $24.5 million cash and 50,000 ounces of gold. In addition, Royal Gold will secure a long-term interest on the Mount Milligan Mine’s free cash flow.

Commencing in approximately 2030, Royal Gold will make cost support payments for metal deliveries. This will form the foundation for an immediate increase in reserve and an extension of the Mount Milligan mine's lifespan until 2035.

Centerra plans to carry out a preliminary economic assessment in the first half of 2025 to consider a potential further extension of the mine's operational lifespan beyond 2035.

Royal Gold already has a streaming interest at the Mount Milligan Mine. This includes a gold stream that delivers 35 percent of the payable gold for a cash payment of $435 per ounce, as well as a copper stream that provides for the delivery of 18.75 percent of the payable copper at 15 percent of the spot copper price. These existing streaming arrangements will remain unaffected by the new agreements.