Business
Royal Gold Agrees to Acquire Royalties From Kennecott Minerals for $25.0 Million
Royal Gold Agrees to Acquire Royalties From Kennecott Minerals for $25.0 Million.
About this update from Alamos Gold Inc.
[{"type":"text","content":"\n\n\n\n\nDENVER, Dec. 23 /CNW/ -- Royal Gold, Inc.\n(Nasdaq: RGLD; TSX: RGL) today announced an agreement to acquire two royalties\nfrom Kennecott Minerals Company for $25.0 million. The royalties consist of a\n3% net smelter return (\"NSR\") royalty on the Robinson mine, which is located\nin eastern Nevada, and a sliding-scale NSR royalty on the Mulatos mine in\nSonora, Mexico. The closing of the acquisition is subject to customary\nconditions and is scheduled to occur by the end of the year.\nTony Jensen, Royal Gold's President and Chief Operating Officer,\ncommented, \"We are pleased to add these royalties to our portfolio due to\ntheir cash flow potential and significant reserves, resulting in relatively\nlong-life assets. We are always eager to expand our royalty interests in\nNevada and are pleased to be associated with the Alamos land position and\nsliding-scale royalty in Mexico.\"\nThe Robinson mine is an open pit copper mine with significant gold and\nmolybdenum credits. The mine was originally operated by Kennecott and later\nowned by BHP Billiton and was subsequently sold to Quadra Mining Ltd.\n(\"Quadra\") in 2004. Quadra has reported that as of December 31, 2004, proven\nand probable reserves include 142.6 million tons (129.4 million tonnes) of\nore, at an average grade of 0.0085 ounces per ton gold (0.29 grams per tonne)\nand 0.69% copper, containing approximately 1.2 million ounces of gold and 2.0\nbillion pounds of copper. The operator estimates that calendar year 2006\nproduction will be in the range of 55,000 to 65,000 ounces of gold and 145 to\n150 million pounds of copper. Quadra also stated that its molybdenum circuit\nis near completion, which is expected to produce in the range of 1.0 to 1.6\nmillion pounds of molybdenum in calendar 2006.\nThe Company will begin receiving revenue from its 3.0% NSR royalty at the\nRobinson mine when a $20.0 million reclamation trust account is fully funded\nwhich, at the end of October 2005, totaled approximately $14.7 million. The\naccount is expected to be fully funded in calendar 2006. Upon completion of\nthat funding, this 3% NSR royalty will then be paid to Royal Gold.\nThe Mulatos project was previously owned by a joint venture between Placer\nDome and Kennecott Minerals, and is now owned and operated by Alamos Gold,\nInc. (\"Alamos\"). The Mulatos project is an ope...