Royal Gold to Acquire Interest in the Gold Production from Teck Cominco's Andacollo Mine in Chile

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[{"type":"text","content":"\n\n\n\nDENVER, April 6 /CNW/ -- ROYAL GOLD, INC. ("Royal Gold") (Nasdaq: RGLD;\nTSX: RGL), a leading precious metals royalty company, announced that it has\nsigned a definitive agreement with a subsidiary of Teck Cominco Limited\n("Teck") (TSX: TCK.A and TCK.B; NYSE: TCK), to acquire an interest in the gold\nproduction at the Andacollo mine located in Chile ("Andacollo Transaction"). \nThe purchase price consists of $100 million in cash and approximately 4.5\nmillion shares of Royal Gold common stock, each subject to potential\nadjustments as described below.\n\n\n\n\n\nRoyal Gold will receive 75% of the gold produced from the sulfide portion\nof the Andacollo deposit until 910,000 payable ounces of gold have been sold,\nafter which Royal Gold will receive 50% of all future payable gold production\nfrom the property.\n\n\n\n\n\nTony Jensen, President and Chief Executive Officer of Royal Gold,\ncommented, "This transaction is a unique opportunity and has all of the\ncharacteristics we look for in an acquisition. We are extremely pleased to\npartner with an experienced operator like Teck on this long-life project in\nthe excellent host country of Chile. This is yet another great addition to our\nworld-class gold royalty portfolio."\n\n\n\n\n\nThe Andacollo mine has been in production since 1996, producing copper\ncathodes from the oxide portion of the deposit. A mill and flotation circuit\nto produce copper and gold from the sulfide portion of the deposit, known as\nthe "Hypogene Project," is currently under construction. Teck expects the\nHypogene Project to begin initial gold production in late calendar 2009 and\nreach commercial production in the first half of calendar 2010.\n\n\n\n\n\nTeck estimates the sulfide reserves to contain proven and probable\nmineral reserves of approximately 393.5 million tonnes grading 0.13 grams of\ngold per tonne. This equates to 1.6 million ounces of gold in the sulfide\nreserves which will be mined over 20 years of production. Over the first 10\nyears of the mine life, Teck expects production will average 53,000 ounces of\ngold and 76,000 tonnes of copper in concentrate annually. Royal Gold's\ninterest does not apply to the production of copper.\n\n\n\n\n\nWilliam Heissenbuttel, Vice President of Corporate Development, added,\n"This transac...

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