Business
Royal Gold Acquires Royalty on Barrick Gold Corporation's Pascua Lama Gold Project
Royal Gold Acquires Royalty on Barrick Gold Corporation's Pascua Lama Gold Project.
About this update from Red Lake Gold Inc
[{"type":"text","content":"\n\n\n\nDENVER, Jan. 17 /CNW/ -- ROYAL GOLD, INC. (Nasdaq: RGLD; Toronto: RGL)\ntoday announced that it has entered into a definitive and binding agreement to\npurchase a net smelter return (\"NSR\") sliding-scale royalty for $20.5 million\non the Pascua Lama project. Pascua Lama is owned by Barrick Gold Corporation\n(\"Barrick\") and is located on the border between Argentina and Chile. The NSR\nroyalty, ranging from 0.16% to 1.08% depending on the average price of gold\nduring the quarter, is applicable to all gold production from an area of\ninterest in Chile. The transaction also includes a 0.216% fixed-rate copper\nroyalty. The copper royalty applies to 100% of the copper reserves but does\nnot take effect until after January 1, 2017. The acquisition is subject to\ncustomary due diligence and is expected to close in early March 2007.\n\n\nTony Jensen, Royal Gold's President and Chief Executive Officer,\ncommented, \"We are pleased to add the Pascua Lama royalty to our diverse and\nrapidly growing portfolio. This royalty provides Royal Gold with exposure to\nanother long life, world-class deposit, and a presence in the prolific mineral\npotential of the Frontera District of Chile.\"\n\n\nAccording to the Barrick's publicly available reserve and resource\nstatement of December 31, 2005, Pascua Lama's proven and probable reserves\ninclude 397 million tons of ore (360 million tonnes), at a grade of 0.046\nounces per ton (1.58 grams per tonne), containing about 18.0 million ounces of\ngold. Approximately 80% of the reserves are located in Chile.\n\n\nBarrick is targeting production in calendar 2010, subject to the receipt\nof certain permits. According to the technical report prepared by Barrick\ndated March 30, 2005 (available at www.sedar.com), production from the mine\nwill average 750,000 to 775,000 ounces of gold over the first decade of\nproduction, at a cash cost range of $130 to $140 per ounce.\n\n\nThe NSR sliding-scale royalty ranges from 0.16% when the average\nquarterly gold price is at or below $325 per ounce, to a maximum of 1.08% when\nthe average quarterly gold price equals or exceeds $800 per ounce, as shown\nbelow. When the average quarterly realized gold price is between any two price\nranges, the royalty rate is proportional to the change in the gold price.\n\n\nRoyalty Schedule - Pascua Lama Royalty\nGold Pr...