Business
Royal Gold Closes Deal To Acquire Royalties From Kennecott Minerals
Royal Gold Closes Deal To Acquire Royalties From Kennecott Minerals.
About this update from Red Lake Gold Inc
[{"type":"text","content":"\n\n\n\n\nDENVER, Jan. 5 /CNW/ -- Royal Gold, Inc.\n(Nasdaq: RGLD; TSX: RGL) today announced that it has closed the agreement with\nKennecott Minerals Company to acquire two royalties for $25.0 million. The\nroyalties consist of a 3% net smelter return (\"NSR\") royalty on the Robinson\nmine, which is located in eastern Nevada, and a sliding-scale NSR royalty on\nthe Mulatos mine in Sonora, Mexico.\nThe Robinson mine is an open pit copper mine with significant gold and\nmolybdenum credits. The mine has been owned and operated by Quadra Mining\nLtd. (\"Quadra\") since 2004. Quadra has reported that as of December 31, 2004,\nproven and probable reserves include 142.6 million tons (129.4 million tonnes)\nof ore, at an average grade of 0.0085 ounces of gold per ton (0.29 grams per\ntonne) and 0.69% copper, containing approximately 1.2 million ounces of gold\nand 2.0 billion pounds of copper. The operator estimates that calendar year\n2006 production will be in the range of 55,000 to 65,000 ounces of gold and\n145 to 150 million pounds of copper. Quadra also stated that its molybdenum\ncircuit is near completion, which is expected to produce in the range of 1.0\nto 1.6 million 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.\nThe Mulatos project, owned and operated by Alamos Gold, Inc. (\"Alamos\"),\nis an open pit, heap leach gold mine, which is nearing completion of\nconstruction. According to Alamos, commercial production is expected in early\ncalendar 2006. Based on the operator's estimates, proven and probable\nreserves, as of June 1, 2004, include 40.1 million tons (36.4 million tonnes)\nof ore, at an average grade of 0.048 ounces per ton of gold (1.64 grams per\ntonne), containing approximately 1.9 million ounces of gold. Alamos\nanticipates that once full production is reached, yearly production is\nexpected to average 150,000 ounces of gold.\nThe Mulatos mine sliding-scale royalty, capped at two million ounces of\ngold production, ranges from a 0.30% payout for gold prices below $300 up to a\nmaximum rate of 1.50% for gold prices above $400.\nRoyal Gol...