Press release
Royal Gold Announces Sale of its Ownership Interest in the Peak Gold Project
DENVER--(BUSINESS WIRE)-- ROYAL GOLD, INC. (NASDAQ: RGLD) (together with its subsidiaries, “Royal Gold” or the “Company,” “we” or “our”) announced today that
About this update from Royal Gold, Inc.
[{"type":"text","content":" DENVER--(BUSINESS WIRE)--\nROYAL GOLD, INC. (NASDAQ: RGLD) (together with its subsidiaries, “Royal Gold” or the “Company,” “we” or “our”) announced today that the Company has entered into an agreement to sell its ownership interest in the Peak Gold Project in Tok, Alaska and its common share position in Contango Ore, Inc. (OTC: CTGO) (“Contango”) for total cash consideration of $61.3 million and increased royalty interests. All conditions precedent to closing have been satisfied and the transactions are expected to close on or before October 1, 2020.\n\nRoyal Gold has agreed to complete two transactions with an affiliate of Kinross Gold Corporation (“Kinross”) for the following cash consideration:\n\n\n$49.2 million in return for the sale of its 40% membership interest in Peak Gold, LLC, the owner of the Peak Gold Project; and,\n\n\n$12.1 million in return for the sale of Royal Gold’s entire holding of 809,744 common shares of Contango, Royal Gold’s partner in Peak Gold, LLC.\n\n\nAfter completion of these transactions, and the concurrent transactions announced between Kinross and Contango, the Peak Gold Project will be owned 70% by Kinross and 30% by Contango, with Kinross as the project operator.\n\nIn addition to the cash consideration, Royal Gold will receive increased royalty interests as follows:\n\n\nAn incremental 28% net smelter return royalty on silver produced from an area of interest which includes the current resource area. Peak Gold, LLC, retains the right to acquire 50% of this royalty for consideration of $4 million; and,\n\n\nAn incremental 1% net smelter return royalty on certain State of Alaska mining claims to be spun out of the land package owned by Peak Gold, LLC, to Contango, increasing Royal Gold’s royalty on this area from 2% to 3%.\n\n\n“This transaction allows Royal Gold to focus on its core royalty and streaming business,” commented Bill Heissenbuttel, President and CEO of Royal Gold. “While the Peak Gold Project is a non-core asset to Royal Gold, it is one of the most interesting emerging gold projects in the United States. We developed a strong working relationship with Chief Michael Sam, the Tetlin Village Council and the Tetlin people over the past several years, and we are confident that Kinross’ experience and record of responsible mining in Alaska positions them as the ideal operator to advanc...