TORONTO (miningweekly.com) – Diversified miner Teck Resources on Friday agreed to sell future gold output from its Chile-based Carmen de Andacollo mine to Royal Gold.
Under the terms of the streaming deal, Royal Gold made a $525-million upfront payment to buy all the payable gold at 15% of the monthly average gold price at each delivery, until 900 000 oz had been delivered.
Teck’s subsidiary Compañia Minera Teck Carmen de Andacollo (CDA) paid $345-million to Royal Gold to terminate a five-year-old royalty agreement, which required CDA to pay Royal Gold 75% of payable gold up to 910 000 oz and 50% after that.
Vancouver-based Teck held a 90% stake in CDA, with Chile's State-owned ENAMI owning the balance.
The agreement was a $162-million boost to Teck’s balance sheet, which was important in this period of relatively low commodity prices and high capital spending.