Royal Gold, Rubicon Sign Gold Stream Deal - Analyst Blog
12 Febbraio 2014 - 10:55PM
Zacks
Royal Gold, Inc. (RGLD) announced that its
fully-owned subsidiary, RGLD Gold AG, has entered into a gold
stream agreement with Rubicon Minerals Corporation
(RBY) which will fund a major part of the construction of the
Phoenix Gold mine in Ontario, Canada.
Per the agreement, Royal Gold will make an advance payment of
$75 million to Rubicon in five installments over the next 12 months
for the construction of Phoenix Gold Project. In exchange, Royal
Gold will receive 6.3% of any gold produced from Phoenix Gold mine
until the delivery of 135,000 ounces and 3.15% afterwards. The
purchase price per ounce for Royal Gold will be 25% of the spot
price at time of delivery.
The Phoenix Gold project is expected to start production in
13–14 months after the completion of the remaining financing. The
Phoenix Gold project is located in Red lake mining district in
Canada. The Red lake district is one of the most preeminent gold
producing districts and has twenty eight mines producing over 26
million ounces of gold since 1930’s.
As per a preliminary economic assessment issued in 2013, Rubicon
forecasts a total mine production of 2.19 million ounces, with
average estimated annual production of 165,300 ounces based on a 13
year mine life in the Phoenix Gold mine. Rubicon expects about $100
million of additional financing to complete the construction
process, inclusive of corporate expenses, along with Royal Gold’s
deposit.
Royal Gold, together with its subsidiaries, is engaged in
acquiring and managing precious metals, royalties and similar
interests. By partnering with capable operators, the company
focuses on building and managing a diversified, cash-flowing
portfolio of precious metal assets.
Royal Gold currently carries a Zacks Rank #3 (Hold).
Other companies in the mining industry with favorable Zacks Rank
include Franco-Nevada Corp. (FNV) and Lake
Shore Gold Corp. (LSG) with both holding a Zacks Rank #2
(Buy).
FRANCO NV CP (FNV): Free Stock Analysis Report
LAKE SHORE GOLD (LSG): Free Stock Analysis Report
ROYAL GOLD INC (RGLD): Free Stock Analysis Report
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