Teck Resources has entered into a long-term gold off-take agreement with Royal Gold for the Carmen de Andacollo mine, which increases Teck’s cash position by $162 million.

Under the terms of the off-take agreement, Royal Gold made an advance payment of $525 million to Carmen de Andacollo, which has agreed to sell and deliver, on a monthly basis, an amount of gold equal to 100% of the payable gold produced from the Carmen de Andacollo mine until 900,000 oz have been delivered, and 50% thereafter. Royal Gold will also pay a cash price of 15% of the monthly average gold price at the time of each delivery. The off-take agreement applies to certain mining exploitation concessions currently owned by Carmen de Andacollo, any mining concessions acquired within an approximately 1.5 km area of interest and certain other mining concessions that the mine may acquire.

Carmen de Andacollo and Royal Gold have also agreed to terminate an earlier $345 million royalty agreement with Royal Gold Chile Limitada from 2010, under which Royal Gold Chile was entitled to royalty payments based on 75% of payable gold produced by Carmen de Andacollo up to 910,000 oz and 50% thereafter. In addition to the termination of $345 million fee, Carmen de Andacollo will make a post-closing payment of approximately $9 million to RG Chile for royalties.

Teck holds a 90% interest in Carmen de Andacollo and ENAMI, a Chilean state-owned entity dedicated to the promotion and development of mining in Chile, holds the remaining 10% interest.