Barrick Gold announced it has closed its previously announced gold and silver streaming transaction with RGLD Gold AG, a subsidiary of Royal Gold, for production referenced to Barrick’s 60% interest in the Pueblo Viejo mine in the Dominican Republic.
Barrick has received an upfront cash payment of $610 million and will receive continuing cash payments for gold and silver delivered under the agreement. Barrick will deliver to Royal Gold, on a quarterly basis, an amount of gold equal to 7.50% of Barrick’s interest in the gold produced at Pueblo Viejo until 990,000 oz of gold have been delivered, and 3.75% thereafter; and an amount of silver equal to 75% of Barrick’s interest in the silver produced at Pueblo Viejo (with silver deliveries based on a fixed 70% recovery rate) until 50 million oz have been delivered, and 37.50% thereafter.
Royal Gold will pay Barrick 30% of the spot price per ounce of gold until 550,000 oz of gold have been delivered, and 60% of the spot price per ounce thereafter; and 30% of the spot price per ounce of silver until 23.10 million oz of silver have been delivered, and 60% of the spot price per ounce thereafter.
“This innovative agreement allows us to strengthen our balance sheet in the short term, while preserving material exposure to higher gold and silver prices in the future,” said Barrick President Kelvin Dushnisky.
Barrick maintains its 60% equity ownership interest in Pueblo Viejo and its associated rights under the joint venture agreement with Goldcorp, including operatorship of Pueblo Viejo. This transaction does not affect any of Pueblo Viejo’s obligations to the Dominican government.
