Royal Gold, Inc. recently announced that RGLD Gold AG, its wholly owned subsidiary, has agreed to acquire a wholly owned subsidiary from Barrick Gold Corporations, BGC Holdings Ltd.
The Precious Metals Purchase and Sale Agreement, which is worth $610 million, outlines the agreement to buy a percentage of Barrick’s attributable gold and silver production. The agreement includes a 60 percent interest in the Dominican Republic’s Pueblo Viejo mine.
Pueblo Viejo is based northwest of Santo Domingo. It is an open-pit mining operation that is operated as a joint venture by Barrick (which owns 60 percent of the operation) and Goldcorp, Inc. (which owns 40 percent). These two organizations are the world’s biggest gold producers.
The mine first launched in 2013. It is the world’s only primary gold mine that has a yearly production that exceeds one million ounces of gold at less than $700 per ounce for all-in sustaining costs.
“This agreement adds revenue from yet another high quality, long lived asset to Royal Gold’s portfolio and, when coupled with three other transactions in recent months, significantly diversifies our revenue sources,” Tony Jensen, president and CEO of Royal Gold, Inc., said. “It provides our shareholders with substantial resource conversion optionality and a favorable entry point in the commodity cycle. Opportunities of this caliber and magnitude are rare and we are pleased to partner with Barrick on this world-class operation.”
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