OTTAWA (dpa-AFX) - First Quantum Minerals Ltd. (FM.TO), a Canadian miner, said on Tuesday that through its wholly owned subsidiary incorporated in Canada, it has inked a gold streaming deal with RGLD Gold AG, a wholly owned subsidiary of Royal Gold, Inc. (RGLD).
Under the terms, First Quantum will receive a $1 billion upfront cash payment in exchange for gold deliveries referenced to copper production from the Kansanshi Mine in Zambia.
First Quantum will deliver Royal Gold with ounces of gold commensurate with copper output.
The company will supply 75 ounces of gold per million pounds of recovered copper produced until 425,000 ounces of gold are delivered.
In addition, 55 ounces of gold per million pounds of recovered copper produced until an additional 225,000 ounces of gold supplied, and 45 ounces of gold per million pounds of recovered copper produced thereafter.
First Quantum will receive production payments from Royal Gold equivalent to 20% of the prevailing spot gold price for each ounce of gold delivered, increasing to 35% of the spot gold price when First Quantum achieves certain financial targets.
Tristan Pascall, CEO of First Quantum, said: 'Today's announcement further enhances the company's financial resilience, while the ramp-up of the S3 Expansion at Kansanshi and a resolution in Panama will continue to strengthen our financial position. It is pleasing to form a new partnership with Royal Gold which is a strong endorsement of the operations at Kansanshi and its multi-generational ore body as well as Zambia as a leading African mining jurisdiction.'
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