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AuRico Metals signs royalty sale agreement with Triple Flag

Published by , Assistant Editor
Global Mining Review,

Centerra Gold Inc.’s subsidiary, AuRico Metals Inc. (AMI), has entered into agreements with Triple Flag Mining Finance Bermuda Ltd. (Triple Flag) in connection with the sale of AMI’s royalty portfolio (the Royalty Sale) and a silver stream on the Kemess project (the Kemess Stream) for combined aggregate proceeds of US$200 million.

President and CEO of Centerra, Scott Perry, commented: “The Royalty Sale and the Kemess Stream represents a compelling way for the company to realise significant cash proceeds from non-core assets which will further enhance our strong balance sheet and assist in funding Centerra’s growth development pipeline.” The Royalty Sale consists of the sale of AMI’s royalty portfolio, together with new 0.5%, 2.0% and 2.0% net smelter returns royalties on AMI’s Kliyul, Chuchi and Redton exploration properties, respectively, for up-front cash proceeds of US$155 million, subject to customary adjustments, including an economic effective date of 1 April 2018.

According to Centerra, the Royalty Sale is expected to be completed during the second quarter of 2018 following the satisfaction of customary conditions to closing. The Kemess Stream consists of the sale of 100% of the silver production from the Kemess project. Triple Flag will pay AMI cash consideration of US$45 million as an advance payment, payable in tranches of US$10 million, US$10 million, US$12.5 million and US$12.5 million on the public announcement by Centerra that its board of directors has approved a construction decision with respect to the Kemess underground development project and the three succeeding anniversaries of such date, respectively. In addition, Triple Flag will make ongoing payments of 10% of the then current market price for each ounce of silver delivered. Shaun Usmar, CEO of Triple Flag Mining Finance Ltd. commented: “The high-quality Centerra precious metals royalty portfolio is a perfect fit for Triple Flag’s substantial and growing portfolio of precious metal royalty and streaming assets. The Kemess silver stream also nicely complements our suite of growth assets. We look forward to our ongoing partnership with the Centerra team.”

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