Thompson Creek Announces Royal Gold Increases Gold Stream Interest to Purchase Additional 15% of Future Gold Production from Mt. Milligan for $270 Million
Posted on January 6, 2012 8:34 am
Thompson Creek Metals Company Inc. ("Company" or "Thompson Creek"), a growing, diversified, North American mining company, today announced that effective December 14, 2011, it has entered into an Amended and Restated Purchase and Sale Agreement with Royal Gold, Inc. ("Royal Gold") to sell an additional 15% of the payable gold from Thompson Creek's Mt. Milligan copper-gold project to Royal Gold in exchange for a total of $270 million, $112 million of which will be paid shortly after signing. Thompson Creek intends to use the proceeds from the Amended and Restated Agreement to finance a portion of the construction of the Mt. Milligan project and related costs.
"We are very pleased with Royal Gold's increased investment and continued support in the advancement of our Mt. Milligan project," said Kevin Loughrey, Chairman and Chief Executive Officer of Thompson Creek. "We believe that Royal Gold's participation in Mt. Milligan is an endorsement of the quality of the project that will transform our Company into a diversified, base metals producer beginning late 2013 and significantly strengthen our Company's financial performance," added Mr. Loughrey.
Mt. Milligan is a copper-gold project located approximately 90 miles northwest of Prince George in central British Columbia, Canada. Thompson Creek is in the process of constructing the mine, which is expected to be in production in the fourth quarter of 2013. The Mt. Milligan project is based on a conventional truck-shovel open pit mine and 60,000 tonnes per day copper flotation concentrator. Average annual production over the current 22-year mine life is expected to be approximately 81 million pounds of copper and 194,000 ounces of gold. Production in years one through six is expected to be higher with approximately 89 million pounds of copper and 262,000 ounces of gold. The current capital expenditure estimate to construct and develop the Mt. Milligan mine is C$1.265 billion. Since inception of the project through September 30, 2011, approximately C$383.1 million has been spent and an additional C$336.3 million has been committed as open purchase orders, contracts, and capital purchase commitments.