Centerra Gold Inc. (TSX: CG) announced that its wholly-owned subsidiary, AuRico Metals Inc. (AMI), has entered into agreements with Triple Flag Mining Finance Bermuda Ltd. in connection with the sale of AMI’s royalty portfolio and a silver stream on the Kemess project for combined aggregate proceeds of US$200 million.
As quoted in the press release:
The Royalty sale consists of the sale of AMI’s royalty portfolio, together with new 0.5 percent, 2.0 percent and 2.0 percent 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 April 1, 2018. 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 percent 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 percent of the then current market price for each ounce of silver delivered.
Scott Perry, president and CEO, commented:
The Royalty sale and the Kemess Stream represents a compelling way for the company to realize significant cash proceeds from non-core assets which will further enhance our strong balance sheet and assist in funding Centerra’s growth development pipeline.
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