Barrick and Royal Gold Close Streaming Transaction

Barrick Gold Corp. (TSX:ABX,NYSE:ABX) announced that it’s closed a previously announced gold and silver streaming transaction with Royal Gold Inc. (TSX:RGL) subsidiary RGLD Gold AG. The agreement is regarding production referenced to Barrick’s 60-percent stake in the Pueblo Viejo mine.
As quoted in the press release:

Barrick has received an upfront cash payment of $610 million and will receive continuing cash payments for gold and silver delivered under the agreement. Proceeds from the transaction will be used to reduce debt.
Distinctive characteristics of the agreement include:

• Significant upside price participation for Barrick.
• Not subject to a Barrick guarantee, and not treated as a debt-like obligation.
• Obligation of Barrick to sell gold and silver under the agreement is serviced using after tax cash flow being remitted from the Dominican Republic.

Under the terms of the agreement, Barrick will sell gold and silver to Royal Gold equivalent to:

• 7.5 percent of Barrick’s interest in the gold produced at Pueblo Viejo until 990,000 ounces of gold have been delivered, and 3.75 percent thereafter.
• 75 percent of Barrick’s interest in the silver produced at Pueblo Viejo until 50 million ounces have been delivered, and 37.5 percent thereafter. Silver will be delivered based on a fixed recovery rate of 70 percent. Silver above this recovery rate is not subject to the stream.

Click here to read the full Barrick Gold Corp. (TSX:ABX,NYSE:ABX) press release.