Crocodile Gold Corp. (TSX:CRK,OTCQX:CROCF) announced that it has reached an agreement with AuRico Gold Inc. (TSX:AUQ,NYSE:AUQ) that ends their net free cash flow sharing agreement regarding the Fosterville and Stawell gold mines.

Rodney Lamond, president and CEO of Crocodile, believes the agreement is “mutually beneficial” and sees it helping his company realize “the full economic benefit of developing Fosterville.”

As quoted in the press release:

Under the terms of the net free cash flow sharing arrangement, which was established whenCrocodile Gold acquired the Fosterville and Stawell Gold Mines from AuRico in 2012, Crocodile Gold was entitled to cumulative net free cash flow from those mines of up to C$60 million. AuRico would then be entitled to 100% of the next C$30 million in net free cash flow, after which Crocodile Gold and AuRico would share the next C$30 million of net free cash flow on a 50/50 basis until C$120 million of cumulative net free cash flow was achieved, following which AuRico would then be entitled to 20% on an ongoing basis.

Under the revised agreement, which will be effective upon final approval from FIRB, Crocodile Gold will pay AuRico C$20 million in cash on the effective date and will grant AuRico a net smelter return royalty of 2% from the Fosterville Gold Mine, also commencing the effective date, and a 1% royalty from the Stawell Gold Mine commencing January 1, 2016.

Click here to read the full Crocodile Gold Corp. (TSX:CRK,OTCQX:CROCF) press release.