New Gold Secures $175-million Streaming Agreement

New Gold Inc. (TSX:NGD,NYSEMKT:NGD) announced that it’s entered into a streaming agreement worth $175 million with Royal Gold Inc. (TSX:RGL,NASDAQ:RGLD) subsidiary RGLD Gold AG.
As quoted in the press release:

Under the terms of the agreement, Royal Gold will provide New Gold with a deposit of $175 million, to be used for the ongoing development of the company’s Rainy River project (the “Project”), in exchange for a percentage of the future annual gold and silver production from the Project.

Further transaction details are as follows:

Upfront Deposit

• Royal Gold to provide New Gold with a$175 million deposit for the development of the company’s Rainy River project
  • $100 million paid at signing with the remaining $75 million to be paid when 60% of the Project development capital has been spent; expected by mid-2016

Gold and Silver Stream Percentage

• New Gold to deliver 6.50% of the Project’s gold production up to a total of 230,000 ounces of gold, and 3.25% of the Project’s gold production thereafter
• New Gold to deliver 60% of the Project’s silver production up to a total of 3.1 million ounces of silver, and 30% of the Project’s silver production thereafter

Ongoing Cash Purchase Price

• In addition to the upfront deposit, Royal Gold to pay 25% of the average spot gold or silver price at the time each ounce of gold or silver is delivered under the stream

Click here to read the full New Gold Inc. (TSX:NGD,NYSEMKT:NGD) press release.