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    First Quantum Secures US$1 Billion in Gold Stream Deal with Royal Gold

    Giann Liguid
    Aug. 06, 2025 09:30AM PST

    The funding will support its Zambian operations while maintaining the company’s exposure to both copper and gold.

    Gold bar on scattered US hundred-dollar bills.
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    First Quantum Minerals (TSX:FM,OTC Pink:FQVLF) has locked in a US$1.0 billion cash infusion through a gold streaming agreement with RGLD Gold AG, a wholly owned subsidiary of Royal Gold (NASDAQ:RGLD).

    The Vancouver-based firm announced on Tuesday (August 5) that the streaming agreement is tied to its Zambian operations, covering future gold deliveries linked to copper output at its Kansanshi mine.


    “Following a thorough evaluation of several deleveraging options, I am pleased to announce this milestone transaction which preserves exposure to all of the copper production at Kansanshi while still maintaining exposure to the majority of the Company’s gold production,” said First Quantum CEO Tristan Pascall in a press release.

    “It is pleasing to form a new partnership with Royal Gold which is a strong endorsement of the operations at Kansanshi and its multi-generational ore body as well as Zambia as a leading African mining jurisdiction,” Pascall added.

    The agreement provides First Quantum with long-term, unsecured capital that does not increase its debt load. Proceeds will be used for capital expenditures and repayment of existing bank loans. Furthermore, the company said that the transaction is expected to materially lower its net debt-to-EBITDA ratio.

    While the arrangement commits First Quantum to deliver gold based on a formula tied to copper production, the company retains most of its gold upside.

    Based on its 2026 and 2027 production forecasts, approximately 84 percent of its total gold output will still be exposed to spot market pricing. The company also retains full exposure to newly discovered near-surface gold zones at Kansanshi.

    Under the terms of the agreement, First Quantum will deliver gold to Royal Gold on a stepdown basis: 75 ounces of gold for every million pounds of recovered copper produced until 425,000 ounces have been delivered, 55 ounces per million pounds for the next 225,000 ounces, and 45 ounces per million pounds thereafter.

    First Quantum will receive 20 percent of the spot gold price per ounce delivered, rising to 35 percent if it secures a BB credit rating or maintains a net leverage ratio of 2.25x or lower for three straight quarters starting Q1 2026.

    The deal also includes two optional acceleration provisions, allowing First Quantum to reduce future delivery commitments. The company can cut delivery thresholds by up to 20 percent at a value of up to US$200 million once it reaches the BB rating or leverage target.

    A further 10 percent reduction, worth US$100 million, is possible upon achieving a leverage ratio of 1.25 times over four consecutive quarters, subject to meeting certain operational conditions.

    The gold streaming deal is part of First Quantum’s continued efforts to strengthen its finances after recent setbacks at the Cobre Panamá mine.

    In May, the company announced it had received government approval in Panama for its Preservation and Safe Management program at the Cobre Panamá mine. The approval enables the company to carry out environmental and safety measures funded through the export of 121,000 dry metric tons of copper concentrate currently stored on site.

    The program does not represent a restart of full operations, but allows First Quantum to maintain the site and manage its obligations in line with Panamanian government requirements.

    On the other hand, the deal also deepens Royal Gold’s exposure to a major African copper-gold asset at a time when the streaming and royalty company is making moves to expand its portfolio.

    Just last month, Royal Gold announced a pair of major acquisitions: a US$3.5 billion all-share deal to acquire Sandstorm Gold (TSX:SSL)and a separate US$196 million cash deal for Horizon Copper (TSXV:HCU).

    The transactions, announced in July, would create a streaming and royalty giant with 393 assets across six continents—including 80 that are currently cash-flowing.

    Shares of First Quantum were up slightly in Tuesday trading following the announcement.

    Don’t forget to follow us @INN_Resource for real-time news updates!

    Securities Disclosure: I, Giann Liguid, hold no direct investment interest in any company mentioned in this article.

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    Giann Liguid

    Giann Liguid

    Writer

    Giann Liguid is a graduate of Ateneo De Manila University with an AB in Interdisciplinary Studies. With a diverse writing background, Giann has written content for the security, food and business industries. He also has expertise in both the public and private sectors, having worked in the government specializing in local government units and administrative dynamics.

    When he is not chasing the next market headline, Giann can most likely be found thrift shopping for his dogs.

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    Giann Liguid
    Giann Liguid

    Writer

    Giann Liguid is a graduate of Ateneo De Manila University with an AB in Interdisciplinary Studies. With a diverse writing background, Giann has written content for the security, food and business industries. He also has expertise in both the public and private sectors, having worked in the government specializing in local government units and administrative dynamics.

    When he is not chasing the next market headline, Giann can most likely be found thrift shopping for his dogs.

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