Royal Gold, Inc. (RGLD) is a precious metals royalty company that owns and manages royalties on principally precious metals mines containing mostly gold and silver deposits. The company’s royalty portfolio provides investors with the opportunity to capture value in the precious metals sector without incurring many of the risks associated with mine operations such as capital and operating costs. Royal Gold owns a large portfolio of active, developing and exploration-style royalties located in some of the world’s most prolific regions.
Last week the company announced entering into a definitive agreement to acquire a portfolio of royalties from Barrick Gold Corporation for net case consideration of $150M. The agreement also includes a restructuring of certain Royal Gold royalty positions at Barrick’s Cortez Pipeline Mining Complex in Nevada. The restructuring will reduce the royalty burden on the undeveloped Crossroads deposit at Cortex while having only a minimal impact on Royal Gold’s royalty revenue from current production.
The Barrick portfolio consists of royalties on 77 properties, which include eight producing royalties, 20 development and evaluation stage properties, and 49 exploration projects. Key assets in the royalty package include the Mulatos, Malartic, Siguiri, Mt. Goode/Cosmos, and Allan properties. The purchase price for the acquisition will be paid from cash on hand.
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