(Reuters) - Canada’s Teck Resources Ltd TCKb.TO agreed to sell future output from its Chile mine to Royal Gold Inc (RGLD.O) RGL.TO for $525 million upfront payment and 15 percent of monthly average gold price at each delivery.
Under the offtake agreement, Teck will sell all the payable gold produced from the Carmen de Andacollo (CDA) mine to Royal Gold until 900,000 ounces have been delivered on a monthly basis.
CDA paid $345 million to Royal Gold to terminate a five-year-old royalty agreement, which required CDA to pay Royal Gold 75 percent of payable gold up to 910,000 ounces and 50 percent after that.
Four years after the gold prices began tumbling, cash-starved, debt-ridden miners are selling, merging or closing shop.
Vancouver-based Teck holds 90 percent stake in CDA, a copper mine in central Chile, and the remaining is owned by Chile’s state-owned ENAMI.
Reporting by Sneha Banerjee in Bengaluru; Editing by Don Sebastian