Tony Jensen, President and CEO, commented, “Fiscal 2012 marks the 11th consecutive year of record revenue and cash flow for Royal Gold. Our current financial results were driven by new and increasing production from recently commissioned mines, steady performance from our diversified royalty portfolio, and a continuation of strong metal prices. Revenue from our three producing cornerstone properties increased 31% as Peñasquito and Andacollo approached design capacity and Voisey’s Bay maintained steady state production. On top of this, we realized full-year production from Canadian Malartic, Holt, Las Cruces and Wolverine, further increasing our revenue base. During the fiscal year, we also added three new assets to our portfolio, and strengthened our balance sheet. We remain well positioned for new business opportunities as we move into fiscal 2013.”
Increase in Gold Stream Interest at the Mt. Milligan Project
Royal Gold has agreed to acquire, through its wholly-owned subsidiary RGLD Gold AG, an additional 12.25% of the payable gold produced from the Mt. Milligan copper-gold project, located in British Columbia, from a subsidiary of Thompson Creek Metals Company. Consideration for the new transaction is $200 million and cash payments equal to the lesser of $435 or the prevailing market price for each payable ounce of gold delivered to Royal Gold (the “Delivery Payments”). Combined with the Company’s previous two transactions, Royal Gold will now be entitled to 52.25% of the payable gold produced from Mt. Milligan for total consideration of $781.5 million and the Delivery Payments. To date, Royal Gold has paid $454.6 million to Thompson Creek and will pay $75 million following closing of the new transaction and the remaining $251.9 million in five scheduled quarterly payments commencing on September 1, 2012 and ending on September 1, 2013. The new transaction is subject to the satisfaction of various conditions, including, among other things, Thompson Creek receiving final approval for an amendment to its senior secured revolving credit agreement satisfactory to Royal Gold and approval of the new transaction by the lenders thereunder within 30 days. Thompson Creek is currently in negotiations with its lenders to obtain these approvals.