Kerr Mines and Star Royalties agree £13.6m streaming deal
Kerr Mines, the American gold producer, and Star Royalties, the Canadian metals-focused royalty and streaming company, have jointly announced the execution of a definitive £13.6 million gold purchase and sale agreement (streaming agreement) to finance the restart of underground operations and gold production at the Copperstone Gold Mine in Arizona.
The first instalment of £4.5 million will be advanced on the initial closing, which is expected to take place on or before November 20. The remaining two tranches will be advanced at the request of Kerr as it incurs expenditures for the restart of the Copperstone Gold Mine Project, with £4.5 million on or before February 28, 2021, and a further £4.5 million on or before April 30 next year.
“This Streaming Agreement provides the required project financing to restart gold production at our Copperstone Gold Mine, which is targeted for Q4-2021. We are extremely pleased to be undertaking this financing transaction with Star Royalties, which has a seasoned team of mining professionals that will prove to be a valued partner as we advance Copperstone to production," says Giulio T Bonifacio, chief executive officer of Kerr.
"With the extensive project evaluation undertaken by Star Royalties, we believe this streaming transaction further validates the value we have identified at Copperstone by way of our recent optimization efforts. We also note that we will be progressing the restart of operations under a whole ore leach processing scenario which will result in increased gold recoveries and production versus a floatation processing scenario.”
As part of the key transaction terms for the agreement, Star Royalties will purchase from Kerr an amount of refined gold equal to 9.9 percent of gold produced at Copperstone until a culminative 21,000 ounces of refined gold are delivered, then 3.3 percent of gold produced until a culminative 27,200 ounces are delivered, and 1.2 percent of gold produced thereafter for the remaining life of the mine, the statement says.
Furthermore, Star Royalties will provide a cash payment to Kerr for each ounce of gold delivered equal to 25 percent of the average London Bullion Market Association gold spot price for five consecutive trading days prior to delivery.
“We are proud to announce our partnership transaction with Kerr to advance the restart of Copperstone. We have structured a mutually beneficial streaming arrangement which should translate to a win-win outcome for both parties’ shareholders.
"This gold stream will provide for significant, near-term cash flow from a highly prospective deposit in a world-class jurisdiction. We look forward to the successful restart at Copperstone and to its exploration upside under Kerr’s experienced and knowledgeable management team,” says Alex Pernin, chief executive officer of Star Royalties.
Newmont acquires Canada’s GT Gold in $325mn deal
Newmont, the world’s biggest gold miner, has acquired Canada’s GT Gold in a deal worth $325mn. The gold giant now controls the Tatogga gold-copper project in the Traditional Territory of the Tahltan Nation.
“With the acquisition of GT Gold and the Tatogga project in the highly sought-after Golden Triangle district of British Columbia, Canada, Newmont continues to strengthen our world-class portfolio,” commented Newmont President and CEO Tom Palmer.
“We look forward to continuing to build a respectful and meaningful relationship with the Tahltan Nation, including the community of Iskut. The relationships we have with Indigenous communities, First Nations and host communities are critical to the way we operate. We will partner with the Tahltan Nation at all levels, and with the Government of British Columbia to ensure a shared path forward as the Company understands and acknowledges that Tahltan consent is necessary for advancing the Tatogga project.”
Newmont’s acquisition includes the Tatogga project, comprised primarily of the Saddle North deposit, which has the potential to contribute future significant gold and copper annual production. There are also further exploration opportunities beyond the known deposits at Saddle North within the land package. The Tatogga project adds to Newmont’s existing interest in the prospective Golden Triangle through the company’s 50% ownership in the Galore Creek project.
Newmont is the world’s leading gold company and a producer of copper, silver, zinc and lead. A world-class portfolio of assets, prospects and talent is anchored in favourable mining jurisdictions in North America, South America, Australia and Africa. The American miner is celebrating its 100th anniversary this month.
With gold prices on the rise, the last six months has seen gold industry M&A activity accelerating. A recent Mckinsey report, advises that the industry need to be mindful of mistakes made during the previous gold price boom, when growth was chased unidirectionally by several companies.