Which US presidential candidate does gold prefer?
Gold loves chaos and should be hitting new highs, especially with inflation coming down and with it, two rate cuts likely before year’s end.
Royal Gold (NASDAQ: RGLD) announced on Wednesday that its subsidiary, RGLD Gold AG, has executed a deal with Centerra Gold (XTSE: CG) and its unit Thompson Creek Metals Company to extend the life of Mount Milligan mine in British Columbia to 2035.
The mine, owned by Centerra, provides near-term cash and gold consideration to Royal Gold in return for long-term cost support.
Royal Gold will receive around $125 million in near-term consideration, comprising $24.5 million in cash and 50,000 ounces of gold, along with a long-term free cash flow interest in the Mount Milligan mine.
Starting in approximately 2030, Royal Gold will provide cost support payments for metal deliveries, which will serve as the basis for an immediate reserve increase and extension of the Mount Milligan mine life to 2035.
“Mount Milligan is a large and potentially long-life operation, and our support is designed to allow Centerra to extend the mine life and add long-term value for each company’s stakeholders,” Royal Gold CEO Bill Heissenbuttel said in a news release.
Centerra expects to complete a preliminary economic assessment in the first half of 2025 to evaluate a mine life extension beyond 2035.
Mount Milligan is located approximately 155 kilometres northwest of Prince George in central BC. It is a conventional truck-shovel open-pit copper and gold mine and concentrator with a 60,000 t/d capacity copper flotation processing plant. The mine produced 154,391 ounces of gold in 2023.
On Wednesday, Centerra announced that preliminary gold production in the final three months of last year was 129,259 ounces, up from 126,221 the quarter before. That took output for last year to 350,317 ounces, near the midpoint of its guidance range of 340,000 to 360,000 ounces.
The Canadian gold producer, which also operates the Oksut mine in Turkey, forecasts gold production of between 370,000 and 410,000 ounces in 2024, marking an increase of 11% over the midpoint of its guidance.
Copper output is set to come in at between 55 million and 65 million pounds, it added.
Shares of Royal Gold rose 0.7% by 11:30 p.m. EDT on the NASDAQ. The miner has a market capitalization of $7 billion. Centerra shares were up 6%. The company has a market cap of $770 million.
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Greg STEWART
Centerra has a market cap of CAN$1.45 billion and perhaps cash of CAN$6oo million. The company is debt free pays around 4.3% dividend