Wedoany.com Report-Aug. 8, Royal Gold’s subsidiary, RGLD Gold, has finalized a stream agreement with Kansanshi Mining, operator of the Kansanshi mine in Zambia, to secure gold deliveries linked to copper production. The mine is 80% owned by First Quantum and 20% by ZCCM Investments Holdings, a company majority-owned by the Zambian government.
Royal Gold will initially pay 20% of the spot gold price per ounce delivered, which may increase to 35% if First Quantum meets specific conditions.
Under the agreement, RGLD Gold made an advance payment of $1 billion to receive gold at varying rates based on copper recovery. Initially, Royal Gold will receive 75 ounces of gold per million pounds of recovered copper until 425,000 ounces are delivered. The rate then adjusts to 55 ounces and later 45 ounces as further thresholds are met. The copper is recovered in concentrate and cathode form, with the stream’s financial terms independent of smelter recoveries or onsite gold production.
First Quantum has two options to accelerate gold deliveries and reduce the advance. The first option, effective from March 31, 2026, requires either a minimum ‘BB’ credit rating for its senior unsecured debt or a net debt-to-EBITDA ratio of 2.25 or less for three consecutive quarters. If activated within a one-year window, First Quantum must supply gold valued up to $200 million over 14 months, reducing streaming rates and delivery minimums by up to 20%. The second option requires a ‘BBB-’ rating or a net debt-to-EBITDA ratio of 1.25 or less for four quarters, alongside specific operational criteria. If exercised, First Quantum will supply gold worth up to $100 million over seven months, further lowering rates by up to 10%.
Royal Gold will pay 20% of the spot gold price per ounce delivered, increasing to 35% if First Quantum meets certain conditions. Bill Heissenbuttel, Royal Gold’s president and CEO, stated: “This large and long-life stream will add another significant gold interest to the enlarged portfolio we are creating with the recently announced transactions for Sandstorm Gold and Horizon Copper, and enhance our position as a premier growth company in the streaming and royalty sector.”
To finance the deal, Royal Gold utilized cash reserves and drew $825 million from its $1 billion revolving credit facility, which was expanded to $1.4 billion via a $400 million accordion feature. Available cash, undrawn credit, and projected cash flow are expected to cover all financial obligations, including debt repayment from the Sandstorm Gold and Horizon Copper acquisitions, set to close in the fourth quarter of 2025.
This agreement strengthens Royal Gold’s portfolio and supports Zambia’s mining sector by facilitating efficient resource monetization.
