Thompson Creek Metals has pre-sold a further 15 per cent of its future gold production from the Mount Milligan gold and copper mine to precious metals royalty company Royal Gold.
The deal, announced Thursday by the Denver-based companies, raises Royal Gold's share of the mine's production to 40 per cent in exchange for $581.5 million up front.
Royal Gold has also agreed to purchase the gold for the lesser of $435 an ounce or the prevailing market price.
Royal Gold said it has paid $252.6 million to Thompson Creek so far, and will pay $112 million following closing of the latest transaction and the remaining $216.9 million in scheduled quarterly payments starting in March.
Thompson Creek said it will use the money to finance a portion of the mine's construction costs.
Located 155 kilometres north of Prince George, the $1.3 billion mine is expected to start operating in late 2013.
"We believe that Royal Gold's participation in Mt. Milligan is an endorsement of the quality of the project that will transform our company into a diversified, base metals producer beginning late 2013 and significantly strengthen our company's financial performance," said Thompson Creek CEO Kevin Loughrey in a statement.
Average annual production over the current 22-year mine life is expected to be 81 million pounds of copper and 194,000 ounces of gold.
Production in years one through six is expected to be higher at 89 million pounds of copper and 262,000 ounces of gold per year.
