RGLD Gold has signed a $175m agreement with New Gold to acquire a percentage of the gold and silver production from the Rainy River project in Canada.

Located 65km north-west of Fort Frances in western Ontario, the Rainy River project is scheduled to produce an average of 325,000oz of gold a year over its first nine years of production.

Go deeper with GlobalData

Premium Insights

The gold standard of business intelligence.

Find out more

Related Company Profiles

View all

The combined open-pit underground operation has a capacity to produce 21,000t per day.

RGLD has received permits to begin major earthworks at the operation.

"The Rainy River Project fits well into our portfolio and met all our criteria for new investments with nearly four million ounces of gold reserves."

As of mid-2015, detailed engineering is 95% complete and the company spent 14% of the total development capital estimate of $877m.

See Also:

Royal Gold president and chief executive officer Tony Jensen said: "The Rainy River Project fits well into our high-quality portfolio and met all our criteria for new investments with nearly four million ounces of gold reserves, continued exploration upside and projected cash costs below $600 per ounce.

How well do you really know your competitors?

Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.

Company Profile – free sample

Thank you!

Your download email will arrive shortly

Not ready to buy yet? Download a free sample

We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form

By GlobalData
Visit our Privacy Policy for more information about our services, how we may use, process and share your personal data, including information of your rights in respect of your personal data and how you can unsubscribe from future marketing communications. Our services are intended for corporate subscribers and you warrant that the email address submitted is your corporate email address.

"We are particularly pleased to add another piece of business in Canada and partner with New Gold, a company that is well-known for its development track record and operational expertise."

As part of the deal, Royal Gold will pay $100m to New Gold at closing and $75m once capital spending on the project is 60% complete.

New Gold will deliver 6.5% of the gold produced at Rainy River to Royal Gold until 230,000oz have been delivered, and later on deliver 3.25%.

Under the purchase and sale agreement, New Gold will deliver gold and silver to Royal Gold on a monthly basis, which in turn plans to sell the gold within a few weeks of receiving each delivery.