Barrick Gold seals $610m gold and silver streaming deal with Royal Gold subsidiary

29 September 2015 (Last Updated September 29th, 2015 18:30)

Barrick Gold has completed its $610m gold and silver streaming deal with RGLD Gold, relating to production at Pueblo Viejo mine in the Dominican Republic.

Barrick Gold has completed its $610m gold and silver streaming deal with RGLD Gold, relating to production at Pueblo Viejo mine in the Dominican Republic.

The agreement relates to Barrick's 60% stake in the Pueblo Viejo mine. Proceeds from the transaction will be used by Barrick to cut debt.

Under the agreement, Barrick will sell gold and silver to Royal Gold equivalent to 7.5% of its stake in the gold produced at the mine until the delivery of 990,000oz of gold.

"This agreement allows us to strengthen our balance sheet in the short-term, while preserving material exposure to higher gold and silver prices in the future."

Following the deal, Barrick will receive ongoing cash payments equivalent to 30% of the existing spot prices from Royal Gold for the initial 550,000oz of gold, as well as 23.1 million ounces of silver delivered.

Barrick Gold president Kelvin Dushnisky said: "This innovative agreement allows us to strengthen our balance sheet in the short-term, while preserving material exposure to higher gold and silver prices in the future."

Pueblo Viejo and its associated rights are 60% owned by Barrick under the joint venture agreement with Goldcorp.

According to Royal Gold, The deal is effective from 1 July 2015 for the gold stream, with the silver stream from 1 January 2016.

Located 100km north0west of the capital city of Santo Domingo, Pueblo Viejo mine is operated by the Pueblo Viejo Dominicana, a joint venture between Barrick (60%) and Goldcorp (40%).

Under agreement, Barrick will maintain a segregated cash collection account for receipt of dividends, as well as other distributions paid to the company by the Pueblo Viejo JV.