Spanish Mountain Gold has signed a royalty agreement with Wheaton Precious Metals to sell a 1.5% net smelter returns royalty (NSR) on its gold and silver production from the Spanish Mountain Gold project in British Columbia (BC), Canada.
The transaction is valued at $55m and will be disbursed in three instalments.
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The initial payment of $22.5m is anticipated in the coming weeks.
A second instalment of $12.5m will be made after the completion of 60,000m of drilling at the Spanish Mountain Gold project.
The final payment of $20m is contingent upon obtaining necessary approvals under BC’s Environmental Assessment Act for the mine’s construction and operation.
Spanish Mountain Gold president, CEO and director Peter Mah said: “We are thrilled to partner with Wheaton. Entering into the definitive financing agreement propels the Spanish Mountain Gold project feasibility study forward, which the company aims to complete in 18 months, enabling a build decision in 2028.
“This financing secures the company’s vision and strategy as an emerging precious metals developer in the Tier 1 Cariboo District, BC, Canada.”
Spanish Mountain Gold retains the option to repurchase one-third of the royalty if a change of control occurs before 31 December 2030 or upon completion of a specified throughput test at the mine.
If the test is not completed by 1 April 2030, the royalty percentage could increase by up to 0.15%.
Alternatively, the company can choose to pay Wheaton $6m to avoid this adjustment. This condition applies annually until the test is fulfilled.
National Bank Financial provided advisory services to Spanish Mountain Gold for this transaction.
The Spanish Mountain Gold project is situated approximately 6km from Likely in the Cariboo region, roughly 70km north-east of Williams Lake.
The project’s total measured and indicated mineral resources are 292.1 million tonnes (mt) at 0.44 grams per tonne (g/t) gold, amounting to 4.16 million contained gold ounces.
Additionally, the inferred mineral resources comprise 40.3mt at 0.40g/t gold, equalling 512,000 contained gold ounces.
