Ok Tedi Mining (OTML) has signed an agreement with INMET Mining to repurchase a 5% net smelter royalty (NSR).

Under the NSR repurchase agreement, Inmet will receive a cash payment of $335m in lieu of its entitlements under the NSR arrangement.

Under the prior arrangement for the NSR, Inmet would have received a cash payment equal to 18% of OTML’s working capital and a 5% net smelter royalty on revenues of product produced from the Ok Tedi mine throughout the mine life, which is expected to end by mid-2014.

The NSR repurchase is expected to be completed by the end of January 2011.