Centerra sells royalty portfolio, Kemess silver stream for $200m

VANCOUVER (miningweekly.com) – Canadian gold miner Centerra Gold has agreed to sell its royalty portfolio and silver stream on the Kemess project, in British Columbia, to Triple Flag Mining Finance Bermuda for $200-million.

The royalty sale comprises the sale of subsidiary AuRico Metals’ (AMI’s) royalty portfolio, together with new 0.5%, 2% and 2% net smelter return royalties on AMI’s Kliyul, Chuchi and Redton exploration properties, respectively, for up-front cash proceeds of $155-million, subject to customary adjustments, including an economic effective date of April 1. 

The Kemess stream comprises all the silver output from the Kemess project, estimated at 4.5-million ounces over a 12-year mine life.

Under the terms of the agreement, Triple Flag will pay AMI $45-million in cash as an advance payment, payable in tranches following a Centerra board decision to proceed with construction of the Kemess underground project and the three succeeding anniversaries of such date, respectively. Triple Flag will also make ongoing production payments pegged at 10% of the then market price for each ounce of silver delivered.

“The royalty sale and the Kemess stream represent a compelling way for the company to realise significant cash proceeds from noncore assets, which will further enhance our strong balance sheet and assist in funding Centerra’s growth development pipeline,” Centerra president and CEO Scott Perry stated.

Triple Flag CEO Shaun Usmar pointed out that the high-quality Centerra precious metals royalty portfolio is a “perfect fit” for Triple Flag’s substantial and growing portfolio of precious metal royalty and streaming assets. “The Kemess silver stream also nicely complements our suite of growth assets.”

The transaction is expected to be completed during the second quarter, after satisfying customary conditions to closing.