GOLD: Barrick streaming deal and debt tender offer

TORONTO – Barrick Gold has closed a gold streaming transaction with a subsidiary of Royal Gold involving production from the Pueblo Viejo gold mine in which Barrick holds a 60% interest in the Dominican Republic. Vancouver-based Goldcorp holds the remaining 40%.

Barrick will receive an immediate payment of US$610 million that is will use to pay down debt. Royal Gold will purchase 7.5% of Barrick’s share of Pueblo Viejo gold output up to 900,000 oz and 3.75% going forward. Royal will also purchase 75% of Barrick’s share of silver production up to 50 million oz and 37.5% thereafter.

Ongoing cash payments to Barrick are tied to the spot prices of gold and silver rather than fixed in advance. Royal Gold will pay the equivalent of 30% of spot price for the first 550,000 oz of gold and 23.1 million oz of silver delivered. After that, payments will double to 60% of prevailing spot prices.

Separately, Barrick announced that it and certain of its subsidiaries have begun a cash tender offer for selected outstanding notes. The terms and details of the offer are available in the recent news release posted at the company’s website.