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Royal Gold Raises $235 Million in Public Offering

Proceeds Will Be Used to Buy Interest in Chilean Gold Mine

Written by Luke Burgess
Posted April 15, 2009

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Precious metals royalty manager Royal Gold Inc. [NASDAQ: RGLD, TSX: RGL] netted over $235 million in a public offering of shares.

The Denver-based company sold 6,500,000 shares of common stock at $38.00 per share and has granted the underwriters a 30-day option to purchase up to 975,000 additional shares of common stock to cover over-allotments, if any.

Royal Gold says that it will use the proceed of the financing to buy an interest in the gold production at the Andacollo mine in Chile, which is owned by a subsidiary of Teck Cominco Ltd. [NYSE: TCK].

Royal will receive 75% of the gold produced from the sulfide portion of the Andacollo deposit until 910,000 payable ounces of gold have been sold, after which Royal Gold will receive 50% of all future payable gold production from the property, for a purchase price of .$100 million in cash and approximately 4.5 million shares of RGLD.

Teck estimates the sulfide reserves to contain proven and probable mineral reserves of approximately 393.5 million tonnes grading 0.13 grams of gold per tonne. This equates to 1.6 million ounces of gold in the sulfide reserves which will be mined over 20 years of production. Over the first 10 years of the mine life, Teck expects production will average 53,000 ounces of gold.

- luke

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