Barrick Gold Corp. entered into a gold and silver streaming agreement with a unit of Royal Gold Inc. for production linked to Barrick’s 60 percent interest in the Pueblo Viejo mine in the Dominican Republic.
In return, Royal Gold agreed to make an upfront cash payment of $610 million plus continuing payments for metal delivered under the agreement, the Toronto-based miner said Wednesday in a statement distributed by Marketwired.
Gold miners globally are striving to lower costs and debt after prices slumped to five-year lows as dollar gains and the prospect of higher U.S. interest rates reduce demand for alternative investments as an inflation hedge.
Barrick pledged to cut debt by at least $3 billion this year. In May, it sold a 50 percent stake in its Porgera mine in Papua New Guinea to Zijin Mining Group Co. for $298 million. Two days earlier, it agreed to sell its Australian Cowal mine to Evolution Mining Ltd. for $550 million. Last week it announced the sale of a stake in its Zaldivar copper mine in Chile for about $1 billion.
Under terms of the pact, Barrick will deliver 7.5 percent of its portion of the gold produced at Pueblo Viejo to Royal Gold until 990,000 ounces have been delivered, and 3.75 percent after that. Goldcorp Inc. owns 40 percent of Pueblo Viejo.