Mine financing company Triple Flag Precious Metals Corp. said on Sunday it has agreed to pay US$550-million upfront as part of a streaming financing deal with China Molybdenum Co. Ltd. (CMOC) for future production of precious metals at CMOC’s Northparkes mine in Australia.
Streaming transactions are a type of alternative financing in the mining industry where funds are provided upfront to a miner in exchange for the sale of a fixed amount of future production of metals at a discounted price.
The deal, between units of the two companies, gives Triple Flag rights to a majority of gold and silver to be produced at the mine in New South Wales until the Toronto-based company receives 630,000 ounces of gold and nine million ounces of silver.
Thereafter, Elliott Management-backed Triple Flag would continue to receive less than half of the gold and silver produced at the mine.
On top of the US$550-million upfront payment, Triple Flag would also pay CMOC 10 per cent of the spot gold and spot silver price for each ounce at the time of each delivery.