11th Feb 2016 07:09
LONDON (Alliance News) - Glencore PLC on Wednesday said it has signed a long-term streaming agreement with Franco-Nevada Corp that will result in Glencore supplying silver and gold to the company from the Antapaccay mine in Peru.
The sales agreement will assist Glencore in reducing its debt, the company's current priority, as Franco-Nevada will make an advanced payment of USD500.0 million to Glencore's subsidiary once the agreement is finalised, which is expected to occur before the end of this month.
In return, Glencore's subsidiary, Narila Investments Ltd, will deliver gold and silver produced at the mine to Franco-Nevada. The amount of gold and silver shipped will be dependent on the amount of copper being produced at the mine.
Narila will deliver 300 ounces of gold per 1,000 tonnes of copper in concentrate produced until total deliveries hit 630,000 ounces, after which, 30% of all gold production from the mine will be shipped to Franco-Nevada.
In addition, 4,700 ounces of silver per 1,000 tonnes of copper in concentrate will be delivered by Narila until 10.0 million ounces of silver has been delivered, after which 30% of all silver production will be shipped to Franco-Nevada.
Franco-Nevada will make ongoing payments of 20% of the spot gold and silver price per ounce delivered which will increase to 30% of the respective spot prices after 750,000 ounces of gold and 12.8 million ounces of silver have been delivered, said Glencore.
By Joshua Warner; [email protected]; @JoshAlliance
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