Unassociated Document
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 OR 15(d) of
The
Securities Exchange Act of 1934
Date of
Report (Date of earliest event reported) October 28, 2010
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ROYAL GOLD, INC.
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(Exact name of registrant as
specified in its
charter)
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Delaware
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001-13357
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84-0835164
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(State
or other jurisdiction
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(Commission
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(IRS
Employer
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of
incorporation)
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File
Number)
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Identification
No.)
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1660
Wynkoop Street, Suite 1000, Denver, CO
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80202-1132
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(Address
of principal executive offices)
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(Zip
Code)
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Registrant’s
telephone number, including area code 303-573-1660
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(Former name or former
address, if changed since last
report.)
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Check the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions (see General Instruction A.2. below):
o Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
o Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
o Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
o Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
Item
1.01 Entry into a Material
Definitive Agreement
As
previously disclosed in Royal Gold, Inc.’s (“Royal Gold”) Current Report on Form
8-K filed on July 8, 2010, on July 1, 2010, Royal Gold entered into two separate
assignment of rights agreements with two private Chilean citizens whereby Royal
Gold acquired the rights to an additional 0.75% net smelter return (“NSR”)
sliding-scale royalty on the Pascua-Lama project, which is owned and operated by
Barrick Gold Corporation (“Barrick”) and located on the border between Argentina
and Chile, for a purchase price of $53 million. The royalty interest
acquired applies to the production on the Chilean side of the Pascua-Lama
project. This additional interest was purchased in separate
transactions from two private Chilean citizens for a total acquisition price of
$53 million, of which amount, $25 million was paid on July 1, 2010, to acquire a
0.35% royalty, and of which $28 million was deferred until October to acquire
the remaining 0.40% royalty.
On
October 28, 2010, Royal Gold completed the deferred portion of the transaction
and entered into two separate assignment of rights agreements with the same
private Chilean citizens pursuant to which Royal Gold paid the remaining $28
million for the remaining 0.40% royalty.
As a
result of the July 1, 2010 and the October 28, 2010 transactions, Royal Gold
reduced its future payment obligations and obtained additional rights to receive
a contingent payment with respect to the portion of the Pascua-Lama royalty
acquired in the International Royalty Corporation (“IRC”) acquisition as
follows: (1) Royal Gold’s obligation to pay to certain individuals who held the
royalty in the event that gold prices exceed $600 per ounce for any six month
period during the first 36 months of commercial production from the project was
reduced from $10.4 million to $8.4 million, (2) Royal Gold’s contingent
obligation to pay $6.4 million to these individuals to extend 24% of the royalty
interest beyond a 14 million ounce production cap that was contractually imposed
upon IRC was reduced to $4.4 million (approximately 20% of Royal Gold’s total
royalty remains subject to the 14 million ounce production cap), and (3) Royal
Gold increased its interest in two one-time payments from $500,000 to $1.5
million per payment, which are payable by Barrick upon the achievement of
certain production thresholds at Pascua-Lama.
Furthermore,
as previously disclosed, as a result of the July 1, 2010 and the October 28,
2010 transactions, Royal Gold acquired a 0.20% NSR fixed-rate copper royalty
that takes effect after January 1, 2017, increasing Royal Gold’s copper royalty
interest in the Pascua-Lama project to 1.05%.
An
English translation of the form of October 28, 2010, assignment of rights
agreement is filed as Annex B to the Form of Assignment of Rights and Assignment
of Rights Promise filed as Exhibit 10.1 of Royal Gold’s Current Report on Form
8-K which was filed on July 8, 2010, and is incorporated into this Item 1.01 by
reference in order to provide investors with information regarding the terms of
the October 28, 2010, agreements. Except for status as the
contractual documents that establish and govern the legal relations among the
parties thereto with respect to the transactions described above, the assignment
of rights agreements are not intended to be a source of factual, business or
operational information about the parties.
Item
2.01 Completion of
Acquisition or Disposition of Assets
The
information set forth in Item 1.01 of this Current Report on Form 8-K is
incorporated into this Item 2.01 by reference.
Item
8.01 Other
Events
On
October 28, 2010, Royal Gold issued a press release announcing the purchase of
additional royalty interests on the Pascua-Lama project. A copy of
the press release is filed herewith as Exhibit 99.1 and incorporated into this
Item 8.01 by reference.
Item
9.01 Financial Statements
and Exhibits
(d)
Exhibits
10.1 Form
of Assignment of Rights Agreement between Royal Gold, Inc. and certain
individuals dated October 28, 2010 (filed as Annex B to Exhibit 10.1 to the
Company's Current Report on Form 8-K on July 8, 2010 and incorporated herein by
reference)
99.1 Press
Release dated October 28, 2010.
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the Registrant has
duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
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Royal
Gold, Inc.
(Registrant)
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Dated: October
29, 2010
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By:
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/s/
Karen Gross |
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Name: |
Karen
Gross |
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Title: |
Vice
President and Corporate Secretary |
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EXHIBIT
INDEX
| Exhibit
No. |
Description |
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99.1
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Press
Release dated October 28,
2010
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