Spanish Mountain Gold (SPA.V) on Tuesday said it has entered into a royalty agreement with Wheaton Precious Metals (WPM.TO) on the Spanish Mountain Gold project for total cash proceeds of US$55 million.
Under the agreement, Wheaton will acquire a 1.5% net smelter returns royalty on gold and silver production from the Spanish Mountain Gold project in British Columbia.
The proceeds will be paid in three installments. The first installment of $22.5 million will be received in the next few weeks. The second installment of $12.5 million is payable following the completion of 60,000 meters of drilling. The third installment of $20 million is payable on the receipt of approvals for the construction, development and operation of a mine at the project.
Spanish Mountain Gold may buy back one-third of the NSR if it undergoes a change of control prior to Dec. 31, 2030, or the achievement of a completion test based on actual throughput at the mine compared to the target, whichever comes earlier.
If the company has not fully achieved the completion test on or before April 1, 2030, the percentage of the NSR will increase up to 0.15%, unless the company chooses to pay Wheaton $16 million.