China Molybdenum seals $550 million precious metals streaming deal with Triple Flag

China Molybdenum Co (CMOC) has reached a deal with Triple Flag Precious Metals Corp that will see the latter pay US$550 million for future gold and silver production from the former’s Northparkes copper mine in Australia.

CMOC, which is listed in Shanghai and Hong Kong, will receive the cash upfront along with ongoing payments in return for gold and silver output from the mine.

The agreement between CMOC and Elliott Management-backed miner Triple Flag marks the first streaming deal involving a Chinese company. Royalty and streaming transactions have become more popular in recent years, particularly in the gold space.

‘Safe haven’ gold investment has driven the price to a nine-year high of more than $1,800 per ounce this year as the COVID-19 pandemic continues to create unprecedented economic uncertainty.

Analysts are expecting a steady flow of royalty and streaming deals this year as gold miners look to tap into fresh forms of financing for projects. In May, Franco-Nevada struck a $150 million deal with SolGold for future production from the Alpala copper-gold deposit in Ecuador.

“This transaction provides CMOC with a long-term financing arrangement at a compelling cost of capital and demonstrates significant value from the gold and silver by-product production from Northparkes,” said CMOC executive Li Chaochun.

“Additionally, CMOC maintains its core exposure to copper production in alignment with our future plans for the mine.”

Northparkes, located 380 km West of Sydney, produced 36,000 tonnes of copper, 25,000 ounces of gold and 308,000 ounces of silver last year. CMOC owns an 80% stake in the underground mine after acquiring it from Rio Tinto in 2013 for $830 million.