First Quantum Scores $1B Streaming Deal with Royal Gold

First Quantum’s $1 Billion Gold Streaming Deal with Royal Gold

Canadian miner First Quantum Minerals (TSX: FM) finalized a $1 billion g agreement with Royal Gold’s subsidiary (NASDAQ: RGLD). The deal provides First Quantum with upfront capital in exchange for future gold production from its Kansanshi copper mine in Zambia. This arrangement allows Royal Gold to purchase gold at discounted rates based on copper output, ensuring a steady stream of gold delivery over time.

First Quantum will deliver 75 ounces per million pounds of recovered copper until 425,000 ounces are reached, then 55 ounces per million pounds for the next 225,000 ounces, followed by 45 ounces thereafter. Additionally, First Quantum receives 20% of the spot gold price per ounce, which could rise to 35% depending on financial targets.

This streaming deal aligns with First Quantum’s strategy to increase gold exposure without compromising copper production. It also strengthens the company’s financial position as it advances the $1.3 billion S3 expansion at Kansanshi.

Strategic Impact of the Streaming Deal on First Quantum and Royal Gold

The $1 billion upfront payment will provide First Quantum immediate cash flow and improve financial flexibility. Royal Gold projects annual gold deliveries between 35,000 and 40,000 ounces over the next decade, starting with about 12,500 ounces in 2025. This consistent gold supply supports Royal Gold’s long-term revenue streams from a major mining asset.

Kansanshi’s combined copper and gold output makes it uniquely suited for streaming agreements. First Quantum can monetize its gold by-product while maintaining its core copper focus. The deal’s completion, expected imminently, will bolster both companies’ growth prospects in the competitive mining sector.

SuperMetalPrice Commentary:

This $1 billion streaming deal underscores a growing trend where miners monetize by-products to fund expansion. First Quantum leverages its copper-gold asset to unlock capital without equity dilution. Meanwhile, Royal Gold secures a valuable, long-term gold supply at favorable terms. As battery and renewable energy metals drive demand, such strategic partnerships will become increasingly vital in the metals market. Investors should watch how streaming deals affect both cash flow stability and exposure to fluctuating metal prices.