Solaris Secures US$200 Million From Royal Gold to Advance Warintza Project in Ecuador

Solaris Resources (SLS.TO, SLSR) on Wednesday said it signed a US$200 million financing arrangement with Royal Gold subsidiary RGLD Gold to advance the Warintza copper-gold project in Ecuador.

The funding package is composed of a gold stream and net smelter return royalty and the US$200 million cash consideration will be paid in three installments.

The first US$100 million tranche will be paid upon deal closing. The second US$50 million tranche will be made available following the publication of the pre-feasibility study and receipt of the environmental impact assessment technical approval. The third US$50 million tranche will be made available on the first anniversary of deal closing and completion of necessary filings.

Royal Gold will receive gold deliveries equivalent to 20 ounces per 1 million pounds of copper produced from the RGLD Gold area of interest, expected to represent only a small percentage of the gold over the life of mine.

For each ounce of gold delivered, Royal Gold will pay the equivalent of 20% of the spot price until 90,000 ounces have been delivered and 60% of spot price thereafter.

Royal Gold will receive a 0.3% net smelter return royalty on all metal production from the RGLD Gold Expanded AOI. The royalty will increase annually by 0.0375%, up to a maximum of 0.6%, until the first delivery of gold under the Stream or eight years following the closing date, whichever comes earlier.

The package provides the funds required to repay the company's senior debt facility with Orion Mine Finance Management and is expected to provide liquidity to fund activities through to a final investment decision.

Solaris' share price at last look gained 1% to US$3.99 in U.S. pre-market trading on Wednesday.