Current Report Filing (8-k)
06 July 2016 - 7:22AM
Edgar (US Regulatory)
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):
July 5, 2016
ROYAL GOLD, INC.
(Exact name of registrant as specified in
its charter)
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
(Former name or former address, if changed
since last report.)
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):
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¨
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Written communications
pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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Soliciting material pursuant
to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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Pre-commencement communications
pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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¨
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Pre-commencement communications
pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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Item 1.01
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Entry into a Material Definitive Agreement.
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On July 5, 2016, Royal
Gold, Inc. (“RGI” or the “Company”) and its wholly-owned subsidiary, RGLD Gold AG (“RGLD”),
entered into a binding Commitment Letter (the “Commitment Letter”) with Centerra Gold Inc. (“Centerra”)
setting forth the terms and conditions of a future amendment to the Mount Milligan streaming agreement (the “Streaming Agreement”)
among RGLD, Terrane Metals Corp. (“Terrane”), the Company and Thompson Creek Metals Company Inc. (“Thompson Creek”)
in connection with the acquisition by Centerra of Thompson Creek by Plan of Arrangement under the Arrangement Agreement executed
between Centerra and Thompson Creek as announced on July 5, 2016 (the “Acquisition”). The obligation of RGLD, RGI,
Terrane and Thompson Creek to amend the Streaming Agreement is subject to the consummation of the Acquisition and other customary
conditions set forth in the Commitment Letter. Under the Commitment Letter, RGI also agreed to an exclusivity arrangement with
Centerra that prohibits RGI from negotiating and entering into any agreement with any person (other than Centerra) relating to
Terrane and Thompson Creek’s obligations under the Streaming Agreement (including any amendments to, or termination of, the
Streaming Agreement) until the earliest of (i) the closing or abandonment of the Acquisition, (ii) the date, if any, on which shareholders
of Thompson Creek decline to approve the Acquisition or (iii) November 30, 2016.
Pursuant to the terms
of the Commitment Letter, RGI and Centerra have agreed to amend the Streaming Agreement, effective on the closing of the Acquisition,
as follows:
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The existing 52.25% gold streaming interest will be amended to 35.0%;
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RGLD will obtain a 18.75% copper streaming interest at Mount Milligan at a price equal to 15% of
the spot price for each metric tonne of copper delivered;
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The existing restriction of $400 million on senior secured debt covered by the Mount Milligan assets
will be extended until RGLD receives the full return of its $781.5 million deposit (the “Payment Deposit”);
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Until RGLD has received the full return of the Payment Deposit and an additional 35,000 metric
tonnes of copper, Terrane will maintain a leverage ratio of total consolidated indebtedness to its earnings before interest, taxes,
depreciation and amortization of no greater than 3:1 (including intercompany debt that ranks parri passu with or in priority to
the Streaming Agreement);
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Upon the occurrence and during the pendency of an event of default by Terrane or Thompson Creek
under the Streaming Agreement, Terrane will not make distributions of cash or property to any of its affiliates; and
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RGLD will enter into an intercreditor agreement with lenders providing financing to Centerra in
connection with the Acquisition, pursuant to which RGLD will (i) retain its first priority security interest in 35.0% of the payable
gold produced from Mount Milligan and all proceeds thereof, (ii) obtain a first priority security interest in 18.75% of the payable
copper produced from Mount Milligan and all proceeds thereof, and (iii) otherwise agree to subordinate its security interest in
the Mount Milligan project on terms and conditions substantially similar to those contained in RGLD’s existing intercreditor
agreement.
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The Commitment Letter
contains customary representations and warranties that each party made to each other. The assertions embodied in those representations
and warranties are being made solely for the purpose of the Commitment Letter, which governs the contractual rights and relationships,
and allocates risks, among the parties thereto, and may be subject to important qualifications and limitations agreed to by RGI
and Centerra in connection with negotiating their respective terms. Moreover, the representations and warranties may be subject
to a contractual standard of materiality that may be different from that which may be viewed as material to stockholders. For the
foregoing reasons, no person should rely on the representations and warranties made by the parties to the Commitment Letter as
statements of factual information at the time they were made or otherwise.
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Item 7.01
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Regulation FD Disclosure.
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On July 5, 2016, RGI
announced the entry into the Commitment Letter. The press release is furnished as Exhibit 99.1 hereto. Also furnished herewith
as Exhibit 99.2 is a presentation that accompanied a conference call held on July 5, 2016.
The information furnished
under this Item 7.01, including the exhibit, shall not be deemed “filed” for purposes of Section 18 of the Securities
Exchange Act of 1934, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, except as
shall be expressly set forth by reference to such filing.
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Item 9.01
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Financial Statements and Exhibits.
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Exhibit No.
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Description
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99.1
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Press Release dated July 5, 2016 regarding entry into the Commitment Letter.
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99.2
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Presentation dated July 5, 2016.
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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.
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(Registrant)
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Dated: July 5, 2016
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By:
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/s/ Bruce C. Kirchhoff
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Name:
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Bruce C. Kirchhoff
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Title:
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Vice President, General Counsel and Secretary
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EXHIBIT INDEX
Exhibit No.
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Description
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99.1
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Press Release dated July 5, 2016 regarding entry into the Commitment Letter.
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99.2
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Presentation dated July 5, 2016.
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