First Quantum Announces $1.0 Billion Gold Stream

Executive Summary

• First Quantum Minerals entered a gold streaming agreement with Royal Gold’s subsidiary RGLD Gold AG, receiving an upfront cash payment of $1.0 billion.
• The transaction provides non‑debt capital to strengthen the balance sheet, fund capex, working capital and repay bank debt, markedly reducing net‑debt/EBITDA.
• Ongoing production payments give First Quantum 20%–35% of spot gold price per ounce delivered, with acceleration options that can cut stream deliveries by up to 30% if certain credit or leverage milestones are met.

Key Details

• Upfront Cash: $1.0 billion payable on August 6, 2025.
• Gold Delivery Formula (step‑down):
• 75 oz Au per million lbs Cu until 425,000 oz Au delivered.
• 55 oz Au per million lbs Cu for the next 225,000 oz Au.
• 45 oz Au per million lbs Cu thereafter.
• Production Payments to First Quantum:
• 20% of prevailing spot gold price per ounce delivered (baseline).
• Increases to 35% when either:
  • BB senior unsecured rating from Fitch or S&P, or
  • Net leverage ≤ 2.25× for any three consecutive quarters starting Q1 2026.
• Acceleration Options:
• Option A: Reduce stream rate & delivery thresholds up to 20% (value up to $200 M) upon achieving BB rating or net leverage ≤ 2.25× as above.
• Option B: Additional 10% reduction (value $100 M) when either:
  • BBB‑ – senior unsecured rating, or
  • Net leverage ≤ 1.25× for any four consecutive quarters.
• Use of Proceeds: Capital expenditures, general working capital, and repayment of existing bank loans; also to support ongoing debt‑capital‑market activities.
• Impact on Leverage: Expected substantial reduction in net‑debt/EBITDA ratio immediately after closing.
• Gold Exposure Retention: Approximately 84% of First Quantum’s 2026–2027 gold production will remain exposed to spot gold prices; full exposure retained for near‑surface gold zones at Kansanshi.
• Security: Stream is unsecured; guarantees provided by First Quantum and its Kansanshi‑related subsidiaries.
• Advisors & Counsel: RBC Capital Markets (financial advisor); Fasken LLP and Caledonian Consultants (legal counsel).

Notable Quotes

“Following a thorough evaluation of several deleveraging options, I am pleased to announce this milestone transaction which preserves exposure to all of the copper production at Kansanshi while still maintaining exposure to the majority of the Company’s gold production.” – Tristan Pascall, CEO, First Quantum Minerals Ltd.

All amounts are in United States dollars unless otherwise noted.