Chicago 10/02/2016 - Glencore completed a long-term streaming agreement between its wholly-owned subsidiary Narila Investments Ltd. and Franco-Nevada (Barbados) Corp for delivery of gold and silver at the Antapaccay mine in Peru, the miner said on Wednesday.
Under the agreement, Franco-Nevada will make an advance payment of $500 million to Narila by end of February.
The Antapaccay copper mine is located in the Espinar Province in southern Peru. It has annual copper output of 160,000 tonnes in concentrate and produces gold and silver by-product credits.
At part of the Narila responsibility, the company will delivery 300 ounces of gold per 1,000 tonnes of copper concentrate up to 630,000 ounces of deliverable gold and 30 percent of production thereafter.
Additionally, 4,700 ounces of silver per 1,000 tonnes of copper concentrate will be exchanged up until 10,000,000 ounces of silver have been delivered and 30 percent of silver production afterwards.
In return, Franco-Nevada will make ongoing payments of 20 percent of the spot gold and silver price per ounce delivered, which will climb to 30 percent of their respective spot prices after 750,000 ounces of gold and 12,800,000 ounces have been delivered.
In September, Glencore announced plans to cut $30 billion in debt by raising up to $2.5 billion of new shares, alongside additional capital preservation and debt reduction measures, which when taken together have an aggregate value of up to $10.2 billion.
Scotiabank Europe Plc will oversee the deal as a financial advisor to Glencore.
(Editing by Tom Jennemann)