Kirkland Lake Gold has decided to go to arbitration against Toronto-listed Centerra Gold, claiming the latter’s sale of royalty portfolio to investment firm Triple Flag Mining Finance Bermuda was in breach of an agreement.
The Canadian miner, which listed on the ASX last year, claimed that its subsidiary, Fosterville Gold Mine, had the right of first offer, or first refusal, in the event of a 2 per cent Fosterville royalty sale that was set out in an agreement with Centerra subsidiary, AMARC.
Centerra Gold’s $US155 million ($210 million) sale included the royalty portfolio of its wholly-owned subsidiary AuRico Metals, and 100 per cent common shares of AMARC. The deal was completed within a night and paid upfront in cash.
Kirkland Lake claimed that it previously sent notice to Centerra, AuRico and AMARC that any such sale would be contrary to the royalty agreement, unless Fosterville was afforded an opportunity to exercise its right of first offer or first refusal.
The royalty sale was part of a larger transaction between Centerra and Triple Flag, which included the $US45 million ($61 million) sale of a silver stream on the Kemess project in Canada, granting Centerra 100 per cent of its silver production.
Kirkland’s centrepieces include Fosterville gold mine in Victoria and Macassa gold mine in Ontario, with a total gold production target of over 620,000oz in 2018.