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First Quantum Minerals (FQM) has entered into a gold streaming agreement with RGLD Gold, a subsidiary of Royal Gold Inc., securing a US$1 billion upfront cash payment in exchange for future gold deliveries from its Kansanshi copper mine in Zambia.
According to a report from Mining Weekly first-quantum-secures-long-term-capital-through-gold-streaming-agreement-2025-08-05 on Tuesday, the agreement stipulates that FQM will deliver 75 ounces of gold per million pounds of recovered copper until a total of 425,000 ounces have been delivered.
The rate will then adjust to 55 ounces per million pounds for the next 225,000 ounces, followed by 45 ounces per million pounds thereafter.
In addition to the upfront cash, FQM will receive ongoing production payments equivalent to 20 percent of the prevailing spot gold price for each ounce delivered under the agreement.
It stated that this will increase to 35 percent once FQM either achieves an unsecured BB senior debt rating from a recognized ratings agency or maintains a net leverage ratio of 2.25 times or lower over three consecutive quarters, starting from Q1 2026.
The deal provides First Quantum with significant non-debt capital, boosting its financial flexibility amid the planned ramp-up of its S3 Expansion Project at Kansanshi.
The company also continues to work toward a resolution for its Cobre Panama mine, which has been suspended since November 2023 following a Panamanian Supreme Court ruling that declared its mining contract unconstitutional.
FQM Chief Executive Officer, Tristan Pascall, described the agreement as a “strong endorsement” of the Kansanshi operation and Zambia’s standing as a premier mining jurisdiction.
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“This partnership with Royal Gold validates Kansanshi’s multi-generational orebody and the long-term value it holds for stakeholders,” Pascall stated.
He added that the transaction was expected to significantly reduce the company’s net debt-to-earnings ratio, enhancing its capacity to fund capital projects, cover working capital requirements, and service existing loans.
Importantly, the structure of the streaming deal allows FQM to retain full exposure to copper production at Kansanshi, while continuing to benefit from spot gold prices. Based on 2026–2027 production guidance, the company estimates that approximately 84 percent of its total gold output will remain tied to spot market pricing.
The agreement also includes options for higher gold exposure and accelerated benefits, contingent on FQM’s financial performance and leverage position in the coming years.
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