Mr. Steve Sharpe of Euromax reports

EUROMAX RESOURCES ANNOUNCES US$175 MILLION GOLD STREAMING AGREEMENT WITH ROYAL GOLD

Euromax Resources Ltd., together with its wholly owned subsidiaries Euromax Resources (Macedonia) U.K. Ltd., Euromax Resources (Macedonia) Ltd. and Euromax Resources DOO Skopje, has entered into a $175-million (U.S.) gold streaming agreement with RGLD Gold AG, a wholly owned subsidiary of Royal Gold Inc., to finance the next stages of development and construction of the company's Ilovitza copper-gold project in Macedonia.

Subject to conditions precedent, including the execution of requisite security documentation, advances under the streaming agreement will be available in three principal tranches:

• An initial tranche of $7.5-million (U.S.) within 90 days from the date of signing;
• A second tranche of $7.5-million (U.S.) on the first anniversary of the signing date;
• A third tranche of $160-million (U.S.) toward the capital cost of the project.

The receipt of the initial tranche is also subject to the company raising not less than $5-million in equity, for which it has already received a conditional proposal, the terms of which are currently being reviewed, and receipt of the second and third tranches is subject to specific conditions precedent related to continuing development of the project.

The first two tranches of the streaming agreement are to be used to further the development of the project in respect of project permitting and the completion of a definitive feasibility study and front-end engineering and design planned for 2016. The third tranche is to be used, pro rata with other sources of finance, to finance all capital expenditures at the project.

Under the streaming agreement, the Euromax group will deliver physical gold in an amount equal to 25 per cent of payable gold produced from the project until 525,000 ounces have been delivered to Royal Gold, and 12.5 per cent thereafter for life of mine. Royal Gold will purchase the gold delivered at a cash purchase price of 25 per cent of the London p.m. gold fixing price as quoted by the London Bullion Market Association on the date of delivery for each ounce delivered and shall apply the balance as a reduction against the $175-million (U.S.) advance payment. No interest shall be payable on the advance payments.

The streaming agreement itself together with a material change report will be filed on SEDAR. Raymond James acted as financial adviser to Euromax in respect of the streaming agreement.

Commenting on this announcement, Varshan Gokool, chief executive officer, said: "The commitment of $175-million (U.S.) announced today goes far further than just addressing our phase 1 financing needs and allows us to progress on track with the DFS and FEED program for delivery in 2016. Consistent with our financing strategy we have been able to leverage the asset value of Ilovitza thereby minimizing dilution to shareholders. Importantly, the stream represents only 14 per cent of our gold equivalent production and will satisfy 31 per cent of our expected construction capital expenditure and further improve the project IRR.

"This stream financing also keeps intact and builds the foundations for the phase 2 financing for which we intend to use project finance debt to maximize the gearing of the project. The streaming agreement incorporates intercreditor principles and debt headroom for such project financing right from the start, to ensure the efficient execution of the phase 2 financing."

Commenting on this announcement, Steve Sharpe, president and chief executive officer, said: "We are absolutely delighted to be able to welcome Royal Gold as long-term partners at Ilovitza. We believe their commitment, which follows extensive technical, environmental and legal due diligence, is a strong endorsement of the Ilovitza project."

Royal Gold will have the benefit of a first-priority security interest on all assets of the company in respect of the project to secure all obligations of the company under the streaming agreement, although under the terms of the streaming agreement, the company is also permitted to raise up to $215-million (U.S.) of senior-ranking debt finance to finance mine construction and operations, as well as capital equipment leases and equipment financing customary for similar projects.

Royal Gold's security interest will be subordinated to that of the permitted senior finance under arrangements to be agreed with the senior financiers on the essential intercreditor terms specified in the streaming agreement. The security granted to Royal Gold will fall away when its entire advance payment has been credited against deliveries.

Receipt of the second tranche will be subject to satisfaction of a number of conditions, including Royal Gold being satisfied with the progress of the DFS and environmental and social impact assessment and the results at that time, the project's position in relation to relevant permits and Euromax's access to sufficient financing to complete the DFS and secure all approvals necessary for development.

Receipt of instalments of the third tranche pro rata with other sources of financing will be subject to the satisfaction of a number of conditions, including Royal Gold being satisfied with the final results of the DFS and the environmental and social impact assessment, that all necessary permits and approvals for construction have been received and that the Euromax group has access to sufficient financing to finance all construction costs and, to the extent financed by way of a credit facility, that all material conditions precedent to a drawdown under the said credit facility have been satisfied.

The streaming agreement and a material change report will be filed on SEDAR.

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