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Chieftain Metals Signs US$60M Gold and Silver Purchase Agreement With Royal Gold

Chieftain Metals Inc. (CFB.TO) announced it has entered into a gold and silver purchase transaction with a subsidiary of Denver-based corporation Royal Gold, Inc. (RGL.TO) to sell a portion of the precious metals stream expected to be produced at the Tulsequah Chief mine. Chieftain will receive an initial, up-front advance payment from Royal Gold for US$10-million following closing, with additional advance payments of up to US$50-million for the project build (upon certain conditions being met) that will be pro-rated during the development of the project.

The advance payments and future proceeds will allow Royal Gold to purchase, upon production of the Tulsequah Chief mine: 12.50% of payable gold at $450/ounce for the first 48,000 ounces delivered, decreasing to 7.50% thereafter at $500/ounce; and 22.50% of payable silver at $5.00/ounce up to 2,775,000 ounces, decreasing to 9.75% thereafter at $7.50/ounce.

The recently completed Preliminary Economic Assessment announced by the Company in a press release dated June 14, 2011 established a base project with robust economics which estimates that approximately 46% of Chieftain's Net Revenues will consist of gold and silver revenue streams. The PEA states that it is anticipated that the project will produce 6.28mm tonnes of mineable resource with an average of 45,000 ounces of payable gold and 1.4mm ounces of payable silver per annum; or 387,000 payable ounces of gold and 12,546,000 payable ounces over the current life of the mine.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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