Background:
The Royalty Agreement granted H.R.S. Resources a 2% royalty on "net smelter returns" from ores and mineral products from the mine, which began production in 2014. A Streaming Agreement between Thompson Creek and Royal Gold allowed Royal Gold to purchase 35% of the mine’s gold and 18.75% of its copper at reduced prices. H.R.S. Resources contested that the Streaming Agreement should not impact the royalty calculations, as it involved sales at reduced rates below market value.

Key Legal Issues:

1. Whether the Streaming Agreement affected the calculation of royalties under the Royalty Agreement.
2. Whether hedging costs related to price risk management were legitimate deductions in calculating net smelter returns.
3. How the $781.5 million deposit from Royal Gold should be factored into the royalty calculation as deferred revenue.
4. A claim for punitive damages, alleging bad faith in royalty payment handling after the acquisition of Thompson Creek by Centerra Gold Inc.

Ruling:
The court favored Thompson Creek Metals, ruling that their royalty calculations and accounting practices complied with the Royalty Agreement.

Costs and Awards:
No punitive damages were awarded. Specific costs in favor of Thompson Creek Metals were not disclosed.