Dee (Storm/Arturo) - Nevada
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4% to 9% NSR¹ 1,252,000 oz M&I / 13,000 oz Inf. (Au) Barrick Gold Corporation (60%) in joint venture with Goldcorp (40%) |
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Franco-Nevada holds a gross royalty on production from a portion of the Dee Gold open pit / underground complex. The agreement includes an AMR payment provision during non-producing periods, which is currently paying $200,000 per year. Open pit operations were discontinued in 2001. Exploration on and adjacent to the property led to the discovery of the Storm and South Arturo deposits. The underground “Storm” deposit, which lies mostly to the north of the royalty property, has been developed and went into production in late 2006. The Dee Gold pit was used for decline access into the underground mine. A production royalty from the Storm operation would only be payable to Franco on production from the Dee claims, which may occur late in the mine’s life. The South Arturo deposit lies entirely on the Dee royalty claims and is being actively drilled by Barrick, with positive results announced in each of the past two years. It is anticipated that South Arturo will likely be mined by conventional open-pit methods, utilizing heap leach processing.
Franco-Nevada owns a sliding scale NSR royalty for production from the Dee claim portions of either the Storm or the South Arturo deposits, with the royalty rate ranging from 4% to 9% depending upon the production rate, the dollar value per ton and certain metallurgical characteristics of the ore. Once any royalty burdened production begins, the past AMR payments are credited against the production royalty payments.
¹ Sliding scale NSR based on dollar value of ore (CPI indexed).