OPERATOR: YAMANA GOLD INC. / AGNICO EAGLE MINES LIMITED
ROYALTY: GR: 1.5%
In June 2011, Franco-Nevada purchased a 1.5% gross royalty on part of the Canadian Malartic gold project. The project is located in Quebec’s Abitibi mining district and is Canada’s largest gold producer. The royalty covers seven claims on the property including the central portion of the open-pit as shown in the schematic which equates to approximately 3 km2. Royalty payments are expected to fluctuate annually based on the location of mining relative to the royalty property. Yamana Gold Inc. and Agnico Eagle Mines Limited are now 50/50 joint operators of the Canadian Malartic mine following the 2014 acquisition of Osisko Mining Corporation.
For 2016, Canadian Malartic produced 585,028 ounces versus 572,000 ounces produced in 2015. Production in 2016 was higher than the 560,000-580,000 ounces forecast at the beginning of the year. Production is expected to steadily increase to 600,000 ounces in 2017, 650,000 ounces in 2018 and then slightly decrease in 2019 to 640,000 ounces.
The operators are aggressively drilling east of the open pit. A C$13.5 million drilling budget for 2016 was increased during the year. Both the Jeffery Zone and Odyssey Zones further east appear to be striking south-east on to Franco-Nevada’s royalty claims. Yamana has stated that drilling will continue into Q1 and Q2 of 2017 to develop Indicated Mineral Resources that could form the basis of a pre-feasibility study.
|Total Revenue to FNV ($ million)