OPERATOR: KIRKLAND LAKE GOLD INC.
ROYALTY: NSR: 0.25-15%
Franco-Nevada has multiple NSR royalties ranging from 0.25 to 15% over the Destor-Porcupine mineral trend just east of Timmins, Ontario spread over more than 120 km and estimated to cover over 340 km2. Kirkland Lake Gold Inc. (“KLG”) acquired St Andrew Goldfields (“St Andrew”) in January 2016 which previously owned and operated most of the properties along the trend on which Franco-Nevada has royalties. KLG is believed to be exploring different options for processing ore from various operations at its underutilized Macassa mill in Kirkland Lake, Ontario as well as its newly acquired Holt mill discussed below. The key properties include:
Holt: The Holt mine is the main producing asset that KLG acquired as part of the St Andrew transaction and includes the Holt mill complex. Franco-Nevada has a sliding scale NSR royalty beginning at 2% when the gold price is less than or equal to $500/ounce and increasing in 1% increments for each $100/ounce increase in the gold price, to a maximum of 10%. The operation re-started in 2011. The Holt mine has an ~7 year mine life based on current Mineral Reserves with additional potential further to the west and down-dip of the main zone.
Holloway: The Holloway mine, restarted in 2009, is located immediately north of the Holt property with ore processed at the Holt mill. Franco-Nevada has a sliding scale NSR royalty of 2% if the price of gold is less than $800/ounce, increasing by 1% for every $100/ounce increase in the price of gold, up to a maximum of 15%. The Holloway mine has an ~2 year mine life based on current level of Mineral Reserves.
Taylor: The Taylor mine (1% NSR) achieved commercial production in November 2015. The operation has an ~4-5 year mine life based on current level of Mineral Reserves with additional exploration potential.
Hislop: Franco-Nevada has a 4% NSR on the Hislop mine which is located approximately 50 km to the west of the Holt mill. The open-pit Mineral Reserve for the Hislop open-pit was fully depleted in 2014.
Other exploration: Additional exploration is targeting mineralization at the Holt Deep Zone 4 (down dip and west of the current workings) as well as areas in close proximity to Holloway. At Hislop, drilling on the northern boundary has indicated that Primero Gold Corporation’s Grey Fox discovery may continue onto the Hislop claims. There is also potential at the Aquarius deposit west of Taylor.
|Total Revenue to FNV ($ million)