OPERATOR: KIRKLAND LAKE GOLD INC. / Yamana Gold Inc. / Agnico Eagle Mines Limited
ROYALTY: NSR: 2-5.5%; NPI: 20%
Franco-Nevada has various royalties covering approximately 170 km2 of the Larder Lake and Main Breaks in the historic Kirkland Lake gold camp of Ontario. KLG has the main interests in the area and operates the Macassa mine which includes production from the Main/’04 Break and the high-grade South Mine Complex (“SMC”).
Franco-Nevada’s royalty interests with KLG include:
- An overlying 2.5% NSR on all of KLG’s properties (including the Macassa mine) which was acquired in 2013 for $50 million and subject to a partial buyback option
- An underlying 20% profit-based royalty immediately to the south-west of the SMC as shown in the inset of the schematic
- An underlying 2-3% NSR on claims to the west of current operations
- An underlying 2% NSR royalty on claims that KLG purchased from Queenston Mining Inc. in July 2012
Based on the current Mineral Reserve and conservative conversion of its M&I Mineral Resource, KLG estimates that the Macassa mine has a 14 year mine life. Production in 2016 is expected to range between 160,000-180,000 ounces increasing to a range of 170,000-190,000 ounces in 2018. Regional exploration drilling to the east of the SMC is ongoing which may advance the SMC onto the Amalgamated Kirkland claims shown in the schematic below (area D). Franco-Nevada believes that there will be continued exploration success on its royalty lands. Franco-Nevada also has a 2% NSR royalty covering the majority of claims held in the Kirkland Lake gold camp by Yamana Gold Inc. (“Yamana”) and Agnico Eagle Mines Limited (“Agnico Eagle”) from their acquisition of Osisko Mining Corporation (“Osisko”) in April 2014. Franco-Nevada’s royalties cover the Upper Canada, Anoki-McBean and Canadian Kirkland deposits.
|Total Revenue to FNV ($ million)