OPERATOR: GOLDCORP INC.
ROYALTY: NPI: 5%
Franco-Nevada has a 5% NPI royalty that covers all of the original leased lands at Goldcorp’s Musselwhite operation. The area is estimated to cover 120 km2 in northwestern Ontario, 480 km north of Thunder Bay. The royalty also covers an area of interest surrounding the property as shown in the schematic. The mine is a fly-in/fly out underground operation which began operating in April 1997 and has produced over 3.0 million ounces of gold.
Franco-Nevada received its first payment under the NPI royalty in 2011 as the mine had then recovered all historical capital and operational costs. As the royalty is a profits interest, operating costs and investment capital are important parameters of the royalty. Musselwhite represents one of the lower cost operations in Goldcorp’s portfolio with 2017 all-in sustaining costs estimated at $715/oz. Production is expected to be 265,000 ounces in 2017 versus 261,000 ounces produced in 2016.
In July 2016, Goldcorp decided to move ahead with the Materials Handling project. The project will enable hoisting of ore through an underground winze which will result in reduced reliance on high-cost truck haulage leading to improved energy efficiency, reduced ventilation requirements, reduced mining costs, enhanced production profile and potential to extend mine life through exploration success. Following completion of the winze, which is expected in the first quarter of 2019, incremental production of approximately 20% is anticipated and operating costs are expected to be reduced by approximately 10% for the life of the mine.
|Total Revenue to FNV ($ million)