Operator: Tahoe Resources Inc.
ROYALTY: NSR: 2.25%
Franco-Nevada acquired a 2.25% NSR royalty on Tahoe Resources Inc.’s (“Tahoe”) Timmins West property in February 2012. The royalty covers a large land package of approximately 130 km2 to the west of the City of Timmins, Ontario which hosts the Timmins and Thunder Creek deposits as well as the 144 exploration zones and the Gold River Trend. In 2016, Tahoe acquired Lake Shore Gold Corp. (“Lake Shore”), the previous operator of the mine.
The Timmins properties (includes Bell Creek on which Franco-Nevada does not have a royalty) produced approximately 158,800 ounces in 2016 which was below guidance set by Lake Shore at the beginning of the year. The production figure includes 36,800 ounces produced in Q1/2016 prior to the acquisition of Lake Shore by Tahoe. For 2017, production is expected to increase to 165,000-185,000 ounces. This estimate includes production from Bell Creek. Progress was made on the infrastructure development at the 144 Gap Deposit and included ramp, raise and lateral development to access the Mineral Resource.
Drilling at the Timmins West Complex focused on definition of Mineral Resources at the 144 Gap Deposit and extensional drilling at Timmins Mine Deep, 144 Trend and Gold River Trend. Probable Mineral Reserves at Timmins West declined in 2016 due to mine depletion and Mineral Resource model reinterpretation. Tahoe expects a significant growth in Mineral Reserves with the expected release of the initial Mineral Reserve for the 144 Gap Deposit scheduled for the third quarter of 2017.
|Total Revenue to FNV ($ million)