Operator: Glencore PLC
Royalty: Precious Metals Stream
In February 2016, Franco-Nevada acquired a precious metals stream with reference to production from the Antapaccay mine for $500 million from Glencore and its subsidiaries. Antapaccay is located within the province of Espinar in Southern Peru–a district with a long mining history. The property also hosts the historic Tintaya open pit mine and related infrastructure which began operating in 1984. Glencore (Xstrata) invested in excess of $1.5 billion of initial capital to build and commission the Antapaccay open pit mine and plant, which commenced operations in 2012.
The Antapaccay open pit mine has been expanding throughput rates and production since late 2012. Franco-Nevada received 73,612 GEOs in 2016 from the Antapaccay stream and expects the stream deliveries to average 70,000 to 80,000 GEOs per year over the next 4 years. Under the streaming agreement, precious metal deliveries are initially referenced to copper in concentrate shipped. Franco-Nevada will receive 300 ounces of gold and 4,700 ounces of silver for each 1,000 tonnes of copper in concentrate shipped, until 630,000 ounces of gold and 10 million ounces of silver have been delivered. Thereafter, Franco-Nevada will receive 30% of the gold and silver shipped. Franco-Nevada will initially pay an on-going price of 20% of the spot price of gold and silver until 750,000 ounces of refined gold and 12.8 million ounces of refined silver have been delivered. Thereafter, the on-going price will increase to 30% of the spot price of gold and silver.
The stream is referenced to the entire Antapaccay concession covering approximately 997 km2. Glencore is currently studying the development of the Coroccohuayco deposit which is located within 10 km of the Antapaccay plant. Coroccohuayco hosts a 289 million tonne M&I Mineral Resource, a 13% increase to the 256 million tonnes estimated at the end of 2015. The Coroccohuayco Mineral Resource is approximately twice the copper grade of Antapaccay Mineral Reserves, and could potentially provide supplementary high grade ore later in the mine life. In addition, there are a number of large-scale regional targets and prospects on the Antapaccay concessions.
|Total Revenue to FNV ($ million)