Operator: Teck Resources Limited
Royalty: NSR: 1.5%
Franco-Nevada has a 1.5% NSR royalty covering the Relincho copper/molybdenum property. The Relincho property is located in the 3rd Region of Chile approximately 50 km northeast of the City of Vallenar and 650 km north of Santiago at an elevation of 1,500 to 2,000 metres above sea level. The 1.5% NSR is subject to a maximum price of $6.00/lb copper and threshold price of $1.50/lb copper, inflation adjusted. No royalty is paid if the average price for the quarter is less than the threshold price and royalty payments commence after four years of commercial production. Franco-Nevada acquired the royalty through its acquisition of Lumina Royalty Corp. in December 2011.
Relincho was being advanced by Teck which announced in August 2015 that is was forming a 50/50 joint venture with Goldcorp to combine their respective El Morro and Relincho projects, located approximately 40 kilometres apart in the Atacama region of Chile, into a single project. By combining the two projects, there will be will be significant reductions to infrastructure requirements and thus initial capital, including utilizing a single desalination plant, a single port, a single transmission line, a single concentrator and a common tailings facility.
The combined project is one of the largest undeveloped copper-gold-molybdenum projects in the Americas. The integrated project allows for the optimization of both resources, resulting in a longer mine life of at least 32 years, based on existing Mineral Reserves, with exploration potential across the combined property. Initial stage development contemplates a single line mill and concentrator facility with an initial capacity in the range of 90,000-110,000 tonnes per day to produce an average of approximately 190,000 tonnes of copper and 315,000 ounces of gold per year over the first full 10 years. In combination with community consultation, a pre-feasibility study is expected to commence in early 2016 and be completed in 12-18 months. Assuming a positive pre-feasibility study, a feasibility study would be initiated thereafter.
|Total Revenue to FNV ($ million)