Operator: Noront Resources Ltd.
Royalty: 2-3% NSR
In April, 2015, Franco-Nevada acquired royalty rights in the Ring of Fire mining district of Ontario by providing a loan and royalty financing to Noront Resources Ltd. (“Noront”). The financing package enabled Noront to acquire the mining claims held by subsidiaries of Cliffs Natural Resources Inc. (“Cliffs”) in the Ring of Fire mining district. Following the close of the transaction, Noront holds a total of approximately 360 mining claims in the emerging mining camp, located 500 km northeast of Thunder Bay.
Franco-Nevada provided Noront with a $25 million loan for a period of five-years at a 7% interest rate which is secured by the acquired Cliffs properties. In return, Franco-Nevada received a 3% royalty over the Black Thor chromite deposit, a 2% royalty over all of Noront’s property in the region (excluding the Eagle’s Nest deposit), 2% on certain other properties previously being advanced by Cliffs as well as a number of other third party exploration royalties. Franco-Nevada paid an additional $3.5 million in cash as part of the granting of the royalty over the existing Noront property. The total royalty concession is estimated to cover 1,000 km2. The royalty package provides Franco-Nevada with a long-term interest in a potential new mining camp with exposure to a world-class chromite resource.