Operator: Teranga Gold Corporation
Stream: Fixed gold deliveries / 6% gold stream
In December 2013, Franco-Nevada provided Teranga Gold Corporation (“Teranga”) with $135 million to fund the acquisition by Teranga of the remaining interests of the Oromin Joint Venture (“OJVG”). The OJVG owned the adjacent property which hosts several deposits representing future ore sources for Teranga’s neighbouring Sabodala mill. With the acquisition, Teranga now controls a sizable land package of 1,055 km2 which includes much of a 70 km strike length along a prospective greenstone belt.
Under the terms of the agreement between Franco-Nevada and Teranga, Teranga will deliver 22,500 ounces of gold annually over the first six years of the agreement. Following delivery of 135,000 ounces of gold, Franco-Nevada will receive 6% of gold production that is sourced from either the Sabodala or OJVG properties. Franco-Nevada will make ongoing payments for each ounce of gold delivered equal to 20% of the spot gold price. As of the end of 2015, Teranga has delivered 45,000 ounces.
2015 production of 182,282 ounces fell short of Teranga’s original expectations production between 200,000-230,000 ounces.
Production was impacted by a change in mine plan at Gora, impact of the rainy season and other minor factors. For 2016, Teranga expects production to increase to a range of 200,000-215,000 ounces with increased mill capacity and increased grade. Longer term, Teranga expected production to average approximately 200,000 ounces per year for nine years and 120,000 ounces per year for the remaining four and half years of the estimated 13.5 year mine life assuming no exploration success from its 1,055 km2 land package.
|Total Revenue to FNV ($ million)