OPERATOR: BARRICK GOLD CORPORATION/PREMIER GOLD MINES LIMITED
ROYALTY: GR: 4-9% with AMR
The South Arturo project consists of a series of sediment hosted Carlin-style gold deposits adjacent to and including the former Dee gold mine, 60 km northwest of Elko, Nevada. The project is operated by a joint venture between Barrick (60%) and Premier Gold Mines Limited (“Premier”) (40%). Premier purchased its interest in the property in 2015 from Goldcorp. Franco-Nevada holds a sliding scale gross royalty (4-9%) on production from the Dee claims. The royalty agreement includes an annual minimum which is credited against any future production royalty payments.
The South Arturo mine achieved commercial production in August 2016. The operation is located in close proximity to Barrick’s Goldstrike where the ore is processed at the refractory facilities. The mine produced 223,145 ounces in 2016 (100% basis), in line with initial guidance of 225,000 ounces, which generated 11,160 GEOs and $13.8 million in revenue to Franco-Nevada. The 2016 payment was net of $3.1 million in advance minimum royalties paid.
The South Arturo mine is forecast to produce between 100,000-112,500 ounces in 2017. The decrease in year-over-year production is attributable to the planned wind down of the Phase 2 pit. Beyond 2017, the El Nino deposit will be targeted which is located immediately down-plunge of the Phase 2 pit. Permits for a potential underground mine at El Nino were submitted in 2016.
|Total Revenue to FNV ($ million)