Mt. Muro - Indonesia
| Royalty: | 3%-7% NSR |
|---|---|
| 2009 Revenue: | $2.2 M |
| Operator: | Straits Resources Limited |
Straits Resources Limited (“Straits”) operates the Mt Muro gold project under a 3rd Generation Contract of Work (“CoW”) agreement with the government of the Republic of Indonesia. This CoW covers 47,940 hectares and was entered into in 1985. Franco-Nevada has a 3% to 7% sliding scale NSR royalty on 90% of production. The royalty is capped after cumulative life-of-mine production totals 1.5 million ounces of gold from the property. The royalty rate is 7% for gold prices higher than $410/oz. At the end of 2009, approximately 1.43 million ounces have been produced from the royalty lands. For 2009, Franco-Nevada received $2.2 million in royalty revenue.
Production from the mine for 2009 was 37,377 ounces of gold and 208,553 ounces of silver, of which approximately 64% was on the COW subject to Franco-Nevada’s royalty, at cash costs of US$1,237/oz. Operational performance was hampered by bottlenecks and a lack of available ore for mining. However, Straits reported that new equipment mobilized towards the end of 2009 is showing improved production results.
Reserves and resources at Mt. Muro, as of June 2009, are 210,000 ounces of gold in reserve and 610,000 ounces of gold in resource. In its 2009 December Quarterly Activities Report, Straits reported a new production plan, which is forecast to deliver 320,000 recovered gold equivalent ounces over a minimum five year period with average cash cost of around US$600/oz.