TSX:FNV 82.53 -0.90 -1.08%
Volume 967,041
September 21, 2018
NYSE:FNV 63.95 -0.66 -1.02%
Volume 1,891,366
September 21, 2018
Gold 1,200.30 -8.03 -0.66%
Volume
September 21, 2018
Contact Share

LOCATION: ONTARIO, CANADA
ROYALTY: NSR: 0.25-15%
OPERATOR: KIRKLAND LAKE GOLD INC.

Franco-Nevada has multiple NSR royalties ranging from 0.25 to 15% over the Destor-Porcupine mineral trend just east of Timmins, Ontario spread over more than 120 km and estimated to cover over 340 km2. Kirkland Lake Gold Inc. (“KLG”) acquired St Andrew Goldfields (“St Andrew”) in January 2016 which previously owned and operated most of the properties along the trend on which Franco-Nevada has royalties. The key properties include:

Holt: The Holt mine is the main producing asset that KLG acquired as part of the St Andrew transaction and includes the Holt mill complex. Franco-Nevada has a sliding scale NSR royalty beginning at 2% when the gold price is less than or equal to $500/ounce and increasing in 1% increments for each $100/ounce increase in the gold price, to a maximum of 10%. The operation re-started in 2011. The Holt mine produced 66,677 ounces of gold in 2017 which was within the guidance range of 65,000-70,000 ounces. For 2018, gold production is expected to be similar to that of 2017 with a range of 65,000-75,000 ounces.

Taylor: The Taylor mine (1% NSR) achieved commercial production in November 2015. The operation produced 50,764 ounces of gold in 2017 which was short of the guidance range for 55,000-60,000 ounces. Drilling in 2018 will continue to target new mineralized extensions situated both at depth and along strike to the east of the Shaft Deposit and west of the West Porphyry Deposit. For 2018, gold production is expected to increase to between 60,000-70,000 ounces.

Holloway: The Holloway mine is located immediately north of the Holt property with ore processed at the Holt mill. Franco-Nevada has a sliding scale NSR royalty of 2% if the price of gold is less than $800/ounce, increasing by 1% for every $100/ounce increase in the price of gold, up to a maximum of 15%. The Holloway mine was placed on care and maintenance at the end of 2016 due to limited economic viability. No exploration is planned for Holloway in 2018.

Hislop: Franco-Nevada has a 4% NSR on the Hislop mine which is located approximately 50 km to the west of the Holt mill. The open-pit Mineral Reserve for the Hislop open-pit was fully depleted in 2014.

Other exploration: KLG has planned production for the Zone 7 (formerly referred to as the Ghost Zone) in 2018. Zone 7 is covered by a reduced royalty rate if developed by the end of 2018, but will revert back to either the Holt or Holloway sliding scale NSRs if not developed by such time. KLG is also actively exploring its full 120 km property along the Destor-Porcupine mineral trend.

ASSET HIGHLIGHTS:

  • Two operating mines in Holt and Taylor
  • Zone 7 expected in production in 2018
  • Large land position offers additional potential at higher gold prices

2017 2016 2015
Revenue to Franco-Nevada ($ million) $ 8.7 $ 10.7 $ 10.1