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Franco-Nevada

Golden Highway (Au)

LOCATION: Ontario, Canada
OPERATOR: Kirkland Lake Gold Inc.
ROYALTY: NSR: 0.25-15%

Franco-Nevada has multiple NSR royalties ranging from 0.25 to 10% over the Destor-Porcupine mineral trend just east of Timmins, Ontario spread over more than 120 km and estimated to cover over 340 km2. 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 Holt mine was built in the late 1980’s by Barrick and was re-started in 2011.

Taylor: The Taylor mine (1% NSR) achieved commercial production in November 2015. Exploration potential at Taylor exists along strike and at depth of current Mineral Resources.

Holloway: The Holloway mine is located immediately north of the Holt property with ore processed at the Holt mill. The Holloway mine was placed on care and maintenance at the end of 2016 due to limited economic viability. In an effort to improve the economics of the operation, in 2019, Franco-Nevada agreed to reduce the royalty at Holloway to a flat 3% NSR from the previous sliding scale royalty. The mine resumed operations in early 2019.

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 Reserves for the Hislop open-pit were fully depleted in 2014.

Under KLG, Holt, Holloway and Taylor have been amalgamated into the Holt Complex for reporting purposes, all feeding the Holt mill for processing. Total production at the Holt Complex in 2019 was 113,952 gold ounces produced versus 2019 guidance of between 120,000-130,000 ounces.

ASSET HIGHLIGHTS

  • Reduced royalty rate at Holloway to encourage production and exploration
  • Large land position offers further potential at higher gold prices

2019 2018 2017
Revenue to Franco-Nevada ($ million) $ 7.0 $ 8.0 $ 8.7
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