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Franco-Nevada

Canadian Malartic (Au)

Canadian Malartic

LOCATION: Quebec, Canada
OPERATOR: Yamana Gold / Agnico Eagle
ROYALTY: GR: 1.5%

In June 2011, Franco-Nevada purchased a 1.5% gross royalty on part of the Canadian Malartic gold project. The project is located in Quebec’s Abitibi mining district and is Canada’s largest gold producer. The royalty covers seven claims on the property including the central portion of the open-pit as shown in the schematic which equates to approximately 3 km2. Royalty payments are expected to fluctuate annually based on the location of mining relative to the royalty property. Yamana and Agnico Eagle are the 50/50 joint operators of the Canadian Malartic mine following the 2014 acquisition of Osisko Mining Corporation.

Canadian Malartic produced 669,192 ounces in 2019, which was better than the projected production of 660,000 ounces, versus 2018 production of 697,200 ounces of gold. On a 100% basis, the Canadian Malartic open-pit contains Proven and Probable Mineral Reserves of 4,778,000 ounces of gold. Franco-Nevada estimates that roughly 12% of the Mineral Reserves and Mineral Resources of the main open-pit are subject to our royalty interest.

Exploration programs continue to evaluate several deposits to the east of the Canadian Malartic open-pit which have the potential to provide new sources of ore for the mill. These are mostly underground zones, some of which are partially covered by Franco-Nevada’s royalty.

The operators continue to evaluate potential production scenarios for underground mining of the Odyssey and East Malartic deposits from surface to a depth of 1000 meters. These deposits could provide higher grade tonnes that could potentially supplement open-pit production in the future. On a 100% basis, the Odyssey project contains an Indicated Mineral Resource of 136,000 ounces and an Inferred Mineral Resource of 1,666,000 ounces while the East Malartic project has an Indicated Mineral Resource of 694,000 ounces and an Inferred Mineral Resource of 5,192,000 ounces. One of Franco-Nevada’s royalty claims covers a portion of the Odyssey South extension which has yet to be properly defined by drilling.

In 2019, most of the exploration was focused on the East Gouldie Zone, which was discovered in late 2018. East Gouldie is located south of the East Malartic and Odyssey zones starting at a depth of approximately 700 meters below surface. An initial Inferred Resource (100% basis) for the East Gouldie Zone of 2,738,000 ounces of gold (25.52 million tonnes grading 3.34 g/t) was reported as of December 31, 2019. Two of Franco-Nevada’s royalty claims cover a portion of the newly-discovered East Gouldie Zone.

ASSET HIGHLIGHTS

  • Canada’s largest gold producer
  • Long life asset in Quebec
  • Exploration targets partially on royalty ground to the east

2019 2018 2017
Revenue to Franco-Nevada ($ million) $ 2.2 $ 2.5 $ 2.0
Canada Malarctic map