TSX:FNV 87.37 -0.11 -0.13%
Volume 221,756
August 21, 2018
NYSE:FNV 67.06 +0.00 +0%
Volume 191,156
August 21, 2018
Gold 1,193.93 +1.30 +0.11%
Volume
August 21, 2018
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LOCATION: ONTARIO / QUEBEC
Operator: DETOUR GOLD CORPORATION
ROYALTY: NSR: 2%

Franco-Nevada has a 2% NSR royalty that covers an area of 140 km2 of the Abitibi greenstone belt located 185 km northeast of Cochrane, Ontario including the Detour Lake mine. Placer Dome Inc. operated a mine on the property from 1983 through 1999 during which time approximately 1.8 million ounces of gold are estimated to have been produced.

Detour Gold Corporation (“Detour”) constructed the current mine from 2010 to 2013 and is the current operator. Production for 2017 increased to 571,463 ounces versus 537,765 ounces in 2016 and the guidance range of 550,000-600,000 ounces of gold. For 2018, Detour expects production to increase to 600,000-650,000 ounces of gold.

Detour provided an updated life of mine plan in March 2017 given uncertainties with the permitting process for the West Detour project. The updated mine increased gold production over the life of mine versus the previous mine plan provided in January 2016 which represents a net benefit to the royalty. The new mine plan assumes average annual production of 656,000 ounces of gold during a 23.25 year mine plan. The mine plan assumes a dip in production in 2019/2020 which Detour is currently trying to address by improving its near-term gold production by accelerating access to the higher grades currently scheduled to be processed in 2021 and 2022. Results of this assessment are expected to be completed in the second quarter of 2018.

During the year, it was determined that the environmental assessment process for the permitting of West Detour would remain a provincial process which is typically a shorter process than a federal review.

ASSET HIGHLIGHTS:

  • Produced a record 571,463 gold ounces in 2017
  • Expected gold production of 600,000-650,000 ounces in 2018
  • New mine plan assumes increased LOM gold production versus previous plan
  • Study underway to smooth near term gold production profile

2017 2016 2015
Revenue to Franco-Nevada ($ million) $ 14.3 $ 13.3 $ 11.7