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
Contact Share

LOCATION: ONTARIO
OPERATOR: BARRICK GOLD CORPORATION
ROYALTY: NSR: 3% / NPI: 50%

The Hemlo gold camp has been producing gold for over 30 years and is located just off the Trans-Canada highway near Marathon, Ontario. Barrick is the operator and manages both the open-pit and underground operations. Franco-Nevada has both a 3% NSR royalty and a 50% NPI royalty on a portion of the western down-dip underground extension of the Hemlo ore-body as shown in the longitudinal schematic.

Initial mining on the royalty property began in late 2008, but revenues were limited to the 3% NSR royalty. The 50% NPI portion of the royalty began paying in third quarter of 2012 after the upfront capital costs had been recovered by Barrick. Hemlo produced 196,000 ounces of gold in 2017 compared with 235,000 ounces of gold in 2016. All-in sustaining costs increased to $1,092 per ounce in 2017 versus $839 per ounce in 2016. For 2018, gold production is expected to be 200,000-220,000 ounces at an all-in sustaining cost of $975-$1,075 per ounce.

Hemlo continued to have exploration success at the operation in 2017. The estimated Mineral Reserve increased by 397,000 ounces while the M&I Mineral Resource increased by 535,000 ounces. Based on the technical report that Barrick provided in April 2017, it is estimated that the royalty ground covers 35% of the underground Mineral Reserve and 19% of the total Mineral Reserve.

ASSET HIGHLIGHTS:

  • Established mine operation in Ontario - Barrick’s only Canadian operation
  • Continued exploration success in 2017
  • Profit royalties are more levered to gold prices

2017 2016 2015
Revenue to Franco-Nevada ($ million) $ 4.4 $ 12.7 $ 5.0