Franco-Nevada

Island Gold (Au)

Island-Gold

LOCATION: Ontario, Canada
OPERATOR: Alamos Gold Inc.
ROYALTY: NSR: 0.62%

In March 2020, Franco-Nevada acquired an existing 0.62% NSR on the Goudreau Lake claims totaling 58 hectares covering the core of the Island Gold mine in western Ontario. The mine is operated by Alamos who acquired the operation in 2016. The mine utilizes longitudinal retreat longhole stoping with cement backfill and ore is processed through a conventional carbon in pulp plant. Alamos produced a total of 139,000 ounces of gold in 2020 from the mine with the majority coming from the royalty claims, down from 150,400 ounces of gold in 2019. In the near term, Franco-Nevada expects the majority of production to continue to come from the royalty claims and it is estimated that approximately 90% of the Mineral Reserves and Mineral Resources on the property are covered by Franco-Nevada’s royalty claims.

In July 2020, Alamos reported results of the positive Phase III expansion study conducted on its Island Gold mine. Based on the results of the study, Alamos is proceeding with an expansion of the shaft to 2,000 tpd. The Phase III expansion is expected to increase average annual gold production to 236,000 ounces per year starting in 2025, representing an approximate 70% increase from 2020 production. Year-over-year Mineral Reserves have increased 8%, to 1.31 million ounces of gold. This increase has yet to be factored into the Phase III expansion project. Alamos is currently focused on permitting and detailed engineering and all shaft expansion permitting requirements are expected to be completed in 2022, with shaft sinking expected to begin in 2023.

Franco-Nevada holds additional royalties in the Island Gold mining camp. These include a 2% NSR royalty on Alamos’ Edwards property located 4 km north-east of the Island Gold mine and a 0.75% NSR royalty on the Cline Lake property immediately adjacent to Edwards. In December 2020, Alamos acquired Trillium Mining Corp. which previously held the Cline Lake property, increasing its land package by approximately 60% in the region. Both of Franco-Nevada’s additional royalties in the mining camp are along strike and on the same geologic structure as the Island Gold mine.

ASSET HIGHLIGHTS

  • Phase III expansion started in December 2020
  • Expansion expected to increase average production to 236,000 ounces starting in 2025
  • Strong exploration potential in Island Gold mining camp

2020 2019 2018
Revenue to Franco-Nevada ($ million) $ 0.8 $ - $ -
Island-Gold_Map