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Franco-Nevada

Island Gold (Au)

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 Gold Inc. (“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 150,400 ounces of gold in 2019 from the mine with the majority coming from the royalty claims. In the near term, Franco-Nevada expects the majority of production to continue to come from the royalty claims.

The Island Gold mine has had ongoing exploration success and, in February 2020, Alamos reported a 21% increase in Mineral Reserves, net of depletion, to a total of 1.2 million ounces. Based on the current throughput of 1,200 tonnes per day, the Island Gold mine has a reserve life of approximately 8 years. Alamos is currently studying a Phase III expansion which could see throughput increase beyond 1,200 tonnes per day, with results expected in June 2020.

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 which is held by Trillium Mining Corp. Both royalties are along strike and on the same geologic structure as the Island Gold mine.