Franco-Nevada

Kirkland Lake (Au)

Kirkland

LOCATION: Ontario, Canada
OPERATOR: Kirkland Lake Gold Ltd. / Agnico Eagle Mines Limited
ROYALTY: NSR: 1.5-5.5%; NPI: 20%

Franco-Nevada has various royalties covering approximately 170 km2 of the Larder Lake and Main Breaks in the historic Kirkland Lake gold camp of Ontario. KLG maintains the largest interest in the area and operates the Macassa mine which includes production from the Main Break, ’04 Break and the high-grade South Mine Complex (“SMC”).

Franco-Nevada’s royalty interests with KLG include:

  • An overlying 1.5% NSR on all of KLG’s properties (including the Macassa mine)
  • An underlying 20% profit-based royalty immediately to the south-west of the SMC as shown in the inset of the schematic
  • An underlying 2-3% NSR on claims to the west of current operations
  • An underlying 2% NSR royalty on claims that KLG purchased from Queenston Mining Inc. in July 2012

Macassa produced 183,037 ounces of gold in 2020 compared to 241,297 ounces of gold in 2019. Macassa achieved its best quarter of production for 2020 in Q4 2020, after production was affected by reduced operations due to COVID-19 and by unscheduled downtime in the mill.

KLG continues to advance the construction of the #4 Shaft, which reached 4,240 feet by the end of 2020. The 21.5-foot diameter, concrete-lined shaft will support higher levels of production and offer more effective underground exploration to the east of the SMC. The project is expected to be completed in one phase, to a depth of 6,400 feet, with project completion targeted for late 2022. Production at Macassa is expected to ramp up over the next three years, reaching 400,000 ounces in 2023 following completion of the #4 Shaft.

Franco-Nevada also has a 2% NSR royalty covering the majority of claims held in the Kirkland Lake gold camp by Agnico Eagle Mines Limited (“Agnico Eagle”) from its acquisition of Osisko Mining Corporation (“Osisko”) in April 2014. Agnico Eagle bought out its JV partner Yamana at the end of 2017 and now owns 100% of the claims. Franco-Nevada’s royalties cover the Upper Canada, Anoki-McBean and Canadian Kirkland deposits.

ASSET HIGHLIGHTS

  • #4 Shaft positioned to increase production to 400,000 gold ounces per year by 2023
  • Large land position in historical mining area covering multiple known deposits
  • Overlying 1.5% royalty covers all of KLG’s properties

2020 2019 2018
Revenue to Franco-Nevada ($ million) $ 5.4 $ 5.2 $ 4.6
Kirkland map