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Franco-Nevada

Kirkland Lake (Au)

Kirkland

LOCATION: Ontario, Canada
OPERATOR: Kirkland Lake Gold Inc. / Agnico Eagle
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 a record 241,297 ounces of gold in 2019 which was in line with the original guidance range of 240,000-250,000 ounces and surpassed the previous record of 240,126 ounces in 2018.

KLG continues to advance the construction of the #4 Shaft, which reached 1,200 feet by the end of 2019. 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 2023, providing a total hoisting capacity of 4,000 tonnes per day and reaching an ultimate depth of approximately 7,000 feet.

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 over 400,000 gold ounces per year by 2023
  • Large land position in historical mining area covering multiple known deposits
  • Overlying 1.5% royalty purchased in 2013 covers all of KLG’s properties

2019 2018 2017
Revenue to Franco-Nevada ($ million) $ 5.2 $ 4.6 $ 4.1
Kirkland map