TSX:FNV 82.53 -0.90 -1.08%
Volume 967,041
September 21, 2018
NYSE:FNV 63.95 -0.66 -1.02%
Volume 1,891,366
September 21, 2018
Gold 1,200.30 -8.03 -0.66%
Volume
September 21, 2018
Contact Share

LOCATION: ONTARIO
OPERATOR: GOLDCORP INC.
ROYALTY: NPI: 5%

Franco-Nevada has a 5% NPI royalty that covers all of the original leased lands at Goldcorp’s Musselwhite operation. The area is estimated to cover 120 km2 in northwestern Ontario, 480 km north of Thunder Bay. The royalty also covers an area of interest surrounding the property as shown in the schematic. The mine is a fly-in/fly out underground operation which began operating in April 1997 and has produced over 3.0 million ounces of gold.

Franco-Nevada’s Musselwhite interest is a profit royalty which did not become payable until historical capital and operational costs had been recovered by the operator which occurred in 2011. Musselwhite represents one of the lower cost operations in Goldcorp’s portfolio, which benefits the profit royalty, with 2018 all-in sustaining costs estimated at $775/oz representing a slight increase from 2017. Gold production is expected to be 265,000 ounces in 2018 versus 236,000 ounces produced in 2017.

The Materials Handling project is now 53% complete, which is expected to increase production from 3,600 tonnes per day to 4,300 tonnes per day. The project is expected to reach commercial production in the first quarter of 2019. The project will enable hoisting of ore through an underground winze which will result in reduced reliance on high-cost truck haulage leading to improved energy efficiency, reduced ventilation requirements, reduced mining costs and enhanced production profile. Capital costs for the project are tracking 10% below budget which could positively impact the profit royalty as construction continues.

Goldcorp continues to actively explore the large land package with approximately $10 million planned for 2018. Musselwhite has consistently replaced mine Mineral Reserves and discovered new mineralization. Goldcorp’s predicts that there is Mineral Reserve growth potential by bringing new mine ore zones online as well as the Karl Zeemal open-pit opportunity.

ASSET HIGHLIGHTS:

  • One of the lower cost operations in Goldcorp portfolio – NPI more levered to gold price
  • Materials Handling project to positively impact production and operating costs
  • Large land package with active exploration program

2017 2016 2015
Revenue to Franco-Nevada ($ million) $ 3.8 $ 5.1 $ 5.4