TSX:FNV 117.86 +1.10 +0.94%
Volume 739,207
July 19, 2019
NYSE:FNV 90.22 +0.64 +0.71%
Volume 728,243
July 19, 2019
Gold 1,425.47 -20.78 -1.44%
Volume
July 19, 2019
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Franco-Nevada

Musselwhite (Au)

LOCATION: Ontario, Canada
OPERATOR: Goldcorp Inc.
ROYALTY: NPI: 5%

Franco-Nevada has a 5% NPI royalty that covers all of the original leased lands at the 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. In early 2019, Newmont announced plans to acquire the current operator, Goldcorp.

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. For 2018, all-in sustaining costs was originally estimated at $775/oz. However, actual all-in sustaining costs were higher than anticipated at $909/oz due to lower tonnes milled as a result of longer haulage distance and greater waste generation associated with the Materials Handling Project described below. Gold production of 205,000 ounces was lower than 2017 production of 236,000 ounces.

The Materials Handling Project is expected to reach commercial production in the third quarter of 2019. The project is expected to increase production from 3,600 tonnes per day to 4,300 tonnes per day. 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 an enhanced production profile.

ASSET HIGHLIGHTS:

  • Higher costs and lower production negatively impacted NPI payments in 2018
  • Materials Handling Project to positively impact production and operating costs once complete
  • Large land package with active exploration program

2018 2017 2016
Revenue to Franco-Nevada ($ million) $ 2.6 $ 3.8 $ 5.1
Musselwhite