Franco-Nevada

Karma (Au)

Karma

Location: Burkina Faso, Rest of World
Operator: Endeavour Mining Corporation
Stream: Fixed gold deliveries / 4.875% Gold Stream

In August 2014, a subsidiary of Franco-Nevada and Sandstorm Gold Ltd. (“Sandstorm”) committed to provide up to $120 million in stream financing to assist the construction of the Karma Project in Burkina Faso, West Africa, for the first ever syndicated stream transaction. Franco-Nevada committed 75% of the funding and Sandstorm committed the remaining 25%. Franco-Nevada ultimately contributed $78.75 million ($75 million with $3.75 million as part of the increase option). The Karma Project was constructed by True Gold Mining Inc. which was acquired by Endeavour in March 2016.

Under the agreement, Endeavour delivered to Franco-Nevada 15,000 ounces of gold per year, beginning in March 2016 through to the end of February 2021, for a total of 75,000 ounces of gold delivered. Thereafter, Endeavour shall deliver to Franco-Nevada an amount of gold equal to 4.875% of the gold produced at Karma over the life of the mine in exchange for ongoing payments equal to 20% of the spot price of gold. The increase option was repaid in 8 quarterly deliveries totaling 5,625 ounces of gold by Q1 2019. Sandstorm will receive deliveries for its 25% interest from Endeavour directly.

The Karma Project started production in 2016. In 2020, Karma produced 98,000 gold ounces and, in 2021, is expected to produce between 80,000 and 90,000 gold ounces.

The agreement covers all of the concessions within the 856 km2 Karma Project and also includes a defined area of interest of 5 km surrounding the borders of the project. The 2020 exploration program totaled 61,500 m of RC drilling to infill drill and test extensions to a number of near mine targets include Kao Main, GG1, Kao North, Rambo West and Nami. The 2020 exploration program results for Kao and the other targets will be further interpreted and Endeavour is not planning any material drilling for 2021.

On March 18, 2021, Endeavour announced updated Mineral Reserves and Mineral Resources as at December 31, 2020. Mineral Reserves of 158,000 gold ounces were reported, with M&I Resources inclusive of Reserves of 1,898,000 gold ounces and Inferred Resources of 679,000 gold ounces.

ASSET HIGHLIGHTS

  • Fixed gold ounce deliveries over five years with trailing 4.875% gold stream
  • Prospective land package of over 850 km2

2020 2019 2018
Revenue to Franco-Nevada ($ million) $ 28.9 $ 20.2 $ 22.5
Karma map