Franco-Nevada

Mt Keith (Ni)

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Location: Australia, Rest of World
Operator: BHP Billiton Limited
Royalty: NPI: 0.25% / GR: 0.375%

Franco-Nevada has a 0.375% gross royalty and a 0.25% NPI royalty on lands including the Mt Keith nickel operation in Western Australia, located 460 km north of Kalgoorlie. BHP Billiton Limited (“BHP Billiton”) is the operator and the project is a large, low-grade disseminated nickel sulphide ore body with an open-pit mine. Franco-Nevada’s royalties cover 236 km2 and includes the Jericho Nickel Deposit located approximately 25 km northwest of Mt Keith. Jericho is a 50/50 joint venture between BHP Billiton and MMC Norilsk Nickel.

Mining commenced in 1993 with the first nickel concentrate produced in 1994. In June 2020, BHP Billiton reported that Mt Keith had an estimated mine life of 15 years.

Mt Keith concentrator ore throughput is approximately 11.5 Mtpa with 64% recoveries. Production capacity is 35,000-40,000 tonnes per annum of nickel in concentrate. Mt Keith is part of Nickel West, BHP Billiton’s integrated business unit for Australian nickel assets, along with four other mines, a concentrator, a smelter and a refinery. BHP Billiton reported that Mt Keith total production for 2020 was 35,060 tonnes of nickel. During 2019, BHP Billiton developed the Goliath and Six Mile Well Nickel Deposits at Yakabindie, located approximately 25 km south of Mt Keith, as satellite operations. Franco-Nevada’s royalty does not cover Goliath or the southern half of Six Mile Well. It is estimated that royalty area production accounted for 88% of Mt Keith total production in 2020. Yakabindie satellite deposits are expected to provide the majority of ore to the Mt Keith concentrator from 2021 onward. In August 2018, BHP Billiton commenced a concept study to expand the Mt Keith concentrator to 50,000 tonnes per annum of nickel in concentrate.

ASSET HIGHLIGHTS

  • 15-year mine life at Mt Keith
  • Yakabindie satellite deposits developed in 2019 - largely outside royalty area
  • Study to expand Mt Keith concentrator to 50,000 tonnes per annum
  • Exploration upside on large land package

2020 2019 2018
Revenue to Franco-Nevada ($ million) $ 1.2 $ 1.7 $ 2.0
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