Franco-Nevada

Subika (Ahafo) (Au)

Subika

Location: Ghana, Rest of World
Operator: Newmont Corporation
Royalty: NSR: 2%

Franco-Nevada has a 2% NSR royalty which covers a 78 km2 area on the southern portion of Newmont’s Ahafo South mine in Ghana (shown in the schematic). Franco-Nevada’s royalty is believed to cover most, if not all, of the Subika open-pit as well as a majority of the Subika underground mineralization identified to date.

Newmont completed the Subika Underground project in the fourth quarter of 2018. The project expansion was designed to increase average annual gold production by 150,000 to 200,000 gold ounces per year for the first five years with an initial mine life of approximately 11 years. A second major project, the Ahafo Mill Expansion, designed to improve production margins and accelerate stockpile processing was also completed. The expansion was designed to increase average annual gold production by 75,000 to 100,000 ounces per year for the first five years beginning in 2020. Together, these projects were expected to increase production to 550,000 to 650,000 ounces per year for the first five full years of production (2020 to 2024). The Ahafo South mine produced 480,000 ounces in 2020 and it is estimated that 61% of this production was from the Subika royalty ground.

With the Subika Underground and Ahafo Mill Expansion completed, Newmont expects production from Ahafo South to increase in 2021 due to the Subika Underground delivering higher tonnes and has provided 2021 production guidance of 515,000 ounces from the Ahafo South operation. Franco-Nevada expects production will increase from the Subika royalty as mining at Ahafo South returns to royalty grounds.

Newmont has announced a multi-year exploration plan to unlock the underexplored geologic trends along 70 km of the Kenyasi thrust fault on which Ahafo South is located. At Ahafo South, Newmont has highlighted significant underground potential at Subika (on royalty ground) and the Apensu pit (not on royalty ground). Newmont is also advancing a new project in Ghana, Ahafo North, which is located 30 km to the north of the Ahafo South mine and not on royalty ground.

ASSET HIGHLIGHTS

  • Commercial production achieved at Subika Underground
  • Ahafo Mill Expansion completed
  • Together, projects expected to increase production to 550,000 to 650,000 gold ounces per year for the first five years of production

2020 2019 2018
Revenue to Franco-Nevada ($ million) $ 10.4 $ 17.4 $ 9.4
Subika map