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Franco-Nevada

Mt Keith (Ni)

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Location: Australia
Operator: BHP Billiton Limited
Royalty: NPI: 0.25% / GR: 0.375%

Franco-Nevada has both 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. BHP Billiton has reported that Mt Keith has an estimated mine life of 12 years.

Mt Keith concentrator ore throughput is approximately 11.5 Mt per annum 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. In January 2020, BHP Billiton reported that Nickel West total production for 2019 was 83,200 tonnes of nickel. During 2019, BHP developed the Goliath and Six Mile Well Nickel Deposits, as satellite operations at Mt Keith. Franco-Nevada’s royalty does not cover these two deposits, located approximately 25 km south of Mt Keith. These two deposits provided the majority of ore to the Mt Keith concentrator by the end of 2019, and are expected to continue to be the primary ore source for the foreseeable future. In August 2018, BHP commenced a concept study to expand the Mt Keith concentrator to 50,000 tonnes per annum of nickel in concentrate.

ASSET HIGHLIGHTS

  • 12 year mine life at Mt Keith
  • Majority of production shifted off royalty ground during 2019 and for the foreseeable future to Goliath and Six Mile Well deposits
  • Study to expand Mt Keith concentrator to 50,000 tonnes per annum
  • Exploration upside on large land package

2019 2018 2017
Revenue to Franco-Nevada ($ million) $ 1.7 $ 2.0 $ 1.3
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