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Franco-Nevada

Mt Keith (Ni)

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

Franco-Nevada has both a 0.375% GR 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 its June 30, 2018 Annual Report, BHP Billiton reported that Mt Keith has an estimated mine life of two years.

Mt Keith concentrator ore throughput is approximately 11.5 Mt per annum with 68% 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 two other underground mines, a concentrator, a smelter and a refinery. In January 2019, BHP Billiton reported that Nickel West total production for 2018 was 84,800 tonnes of nickel. In August 2018, BHP announced plans to develop Yakabindie Nickel Deposit in 2019, as a satellite operation at Mt Keith. Franco-Nevada’s royalty does not cover the Yakabindie deposit. Also 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:

  • 2 year mine life at Mt Keith
  • Production shifting off royalty ground to Yakabindie deposit during 2019
  • Study to expand Mt Keith concentrator to 50Ktpa
  • Exploration upside on large land package, including Betheno target located just north of Yakabindie

2018 2017 2016
Revenue to Franco-Nevada ($ million) $ 2.0 $ 1.3 $ 1.3