TSX:FNV 82.53 -0.90 -1.08%
Volume 967,041
September 21, 2018
NYSE:FNV 63.95 -0.66 -1.02%
Volume 1,891,366
September 21, 2018
Gold 1,200.30 -8.03 -0.66%
Volume
September 21, 2018
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Location: Senegal, Rest of World
Operator: Teranga Gold Corporation
Stream: Fixed gold deliveries / 6% gold stream

In December 2013, Franco-Nevada provided Teranga Gold Corporation (“Teranga”) with $135 million to fund the acquisition by Teranga of the remaining interests of the Oromin Joint Venture (“OJVG”). The OJVG owned the adjacent property which hosts several deposits representing future ore sources for Teranga’s neighbouring Sabodala mill. With the acquisition, Teranga now controls a sizable land package of over 950 km2 which includes much of a 70 km strike length along a prospective greenstone belt.

Under the terms of the agreement between Franco-Nevada and Teranga, Teranga will deliver 22,500 ounces of gold annually over the first six years of the agreement. Following delivery of 135,000 ounces of gold, Franco-Nevada will receive 6% of gold production that is sourced from either the Sabodala or OJVG properties. Franco-Nevada will make ongoing payments for each ounce of gold delivered equal to 20% of the spot gold price. As of the end of 2017, Teranga has delivered 90,000 ounces.

Sabodala had another strong year in 2017 producing a record 233,267 ounces of gold which exceeded the guidance range of 205,000-225,000 ounces. For 2018, Teranga expects to produce between 210,000-225,000 ounces from Sabodala which compares favourably to the 213,000 ounces outlined in the 2017 technical report. The technical report outlined an increased Mineral Reserve of 2.7 million ounces (61.6 Mt @ 1.37 g/t) supporting a 14 year mine life producing an average of 176,000 gold ounces per year. Production for the first five years (2018-2022) is expected to average 213,000 gold ounces per year.

ASSET HIGHLIGHTS:

  • Fixed ounce payments of 22,500 per year for six years with trailing 6% gold stream
  • Estimated 13.5 year mine life based on existing Mineral Resources
  • Land package offers significant exploration potential

2017 2016 2015
Revenue to Franco-Nevada ($ million) $ 30.5 $ 26.0 $ 28.3