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Franco-Nevada

Subika (Au)

Subika

Location: Ghana
Operator: Newmont Mining Corporation
Royalty: NSR: 2%

Franco-Nevada has a 2% NSR royalty which covers a 78 km2 area of Newmont’s Ahafo project 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. The royalty first became payable to Franco-Nevada in the third quarter of 2012.

Ahafo produced 643,000 gold ounces in 2019, a significant increase over the 2018 production of 436,000 gold ounces. Gold production increased due to higher milled grade and higher recovery due primarily to the Subika Underground and Ahafo Mill Expansion projects (discussed below).

Newmont completed the Subika Underground project in the fourth quarter of 2018. The project is expected to increase average annual gold production by 150,000-200,000 gold ounces per year for the first five years with an initial mine life of approximately 11 years. The second major project, the Ahafo Mill Expansion, is designed to improve production margins and accelerate stockpile processing. The expansion is expected to increase average annual gold production by 75,000-100,000 ounces per year for the first five years beginning in 2020. Together, these projects are expected to result in production of 550,000-650,000 ounces per year for the first five full years of production (2020 to 2024). Stripping at the Subika open-pit will continue through to 2021 and development activities at the Subika Underground will be completed for an updated mining method.

ASSET HIGHLIGHTS

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

2019 2018 2017
Revenue to Franco-Nevada ($ million) $ 17.4 $ 9.4 $ 6.6
Subika map