TSX:FNV 102.22 +0.81 +0.8%
Volume 367,024
May 17, 2019
NYSE:FNV 75.92 +0.61 +0.81%
Volume 447,074
May 17, 2019
Gold 1,278.30 -9.10 -0.71%
Volume
May 17, 2019
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Franco-Nevada

Subika (Au)

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 436,000 gold ounces in 2018, a significant increase over the 2017 production of 349,000 gold ounces. Gold production increased due to higher grade milled and higher recovery which was partially due to the Subika Underground project (discussed below) achieving commercial production in the fourth quarter of 2018. Production also benefitted from a drawdown of in-circuit inventory.

Newmont completed the Subika Underground project and declared commercial production 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 improve Ahafo’s production to 550,000 - 650,000 ounces per year for the first five full years of production (2020 to 2024).

ASSET HIGHLIGHTS:

  • Commercial production from Subika underground reached
  • Mill expansion advancing; first production expected in 2019
  • Together, projects expected to increase production to 550,000-650,000 gold ounces per year for first five years of production

2018 2017 2016
Revenue to Franco-Nevada ($ million) $ 9.4 $ 6.6 $ 4.8