Franco-Nevada

Cascabel (Alpala) (Au)

Alpala


Location: Ecuador, South America
Operator: SolGold plc
Royalty: NSR: 1%

In 2020, Franco-Nevada acquired a 1% NSR on the Alpala copper-gold-silver project located in northern Ecuador being advanced by SolGold plc (“SolGold”). The Alpala project is owned by Exploraciones Novamining SA, which is held 85% by SolGold and 15% by Cornerstone Capital Resource Inc. The royalty is in reference to all minerals produced by Alpala with the option by Franco-Nevada to convert the royalty to a gold NSR for a period of time once Alpala is producing. Franco-Nevada is further entitled to receive certain minimum royalty payments starting in 2028. The royalty agreement includes a buyback of 50% of the royalty for a period of time. Alpala is a porphyry copper-gold deposit and represents one of the largest copper-gold projects being advanced globally. The royalty covers nearly 50 km2 of the Cascabel mining concessions. SolGold completed a preliminary economic assessment on Alpala in 2019 and is currently advancing a prefeasibility study. The Measured and Indicated Mineral Resource includes a high grade core containing 12.3 million ounces of gold, 3.8 million tonnes of copper, and 33.3 million ounces of silver (442 million tonnes grading 0.86 g/t Au, 0.87% Cu, and 2.34 g/t Ag). In total, the Measured and Indicated Mineral Resources contain 21.7 million ounces of gold, 9.9 million tonnes of copper, and 92.2 million ounces of silver (2,663 million tonnes grading 0.25 g/t gold, 0.37% Cu and 1.08 g/t silver). The preliminary economic assessment study contemplates a large scale underground block cave operation with an initial mine life of more than 50 years, producing 207,000 tonnes of copper, 438,000 ounces of gold, and 1.4 million ounces of silver per year for the first 25 years (under the 50 Mtpa mining scenario). The upcoming prefeasibility study is expected to consider a lower throughput, but higher grade operation, while maintaining expansion potential to optimize the upfront capital and construction schedules.

Exploration yielded encouraging results in 2020 on the broader Cascabel concessions with the identification of a highly mineralized system at Tandayama-America located only 3 km from Alpala. SolGold is reviewing this and other satellite targets on the concession to further evaluate the resource potential.

ASSET HIGHLIGHTS

  • One of the largest copper-gold development projects in the world
  • Prefeasibility study underway
  • Exploration success on royalty concessions outside of Alpala deposit

2020 2019 2018
Revenue to Franco-Nevada ($ million) $ – $ – $ –

Alpala