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
Contact Share

FireCreek

Location: NEVADA
Royalty: FIXED GOLD DELIVERIES / NSR: 2.5%
Operator: KLONDEX MINES LTD.

In February 2014, Franco-Nevada assisted Klondex Mines Ltd. (“Klondex”) in the acquisition of the Midas mine and milling facility located in Nevada from Newmont. Klondex purchased the Midas mill to provide it with processing capacity for its Fire Creek ores, which are located 180 km south (via highway and roadways) of Midas, while providing the option to potentially extend the mine life at Midas. On March 19, 2018, Hecla Mining Company announced plans to acquire Klondex which includes the Fire Creek, Midas and Hollister mines.

The Fire Creek property is located in north central Nevada, at the cross-section of the Northern Nevada Rift and the Battle Mountain Trend and is a high-grade epithermal gold deposit. The property consists of a combination of private fee land and U.S. Bureau of Land Management (“BLM”) land for a total area of approximately 45 km2 plus an area of interest in adjacent townships along strike with mineralization. Midas was discovered and constructed by Franco-Nevada’s predecessor company prior to its combination with Newmont. The property position extends over private fee land and BLM land for a total area of 137 km2 with an area of interest surrounding the property.

Franco-Nevada paid $35 million for a prepaid gold purchase arrangement totaling 38,250 ounces of gold to be delivered by December 31, 2018 and a 2.5% NSR royalty on the Fire Creek and Midas properties commencing in 2019. Under the terms of the agreement, prepaid gold purchase deliveries began in June 2014 and will be made at the end of each month until 38,250 ounces have been delivered. Klondex delivered the remaining 8,000 ounces in December 2017 which will be sold over the course of 2018.

Klondex is actively exploring both the Fire Creek and Midas properties in efforts to extend the mine lives. At Fire Creek, Klondex provided an initial open-pit Mineral Resource at what has historically been an underground operation. The Indicated Mineral Resource included 1.1 million gold equivalent ounces (42.9 million tons @ 0.88 AuEq g/t) and an Inferred Mineral Resource of 1.1 million gold equivalent ounces (31.7 million tons @ 1.19 AuEq g/t) which excludes all underground Mineral Resources. At Midas, Klondex is drilling the Trinity zone in an effort to extend mineralization north towards the existing underground workings and planned development.

ASSET HIGHLIGHTS:

  • Fixed gold payments through 2018 - delivered in December 2017
  • Trailing 2.5% NSR royalty on two properties starts in 2019
  • Actively drilling both Fire Creek and Midas to extend mine life

2017 2016 2015
Revenue to Franco-Nevada ($ million) $ 11.0 $ 9.2 $ 8.7

Fire_Creek

Midas