Franco-Nevada

Goldstrike (Au)

Goldstrike

LOCATION: Nevada, United States
OPERATOR: Nevada gold Mines llc
ROYALTY: NSR: 2-4% / NPI: 2.4-6%

Franco-Nevada holds royalties covering the majority of the Nevada Gold Mines LLC (“Nevada Gold Mines”) Goldstrike complex operated by Barrick Gold Corporation (“Barrick”). The Goldstrike complex is located on the Carlin Trend, about 60 km northwest of the town of Elko, Nevada and includes the open-pit Betze-Post mine, as well as the underground operations of Meikle and Rodeo immediately to the north. Mining activity commenced on the property in 1976 and, since 1987, has been operated by Barrick. Franco-Nevada holds both NSR (2-4%) and NPI (2.4-6%) royalties at Goldstrike covering over 50% of the reported Mineral Reserves. This estimate include low-grade ore that has been stockpiled. The royalties vary depending on the claim blocks, operating costs and capital investments, as shown in the schematic. As a result, royalty payments can vary substantially on a quarterly basis. Franco-Nevada anticipates royalty production in 2021 to be similar to that of 2020.

On July 1, 2019, Barrick (61.5%) and Newmont Corporation (“Newmont”) (38.5%) combined their significant assets across Nevada to create Nevada Gold Mines as a joint venture. Under this joint venture, Goldstrike is now reported as part of the Carlin operation category by Barrick. In February 2021, Barrick announced year-end 2020 production of 1,024,000 gold ounces from its 61.5% share of Carlin which includes Goldstrike, Gold Quarry and Nevada Gold Mines’ 60% equity share of South Arturo as well as other properties where Franco-Nevada has no royalties or stream interests. Barrick reported 2021 production guidance from its 61.5% share of 940,000 to 1,000,000 gold ounces. Barrick reported 2021 production guidance from its 61.5% share of 940,000 to 1,000,000 gold ounces. Barrick has reported that 2021 and 2022 are earmarked as investment years for Nevada Gold Mines, with processing improvements to be conducted to increase options and lower costs.

ASSET HIGHLIGHTS

  • World class gold operation
  • Profit royalties provide more leverage to gold prices
  • NSR royalties provide the highest margins and most downside protection to changes in gold prices

2020 2019 2018
Total NSR Revenue to FNV ($ million) $ 5.2 $ 4.2 $ 4.9
Total NPI Revenue to FNV ($ million) $ 15.5 $ 17.0 $ 14.1
Total Revenue to FNV ($ million) $ 20.7 $ 21.2 $ 19.0

Goldstrike map