Franco-Nevada

South Arturo (Au)

SouthArturo-Panoramic

LOCATION: Nevada, United States
OPERATOR: Nevada Gold Mines LLC / i-80 Gold Corp.
ROYALTY: GR: 4-9% WITH AMR

The South Arturo project consists of a series of sediment hosted Carlin-style gold deposits adjacent to and including the former Dee gold mine, 60 km northwest of Elko, Nevada. The project is operated by a joint venture between Nevada Gold Mines (60%) and i-80 Gold Corp. (“i-80 Gold”) (40%), formerly Premier Gold Mines Limited (“Premier”). In December 2020, Equinox Gold Corp. (“Equinox Gold”) and Premier announced that they had entered into a definitive agreement whereby Equinox Gold would acquire all the outstanding shares of Premier. Concurrently, Premier spun-out its US-focused gold production and development assets into i-80 Gold, which will include El Niño and South Arturo. The transaction closed in April 2021.

Franco-Nevada holds a sliding scale gross royalty (4-9%) on production from the Dee claims. The royalty rate depends on the type of ore (oxide versus non-oxide), as well as the grade (for oxide only). Franco-Nevada estimates a 4% royalty rate for the oxide mineralization and a 6% royalty rate for the non-oxide. The royalty agreement includes an annual minimum payment which is credited against any future production royalty payments.

Commercial production at South Arturo’s El Niño mine was declared at the end of Q3 2019. The operation is located in close proximity to Nevada Gold Mines’ Goldstrike where the ore is processed at the refractory facilities. On a 100% basis, the mine produced 58,793 ounces in 2020 versus 18,815 ounces produced in 2019. On July 1, 2019, Barrick (61.5%) and Newmont (38.5%) combined their significant assets across Nevada to create Nevada Gold Mines as a joint venture. Under this joint venture, Barrick’s 60% share of South Arturo is now reported under the Carlin operations category.

South Arturo delivered year-over-year total open-pit Mineral Resource growth at consistent grades. Production from El Niño and the Phase 1 pit began in 2019. Mining of the Phase 1 pit was suspended in December 2019 and will resume when roasting capacity at Goldstrike is available. In January 2021, Premier reported increased Mineral Reserves and Mineral Resources and released a positive prefeasibility study which includes the underground El Niño mine and the proposed Phase 1 open-pit. Based on the pre-feasibility study, El Niño has a two-year mine life with 58,750 recoverable ounces and Phase 1 has an 18-year mine life with 664,000 recoverable ounces with production targeted to begin in 2025.

ASSET HIGHLIGHTS

  • Significant exploration potential to achieve long-term production
  • Ongoing evaluation of P1 and P3 open-pits and heap leach

2020 2019 2018
Revenue to Franco-Nevada ($ million) $ 6.2 $ 1.8 $ 4.1

SouthArturo