HAILEYBURY (miningweekly.com) – Resources royalty firm Franco-Nevada Corporation has entered into agreements to buy a 7,29% net smelter return royalty on the Gold Quarry Royalty property, which is part of Newmont Mining's Gold Quarry openpit mine, in the Carlin district of Nevada.
Franco-Nevada will buy the royalty from “private individuals” for $103,5-million in cash.
“Since 1984, over eight million ounces of gold are estimated to have been produced from the Royalty Property and the royalty interests being acquired are estimated to have realized approximately $250 million in royalty payments,” the company said in a statement.
Based on historic reported payment data, Franco-Nevada expects to earn at least an average of 11 200 royalty ounces a year of gold.
The production based royalty can be taken in cash or in-kind and the transaction is expected to be accretive to Franco-Nevada “on most financial measures”, the firm said.
“Franco-Nevada is optimistic on gold’s longer term potential and the agreement to acquire the Gold Quarry Royalty is a first step in the company’s near term strategy to further increase Franco-Nevada’s exposure to gold.”
The firm is well positioned, with over $500-million in cash and other facilities, which it can use for acquisitions and investments.