Gold-focused royalty streaming company Franco-Nevada on Friday advanced $100-million to dual-listed developer SolGold under a net-smelter royalty finance agreement (NSR).
The funding, which was first announced in May, will be used to advance the Alpala copper/gold project through to a final feasibility study and a development decision, as well as for the remainder of the Cascabel concession in northern Ecuador.
Franco-Nevada advanced the $100-million less the amount of outstanding principal interest under the $15-million secured bridge loan pursuant to the bridge loan agreement (BLA) with Franco-Nevada announced in May. The aggregate amount owing under the BLA was therefore repaid out of the proceeds of the NSR financing. Accordingly, the company is not required to issue 12 220 000 warrants to Franco-Nevada that would have been required had the company elected to extend the maturity date under the BLA for a further four-month term.
In return for the royalty purchase price, Franco-Nevada has been granted a perpetual 1% royalty interest to be calculated by reference to NSR from the Cascabel concession.
The NSR financing can be upsized by $50-million at SolGold's election to a 1.5% NSR royalty interest on or before January 11, 2021.