(in U.S. dollars unless otherwise noted)
TORONTO, Aug. 13,
2024 /PRNewswire/ - Franco-Nevada Corporation
("Franco-Nevada" or the
"Company") (TSX: FNV) (NYSE: FNV) is pleased to announce
that its wholly-owned subsidiary has acquired from Compañía de
Minas Buenaventura S.A.A. ("Buenaventura") and its
subsidiary, an existing 1.8% net smelter return royalty on all
minerals (the "Royalty") covering Newmont Corporation's
("Newmont") Yanacocha mine and adjacent mineral properties
located in Peru. Consideration for
the Royalty consists of $210 million
paid in cash on closing, plus a contingent payment of $15 million in Franco-Nevada common shares,
payable upon achievement of certain conditions as described
below.
"We are pleased to partner with Buenaventura to acquire this
existing Royalty which adds immediately cash flowing gold
production and growth from a leading gold operator," said
Paul Brink, President & CEO of
Franco-Nevada. "Yanacocha has been one of the largest gold mines
globally and the district covered by the Royalty remains highly
prospective with over 47 Moz AuEq(1) in total reserves
and resources. The Royalty covers current oxide production, the
planned sulfide project and high-quality growth projects, including
Conga, which together have the potential to add decades of
contributions to Franco-Nevada."
Transaction Overview:
- Immediately Cash Flowing: Yanacocha is currently
producing from the open pit oxides and will contribute immediate
GEOs to Franco-Nevada. Newmont's guidance is to produce 290 koz Au
at Yanacocha in 2024.
- Sulfide Project: The Royalty covers the Yanacocha
Sulfides Project which is a large copper-gold project with 1.2 Mt
Cu total reserves and resources and 7.2 Moz
Au total reserves and resources(2) located within
the footprint of the current oxide operations and is expected to
produce more than 500 koz AuEq per year in the first five years and
extend the mine plan beyond 2040. Newmont has deferred a decision
on developing the Yanacocha Sulfides Project until at least 2025 as
it consolidates its recent acquisition of Newcrest Mining
Limited.
- Project Optionality: The Royalty also covers the Conga
project and other known resources on the property adding long-term
optionality. Conga is a large copper-gold porphyry adjacent to
Yanacocha with indicated resources of 14.6 Moz Au and 4.0 Blbs Cu and inferred resources of
2.9 Moz Au and 0.9 Blbs
Cu(1).
- Exploration and Expansion Potential: In addition to the
producing oxides and projects outlined above, the Royalty covers a
large land package of more than 750 km2 that has
produced more than 40 Moz Au and hosts numerous additional targets
and potential for mine life extensions.
Key Financing Terms:
- $210 million in cash was paid to
Buenaventura and its affiliate on closing, whereby a wholly-owned
subsidiary of Franco-Nevada acquired their Peruvian subsidiary
Chaupiloma Dos De Cajamarca, which holds the Royalty.
- A contingent payment of 118,534 common shares of Franco-Nevada,
worth $15 million as at signing, will
be payable to Buenaventura and its affiliate upon the Conga project
achieving commercial production for a full year prior to the
20th anniversary of closing.
- Franco-Nevada now holds a
right of first refusal on the sale by Buenaventura and its
affiliate of certain of their royalty interests, including an
incremental royalty of 0.5% NSR on the Conga project and two
additional royalties on certain other parts of the property.
Franco-Nevada Corporate Summary
Franco-Nevada Corporation is the leading gold-focused royalty
and streaming company with the most diversified portfolio of
cash-flow producing assets. Its business model provides investors
with gold price and exploration optionality while limiting exposure
to cost inflation. Franco-Nevada
is debt-free and uses its free cash flow to expand its portfolio
and pay dividends. It trades under the symbol FNV on both the
Toronto and New York stock exchanges.
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(1)
|
Total reserves and
resources per Newmont's 2023 Reserves and Resources Release,
converted gold equivalent at long term prices of $1,915/oz Au and
$4.08/lb Cu. Newmont's reserves and resources are prepared in
compliance with Subpart 1300 of Regulation S-K adopted by the
United States Securities and Exchanges Commission. Total reserves
and resources include the following: Yanacocha Gold – 140.9 Mt at
1.22 g/t Au for 5.5 Moz Au proven and probable reserves, 134.8 Mt
at 0.64 g/t Au for 2.8 Moz Au measured and indicated resources and
189.9 Mt at 0.88 g/t Au for 5.4 Moz Au inferred resources.
Yanacocha Copper – 111.1 Mt at 0.63% Cu for 1.5 Blbs Cu proven and
probable reserves, 101.3 Mt at 0.37% Cu for 0.8 Blbs Cu measured
and indicated resources and 39.7 Mt at 0.37% Cu for 0.3 Blbs Cu
inferred resources. Conga Gold – 693.8 Mt at 0.65 g/t Au for 14.6
Moz Au indicated resources and 230.5 Mt at 0.39 g/t Au for 2.9 Moz
Au inferred resources. Conga Copper – 693.8 Mt at 0.26% Cu for 4.0
Blbs Cu indicated resources and 230.5 Mt at 0.19% Cu for 0.3 Blbs
Cu inferred resources.
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|
(2)
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Included in the full
Yanacocha estimate disclosed in footnote 1 above. This is the only
publicly available resource estimate and is presented on a total
reserves and resources basis, inclusive of inferred resources, as
disclosed by Newmont in its Q2 2024 Investor
Presentation.
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Additional Information
Scientific and technical information included in this news
release has been reviewed by Amri Sinuhaji, P.Eng, Vice President,
Mining of Franco-Nevada, a non-independent qualified person under
National Instrument 43-101.
Forward-Looking Statements
This press release contains "forward-looking information" and
"forward-looking statements" within the meaning of applicable
Canadian securities laws and the United States Private Securities
Litigation Reform Act of 1995, respectively, which may include, but
are not limited to, statements with respect to future events or
future performance, expected future performance of the Yanacocha,
Conga or other projects, Newmont's guidance and the timing and
likelihood of Newmont's development decision in respect of the
Yanacocha Sulfides Project, the prospectivity of the Royalty
property, management's expectations regarding Franco-Nevada's
growth, results of operations, estimated future revenues,
performance guidance, carrying value of assets, future dividends
and requirements for additional capital, mineral resources and
mineral reserves estimates, production estimates, production costs
and revenue, future demand for and prices of commodities, expected
mining sequences, business prospects and opportunities, the
performance and plans of third party operators, audits being
conducted by the Canada Revenue Agency ("CRA"), the expected
exposure for current and future tax assessments and available
remedies, and statements with respect to the future status and any
potential restart of the Cobre Panama mine and related arbitration
proceedings. In addition, statements relating to mineral resources
and mineral reserves, GEOs or mine lives are forward-looking
statements, as they involve implied assessment, based on certain
estimates and assumptions, and no assurance can be given that the
estimates and assumptions are accurate and that such mineral
resources and mineral reserves, GEOs or mine lives will be
realized. Such forward-looking statements reflect management's
current beliefs and are based on information currently available to
management. Often, but not always, forward-looking statements can
be identified by the use of words such as "plans", "expects", "is
expected", "budgets", "potential for", "scheduled", "estimates",
"forecasts", "predicts", "projects", "intends", "targets", "aims",
"anticipates" or "believes" or variations (including negative
variations) of such words and phrases or may be identified by
statements to the effect that certain actions "may", "could",
"should", "would", "might" or "will" be taken, occur or be
achieved. Forward-looking statements involve known and unknown
risks, uncertainties and other factors, which may cause the actual
results, performance or achievements of Franco-Nevada to be
materially different from any future results, performance or
achievements expressed or implied by the forward-looking
statements. A number of factors could cause actual events or
results to differ materially from any forward-looking statement,
including, without limitation: fluctuations in the prices of the
primary commodities that drive royalty and stream revenue (gold,
platinum group metals, copper, nickel, uranium, silver, iron-ore
and oil and gas); fluctuations in the value of the Canadian and
Australian dollar, Mexican peso and any other currency in which
revenue is generated, relative to the U.S. dollar; changes in
national and local government legislation, including permitting and
licensing regimes and taxation policies and the enforcement
thereof; the adoption of a global minimum tax on corporations;
regulatory, political or economic developments in any of the
countries where properties in which Franco-Nevada holds a royalty,
stream or other interest are located or through which they are
held; risks related to the operators of the properties in which
Franco-Nevada holds a royalty, stream or other interest, including
changes in the ownership and control of such operators;
relinquishment or sale of mineral properties; influence of
macroeconomic developments; business opportunities that become
available to, or are pursued by Franco-Nevada; reduced access to
debt and equity capital; litigation; title, permit or license
disputes related to interests on any of the properties in which
Franco-Nevada holds a royalty, stream or other interest; whether or
not the Company is determined to have "passive foreign investment
company" ("PFIC") status as defined in Section 1297 of the United
States Internal Revenue Code of 1986, as amended; potential changes
in Canadian tax treatment of offshore streams; excessive cost
escalation as well as development, permitting, infrastructure,
operating or technical difficulties on any of the properties in
which Franco-Nevada holds a royalty, stream or other interest;
access to sufficient pipeline capacity; actual mineral content may
differ from the mineral resources and mineral reserves contained in
technical reports; rate and timing of production differences from
resource estimates, other technical reports and mine plans; risks
and hazards associated with the business of development and mining
on any of the properties in which Franco-Nevada holds a royalty,
stream or other interest, including, but not limited to unusual or
unexpected geological and metallurgical conditions, slope failures
or cave-ins, sinkholes, flooding and other natural disasters,
terrorism, civil unrest or an outbreak of contagious disease; the
impact of future pandemics; and the integration of acquired assets.
The forward-looking statements contained herein are based upon
assumptions management believes to be reasonable, including,
without limitation: the ongoing operation of the properties in
which Franco-Nevada holds a royalty, stream or other interest by
the owners or operators of such properties in a manner consistent
with past practice; the accuracy of public statements and
disclosures made by the owners or operators of such underlying
properties; no material adverse change in the market price of the
commodities that underlie the asset portfolio; the Company's
ongoing income and assets relating to determination of its PFIC
status; no material changes to existing tax treatment; the expected
application of tax laws and regulations by taxation authorities;
the expected assessment and outcome of any audit by any taxation
authority; no adverse development in respect of any significant
property in which Franco-Nevada holds a royalty, stream or other
interest; the accuracy of publicly disclosed expectations for the
development of underlying properties that are not yet in
production; integration of acquired assets; and the absence of any
other factors that could cause actions, events or results to differ
from those anticipated, estimated or intended. However, there can
be no assurance that forward-looking statements will prove to be
accurate, as actual results and future events could differ
materially from those anticipated in such statements. Investors are
cautioned that forward-looking statements are not guarantees of
future performance. In addition, there can be no assurance as to
(i) the outcome of the ongoing audit by the CRA or the Company's
exposure as a result thereof, or (ii) the future status and any
potential restart of the Cobre Panama mine or the outcome of any
related arbitration proceedings. Franco-Nevada cannot assure investors that actual
results will be consistent with these forward-looking statements.
Accordingly, investors should not place undue reliance on
forward-looking statements due to the inherent uncertainty
therein.
For additional information with respect to risks,
uncertainties and assumptions, please refer to Franco-Nevada's most
recent Annual Information Form as well as Franco-Nevada's most
recent Management's Discussion and Analysis filed with the Canadian
securities regulatory authorities on www.sedarplus.com and
Franco-Nevada's most recent Annual Report filed on Form 40-F filed
with the SEC on www.sec.gov. The forward-looking statements herein
are made as of the date hereof only and Franco-Nevada does not
assume any obligation to update or revise them to reflect new
information, estimates or opinions, future events or results or
otherwise, except as required by applicable law.
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SOURCE Franco-Nevada Corporation