Franco-Nevada buys a royalty on the Côté gold mine for $1.05bn

Franco-Nevada agreed to buy, from a private holder, a 7.5% gross margin royalty covering all reserves and almost all resources at Côté in Ontario. The mine is run by IAMGOLD, which owns 70%, with Sumitomo Metal Mining holding 30%. The two owners can buy back up to half of the royalty.

Why it matters. A large royalty on a new mine is a bond-like claim on its cash flow, priced on the mine’s reserves and the gold price.

Source

MINING.COM

In the course

Module 7: Funding a project