Canadian Mining Journal


GOLD-SILVER: Franco-Nevada seals $800M financing for streaming deal with Glencore

PERU – Swiss mining giant Glencore is chipping away at its debt, and its latest move is the sale of a gold and silver stream from the Antapaccay copper mine to Franco-Nevada Corp. of Toronto. Antapaccay is a brownfield expansion of the nearby Tintaya open pit in the Cusco department.

Franco-Nevada is making an immediate payment of US$500 million for the gold and silver amounts as referenced to copper production: 300 oz of gold per 1,000 tonnes of copper in concentrate up until 630,000 oz of gold have been delivered and 30% of gold production thereafter; and 4,700 oz of silver per 1,000 tonnes of copper in concentrate up until 10.0 million oz of silver have been delivered and 30% of silver production thereafter.

Franco-Nevada will make ongoing payments of 20% of the spot gold and silver price per ounce delivered which will increase to 30% of the respective spot prices after 750,000 oz of gold and 12.8 million oz of silver have been delivered.

To pay for these streams, Franco-Nevada entered into a US$550 million bought deal financing consisting of 11.5 million common shares at a price of US$47.85 per share. Earlier today (Feb. 11) the company said that strong demand permitted it to increase the offering to 16.7 million shares, for gross proceeds of US$800 million. The underwriters have also been offered an overallotment that if exercised in its entirety would boost the gross proceeds to US$920 million.

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