Business
Franco-Nevada to acquire 22% gold stream on Taseko's Prosperity Project
Franco-Nevada to acquire 22% gold stream on Taseko's Prosperity Project
About this update from Franco-nevada Corporation
[{"type":"text","content":"\n\n\n\n May 12, 2010 (Canada NewsWire Group) -- \n\n >\n\n\n Franco-Nevada Corporation (TSX:FNV) has agreed to acquire an amount of gold equal to 22% of the gold produced at the Prosperity copper-gold project in British Columbia from Taseko Mines Limited (TSX:TKO). Franco-Nevada will provide a US$350 million deposit for the construction of Prosperity advanced pro-rata with other financing for the project once the project is fully permitted and financed and will grant Taseko two million of its 2017 warrants (TSX:FNV.WT.A), subject to TSX approval, with the first installment. In addition Franco-Nevada will pay Taseko the lower of US$400 an ounce (subject to an adjustment for inflation) or the prevailing market price for each ounce of gold delivered.\nTaseko plans to develop its 100% owned Prosperity Property in British Columbia into a large-scale, long-life open pit mine. Taseko operates the Gibraltar mine, Canada's 2nd largest open pit copper mine, located 125 km northeast of Prosperity. In November 2009 Taseko announced reserves for Prosperity of 7.7 million ounces of recoverable gold and 3.6 billion pounds of recoverable copper. Taseko projects pre-production capital costs of C$815 million to construct a project capable of milling 70,000 tonnes per day and producing in the first five years an average of 300,000 ounces of gold and 130 million pounds of copper per year. In January 2010, a provincial environmental assessment certificate was issued for Prosperity and the federal review process for the project is currently underway. Taseko expects a 2.5 year construction and commissioning period that would commence on receipt of the federal environmental authorization. With this financing commitment, its cash on hand and operating cash flow from Gibraltar, Taseko will have Prosperity approximately 80% funded without any debt. Additional details on the project are available from Taseko's public disclosures on its website and SEDAR.\nFranco-Nevada has substantial capital resources to support the development of the Prosperity project. At March 31, 2010, Franco-Nevada held over US$650 million in working capital and marketable securities along with an available revolver of US$175 million. Franco-Nevada has no debt or material capital needs and is generating strong cash flow from its existing portfolio of royalties. "We are very ple...