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Franco-Nevada to Acquire a Gold & Silver Stream on Candelaria from Lundin Mining for US$648 million
TORONTO , Oct. 6, 2014 /CNW/ - Franco-Nevada Corporation (TSX: FNV; NYSE: FNV) today...
About this update from Franco-nevada Corporation
[{"type":"text","content":"\n\nTORONTO, Oct. 6, 2014 /CNW/ - Franco-Nevada Corporation (TSX: FNV; NYSE: FNV) today announced that it has agreed to acquire a gold & silver stream on production from the Candelaria and Ojos del Salado mines (collectively \"Candelaria\") located in Chile from Lundin Mining Corporation (\"Lundin\") upon the completion of the acquisition of Candelaria by Lundin from Freeport-McMoRan Inc. (\"Freeport\").  Candelaria is currently owned 80% by Freeport and 20% by Sumitomo Corporation and Sumitomo Metal Mining Co., Ltd. (collectively \"Sumitomo\"). Lundin announced today that it has agreed to acquire Freeport's 80% interest in Candelaria for US$1.8 billion and Sumitomo will continue as a 20% partner.  Franco-Nevada will provide an up-front deposit of US$648 million to acquire a gold & silver stream and Franco-Nevada has agreed to subscribe for up to C$50 million in Lundin's planned subscription receipts financing. \n\n\"Franco-Nevada is pleased to partner with Lundin to support this major step in its growth,\" said David Harquail, President and CEO of Franco-Nevada.  \"Today's announcement is a good example of how royalty and stream financing can work in parallel with more traditional debt and equity financing sources to help an operating company execute a major acquisition.  For Franco-Nevada, this will be a new cornerstone asset defined by substantial cash flow, upside potential and attractive geography.\"\n\nTransaction Highlights\n\n\nImmediate contribution: Candelaria is an established mining operation which will immediately contribute to Franco-Nevada's revenues and cash flows upon closing. The effective date for the transaction is July 1, 2014 with closing expected before year end. For the second half of 2014, Franco-Nevada is expecting 35,000 to 40,000 gold equivalent ounces (\"GEOs\")1 applicable to the stream. The amount of GEOs recognized in revenue by Franco-Nevada in 2014 may vary depending on the timing of concentrate shipments and sales. Based on expected mine performance, full year contributions to Franco-Nevada from Candelaria are expected to average 60,000 to 70,000 GEOs per year over the next 5 years with 2015 expected to be a stronger than average year. Assuming current spot commodity prices, this would increase Franco-Nevada's operating cash flow by approximately 20% and GEOs by...