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Franco-Nevada to provide True Gold's Karma Project with up to $120 million stream financing in partnership with Sandstorm Gold
TORONTO , Aug. 11, 2014 /CNW/ - Franco-Nevada (TSX/NYSE: FNV) and Sandstorm Gold Inc. ("S...
About this update from Franco-nevada Corporation
[{"type":"text","content":"\n\nTORONTO, Aug. 11, 2014 /CNW/ - Franco-Nevada (TSX/NYSE: FNV) and Sandstorm Gold Inc. (\"Sandstorm\") (T: SSL; NYSE.MKT: SAND) have entered into a US$120-million stream financing agreement (the \"Agreement\") with True Gold Mining Inc. (TSX-V; TGM) (\"True Gold\") to assist in funding the construction of the Karma Project (\"Karma\") in Burkina Faso, West Africa.  True Gold is targeting first gold pour at Karma by the end of 2015.\n\nKEY TRANSACTION TERMS\n\n\nFranco-Nevada and Sandstorm (the \"Syndicate\") will provide True Gold with US$100 million in initial funding.  Franco-Nevada and Sandstorm will provide 75% and 25% of the upfront deposit respectively.  \nOver a period of five years, starting March 31, 2016, True Gold shall deliver to the Syndicate an aggregate of 20,000 ounces of gold each year, for a total of 100,000 ounces of gold. Thereafter, True Gold shall deliver to the Syndicate an amount of refined gold equal to 6.5% of the equivalent amount of gold produced at Karma for the life of the project in exchange for Ongoing Payments. \nIn addition to the deposit, the Syndicate will pay True Gold 20% of the spot price of gold (\"Ongoing Payment\") for each ounce delivered by True Gold. \nThe Agreement covers all of the concessions within the 856 km2 Karma project and also includes a defined area of interest of 5 km surrounding the borders of the Karma project. \nTrue Gold has the option to increase the funding provided by the Syndicate by up to US$20-million (\"Increase Option\") during the next 18 months.  The Increase Option is repayable in eight quarterly deliveries totalling up to 30,000 ounces of gold based on the pro-rata portion of the amount drawn thereunder, starting 18 months from when the first tranche under the Increase Option is drawn down. \nStream financing will be provided by Franco-Nevada (Barbados) Corporation (\"FNB\"), a wholly-owned subsidiary of Franco-Nevada, to a wholly-owned subsidiary of True Gold.  \nThe deposit will be funded conditional on the project being fully funded and all permits being in place and will be made available pro-rata with other sources of funding for the project. The completion of the stream financing, together with True Gold's other funding sources, will fully fund the current project plan and the supplemental permits for True Gold's Kao and Nam...