Franco-Nevada Corp. (TSX:FNC,NYSE:FNV) and Inmet Mining Corp. (TSX:IMN) announced that Franco-Nevada will contribute $1 billion towards the development costs of Inmet’s Cobre Panama copper project as part of the terms of a precious metals streaming deal between the two companies.
As quoted in the press release:
- Fully funded project: Franco-Nevada will commit $1 billion to Inmet’s share of the development costs of Cobre Panama. Inmet now has funding in place for $4.2 billion of its $4.8 billion required capital with the balance expected either from other sources of debt or from future operating cash flow.
- Aligned partners: The precious metals stream is linked to copper production over the expected initial 31 year mine life – details of the agreement are described below. Basing the gold and silver delivery obligation on copper production provides alignment between Inmet and Franco-Nevada.
- Upside opportunities: The current mine plan envisions an initial 160,000 tonnes per day operation with expansion to 240,000 tonnes per day by the tenth year of operation. There is an opportunity to undertake the expansion earlier, subject to consent from KPMC. The current mine plan incorporates 2.3 billion tonnes of reserves. There is additional potential from up to 1.8 billion of measured and indicated resources not included in reserves as well as an additional 3.7 billion tonnes of inferred resources. Exploration at Cobre Panama is ongoing.