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Franco-Nevada Announces $500 Million Precious Metals Stream with Sibanye-Stillwater
FNVFranco-Nevada(FNV) Prnewswire·2024-12-19 05:28

Core Insights - Franco-Nevada Corporation has entered into a 500millionpreciousmetalsstreamagreementwithSibanye−StillwaterLimited,focusingongoldandplatinumproductionfromspecificminingoperationsinSouthAfrica[1][2][3]TransactionOverview−TheStreamwillprovideimmediatecashflowandisexpectedtogenerateastablegoldequivalentounce(GEO)profileoverthenext20years,withapproximately70500 million precious metals stream agreement with Sibanye-Stillwater Limited, focusing on gold and platinum production from specific mining operations in South Africa [1][2][3] Transaction Overview - The Stream will provide immediate cash flow and is expected to generate a stable gold equivalent ounce (GEO) profile over the next 20 years, with approximately 70% gold and 30% platinum deliveries [3][4] - Sibanye-Stillwater's Western Limb operations contribute about 15% of global platinum supply and are expected to operate at the lower half of the PGM cost curve [2][3] - The Stream Area has a mine life projected to extend to 2070, with significant resources including 182 million ounces (Moz) of 4E PGM Measured and Indicated Resources [3][4] Production and Delivery Terms - Gold deliveries will be linked to the volume of 4E PGM ounces produced, ensuring alignment with Sibanye-Stillwater's production [4][5] - The gold stream parameters include a delivery schedule starting at 1.1% of 4E PGM ounces until 87.5 thousand ounces (koz) of gold, then 0.75% until 237 koz, and 80% for the remaining life of mine [5][7] - Platinum stream parameters include 1.0% of platinum until 48 koz is delivered, stepping up to 2.1% until 294 koz, after which no further deliveries will occur [6][7] Financial and Operational Considerations - Franco-Nevada plans to finance the Stream using cash on hand, with approximately 1.3 billion in cash and cash equivalents as of September 30, 2024 [12] - The effective start date of the Stream is September 1, 2024, with the first delivery expected approximately 45 days after closing [7][12] - Corporate guarantees will be provided by Sibanye-Stillwater and its operating companies, ensuring security for Franco-Nevada [7][12] Strategic Importance - This transaction is seen as a means to unlock further value from Sibanye-Stillwater's PGM operations, enhancing their balance sheet while retaining leverage to higher PGM prices [2][3] - The partnership is expected to support both medium and long-term growth for Franco-Nevada, complementing recent deals in other regions [2][3]