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Franco-Nevada Closes Glencore's Precious Metals Stream Buy

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Franco-Nevada CorporationFNV declared that it has concluded the acquisition, through its fully owned subsidiary Franco-Nevada (Barbados) Corporation ("FNB"), of a precious metals stream ("Glencore Stream") with reference to production from the Antapaccay mine. Antapaccay, based in Southern Peru, is fully owned and operated by Glencore plc and its subsidiaries.

FNB made a one-time advance payment of $500 million for the Glencore Stream and financed the transaction using the net proceeds of Franco-Nevada's offering of common shares that closed on Feb Array9.

Through this acquisition, Franco-Nevada hopes to further strengthen and diversify its portfolio of some the best mining projects in the world. The renowned Antapaccay open pit mine has been expanding throughput rates and production since late 20Array2. Glencore invested an additional $Array.5 billion to develop Antapaccay into a low-cost operation, which is counted among the top 20 copper mines in the world in terms of production. It is located on the same property as the Tintaya mine that has been operational for almost three decades.

Franco-Nevada expects 60,000-70,000 gold equivalent ounces (GEOs) applicable to deliveries from the stream in 20Array6. The company expects ArrayArray months of deliveries to add to the top line in the same year.

Total throughput from the Antapaccay plant and Tintaya plant are expected to rise to Array05,000 tons per day by mid-20Array6. The company anticipates full-year contributions from the Glencore Stream to average 70,000 to 80,000 GEOs in each of the next five years. Glencore's current mine plan projects production till 2030.

Per the deal, FNB will be provided 300 ounces of gold and 4,700 ounces of silver for each Array,000 tons of copper in concentrate it ships. However, after the Franco-Nevada unit delivers 630,000 ounces of gold and Array0 million ounces of silver it will get 30% of the gold and silver shipped.

Franco-Nevada, last Friday, also declared a dividend of 2Array cents per share for the first quarter of 20Array6. The dividend is payable on Mar 3Array to its shareholders of record as of Mar Array7, 20Array6.

Franco-Nevada currently carries a Zacks Rank #3 (Hold).

Some better-ranked mining companies are AngloGold Ashanti Ltd. AU , Golden Star Resources, Ltd. GSS and Harmony Gold Mining Company Limited HMY . All the three stocks carry a Zacks Rank #2 (Buy).

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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