Getting in On US; Largest and Fastest Growing Gold Discoveries

Franco-Nevada Corporation has officially confirmed the news of its wholly-owned subsidiary acquiring an existing 1.0% net smelter return royalty on AngloGold Ashanti plc’s Arthur Gold Project (previously the Expanded Silicon Project) from Altius Minerals Corporation.

According to certain reports, the stated subsidiary paid up $250 million in cash, plus a contingent cash payment of $25 million payable subject to the achievement of particular conditions.

For better understanding, the Arthur Gold Project is one of the largest new gold discoveries in all of United States. An example relaying the same would be how one ongoing drill program on the site has successfully expanded the resource by 20% year over year, taking the gold Mineral Resource base to 3.4 million ounces of Indicated Mineral Resources and 12.9 million ounces of Inferred Mineral Resources.

Talk about the whole transaction on a slightly deeper level, we begin from the royalty to Franco-Nevada on a Tier-1 gold asset in Nevada. This royalty basically applies to a substantial land package in the Beatty District of Nevada which covers the vast majority of existing Mineral Resource of the Arthur Gold Project (including both Merlin and Silicon deposits), thus providing the potential for decades of stable gold cash flow once in production. 

Next up, we must dig into how the acquisition unlocks for Franco-Nevada extensive amounts of mineral endowment and exploration potential. We get to say so because the Arthur Gold Project has a large and rapidly growing Mineral Resource base across the Merlin and Silicon deposits for a total of 3.4 Moz of gold Indicated Mineral Resources (122 Mt at 0.87 g/t Au) and 12.9 Moz of gold Inferred Mineral Resources (391 Mt at 1.03 g/t Au). 

Not just that, the mineral resources in question have also grown rapidly since first discovery in 2018 and the maiden Resource estimate in 2021.

Markedly enough, AngloGold has already completed 430 km of drilling as of year-end 2024. This covers 132 km of drilling with two reverse circulation, and seven diamond core rigs. 

Another detail worth a mention relates to how The Arthur Gold Project is envisioned as a large oxide project with both heap leach and milling operations, making it a Tier-1 opportunity for AngloGold. As for the initiative’s key priorities moving forward, they include advancing further infill drilling; a potential upgrade in resources to reserves, and executing strategic land and water rights acquisitions.

Now, we referred to $25 million worth of contingency payments, but what we haven’t mentioned yet is that they will be dependent on final outcome of an ongoing arbitration process between Altius and AngloGold which will confirm the full extent of royalty beyond the base area of interest.

Among other things, it ought to be acknowledged that this whole transaction was structured as an asset sale and Franco-Nevada will deplete the full purchase price on a units-of-production basis for tax depletion purposes.

“We are pleased to acquire this existing Royalty on the Arthur Gold Project, which is one of the most exciting new gold discoveries in Nevada,” said Paul Brink, President & CEO of Franco-Nevada. “AngloGold, a tier-1 operator, has been rapidly growing the resource base at Arthur since its initial discovery in 2018. This acquisition will further add to our portfolio of Nevada royalties, and we look forward to the long-term growth potential of the asset and the overall district as AngloGold continues to advance the project.”