Transactions & Cases Detail



Transaction/Case Details

Franco-Nevada to acquire a precious metals stream from Glencore for US$500M

DATE CLOSED

February 11, 2016

BUSINESS SECTOR

Mining & Metals

LEAD OFFICE

London, UK

VALUE

500 Million USD


OVERVIEW

On February 11, 2016, mining and commodities giant Glencore signed a US$500 million deal to deliver gold and silver to Franco-Nevada. At the same time, Franco Nevada undertook a concurrent US$550 million bought deal financing.

Toronto-based Franco-Nevada has committed to acquire a precious metal stream from Glencore’s Antapaccay mine in southern Peru, which has been expanding production since late 2012.  Franco-Nevada will make payments of 20% of the gold and silver delivered from the mine, increasing them to 30% once Glencore delivers 750,000 ounces of gold and 12.8 million ounces of silver.

The contract follows a similar streaming agreement with Silver Wheaton (TSX, NYSE:SLW) in November to deliver silver from its Antamina mine in Peru in exchange for US$900 million. Streaming firms typically provide a chunk of cash upfront to mining companies to secure a “stream” of precious metals down the road. Streaming deals have become increasingly popular of late, as miners have had great difficulty raising cash on stock and bond markets.

Glencore is one of the world’s largest global diversified natural resource companies and a major producer and marketer of more than 90 commodities. The Group's operations comprise around 150 mining and metallurgical sites, oil production assets and agricultural facilities. 

McCarthy Tétrault LLP advised Glencore with a team that included Adam Taylor, Roger Taplin, Adam Wanke and Steve Molnar (Mining and M&A). 

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