The terms are the same as the US$178 million precious metals stream announced in September in connection with First Quantum Minerals Ltd.'s ("First Quantum") acquisition of a separate 10% interest from LS-Nikko Copper Inc.  FNB, First Quantum and KORES have entered into a definitive purchase and sale agreement and closing is expected at the end of January.  The closing is subject to customary closing conditions.  Upon closing, FNB will have precious metal stream interests covering 100% of the ownership of Cobre Panama.

In addition, FNB now expects to fund the combined US$356 million without a syndication partner.  Previously, CEF Holdings Limited was named as a possible one-third syndication partner.  CEF was unable to put a suitable structure in place to participate in this transaction.  Franco-Nevada and CEF look forward to working together on future transactions.

FNB's existing precious metals stream has been in place since 2015 and covers First Quantum's 80% interest in Cobre Panama. This is a US$1 billion commitment with FNB funding prorated to First Quantum's project expenditures.  To the end of 2017, FNB has funded US$727 million under the original stream and has a balance of US$273 million remaining.

Franco-Nevada CEO David Harquail said: "We are pleased to have KORES as a new partner.  KORES has supported the construction of Cobre Panama since the start of the project.

"First Quantum has now substantially de-risked the project and expects to begin phased commissioning in late 2018 with continued ramp-up over 2019.  Cobre Panama is expected to add materially to Franco-Nevada's growth profile beginning in 2019."

Precious Metals Stream Terms

FNB's existing precious metals stream covering 80% of production is being funded pro-rata with First Quantum's project expenditures.  In addition, the ongoing payment for deliveries under this stream uses fixed gold and silver prices with a 1.5% annual inflation factor.

The incremental 20% stream differs in that FNB is funding the full amount upfront rather than pro-rata. In addition, the ongoing payment for deliveries is based on a percentage of the spot price.  The following table sets out the attributable deliveries and thresholds to FNB under the 20% incremental Cobre Panama stream.  All precious metals deliveries are referenced off total project metal-in-concentrate shipped.