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First Quantum Minerals Ltd. (TSX:FM,LSE:FQM) and Franco-Nevada Corp. (TSX:FNV,NYSE:FNV) announced that they have finalized the terms of a replacement precious metals stream agreement for the Cobre Panama project.
First Quantum Minerals Ltd. (TSX:FM,LSE:FQM) and Franco-Nevada Corp. (TSX:FNV,NYSE:FNV) announced that they have finalized the terms of a replacement precious metals stream agreement for the Cobre Panama project.
In another press release, First Quantum highlights the new agreement as a positive response it has made to the current low price environment.
As quoted in the press release:
Under the terms of the revised agreement, Franco-Nevada’s subsidiary, Franco-Nevada (Barbados) Corporation (“FN Barbados”) will provide a $1 billion deposit against future deliveries of gold and silver from the Project. This deposit will be funded on a pro-rata basis of 1:3 with the Company’s 80% share of the capital costs in excess of $1 billion. Execution of the revised documentation is expected shortly and initial funding is expected to be completed during October. Based on this timing, initial funding by FN Barbados is expected to be $330 million to $340 million.
The changes from the original agreement have largely addressed standardizing reporting arrangements and providing a mechanism for the Company to utilize the Project as collateral whilst still maintaining the FN Barbados security.
Commissioning of the Project is aimed to start before the end of 2017 and remains on track to achieve this.