Euro, Franco double acreage with new Carlin royalty deal

In a bid to increase their exposure to any new gold discoveries on Nevada’s rich Carlin gold trend, royalty specialists Franco-Nevada Mining (TSE) and Euro-Nevada Mining (TSE) have carved out a new deal with the region’s biggest producer, Newmont Gold (NYSE). Under the agreement, a patchwork of Euro-and Franco-held properties between the Carlin and Gold Quarry mines has been combined with ground owned by Newmont to form a single block of land spanning 12,000 acres.

The agreement makes Newmont sole owner of the properties, while Franco and Euro will share equally a 4% net smelter royalty on any future production.

While no reserves have been established on the royalty ground, Euro-Nevada President Pierre Lassonde says he is delighted with the arrangement as it doubles Euro-Franco’s land position in the heart of the Carlin trend to approximately 18 from 9 square miles.

“Land exposure is everything in the royalty business,” said Lassonde who expects Newmont to spend about $250,000 this year to explore the property.

The royalty block is about three miles north of Newmont’s Gold Quarry mine which at Dec. 31 had 212.5 million tons of proven and possible reserves averaging 0.042 oz. gold per ton or 8.8 million contained oz.

In a separate deal, Euro has agreed to vend its 120-acre Chicagos claim to Newmont in return for a commitment that the big company will spend about $250,000 on exploration. Euro will retain a 5% net smelter royalty on the Chicagos which are on the Carlin trend just south of Newmont’s Blue Star open pit.

Franco’s chief assets are a 4% net smelter and 5% net profit interest royalty in American Barrick Resources’ (TSE) Goldstrike mine at Carlin, while Euro retains, among other things, identical interests in the Purple vein discovery north of Goldstrike.