09:29 AM EDT, 07/17/2024 (MT Newswires) -- Stifel GMP on Wednesday reiterated its buy rating on the shares of Franco-Nevada ( FNV ) and its C$196.00 price target after the royalty and streaming company acquired a gold stream on SolgGold's (SOLG.TO) Cascabel Project in Ecuador.

"FNV along with Osisko Gold Royalties (OR) announced they had together entered into a gold stream for SolGold's Cascabel copper-gold project in Ecuador. This is a syndicated (70% FNV / 30% OR) US$750M gold stream for 20% of gold production (reducing to 12% following delivery threshold) on one of the largest undeveloped copper resources in Latin America. On first look, we estimate the gold stream to be NAV neutral/marginally accretive to FNV with an after-tax IRR of ~8% based on our LT gold price of $1,900/oz (at spot gold prices, our estimated IRR increases to low double-digits) and 28-year LOM. We assume initial production by the end of this decade. We see the merits of locking in exposure in a long-life, quality copper-gold project - Cascabel has been a recent success on new, sizable copper-gold discoveries. The currently projected 28-year mine-life is likely to be a snapshot of its longevity," analyst Ingrid Rico wrote.

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