11:25 AM EDT, 07/15/2024 (MT Newswires) -- Franco-Nevada ( FNV ) on Monday said its subsidiary Franco-Nevada ( FNV ) (Barbados) acquired a gold stream from SolGold's ( SLGGF ) gold production from the Cascabel project in Ecuador.

Franco-Nevada Barbados (FNB) has partnered with Osisko Gold Royalties ( OR ) (OR.TO, OR) subsidiary Osisko Bermuda to provide a syndicated financing package on a 70%/30% basis, under which FNB will provide US$525 million and Osisko will provide US$225 million for a total of US$750 million.

A total of US$100 million, consisting of US$70 million from FNB and US$30 million from Osisko, will be allocated for pre-construction funding available as three equal-sized staged payments. The first tranche will be funded at closing with two further tranches, subject to development milestones.

FNB will make US$455 million available and Osisko will make US$195 million available for a total of US$650 million toward construction once the project is fully funded.

"Cascabel ranks amongst the best copper-gold development projects in the world and has the potential to add significant [gold equivalent ounces] to our growth pipeline," said Franco-Nevada President and CEO Paul Brink.

In return for the financing, the pair will receive 20% of Cascabel's production at 20% of the spot gold price until the mine produces 750,000 ounces. They will receive 12% of the mine's output. The agreement covers only the mine's gold production.

Franco-Nevada ( FNV ) will finance the transactions from cash on hand, with about US$1.3 billion in cash and cash equivalents and US$2.3 billion in available capital as of March 31.

Meanwhile, Franco-Nevada ( FNV ) received a sector-perform rating and a $195 price target while Osisko secured an outperform rating and a $26.00 price target from National Bank of Canada.

The bank said in a Monday note that the "syndication of royalties is a sign of cooperation for limited resources and has likely led to improved economics with respect to the stream."

Franco-Nevada's ( FNV ) shares were last seen down $0.14 to $175.88 on the Toronto Stock Exchange, while Osisko shares rose $0.48 to $23.94 and SolGold ( SLGGF ) rose $0.04 to $0.19.

Price: 175.88, Change: -0.14, Percent Change: -0.08