11:10 AM EST, 12/19/2024 (MT Newswires) -- (Adds analyst comment and updates shares.)

Franco-Nevada ( FNV ) on Thursday said its subsidiary Franco-Nevada ( FNV ) (Barbados) signed a precious metals streaming agreement for specific production from Sibanye-Stillwater's Marikana, Rustenburg and Kroondal mining operations in South Africa.

The stream from the Bushveld Complex operations is primarily composed of a gold component for the life of mine and a platinum component for about 25 years supporting a more stable gold equivalent ounce delivery profile to Franco-Nevada ( FNV ) (Barbados) over this period.

The stream is expected to generate a stable gold equivalent ounce profile over the next 20 years based off the platinum, palladium, rhodium and gold production profile based on Sibanye-Stillwater's ore reserve life of mine as at Dec. 31, 2023.

The stream's effective start date is Sept. 1, with funding of the US$500 million deposit in the next few weeks and first delivery around 45 days after closing of the transaction.

Franco-Nevada ( FNV ) will finance the stream from cash on hand, with about US$1.3 billion in cash and cash equivalents and US$2.3 billion in available capital as at Sept. 30.

"The Bushveld complex represents a unique and essential source of [platinum group metals], with Sibanye-Stillwater's Western Limb operations currently providing approximately 15% of global platinum supply," said Paul Brink, president and CEO of Franco-Nevada ( FNV ). "The combination of extensive resources, established infrastructure, and a large pipeline of extension projects, operated by a leading global PGM producer, makes for a high-quality stream with very long-life potential."

National Bank of Canada maintained its sector-perform rating on the shares of Franco-Nevada ( FNV ) and its $200 price target following the news.

The bank said the rating offsets the company's stable five-year production outlook and industry-leading financial strength with its premium valuation, uncertainty around long-term recoverable value from the Cobre Panama mine and a competitive deal environment for new royalty/stream origination.

Franco-Nevada ( FNV ) shares were last seen up $1.705 to $168.375 on the Toronto Stock Exchange.

Price: 168.30, Change: +1.63, Percent Change: +0.98