Minerals 260 Ltd. has secured a AU$220 million strategic funding package from Franco-Nevada Corp. to accelerate and de-risk the development of the Bullabulling gold project in Western Australia.
Franco-Nevada’s subsidiary Franco-Nevada Australia will pay AU$170 million in exchange for increasing its total royalty over the project to 2.45 per cent from its current royalty of 1 per cent over certain tenements.
Franco-Nevada will also invest AU$50 million by subscribing to 111.11 million shares at 45 cents each. After this investment, Franco-Nevada will hold 4.9 per cent of shares.
The investment is the largest ever investment in Australia by Franco-Nevada after extensive due diligence.
Franco-Nevada CEO Paul Brink said Bullabulling project as “one of the most attractive gold development projects in Australia” due to its growing orebody.
“After a full review by our team of the rapid and impressive progress made by Minerals 260, we are excited to increase our exposure to the project,” Brink said.
“This represents Franco-Nevada’s largest ever royalty acquisition in Australia and adds to the extensive royalty coverage we have in the country.”
The funds raised will be used to construct an initial 400-room village, procurement of long lead items and commencement of early site works.
Minerals 260 is on track to release its pre-feasibility study on Bullabulling in July. The company is undertaking environmental and technical assessment to support the preparation of key statutory approvals.
The Bullabulling gold project is in the Eastern Goldfields region of Western Australian and hosts a JORC 2012 mineral resource estimate of 130 million tonnes at 1.0 grams per tonne of gold for 4.5 million ounces of gold.
Minerals 260 Managing Director Luke McFayden said securing funding from Franco-Nevada is value accretive and is a fantastic outcome for the company.
“Securing a AU$220 million funding package with the world’s leading gold royalty company at this early stage of Bullabulling’s development is a major endorsement of the project and a milestone that will allow us to accelerate the project towards production, expand our exploration strategy and de-risk our funding pathway.”