Franco-Nevada, Inmet in $1 billion funding deal
(Reuters) - Franco-Nevada Corp (FNV.TO: Quote) (FNV.N: Quote), which provides miners upfront cash in exchange for future production, said it will pay $1 billion to Inmet Mining Corp IMN.TO for the development of its Cobre Panama copper-gold project in Panama.
Toronto-based Franco-Nevada, which holds interests in precious metal, base metal, and oil and gas projects around the world, will get about 86 percent of precious metals output from Inmet's share of production from the mine.
Inmet, also based in Toronto, holds an 80 percent stake in the Cobre Panama project, which is expected to produce an annual average 266,000 tonnes of copper over 31 years, and about 87,000 ounces of gold and 1.5 million ounces of silver per year.
The remaining interest is owned by a Korean consortium that includes Korea Resources Corp KOREC.UL and LS-Nikko Copper Inc.
Inmet, which previously considered selling a part of its interest in Cobre Panama to defray costs, said in July that it was in talks to sell a part of future precious metal production from the mine to help finance its development.
The base metals miner secured $4.2 billion out of an estimated $6.2 billion capital required for the project.
Inmet closed a $1.5 billion debt offer in May with the proceeds of the deal to be used for funding the construction of the Cobre Panama project.
The company's shares, which have lost 32 percent of their value over the last six months, closed at C$44.82 on the Toronto Stock Exchange on Friday.
Shares of Franco-Nevada closed at C$49.08.
(Reporting by Maneesha Tiwari in Bangalore; Editing by Joyjeet Das)
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