Franco-Nevada exchanges the Ken Snyder mine for a 19.9% strategic interest in Normandy Mining Limited

Apr 02, 2001, 01:00 ET from Franco-Nevada Mining Corporation Limited

    TORONTO, April 2 /PRNewswire/ - Toronto-based Franco-Nevada Mining
 Corporation Limited (TSE:FN) has entered into an agreement to exchange its Ken
 Snyder mine and Australian assets in return for a major strategic interest in
 Normandy Mining Limited (Normandy), Australia's largest gold producer.
     The exchange will result in Normandy issuing 446.1 million new ordinary
 shares to Franco-Nevada, representing a 19.9% interest in Normandy, post
 issuance. These shares will have no escrow or other restrictions. Pierre
 Lassonde, President and Co-CEO of Franco-Nevada will join Normandy's board of
 directors.
     Franco-Nevada will transfer to Normandy 100% ownership of its Ken Snyder
 gold mine and Midas exploration properties in Nevada and its Australian
 interests, as well as subscribe for US$48 million in Normandy shares. On the
 Ken Snyder mine and Midas exploration properties, Franco-Nevada will retain a
 minimum 5% net smelter return royalty which escalates at gold prices over
 US$300 per ounce to a maximum 10% net smelter return royalty at gold prices
 over US$400 per ounce. Both companies have granted each other preferential
 rights on future asset transactions.
     The Boards of both companies have approved the transaction and mutual due
 diligence has been completed. This agreement is subject to certain regulatory
 and other approvals including that of the Australian Foreign Investment Review
 Board and by a simple majority of Normandy shareholders voting at a special
 meeting. Both the Normandy shareholder meeting and closing of the transaction
 are expected in May.
     The Ken Snyder mine is a high-grade, underground operation located in
 northern Nevada. For Franco-Nevada's fiscal year ended March 31, 2001 the mine
 produced 216,000 ounces of gold and 2,068,000 ounces of silver for an
 effective production of 257,000 gold equivalent ounces. 282,000 tons of ore
 were milled at an average rate of 775 tons per day with a head grade of 0.95
 gold equivalent ounces per ton. Mill recovery was 96.2% of contained
 equivalent ounces. Unaudited cash operating costs are estimated at US$113 per
 equivalent ounce.
     Proven and probable reserves for the Ken Snyder Mine at March 31, 2001
 are estimated at 3,356,000 tons grading 0.63 ounces per ton of gold (2,128,000
 gold ounces) and 7.77 ounces per ton of silver (26,075,000 silver ounces) for
 an equivalent grade of 0.79 ounces per ton gold equivalent (2,649,000 gold
 equivalent ounces.) Reserves were calculated using a US$300 gold price
 assumption and a 50 to 1 silver to gold equivalency ratio under the direction
 of Paul Schumacher P. Eng. who has been designated as the Qualified Person for
 this purpose.
     Normandy is the seventh largest gold producer in the world with
 attributable gold production of 2.2 million ounces per annum, reserves of 21.8
 million ounces and resources of 53.8 million ounces. Normandy has a record of
 strong earnings and dividend payments.
     Franco-Nevada is the world's leading precious metals royalty company and
 by market capitalization is the fifth largest gold company in the world. This
 transaction will return Franco-Nevada to what it does best, delivering
 superior returns to investors through its high margin royalty and non-
 operating assets in gold, platinum group metals, oil & gas and diamonds.
 
 

SOURCE Franco-Nevada Mining Corporation Limited
    TORONTO, April 2 /PRNewswire/ - Toronto-based Franco-Nevada Mining
 Corporation Limited (TSE:FN) has entered into an agreement to exchange its Ken
 Snyder mine and Australian assets in return for a major strategic interest in
 Normandy Mining Limited (Normandy), Australia's largest gold producer.
     The exchange will result in Normandy issuing 446.1 million new ordinary
 shares to Franco-Nevada, representing a 19.9% interest in Normandy, post
 issuance. These shares will have no escrow or other restrictions. Pierre
 Lassonde, President and Co-CEO of Franco-Nevada will join Normandy's board of
 directors.
     Franco-Nevada will transfer to Normandy 100% ownership of its Ken Snyder
 gold mine and Midas exploration properties in Nevada and its Australian
 interests, as well as subscribe for US$48 million in Normandy shares. On the
 Ken Snyder mine and Midas exploration properties, Franco-Nevada will retain a
 minimum 5% net smelter return royalty which escalates at gold prices over
 US$300 per ounce to a maximum 10% net smelter return royalty at gold prices
 over US$400 per ounce. Both companies have granted each other preferential
 rights on future asset transactions.
     The Boards of both companies have approved the transaction and mutual due
 diligence has been completed. This agreement is subject to certain regulatory
 and other approvals including that of the Australian Foreign Investment Review
 Board and by a simple majority of Normandy shareholders voting at a special
 meeting. Both the Normandy shareholder meeting and closing of the transaction
 are expected in May.
     The Ken Snyder mine is a high-grade, underground operation located in
 northern Nevada. For Franco-Nevada's fiscal year ended March 31, 2001 the mine
 produced 216,000 ounces of gold and 2,068,000 ounces of silver for an
 effective production of 257,000 gold equivalent ounces. 282,000 tons of ore
 were milled at an average rate of 775 tons per day with a head grade of 0.95
 gold equivalent ounces per ton. Mill recovery was 96.2% of contained
 equivalent ounces. Unaudited cash operating costs are estimated at US$113 per
 equivalent ounce.
     Proven and probable reserves for the Ken Snyder Mine at March 31, 2001
 are estimated at 3,356,000 tons grading 0.63 ounces per ton of gold (2,128,000
 gold ounces) and 7.77 ounces per ton of silver (26,075,000 silver ounces) for
 an equivalent grade of 0.79 ounces per ton gold equivalent (2,649,000 gold
 equivalent ounces.) Reserves were calculated using a US$300 gold price
 assumption and a 50 to 1 silver to gold equivalency ratio under the direction
 of Paul Schumacher P. Eng. who has been designated as the Qualified Person for
 this purpose.
     Normandy is the seventh largest gold producer in the world with
 attributable gold production of 2.2 million ounces per annum, reserves of 21.8
 million ounces and resources of 53.8 million ounces. Normandy has a record of
 strong earnings and dividend payments.
     Franco-Nevada is the world's leading precious metals royalty company and
 by market capitalization is the fifth largest gold company in the world. This
 transaction will return Franco-Nevada to what it does best, delivering
 superior returns to investors through its high margin royalty and non-
 operating assets in gold, platinum group metals, oil & gas and diamonds.
 
 SOURCE Franco-Nevada Mining Corporation Limited