Franco-Nevada issue worth $38 million

Gold royalty company Franco-Nevada Mining (TSE) plans to raise at least $38 million through an offering of special warrants.

The Toronto-based company has entered into an agreement with First Marathon Securities, Gordon Capital Corp. and Nesbitt Thomson to issue one million special warrants at $38 each. The transaction is subject to regulatory approval.

Each special warrant will be convertible into one common share and one-half of a warrant to purchase an additional share at $50 per share, exercisable for five years.

Among Franco’s royalty assets is a net smelter return from the Goldstrike mine in Nevada which produced more than 1.1 million oz. in 1992 for operator American Barrick Resources.

In addition, Franco has a 5-6% net profit interest in Goldstrike which will come into effect after the operator pays back the capital outlays required to develop the property.

Meanwhile, associated company Redstone Resources (TSE) has added three copper royalties to its portfolio of base metal and industrial mineral royalties at a total acquisition cost of US$2.1 million.

These include: a 1.5% gross royalty on Asarco’s Helvetia property 50 km southeast of Tucson, Ariz.; a 0.225% gross royalty on Magma Copper Co.’s Robinson property near Ely, Nev.; and a 5% gross royalty on 12 patented claims in the old Bristol and Jackrabbit mining districts of southeastern Nevada.