Globe says Franco-Nevada finally making deals

2009-01-22 05:03 ET - In the News

Also In the News (C-CDM) Coeur D'Alene Mines Corp

The Globe and Mail reports in its Thursday, Jan. 22, edition that Franco-Nevada Wednesday did the type of deal investors have been waiting for ever since the firm returned to public markets in December, 2007.

The Globe's Andrew Willis writes in the Streetwise column that in 2008 Franco-Nevada raised $232-million in a bought deal. There was an expectation last year that Franco-Nevada head David Harquail would pound out deals, but he did not. Luckily, the longer he waited, the more equity markets slipped and credit dried up.

This patience translated into far better terms on transactions as Franco-Nevada finally cracks a $400-million war chest. To get access to Franco-Nevada's capital, in this case $80-million, Coeur D'Alene Mines agreed to a 50-per-cent royalty stream on the gold from the Palmarejo mine, which is in Mexico. National Bank Financial analyst Tanya Jakusconek figures "this acquisition could have a net present value of about $120-million."

As a result Ms. Jakusconek added 40 cents a share to her $11.20-a-share net asset value estimate for Franco-Nevada. The Coeur D'Alene financing comes on the heels of a $103.5-million investment in December in one of Newmont's Nevada gold mines.

Hg