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Voisey's Bay

Canada Flag

Operator: Vale S.A.

Location: Labrador, Canada

Royalty:

2.7% NVR (copper, nickel and cobalt)

Term of Royalty: Life of Mine

Voisey’s Bay is an open-pit mine, owned and operated by Vale Newfoundland & Labrador Ltd., a subsidiary of Vale S.A. Voisey’s Bay is located in the province of Newfoundland & Labrador, Canada, approximately 35 kilometers southwest of the town of Nain and 80 kilometers northwest of Natuashish.

Operations at the Voisey’s Bay open-pit mine began in 2005. Ore is processed at a 6,000 tonne per day mill facility that produces two types of concentrate: nickel-cobalt-copper concentrate and copper concentrate. Nickel concentrate is processed at the Long Harbour Processing Plant (LHPP) hydrometallurgical processing facility in Long Harbour, Newfoundland, which began operations in 2014, and copper concentrate is sold on the open market.

The Voisey’s Bay underground mine extension project (VBME) is expected to replace production from the existing Voisey’s Bay open-pit mine and extend the mine life of the Voisey’s Bay operation from 2023 to 2034. Estimated average annual production will be around 45,000 tonnes of nickel, 20,000 tonnes of copper and 2,600 tonnes of cobalt. VBME start-up is expected in the first half of calendar 2021.

Labrador Nickel Royalty Limited Partnership (LNRLP) holds a 3% net value royalty on Voisey’s Bay, of which Royal Gold, Inc.’s wholly-owned indirect subsidiary, International Royalty Corporation, is the general partner and 90% owner. The remaining 10% interest in LNRLP is owned by a subsidiary of Altius Minerals Corporation.

Royal Gold acquired the Voisey’s Bay royalty, effective February 22, 2010, with the acquisition of International Royalty Corporation.

On September 13, 2018, LNRLP entered into an agreement with Vale Canada Limited and certain of its subsidiaries (collectively, the “Parties”) to comprehensively settle long-standing litigation related to calculation of the royalty on the sale of all concentrates produced from the Voisey’s Bay mine.

The Parties agreed to a new method for calculating the royalty in respect of concentrates processed at Vale’s Long Harbour Processing Plant (LHPP), which became effective for all Voisey’s Bay mine production after April 1, 2018. Under the terms of the settlement, Royal Gold expects the 3% royalty rate will apply to approximately 50% of the gross metal value in the concentrates at the nickel, copper and cobalt prices prevailing at the time of settlement. As those metal prices rise or fall, the percentage of gross metal value in the concentrates applicable to the royalty correspondingly increases or decreases.

*Detailed information on our interest can be found on the Portfolio Asset Summary table