Gold bars are pictured at the Austrian Gold and Silver Separating Plant 'Oegussa' in Vienna August 26, 2011Lisi Niesner/Reuters
Franco-Nevada Corp. is raising $500-million to make acquisitions, the company said on Wednesday, the same week it announced plans to help finance a gold project in West Africa.
Franco-Nevada, which buys royalties and streams of future gold production from miners, is selling 8.375 million shares at $59.75 in a bought deal to a group of banks led by Royal Bank of Canada.
Earlier this week, Toronto-based Franco-Nevada and fellow streaming company Sandstorm Gold Inc. said it would provide Vancouver-based True Gold Mining Inc. with $100-million to build a gold mine in Burkina Faso.
The share offering comes after Franco-Nevada agreed to help Lundin Mining Corp. finance a bid of more than $2-billion for one of Freeport-McMoRan Copper & Gold Inc.'s big copper mines, according to sources familiar with the matter.
Lundin's bid for Freeport's Candelaria mine in Chile has been held back because of tax issues, sources familiar with the matter said. It is unclear whether they will be resolved.
Franco-Nevada's share offering, the largest in the mining sector this year, is expected to close around Aug. 21.
The other underwriters of the share offering include Canadian Imperial Bank of Commerce, BMO Nesbitt Burns, Bank of America, GMP Securities and National Bank of Canada. The banks have an option to buy an additional 1.256 million shares after the closing, which would raise a total of $575-million for Franco-Nevada.
Rachelle Younglai