Franco-Nevada commits A$220M package to Minerals 260 to accelerate Bullabulling development
Deal snapshot
Franco‑Nevada has structured a A$220 million support package for the Bullabulling Gold Project by buying a A$170M gross royalty and subscribing A$50M for new equity in Minerals 260. The financing raises Franco‑Nevada’s effective royalty over a defined Bullabulling land package to 2.45%, while the equity stake will sit at roughly 4.9% of issued stock on closing.
Operational levers and timing
Transaction proceeds are earmarked to accelerate drilling, site infrastructure and procurement of long‑lead items, supporting Minerals 260’s plan to deliver a pre‑feasibility study by mid‑2026. Management has indicated a pathway to a final investment decision in early 2027 and potential first gold as soon as H2 2028; Franco‑Nevada’s funding lowers near‑term capital strain that can otherwise slow those milestones.
Resource and scale signals
Bullabulling hosts a multi‑million ounce package reported as about 3.0 Moz indicated and 1.5 Moz inferred across several deposits, and Franco‑Nevada’s technical review sees staged throughput expansion toward 7–8 Mtpa. The royalty covers all defined Mineral Resources plus an area of interest, preserving upside from further exploration and conversion work.
Commercial structure and protections
Cash consideration is split into an upfront A$75M payment with a A$95M balance contingent on foreign investment approval; the royalty rate steps down to 1.63% once cumulative production from royalty lands reaches 4 Moz. Franco‑Nevada also secures right of first refusal on future streams, royalties or similar instruments tied to the royalty area, maintaining preferential optionality.
Context and pattern across Franco‑Nevada deals
This transaction follows a clear playbook Franco‑Nevada has used elsewhere — combining a royalty purchase with an equity tranche to accelerate project delivery while limiting operator execution risk. Comparable recent deals (for example, a material royalty-plus-capital package in Nevada) were funded from Franco‑Nevada’s on‑hand liquidity and included commercial rights to collaborate beyond finance, such as commitments on environmental and social programs. While modalities differ by project, the common intent is the same: use targeted hybrid capital to de‑risk staged development and secure long‑term, fee‑like exposure.
Execution risks and strategic implications
Key execution risks remain: timing of FIRB approval for the contingent tranche, schedule slippage in drilling and PFS deliverables, capital intensity of reaching 7–8 Mtpa, and inflation in procurement and construction. The deal shifts near‑term capital burden to Franco‑Nevada and reshapes financing dynamics — it can reduce the need for higher‑cost streaming or dilutive debt in the short term but also establishes Franco‑Nevada as a strategic financier with asymmetric influence via its royalty and minority equity position.
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