Lake Shore Gold, Franco-Nevada close equity investment transaction

11 March 2012 (Last Updated March 11th, 2012 18:30)

Canada's Lake Shore Gold Corp has closed its previously-announced royalty and equity investment agreements with Franco-Nevada Corp.

Canada's Lake Shore Gold Corp has closed its previously-announced royalty and equity investment agreements with Franco-Nevada Corp.

Under the terms of the agreement, Franco-Nevada has made a payment of $35m to Lake Shore for a 2.25% net smelter return (NSR) royalty on the sale of minerals at Lake Shore's Timmins West Complex in Ontario, Canada.

Franco-Nevada has also paid $15m to acquire 10,050,591 common shares of the company on a private placement basis.

Lake Shore president and CEO Gold Tony Makuch said: "We are pleased to have completed this transaction and to welcome Franco-Nevada as a new shareholder of the company.

"With the funds we have received, our pro forma cash position at the end of February stood at approximately $95 million, which provides significant financial flexibility as we prepare for a sharp increase in production beginning late this year."