Franco-Nevada Reports Q3 2024 Results
Franco-Nevada reported Q3 2024 results with revenue of $275.7 million, down 11% year-over-year, primarily due to Cobre Panama's inactive status. The company sold 110,110 GEOs, a 32% decrease from Q3 2023. Net income was $152.7 million ($0.79/share). Notable developments include initial contributions from the newly commissioned Tocantinzinho mine, increased contributions from Greenstone mine, and the newly acquired Yanacocha royalty. The company maintains a strong financial position with no debt and $2.3 billion in available capital. Due to lower gold production at Candelaria and slower mine ramp-ups, Franco-Nevada revised its 2024 guidance to 445,000-465,000 total GEOs.
Franco-Nevada ha riportato i risultati del terzo trimestre 2024 con un fatturato di 275,7 milioni di dollari, in calo dell'11% rispetto all'anno precedente, principalmente a causa dello stato inattivo di Cobre Panama. L'azienda ha venduto 110.110 GEO, con una diminuzione del 32% rispetto al terzo trimestre 2023. L'utile netto è stato di 152,7 milioni di dollari (0,79 dollari per azione). Tra gli sviluppi significativi ci sono i contributi iniziali dalla nuova miniera Tocantinzinho, aumenti dei contributi dalla miniera Greenstone e la nuova royalty acquisita di Yanacocha. L'azienda mantiene una solida posizione finanziaria senza debiti e con 2,3 miliardi di dollari di capitale disponibile. A causa della riduzione della produzione d'oro a Candelaria e dei rallentamenti nei lavori di estrazione, Franco-Nevada ha rivisto le previsioni per il 2024 a un totale di 445.000-465.000 GEO.
Franco-Nevada reportó resultados del tercer trimestre de 2024 con ingresos de 275,7 millones de dólares, una disminución del 11% en comparación con el año anterior, principalmente debido al estado inactivo de Cobre Panamá. La compañía vendió 110,110 GEO, una disminución del 32% respecto al tercer trimestre de 2023. El beneficio neto fue de 152,7 millones de dólares (0,79 dólares por acción). Los desarrollos notables incluyen las primeras contribuciones de la nueva mina Tocantinzinho, el aumento de las contribuciones de la mina Greenstone y la nueva regalía adquirida de Yanacocha. La compañía mantiene una sólida posición financiera sin deudas y con 2,3 mil millones de dólares en capital disponible. Debido a la menor producción de oro en Candelaria y a una ralentización en la puesta en marcha de las minas, Franco-Nevada revisó su pronóstico para 2024 a un total de 445,000-465,000 GEO.
프랑코-네바다는 2024년 3분기 실적을 발표하며 2억 7570만 달러의 수익을 보고했습니다. 이는 전년 대비 11% 감소한 수치로, 주요 원인은 코브레 파나마의 비활성 상태입니다. 회사는 110,110 GEO를 판매했으며, 이는 2023년 3분기 대비 32% 감소한 것입니다. 순이익은 1억 5270만 달러 (주당 0.79 달러)였습니다. 주목할 만한 발전으로는 새로 가동된 토칸틴진호 광산의 초기 기여도와 그린스톤 광산의 기여 증대, 새로 인수한 야나코차 로열티가 포함됩니다. 회사는 부채가 없고 23억 달러의 자본이 있는 강력한 재무 상태를 유지하고 있습니다. 칸델라리아에서의 낮은 금 생산량과 광산 확장 지연으로 인해, 프랑코-네바다는 2024년 가이던스를 445,000-465,000 GEO로 수정했습니다.
Franco-Nevada a publié les résultats du troisième trimestre 2024 avec un chiffre d'affaires de 275,7 millions de dollars, en baisse de 11 % par rapport à l'année précédente, principalement en raison du statut inactif de Cobre Panama. L'entreprise a vendu 110 110 GEO, soit une diminution de 32 % par rapport au troisième trimestre 2023. Le résultat net s'est élevé à 152,7 millions de dollars (0,79 dollar par action). Les développements notables incluent les premières contributions de la nouvelle mine Tocantinzinho, l'augmentation des contributions de la mine Greenstone et la nouvelle redevance acquise de Yanacocha. L'entreprise maintient une solide position financière sans dettes et avec 2,3 milliards de dollars de capital disponible. En raison d'une production d'or plus faible à Candelaria et d'une mise en service plus lente des mines, Franco-Nevada a révisé ses prévisions pour 2024 à un total de 445 000-465 000 GEO.
Franco-Nevada hat die Ergebnisse des dritten Quartals 2024 mit einem Umsatz von 275,7 Millionen Dollar gemeldet, was einem Rückgang von 11 % im Jahresvergleich entspricht, hauptsächlich aufgrund des inaktiven Status von Cobre Panama. Das Unternehmen verkaufte 110.110 GEO, ein Rückgang von 32 % im Vergleich zum dritten Quartal 2023. Der Nettogewinn betrug 152,7 Millionen Dollar (0,79 Dollar pro Aktie). Zu den bemerkenswerten Entwicklungen gehören die ersten Beiträge aus der neu in Betrieb genommenen Tocantinzinho-Mine, höhere Beiträge aus der Greenstone-Mine und die neu erworbene Royalties von Yanacocha. Das Unternehmen hat eine starke finanzielle Position mit keinen Schulden und 2,3 Milliarden Dollar an verfügbarem Kapital. Aufgrund der geringeren Goldproduktion in Candelaria und langsamerer Anlaufzeiten der Minen hat Franco-Nevada die Prognose für 2024 auf 445.000-465.000 GEO angepasst.
- Record gold prices drove higher revenues quarter-over-quarter
- Strong financial position with no debt and $2.3 billion in available capital
- Initial contributions from newly commissioned Tocantinzinho mine
- Quarterly dividend increased by 5.88% to $0.36/share
- exposure to cost inflation
- Revenue decreased 11% year-over-year to $275.7 million
- GEOs sold decreased 32% year-over-year to 110,110
- Net income declined 13% year-over-year to $152.7 million
- Downward revision of 2024 GEO sales guidance from 480,000-540,000 to 445,000-465,000
- Continued suspension of Cobre Panama operations affecting performance
Insights
Franco-Nevada's Q3 2024 results show mixed performance with
Key positives include initial contributions from Tocantinzinho stream, increased revenue from Greenstone mine and the newly acquired Yanacocha royalty. However, challenges include revised lower gold production guidance at Candelaria and slower ramp-ups at new mines, leading to reduced 2024 GEO guidance of 445,000-465,000 from previous 480,000-540,000.
The diversified portfolio strategy continues to provide stability, with precious metals accounting for
The operational landscape shows mixed results across Franco-Nevada's portfolio. The Tocantinzinho mine's commercial production achievement is significant, targeting 174,700 annual gold ounces over 10.5 years. The Cobre Panama situation remains uncertain, with resolution potentially delayed until early 2025.
Portfolio development continues with strategic moves in high-potential areas: the Cascabel copper-gold project stream, expansion potential at Detour Lake targeting 1 million annual ounces from 2030 and synergistic opportunities at the Magino/Island Gold complex. However, commissioning challenges at Greenstone and revised production guidance at several operations indicate near-term operational headwinds.
The company's exposure to multiple commodities and jurisdictions provides resilience, though the reduced GEO guidance reflects both operational challenges and the mathematical impact of higher gold prices on GEO calculations for non-gold revenue.
Initial Contributions from Tocantinzinho Stream
(in
Financial Summary
in revenue, -$275.7 million 11% compared to Q3 2023, or +14% when excluding the impact of Cobre Panama remaining on preservation and safe management during the quarter- 110,110 GEOs sold in the quarter, -
32% compared to Q3 2023, which partly reflects:22% due to the impact of Cobre Panama, and3% due to record gold prices, reducing the conversion of non-gold revenue into GEOs
in operating cash flow, -$213.6 million 9% compared to Q3 2023 in net income or$152.7 million /share, -$0.79 13% compared to Q3 2023 in Adjusted EBITDA or$236.2 million /share, -$1.23 7% compared to Q3 2023, or +16% excluding Cobre Panama in Adjusted Net Income or$153.9 million /share, -$0.80 12% compared to Q3 2023, or +12% excluding Cobre Panama- Quarterly dividend of
/share effective Q1 2024, an annual increase of$0.36 5.88% - Strong financial position with no debt and
in available capital as at September 30, 2024$2.3 billion
Sector-Leading ESG
- Rated #1 precious metals company and #1 gold company by Sustainalytics, AA by MSCI and Prime by ISS ESG
- Committed to the World Gold Council's Responsible Gold Mining Principles
- Partnering with our operators on community and ESG initiatives
40% diverse representation at the Board and top leadership levels as a group
Diverse, Long-Life Portfolio
- Most diverse royalty and streaming portfolio by asset, operator and country
- Attractive mix of long-life streams and high optionality royalties
- Long-life mineral resources and mineral reserves
Growth and Optionality
- Mine expansions and new mines driving 5-year growth profile
- Long-term optionality in gold, copper and nickel and exposure to some of the world's great mineral endowments
- Strong pipeline of precious metal and diversified opportunities
Quarterly revenue and GEOs sold by commodity | |||||||||||
Q3 2024 | Q3 2023 | ||||||||||
GEOs Sold | Revenue | GEOs Sold | Revenue | ||||||||
# | (in millions) | # | (in millions) | ||||||||
PRECIOUS METALS | |||||||||||
Gold (excluding Cobre Panama) | 71,100 | $ | 177.6 | 72,939 | $ | 140.4 | |||||
Silver (excluding Cobre Panama) | 11,111 | 28.5 | 12,261 | 23.4 | |||||||
PGM | 2,166 | 5.6 | 5,170 | 9.7 | |||||||
84,377 | $ | 211.7 | 90,370 | $ | 173.5 | ||||||
DIVERSIFIED | |||||||||||
Iron ore | 5,528 | $ | 12.1 | 6,619 | $ | 12.8 | |||||
Other mining assets | 1,068 | 2.7 | 1,677 | 3.2 | |||||||
Oil | 14,366 | 32.5 | 20,926 | 38.2 | |||||||
Gas | 2,576 | 8.4 | 4,098 | 9.9 | |||||||
NGL | 2,195 | 5.5 | 2,191 | 4.6 | |||||||
25,733 | $ | 61.2 | 35,511 | $ | 68.7 | ||||||
Royalty, stream and working interests (excluding Cobre | 110,110 | $ | 272.9 | 125,881 | $ | 242.2 | |||||
Interest revenue and other interest income | — | $ | 2.8 | — | $ | — | |||||
Revenue and GEOs (excluding Cobre Panama) | 110,110 | $ | 275.7 | 125,881 | $ | 242.2 | |||||
Cobre Panama | — | $ | — | 34,967 | $ | 67.3 | |||||
Total revenue and GEOs | 110,110 | $ | 275.7 | 160,848 | $ | 309.5 |
Year-to-date revenue and GEOs sold by commodity | |||||||||||
YTD 2024 | YTD 2023 | ||||||||||
GEOs Sold | Revenue | GEOs Sold | Revenue | ||||||||
# | (in millions) | # | (in millions) | ||||||||
PRECIOUS METALS | |||||||||||
Gold (excluding Cobre Panama) | 215,635 | $ | 495.3 | 215,146 | $ | 415.8 | |||||
Silver (excluding Cobre Panama) | 34,796 | 81.5 | 37,231 | 71.9 | |||||||
PGM | 9,284 | 21.8 | 15,951 | 31.0 | |||||||
259,715 | $ | 598.6 | 268,328 | $ | 518.7 | ||||||
DIVERSIFIED | |||||||||||
Iron ore | 17,984 | $ | 38.9 | 18,801 | $ | 36.0 | |||||
Other mining assets | 3,223 | 7.4 | 5,435 | 10.3 | |||||||
Oil | 44,713 | 94.6 | 54,847 | 102.2 | |||||||
Gas | 11,450 | 31.5 | 19,800 | 41.0 | |||||||
NGL | 6,156 | 15.0 | 7,203 | 14.0 | |||||||
83,526 | $ | 187.4 | 106,086 | $ | 203.5 | ||||||
Royalty, stream and working interests (excluding Cobre Panama) | 343,241 | $ | 786.0 | 374,414 | $ | 722.2 | |||||
Interest revenue and other interest income | — | $ | 6.5 | — | $ | — | |||||
Revenue and GEOs (excluding Cobre Panama) | 343,241 | $ | 792.5 | 374,414 | $ | 722.2 | |||||
Cobre Panama | 30 | $ | 0.1 | 100,280 | $ | 193.5 | |||||
Total revenue and GEOs | 343,271 | $ | 792.6 | 474,694 | $ | 915.7 |
In Q3 2024, we recognized
Guidance
We benefited from record gold prices in the first nine months of 2024, with revenue exceeding our initial expectations. Our full-year revenue for 2024 is expected to be between
2024 Original Guidance1 | 2024 Revised Guidance2 | ||||||
Total GEOs | 480,000 to 540,000 | 445,000 to 465,000 | |||||
Precious Metal GEO sales | 360,000 to 400,000 | 340,000 to 360,000 |
|
Environmental, Social and Governance ("ESG") Updates
We continue to rank highly with leading ESG rating agencies. During the quarter, we expanded the Franco-Nevada Diversity Scholarship program by awarding four new diversity scholarships to mining engineering students at University of Toronto, Université du
Portfolio Additions
- Acquisition of Royalty on Yanacocha Operations: As previously announced, on August 13, 2024, we indirectly acquired from Compañía de Minas Buenaventura ("Buenaventura") and its subsidiary, an existing
1.8% NSR on all minerals covering Newmont's Yanacocha mine and adjacent mineral properties, including Conga, located inPeru . Consideration for the Yanacocha royalty consisted of paid in cash on closing, plus a contingent payment of$210 million payable in Franco-Nevada common shares payable upon the Conga project achieving commercial production. The acquisition of the Yanacocha royalty was effective July 1, 2024.$15 million - Acquisition of Gold Stream on Cascabel Copper-Gold Project: As previously announced, on July 15, 2024, our wholly owned subsidiary, Franco-Nevada (
Barbados ) Corporation ("FNB") acquired a gold stream from SolGold with reference to production from the Cascabel project located inEcuador . FNB partnered with Osisko Gold Royalties' subsidiary, Osisko Bermuda Limited ("Osisko"), to participate in the financing package on a70% /30% basis. FNB will provide a total of and Osisko a total of$525 million for a total combined funding of$225 million , consisting of$750 million in pre-construction funding and$100 million towards construction once the project is fully funded and further derisked. During the quarter, FNB funded$650 million upon closing of the agreement.$23.4 million - Term Loan with EMX Royalty Corporation: As previously announced, on August 9, 2024, we funded a term loan to EMX Royalty Corporation of
. Interest is payable monthly at a rate equal to the 3-Month Term Secured Overnight Financing Rate plus an applicable margin based on EMX's net debt to adjusted EBITDA ratio.$35 million - G Mining Ventures Private Placement and Warrants: As previously announced, on July 12, 2024, we completed a private placement of
with G Mining Ventures at a price of$25 million C per share (equivalent to$2.27 9C per share following the merger between G Mining Ventures and Reunion Gold on July 15, 2024). La Mancha Investments S.à r.l. completed a concurrent$9.11 6 private placement resulting in total proceeds to G Mining of$25 million . The placement was related to G Mining Ventures' business combination with Reunion Gold and advancement of the Oko West gold development project in$50 million Guyana . Franco-Nevada also holds share purchase warrants which allow the Company to acquire 2,875,000 common shares of G Mining Ventures at a price ofC for a total cost of$7.60 C . Franco-Nevada expects to exercise such warrants prior to the accelerated expiry date of December 4, 2024.$21.9 million - Option to Acquire Royalty with Brazil Potash Corp.: Subsequent to quarter-end, on November 1, 2024, we acquired an option from Brazil Potash for
to purchase a$1.0 million 4.0% gross revenue royalty on potash produced from Brazil Potash's Autazes project inBrazil .
Q3 2024 Portfolio Updates
Precious Metal assets: GEOs sold from our Precious Metal assets were 84,377, down
Candelaria (gold and silver stream) – GEOs delivered and sold in Q3 2024 were lower than those sold in Q3 2023. In Q2 2024, mining rates were impacted by the interface of the open pit and historic underground mining stopes, requiring more stockpiled ore to be processed which reduced grades and recoveries. While production in the quarter increased due to access to higher grade ore and improved runtime in the SAG mills, Lundin Mining has revised its 2024 annual gold production guidance forCandelaria down to between 92,000 and 102,000 gold ounces (from 100,000 to 110,000 gold ounces previously) due to revised gold grades and expected recoveries for the period. Lundin Mining expects to achieve its original copper production guidance forCandelaria for 2024.- Antapaccay (gold and silver stream) – GEOs delivered and sold were lower in Q3 2024 compared to Q3 2023. Mine scheduling was adjusted in part due to a geotechnical event which occurred in Q2 2024 and temporarily limited pit access. Deliveries improved in Q3 2024, and we expect deliveries to be between 50,000 to 60,000 GEOs as originally guided for 2024.
- Antamina (
22.5% silver stream) – GEOs delivered and sold were relatively consistent in Q3 2024 compared to Q3 2023. While throughput and copper production increased compared to the prior year period, silver grades were lower, as expected based on the life of mine plan. - Tocantinzinho (gold stream) – In September 2024, G Mining Ventures announced its Tocantinzinho mine achieved commercial production. The mine is planned to ramp up production through H2 2024, targeting nameplate throughput by Q1 2025. Tocantinzinho is expected to average annual gold production of 174,700 ounces over a 10.5-year mine life and 196,200 ounces for the first five full years. Franco-Nevada received initial deliveries of 1,108 GEOs in Q3 2024.
- Yanacocha (
1.8% royalty) – Newmont reported higher leach pad production in Q3 2024 as a result of injection leaching. Newmont's production guidance for 2024 for the Yanacocha mine was approximately 290,000 ounces and the mine produced 260,000 gold ounces year-to-date as of the end of September 2024. Franco-Nevada recognized 1,156 GEOs in revenue in Q3 2024. - Cascabel (gold stream and
1% royalty) – SolGold continues to report progress on the development of the project, including the receipt in August 2024 of the underground exploration and geotechnical drilling permits. - Salares Norte (1-
2% royalties) – Gold Fields reported that following the first gold pour at Salares Norte in March 2024, the plant was temporarily shut down and ramp-up suspended due to severe winter weather conditions. Gold Field's most recent guidance indicated an estimated gold equivalent production for the mine of between 40,000 and 50,000 ounces for 2024 (220,000 and 240,000 ounces initially).
- Cobre Panama (gold and silver stream) – Production at Cobre Panama has been halted since November 2023 with mining activities currently on preservation and safe management. During the quarter, President Mulino made public statements to the effect that his government intends to address the Cobre Panama mine in early 2025. An integrated audit of Cobre Panama is also expected to be conducted with international experts to establish a factual basis to aid in decision making for the future of the mine. As disclosed in Q2, 2024, Franco-Nevada filed a request for arbitration to the International Centre for Settlement of Investment Disputes on June 27, 2024. While we continue to pursue these legal remedies, we strongly prefer and hope for a resolution with the
State of Panama providing the best outcome for the Panamanian people and all parties involved. - Guadalupe-Palmarejo (
50% gold stream) – GEOs sold from Guadalupe-Palmarejo in Q3 2024 decreased relative to Q3 2023 due to lower grades.
Stillwater (5% royalty) – GEOs from ourStillwater royalty decreased in Q3 2024 compared to Q3 2023. Sibanye-Stillwater announced in September 2024 a further restructuring of its US PGM operations as a result of current PGM prices. Sibanye-Stillwater is now guiding to production of 265,000 PGM ounces starting in 2025. Production guidance for 2024 remains unchanged and is expected to be between 440,000 to 460,000 PGM ounces.- Goldstrike (2
-4% royalties & 2.4-6% NPI) – GEOs from our Goldstrike royalties decreased in Q3 2024 compared to Q3 2023 due to less open pit stockpile tons from royalty ground being processed through the Goldstrike processing facilities, resulting in lower payments for our royalties. - South Arturo (4
-9% royalty) – GEOs from South Arturo increased in Q3 2024 compared to Q3 2023 as royalty payments from the restart of open pit mining are beginning to be received. South Arturo is part of Nevada Gold Mines'Carlin operations.
- Detour Lake (
2% royalty) – In June 2024, Agnico Eagle released the results of a technical study reflecting the potential for a concurrent underground operation at Detour Lake that would increase annual production to approximately one million ounces for 14 years starting in 2030. Agnico Eagle expects to commence a two-kilometre exploration ramp in Q1 2025, which will be used collect a bulk sample and to facilitate infill and expansion drilling of the current underground mineral resource. - Macassa (
Kirkland Lake ) (1.5-5.5% royalty &20% NPI) – GEOs from Macassa were higher in Q3 2024 than in Q3 2023, reflecting productivity gains since the completion of #4 Shaft and the new ventilation infrastructure in 2023.Agnico Eagle is continuing to focus on asset optimization and is working on further improving mill throughput. - Magino (
3% royalty) and Island Gold (0.62% royalty) –Alamos completed the acquisition of the Magino mine in July 2024. The transaction is expected to result in substantial synergies through shared infrastructure between the adjacent Magino and Island Gold mines.Alamos has noted potential longer-term upside through a single optimized milling complex at Magino with an expansion to between 15,000 and 20,000 tonnes per day. - Greenstone (
3% royalty) – The mine achieved its inaugural gold pour in May 2024. While the operation has experienced some commissioning issues, it continues to progress toward design capacity, ramping up both mining rates and plant throughput. Equinox Gold has revised its 2024 production estimate to between 110,000 and 130,000 gold ounces (from 175,000 to 205,000 gold ounces previously). - Canadian Malartic (
1.5% royalty) – Agnico Eagle reported that ramp development, shaft sinking activities and surface construction progressed on schedule in Q3 2024. Exploration drilling continued to return positive results in the eastern and upper extensions of the East Gouldie deposit, demonstrating the potential to add significant mineral resources along extensions of the main East Gouldie deposit. - Valentine Gold (
3% royalty) – Calibre Mining reported that construction at the project was81% complete as of the end of September 2024 and remains on track for completion of construction in Q2 2025. Production is expected to average 195,000 gold ounces per year over an initial mine life of 12 years.
Rest of World:
- MWS (
25% stream) – GEOs delivered and sold from our MWS stream were higher than in Q3 2023 reflecting an increase in tonnes processed and higher recoveries. Subsequent to quarter-end, following the delivery of 1,587 gold ounces in Q4 2024, our MWS stream reached its cumulative cap of 312,500 gold ounces. - Subika (Ahafo) (
2% royalty) – GEOs from our Subika (Ahafo) royalty were higher than in Q3 2023. Gold production at the mine increased60% due to higher mill throughput and higher ore grade milled.
Diversified assets: Our Diversified assets, primarily comprising our Iron Ore and Energy interests, generated
Iron Ore:
- Vale Royalty (iron ore royalty) – Revenue from our Vale royalty increased slightly compared to Q3 2023. Production from the Northern System benefited from strong production at S11D, partly offset by lower estimated iron ore prices and higher shipping cost deductions. Higher production from the Southeastern System was driven by enhanced performance at the Itabira plant and higher output at Brucutu. We expect royalty payments from the Southeastern System to commence approximately mid-2025.
- LIORC – LIORC declared a cash dividend of
C per common share in the current period, compared to$0.70 C in Q3 2023. Production from Iron Ore Company of$0.95 Canada was11% lower than Q3 2023 due to an 11-day site-wide shutdown following forest fires in mid-July 2024. - Caserones (
0.517% effective NSR) – GEOs from our interest in Caserones were lower in Q3 2024 than in Q3 2023 in part due to our lower effective NSR interest in the current period. In January 2024, EMX exercised an option to acquire0.0531% of our NSR, such that we now own a0.517% effective NSR, compared to0.5701% in Q3 2023.
Energy:
- U.S. (various royalty rates) – Revenue from our U.S. Energy interests was relatively consistent with Q3 2023. We benefited from an increase in production due to new wells at our Permian interests and new contributions from our new Haynesville interests, which mostly offset the impact of lower realized prices and reduced drilling activity.
- Canada (various royalty rates) – Revenue from our Canadian Energy interests was lower than in Q3 2023. Higher production at
Weyburn was more than offset by lower realized prices.
Dividend Declaration
Franco-Nevada is pleased to announce that its Board of Directors has declared a quarterly dividend of
The Company has a Dividend Reinvestment Plan (the "DRIP") which allows shareholders of Franco-Nevada to reinvest dividends to purchase additional common shares at the Average Market Price, as defined in the DRIP, subject to a discount from the Average Market Price in the case of treasury acquisitions. The Company will issue additional common shares through treasury at a
This press release is not an offer to sell or a solicitation of an offer for securities. A registration statement relating to the DRIP has been filed with the
Shareholder Information
The complete unaudited Condensed Consolidated Interim Financial Statements and Management's Discussion and Analysis can be found on our website at www.franco-nevada.com, on SEDAR+ at www.sedarplus.com and on EDGAR at www.sec.gov.
We will host a conference call to review our Q3 2024 results. Interested investors are invited to participate as follows:
Conference Call and Webcast: | November 7th 8:00 am ET |
Dial‑in Numbers: | Toll‑Free: 1-888-510-2154 International: 437-900-0527 |
Conference Call URL (This allows participants to join the |
|
Webcast: | |
Replay (available until November 14th): | Toll‑Free: 1-888-660-6345 International: 289-819-1450 Pass code: 19672# |
Corporate Summary
Franco-Nevada Corporation is the leading gold-focused royalty and streaming company with the most diversified portfolio of cash-flow producing assets. Its business model provides investors with gold price and exploration optionality while limiting exposure to cost inflation. Franco-Nevada is debt-free and uses its free cash flow to expand its portfolio and pay dividends. It trades under the symbol FNV on both the
Forward-Looking Statements
This press release contains "forward-looking information" and "forward-looking statements" within the meaning of applicable Canadian securities laws and the United States Private Securities Litigation Reform Act of 1995, respectively, which may include, but are not limited to, statements with respect to future events or future performance, management's expectations regarding Franco-Nevada's growth, results of operations, estimated future revenues, performance guidance, carrying value of assets, future dividends and requirements for additional capital, mineral resources and mineral reserves estimates, production estimates, production costs and revenue, future demand for and prices of commodities, expected mining sequences, business prospects and opportunities, the performance and plans of third party operators, audits being conducted by the Canada Revenue Agency ("CRA"), the expected exposure for current and future tax assessments and available remedies, and statements with respect to the future status and any potential restart of the Cobre Panama mine and related arbitration proceedings. In addition, statements relating to mineral resources and mineral reserves, GEOs or mine lives are forward-looking statements, as they involve implied assessment, based on certain estimates and assumptions, and no assurance can be given that the estimates and assumptions are accurate and that such mineral resources and mineral reserves, GEOs or mine lives will be realized. Such forward-looking statements reflect management's current beliefs and are based on information currently available to management. Often, but not always, forward-looking statements can be identified by the use of words such as "plans", "expects", "is expected", "budgets", "potential for", "scheduled", "estimates", "forecasts", "predicts", "projects", "intends", "targets", "aims", "anticipates" or "believes" or variations (including negative variations) of such words and phrases or may be identified by statements to the effect that certain actions "may", "could", "should", "would", "might" or "will" be taken, occur or be achieved. Forward-looking statements involve known and unknown risks, uncertainties and other factors, which may cause the actual results, performance or achievements of Franco-Nevada to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. A number of factors could cause actual events or results to differ materially from any forward-looking statement, including, without limitation: fluctuations in the prices of the primary commodities that drive royalty and stream revenue (gold, platinum group metals, copper, nickel, uranium, silver, iron-ore and oil and gas); fluctuations in the value of the Canadian and Australian dollar, Mexican peso and any other currency in which revenue is generated, relative to the
For additional information with respect to risks, uncertainties and assumptions, please refer to Franco-Nevada's most recent Annual Information Form as well as Franco-Nevada's most recent Management's Discussion and Analysis filed with the Canadian securities regulatory authorities on www.sedarplus.com and Franco-Nevada's most recent Annual Report filed on Form 40-F filed with the SEC on www.sec.gov. The forward-looking statements herein are made as of the date hereof only and Franco-Nevada does not assume any obligation to update or revise them to reflect new information, estimates or opinions, future events or results or otherwise, except as required by applicable law.
ENDNOTES:
- GEOs: Gold equivalent ounces ("GEOs") include Franco-Nevada's attributable share of production from our Mining and Energy assets after applicable recovery and payability factors. GEOs are estimated on a gross basis for NSRs and, in the case of stream ounces, before the payment of the per ounce contractual price paid by the Company. For NPI royalties, GEOs are calculated taking into account the NPI economics. Silver, platinum, palladium, iron ore, oil, gas and other commodities are converted to GEOs by dividing associated revenue, which includes settlement adjustments, by the relevant gold price. The price used in the computation of GEOs varies depending on the royalty or stream agreement of each particular asset, which may make reference to the market price realized by the operator, or the average price for the month, quarter, or year in which the commodity was produced or sold. For Q3 2024, the average commodity prices were as follows:
/oz gold (Q3 2023 -$2,477 ),$1,929 /oz silver (Q3 2023 -$29.42 ),$23.57 /oz platinum (Q3 2023 -$963 ) and$931 /oz palladium (Q3 2023 -$970 ),$1,251 /t Fe$100 62% CFR China (Q3 2023 - ),$113 /bbl WTI oil (Q3 2023 -$75.09 ) and$82.26 /mcf Henry Hub natural gas (Q3 2023 -$2.24 ). For YTD 2024 prices, the average commodity prices were as follows:$2.66 /oz gold (YTD 2023 -$2,296 ),$1,932 /oz silver (YTD 2023 -$27.21 ),$23.44 /oz platinum (YTD 2023 -$951 ) and$985 /oz palladium (YTD 2023 -$973 ),$1,422 /t Fe$112 62% CFR China (YTD 2023 - ),$116 /bbl WTI oil (YTD 2023 -$77.54 ) and$77.39 /mcf Henry Hub natural gas (YTD 2023 -$2.22 ).$2.58 - NON-GAAP FINANCIAL MEASURES: Adjusted Net Income and Adjusted Net Income per share, Adjusted Net Income Margin, Adjusted EBITDA and Adjusted EBITDA per share, and Adjusted EBITDA Margin are non-GAAP financial measures with no standardized meaning under International Financial Reporting Standards ("IFRS Accounting Standards") and might not be comparable to similar financial measures disclosed by other issuers. For a quantitative reconciliation of each non-GAAP financial measure to the most directly comparable financial measure under IFRS Accounting Standards, refer to the following tables. Further information relating to these non-GAAP financial measures is incorporated by reference from the "Non-GAAP Financial Measures" section of Franco-Nevada's MD&A for the three and nine months ended September 30, 2024 dated November 6, 2024 filed with the Canadian securities regulatory authorities on SEDAR+ available at www.sedarplus.com and with the
U.S. Securities and Exchange Commission available on EDGAR at www.sec.gov.
- Adjusted Net Income and Adjusted Net Income per share are non-GAAP financial measures, which exclude the following from net income and earnings per share ("EPS"): impairment losses and reversal related to royalty, stream and working interests and investments; gains/losses on disposals of royalty, stream and working interests and investments; impairment losses and expected credit losses related to investments, loans receivable and other financial instruments, changes in fair value of investments, loans receivable and other financial instruments, foreign exchange gains/losses and other income/expenses; unusual non-recurring items; and the impact of income taxes on these items.
- Adjusted Net Income Margin is a non-GAAP financial measure which is defined by the Company as Adjusted Net Income divided by revenue.
- Adjusted EBITDA and Adjusted EBITDA per share are non-GAAP financial measures, which exclude the following from net income and EPS: income tax expense/recovery; finance expenses and finance income; depletion and depreciation; impairment charges and reversals related to royalty, stream and working interests and investments; gains/losses on disposals of royalty, stream and working interests and investments; impairment losses and expected credit losses related to investments, loans receivable and other financial instruments, changes in fair value of investment, loans receivable and other financial instruments, foreign exchange gains/losses and other income/expenses; and unusual non-recurring items.
- Adjusted EBITDA Margin is a non-GAAP financial measure which is defined by the Company as Adjusted EBITDA divided by revenue.
Reconciliation of Non-GAAP Financial Measures:
For the three months ended | For the nine months ended | |||||||
September 30, | September 30, | |||||||
(expressed in millions, except per share amounts) | 2024 | 2023 | 2024 | 2023 | ||||
Net income | $ | 152.7 | $ | 175.1 | $ | 376.7 | $ | 516.1 |
Gain on disposal of royalty interests | — | — | (0.3) | (3.7) | ||||
Foreign exchange loss (gain) and other expenses (income) | 1.3 | 1.8 | 12.7 | (2.1) | ||||
Tax effect of adjustments | (0.4) | (1.8) | (2.4) | (0.1) | ||||
Other tax related adjustments | ||||||||
Deferred tax expense related to the remeasurement of deferred tax | — | — | 49.1 | — | ||||
Change in unrecognized deductible temporary differences | 0.3 | — | (1.1) | — | ||||
Adjusted Net Income | $ | 153.9 | $ | 175.1 | $ | 434.7 | $ | 510.2 |
Basic weighted average shares outstanding | 192.3 | 192.1 | 192.3 | 192.0 | ||||
Adjusted Net Income per share | $ | 0.80 | $ | 0.91 | $ | 2.26 | $ | 2.66 |
For the three months ended | For the nine months ended | |||||||||||
September 30, | September 30, | |||||||||||
(expressed in millions, except Adjusted Net Income Margin) | 2024 | 2023 | 2024 | 2023 | ||||||||
Adjusted Net Income | $ | 153.9 | $ | 175.1 | $ | 434.7 | $ | 510.2 | ||||
Revenue | 275.7 | 309.5 | 792.6 | 915.7 | ||||||||
Adjusted Net Income Margin | 55.8 | % | 56.6 | % | 54.8 | % | 55.7 | % |
For the three months ended | For the nine months ended | |||||||
September 30, | September 30, | |||||||
(expressed in millions, except per share amounts) | 2024 | 2023 | 2024 | 2023 | ||||
Net income | $ | 152.7 | $ | 175.1 | $ | 376.7 | $ | 516.1 |
Income tax expense | 42.2 | 24.9 | 165.0 | 79.5 | ||||
Finance expenses | 0.7 | 0.7 | 1.9 | 2.1 | ||||
Finance income | (14.9) | (15.5) | (47.1) | (36.0) | ||||
Depletion and depreciation | 54.2 | 68.1 | 165.3 | 204.2 | ||||
Gain on disposal of royalty interests | — | — | (0.3) | (3.7) | ||||
Foreign exchange loss (gain) and other expenses (income) | 1.3 | 1.8 | 12.7 | (2.1) | ||||
Adjusted EBITDA | $ | 236.2 | $ | 255.1 | $ | 674.2 | $ | 760.1 |
Basic weighted average shares outstanding | 192.3 | 192.1 | 192.3 | 192.0 | ||||
Adjusted EBITDA per share | $ | 1.23 | $ | 1.33 | $ | 3.51 | $ | 3.96 |
For the three months ended | For the nine months ended | |||||||||||
September 30, | September 30, | |||||||||||
(expressed in millions, except Adjusted EBITDA Margin) | 2024 | 2023 | 2024 | 2023 | ||||||||
Adjusted EBITDA | $ | 236.2 | $ | 255.1 | $ | 674.2 | $ | 760.1 | ||||
Revenue | 275.7 | 309.5 | 792.6 | 915.7 | ||||||||
Adjusted EBITDA Margin | 85.7 | % | 82.4 | % | 85.1 | % | 83.0 | % |
FRANCO-NEVADA CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
(in millions of
At September 30, | At December 31, | |||
2024 | 2023 | |||
ASSETS | ||||
Cash and Cash equivalents | $ | 1,317.3 | $ | 1,421.9 |
Receivables | 133.9 | 111.0 | ||
Gold bullion, prepaid expenses and other current assets | 99.8 | 82.4 | ||
Current assets | $ | 1,551.0 | $ | 1,615.3 |
Royalty, stream and working interests, net | $ | 4,230.6 | $ | 4,027.1 |
Investments | 323.3 | 254.5 | ||
Loans receivable | 110.5 | 24.8 | ||
Deferred income tax assets | 30.7 | 37.0 | ||
Other assets | 53.5 | 35.4 | ||
Total assets | $ | 6,299.6 | $ | 5,994.1 |
LIABILITIES | ||||
Accounts payable and accrued liabilities | $ | 26.2 | $ | 30.9 |
Current income tax liabilities | 40.1 | 8.3 | ||
Current liabilities | $ | 66.3 | $ | 39.2 |
Deferred income tax liabilities | $ | 242.0 | $ | 180.1 |
Other liabilities | 4.5 | 5.7 | ||
Total liabilities | $ | 312.8 | $ | 225.0 |
SHAREHOLDERS' EQUITY | ||||
Share capital | $ | 5,762.1 | $ | 5,728.2 |
Contributed surplus | 21.9 | 20.6 | ||
Retained earnings | 380.3 | 212.3 | ||
Accumulated other comprehensive loss | (177.5) | (192.0) | ||
Total shareholders' equity | $ | 5,986.8 | $ | 5,769.1 |
Total liabilities and shareholders' equity | $ | 6,299.6 | $ | 5,994.1 |
The unaudited condensed consolidated interim financial statements and accompanying notes can be found in our Q3 2024 Quarterly Report available on our website
FRANCO-NEVADA CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
(in millions of
For the three months ended | For the nine months ended | |||||||
September 30, | September 30, | |||||||
2024 | 2023 | 2024 | 2023 | |||||
Revenue | ||||||||
Revenue from royalty, streams and working interests | $ | 272.9 | $ | 309.5 | $ | 786.1 | $ | 915.7 |
Interest revenue | 2.8 | — | 5.9 | — | ||||
Other interest income | — | — | 0.6 | — | ||||
Total revenue | $ | 275.7 | $ | 309.5 | $ | 792.6 | $ | 915.7 |
Costs of sales | ||||||||
Costs of sales | $ | 31.9 | $ | 48.9 | $ | 94.6 | $ | 134.2 |
Depletion and depreciation | 54.2 | 68.1 | 165.3 | 204.2 | ||||
Total costs of sales | $ | 86.1 | $ | 117.0 | $ | 259.9 | $ | 338.4 |
Gross profit | $ | 189.6 | $ | 192.5 | $ | 532.7 | $ | 577.3 |
Other operating expenses (income) | ||||||||
General and administrative expenses | $ | 7.8 | $ | 5.0 | $ | 21.9 | $ | 17.4 |
Share-based compensation expenses | 2.4 | 0.7 | 7.0 | 6.3 | ||||
Gain on disposal of royalty interests | — | — | (0.3) | (3.7) | ||||
Gain on sale of gold bullion | (2.6) | (0.2) | (5.1) | (2.3) | ||||
Total other operating expenses | $ | 7.6 | $ | 5.5 | $ | 23.5 | $ | 17.7 |
Operating income | $ | 182.0 | $ | 187.0 | $ | 509.2 | $ | 559.6 |
Foreign exchange (loss) gain and other (expenses) income | $ | (1.3) | $ | (1.8) | $ | (12.7) | $ | 2.1 |
Income before finance items and income taxes | $ | 180.7 | $ | 185.2 | $ | 496.5 | $ | 561.7 |
Finance items | ||||||||
Finance income | $ | 14.9 | $ | 15.5 | $ | 47.1 | $ | 36.0 |
Finance expenses | (0.7) | (0.7) | (1.9) | (2.1) | ||||
Net income before income taxes | $ | 194.9 | $ | 200.0 | $ | 541.7 | $ | 595.6 |
Income tax expense | 42.2 | 24.9 | 165.0 | 79.5 | ||||
Net income | $ | 152.7 | $ | 175.1 | $ | 376.7 | $ | 516.1 |
Other comprehensive income (loss), net of taxes | ||||||||
Items that may be reclassified subsequently to profit and loss: | ||||||||
Currency translation adjustment | $ | 24.1 | $ | (31.7) | $ | (27.4) | $ | (1.8) |
Items that will not be reclassified subsequently to profit and loss: | ||||||||
Gain on changes in the fair value of equity investments | ||||||||
at fair value through other comprehensive income ("FVTOCI"), | ||||||||
net of income tax | 24.3 | 3.5 | 41.5 | 4.5 | ||||
Other comprehensive income (loss), net of taxes | $ | 48.4 | $ | (28.2) | $ | 14.1 | $ | 2.7 |
Comprehensive income | $ | 201.1 | $ | 146.9 | $ | 390.8 | $ | 518.8 |
Earnings per share | ||||||||
Basic | $ | 0.79 | $ | 0.91 | $ | 1.96 | $ | 2.69 |
Diluted | $ | 0.79 | $ | 0.91 | $ | 1.96 | $ | 2.68 |
Weighted average number of shares outstanding | ||||||||
Basic | 192.3 | 192.1 | 192.3 | 192.0 | ||||
Diluted | 192.5 | 192.4 | 192.5 | 192.3 | ||||
The unaudited condensed consolidated interim financial statements and accompanying notes can be found in our Q3 2024 Quarterly Report available on our website
FRANCO-NEVADA CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in millions of
For the three months ended | For the nine months ended | |||||||
September 30, | September 30, | |||||||
2024 | 2023 | 2024 | 2023 | |||||
Cash flows from operating activities | ||||||||
Net income | $ | 152.7 | $ | 175.1 | $ | 376.7 | $ | 516.1 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||
Depletion and depreciation | 54.2 | 68.1 | 165.3 | 204.2 | ||||
Share-based compensation expenses | 1.3 | 1.5 | 4.2 | 4.7 | ||||
Gain on disposal of royalty interests | — | — | (0.3) | (3.7) | ||||
Unrealized foreign exchange loss | 0.1 | 1.8 | 7.9 | (1.7) | ||||
Deferred income tax expense | 7.7 | 1.5 | 64.0 | 16.6 | ||||
Other non-cash items | (1.7) | (0.2) | (5.7) | (2.2) | ||||
Acquisition of gold bullion | (20.0) | (15.9) | (52.4) | (41.1) | ||||
Proceeds from sale of gold bullion | 12.7 | 1.9 | 29.3 | 20.5 | ||||
Changes in other assets | — | 13.9 | (17.4) | 13.9 | ||||
Operating cash flows before changes in non-cash working capital | $ | 207.0 | $ | 247.7 | $ | 571.6 | $ | 727.3 |
Changes in non-cash working capital: | ||||||||
(Increase) decrease in receivables | $ | (12.8) | $ | 9.6 | $ | (22.7) | $ | 0.9 |
Decrease (increase) in prepaid expenses and other | 8.2 | (6.5) | 10.7 | (10.5) | ||||
(Decrease) increase in current liabilities | 11.2 | (14.8) | 26.9 | (10.0) | ||||
Net cash provided by operating activities | $ | 213.6 | $ | 236.0 | $ | 586.5 | $ | 707.7 |
Cash flows used in investing activities | ||||||||
Acquisition of royalty, stream and working interests | $ | (238.6) | $ | (165.0) | $ | (401.7) | $ | (435.8) |
Advances of loans receivable | (34.7) | — | (118.2) | — | ||||
Acquisition of investments | (27.9) | (8.4) | (38.9) | (8.9) | ||||
Proceeds from repayment of loan receivable | 10.0 | — | 28.9 | — | ||||
Proceeds from sale of investments | 12.9 | 0.1 | 14.0 | 2.0 | ||||
Proceeds from disposal of royalty interests | — | — | 11.2 | 7.0 | ||||
Acquisition of energy well equipment | (0.7) | (0.4) | (1.4) | (1.2) | ||||
Acquisition of property and equipment | — | — | (0.1) | — | ||||
Net cash used in investing activities | $ | (279.0) | $ | (173.7) | $ | (506.2) | $ | (436.9) |
Cash flows used in financing activities | ||||||||
Payment of dividends | $ | (61.1) | $ | (56.8) | $ | (180.3) | $ | (173.2) |
Proceeds from exercise of stock options | — | — | 2.7 | 2.9 | ||||
Revolving credit facility amendment costs | — | — | (0.8) | — | ||||
Net cash used in financing activities | $ | (61.1) | $ | (56.8) | $ | (178.4) | $ | (170.3) |
Effect of exchange rate changes on cash and cash equivalents | $ | 4.8 | $ | (3.5) | $ | (6.5) | $ | 0.1 |
Net change in cash and cash equivalents | $ | (121.7) | $ | 2.0 | $ | (104.6) | $ | 100.6 |
Cash and cash equivalents at beginning of period | $ | 1,439.0 | $ | 1,295.1 | $ | 1,421.9 | $ | 1,196.5 |
Cash and cash equivalents at end of period | $ | 1,317.3 | $ | 1,297.1 | $ | 1,317.3 | $ | 1,297.1 |
Supplemental cash flow information: | ||||||||
Income taxes paid | $ | 14.1 | $ | 16.1 | $ | 56.6 | $ | 67.0 |
Dividend income received | $ | 5.1 | $ | 3.1 | $ | 9.3 | $ | 8.7 |
Cash paid for interest expense and loan standby fees | $ | 0.5 | $ | 0.6 | $ | 1.5 | $ | 1.8 |
The unaudited condensed consolidated interim financial statements and accompanying notes can be found in our Q3 2024 Quarterly Report available on our website
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SOURCE Franco-Nevada Corporation
FAQ
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