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  Title	Franco-Nevada Reports Q3 2024 Results
  ID	3953098
  External ID	7280577818
  Author	David Harquail
  Published Date	Nov. 6, 2024, 5:12 p.m.
  Summary	(in U.S. dollars unless otherwise noted) TORONTO, Nov. 6, 2024 /CNW/ - "Record gold prices generated higher revenues, Adjusted EBITDA and earnings in Q3 compared to Q2 2024," stated Paul Brink, CEO. "
  Tags	press-release
  URL	https://www.juniorminingnetwork.com/junior-miner-news/press-releases/1110-tsx/fnv/170022-franco-nevada-reports-q3-2024-results.html
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  Relevance	0.03256

• Content Details

  Content ID	2230578
  Key	0734590c-af8e-49db-89de-0d1e14d3c920
  Content	(in U.S. dollars unless otherwise noted) TORONTO, Nov. 6, 2024 /CNW/ - "Record gold prices generated higher revenues, Adjusted EBITDA and earnings in Q3 compared to Q2 2024," stated Paul Brink, CEO. "GEO sales were stable compared to Q2 although lower compared to Q3 2023 without the contribution from Cobre Panama. The quarter benefitted from contributions from the newly commissioned Tocantinzinho mine in Brazil, and increased contributions from royalties from the recently completed Greenstone mine and the newly acquired Yanacocha royalty. Candelaria reported an increase in copper and gold production for the quarter. While Candelaria's copper output is on track, Lundin Mining has revised its 2024 gold production guidance lower to reflect revised gold grades for the period. In addition, revenue from our Diversified assets translated into lower GEOs reflecting record gold prices. We have adjusted our 2024 guidance as a result. Franco-Nevada continues to benefit from higher gold prices with limited exposure to cost inflation. The company remains debt-free with substantial available capital and has a strong pipeline of potential precious metal streams and royalties." Financial Summary $275.7 million in revenue, -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, and 3% due to record gold prices, reducing the conversion of non-gold revenue into GEOs $213.6 million in operating cash flow, -9% compared to Q3 2023 $152.7 million in net income or $0.79 /share, -13% compared to Q3 2023 $236.2 million in Adjusted EBITDA or $1.23 /share, -7% compared to Q3 2023, or +16% excluding Cobre Panama $153.9 million in Adjusted Net Income or $0.80 /share, -12% compared to Q3 2023, or +12% excluding Cobre Panama Quarterly dividend of $0.36 /share effective Q1 2024, an annual increase of 5.88% Strong financial position with no debt and $2.3 billion in available capital as at September 30, 2024 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 In Q3 2024, we recognized $275.7 million in revenue, down 10.9% from Q3 2023 (up 13.8% excluding Cobre Panama). Revenue in the 2023 period included contributions from Cobre Panama, which remained on preservation and safe management during the current period. During the quarter, we benefited from record gold prices, offset by lower contributions from Candelaria and our Energy assets. Precious Metal revenue accounted for 76.8% of our revenue (64.5% gold, 10.3% silver, 2.0% PGM). Revenue was sourced 81.2% from the Americas (38.3% South America, 8.1% Central America & Mexico, 17.0% U.S. and 17.8% Canada ). 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 $1,050 million and $1,150 million. However, lower than expected gold production at Candelaria and slower ramp-ups at our newly contributing mines have resulted in fewer Precious Metal GEOs than originally anticipated. In addition, record gold prices in the current year have impacted the conversion of our non-gold revenue into GEOs. As a result, we are revising our GEO sales guidance as follows: 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 Québec, and École Polytechnique. Franco-Nevada is now providing scholarships to 13 students. We also renewed our funding support for the Enseña Perú education initiative in Peru. 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 in Peru. Consideration for the Yanacocha royalty consisted of $210 million paid in cash on closing, plus a contingent payment of $15 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. 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 in Ecuador. FNB partnered with Osisko Gold Royalties' subsidiary, Osisko Bermuda Limited ("Osisko"), to participate in the financing package on a 70%/30% basis. FNB will provide a total of $525 million and Osisko a total of $225 million for a total combined funding of $750 million, consisting of $100 million in pre-construction funding and $650 million towards construction once the project is fully funded and further derisked. During the quarter, FNB funded $23.4 million upon closing of the agreement. Term Loan with EMX Royalty Corporation: As previously announced, on August 9, 2024, we funded a term loan to EMX Royalty Corporation of $35 million. 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. G Mining Ventures Private Placement and Warrants: As previously announced, on July 12, 2024, we completed a private placement of $25 million with G Mining Ventures at a price of C$2.279 per share (equivalent to C$9.116 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 $25 million private placement resulting in total proceeds to G Mining of $50 million. The placement was related to G Mining Ventures' business combination with Reunion Gold and advancement of the Oko West gold development project in 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 of C$7.60 for a total cost of C$21.9 million. Franco-Nevada expects to exercise such warrants prior to the accelerated expiry date of December 4, 2024. Option to Acquire Royalty with Brazil Potash Corp.: Subsequent to quarter-end, on November 1, 2024, we acquired an option from Brazil Potash for $1.0 million to purchase a 4.0% gross revenue royalty on potash produced from Brazil Potash's Autazes project in Brazil. Q3 2024 Portfolio Updates Precious Metal assets: GEOs sold from our Precious Metal assets were 84,377, down 32.7% from 125,337 GEOs in Q3 2023, or down 6.6% from 90,370 GEOs when excluding Cobre Panama. Lower contributions from Candelaria and Antapaccay were partly offset by higher GEOs from Subika, and contributions from the recently constructed Tocantinzinho and Greenstone mines and the newly acquired Yanacocha royalty. South America : 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 for Candelaria 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 for Candelaria 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). Central America & Mexico : 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. U.S.: Stillwater (5% royalty) – GEOs from our Stillwater 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. Canada : 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 was 81% 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 increased 60% due to higher mill throughput and higher ore grade milled. Diversified assets: Our Diversified assets, primarily comprising our Iron Ore and Energy interests, generated $61.2 million in revenue, down 10.9% from $68.7 million in Q3 2023. When converted to GEOs, our Diversified assets contributed 25,733 GEOs, down 27.5% from 35,511 GEOs in Q3 2023, of which 21.9% was due to changes in gold prices used in the conversion of non-gold revenue into GEOs. 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$0.70 per common share in the current period, compared to C$0.95 in Q3 2023. Production from Iron Ore Company of Canada was 11% 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 acquire 0.0531% of our NSR, such that we now own a 0.517% effective NSR, compared to 0.5701% 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 US$0.36 per share. The dividend will be paid on December 19, 2024, to shareholders of record on December 5, 2024 (the "Record Date"). The dividend has been declared in U.S. dollars and the Canadian dollar equivalent will be determined based on the daily average rate posted by the Bank of Canada on the Record Date. Under Canadian tax legislation, Canadian resident individuals who receive "eligible dividends" are entitled to an enhanced gross-up and dividend tax credit on such dividends. 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 1% discount to the Average Market Price. The Company may, from time to time, in its discretion, change or eliminate the discount applicable to treasury acquisitions or direct that such common shares be purchased in market acquisitions at the prevailing market price, any of which would be publicly announced. Participation in the DRIP is optional. The DRIP and enrollment forms are available on the Company's website at www.franco-nevada.com. Canadian and U.S. registered shareholders may also enroll in the DRIP online through the plan agent's self-service web portal at www.investorcentre.com/franco-nevada. Canadian and U.S. beneficial shareholders should contact their financial intermediary to arrange enrollment. Non-Canadian and non-U.S. shareholders may potentially participate in the DRIP, subject to the satisfaction of certain conditions. Non-Canadian and non-U.S. shareholders should contact the Company to determine whether they satisfy the necessary conditions to participate in the DRIP. 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 U.S. Securities and Exchange Commission and may be obtained under the Company's profile on the U.S. Securities and Exchange Commission's website at www.sec.gov. 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:
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