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    FNV
    Earnings call· Jun 2025(Q2 FY25)

    FRANCO NEVADA Corp FNV

    Aug 11, 2025 Source

    Executive summary

    Franco-Nevada Q2 FY25 — Record Financials Driven by High Gold Prices and Portfolio Growth

    Franco-Nevada delivered record financial results in Q2 FY25, driven by strong precious metal prices and robust portfolio performance. The company continues to strategically expand its asset base through acquisitions and progress on key growth projects, while maintaining a strong financial position. Positive developments at Cobre Panama offer potential upside, though the asset remains offline.

    Highlights

    5

    • Achieved record total revenue of $369.4 million, a 42% increase year-over-year.

    • Reported record adjusted EBITDA of $365.7 million, up 65% compared to Q2 2024.

    • Precious metal GEOs sold increased 12% year-over-year to 92,449.

    • Made significant progress on Cobre Panama, including the shipment of remaining concentrate and positive sentiment for a restart.

    • Expanded portfolio with strategic acquisitions like the Cote Gold royalty and Arthur project royalty, alongside progress on growth projects like Cascabel and Castle Mountain.

    Concerns

    3

    • Diversified GEOs sold decreased to 19,644 from 29,914 in Q2 2024, primarily due to the impact of higher gold prices on conversion.

    • GEOs from Antapaccay were lower than expected in the quarter due to timing of deliveries, though a stronger second half is anticipated.

    • Oil prices have pulled back in recent months, which may soften Permian production levels and drilling activity.

    Guidance & targets

    5
    CategoryTargetConfidence
    Total GEOs sold
    465,000 to 525,000
    high materiality
    High
    Precious metal GEOs sold
    385,000 to 425,000
    high materiality
    High
    Cobre Panama GEOs
    approximately 10,000 GEOs
    medium materiality
    High
    Gold price assumption for guidance
    $3,250 per ounce
    high materiality
    High
    Silver price assumption for guidance
    $37 per ounce
    high materiality
    High

    Segment performance

    3
    SegmentRevenueYoYQoQMargin
    Precious Metals
    Precious metals accounted for 82% of total revenue in Q2 2025.
    		82%———
    Americas
    86% of total revenue was sourced from the Americas in Q2 2025.
    		86%———
    Candelaria
    Candelaria was the largest single contributor to revenue, accounting for 15% in Q2 2025.
    		15%———

    Operational metrics

    24
    Adjusted EBITDA
    $365.7 millionup 65% YoY
    Q2 FY25

    Record adjusted EBITDA for the quarter.

    Gold ounces in inventory
    2,469
    as of June 30, 2025

    Remaining gold ounces in inventory after liquidating majority to fund Cote Gold Royalty acquisition.

    Gold price assumption for guidance
    $3,250up from $2,800 per ounce
    FY25

    Updated gold price assumption used for full-year guidance.

    Silver price assumption for guidance
    $37
    FY25

    Updated silver price assumption used for full-year guidance.

    Deal size range
    $100 million to $500 million
    ongoing

    Typical range for opportunities being pursued in corporate development.

    New Prosperity financing commitment
    $300 million
    2012

    Original financing commitment for the New Prosperity project, not yet expended.

    Musselwhite NPI contribution
    7.7%
    Q2 FY25

    Higher than normal contribution due to gold price leverage, better operations, and a catch-up payment.

    Margin per GEO
    just shy of $3,000
    Q2 FY25

    Significant increase in margin per GEO as gold price has risen.

    Total revenue
    $369.4 millionup 42%
    Q2 FY25

    Record total revenue for the quarter.

    Adjusted net income
    $238.5 millionup 65% YoY
    Q2 FY25

    Record adjusted net income for the quarter.

    Adjusted EPS
    $1.24up 65% YoY
    Q2 FY25

    Record adjusted EPS for the quarter.

    Gain on sale of gold bullion
    $42.2 million
    Q2 FY25

    Resulted from liquidating majority of gold inventory to fund Cote Gold Royalty acquisition.

    Cost of sales
    $33.5 millionvs $29.1 million last year
    Q2 FY25

    Increase due to higher stream ounces sold.

    Depletion
    $64 millionvs $52.9 million a year ago
    Q2 FY25

    Increased due to more GEOs from Candelaria and recent transactions (Yanacocha, Western Limb, Porcupine) which are higher per ounce depletion assets.

    Cash and cash equivalents
    $160.3 million
    as of June 30, 2025

    Cash balance at the end of the quarter.

    Credit facility
    $1 billion
    ongoing

    Available credit facility.

    Equity investment
    $439.7 million
    as of June 30, 2025

    Derived from total available capital ($1.6B) minus cash ($160.3M) and credit facility ($1B).

    Total available capital
    $1.35 billiondown from $1.6 billion
    currently

    Available capital after funding the Arthur project acquisition.

    Arthur project acquisition cost
    $250 million
    July 2025

    Cost for the royalty acquisition on AngloGold's Arthur project.

    Credit facility draw
    $175 million
    July 2025

    Amount drawn from credit facility to assist in funding the Arthur project acquisition.

    Annual cash flow generation
    approximately $1.3 billion
    annual

    Company's current rate of cash flow generation.

    Gold price sensitivity (GEOs)
    4,700 GEOs lower
    annual

    Impact of gold price increase on the conversion of other commodities to GEOs.

    Cote Gold buyback option
    up to 50%
    ongoing

    IAMGOLD has an option to buy back up to 50% of the royalty.

    Porcupine buyback option
    —
    ongoing

    Porcupine also has a similar buyback feature, but the specific percentage was not quantified.

    Industry KPIs

    4
    MetricValueDetails
    Unit cash cost$299USD per GEO
    Growth project CAPEX first production—
    Ore grade recovery drilling by deposit—
    Production sales volume by metal and by mine112,093GEOs

    Deals & partnerships

    8
    IAMGOLDRoyalty acquisition on Cote Gold Mine

    Acquired a royalty on Cote Gold Mine, one of Canada's newest large-scale gold mines. Cote and Gosselin have 16 million ounces of M&I and 12 million ounces of inferred resources, with IAMGOLD targeting over 20 million ounces of M&I.

    AngloGoldRoyalty acquisition on Arthur project (Merlin and Silicon deposits)$250 million

    Acquired a royalty on AngloGold's Arthur project in Nevada, comprising Merlin and Silicon deposits. The project has 3.4 million ounces indicated and 12.9 million ounces inferred, with an initial assessment outlining 1 million ounces per annum production for the first years.

    NewmontInterest in Yanacocha operations

    Acquired interest in Newmont's Yanacocha operations in Peru in the last two years.

    SibanyeInterest in PGM operations in Western Limb of Bushveld

    Acquired interest in Sibanye's PGM operations in South Africa in the last two years.

    SolGoldInterest in Cascabel Copper Gold development project

    Acquired interest in SolGold's Cascabel Copper Gold development project in Ecuador in the last two years.

    Discovery SilverRoyalty on Porcupine operations

    Acquired a royalty on Porcupine operations, operated by Discovery Silver.

    Taseko / Chukotun First NationStream financing agreement for New Prosperity project$300 million

    Holds a 22% gold stream financing agreement for the New Prosperity project, contingent on permitting. Recent positive shift in relations with Chukotun First Nation, who now have an ownership stake.

    AngloGoldTransaction to consolidate district around Arthur project

    AngloGold announced a transaction to further consolidate the district around the Arthur project since Franco-Nevada's acquisition of the royalty.

    Risks & headwinds

    3
    Cobre Panama remains offlineOngoing

    Asset fully impaired; no revenue contribution currently.

    Mitigation: Engaging with government for resolution, suspending arbitration to create space for solutions. Considered 'all upside' if it restarts.

    Antapaccay GEOs lower than expectedQ2 FY25

    Lower GEOs in Q2 FY25.

    Mitigation: Solely due to timing of deliveries; stronger second half of the year expected from this asset.

    Softening Permian production/drilling activityRecent months, potentially ongoing

    Oil prices pulled back.

    Mitigation: Permian assets are reflective of overall basin performance; production levels and drilling activity likely to stay reasonably consistent, perhaps soften slightly.

    What to watch in Q3 FY25

    5

    Cobre Panama restart progress

    next quarter
    CurrentArbitration suspended, concentrate shipped, positive sentiment
    TargetFurther clarity on restart timeline or resolution

    Why it matters

    A restart of Cobre Panama would provide significant upside to Franco-Nevada's GEOs and financial performance, as the asset is currently impaired.

    We expect to release our third quarter 2025 results after market close on November 3.

    Q&A highlights

    6

    Why did Franco-Nevada suspend the arbitration proceedings related to Cobre Panama?

    Management stated that suspending arbitration was a request from the Panamanian government to create space for finding a new solution, and the company is amenable to working with the government for a positive resolution, as a mine restart is the best outcome for all parties.

    “It had been a request of the asset from the Magino government that the arbitrations be suspended, to give the space, to try and find a new solution. So we are very amenable to working with the government to allow that to happen.”

    asked by Fahad Tariq · answered by Paul Brink

    2 min read5 chapters

    Detailed Narrative

    01

    Cobre Panama Developments and Outlook

    Franco-Nevada reported constructive developments in Panama, including the approval of the preservation and safe maintenance plan for Cobre Panama and the successful shipment of the remaining copper concentrate. The company noted a shifting sentiment in the country towards a restart of operations and management's continued commitment to finding a resolution. Franco-Nevada suspended its arbitration proceedings at the request of the Panamanian government to facilitate a new solution, viewing a restart as the best outcome for all parties involved.

    02

    Strategic Acquisitions and Portfolio Growth

    The company continued its active portfolio expansion, acquiring a royalty on IAMGOLD's Cote Gold Mine in Canada and a royalty on AngloGold's Arthur project in Nevada post-quarter end. These additions build on previous acquisitions like Newmont's Yanacocha and Sibanye's PGM operations. Management highlighted that the acquisitions over the last two years, combined with the potential Cobre Panama restart and New Prosperity development, position Franco-Nevada with a highly exciting growth outlook in the space.

    03

    Growth Project Pipeline and Permitting Progress

    Franco-Nevada anticipates attractive growth over the next five years from its existing portfolio, particularly benefiting from improved mine permitting processes in the U.S. Three projects, Perpetua's Stibnite Gold, Hudbay's Copper World, and Castle Mountain, are advancing. Castle Mountain's inclusion in the FAST-41 permitting process is expected to accelerate its development. Additionally, SolGold's Cascabel project is now targeting first production as early as 2028, potentially entering Franco-Nevada's five-year outlook sooner than anticipated.

    04

    Financial Strength and Capital Allocation

    The company reported a strong financial position with $160.3 million in cash and cash equivalents at quarter-end and total available capital of $1.6 billion, which adjusted to $1.35 billion after funding the Arthur project acquisition. Franco-Nevada emphasized its robust annual cash flow generation of approximately $1.3 billion, enabling rapid repayment of its credit facility and continued pursuit of high-quality assets. The company's strategy remains focused on being a long-term financial backer for companies with great assets and management teams.

    05

    Asset Performance and Diversification

    Franco-Nevada's portfolio largely performed as expected, with strong contributions from Guadalupe and Candelaria, and continued ramp-up at new mines like Tocantinzinho, Greenstone, and Salares Norte. Precious metals accounted for 82% of Q2 FY25 revenue, with 86% of revenue sourced from the Americas, demonstrating continued diversification. The company also noted the leverage of its Hemlo NPI to higher gold prices and a catch-up📎 payment from Musselwhite NPI contributing to strong performance.

    AI-generated summary of the company’s earnings call. Not investment advice.