Franco-Nevada Q3 2024 Earnings Report

Franco-Nevada EPS Results

• Actual EPS: $0.80
• Consensus EPS: $0.83
• Beat/Miss: Missed by -$0.03
• One Year Ago EPS: $0.91

Franco-Nevada Revenue Results

• Actual Revenue: $275.70 million
• Expected Revenue: $279.11 million
• Beat/Miss: Missed by -$3.41 million
• YoY Revenue Growth: -10.90%

Franco-Nevada Announcement Details

• Quarter: Q3 2024
• Date: 11/6/2024
• Time: After Market Closes
• Conference Call Date: Thursday, November 7, 2024
• Conference Call Time: 8:00AM ET

Franco-Nevada (NYSE:FNV) is a Toronto-based royalty and streaming company that specializes in securing and managing long-term interests in mining properties. The firm focuses primarily on precious metals, particularly gold, while also holding interests related to silver, copper, platinum-group metals and select base metals. Rather than operating mines directly, Franco-Nevada acquires royalty and streaming agreements that entitle it to a percentage of production or revenue from producing and developing assets in exchange for upfront or staged financing.

The company’s business model centers on providing capital to mining companies in return for a sustained share of production or metal revenue, which can reduce exposure to operating and capital cost risks typical of mine operators. Its portfolio typically includes a mix of life-of-mine royalties on producing operations, streams that deliver metal directly at agreed pricing or discounts, and contractual interests on projects at various stages of development and exploration. This structure aims to generate predictable cash flows and long-dated exposure to commodity prices for shareholders.

Franco-Nevada maintains a geographically diversified portfolio with interests across major mining jurisdictions, including operations and projects in the Americas, Africa, Australia and other regions. The company’s holdings span both established producing mines and earlier-stage projects, seeking a balance between near-term cash generation and exposure to future resource growth. Diversification by geography and commodity is a key component of its risk management approach.

The current Franco-Nevada organization traces its heritage to earlier royalty businesses that established the Franco-Nevada name in the mining finance sector, and the company is publicly listed in North America. It is managed by a team with industry experience in royalty and mining finance and positions itself as a specialist owner-operator of non-operating mineral and related royalty assets. Franco-Nevada’s model appeals to investors seeking exposure to commodity upside while avoiding the direct operational responsibilities of mining companies.

Franco-Nevada Q3 2024 Earnings Call Transcript

Key Takeaways

• Q3 revenue reached $275.7 million with adjusted EBITDA of $236.2 million and margins of roughly $2,200 per ounce, driven by record gold prices.
• Sold 110,110 GEOs in Q3—down year-over-year without Cobre Panama—and lowered total 2024 GEO guidance to 445,000-465,000 ounces (340,000-360,000 precious).
• The Cobre Panama mine remains in preservation mode, with planned audits and reopening talks with Panama’s new administration expected in early 2025.
• With $2.3 billion of available capital and no debt, Franco Nevada is expanding its portfolio, adding royalties from new mines and exploring bulk commodities like potash for long-term optionality.
• Operations faced headwinds at Candelaria and Hemlo—lower gold grades, NPI volatility, and shipment timing issues—but management anticipates a stronger Q4 delivery schedule.

Presentation

[Operator]

Good morning and welcome to Franco-Nevada Corporation's Third Quarter 2024 Results Conference Call and Webcast. This call is being recorded on November 7th of 2024. At this time, all lines are in listen-only mode. Following the presentation, we will conduct a Q&A session where you may ask a question through the phone line or webcast. If you are joining by webcast, you may submit a written question for the Q&A session at any time during this call by typing your question in the Q&A section of the webcast platform. If you require immediate assistance during this call, please press star zero at any time for the operator. I would now like to turn the conference over to your host, Candida Hayden, Senior Analyst, Investor Relations. Please go ahead.

[Candida Hayden, Senior Analyst of Investor Relations at Franco-Nevada Corp]

Thank you, Chloe. Good morning, everyone. Thank you for joining us today to discuss Franco-Nevada's Third Quarter 2024 Results. Accompanying this call is a presentation which is available on our website at franco-nevada.com, where you will also find our full financial results. The presentation is also available to view on the webcast. During our call this morning, Paul Brink, President and CEO of Franco-Nevada, will provide introductory remarks followed by Sandip Rana, Chief Financial Officer, who will provide a brief review of our results. This will be followed by a Q&A period. Our full executive team is available to answer any questions. Participants may submit questions by telephone or via the webcast. We would like to remind participants that some of today's commentary may contain forward-looking information, and we refer you to our detailed cautionary note on slide two of this presentation.

[Candida Hayden, Senior Analyst of Investor Relations at Franco-Nevada Corp]

I will now turn over the call to Paul Brink, President and CEO of Franco-Nevada.

[Paul Brink, Director, President and CEO at Franco-Nevada Corp]

Thank you, Candida, and good morning. Our inflation-protected business model is working well. Record gold prices regenerated high revenues, EBITDA, and earnings in Q3 compared to Q2 this year. Your sales were stable compared to Q2, although lower compared to Q3 2023 without contribution from Cobre Panamá. The quarter benefited from deliveries from the newly commissioned Tocantinzinho mine in Brazil and increased contributions from royalties on the recently completed Greenstone mine and the newly acquired Yanacocha royalty. Candelaria reported an increase in copper and gold production for the quarter, with operations recovering after encountering underground voids in the open pit in Q2. Candelaria's copper output is now ahead of its initial expectations. Gold grades have been below expectation in the period, and Lundin Mining has revised its 2024 gold production guidance for Candelaria at lower.

[Paul Brink, Director, President and CEO at Franco-Nevada Corp]

In addition, using record gold prices, revenue from our diversified assets translates into lower GEOs. We've adjusted our 2024 GEO guidance as a result. Our full year revenue, however, is expected to be higher than when we provided our original guidance in March 2024. 2024 revenue is expected to be between $1 billion and $1.1 billion. Cobre Panamá remains in preservation and safe management. President Mulino took office in July this year and has indicated a willingness to discuss the reopening of the mine with a likely timing of discussions early in 2025. His administration is arranging for an audit of the mine by international experts. I think this is a good practical step to dispel some of the misconceptions about the mine that were touted during last year's protests.

[Paul Brink, Director, President and CEO at Franco-Nevada Corp]

For the new school year starting in the quarter, we were proud to grant diversity scholarships to four new mining engineering students. We now have a total of 13 students that we're supporting through their mining engineering studies. Our business development team has been very busy. We have a strong deal pipeline and are confident we can add attractive precious metal assets to the portfolio in the coming months. There's also good potential to add incremental diversified assets. With that, I'll hand the call over to Sandip.

[Sandip Rana, CFO at Franco-Nevada Corp]

Thank you, Paul. Good morning, everyone. I will turn to slide four to give an overview of the financial results for the quarter. Overall GEOs sold were 110,110 for Q3 2024. This compares to 160,848 for the prior year quarter and 125,882 for the prior year quarter when Cobre Panamá GEOs are excluded. As you are aware, Cobre Panamá continues to be in preservation and safe management. In terms of operating assets and GEOs delivered and sold for the quarter, the main drivers of lower GEOs were Candelaria and Antapaccay. Candelaria GEOs delivered and sold in Q3 2024 were lower than those sold in prior year. In the first half of this year, 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.

[Sandip Rana, CFO at Franco-Nevada Corp]

While production in third quarter increased significantly due to accessing higher grade ore and improved runtime of the SAG mill, GEO deliveries were still lower than prior year. However, this was partially due to timing of shipments, as delivery of gold and silver was carried over into fourth quarter. We do expect a stronger quarter for GEOs delivered and sold from Candelaria for Q4. At Antapaccay, although GEOs sold were lower in Q3 2024 compared to prior year, we did see a recovery of GEOs delivered compared to second quarter 2024. As a result, we expect full year deliveries to be between 50,000-60,000 GEOs, as originally guided for the year. The Hemlo NPI was again weaker than expected. Our visibility is limited, and it continues to be difficult to estimate what the NPI will be going forward.

[Sandip Rana, CFO at Franco-Nevada Corp]

With respect to new mines, we did receive our initial ounces from Tocantinzinho during the quarter and expect a stronger quarter from both Tocantinzinho and Greenstone in Q4. For the quarter, precious metal GEOs were 84,377. This compares to 90,370 in prior year when Cobre Panamá GEOs are excluded. Precious metal GEOs represented approximately 77% of total GEOs for the quarter. For diversified, total GEOs sold were 25,733 compared to 35,511 in prior year. Iron ore GEOs sold were slightly lower year over year, while energy GEOs were lower at 19,137. The decrease in energy GEOs is a combination of lower production and revenue due to weaker natural gas prices, as well as the impact of converting energy revenue to GEOs by higher gold prices. As we looked at total revenue, revenue was $275.7 million for Q3 2024 compared to $309.5 million in prior year.

[Sandip Rana, CFO at Franco-Nevada Corp]

However, when you exclude Cobre Panamá from prior year revenue, revenue was higher by $33.5 million, or 14% year over year. Q3 2024 saw continued volatility in average commodity prices. As you see on slide five, gold and silver average prices were significantly higher for the quarter and year to date when compared to prior year. Slide six highlights the financial results for the quarter and year to date 2024. As mentioned, GEOs sold were lower at 110,110 compared to prior year, and revenue was also lower year over year. Adjusted EBITDA was $236.2 million, while adjusted net income was $153.9 million. This compares to $255.1 million in adjusted EBITDA in Q3 2023 and adjusted net income of $175.1 million in Q3 2023. On a per-share basis, adjusted net income was $0.80 for the quarter.

[Sandip Rana, CFO at Franco-Nevada Corp]

On the cost side, we did have a decrease in cost of sales compared to Q3 2023, as we did not incur the ongoing fixed cost for ounces delivered by Cobre Panamá and had lower GEOs delivered and sold from Candelaria and Antapaccay. Also, cost of sales is dependent on which assets deliver stream ounces, as not all fixed payments per stream ounce are equal. With respect to the arbitration cost for Cobre Panamá, the company incurred costs of $1.9 million in Q3 2024 and have incurred $4.2 million year to date. We expect approximately $1.5 million to be incurred for the rest of the year. Depletion decreased to $54.2 million versus $68.1 million a year ago. The decrease was due to zero depletion recorded for Cobre Panamá, as well as lower depletion recorded for Candelaria because of the lower deliveries in the quarter.

[Sandip Rana, CFO at Franco-Nevada Corp]

Our effective tax rate was 21.6% in the quarter. We expect it to average around 20% going forward. Slide seven highlights the continued diversification of the portfolio. From the charts, you can see that 77% of our third quarter 2024 revenue was generated by precious metals, with revenue being sourced 81% from the Americas. Slide eight illustrates the strength of our business model to generate high margins. For Q3 2024, the cash cost per geo, which is essentially cost of sales divided by gold equivalent ounces sold, was $290 per geo. This compares to $304 per geo in Q3 2023. This amount will fluctuate depending on the mix of royalty versus stream geos, including mining and energy. But as you can see, at current average gold prices, the company generates significant margins. Margin was approximately $2,200 per ounce in Q3 2024.

[Sandip Rana, CFO at Franco-Nevada Corp]

When you compare Q3 2024 to Q3 2023, the average gold price increased 28% year over year. However, the margin per ounce Franco-Nevada achieved increased 35%. In a rising commodity price environment, Franco-Nevada benefits fully as the cost per geo sold will not increase significantly. As we turn to available capital, the company has $2.3 billion as of September 30th, 2024. The company continues to be debt-free. Finally, with respect to guidance, we have benefited from record gold prices in the first nine months of 2024, with revenue exceeding our initial expectations. However, lower than expected gold deliveries from Candelaria and slower ramp-ups at our newly contributing mines has resulted in fewer precious metal geos than originally anticipated. In addition, record gold prices in the current year have impacted the conversion of our known gold revenue into geos.

[Sandip Rana, CFO at Franco-Nevada Corp]

Our original guidance for 2024 was total GEOs sold of 480,000-540,000. Of this total, precious metal GEOs were estimated to be 360,000-400,000 GEOs sold. Based on performance of the portfolio year to date, as well as the increase in gold prices, we now estimate total GEOs sold for 2024 to be 445,000-465,000. Of this total, precious metal GEOs are estimated to be 340,000-360,000. And with that, I will now pass it over to the operator, and we're happy to answer any questions.

[Operator]

Of course. During the Q&A session, if you would like to ask a question, simply press star then the number one on your telephone keypad. If you would like to withdraw your question, please press the pound key. If you are joining us on the webcast, please submit your questions through the Q&A section of the webcast platform. Again, if you would like to ask a question, simply press star then the number one on your telephone keypad. Your first question comes from the line of Cosmos Chiu from CIBC. Your line is open.

[Cosmos Chiu, Executive Director of Institutional Equity Research at CIBC]

Thanks, Paul and Sandip. Maybe if I can ask you on guidance first. You've revised guidance. We've now gone through about nine months of production, but for the revised full year guidance, you've still given us a range of 20,000 ounces. I'm just wondering, what could be a potential driver for you to either hit the higher end of that range or come in on the lower end? I think you mentioned that Candelaria will likely have a better Q4. Is that the driver, or are there any other key assets that we should be aware of as well?

[Sandip Rana, CFO at Franco-Nevada Corp]

Hey, Cosmos, it's Sandip. Yes, so the range is 20,000. In terms of where we come in at the higher or lower end, one is obviously on the diversified with the gold price. Depending on how gold price performs, that will either increase or reduce the diversified GEOs. So there is obviously variability there. The other is timing of deliveries. As you would have seen, Lundin had a really good Q3, 29,000 ounces of gold produced, but it is timing of delivery. So whether you get that in production in Q4 or if it carries on into 2025, that can impact what we realize in terms of GEOs sold.

[Cosmos Chiu, Executive Director of Institutional Equity Research at CIBC]

Correct. And then longer term, I noticed that despite the changes in 2024 guidance, you've maintained your guidance five years out or four years out, 2028, at 540,000-600,000 ounces. So I guess that's implying some of these issues that you've experienced in Q4 or in 2024 will be more short-term, and it shouldn't impact your longer-term sort of profile. Is my sort of deduction correct?

[Sandip Rana, CFO at Franco-Nevada Corp]

Yes. The portfolio overall is performing well. Candelaria had a tough start to the year, but as you saw in Q3, it's done well. Antapaccay is going to meet its guidance from what we can see so far, and the new mines, they're ramping up, and as you know, there's always issues when mines ramp up, so longer term, we have full confidence in our portfolio. We will be providing updated guidance in March when we release our year-end results for 2029, and we'll update at that time.

[Cosmos Chiu, Executive Director of Institutional Equity Research at CIBC]

Great. And then maybe one last question and switching gears a little bit. I saw that you've invested $1 million for an option to potentially acquire something in Potash. Paul, you kind of touched on it, diversification for the company. But maybe can you remind us in terms of Franco-Nevada's thinking in other commodities other than gold? And I guess in this case, more specifically, potash. And maybe if you can comment on the potential opportunities out there. You mentioned the corporate team is very busy and potential size of some of these transactions.

[Paul Brink, Director, President and CEO at Franco-Nevada Corp]

Sure, Cosmos. Let's see. In terms of our interest in other commodities, we always like to be strategic. Take opportunities both when there's a downturn in commodity prices that gets us a good entry point into other commodities. But the other thing we look for is what can we get in other commodities that you can't get in gold? And with assets, as you've seen with iron ore and potentially with potash, you get interest on some very large deposits that have got reserve lives that are many, many decades. So we would be interested in getting into potash for that reason. I think that would complement the gold portfolio quite nicely. And what we're contemplating here is an option that if and when that project goes ahead, we'd be able to buy a royalty on it, which I think would be a great addition to the portfolio.

[Cosmos Chiu, Executive Director of Institutional Equity Research at CIBC]

Great. Thanks, Paul and Sandip. Those are all the questions I have. Thanks once again.

[Operator]

Our next question comes from the line of Tanya Jakusconek from Scotiabank. Your line is open.

[Tanya Jakusconek, Research Analyst of Metals and Mining at Scotiabank]

Thank you so much for my questions. Paul, I wanted to continue on the Potash here. Just wondering if this is just a foothold in Taiwan or could we see other Potash deals as well?

[Paul Brink, Director, President and CEO at Franco-Nevada Corp]

Long-term, Tanya, we're open to all commodities. As I said, those bulk commodities, iron ore, copper, potash, we like them because of the long-dated nature. In terms of what's in front of us at the moment, this is the only immediate potash thing, but open over the longer term.

[Tanya Jakusconek, Research Analyst of Metals and Mining at Scotiabank]

What sort of deal size would those ones be? I think when I asked last time, it was in the $50-$400 million range. Is that still the range for these non-gold transactions or precious metal transactions?

[Paul Brink, Director, President and CEO at Franco-Nevada Corp]

Yes, that's an accurate range. We've got a couple of things that may be actionable, but those are the sort of sizes.

[Tanya Jakusconek, Research Analyst of Metals and Mining at Scotiabank]

Okay. And then on the precious metal front, can you talk a little bit about sort of the size that you're seeing there? And has there been any change from the last quarter in terms of what else you're looking at in terms of funding for projects or operating cash flow assets that are coming up and/or any other structures that you're seeing out there that you may have to look and change? And I guess that's the question as well. Are you looking at having to change some of the structure of your deals given the competitiveness of this environment?

[Paul Brink, Director, President and CEO at Franco-Nevada Corp]

I'm going to hand that over to Ian, Tanya.

[Sandip Rana, CFO at Franco-Nevada Corp]

Morning, Tanya. I would say overall, a number of market and structural factors lend itself to this being a pretty active year on the precious metal side. I think you've probably seen it already. There have been a number of deals that have taken place. I see that continuing, Tanya. It remains quite robust, as Paul mentioned earlier, in terms of potential transactions. Pretty meaningful size. Our structure, we have already evolved a little bit, but we continue to do that. Backing the team at GMIN has been a very successful transaction, and it's great to see that go into operations. So that's something we continue to look to replicate, and it's been quite constructive, I think, for the portfolio. So going forward, expect to be quite active on the precious metal side with kind of pretty meaningful size transactions overall.

[Tanya Jakusconek, Research Analyst of Metals and Mining at Scotiabank]

What are meaningful transactions for you? We talked about the $300 million, but that's not meaningful. I'm not sure.

[Sandip Rana, CFO at Franco-Nevada Corp]

Yeah. I would say $300 million is kind of a good medium-sized transaction. We're seeing more towards the mid to higher end at the moment, but it's a spectrum. We look at smaller deals where we see good potential. And I think it was a good point that you raised, Tanya. We do transactions where we see excellent optionality, but we're also quite focused on areas where we can add immediate cash flow, and there's some good opportunities there as well.

[Tanya Jakusconek, Research Analyst of Metals and Mining at Scotiabank]

Okay, and when you said mid to high, would that mean plus $300 million? Because if you put mid at $300 million, upper end should be higher than that?

[Sandip Rana, CFO at Franco-Nevada Corp]

There are opportunities above that, yeah.

[Tanya Jakusconek, Research Analyst of Metals and Mining at Scotiabank]

Ian, I wouldn't be surprised to see you in some of these competitive situations still take equity interest, provide debt financing, and potentially I saw a deal that had collars involved as well in the initial startup. Would that be a deal for that as well?

[Sandip Rana, CFO at Franco-Nevada Corp]

Yeah. We have used the balance sheet to kind of provide a full package like we did with GMIN, and it's been quite successful. So as I said, I think that is the model on some transactions, not all, but where we can use that type of structure to help a company succeed, we will. And with that case study, the equity and debt have been quite complementary and provided good returns.

[Tanya Jakusconek, Research Analyst of Metals and Mining at Scotiabank]

Okay. Thank you. I can move over to you and just ask forecasts as Hemlo may be surprised by the Hemlo contribution. Is there anything else within the portfolio that I think that one we're very surprised it's very hard for me to forecast that, so I appreciate that. But any other one within the portfolio that we talked about looking at longer term? I saw the Stillwater numbers as well. That looks like that asset is going to be down for a bit for a while. So is that something when you think about your five-year outlook that you kind of assume that mine comes back on to a normal rate or we're back at that 255,000 ounce GEO? I'm just trying to think of how you assets that are hard.

[Sandip Rana, CFO at Franco-Nevada Corp]

Sure. So obviously, the NPIs are always the most difficult to predict. Goldstrike is probably more easier to estimate just based on past history. Hemlo has always been the one that fluctuates a lot just because the NPI doesn't cover all the land or all the deposit as well as the cost impact there for development because it's underground. So it's tough to estimate for that. As for other assets, you mentioned Stillwater. Yes, Sibanye-Stillwater came out and has reduced their guidance for next year to around 265,000 ounces. Longer term, we do expect that to get back up to the 500,000 mark, and unless Sibanye-Stillwater guides differently, that's what we've estimated, but other than that, the rest of the portfolio, there shouldn't be really any major surprises longer term.

[Tanya Jakusconek, Research Analyst of Metals and Mining at Scotiabank]

Yeah. Obviously, the only other one would be when Cobre Panamá comes into production. And I think the operator has mentioned that when it does come up into production, it's going to take a six-month ramp-up. Is that your understanding?

[Sandip Rana, CFO at Franco-Nevada Corp]

Yeah. I think that's reasonable if that's what First Quantum has disclosed.

[Tanya Jakusconek, Research Analyst of Metals and Mining at Scotiabank]

Okay. Thank you so much for helping me. I appreciate it.

[Sandip Rana, CFO at Franco-Nevada Corp]

Thanks, Tanya.

[Operator]

Our next question comes from the line of Derick Ma from TD Cowen. Your line is open.

[Derick Ma, Equity Research Analyst at TD Cowen]

Thank you. I just want a point of clarification. In terms of the CRA and tax-related exposure, with the GMT now in place, is there still potential tax exposure in terms of transfer pricing in 2024, or is everything you're showing in the financial reports basically everything we're going to be looking at?

[Sandip Rana, CFO at Franco-Nevada Corp]

So in the financials, we've disclosed up until the end of 2023 our exposure in terms of transfer pricing. We had three audit issues outstanding with CRA. Two have been dropped by CRA. That was earlier in the year. With respect to transfer pricing, that process is still ongoing. So that has nothing to do with the GMT.

[Derick Ma, Equity Research Analyst at TD Cowen]

Would there still be potential exposure in terms of transfer pricing in 2024, or does the GMT cover that?

[Sandip Rana, CFO at Franco-Nevada Corp]

No, there still would be.

[Derick Ma, Equity Research Analyst at TD Cowen]

There still would be. Okay.

[Sandip Rana, CFO at Franco-Nevada Corp]

Yeah. They're independent.

[Derick Ma, Equity Research Analyst at TD Cowen]

Independent issues. Okay. Understood. Thank you.

[Operator]

Our next question comes from the line of Heiko from H.C. Wainwright. Your line is open.

[Heiko Ihle, Managing Director of Equity Research at H.C. Wainwright]

Hey, good morning. Thanks for taking my questions.

[Paul Brink, Director, President and CEO at Franco-Nevada Corp]

Morning, Heiko.

[Heiko Ihle, Managing Director of Equity Research at H.C. Wainwright]

The first two things I have for you have already been answered, but just following up from an earlier question, you said there are some deals with immediate cash flow earlier in this Q&A session. Size-wise, how much will these deals move the needle, not just for you, but also for the operators that are offering them up? And have you seen any, just following up on that, have you seen any improvements in pricing for these deals in the current market environment, or are the high gold prices that we've seen pretty much, well, I was going to say all the way through yesterday, but all the way through today, really just too good and everyone's trying to get in?

[Sandip Rana, CFO at Franco-Nevada Corp]

So in terms of near-term cash flow deals, as I said, across the spectrum, we've done some transactions that had more optionality, but I do see potential for meaningful transactions both for us and the people that we would potentially be transacting with going forward. Sorry, Heiko, the second part of your question?

[Heiko Ihle, Managing Director of Equity Research at H.C. Wainwright]

Price-wise, is the gold price just king and everyone's scrambling to get in, or have people been a little bit more willing to negotiate pricing?

[Sandip Rana, CFO at Franco-Nevada Corp]

Again, it varies, but I do see overall a slightly more muted competitive environment at the moment, which is conducive to pricing better.

[Heiko Ihle, Managing Director of Equity Research at H.C. Wainwright]

And pricing depends on geopolitical risks, as in maybe slightly more challenging places are easier to get in, or is it just however desperate the operator is? Maybe desperate's the wrong word.

[Sandip Rana, CFO at Franco-Nevada Corp]

Yeah. No, that's another good question, Heiko. I would say, first off, every deal is a bit different, and it's important to do your diligence and then price the risk and upside appropriately. So we get the opportunity to review assets, to do site visits, and then we assess pricing in light of what we see as the risks and the upside. So it's a really balanced approach, and we're very thoughtful about that in each transaction.

[Heiko Ihle, Managing Director of Equity Research at H.C. Wainwright]

Very well. I'll get back in queue. Thank you, guys.

[Operator]

Again, if you'd like to ask a question via phone, simply press Star and the number one on your telephone keypad. There are no further questions on the phone. I will now turn the Q&A session over to Candida Hayden, who will take questions from the webcast.

[Candida Hayden, Senior Analyst of Investor Relations at Franco-Nevada Corp]

Thank you. Our first question comes from Diego Tramaterra from Noster Capital Management. Can you clarify a bit more what does addressing the Cobre Panamá mine in early 2025 mean? Are there any proactive measures you or First Quantum are taking to try and sit down with President Mulino and his administration?

[Paul Brink, Director, President and CEO at Franco-Nevada Corp]

Thanks, Diego. It's Paul. President Mulino has made comments to say he is open to discuss the mine. The first item on his agenda, though, is pension reform, which they are currently trying to address. I believe there's a bill that's now in front of Parliament to address that. So expect any discussions on the mine would be early next year. First Quantum is being proactive on a couple of fronts. One is trying to familiarize Panamanians with the mine with the professional operation that they run in country. I think that is going well. I think that is impacting sentiment in the country towards mining. They also are engaging with the government on a couple of fronts. Obviously, there are two things there. Both for them and for us, there's the potential for arbitration. So there are interactions on that front. It's not plan A for either of us.

[Paul Brink, Director, President and CEO at Franco-Nevada Corp]

Plan A is to get the mine up and operating again. So they are engaging with the government on that. They're obviously the driver in this. We're very supportive of their efforts and engage very closely on them with it.

[Candida Hayden, Senior Analyst of Investor Relations at Franco-Nevada Corp]

The second part of Diego's question, if Cobre Panamá remains in preservation and safe management mode for several years, is there anything you might consider doing with that stream, like selling it?

[Paul Brink, Director, President and CEO at Franco-Nevada Corp]

We're very hopeful that the mine will return to operation, and it has the potential to be a tremendous contributor to us. If and when it comes back at its full operating rate, that would be roughly a 30% increase in our GEOs and revenues. So I still believe it's a tremendously valuable asset. I think the full value of it has been taken out of our stock. So I think probably the best optionality you can get in the royalty industry today is a free option on Cobre Panamá coming back online.

[Candida Hayden, Senior Analyst of Investor Relations at Franco-Nevada Corp]

Our last question is from Heiko from H.C. Wainwright. Wanted to see if you anticipate any near-term or long-term impacts from the U.S. election given some of the geopolitical changes that might bring around the world.

[Paul Brink, Director, President and CEO at Franco-Nevada Corp]

I think potential for some positive impacts for us. Most immediately, we have a royalty on the Stibnite mine. It's been moving through the permitting process. Got notice that they should be receiving their Record of Decision by the end of this year. I think that is even more likely now. A second mine that we've got a royalty on is Copper World, also moving through permitting process. I think it's water permit now in hand, just waiting for one more permit. So I think this change will be positive. I hope that it'll impact that side of our portfolio. As you know, we also have quite substantial oil and gas interests in the U.S. In particular, we have gas interests in the Haynesville. And one of the drivers for that industry is LNG offtake off the Gulf Coast going into Europe.

[Paul Brink, Director, President and CEO at Franco-Nevada Corp]

I think this can be potentially positive to see more developments on that front that'll serve those assets well.

[Candida Hayden, Senior Analyst of Investor Relations at Franco-Nevada Corp]

There are no further questions from the webcast. This concludes our third quarter results conference call and webcast. Thank you for your interest in Franco-Nevada.

Participants

Executives

• Candida Hayden, Senior Analyst of Investor Relations
• Paul Brink, Director, President and CEO
• Sandip Rana, CFO

Analysts

• Tanya Jakusconek, Research Analyst of Metals and Mining at Scotiabank
• Derick Ma, Equity Research Analyst at TD Cowen
• Heiko Ihle, Managing Director of Equity Research at H.C. Wainwright
• Cosmos Chiu, Executive Director of Institutional Equity Research at CIBC