Franco-Nevada Q1 2025 Earnings Report

Franco-Nevada EPS Results

• Actual EPS: $1.07
• Consensus EPS: $1.00
• Beat/Miss: Beat by +$0.07
• One Year Ago EPS: $0.76

Franco-Nevada Revenue Results

• Actual Revenue: $368.40 million
• Expected Revenue: $328.79 million
• Beat/Miss: Beat by +$39.61 million
• YoY Revenue Growth: +43.50%

Franco-Nevada Announcement Details

• Quarter: Q1 2025
• Date: 5/8/2025
• Time: After Market Closes
• Conference Call Date: Friday, May 9, 2025
• 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 Q1 2025 Earnings Call Transcript

Key Takeaways

• Franco Nevada reported record Q1 results with revenue of CAD 368.4 million (up 43% YoY) and adjusted EBITDA of CAD 321.9 million (up 49% YoY), driven by elevated gold prices and high-margin royalty assets.
• The company closed a USD 500 million stream deal on Stillwater’s Western Limb and a USD 300 million NSR royalty on Discovery Silver’s Porcupine project, ending the quarter debt-free with CAD 2.1 billion in available capital.
• Hemlo NPI revenue surged to USD 17.7 million in Q1 (from USD 4.8 million a year ago) including a USD 5 million catch-up accrual, though future performance remains tied to gold price fluctuations.
• Despite President Molina’s willingness to negotiate on Cobre Panama and restart operations, concentrate sales haven’t resumed and Franco Nevada’s arbitration claim remains active, keeping the outcome uncertain.
• Further growth is expected from the ramp-ups at Tokotazinho, Greenstone and the start-up of Valentine Gold, plus contributions from the new Porcupine royalty.

Presentation

[Operator]

Morning and welcome to Franco-Nevada Corporation's First Quarter 2025 Results Conference Call and Webcast. This call is being recorded on May 9, 2025. At this time, all lines are in a listen-only mode. Following the presentation, we will conduct a question-and-answer 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 call over to your host, Candida Hayden, Senior Analyst, Investor Relations. Please go ahead.

[Candida Hayden, Senior Analyst for Investor Relations at Franco-Nevada Corporation]

Thank you, Jenny. Good morning, everyone. Thank you for joining us today to discuss Franco-Nevada's first quarter 2025 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 for Investor Relations at Franco-Nevada Corporation]

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

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

Thank you, Candida, and good morning, everyone. Today, we're reporting our best financial results ever. We achieved record-quarterly top and bottom-line results, and that without any contributions from corporate backlog. The results benefited from elevated gold prices, a good contribution from our Hemlo NPI, and strong production from our energy. We're looking forward to added contributions through the year, in particular from the ongoing ramp-up of Tocantinzinho and Greenstone, and the start-up of Valentine Gold, as well as contributions from the new Porcupine Royalty. On the topic of Cobre Panama, President José Raúl Mulino of Panama continues to indicate a willingness to hold discussions about the mine this year, and we're encouraged by his recent statements in this regard.

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

It was an active quarter for our community support program, and we funded contributions for a waste management initiative at Cascabel SolGold, the reopening of the Museum of Northern History in Kirkland Lake with Agnico Eagle and Alamos, and a contribution to the Sioux Area Hospital Foundation with Alamos. During the quarter, we closed the previously announced $500 million acquisition of a stream on Sibanye-Stillwater's Western Limb Mining Operations, and we received the initial payment which relates to operations in the last four months of last year. We ended the quarter debt-free and with $2.1 billion in available capital. Post-quarter end, we closed the acquisition of a 4.25% NSR royalty for $300 million with Discovery Silver on the Porcupine Complex.

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

You'll recall, as part of that financing package, we also provided a $100 million loan facility, and we provided a roughly CAD 70 million lead order in their equity issue. Needless to say, we're delighted with the roughly tripling value of the shares from our purchase price. We remain well-capitalized to add further growth, and our business development team have a number of actual opportunities that could add further attractive assets this year. With that, I'll hand the call to Sandip.

[Sandip Rana, CFO at Franco-Nevada Corporation]

Thanks, Paul. Good morning, everyone. As Paul mentioned, Franco-Nevada reported record financial results for first quarter ended March 31, 2025. This was the result of both strong production from our asset base and higher precious metal prices. Precious metal prices, with gold in particular, were very strong in first quarter. On slide four, you'll see a comparison of commodity prices for Q1 2025 and Q1 2024. Gold and silver prices increased significantly year over year, with the average gold price being higher by 38% in the quarter and average silver price being higher by 37%. Prices for palladium, iron ore, and oil continued to be volatile and were lower compared to prior year. However, you did see a significant increase in natural gas prices. On slide five, we highlight total GEO sold and net GEO sold for Q1 2025, Q1 2024.

[Sandip Rana, CFO at Franco-Nevada Corporation]

Total GEO sold were $126,585 in the quarter compared to $122,897 in first quarter 2024, a 3% increase. Precious metal GEOs sold in the quarter were $100,623, higher by 8% compared to prior year. For the quarter, we received strong contributions from and benefited from the recent acquisitions made: Yanacocha and Western Limb Mining Operations. As Paul mentioned, we did receive our first GEOs from Western Limb in the quarter, which were related to the production period September 1 to December 31 of last year. GEOs related to January 2025 were delivered in April, and it's important to note there's a three-month delay between production and delivery to Franco-Nevada. In addition to better performance from Candelaria and receiving GEOs from recent acquisitions, we also benefited from the continued ramp-up of operations at new mines Tocantinzinho and Greenstone. I look forward to increasing contributions from these assets.

[Sandip Rana, CFO at Franco-Nevada Corporation]

One of the key outperformers versus our expectations was the HAMLO NPI. We did record a catch-up accrual related to 2024 that was recorded in the first quarter, but the HAMLO NPI again showed its leverage to higher gold prices. Revenue recorded for the quarter was $17.7 million compared to $4.8 million a year ago. Diversified GEO sold were 25,962 for the quarter compared to 29,879 for prior year, despite diversified revenue being higher by 21% year over year: $74.8 million versus $61.6 million. The approximate 4,000 GEO sold reduction is due to the impact of higher gold prices when converting revenue to GEOs. As we look at our royalty and streaming business, we think it's important to evaluate contributions from assets based on margin contribution and not necessarily top-line measures.

[Sandip Rana, CFO at Franco-Nevada Corporation]

Royalty GEOs are higher margin GEOs as there is minimal cost associated with each versus stream GEOs where an ongoing fixed payment is required. The measure net GEOs removes the cost of sales component for all GEOs so that GEOs sold are represented after cost. For Q1 2025, net GEOs were $113,138 for Franco-Nevada compared to $106,681 in Q1 2024, a 6% increase. I think it is important to note that when looking at our growth going forward, the majority of that growth comes from high-margin royalty GEOs versus streams. As you turn to slide six, we have highlighted our revenue and adjusted EBITDA results for the last five quarters. Total revenue for the quarter was $368.4 million, which is a record for Franco-Nevada. This compares to $256.8 million last year, a 43% increase. Precious metals accounted for 79% of revenue.

[Sandip Rana, CFO at Franco-Nevada Corporation]

Adjusted EBITDA, also a record, was 49% higher for the quarter at $321.9 million compared to $216.1 million in 1st quarter 2024. Slide seven highlights the key financial metrics used by the company. As mentioned, total GEOs were approximately 126,500, generating $368.4 million in revenue during the quarter. With respect to cost, we did have an increase in cost of sales compared to Q1 2024 due to higher stream ounces sold. Cost of sales was $38.5 million versus $33.6 million last year. Depletion did increase as well to $68.4 million versus $58.2 million a year ago. Depletion is based on actual mining GEOs sold and barrels of oil equivalent received from the energy division. As we received more GEOs from Candelaria and began depleting our recent transactions, Yanacocha and Western Limb Mining Operations, this impacted depletion as those assets are currently higher per ounce depletion assets.

[Sandip Rana, CFO at Franco-Nevada Corporation]

Adjusted net income was $205.6 million or $1.07 per share for the quarter, both up 51% versus prior year. Slide eight highlights the continued diversification of the portfolio. 79% of our Q1 2025 revenue was generated by precious metals, with revenue being sourced 84% from the markets. Our largest contributor to revenue was Candelaria. Slide nine illustrates the strength of our business model to continue to generate high margins. For 1st quarter 2025, the cash cost per GEO, which is essentially cost of sale divided by gold equivalent ounces sold, was $304 per GEO. This compares to $273 per GEO in Q1 2024. As the gold price has risen, Franco-Nevada has seen a significant increase in our margin per GEO, with it being over $2,500 per GEO in Q1 2025.

[Sandip Rana, CFO at Franco-Nevada Corporation]

As we've always said, in a rising commodity price environment, we expect to benefit fully as the cost per GEO should not increase significantly. Lastly, slide 10 summarizes the financial resources available to the company. When including our credit facility of $1 billion, total available capital at March 31 is $1.9 billion. However, this is net of the $300 million funded after quarter end for the Porcupine Royalty. The company remains well-capitalized to continue to add long-life, high-quality assets to the portfolio. Now I'll pass it back over to Jenny, and we're happy to answer any questions.

[Operator]

Thank you. 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 star two. If you are joining us on the webcast, please submit your question through the Q&A section of the webcast platform. Once again, that is star one should you wish to ask a question on the phone lines. Your 1st question is from Heiko Ihle from HC Wainwright. Your line is now open.

[Heiko Ihle, Managing Director at HC Wainwright]

Hey, good morning, Paul, Sandip and team. Happy Friday.

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

Hey, Heiko.

[Heiko Ihle, Managing Director at HC Wainwright]

Likewise.

[Heiko Ihle, Managing Director at HC Wainwright]

You did the conversion of the net profit interest on Pandora into a net smelter return royalty. Out of curiosity, given current commodity pricing, is that something where you're getting more and more operators approaching you on some sort of conversion or amendment to streams? Because I was always under the impression that, you know, in general, once a stream is there, it sort of stays and it does not really get renegotiated. Is there more seen right now with people trying to do things, given that a lot of the operators have more cash flow than they probably thought a year ago?

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

I do not see a theme at the moment. That conversion was just a function of the transaction that we did. It was still ordered at the time, and it did make more sense in doing that to convert that into an NSR, which is a more predictable instrument for us. I would say it is more just related to the particular transaction.

[Heiko Ihle, Managing Director at HC Wainwright]

Fair enough. So we shouldn't expect anything else like this in Q2 and beyond, really?

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

Yeah, no conversions expected.

[Heiko Ihle, Managing Director at HC Wainwright]

Okay. And then something completely different. There was an article in the Wall Street Journal a couple of days ago with Warren Buffett and his stake in Occidental Petroleum. Essentially, it said the investment did not really work out. In contrast, your U.S. energy interests actually did quite okay with, you know, obviously higher royalty rates and the . Just want to see what have you been doing better? Given current pricing, what are you seeing with new royalty investments in that space?

[Jason O'Connell, Senior VP at Franco-Nevada Corporation]

It's Jason O'Connell here. You know, I don't think we have a similar interest as Oxy did. We are a passive investor in royalties in the U.S. So we don't have the cost structure, et cetera, that Oxy would have and some of the performance issues that they may have had. You know, I think our exposure in the U.S. is fairly broad. We've got access to most of the major shale plays, including both the Permian and Anadarko on the oil side, as well as the Haynesville and Appalachia on the gas side. We are very well exposed both in terms of our footprint in the different basins as well as the different commodities. We are continuing to evaluate different opportunities in oil and gas. We look at good quality assets and royalty packages as they become available. We'll continue to assess those.

[Jason O'Connell, Senior VP at Franco-Nevada Corporation]

If there's something that is of good quality and value, we may look at doing that in the future.

[Heiko Ihle, Managing Director at HC Wainwright]

Fair enough. Thank you, guys. I'll get back to you.

[Operator]

Thank you. Your next question is from Cosmos Chiu from CIBC. Your line is now open.

[Cosmos Chiu, Institutional Equity Research at CIBC]

Thanks, Paul, Sandip and team. Congrats on the record earnings. It's well-deserved. Maybe quick question first on the MPI at HAMLO. Sandip, as you mentioned, there is a bit of a catch-up in the quarter. To confirm, we shouldn't expect the same sort of elevated level in terms of earnings from HAMLO for future quarters. It'd still be good because, as we know, MPI is very levered to higher commodity prices, but likely wouldn't be to the same sort of level.

[Sandip Rana, CFO at Franco-Nevada Corporation]

Yes, hi Cosmos. Yes. The catch-up earnings related to last year was about $5 million U.S. The Q1 MPI on its own was about $12 million U.S. You know, as you said, it's very hard to predict MPIs, and especially at HAMLO where we do not cover the entire mine. We're just on one portion of the underground. At current commodity prices, you know, I'd expect something similar in terms of revenue unless something drastic happened. As I said, until you get the numbers, you do not really know. I think that's a fair estimate going forward.

[Cosmos Chiu, Institutional Equity Research at CIBC]

You know what? It's a good surprise. I think that's a positive. In terms of MPIs, as we talked about, very leveraged to higher commodity prices. If I scan through your portfolio, the other MPIs in Kirkland Lake. Is there any way that you can kind of talk about the potential here at the MPI at Kirkland Lake? It ain't seen the same degree in terms of increase in Q1. Maybe it's just based on the area that you cover. Is there any more additional colors that you can give us on the Kirkland Lake MPI?

[Sandip Rana, CFO at Franco-Nevada Corporation]

Sure. The Kirkland Lake MPI is a 20% accounting profit MPI, but it's only on a couple of claims at Kirkland Lake where they're not mining right now. We're not getting, but they've had very good exploration results there, and they're moving towards those claims. In the years going forward, I do expect to finally start receiving payments on those. There won't be anything this year. The one MPI I will mention is Musselwhite, where we have a 5% MPI. You know, with Orlett taking over that asset from Newmont, you know, we're looking forward to seeing what they do with that asset in terms of more efficient mining, improving productivity and just these higher commodity prices, just see how that plays out. That is one where I think we do have some leverage.

[Cosmos Chiu, Institutional Equity Research at CIBC]

Does the Musselwhite MPI cover the entire property?

[Sandip Rana, CFO at Franco-Nevada Corporation]

Yes, it did.

[Cosmos Chiu, Institutional Equity Research at CIBC]

Okay. That's good to know. Maybe switching gears just quickly on the Western Limb, the fairly recent acquisition. Could you maybe talk about the timing again in terms of I saw that you received 6,540 GEOs in the quarter, but that was for the four months ended last year. I would have expected it to be all the way to March or the end of Q1 in terms of payments. Maybe there's a lag. Could you walk me through the timing in terms of what should we expect in terms of receipts in, say, Q2 and then Q3 for Franco-Nevada into 2025?

[Sandip Rana, CFO at Franco-Nevada Corporation]

Sure. What we received in Q1 was related to last year for the last four months of the year. We did not receive anything related to 2025. There is basically a one-quarter lag. January got delivered in April. February will be May. As we guide it to on an annual basis, it is roughly 20,000 GEOs. You know, divide that by four, so roughly 5,000 GEOs a quarter.

[Cosmos Chiu, Institutional Equity Research at CIBC]

Great. Maybe one last question, bigger picture. Paul, you had kind of mentioned Cobre Panama. Based on your point of view and your interpretation, maybe give us a bit more color in terms of what you think is kind of happening in Panama, how that relates to Cobre Panama. As we all know, First Quantum discontinued their international arbitration process. I think yours is still active. Maybe you can talk a little bit about that as well.

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

Maybe starting up, you know, what is going on in Panama at the moment? You would have seen that President Mulino for a while has said he's open to a discussion on the mine this year. He did late in March give instructions to his team to say he wanted them to turn their minds to how they might address the mine. The country has been completing the process on social security. They've also had to deal with the U.S. in terms of the Panama Canal. Those have all been items on the agenda. Very hopeful that negotiations can start fairly soon with the company. I was also encouraged by some comments that Mulino had made to say he would like to see that they can get the situation with the mine resolved by year-end. I think that is the setup.

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

In terms of our own arbitration process and suspending, we have had discussions with the representative of the government. Those have been productive, but we do not have anything to report on that at this stage.

[Cosmos Chiu, Institutional Equity Research at CIBC]

Great. Thanks, Paul, Sandip, and team. Those are all the questions I have. Have a good weekend.

[Cosmos Chiu, Institutional Equity Research at CIBC]

Thanks, Paul.

[Operator]

Thank you. Your next question is from Daniel Major from UBS. Your line is now open.

[Daniel Major, Metals and Mining Analyst at UBS]

Hi, Paul. Hi, Sandip. Thanks for the questions. First one, just to follow up again on Cobre Panama, just looking at the commentary from Mulino, I mean, I think he quoted that he's open to forming an association with First Quantum with respect to the new Cobre Panama license not being based on contract law, but he wants to see all arbitration suspended. Is this something that the Panamanian government have approached you about dropping your arbitration claim to facilitate an engagement on the licensing agreement, or is this just purely a negotiation between First Quantum and the government of Panama?

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

You know, in terms of the ownership, as you well know, it is First Quantum and also Kores , the Koreans, who are the owners of the asset. In terms of any negotiation, it's a negotiation with those parties. We're a financier to this project. We don't have a seat at the table. As I outlined and mentioned before, we obviously do have our arbitration rights. As I said, we have had some discussions with government representatives, but don't have anything to report on it.

[Daniel Major, Metals and Mining Analyst at UBS]

Okay. So at this stage, you're not looking to drop your arbitration claim?

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

You know, our discussions have been we're open to suspending it under the right conditions. We've had discussions around that.

[Daniel Major, Metals and Mining Analyst at UBS]

Okay. That's useful. Thank you. The second question, strong performance from the oil and gas component of the portfolio this quarter. Can you give us a steer on the distribution of expected GEO sales from the diversified portion of the business through the balance of the year?

[Jason O'Connell, Senior VP at Franco-Nevada Corporation]

I think in terms of the energy performance, we did have a strong quarter. Part of that was helped out by prices. The other piece was we had some strong performance in our Permian assets from new wells that came online during the quarter. Going forward, you know, I expect that we'll see a reasonably flat profile, although it will depend on where prices go. You would have seen last year when the gas price was weak, some of our volumes on our gas assets came off as operators pulled back on activity. We are waiting to see how the operators on our lands react to what has been a lower oil price. You can expect that if prices stay lower for a longer period of time, there may be some reduction in activity, which could translate into slightly lower volumes. It is largely a function of price.

[Jason O'Connell, Senior VP at Franco-Nevada Corporation]

If prices sort of stabilize in and around where they were last year, I would expect a fairly flat profile. If prices continue to weaken, you may see some modest volume decline associated with a pullback in activity.

[Daniel Major, Metals and Mining Analyst at UBS]

Okay. Thanks. One more, if I could, just thinking about your pipeline of projects and where your focus is at the moment. Can you give us any steer? You know, most of the transactions have been more focused on gold assets in the space. Are you seeing any pickup in interest in the base metal space? Has there been any negotiations in that you can make any comments on?

[Eaun Gray, Chief Investment Officer at Franco-Nevada Corporation]

Hi, Daniel. Team, Gray speaking. I would make the first overall comment that the gold market is very active in terms of royalties and streams. So we're spending the majority of our time there, and we're quite pleased with the conditions. There are opportunities outside of gold, relatively few compared to what we're seeing in gold. And no specific commentary I can provide on Argentina.

[Daniel Major, Metals and Mining Analyst at UBS]

All right. Thanks. Very useful. Have a nice weekend.

[Jason O'Connell, Senior VP at Franco-Nevada Corporation]

Great. Thank you.

[Operator]

Thank you. Your next question is from Tania Jakusconek from Scotiabank. Your line is now open.

[Tanya Jakusconek, Managing Director and Senior Equity Analyst at Scotiabank]

Great. Good morning, everybody. Congrats on a good quarter and good start to the year. That HAMLO NPI is the one that just keeps on giving. So hard to forecast. Anyhow.

[Cosmos Chiu, Institutional Equity Research at CIBC]

That is so true.

[Tanya Jakusconek, Managing Director and Senior Equity Analyst at Scotiabank]

Right? I have three questions, if I could. I'm going to start with Sandip, just the easier one on just on the modeling side. Thank you for that modeling on the HAMLO. I just wanted to have a little bit of an idea on how the overall profile for the company shapes out during the year. We had started, obviously, with a good Q1. We had talked about a profile of 47% in the 1st half, 53% in the second, with, you know, a similar Q3, Q4. That was based on the ramp-up of some of the operations that Paul mentioned in the beginning of the presentation. Just wondering is that still what you're looking at based on what you know today?

[Jason O'Connell, Senior VP at Franco-Nevada Corporation]

Yeah, Tania, I think that's a fair profile. You know, the caveat is that, you know, the gold price has gone higher. Like our guidance was done at $2,800 an ounce and gold's over $3,000 now. And energy prices have pulled back from, especially oil, from where we had budgeted. You know, on an overall GEO profile, I think that's fair. You'll probably, you might see some of the gains on the mining side negated on the conversion when we're converting the diversified side. But for your modeling purposes, I still think it's a fair profile.

[Tanya Jakusconek, Managing Director and Senior Equity Analyst at Scotiabank]

Okay. Just on the energy side, and I know we touched a little bit on it, can you just remind me the lag in terms of pricing that are felt? I thought there was about a six-month lag. Is that correct in terms of, you know, what they're doing today versus where you're going to see this in your financials? Is it about six months?

[Jason O'Connell, Senior VP at Franco-Nevada Corporation]

Tania, it depends on how you look at it from a pure price impact. We get paid on our royalties. Typically, they range, but from anywhere from one month to maybe three months following production. There is that impact. The other impact that I spoke about earlier is an impact to drilling activity.

[Tanya Jakusconek, Managing Director and Senior Equity Analyst at Scotiabank]

Yeah.

[Jason O'Connell, Senior VP at Franco-Nevada Corporation]

That is a longer lag. Operators typically will want to see where prices are going to sort of flatten out a little bit. Oftentimes, yeah, I'd say six months is probably a reasonable time frame to see how that unfolds. You would see if you look at some of the disclosure around our operating companies. Some of them are starting to react to lower prices by reducing their capital budgets somewhat. There is already a little bit of impact. I would say the majority, likely you'll see some news next quarter of prices continuing to be lower.

[Tanya Jakusconek, Managing Director and Senior Equity Analyst at Scotiabank]

Okay. Thanks for that, Jason. Maybe I can come to Paul on my second question, just back on Cobre Panama and the arbitration. Actually, maybe just on the next steps, where do we stand on the concentrate? I mean, we've been told that they fired up the power plant, or have they fired up the power plant? I think they were given direction to fire up the power plant. There was a concentrate on site that was supposed to be sold. Maybe just what exactly is happening on site? Have we a timeline on selling this concentrate?

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

No timeline yet, Tania. Really, three moving pieces there that they want is the approval of the preservation and safe maintenance. The other is shipping of the concentrate. The third is restarting the power plant. The indications, again, from the government is that they are open to all of those things, going ahead. They have not actually gone ahead at this stage. I am hopeful that in the coming months that we should see all of those things go ahead.

[Tanya Jakusconek, Managing Director and Senior Equity Analyst at Scotiabank]

Okay. On the mines, I guess on the property mine site, they're just keeping it on care and maintenance with the normal care and maintenance procedures that are in place. There's nothing else that is going on?

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

Not that I'm aware of.

[Tanya Jakusconek, Managing Director and Senior Equity Analyst at Scotiabank]

Okay. In your comments, you said you'd be open to dropping the arbitration under certain conditions with your discussions, you know, not into the itty-bitty details, but just from a bigger picture. You know, what would lead you to drop the arbitration? Would it be that, you know, you're progressing ahead, the concentrate is sold, or is there anything that you can provide some color on what would help you with your decision on the arbitration?

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

Yeah. First, it's suspending rather than dropping. That just would be putting it on hold for a period to allow that there is a negotiation. You know, still with the rights that that could pursue. I'd say putting it on hold is a good word. I don't want to get into the details of, you know, what those conditions would be. You know, the broad is, you know, want to know that the table is set for a negotiation and that both parties are ready to go.

[Tanya Jakusconek, Managing Director and Senior Equity Analyst at Scotiabank]

Okay. Okay. Thank you for that. Maybe my last question, I just wanted to circle back on the transaction opportunities. I want to start by asking, you know, last quarter when we talked about the transaction opportunities, we talked about a pipeline in the $100 million-$500 million range. Some of your peers have mentioned that that range now has moved up in size. I'm just wondering, are you seeing larger opportunities out there? Are those opportunities mainly in base metal producers that are trying to crystallize on this higher gold price? I'm just trying to understand whether that's something that has increased in sort of transaction opportunities. I just wanted to ask about the royalties versus the stream. How do those look in terms of opportunities? Are you seeing more royalties, more streams?

[Jason O'Connell, Senior VP at Franco-Nevada Corporation]

Hi, Tania. It's Ian again. I would say, first off, we're seeing similar conditions to what we saw last year in terms of overall volume of deals and also on size. That's probably the best guidance I can give you in terms of deal volume and sizing. In terms of royalties versus streams, similar to last year, it's a mix. We're seeing good opportunities in both.

[Tanya Jakusconek, Managing Director and Senior Equity Analyst at Scotiabank]

Okay. Ian, just you, you know, you came back and talked a little bit about, you know, you have some opportunities in the non-precious metals. Would that be outside of energy?

[Jason O'Connell, Senior VP at Franco-Nevada Corporation]

Hey, Tania. It's Jason. You know, we're looking at opportunities both within energy and outside of energy. So it's a pretty broad universe of things that we're looking at. Overall, you know, it's a little bit about the commodity, but a lot of it is just what assets are available and which are the best quality opportunities. And those are the ones that we'll focus our time on.

[Tanya Jakusconek, Managing Director and Senior Equity Analyst at Scotiabank]

Okay. In the non-gold opportunities, what size would those be at?

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

You know, there's really a wide range from very small to larger transactions. So we're looking at a full spectrum of sort of quantum.

[Tanya Jakusconek, Managing Director and Senior Equity Analyst at Scotiabank]

Okay. When you say large, is that small from like 50 to 500, or is it up to a billion? I don't know what your large is.

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

You know, large is a spectrum from, you know, zero to plus $500 million.

[Tanya Jakusconek, Managing Director and Senior Equity Analyst at Scotiabank]

Okay. All right. That's helpful. Thank you so much for taking my questions. Good luck in the next quarter. Thank you.

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

Thanks, Tania.

[Operator]

Thank you. Your next question is from John Tumazos. From John Tumazos, Independent Research. Your line is now open.

[John Tumazos, Principal at John Tumazos Independent Research]

Thank you. I noticed that Newmont sold 40 million shares of Discovery Silver overnight. First question, would Franco want to buy the next block that Newmont wants to sell to have more, or would Franco be a seller?

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

You know, John, we're a very happy supporter of the team at Discovery. We're delighted with the shares that we hold. You know, our strategy, as you know, is principally around royalties and streams. Where in getting deals done, it's helpful for us to do some equity, in particular. That it be a lead order in an equity deal is something that we do. One of the things we're trying to do is put money in, but leverage the dollars that we're putting in. If we can help the company raise more capital by providing that endorsement, that's a good part of the strategy. Just buying, you know, a block of shares is not really part of the strategy.

[John Tumazos, Principal at John Tumazos Independent Research]

Following up on the earlier question, as the gold price rises, it's easier for the exploration and development companies to raise money. Should we expect Franco-Nevada to have a larger dividend payout in view of the booming gold price?

[Jason O'Connell, Senior VP at Franco-Nevada Corporation]

Hi, John. It's Sandip here. As you know, we have always highlighted our dividend strategy as being sustainable and progressive, where we always want to be in a position where we are raising the dividend. You know, we're proud of the fact that we've raised it 18 years in a row. In terms of a higher dividend payout, you know, our priority is always adding assets, good long-life assets, whether royalty or stream. We see lots of opportunity right now. I think you'd see our focus for capital deployment on adding those types of assets to the portfolio, but still raising the dividend. I wouldn't expect an unusually higher increase in the dividend than we normally have had.

[John Tumazos, Principal at John Tumazos Independent Research]

Happy hunting. Thank you.

[Operator]

Thank you. There are no further questions on the phone line. I will now turn the Q&A session over to Candida Hayden, who will take questions from the webcast.

[Candida Hayden, Senior Analyst for Investor Relations at Franco-Nevada Corporation]

Thank you, Jenny. There are no further questions from the webcast. This concludes our first quarter 2025 results conference call and webcast. We expect to release our second quarter 2025 results after market close on August 9. Thank you for your interest in Franco-Nevada.

[Operator]

Thank you. Ladies and gentlemen, that concludes our conference call for today. Thank you all for participating. You may now disconnect your lines.

Participants

Executives

• Eaun Gray, Chief Investment Officer
• Candida Hayden, Senior Analyst for Investor Relations
• Sandip Rana, CFO
• Paul Brink, President and CEO
• Jason O'Connell, Senior VP

Analysts

• Cosmos Chiu, Institutional Equity Research at CIBC
• Heiko Ihle, Managing Director at HC Wainwright
• Tanya Jakusconek, Managing Director and Senior Equity Analyst at Scotiabank
• John Tumazos, Principal at John Tumazos Independent Research
• Daniel Major, Metals and Mining Analyst at UBS