Franco-Nevada Q2 2026 Earnings Report

Franco-Nevada EPS Results

• Actual EPS: $1.81
• Consensus EPS: $1.95
• Beat/Miss: Missed by -$0.14
• One Year Ago EPS: $1.24

Franco-Nevada Revenue Results

• Actual Revenue: $580.90 million
• Expected Revenue: $616.66 million
• Beat/Miss: Missed by -$35.76 million
• YoY Revenue Growth: +57.30%

Franco-Nevada Announcement Details

• Quarter: Q2 2026
• Date: 8/11/2026
• Time: After Market Closes
• Conference Call Date: Wednesday, August 12, 2026
• 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 Q2 2026 Earnings Call Transcript

Key Takeaways

• Positive Sentiment: Strong quarterly performance: GEOs sold increased 18% year over year to 132,405, while revenue rose 57%, adjusted EBITDA 45%, and adjusted net income 46%. Results benefited from higher commodity prices, stronger production at Antamina and South Arturo, and contributions from Côté Gold, Casa Berardi, and Valentine Gold.
• Positive Sentiment: 2026 outlook is trending toward the upper half of guidance. Management expects stronger second-half contributions from Candelaria, Côté, Tocantinzinho, and Valentine, alongside approximately 9,000–10,000 GEOs from Cobre Panama stockpile processing and continued strong energy revenue.
• Positive Sentiment: Portfolio growth prospects remain broad: Management highlighted potential expansions and exploration success across assets including Côté, Detour, Magino, Valentine, Porcupine, Guadalupe, AurMac, Bullabulling, and Stibnite. The company also cited a pickup in U.S. oil rigs and producer reinvestment, which could support higher energy volumes into late 2026 and 2027.
• Neutral Sentiment: Cobre Panama remains dependent on government action. An environmental audit found no major issues and reported 87.7% overall compliance, but formal negotiations on fiscal terms for a potential restart have not begun and Franco-Nevada is not directly involved in those discussions.
• Positive Sentiment: Franco-Nevada remains financially positioned for acquisitions: Available capital totaled $4.3 billion at quarter-end, including $1 billion in cash, $1.2 billion in marketable securities, and an undrawn credit facility, with no debt. Management expects deal activity to accelerate later this year and into 2027, reducing the near-term likelihood of returning excess capital through a special dividend.

Presentation

[Operator]

Good morning, and welcome to Franco-Nevada Corporation's second quarter 2026 results conference call and webcast. This call is being recorded on August 12, 2026. At this time, all lines are in a 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 questions for the Q&A session 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 anytime for the operator. I would now like to turn the conference over to your host, Bonavie Tek, VP Finance and Investor Relations. Please go ahead.

[Bonavie Tek, VP of Finance and Investor Relations at Franco-Nevada Corporation]

Thank you, Anis. Good morning, everyone. Thank you for joining us today to discuss Franco-Nevada's second quarter 2026 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 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.

[Bonavie Tek, VP of Finance and 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, Bonavie, and good morning. We had a strong second quarter with GEO sold up 18% year-over-year due to higher production at Antamina and South Arturo, new contributions from the recently acquired Côté Gold and Casa Berardi interests, and start production at Valentine Gold. In addition to record gold prices in the quarter, we saw strong oil prices. With the higher energy contribution and the processing of stockpiles at Cobre Panama, we are tracking towards the upper half of our annual guidance range for 2026. At Cobre Panama, the environmental audit was completed, indicating no major findings and an overall compliance rate by the operation of 87.7%. The government then established a commission of senior ministers to evaluate both the environmental aspects and the economic contribution of a potential mine restart.

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

Simply put, in our business, you want to grow through acquisition in the bear market and organically in a bull market. In particular, with our deep royalty portfolio, that organic growth can be very powerful. Q2 is the spring quarter, and we saw green shoots across the portfolio. We received good news on future mine expansions at Côté, Detour, Magino, Valentine, Condé Star Lake, Caserones, and Séguéla. At Candelaria, we had news of a potential pit pushback. At Porcupine, we had the Kidd acquisition that may ultimately allow a doubling of output. Guadalupe, Hemlo, Bullabulling, and AurMac all announced resource expansions. There was positive progress on mine development at Copper World and Stibnite Gold. Crawford Nickel received its federal approval, and PSJ Cobre Mendocino, previously San Jorge, its Argentinian RIGI approval. Lastly, success at the drill bit.

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

Great exploration results in the Porcupine Camp, Borden, Hoyle, Owl Creek, and others. Midas, where Hecla are considering a restart, Stibnite, where they started drilling again after more than a decade, and at AurMac and Bullabulling, where we have new interests. Energy revenue was up on stronger oil prices. While operator capital discipline prevails, there has been a pickup in U.S. oil rig rates, 450 rigs now up from 420 three months ago in the lower 48. Also, reinvestment rates amongst the U.S. producers are moving up, 55% now on average versus 51% earlier in the year, both of which bode well for higher future production rates. The leverage on the API at our Weyburn interest in Canada gave a nice boost to our Canadian energy segment. On the sustainability front, we continue to expand our engagement with and contributions to communities at mine sites.

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

Franco-Nevada was recognized as one of Corporate Knights' best 50 corporate citizens in Canada for 2026 and achieved an A rating from CDP. We are in the progress of evaluating candidates for our expanded scholarship program and are delighted with a bumper crop of excellent applicants this year. Eaun and the business development team have a strong pipeline of opportunities. Fortunately, our total available capital stands at $4.3 billion, so we are well-positioned to add attractive new assets to the portfolio. With that, I will hand the call over to Sandip.

[Sandip Rana, CFO at Franco-Nevada Corporation]

Thanks, Paul. Good morning, everyone. Franco-Nevada reported another quarter of solid financial results as our portfolio of royalty and stream assets continued to perform well and in line with our expectations. The performance during the quarter continues the very strong start to the year with record financial results achieved for revenue, adjusted EBITDA, adjusted net income, and operating cash flow for the first six months of 2026. On slide four, you will see a summary of commodity prices for second quarter 2026 and 2025. Precious metal prices have increased significantly year-over-year, with the average gold price higher by 38% and silver by 118% in the quarter. However, both gold and silver prices have retreated from the highs reached during first quarter. For the diversified commodities, with the continued conflict in the Middle East, oil price has seen a sharp increase over prior year.

[Sandip Rana, CFO at Franco-Nevada Corporation]

The WTI price has been volatile over the last few months, but remains above $80 a barrel. Energy revenues did benefit from the higher price in the quarter, and we expect this to carry through to the third quarter. Slide five provides an overview of our key financial results. The performance from our assets, combined with stronger commodity prices, resulted in an increase in revenue of 57%, adjusted EBITDA of 45%, and adjusted net income of 46%. Total GEOs sold for the quarter increased by 18% to 132,405, compared to just over 112,000 in second quarter of 2025. Precious metal GEOs sold in the quarter were 114,111, higher by 23% compared to prior year. 56% of total GEOs sold during the quarter were sourced directly from mines where precious metals are the primary commodity. For the quarter, we received strong contributions from several assets.

[Sandip Rana, CFO at Franco-Nevada Corporation]

At Antamina, we benefited from both higher deliveries, but also benefited from the higher silver price, resulting in an increase in revenue from $23.3 million in Q2 2025 to $57.4 million this quarter. For Antamina, we benefited from the processing of higher grade ore, which we expect to continue in the second half of 2026. At South Arturo, we had a significant increase in GEOs as we benefited from the phase I production of the open pit. Please note this strong performance was always weighted towards the first half of the year. At Candelaria, production at the mine was lower compared to prior year, as last year the mine had the benefit of higher grade ore from phase IA.

[Sandip Rana, CFO at Franco-Nevada Corporation]

Lundin Mining expects production to be weighted towards the second half of 2026 due to increased availability of higher grade phase 12 ore, combined with increased underground mining rates as the underground insourcing initiative nears completion. Diversified GEOs sold were 18,209 for the quarter, compared to 19,644 for prior year, despite diversified revenue being 31% higher at $82.2 million. The decrease in GEOs is the result of converting revenue to GEOs at a higher gold price. As you know, we are converting GEOs to using a fixed gold price of $4,500 per ounce. With respect to cost, we did have an increase in cost of sales compared to Q2 2025 due to higher fixed costs paid for stream ounces, as a portion of our streams have a fixed cost based on a percentage of the gold price. Cost of sales was $45.9 million versus $32.5 million last year.

[Sandip Rana, CFO at Franco-Nevada Corporation]

Depletion increased to $84 million versus $64 million a year ago, the increase being due to depletion being recorded on some of our recent transactions, Yanacocha, Casa Berardi, Porcupine, and Côté. These assets are higher per ounce depletion assets. We expect the depletion rate to decrease over time as the reserves on the properties grow. Adjusted net income was $349.2 million, or $1.81 per share for the quarter, both higher by 46% year-over-year. Slide six highlights the continued diversification of the portfolio. 86% of our second quarter revenue was generated by precious metals, with revenue being sourced 88% from the Americas, and no one asset generated more than 10% of revenue, as we have one of the most diverse portfolios in the industry. The model continues to be a very high margin business, as shown on slide seven.

[Sandip Rana, CFO at Franco-Nevada Corporation]

The margin per GEO is increased from $1,559 per GEO in 2022 to $4,352 per GEO in 2026, a 179% increase, while during this time the gold price has increased 160%. As we turn to dividends on slide eight, the company continues to pay a quarterly dividend, with $84 million being paid to shareholders during the quarter. With respect to our guidance summarized on slide nine, we have guided to 510,000-570,000 total GEOs sold for the full-year 2026. With the strong performance of our portfolio for the first six months of 2026, with approximately 269,000 GEOs sold and an expected stronger second half of the year, we are tracking towards the upper half of the annual guidance range. We expect stronger second half performance from several assets, including Candelaria, Tocantinzinho, Côté, and Valentine.

[Sandip Rana, CFO at Franco-Nevada Corporation]

We expect to receive between 9,000 and 10,000 GEOs from Cobre Panama as First Quantum has begun processing stockpile ore. With the continued stronger oil price, we expect energy revenue to remain strong in the second half of the year. Lastly, slide 10 highlights our available capital. As at June 30, 2026, the total available capital is $4.3 billion, comprised of $1 billion in cash, $2.25 billion of a credit facility including the accordions, and $1.2 billion in liquid marketable securities. The company continues to remain debt-free and is well capitalized to continue to add good quality assets to the portfolio. With that, I will pass it over to Anis, as management is happy to answer any questions.

[Operator]

Of course, Sandip. During this 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 star followed by two. If you are joining us on the webcast, please submit your questions through the Q&A section of the webcast platform. One moment please for your first question. Your first question comes from Cosmos Chiu with CIBC. Please go ahead.

[Cosmos Chiu, Analyst at CIBC]

Thanks, Paul and Sandip, for taking my questions. Maybe my first question is on the NPIs. I noticed that Hemlo was down quarter-over-quarter, whereas the Musselwhite NPI was up quarter-over-quarter. I guess it is always volatile in terms of these NPIs, but how should we look at it based on what we know in Q1 and Q2, on what we should expect in Q3 and Q4?

[Sandip Rana, CFO at Franco-Nevada Corporation]

Sure. Hi, Cosmos. Thanks for the questions.

[Cosmos Chiu, Analyst at CIBC]

Hi, Sandip.

[Sandip Rana, CFO at Franco-Nevada Corporation]

Hey, you said it correctly, they are volatile and for us a lot of it is based on visibility. At Hemlo, in Q2, Hemlo Mining produced less on our Interlake lands than previous quarters, which impacted the NPI. I think for the second half of the year, from what we gather, production should increase. Does it hit what was achieved in Q1? I don't know, but it should be higher than Q2. I would expect a slightly higher NPI for the second half of the year from Hemlo. Obviously, that's all contingent upon commodity prices as well. At Musselwhite, we did have strong performance in Q2. A large component of that was a catch-up entry for 2025. For Musselwhite, we have limited visibility and then there's a finalization of the NPI calculation that happens in the following year.

[Sandip Rana, CFO at Franco-Nevada Corporation]

In Q2 is when we got that final number and we recorded that. But considering where commodity prices are right now, I would expect a very strong NPI for Musselwhite for 2026.

[Cosmos Chiu, Analyst at CIBC]

Great. Then maybe diving a little bit deeper into Hemlo. Last night, I guess they reported earnings and they are deferring formal production guidance from sometime in 2026 into 2027. From where you are standing, there is a lot of moving pieces, it is based on actual production from the asset, but also the Interlake component. Any concerns in terms of that deferral of guidance? It seems like things are kind of ramping up potentially slower than expected.

[Sandip Rana, CFO at Franco-Nevada Corporation]

I think the team is doing a very good job there. They just took over the asset last year. From our perspective, we are pretty confident that mining on Interlake will continue for the next number of years. Obviously, it will be volatile just depending upon how development is going, but we are pretty confident that the NPI will be there for the foreseeable future.

[Cosmos Chiu, Analyst at CIBC]

Great. Maybe switching gears a little bit to Guadalupe on Palmarejo. As you mentioned in your prepared remarks, it continues to be one of the larger contributors of GEOs. My question is, when we talk to Coeur Mining and the management team continues to remind us that exploration continues beyond the Franco-Nevada area of influence. From that perspective, how should we look at it? Is there any kind of near-term concerns to Franco-Nevada?

[Sandip Rana, CFO at Franco-Nevada Corporation]

They have had very good exploration results, both on stream ground and off stream ground, on our ground, specifically Hidalgo. Based upon what we have seen, production on our land will continue for the foreseeable future. A large portion of their production is still on Franco stream ground. Obviously, they are trying to find additional resources on adjacent lands where the stream does not apply. But right now, we do not have any concern.

[Cosmos Chiu, Analyst at CIBC]

Great. Then maybe one last question, tracking your margins here, and Sandip, you did a good job in terms of looking at the margin expansion. Another way I looked at it was the adjusted EBITDA margin. I noticed that it's increased 87.6 four quarters ago to 90.6, 91 now to 91.2%. Again, the adjusted EBITDA margin. Is that just a function of, I guess, the increase in commodity prices coupled with not as much of an increase or no increase at all to cost? Is that a percentage that you track yourself? Are you happy with a 91.2% right now?

[Sandip Rana, CFO at Franco-Nevada Corporation]

Yeah, no, we are a very high margin business. Obviously, it's composed of a number of factors. One is how much of our GEOs and revenue and EBITDA is being generated by streams. It just so happens right now in the recent deals we've done have been more royalty deals, and they're obviously limited or no cost associated with those. So it's just the leverage of the portfolio overall.

[Cosmos Chiu, Analyst at CIBC]

Great. Those are all the questions I have. Thanks again, Sandip and Paul, for answering all my questions.

[Operator]

Thank you. Your next question comes from Lawson Winder with Bank of America Securities. Please go ahead.

[Lawson Winder, Analyst at Bank of America Securities]

Thank you, operator. Good morning, Paul and Sandip. Thank you for today's update. Can I start with the 2026 guidance and your expectation to be in the top half of the range, and that includes Cobre Panama, potentially stronger oil prices. If you just take the midpoint of the GEO volume guidance range of 540 and then add Cobre Panama, which is about 27.5 GEOs, then you assume higher oil prices, I think you could comfortably get above the range. So it would suggest that you're tracking to above the range, or it might also suggest that ex Cobre Panama and higher oil prices, the portfolio is tracking to perhaps well below the midpoint. Could you maybe just clear up what would be the right way to think about that?

[Sandip Rana, CFO at Franco-Nevada Corporation]

That's a good question, Lawson. So for us, obviously, we've looked at our numbers. As you said, the midpoint was 540 of our guidance range. Cobre is 9-10. Energy prices will add some additional GEOs, assuming oil prices stay where they are. We are expecting stronger performance from Candelaria, Côté, Valentine, a few others. We're expecting weaker performance from the South Arturo, which was more focused on the first half of the year. So as we've said, it's going to be tracking at the higher end of the overall range. We're still in the middle of the year. There is the possibility that you could surpass the range, but a lot of things have to happen for that to occur. So right now we're comfortable with just providing that guidance range.

[Operator]

Lawson, do you have any follow-up?

[Lawson Winder, Analyst at Bank of America Securities]

Yeah. Thank you very much for that color. You spoke in the release also about the pipeline, and you noted a relatively robust pipeline. Yet, a number of the transactions you did in the quarter, while they were relatively numerous, were relatively small. Total value in the $84 million including around $84 million including the July transaction. Could you just speak to what you are seeing in the pipeline in terms of substantially large transactions? Particularly in light of $4.3 billion. The other side of the question would be, if you are not seeing really substantial meaty deals in the pipeline, if it is a lot more of these smaller transactions like you guys completed in Q2 and in Q3 to date, is there a thought to perhaps considering a special dividend?

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

Hi, Lawson, it is Eaun speaking here. Thank you for the question. It is a good question. What I would say is we are active across a range of development phases and deal sizes. You are right that during the quarter, the size did step down from the cadence and magnitude that you had seen in prior quarters. I don't think that is reflective of the pipeline going forward necessarily, though. What I do see at the moment is a number of opportunities in project finance, which suits our financial backer strategy well. We are hopeful that with time, we will see more of those types of transactions come forward.

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

In terms of overall liquidity, looking at the magnitude of the pipeline, I do feel comfortable at this stage that we are going to be able to deploy quite a bit of our capital before we have to think about any other ways to return it.

[Lawson Winder, Analyst at Bank of America Securities]

Okay. Just so thinking about some of the larger transactions that you might have in the portfolio, can you help sort of narrow that down to a bit of a size range? Are we talking like $100 million size range, or are there potential like billion-dollar transactions in the pipeline?

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

It's a wide range, as I highlighted. There are some significantly larger transactions which are required to deploy the kind of capital that we've accumulated. I think what you've seen over the last couple of years in terms of transactions is reflective of kind of the potential we see in the pipeline going forward. We were successful deploying in the past, and I believe we'll be successful going forward.

[Lawson Winder, Analyst at Bank of America Securities]

Then maybe just one final follow-up on the pipeline. To what extent would you describe the current pipeline as urgent, or how would you describe the urgency of the deals within the pipeline? Is this stuff you could see completed in Q3? Are we looking at sort of a longer timeline, maybe looking out 12-18 months?

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

Sure. Yeah, that's a good observation. What I would say is the larger transactions tend to be a little bit lumpier. The timeline can be longer for those. So hard to kind of handicap exactly when deals are going to close. But, I'd see the cadence perhaps, just based on what I'm seeing now, picking up later in the year and into next year.

[Lawson Winder, Analyst at Bank of America Securities]

Okay. Thanks so much. Appreciate it, Eaun. Appreciate it, Paul and Sandy. Thanks.

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

Thank you.

[Operator]

Thank you. Your next question comes from Daniel Major with UBS. Please go ahead.

[Daniel Major, Analyst at UBS]

Hi. Yeah, thanks for the presentation. Thanks for the questions. First question on just on Cobre Panama. My understanding is First Quantum has started or is imminently starting negotiations with the government on the fiscal terms to facilitate a restart. Have you had any engagement with the Panamanian government? Has there been any discussions around any potential changes to the economics of the stream?

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

Daniel, it's Paul. No. First Quantum is the operator there, so they are the party that will engage with the government here. As you know, no formal negotiations yet. But we're not at that table.

[Daniel Major, Analyst at UBS]

Okay. There's no discussion at this point of any potential changes to the fiscal terms as part of any negotiation or any settlement to start the mine?

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

No, there isn't.

[Daniel Major, Analyst at UBS]

Okay. Thank you. That's clear. A second question, just on the energy diversified portfolio. You obviously highlighted the benefit from higher revenues and made a reference to the increase in the rig count in the U.S. Would you also expect to see any pickup in sales volumes, not on a GEO basis, but on a unit basis in the second half and potentially following through into 2027?

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

I'm hopeful that they will be. In my own estimation for the U.S. plays, you need at least six months for people to change their drill programs. So Q2 is still too early. If you go six months ahead of that, your oil prices were probably still in the $60 ranges. So I only expect back end of this year, as you say, beginning of next year, that you'll see those higher drill rates translating into production. I am hopeful that we'll see higher unit volumes as a result.

[Daniel Major, Analyst at UBS]

Okay. So there's a potential tailwind independent of energy pricing into 2027 from a GEO basis?

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

Yes.

[Daniel Major, Analyst at UBS]

Okay, thanks. The next one, just thinking about a question on the project pipeline. New Prosperity has been something you've mentioned on previous calls. Can you give us an update on the catalysts we should be looking for there?

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

Yeah. As we've spoken before, the arrangement that was set up, I think it's about a year ago now, between the operator there and First Nations, was that there's potential that if the First Nations decides to go ahead with the mining operation, that they would have 20% ownership of that. So there is a land use planning process that is going on amongst the First Nations. There's no timeline to that. It's at their determination. But they and the BC government are working on that. I'm hopeful it'll come to a positive conclusion. Can't put a timeline on it. So I think that is the outlook.

[Daniel Major, Analyst at UBS]

Okay, great. Thank you. One just very last quick one, if I may. I think Lundin mentioned the step down in the Candelaria stream around the end of this year. What quarter, or can you give us any sort of clear guidance on when you expect that to come through?

[Sandip Rana, CFO at Franco-Nevada Corporation]

Our estimate is first half of 2027. Obviously, depending upon how production goes at Candelaria for the remainder of 2026, it could happen later this year, but for now, we are estimating first half of 2027.

[Daniel Major, Analyst at UBS]

Okay, great. Thanks a lot.

[Operator]

Thank you. Your next question comes from Tanya Jakusconek with Scotiabank. Please go ahead.

[Tanya Jakusconek, Analyst at Scotiabank]

Oh, great. Good morning, everybody. Thank you for taking my questions. Sandip, can I start on just the revenue side? I was a bit light on the oil and gas on the energy side. I am just wondering on the energy side, was there a little bit of a delay in sort of the pricing of oil and sort of when you received your revenue that shifted it into Q3? I am just wondering why I was a bit heavy on my side on the oil side.

[Sandip Rana, CFO at Franco-Nevada Corporation]

Sure, Tanya. Part of that is just information in terms of production. There is a delay in receiving actual production data for the wells that is on our land. We do make an estimate, but in our nature, we do try to make sure that we are as accurate as possible. We will not lean more towards the conservative side. Wells that we are producing and the production data for, say, May and June, we do not get the actual numbers till a few months later. That is probably partly the reason why you were light.

[Tanya Jakusconek, Analyst at Scotiabank]

Okay.

[Sandip Rana, CFO at Franco-Nevada Corporation]

Or sorry, too high.

[Tanya Jakusconek, Analyst at Scotiabank]

Yeah, too high. The other area I was a bit too high on was also iron ore. Just wondering on the Vale side, how should I be thinking about the second half? On Sudbury, on the PGM, how should I be thinking about that?

[Matt Begeman, VP of Business Development at Franco-Nevada]

Sure. Hi Tanya, it is Matt Begeman here. On the iron ore, I think that is impacted in part by our estimate on the shipping rates, is probably the largest variance there. I know that is also an accrual where we will get the true up later into September. But probably the largest variance there is our estimation to the read-through of the higher shipping rates caused by the Strait of Hormuz closure.

[Tanya Jakusconek, Analyst at Scotiabank]

Okay. Should I be thinking that we have a better second half, or how should I be thinking about that?

[Matt Begeman, VP of Business Development at Franco-Nevada]

Yeah, I think it would probably be a bit more flat absent the change in the kind of maritime rates.

[Tanya Jakusconek, Analyst at Scotiabank]

Okay. Anything on the PGMs in Sudbury that had an impact?

[Sandip Rana, CFO at Franco-Nevada Corporation]

No. We have the stream there with Magna Mining. They actually did quite well in terms of their production for the first half of the year. On the PGMs, it is just lower production from Stillwater and the Sabodala assets than initially expected for the first part of this year.

[Tanya Jakusconek, Analyst at Scotiabank]

Okay. Thank you for that. If I could come back just maybe to capital allocation before I come back to just the transaction environment. How should I be thinking, should IAMGOLD decide to purchase back half the Côté Gold NPI, it would be $500 million coming in for you guys. Would I be thinking as that as something you would allocate to the dividend if something like that was to occur?

[Sandip Rana, CFO at Franco-Nevada Corporation]

Tanya, if they do the buyback, obviously that would be an influx of cash for us. As the teams highlighted, we are active on the deal pipeline front. We have never been worried about having cash on the balance sheet, as we know this is a very capital-intensive industry and there is always a requirement for financing. But if we did come to that conclusion, it would not be any sort of special dividend of that nature. It would just be looking at what is on our balance sheet in terms of cash and increasing the dividend at a higher percentage than we have in possibly previous years.

[Tanya Jakusconek, Analyst at Scotiabank]

Okay. All right. Thank you for that. Maybe just on the deal transaction, Eaun, you were saying it is quite varied. Again, I always divide the deals into two categories. There is the precious metals deals, and then there is the non-precious metals one. Maybe you can talk a little bit about in the non-precious metal side. You had talked about deals in the $200 million-$500 million range. Has that changed at all from Q1, or has anything changed in that area?

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

Yes, Tanya, good question. I think that remains unchanged. It continues to be very active on the precious side. I would highlight for you the magnitude of potential transactions does vary, as you have seen in the market. Some can be very large. We like to maintain optionality when we see it at relatively low cost, and so we will still do some of the smaller deals when we have got capacity. So pretty much steady as she goes.

[Tanya Jakusconek, Analyst at Scotiabank]

Okay, but in the non-precious metals, is that 200-500 still valid?

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

Yes.

[Tanya Jakusconek, Analyst at Scotiabank]

Okay, so that is that. In the precious metal side, we had talked previously about these larger operators in the base metal side, looking at streaming off gold and silver maybe. We had looked at mine builds. Anything change there from Q1?

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

Look, I think it is very mainstream. Any CFO now has to look very seriously at streaming and royalties as an option to finance, including at the very large companies. So potential exists there, and we need liquidity to be able to execute on those appropriately. The key theme, however, that I see emerging, Tanya, as I mentioned earlier, is project finance. We are seeing good impetus for new mines to be built and our strategy, as you would have noticed, we have tilted towards backing teams to get projects built, and we are looking to do that big and small.

[Tanya Jakusconek, Analyst at Scotiabank]

Still the same thing, Eaun, in terms of there is a stream component plus an equity component and a debt component. Has anything else changed in the structure of these deals?

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

No, I think you precisely got it. What we are trying to do is where there is acute need for capital provided, makes it smoother, provides the market confidence. The team has got the backing they need to get a project built. We will continue to work across the capital structure with the core, however, continuing to be royalties and streams.

[Tanya Jakusconek, Analyst at Scotiabank]

Okay. Well, good luck on that. Thank you so much for taking my questions.

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

Thank you, Tanya.

[Operator]

Thank you. Your next question comes from Brian MacArthur with Raymond James Financial. Please go ahead.

[Brian MacArthur, Analyst at Raymond James Financial]

Thank you. Most of my question's been answered, but can I just ask on Karma whether there's any update? Secondly, if that doesn't work out, I assume the book value, that's pretty low.

[Lloyd Hong, Chief Legal Officer and Corporate Secretary at Franco-Nevada Corporation]

Hi, Brian, it's Lloyd Hong here. There's no real update since we put out our press release. We are continuing to pursue our remedies under the agreement, which is governed by Ontario law. We do believe that the Burkinabè judgment is not valid and are continuing to seek to have that vacated. In terms of book value, we are not carrying any book value for that asset.

[Brian MacArthur, Analyst at Raymond James Financial]

Thank you. Maybe just one other question. This Lomiko Metals deal, is that totally separate from G Mining Ventures, and what are you actually trying to do with that, to the extent that you can talk about it, and should I think about you doing more of these things?

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

Brian, it's Paul. As you know, we've got a very strong relationship with the Gignac. Backed them in the build of Tocantinzinho. One of their next ventures here is with Tintina Mines. You would've seen that they have made an investment there. We also were included in that investment. It's a copper-gold property down in Chile. Their objective was that they could invest in that without having to liquidate any of their shares in the G Mining Ventures. We have backed them in doing that. I'm sure they will be very successful, and we're hopeful that there will also be a stream opportunity on that asset in due course.

[Brian MacArthur, Analyst at Raymond James Financial]

Sorry. If I can just follow-up, that was kind of my question. Do you, by doing this, get a first right of refusal or an option on a stream or a royalty if they go forward? Is that like you're kind of buying, I almost think of it as exploration dollars with a return, and you're getting an option off that. Is that the way to think about it?

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

There's no obligation there, Brian. We've got a very strong relationship, and we hope this helps build the relationship and that positions us well.

[Brian MacArthur, Analyst at Raymond James Financial]

Great. Thanks very much. That's helpful.

[Operator]

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

[Bonavie Tek, VP of Finance and Investor Relations at Franco-Nevada Corporation]

Thank you, Anis. There are no questions from the webcast. This concludes our second quarter 2026 conference call and webcast. We expect to release our Q3 2026 results after market close on November 10. The conference call held the following morning. Thank you for your interest in Franco-Nevada.

[Operator]

Ladies and gentlemen, this concludes your conference call for today. We thank you for participating and ask that you please disconnect your lines. Have a great day.

Participants

Executives

• Bonavie Tek, VP of Finance and Investor Relations
• Paul Brink, President and CEO
• Sandip Rana, CFO
• Eaun Gray, Chief Investment Officer
• Matt Begeman, VP of Business Development
• Lloyd Hong, Chief Legal Officer and Corporate Secretary

Analysts

• Cosmos Chiu, Analyst at CIBC
• Lawson Winder, Analyst at Bank of America Securities
• Daniel Major, Analyst at UBS
• Tanya Jakusconek, Analyst at Scotiabank
• Brian MacArthur, Analyst at Raymond James Financial