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01/11 03:23
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Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
The earnings call reveals strong financial performance, with record revenues and EBITDA increases. Despite a rise in cash cost per GEO, margins remain high due to increased gold prices. Management's optimistic guidance and strategic acquisitions bolster future growth prospects. The Q&A session highlighted confidence in asset value and long-term strategy, with no major negative concerns raised. The combination of strong financials, strategic growth, and positive sentiment from analysts suggests a positive stock price movement over the next two weeks.
Total GEOs sold 112,093 in Q2 2025, a 2% increase from 110,264 in Q2 2024. This increase was driven by strong contributions from Guadalupe and Candelaria, as well as recent acquisitions like Yanacocha and Western Limb.
Precious metal GEOs sold 92,449 in Q2 2025, a 12% increase compared to the prior year. This was due to better performance from Guadalupe and Candelaria, and ramp-up of operations at new mines like Tocantinzinho, Greenstone, and Salares Norte.
Diversified GEOs sold 19,644 in Q2 2025, down from 29,914 in Q2 2024. The reduction was due to the impact of higher gold prices when converting diversified revenue to GEOs.
Revenue $369.4 million in Q2 2025, a 42% increase from Q2 2024. This was driven by higher precious metal prices and contributions from recent acquisitions.
Adjusted EBITDA $365.7 million in Q2 2025, a 65% increase from $221.9 million in Q2 2024. This was due to higher revenue and strong performance from key assets.
Adjusted net income $238.5 million or $1.24 per share in Q2 2025, a 65% increase from the prior year. This was attributed to higher revenue and gains from the sale of gold bullion.
Cash cost per GEO $299 per GEO in Q2 2025, up from $264 per GEO in Q2 2024. The increase was due to higher stream ounces sold.
Margin per GEO Just shy of $3,000 per GEO in Q2 2025, reflecting the significant rise in gold prices.
Cote Gold Mine Royalty Acquisition: Franco-Nevada acquired a royalty on IAMGOLD's Cote Gold Mine, one of Canada's newest large-scale gold mines. The mine achieved nameplate throughput ahead of schedule and positive grade reconciliation. IAMGOLD is targeting more than 20 million ounces of M&I resources, with an updated resource expected in the first half of 2026.
Arthur Project Royalty Acquisition: Franco-Nevada acquired a royalty on AngloGold's Arthur project in Nevada, which includes the Merlin and Silicon deposits. The project is one of the largest gold discoveries in recent years, with significant resource expansion potential.
Geographic Expansion: Franco-Nevada expanded its exposure in Canada and the U.S. through acquisitions, including the Porcupine and Cote operations in Ontario and the Arthur project in Nevada.
Record Financial Performance: Franco-Nevada reported record revenue of $369.4 million and adjusted EBITDA of $365.7 million for Q2 2025, driven by high gold prices and strong portfolio performance.
Increased Precious Metal GEOs: Precious metal GEOs sold increased by 12% year-over-year to 92,449, contributing to the company's strong financial results.
Long-Term Growth Outlook: Franco-Nevada's acquisitions over the last two years have transformed its long-term growth outlook, with significant contributions expected from Cobre Panama, new prosperity, and other projects.
Deal Pipeline and Capital Position: The company has a strong deal pipeline and remains well-capitalized with $1.35 billion in available capital, enabling further acquisitions and growth.
Cobre Panama Operations: The operations at Cobre Panama faced challenges earlier, but there are constructive developments, including approval of the preservation and safe maintenance plan. However, the situation remains dependent on the Panamanian government's commitment to resolving the issues.
Permitting Processes: The company is optimistic about unlocking mine permitting processes in the U.S., but delays or regulatory hurdles in permitting could impact project timelines and growth.
Antapaccay Asset Performance: The performance of the Antapaccay asset was lower than expected due to timing of deliveries, which could impact revenue projections if delays persist.
Commodity Price Volatility: Prices for iron ore and oil remain volatile and were lower compared to the prior year, which could affect diversified revenue streams.
Cost of Sales and Depletion: Increased cost of sales and higher depletion rates due to recent acquisitions and higher stream ounces sold could pressure margins if not offset by higher revenues.
Credit Facility Utilization: The company utilized its credit facility to fund acquisitions, which, while manageable, increases financial leverage and could limit flexibility for future investments.
5-Year Growth Outlook: Franco-Nevada anticipates attractive growth over the next five years, driven by unlocking mine permitting processes in the U.S. and advancements in projects such as Perpetua's Stibnite Gold, Hudbay's Copper World, and Castle Mountain's inclusion in the FAST-41 permitting process.
Cascabel Project: The Cascabel project, under new management at SolGold, is expected to accelerate production with first production potentially occurring as soon as 2028.
New Prosperity Development: Positive developments in relations with the Chukotun First Nation could lead to mine development, significantly contributing to Franco-Nevada's growth.
IAMGOLD's Cote Gold Mine: IAMGOLD plans to publish an updated technical report in 2026, targeting more than 20 million ounces of M&I resources and considering expansion scenarios to 20 million tonnes per annum throughput.
AngloGold's Arthur Project: The Merlin initial assessment outlines production at 1 million ounces per annum, with potential for extended high-grade production. The project is expected to grow significantly, comparable to Goldstrike and Cortez.
Revenue Guidance for 2025: Franco-Nevada maintains its guidance of 465,000 to 525,000 total GEOs for 2025, with 385,000 to 425,000 precious metal GEOs, supported by updated commodity price assumptions.
Cobre Panama Contributions: Franco-Nevada expects to receive approximately 10,000 GEOs in Q3 2025 from Cobre Panama, following the shipment of concentrate and commencement of gold and silver deliveries.
The selected topic was not discussed during the call.
Franco-Nevada's earnings call highlights strong growth prospects with several project advancements, positive developments in partnerships, and strategic equity investments. Despite some uncertainties in non-precious metal transactions and project timelines, the overall sentiment is positive due to strong revenue guidance and strategic positioning in precious metals. The Q&A session reinforced positive expectations, with management addressing key bottlenecks and market opportunities effectively. The company's shareholder return plan and stable financial health further support a positive outlook.
The earnings call reveals strong financial performance, with record revenues and EBITDA increases. Despite a rise in cash cost per GEO, margins remain high due to increased gold prices. Management's optimistic guidance and strategic acquisitions bolster future growth prospects. The Q&A session highlighted confidence in asset value and long-term strategy, with no major negative concerns raised. The combination of strong financials, strategic growth, and positive sentiment from analysts suggests a positive stock price movement over the next two weeks.
The earnings report highlights strong financial performance with a 51% increase in adjusted net income and increased margins per GEO. The dividend increase and no debt status are positive indicators. While the Q&A reveals some uncertainties, such as the arbitration claim and lack of clear guidance on concentrate sales, the overall sentiment remains positive due to optimistic revenue guidance and production growth. The stock price is likely to react positively, given the strong financial metrics, dividend increase, and optimistic guidance, despite some concerns.
The earnings call highlights a mix of positive financial performance with a 6% EPS increase, a consistent dividend increase, and substantial cash reserves with no debt. While GEOs sold decreased due to Cobre Panama, other areas showed growth. The Q&A confirmed management's confidence in negotiations and future production, despite minor uncertainties. The dividend increase and substantial capital position, combined with optimistic guidance, suggest a positive stock price reaction over the next two weeks.
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