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01/11 03:18
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Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
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.
Total GEOs sold 138,772 in Q3 2025, a 26% increase compared to 110,110 in Q3 2024. This increase was driven by strong contributions from key assets like Cobre Panama, Guadalupe, and Candelaria, as well as recent acquisitions and ramp-up of operations at new mines.
Precious metal GEOs sold 119,109 in Q3 2025, a 41% increase compared to the prior year. This was due to better performance from key assets and contributions from recent acquisitions.
Revenue $487.7 million in Q3 2025, a 77% increase compared to Q3 2024. This was driven by higher precious metal prices and increased GEOs sold.
Adjusted EBITDA $427.3 million in Q3 2025, an 81% increase compared to $236.2 million in Q3 2024. This was due to higher revenue and strong performance of the portfolio.
Adjusted net income $275 million or $1.43 per share in Q3 2025, a 79% increase compared to the prior year. This was driven by higher revenue and gains from equity investment sales.
Cash cost per GEO $340 per GEO in Q3 2025, compared to $290 per GEO in Q3 2024. The increase was due to higher stream ounces sold.
Margin per GEO $3,116 per GEO in Q3 2025, a 42% increase year-over-year. This was driven by the rise in gold prices.
New acquisitions: Six new gold interests acquired over the last 18 months, including Yanacocha, Cascabel, Sibanye's Western Limb, Porcupine, Côté, and Arthur. Three of these (Porcupine, Yanacocha, and Western Limb) are already producing.
Royalty acquisition: Acquired a royalty on the Arthur Gold project in Nevada, operated by AngloGold.
Revenue growth: 85% of revenue in Q3 2025 came from precious metals, with total revenue increasing by 77% year-over-year to $487.7 million.
Geographic diversification: 88% of revenue sourced from the Americas, with no single asset contributing more than 10% of revenue.
Operational highlights: Progress at Cobre Panama includes completion of concentrate shipments, pre-commissioning of the power plant, and initiation of an environmental audit.
Production growth: Total GEOs sold increased by 26% year-over-year to 138,772, with precious metal GEOs sold rising by 41%.
Cost efficiency: Cash cost per GEO was $340, with a margin of $3,116 per GEO, reflecting a 42% year-over-year increase in margin.
Strategic partnerships: Collaborated with G Mining Ventures and Porcupine discovery team to provide financial backing for their projects.
Critical minerals focus: Permitting processes advanced for Copper World and Stibnite Gold, with Castle Mountain included in the U.S. FAST-41 permitting process.
Cobre Panama mine closure: The potential closure of the Cobre Panama mine poses a significant risk to the company's operations and revenue. Although there are constructive comments from the President of Panama, the situation remains unresolved.
Cost of sales increase: The company experienced an increase in cost of sales due to higher stream ounces sold, particularly from Cobre Panama, which could impact profit margins.
Depletion costs: Depletion costs have increased significantly due to higher per ounce depletion assets, which could affect overall profitability.
Dependence on precious metals: 85% of the company's revenue is derived from precious metals, making it highly sensitive to fluctuations in gold and silver prices.
Regulatory and permitting challenges: The company faces regulatory and permitting challenges, particularly in advancing projects like Copper World and Stibnite Gold, which could delay operations or increase costs.
Hemlo mine performance: Lower production on Franco's Interlake claims at the Hemlo mine has impacted the NPI, and the mine is undergoing a sale, introducing uncertainty about future performance.
Market conditions for acquisitions: The run-up in gold prices has made acquisitions more expensive, potentially limiting future growth opportunities.
Exploration and development risks: The company is heavily reliant on exploration and development activities, which carry inherent risks such as project delays, cost overruns, or failure to discover economically viable resources.
Future GEOs Growth: Positioned for roughly 50% growth in GEOs over 5 years compared to last year, driven by recent acquisitions and potential resolution of the Cobre mine closure.
Revenue Guidance: Updated guidance for total GEOs sold in 2025 is now expected to be between 495,000 to 525,000, up from the initial range of 465,000 to 525,000. Precious metal GEOs guidance has been revised to 420,000 to 440,000, exceeding the original range of 385,000 to 425,000.
Organic Growth and Mine Expansions: Expecting strong organic growth driven by mine expansions at Detour, Côté, Magino, and Valentine. Developers like Skeena and Perpetua are advancing projects such as Eskay Creek and Stibnite Gold.
Critical Minerals and Permitting: Recognition of critical minerals has unlocked permitting processes, enabling construction at Copper World and Stibnite Gold. Castle Mountain is included in the U.S. FAST-41 permitting process.
Financial Resources: Company remains debt-free with $236.7 million in cash and cash equivalents and total available capital exceeding $1.8 billion, ensuring financial flexibility for future investments.
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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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