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Franco-Nevada is a member of the Basic Materials sector. This group includes 233 individual stocks and currently holds a Zacks Sector Rank of #11. The Zacks Sector Rank considers 16 different sector groups. The average Zacks Rank of the individual stocks within the groups is measured, and the sectors are listed from best to worst. Investors interested in Basic Materials stocks should always be looking to find the best-performing companies in the group. Is Franco-Nevada (FNV) one of those stocks right now? A ...

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Group 1 - Franco-Nevada (FNV) has returned 43.1% year-to-date, significantly outperforming the Basic Materials sector, which has returned an average of 6.8% [4] - The Zacks Consensus Estimate for FNV's full-year earnings has increased by 11.6% over the past 90 days, indicating improved analyst sentiment [4] - Franco-Nevada holds a Zacks Rank of 1 (Strong Buy), suggesting a favorable outlook for the stock [3] Group 2 - Franco-Nevada is part of the Mining - Gold industry, which consists of 39 companies and is currently ranked 14 in the Zacks Industry Rank [6] - The Mining - Gold industry has an average year-to-date return of 46.4%, indicating that FNV is slightly underperforming its industry [6] - Coeur Mining (CDE), another stock in the Basic Materials sector, has returned 42.3% year-to-date and has a Zacks Rank of 2 (Buy) [5]

Group 1: Acquisition Overview - Franco-Nevada Corporation (FNV) has announced the acquisition of a royalty package on the Côté Gold Mine in Ontario for $1.05 billion in cash, enhancing its portfolio and generating immediate gold revenues from a significant new mine [1][7] - The Côté Gold Mine is a joint venture between IAMGOLD Corporation (IAG) and Sumitomo Metal Mining Co. Ltd., with IAG holding a 70% stake and Sumitomo holding 30% [2] - The mine contains 16 million ounces of Measured and Indicated Mineral Resources and 4 million ounces of Inferred Mineral Resources [2] Group 2: Royalty Details - The royalty package includes a 7.5% gross margin royalty applicable to 100% of mineral production from the Chester claims, covering all Mineral Reserves and over 99.9% of current Mineral Resources at the mine [4] - Existing royalty arrangements will be replaced with a new agreement that clarifies audit and information rights, while the payment calculation methodology will remain unchanged [5] Group 3: Financial Projections - Franco-Nevada is expected to generate annual revenues of $67 million at a gold price of $3,200 per ounce from this acquisition [7] - The mine is projected to reach its nameplate capacity of 13 million tonnes per annum (Mtpa) by year-end, with potential increases to 20 Mtpa [9] Group 4: Operational Efficiency - The Côté Gold Mine utilizes modern design and technology, including autonomous equipment and efficient milling, which are expected to keep production costs low [8] - The mine's cash costs are anticipated to decrease as production volume increases and operational processes improve [8] Group 5: Market Performance - Franco-Nevada's shares have increased by 39.8% over the past year, compared to the industry's growth of 43.4% [10]

Core Viewpoint - Franco-Nevada Corporation has announced an agreement to acquire a royalty package on the Côté Gold Mine in Ontario for $1,050 million, which includes a 7.5% gross margin royalty on mineral production from the mine [1][2]. Acquisition Details - The royalty package covers all Mineral Reserves and over 99.9% of current Mineral Resources at the Côté Gold Mine, which is operated by IAMGOLD Corporation and Sumitomo Metal Mining Co. Ltd. [1][2] - The acquisition is expected to close at the end of Q2 2025, with an effective date of July 1, 2025 [6]. Financial Aspects - Franco-Nevada has approximately $2 billion in available capital and generates $275-$300 million in free cash flow each quarter, positioning the company well to finance the transaction [7]. - The Côté Gold Mine is projected to produce between 360,000 to 400,000 ounces of gold in 2025, with cash costs estimated between $950 to $1,100 per ounce [4]. Resource and Production Potential - The Côté Gold Mine has a significant mineral resource base of over 16 million ounces of Measured and Indicated Mineral Resources and 4 million ounces of Inferred Mineral Resources [1][4]. - The mine's resource base has doubled since the addition of the Gosselin deposit in 2021, indicating strong growth potential [5]. Operational Insights - The Côté Gold Mine utilizes modern technology, including a fully autonomous haul truck fleet and efficient milling capabilities, which positions it in the lower half of the cost curve [12]. - The mine is expected to ramp up to a nameplate capacity of 13 million tonnes per annum (Mtpa) by the end of 2025, with potential for future expansion to 20 Mtpa [12]. Partnership and Future Outlook - Franco-Nevada has partnered with IAMGOLD and Sumitomo for the acquisition, which allows for detailed due diligence and future collaboration on resource growth and mill capacity expansion [2][3]. - IAMGOLD anticipates further growth opportunities at the Côté Gold Mine, including the integration of the Gosselin zone into an updated mine plan [3].

Core Insights - Franco-Nevada Corporation (FNV) reported record adjusted earnings of $1.07 per share, exceeding the Zacks Consensus Estimate of $1.00, with a year-over-year increase of 51% [1] - The company achieved record revenues of $368 million in the reported quarter, reflecting a 43.5% year-over-year growth, driven by higher GEOs sold and record gold prices [2] - Adjusted EBITDA rose 49% year over year to $322 million, with an adjusted EBITDA margin of 87.4%, up from 84.2% in the previous quarter [4] Financial Performance - FNV sold 100,623 GEOs from Precious Metal assets in the reported quarter, an 8% increase from the prior-year quarter, influenced by lower deliveries from Cobre Panama and Antamina, offset by higher contributions from other mines [3] - At the end of Q1 2025, Franco-Nevada had $1.13 billion in cash, down from $1.45 billion at the end of 2024, with an operating cash flow of $289 million, up from $179 million year-over-year [5] - The company remains debt-free and has available capital of $2.1 billion for portfolio expansion and dividends [5] Market Performance - Franco-Nevada's stock has increased by 27.9% over the past year, compared to the industry's growth of 45.7% [6] - The company currently holds a Zacks Rank 2 (Buy) [9] Peer Comparisons - Royal Gold, Inc. (RGLD) reported an adjusted EPS of $1.51, a 66% year-over-year increase, with revenues of $193 million, up 30% year over year [10] - B2Gold Corp (BTG) reported adjusted EPS of 9 cents, a 50% year-over-year improvement, with revenues of $532 million compared to $461 million in the prior year [11] - Kinross Gold Corporation (KGC) posted adjusted earnings of 30 cents per share, up from 10 cents in the prior year, with revenues rising 38.4% year over year to $1.49 billion [11]

Group 1 - Franco-Nevada Corporation announced the election of its board of directors during the 2025 Annual and Special Meeting of Shareholders, with detailed voting results provided [1][2] - The nominees received high approval rates, with Paul Brink receiving 99.79% of votes for, and Hugo Dryland receiving 99.96% [2] - The company is recognized as a leading gold-focused royalty and streaming company, boasting a diversified portfolio of cash-flow producing assets [3] Group 2 - Franco-Nevada Corporation operates a business model that offers investors gold price and exploration optionality while minimizing exposure to cost inflation [3] - The company is debt-free and utilizes its free cash flow for portfolio expansion and dividend payments [3] - Franco-Nevada trades under the symbol FNV on both the Toronto and New York stock exchanges [3]

Financial Performance - Total revenue for Q1 2025 was $368.4 million, a 43.5% increase from $256.8 million in Q1 2024[4] - Net income for Q1 2025 reached $209.8 million, up 45.3% compared to $144.5 million in Q1 2024[4] - Gross profit for Q1 2025 was $261.5 million, representing a 58.5% increase from $165.0 million in Q1 2024[4] - Basic earnings per share for Q1 2025 were $1.09, an increase from $0.75 in Q1 2024[4] - For Q1 2025, the company reported a net income of $209.8 million, resulting in a diluted earnings per share (EPS) of $1.09, compared to a net income of $144.5 million and an EPS of $0.75 in Q1 2024[61] - Total revenue for Q1 2025 was $368.4 million, an increase from $256.8 million in Q1 2024, driven by higher revenues from precious metals and energy segments[62] - Gold revenue increased to $245.9 million in Q1 2025 from $160.9 million in Q1 2024, representing a 52.7% growth[47] - Energy revenue increased to $58.0 million in Q1 2025 from $43.8 million in Q1 2024, a growth of 32.5%[47] Cash Flow and Assets - Cash and cash equivalents decreased to $1,128.1 million at March 31, 2025, down 22.2% from $1,451.3 million at December 31, 2024[3] - Total assets increased to $6,653.4 million at March 31, 2025, a rise of 5.1% from $6,330.4 million at December 31, 2024[3] - Shareholders' equity rose to $6,292.5 million at March 31, 2025, an increase of 4.9% from $5,996.6 million at December 31, 2024[3] - Operating cash flows before changes in non-cash working capital for Q1 2025 were $287.0 million, compared to $185.7 million in Q1 2024[5] Dividends and Shareholder Returns - The company declared dividends of $73.4 million in Q1 2025, up from $69.4 million in Q1 2024[6] - The company declared dividends of $0.38 per common share in Q1 2025, up from $0.36 in Q1 2024, with total cash dividends paid amounting to $70.2 million compared to $58.9 million in the prior year[60] Acquisitions and Investments - The company acquired royalty, stream, and working interests totaling $505.2 million in Q1 2025, compared to $146.9 million in Q1 2024[5] - The Company acquired a 4.25% NSR royalty for $300.0 million on Discovery Silver Corp.'s Porcupine Complex and provided a $100.0 million senior secured term loan[17] - The Company completed the acquisition of a precious metals stream from Sibanye Stillwater Limited for $500.0 million, primarily comprising gold and platinum components[23] - The company reported a total of $4,539.0 million in royalty, stream, and working interests as of March 31, 2025, up from $4,098.8 million at December 31, 2024[43] Expenses and Costs - General and administrative expenses rose to $8.7 million in Q1 2025, compared to $4.2 million in Q1 2024, reflecting a 69% increase[50] - Share-based compensation expenses totaled $5.7 million in Q1 2025, up from $2.8 million in Q1 2024, indicating a 103.6% increase[51] - The company recorded $38.5 million in costs of sales for Q1 2025, compared to $33.6 million in Q1 2024, marking a 14.6% increase[49] Taxation and Regulatory Matters - The company is currently undergoing an audit by the Canada Revenue Agency for its taxation years from 2013 to 2021[56] - The Company received reassessments from the CRA for taxation years 2013-2016, resulting in additional taxes of $20.8 million (C$29.9 million) and penalties of $8.3 million (C$12.0 million) related to its Mexican subsidiary[84] - For taxation years 2014-2019, the Company faces potential additional taxes of $77.4 million (C$111.1 million) and penalties of $12.2 million (C$17.6 million) concerning its Barbadian subsidiary[84] - If the CRA reassesses taxation years 2020-2024, the Company estimates potential additional taxes of $273.3 million (C$392.8 million) and penalties of $103.3 million (C$148.6 million)[91] - The Company has filed formal Notices of Objection with the CRA against the reassessments and has posted security for 50% of the reassessed amounts[86] - The Company intends to seek relief from double taxation under the Canada-Mexico tax treaty and the Canada-Barbados tax treaty if required[87][92] - The CRA expanded its audit to include the 2020 and 2021 taxation years, but no proposals or reassessments have been received for these years[93] - The Company believes it has complied with all applicable tax laws and has not recorded any liabilities for the Transfer Pricing Reassessments in its financial statements[94] - The CRA audit is ongoing, and there is a risk of additional income taxes, penalties, and interest if the CRA successfully challenges the Company's tax filings[95] Commitments and Future Obligations - As of March 31, 2025, the company has capital commitments totaling $1.0 billion, including $501.6 million for the Cascabel stream and $300.0 million for the Porcupine Complex royalty[79] - The company has remaining commitments of up to $44.7 million related to the Royalty Acquisition Venture as of March 31, 2025[25] - The company has commitments related to environmental and social initiatives in connection with its acquisition of royalty and stream interests[82] - The company has a commitment of 118,534 common shares (equivalent to $15.0 million) related to the Yanacocha royalty, contingent on achieving commercial production[79] - The company has a commitment of $12.5 million for the Copper World royalty, contingent on project permits and approvals[79] - The company has a commitment of $4.9 million related to sourcing new precious metals and copper royalties through a joint acquisition agreement[79] - The Company has a fixed delivery commitment of 8,760 ounces of gold per annum from January 1, 2021, to December 31, 2025[77] - The company has a purchase commitment for gold deliveries indexed to copper production, with specific delivery rates until certain thresholds are met[71]

Core Viewpoint - Franco-Nevada reported its best financial results ever, driven by elevated gold prices, strong production from energy interests, and a robust deal pipeline, while remaining debt-free and well-capitalized [1][4]. Financial Highlights - Revenue reached $368.4 million, a 43% increase compared to Q1 2024, with 126,585 GEOs sold, up 3% year-over-year [4][6]. - Operating cash flow was $288.9 million, marking a 62% increase from Q1 2024, and adjusted EBITDA was $321.9 million, a 49% increase [4][36]. - Net income was $209.8 million, or $1.09 per share, reflecting a 45% increase compared to the previous year [4][38]. Portfolio and Production - The precious metals segment accounted for 79% of total revenue, with gold contributing 67% [6][18]. - The company sold 100,623 GEOs from precious metal assets, an 8% increase from Q1 2024, primarily due to higher sales from Candelaria and Hemlo [9][18]. - Diversified assets generated $74.8 million in revenue, a 21.4% increase from Q1 2024, despite a 13.1% decrease in GEOs contributed by these assets [18][22]. Growth and Strategic Initiatives - Franco-Nevada completed a $448.6 million financing package for the Porcupine Complex, expecting to receive approximately 6,000 GEOs in 2025 [10]. - The company acquired a precious metals stream from Sibanye Stillwater's Western Limb Mining Operations for $500 million, enhancing its portfolio [10]. - The company is committed to ESG initiatives, funding various community projects and maintaining high ratings from ESG agencies [8][18]. Dividend and Shareholder Information - A quarterly dividend of $0.38 per share was declared, representing a 5.6% annual increase [23][24]. - The company has a Dividend Reinvestment Plan (DRIP) allowing shareholders to reinvest dividends for additional shares [24].