Financial Data and Key Metrics Changes - The company reported a revenue of $275.7 million for Q3 2024, down from $309.5 million in the prior year, but up by $33.5 million or 14% year-over-year when excluding Cobre Panama from prior year revenue [17][19] - Adjusted EBITDA for Q3 2024 was $236.2 million, compared to $255.1 million in Q3 2023, while adjusted net income was $153.9 million, down from $175.1 million in the prior year [19] - The cash cost per GEO was $290 per GEO in Q3 2024, down from $304 per GEO in Q3 2023, indicating improved margins [24] Business Line Data and Key Metrics Changes - Total GEOs sold were 110,110 for Q3 2024, compared to 160,848 in the prior year, with a significant decrease attributed to lower deliveries from Candelaria and Antapaccay [11][19] - Precious metal GEOs sold were 84,377, down from 90,370 in the prior year, representing approximately 77% of total GEOs for the quarter [16] - Energy GEOs were lower at 19,137 due to weaker natural gas prices and the impact of converting energy revenue to GEOs by higher gold prices [17] Market Data and Key Metrics Changes - The average gold price increased by 28% year-over-year, contributing to a margin of approximately $2,200 per ounce in Q3 2024 [25] - The company expects total GEOs sold for 2024 to be between 445,000 to 465,000, down from the original guidance of 480,000 to 540,000 [27] Company Strategy and Development Direction - The company is focused on diversifying its portfolio, with a strong deal pipeline for adding precious metal assets and potentially entering the potash market [9][34] - The management expressed confidence in the long-term performance of the portfolio, despite short-term challenges in 2024 [32] Management's Comments on Operating Environment and Future Outlook - Management noted that the inflation-protected business model is performing well, with record gold prices positively impacting revenues [5] - The company remains optimistic about the reopening of Cobre Panama, with discussions expected to take place in early 2025 [8][60] Other Important Information - The company is currently debt-free, with available capital of $2.3 billion as of September 30, 2024 [25] - The effective tax rate for the quarter was 21.6%, with expectations to average around 20% going forward [22] Q&A Session Summary Question: What could be a driver for you to either hit the higher end of the revised guidance range or come in on the lower end? - Management indicated that gold price performance and timing of deliveries from key assets like Candelaria will influence the outcome [30] Question: Can you clarify the company's interest in potash and potential opportunities? - The company is strategically interested in potash due to its long reserve life and is considering options for acquiring royalties [34] Question: What is the expected impact of the U.S. election on the company's operations? - Management anticipates positive impacts, particularly regarding permitting processes for mines in which the company holds royalties [66]

Financial Performance - Franco-Nevada reported revenue of $275.7 million for Q3 2024, a decrease of 10.9% compared to $309.5 million in Q3 2023[14]. - Operating income for Q3 2024 was $182.0 million, compared to $187.0 million in Q3 2023, reflecting a decrease of 0.5%[14]. - Net income for Q3 2024 was $152.7 million, down 12.8% from $175.1 million in Q3 2023[14]. - Adjusted EBITDA for Q3 2024 was $236.2 million, or $1.23 per share, reflecting a 7.4% decline[18]. - Year-to-date 2024 revenue was $792.6 million, a decrease of 13.4%, but a 9.7% increase when excluding Cobre Panama[19]. - Net income in YTD 2024 was $376.7 million, or $1.96 per share, down from $516.1 million, or $2.69 per share in YTD 2023, a decrease of 27.0%[99]. - Adjusted Net Income for YTD 2024 was $434.7 million, or $2.26 per share, compared to $510.2 million, or $2.66 per share in YTD 2023, a decrease of 15.0%[100]. Revenue Breakdown - Franco-Nevada's revenue from precious metals accounted for 75.5% of total revenue in YTD 2024[12]. - Revenue from Cobre Panama was $275.7 million in Q3 2024, compared to $67.3 million in Q3 2023, indicating a significant increase[59]. - Revenue from the South America region for Q3 2024 was $100.6 million, slightly down from $98.6 million in Q3 2023[59]. - The Guadalupe-Palmarejo asset in the United States generated $22.0 million in Q3 2024, an increase from $20.3 million in Q3 2023, marking an 8.4% growth[59]. - Revenue from U.S. Energy interests decreased to $29.3 million in Q3 2024, compared to $30.7 million in Q3 2023[73]. - Revenue from U.S. Energy interests decreased to $88.8 million in YTD 2024 from $102.2 million in YTD 2023, a decrease of 13.2%[94]. Production and Sales - Franco-Nevada sold 110,110 gold equivalent ounces (GEOs) in Q3 2024, down 31.5% from 160,848 GEOs in Q3 2023[14]. - The company expects its streams to contribute between 227,500 and 242,500 of its GEO sales for 2024, with YTD 2024 sales from streams at 172,526 GEOs[58]. - The Tocantinzinho mine is expected to average annual gold production of 174,700 ounces over a 10.5-year mine life, with Franco-Nevada owning a 12.5% gold stream on production[47]. - The Greenstone mine's production estimate was revised to between 110,000 and 130,000 gold ounces for 2024, down from 175,000 to 205,000 ounces[48]. - The Salares Norte mine's estimated 2024 gold equivalent production was revised to between 40,000 and 50,000 ounces, down from 220,000 to 240,000 ounces[49]. Costs and Expenses - Cash costs per GEO sold were $290 in Q3 2024, a slight decrease from $304 in Q3 2023[14]. - Costs of sales for Q3 2024 were $31.9 million, down from $48.9 million in Q3 2023, reflecting a decrease in GEOs sold[75]. - Depletion and depreciation expense totaled $54.2 million in Q3 2024, down from $68.1 million in Q3 2023[77]. - Cash costs per GEO sold for the three months ended September 30, 2024, were $290, compared to $304 for the same period in 2023, a decrease of 4.6%[151]. Assets and Equity - As of September 30, 2024, total assets were $6,299.6 million, an increase from $5,994.1 million as of December 31, 2023[15]. - Total shareholders' equity increased to $5,986.8 million as of September 30, 2024, compared to $5,769.1 million at the end of 2023[15]. - Cash and cash equivalents decreased to $1,317.3 million as of September 30, 2024, from $1,421.9 million as of December 31, 2023[119]. Dividends - In Q3 2024, the company declared a quarterly dividend of $0.36 per share, a 5.9% increase from $0.34 per share in Q3 2023, resulting in total dividends of $69.3 million for the quarter[38]. - For the nine months ended September 30, 2024, the company paid total dividends of $208.3 million, with $180.3 million paid in cash and $28.0 million settled in common shares under the Dividend Reinvestment Plan[38]. Taxation and Legal Matters - The company recognized an additional income tax expense of $30.6 million due to changes in Barbados tax legislation for the nine months ended September 30, 2024[41]. - Total income tax expense for Q3 2024 was $42.2 million, compared to $24.9 million in Q3 2023, with a total of $165.0 million for the nine months ended September 30, 2024, compared to $79.5 million in the same period of 2023[41]. - The company is pursuing legal remedies to protect its investment in Cobre Panama, including arbitration under the Canada-Panama Free Trade Agreement[129]. - The Company has filed formal Notices of Objection with the CRA against the reassessments and has posted security for 50% of the reassessed amounts[132]. Forward-Looking Statements - Forward-looking statements indicate management's expectations regarding future growth and performance, but actual results may differ due to various risks and uncertainties[164]. - Management believes that fluctuations in commodity prices and currency values could significantly affect revenue and performance[164].

Core Viewpoint - The company reported record gold prices leading to higher revenues, Adjusted EBITDA, and earnings in Q3 2024 compared to Q2 2024, despite a decline in GEO sales compared to Q3 2023 due to the absence of contributions from Cobre Panama and the impact of record gold prices on non-gold revenue conversion [1][2]. Financial Summary - Revenue for Q3 2024 was $275.7 million, down 11% compared to Q3 2023, but up 14% when excluding Cobre Panama [2]. - GEOs sold in the quarter totaled 110,110, a decrease of 32% compared to Q3 2023, with 22% attributed to Cobre Panama and 3% due to record gold prices [2]. - Operating cash flow was $213.6 million, down 9% from Q3 2023 [2]. - Net income was $152.7 million or $0.79 per share, down 13% from Q3 2023 [2]. - Adjusted EBITDA was $236.2 million or $1.23 per share, down 7% from Q3 2023, but up 16% excluding Cobre Panama [2]. - Adjusted Net Income was $153.9 million or $0.80 per share, down 12% from Q3 2023, but up 12% excluding Cobre Panama [2]. - The company declared a quarterly dividend of $0.36 per share, marking a 5.88% annual increase [2]. Sector-Leading ESG - The company is rated 1 in the precious metals sector and 1 gold company by Sustainalytics, with an AA rating from MSCI and Prime status from ISS ESG [3]. - It is committed to the World Gold Council's Responsible Gold Mining Principles and has a 40% diverse representation at the Board and top leadership levels [3]. Growth and Optionality - The company has a strong growth profile driven by mine expansions and new mines, with a diverse portfolio of long-life streams and high optionality royalties [4]. - The Tocantinzinho mine in Brazil has recently commenced production, contributing to the company's revenue [1][9]. Guidance - The company revised its 2024 GEO sales guidance to 445,000 to 465,000, down from the original guidance of 480,000 to 540,000 due to lower than expected gold production at Candelaria and the impact of record gold prices [6]. Portfolio Additions - The company acquired a 1.8% NSR on Yanacocha operations for $210 million, with a contingent payment of $15 million [8]. - A gold stream on the Cascabel Copper-Gold Project was acquired for a total of $750 million, with $525 million funded by the company [8]. - A term loan of $35 million was provided to EMX Royalty Corporation [8]. Q3 2024 Portfolio Updates - Precious Metal assets sold 84,377 GEOs, down 32.7% from Q3 2023, with contributions from Tocantinzinho and Greenstone mines partially offsetting lower contributions from Candelaria and Antapaccay [9]. - Candelaria's gold production guidance was revised down to 92,000 to 102,000 ounces for 2024 due to lower grades [9]. - Cobre Panama's production remains halted, with plans for an integrated audit expected in early 2025 [10].

Group 1 - Franco-Nevada Corporation will report its third quarter 2024 results on November 6th after market close [1] - The conference call to discuss the results will take place on November 7th at 8:00 am ET [1] - Participants can join the conference call via a toll-free number or through a webcast [1]

Company Performance - Franco-Nevada reported adjusted earnings of 75 cents per share for Q2 2024, missing the Zacks Consensus Estimate of 78 cents, representing a 21% year-over-year decrease [2] - The company generated revenues of $260 million in the reported quarter, down 21.2% year over year, primarily due to lower contributions from Antapaccay, Candelaria, and Energy assets, despite record gold prices [3] - The company sold 82,350 Gold Equivalent Ounces (GEOs) in the reported quarter, a decrease from 132,033 GEOs in the prior-year quarter [4] - Adjusted EBITDA was down 19.5% year over year to $222 million, with an adjusted EBITDA margin of 85.3%, compared to 83.5% in the prior-year quarter [4] Financial Position - At the end of Q2 2024, the company had $1.44 billion in cash, an increase from $1.42 billion at the end of 2023 [5] - Operating cash flow for the first half of 2024 was $373 million, down from $472 million in the prior-year period [5] - Franco-Nevada is debt-free and has $2.4 billion in available capital for portfolio expansion and dividends [5] Industry Comparison - Franco-Nevada belongs to the Zacks Mining - Gold industry, where Agnico Eagle Mines (AEM) reported revenues of $2.08 billion, a year-over-year increase of 20.9% [9][10] - Agnico's EPS for the same period was $1.07, compared to $0.65 a year ago, and is expected to post earnings of $0.90 per share for the current quarter, reflecting a year-over-year change of 104.6% [10]

Franco-Nevada Corporation (FNV) reported adjusted earnings of 75 cents per share in second-quarter 2024, missing the Zacks Consensus Estimate of 78 cents. The bottom line decreased 21% year over year. The company generated revenues of $260 million in the reported quarter, down 21.2% year over year. The downside was driven by lower contributions from Antapaccay, Candelaria and Energy assets, partially offset by record gold prices. In the June-end quarter, 74.2% of revenues were sourced from Precious Metal as ...

Financial Data and Key Metrics Changes - Q2 2024 revenues were $260.1 million, down from $329.9 million in Q2 2023, but up from $258.2 million when excluding Cobre Panama [7][8] - Adjusted EBITDA for Q2 2024 was $221.9 million, with adjusted net income at $144.9 million, translating to $0.75 per share [8][9] - Total GEOs sold in Q2 2024 were 110,264, compared to 168,515 in the prior year quarter [5][6] Business Line Data and Key Metrics Changes - Precious metal GEOs sold were 82,350 in Q2 2024, down from 95,383 in Q2 2023, representing approximately 75% of total GEOs [7][8] - Diversified GEOs sold were 27,914, down from over 36,000 in Q2 2023, while energy GEOs decreased to 22,100 from 28,683 [7][8] - The cash cost per GEO was $264 in Q2 2024, down from $280 in Q2 2023, indicating improved margins [10][11] Market Data and Key Metrics Changes - Gold and silver average prices were significantly higher in Q2 2024 compared to the prior year, while platinum and palladium prices were lower [8][9] - The company expects stronger production from Candelaria and Antapaccay in the second half of 2024, contributing to improved results [6][12] Company Strategy and Development Direction - The company has successfully added two long-life assets: a gold stream on SolGold's Cascabel project and a royalty on Newmont's Yanacocha operations [4][12] - The focus remains on precious metals, with a commitment to high-quality assets while remaining open to opportunities in other commodities [25][35] Management's Comments on Operating Environment and Future Outlook - Management noted that lower production at Candelaria and Antapaccay is a short-term issue, with expectations for a return to normal operations [3][6] - The company anticipates continued volatility in commodity prices but expects to benefit from rising gold prices in the future [8][11] Other Important Information - The company has $2.4 billion available as of June 30, 2024, and has amended its $1 billion unsecured revolving credit facility to extend its term to June 2029 [11][12] - A tax adjustment of $49.1 million was recorded due to changes in Barbados' corporate tax rate [9][10] Q&A Session Summary Question: Insights on the Yanacocha transaction and its appeal - Management sees great potential in Yanacocha due to its history as a significant producer and the immediate cash flow from existing oxide production [17][18] Question: Future opportunities for project financing type transactions - Management indicated that there are opportunities for both project financing and operating assets, with a rich deal environment currently [19] Question: Timing for increased royalty revenues from Haynesville - Management explained that low gas prices have impacted revenues, but they expect normalization as commodity prices rebound [20][21] Question: Internal rate of return for recent transactions - Management stated that the Yanacocha transaction offers reasonable returns with significant optionality, while SolGold's return is expected to be meaningfully higher [30][31] Question: Deal pipeline and royalty opportunities - Management confirmed a robust pipeline for both streams and royalties, with a focus on transactions in the $100 million to $300 million range [33][34]

[Condensed Consolidated Statements of Financial Position](index=1&type=section&id=Condensed%20Consolidated%20Statements%20of%20Financial%20Position) The company's financial position shows an increase in total assets and liabilities from December 2023 to June 2024 Condensed Consolidated Statements of Financial Position (June 30, 2024 vs. December 31, 2023) | Metric | June 30, 2024 ($M) | December 31, 2023 ($M) | | :--------------------------- | :----------------- | :--------------------- | | **ASSETS** | | | | Cash and cash equivalents | 1,439.0 | 1,421.9 | | Current assets | 1,668.3 | 1,615.3 | | Royalty, stream & working interests, net | 4,031.1 | 4,027.1 | | Investments | 278.0 | 254.5 | | Total assets | 6,141.2 | 5,994.1 | | **LIABILITIES** | | | | Current liabilities | 57.3 | 39.2 | | Total liabilities | 296.0 | 225.0 | | **SHAREHOLDERS' EQUITY** | | | | Total shareholders' equity | 5,845.2 | 5,769.1 | | Total liabilities and shareholders' equity | 6,141.2 | 5,994.1 | - **Total assets increased** by **$147.1 million (2.45%)** from **December 31, 2023**, to **June 30, 2024**, primarily driven by increases in **Cash and cash equivalents**, investments, and royalty, stream and working interests[1](index=1&type=chunk) - **Total liabilities increased** by **$71.0 million (31.56%)** over the six-month period, mainly due to a rise in current income tax liabilities[1](index=1&type=chunk) [Condensed Consolidated Statements of Income and Comprehensive Income](index=3&type=section&id=Condensed%20Consolidated%20Statements%20of%20Income%20and%20Comprehensive%20Income) The company experienced a decline in total revenue and a significant decrease in net income for both Q2 and H1 2024 compared to prior year periods Condensed Consolidated Statements of Income and Comprehensive Income (Q2 2024 vs. Q2 2023 and H1 2024 vs. H1 2023) | Metric | Q2 2024 ($M) | Q2 2023 ($M) | H1 2024 ($M) | H1 2023 ($M) | | :--------------------------- | :----------- | :----------- | :----------- | :----------- | | Total revenue | 260.1 | 329.9 | 516.9 | 606.2 | | Total costs of sales | 82.0 | 122.2 | 173.8 | 221.4 | | Gross profit | 178.1 | 207.7 | 343.1 | 384.8 | | Operating income | 169.0 | 200.5 | 327.2 | 372.6 | | Net income before income taxes | 174.8 | 211.5 | 346.8 | 395.6 | | Income tax expense | 95.3 | 27.0 | 122.8 | 54.6 | | Net income | 79.5 | 184.5 | 224.0 | 341.0 | | Comprehensive income | 82.6 | 209.0 | 189.7 | 371.9 | | Basic EPS | 0.41 | 0.96 | 1.17 | 1.78 | | Diluted EPS | 0.41 | 0.96 | 1.16 | 1.77 | - **Total revenue decreased** by **21.2% in Q2 2024** and **14.8% in H1 2024** compared to the prior year periods, primarily driven by lower revenue from royalty, streams, and working interests[3](index=3&type=chunk) - **Net income significantly decreased** by **56.9% in Q2 2024** and **34.3% in H1 2024**, largely due to a substantial increase in income tax expense[3](index=3&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Operating cash flow decreased in H1 2024 due to lower net income, while investing activities saw reduced cash usage Condensed Consolidated Statements of Cash Flows (H1 2024 vs. H1 2023) | Metric | H1 2024 ($M) | H1 2023 ($M) | | :---------------------------------------- | :----------- | :----------- | | Net cash provided by operating activities | 372.9 | 471.7 | | Net cash used in investing activities | (227.2) | (263.2) | | Net cash used in financing activities | (117.3) | (113.5) | | Net change in cash and cash equivalents | 17.1 | 98.6 | | Cash and cash equivalents at end of period | 1,439.0 | 1,295.1 | - **Net cash provided by operating activities decreased** by **20.9% in H1 2024** compared to **H1 2023**, primarily due to lower net income[4](index=4&type=chunk) - **Net cash used in investing activities decreased** by **13.7% in H1 2024**, driven by lower acquisition of royalty, stream, and working interests[4](index=4&type=chunk) [Condensed Consolidated Statements of Changes in Shareholders' Equity](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Changes%20in%20Shareholders'%20Equity) Shareholders' equity increased in H1 2024, primarily from net income and dividend reinvestment, despite higher dividends declared Condensed Consolidated Statements of Changes in Shareholders' Equity (H1 2024 vs. H1 2023) | Metric | June 30, 2024 ($M) | June 30, 2023 ($M) | | :----------------------------------- | :----------------- | :----------------- | | Balance at January 1 | 5,769.1 | 6,417.6 | | Net income | 224.0 | 341.0 | | Other comprehensive income (loss) | (34.3) | 30.9 | | Total comprehensive income | 189.7 | 371.9 | | Exercise of stock options | 2.7 | 2.9 | | Share-based payments | 2.9 | 3.5 | | Dividend reinvestment plan | 19.8 | 14.5 | | Dividends declared | (139.0) | (130.9) | | Balance at June 30 | 5,845.2 | 6,679.5 | - **Total shareholders' equity increased** by **$76.1 million in H1 2024**, primarily due to net income and **dividend reinvestment plan**, partially offset by dividends declared and other comprehensive loss[5](index=5&type=chunk) - **Dividends declared increased** to **$139.0 million in H1 2024** from **$130.9 million** in **H1 2023**[5](index=5&type=chunk) [Notes to the Condensed Consolidated Financial Statements](index=6&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Financial%20Statements) This section provides detailed disclosures and explanations supporting the condensed consolidated financial statements, covering accounting policies, acquisitions, and key financial components [Note 1 - Corporate Information](index=6&type=section&id=Note%201%20-%20Corporate%20Information) Franco-Nevada Corporation is a royalty and stream company focused on precious metals, holding a diverse portfolio of interests across various stages of development and global locations - **Franco-Nevada Corporation is a royalty and stream company** specializing in precious metals (gold, silver, platinum group metals) with a diversified revenue base[6](index=6&type=chunk) - The Company holds a portfolio of royalty, stream, and working interests on properties ranging from production to early exploration, located in South America, Central America & Mexico, United States, Canada, Australia, Europe, and Africa[6](index=6&type=chunk) [Note 2 - Material Accounting Policy Information](index=7&type=section&id=Note%202%20-%20Material%20Accounting%20Policy%20Information) This section outlines the basis of presentation for the unaudited condensed consolidated interim financial statements, prepared in accordance with IFRS Accounting Standards [Basis of Presentation](index=7&type=section&id=Basis%20of%20Presentation) The condensed consolidated interim financial statements are prepared in accordance with IFRS Accounting Standards, detailing accounting treatment for loans receivable - The condensed consolidated interim financial statements are prepared in accordance with **IFRS Accounting Standards**, specifically **IAS 34 Interim Financial Reporting**[7](index=7&type=chunk) - **Loans receivable are classified** either at amortized cost (for contractual cash flows representing solely principal and interest) or at **fair value through profit or loss (FVTPL)** for other contractual cash flows[7](index=7&type=chunk) [Significant Judgments, Estimates and Assumptions](index=7&type=section&id=Significant%20Judgments,%20Estimates%20and%20Assumptions) The preparation of financial statements requires management to make judgments, estimates, and assumptions consistent with those reported in the annual consolidated financial statements - The preparation of financial statements requires management to make judgments, estimates, and assumptions consistent with those reported in the annual consolidated financial statements for **December 31, 2023**[7](index=7&type=chunk) [New and Amended Accounting Standards Adopted by the Company](index=9&type=section&id=New%20and%20Amended%20Accounting%20Standards%20Adopted%20by%20the%20Company) Amendments to IAS 1 regarding liability classification were adopted as of January 1, 2024, with no significant impact on the Company's financial statements - **Amendments to IAS 1** – Classification of Liabilities as Current or Non-current were adopted as of **January 1, 2024**, with no significant impact on the Company's financial statements[8](index=8&type=chunk) [New Accounting Standards Issued But Not Yet Effective](index=9&type=section&id=New%20Accounting%20Standards%20Issued%20But%20Not%20Yet%20Effective) New accounting standards like IFRS 18 and amendments to IFRS 9 and IFRS 7 are being assessed for their potential impact on future financial statements - **IFRS 18** – Presentation and Disclosure in Financial Statements, effective **January 1, 2027**, will require new categories of income and expense presentation; the Company is currently assessing its impact[8](index=8&type=chunk) - **Amendments to IFRS 9 and IFRS 7**, effective **January 1, 2026**, clarify classification and measurement of financial instruments; the Company is currently assessing their impact[8](index=8&type=chunk) [Note 3 - Acquisitions and Other Transactions](index=9&type=section&id=Note%203%20-%20Acquisitions%20and%20Other%20Transactions) Franco-Nevada engaged in several significant acquisitions and financing activities during and subsequent to Q2 2024 [Acquisition of Royalty on Newmont Corporation's Yanacocha Operations – Peru](index=9&type=section&id=Acquisition%20of%20Royalty%20on%20Newmont%20Corporation's%20Yanacocha%20Operations%20–%20Peru) Subsequent to quarter-end, Franco-Nevada acquired a 1.8% NSR on Newmont's Yanacocha mine in Peru for $210.0 million cash - Subsequent to quarter-end (**August 13, 2024**), **Franco-Nevada acquired a 1.8% NSR** on Newmont's Yanacocha mine and adjacent properties in Peru for **$210.0 million cash**, plus a contingent payment of **$15.0 million** in **common shares**[9](index=9&type=chunk) [Acquisition of Gold Stream on SolGold plc's Cascabel Copper-Gold Project – Ecuador](index=9&type=section&id=Acquisition%20of%20Gold%20Stream%20on%20SolGold%20plc's%20Cascabel%20Copper-Gold%20Project%20–%20Ecuador) Subsequent to quarter-end, the Company acquired a gold stream on SolGold's Cascabel project in Ecuador, committing $525.0 million as part of a syndicated financing package - Subsequent to quarter-end (**July 15, 2024**), the Company **acquired a gold stream** on SolGold's Cascabel project in Ecuador, committing **$525.0 million** as part of a **$750.0 million** syndicated financing package (**70%** FNB, **30%** Osisko)[9](index=9&type=chunk) - **Stream deliveries for FNB are 14.0% of gold produced until 525,000 ounces, then 8.4%** for the remaining life of mine, with SolGold receiving **20% of the spot gold price**[10](index=10&type=chunk) [Private Placement with G Mining Ventures Corp.](index=10&type=section&id=Private%20Placement%20with%20G%20Mining%20Ventures%20Corp.) Subsequent to quarter-end, the Company completed a $25 million private placement with G Mining Ventures Corp - Subsequent to quarter-end (**July 12, 2024**), the Company completed a **$25 million private placement** with **G Mining Ventures Corp**. at **C$2.279** per share[10](index=10&type=chunk) [Term Loan with EMX Royalty Corporation](index=10&type=section&id=Term%20Loan%20with%20EMX%20Royalty%20Corporation) The Company entered into a $35.0 million term loan agreement with EMX Royalty Corporation, fully advanced subsequent to quarter-end - On **June 19, 2024**, the Company entered into a **$35.0 million term loan agreement** with **EMX Royalty Corporation**, fully advanced subsequent to quarter-end on **August 9, 2024**[10](index=10&type=chunk) [Term Loan with SolGold](index=11&type=section&id=Term%20Loan%20with%20SolGold) The Company provided a $10.0 million term loan to SolGold, which was repaid in full subsequent to quarter-end - On **May 13, 2024**, the Company provided a **$10.0 million term loan** to SolGold, which was repaid in full on **July 17, 2024**, subsequent to quarter-end[11](index=11&type=chunk) [Funding of G Mining Ventures Term Loan for the Tocantinzinho Project – Brazil](index=11&type=section&id=Funding%20of%20G%20Mining%20Ventures%20Term%20Loan%20for%20the%20Tocantinzinho%20Project%20–%20Brazil) The Company completed its $75.0 million commitment to G Mining Ventures for the Tocantinzinho gold project with a final advance of $33.0 million - On **April 19, 2024**, the Company completed its **$75.0 million commitment** to **G Mining Ventures** for the **Tocantinzinho gold project** with a final advance of **$33.0 million**[11](index=11&type=chunk) [Acquisition of Royalty on Claims in the Stewart Mining Camp and Private Placement with Scottie Resources Corp. – British Columbia, Canada](index=13&type=section&id=Acquisition%20of%20Royalty%20on%20Claims%20in%20the%20Stewart%20Mining%20Camp%20and%20Private%20Placement%20with%20Scottie%20Resources%20Corp.%20–%20British%20Columbia,%20Canada) Franco-Nevada acquired a 2.0% gross production royalty on Scottie Resources Corp.'s claims for $5.9 million and invested in common shares - On **April 15, 2024**, **Franco-Nevada acquired a 2.0% gross production royalty** on Scottie Resources Corp.'s claims in British Columbia for **$5.9 million** and invested an additional **$0.7 million** in Scottie **common shares**[12](index=12&type=chunk) [Receipt of Séguéla Royalty Buy-Back – Cote d'Ivoire](index=13&type=section&id=Receipt%20of%20Séguéla%20Royalty%20Buy-Back%20–%20Cote%20d'Ivoire) Fortuna Mining Corp. exercised its option to buy back 0.6% of the Séguéla mine NSR for $6.5 million, reducing Franco-Nevada's interest - On **March 30, 2024**, Fortuna Mining Corp. **exercised its option to buy back 0.6% of the Séguéla mine NSR** for **$6.5 million**, reducing Franco-Nevada's interest to **0.6%**[12](index=12&type=chunk) [Amendments to Condestable Gold and Silver Stream – Peru](index=13&type=section&id=Amendments%20to%20Condestable%20Gold%20and%20Silver%20Stream%20–%20Peru) The Company amended its Condestable stream agreement, advancing an additional $10.0 million and increasing its variable phase gold and silver deliveries - On **March 27, 2024**, the Company **amended its Condestable stream agreement** in Peru, advancing an additional **$10.0 million** and increasing its **variable phase gold and silver deliveries** from **25% to 37.5%**[12](index=12&type=chunk) [Acquisition of Silver Royalty on Stibnite Gold Project – U.S.](index=13&type=section&id=Acquisition%20of%20Silver%20Royalty%20on%20Stibnite%20Gold%20Project%20–%20U.S.) Franco-Nevada acquired a NSR interest on all payable silver production from the Stibnite Gold project in Idaho, U.S., for $8.5 million - On **March 21, 2024**, **Franco-Nevada acquired a NSR interest** on all **payable silver production** from the **Stibnite Gold project** in Idaho, U.S., for **$8.5 million**[12](index=12&type=chunk) [Exercise of Option by EMX for an Effective NSR Interest on Caserones – Chile](index=13&type=section&id=Exercise%20of%20Option%20by%20EMX%20for%20an%20Effective%20NSR%20Interest%20on%20Caserones%20–%20Chile) EMX exercised an option to acquire a portion of Franco-Nevada's effective NSR on the Caserones mine for $4.7 million, reducing Franco-Nevada's interest - On **January 19, 2024**, EMX **exercised an option** to acquire a portion of Franco-Nevada's effective **NSR** on the **Caserones mine** for **$4.7 million**, reducing Franco-Nevada's interest to **0.517%**[12](index=12&type=chunk) [Acquisition of Royalties on Pascua-Lama Project – Chile](index=13&type=section&id=Acquisition%20of%20Royalties%20on%20Pascua-Lama%20Project%20–%20Chile) The Company acquired an additional interest in the Chilean portion of Barrick Gold Corporation's Pascua-Lama project for $6.7 million - On **January 3, 2024**, the Company **acquired an additional interest** in the Chilean portion of Barrick Gold Corporation's **Pascua-Lama project** for **$6.7 million**, increasing its **NSR** to **2.941% (gold) and 0.588% (copper)** at gold prices exceeding **$800/ounce**[12](index=12&type=chunk) [Acquisition of Additional Natural Gas Royalty Interests in Haynesville – U.S.](index=14&type=section&id=Acquisition%20of%20Additional%20Natural%20Gas%20Royalty%20Interests%20in%20Haynesville%20–%20U.S.) The Company completed the acquisition of a royalty portfolio in the Haynesville gas play for $125.0 million - On **January 2, 2024**, the Company completed the **acquisition of a royalty portfolio** in the **Haynesville gas play** for **$125.0 million**[14](index=14&type=chunk) [Acquisition of Mineral Rights with Continental Resources, Inc. – U.S.](index=14&type=section&id=Acquisition%20of%20Mineral%20Rights%20with%20Continental%20Resources,%20Inc.%20–%20U.S.) Franco-Nevada contributed $19.1 million to the Royalty Acquisition Venture with Continental Resources Inc. in H1 2024 - **Franco-Nevada contributed $19.1 million** to the **Royalty Acquisition Venture** with Continental Resources Inc. in **H1 2024**, bringing its **cumulative investment** to **$469.3 million** with **remaining commitments** of up to **$50.7 million**[14](index=14&type=chunk) [Note 4 - Cash and Cash Equivalents](index=14&type=section&id=Note%204%20-%20Cash%20and%20Cash%20Equivalents) Cash and cash equivalents primarily consist of interest-bearing deposits, showing a slight increase from December 31, 2023, to June 30, 2024 Cash and Cash Equivalents (June 30, 2024 vs. December 31, 2023) | Metric | June 30, 2024 ($M) | December 31, 2023 ($M) | | :-------------- | :----------------- | :--------------------- | | Cash deposits | 519.0 | 571.4 | | Term deposits | 920.0 | 850.5 | | Total | 1,439.0 | 1,421.9 | - **Cash and cash equivalents increased** by **$17.1 million** to **$1,439.0 million** as of **June 30, 2024**, from **$1,421.9 million** at **December 31, 2023**[16](index=16&type=chunk) [Note 5 - Investments](index=14&type=section&id=Note%205%20-%20Investments) The Company's investments primarily comprise equity investments at FVTOCI and warrants, showing an increase from December 31, 2023, to June 30, 2024 Investments (June 30, 2024 vs. December 31, 2023) | Metric | June 30, 2024 ($M) | December 31, 2023 ($M) | | :--------------------------- | :----------------- | :--------------------- | | Equity investments at FVTOCI | 267.5 | 246.4 | | Warrants | 10.5 | 8.1 | | Total Investments | 278.0 | 254.5 | Equity Investments at FVTOCI Breakdown (June 30, 2024 vs. December 31, 2023) | Company | June 30, 2024 ($M) | December 31, 2023 ($M) | | :--------------------------- | :----------------- | :--------------------- | | Labrador Iron Ore Royalty Corporation | 134.6 | 152.7 | | G Mining Ventures | 77.1 | 47.6 |\n| Other | 55.8 | 46.1 | | Total | 267.5 | 246.4 | - **Total investments increased** by **$23.5 million** to **$278.0 million** as of **June 30, 2024**[17](index=17&type=chunk) - The Company disposed of **equity investments** with a cost of **$12.3 million** for **gross proceeds** of **$8.5 million** during **H1 2024**[17](index=17&type=chunk) - **Gain on changes in fair value of equity investments at FVTOCI**, net of income tax, was **$17.2 million** in **H1 2024**, compared to **$1.0 million** in **H1 2023**[18](index=18&type=chunk) [Note 6 – Loans Receivable](index=16&type=section&id=Note%206%20–%20Loans%20Receivable) Loans receivable increased significantly from December 31, 2023, to June 30, 2024, primarily due to the G Mining Ventures Term Loan [G Mining Ventures Term Loan](index=16&type=section&id=G%20Mining%20Ventures%20Term%20Loan) The Company funded a total of $75.0 million to G Mining Ventures in H1 2024, bearing interest at 3-Month SOFR +5.75% - The Company funded a total of **$75.0 million** to **G Mining Ventures** in **H1 2024**, bearing interest at **3-Month SOFR +5.75%** (reducing to **+4.75%** after completion tests)[19](index=19&type=chunk) - **Interest revenue** recognized from this loan was **$2.9 million** for **H1 2024**[19](index=19&type=chunk) [SolGold Loan Facility](index=16&type=section&id=SolGold%20Loan%20Facility) A $10.0 million term loan was provided to SolGold on May 13, 2024, at 12% interest, and was fully repaid on July 17, 2024 - A **$10.0 million term loan** was provided to SolGold on **May 13, 2024**, at **12%** interest, and was fully repaid on **July 17, 2024**[20](index=20&type=chunk) - **Interest revenue** of **$0.2 million** was recognized from the **SolGold Term Loan** for **Q2 2024**[20](index=20&type=chunk) [Skeena Convertible Debenture](index=18&type=section&id=Skeena%20Convertible%20Debenture) The $18.7 million Skeena Convertible Debenture matured on June 26, 2024, and was fully repaid for $18.9 million - The **$18.7 million Skeena Convertible Debenture** matured on **June 26, 2024**, and was fully repaid for **$18.9 million**[21](index=21&type=chunk) - A **loss of $5.7 million related to the change in fair value of the debenture** was recognized in **H1 2024**, with **other interest income** of **$0.6 million**[21](index=21&type=chunk) [EMX Term Loan](index=18&type=section&id=EMX%20Term%20Loan) A $35.0 million term loan agreement with EMX was entered into on June 19, 2024, with the full amount advanced subsequent to quarter-end - A **$35.0 million term loan agreement** with EMX was entered into on **June 19, 2024**, with the full amount advanced subsequent to quarter-end on **August 9, 2024**[22](index=22&type=chunk) [Note 7 – Gold Bullion, Prepaid Expenses and Other Current Assets](index=18&type=section&id=Note%207%20–%20Gold%20Bullion,%20Prepaid%20Expenses%20and%20Other%20Current%20Assets) This section details the composition of gold bullion, prepaid expenses, and other current assets, showing an increase in gold bullion holdings Gold Bullion, Prepaid Expenses and Other Current Assets (June 30, 2024 vs. December 31, 2023) | Metric | June 30, 2024 ($M) | December 31, 2023 ($M) | | :------------------------ | :----------------- | :--------------------- | | Gold bullion | 69.9 | 51.3 | | Prepaid expenses | 27.4 | 30.0 | | Stream ounces inventory | 0.5 | 0.5 | | Debt issue costs | 0.4 | 0.6 | | Total | 98.2 | 82.4 | - **Gold bullion increased** by **$18.6 million** to **$69.9 million** as of **June 30, 2024**[23](index=23&type=chunk) [Note 8 - Royalty, Stream and Working Interests](index=19&type=section&id=Note%208%20-%20Royalty,%20Stream%20and%20Working%20Interests) The carrying value of royalty, stream, and working interests remained relatively stable, with additions and disposals impacting the balance in H1 2024 [Royalty, Stream and Working Interests Overview](index=19&type=section&id=Royalty,%20Stream%20and%20Working%20Interests%20Overview) The carrying value of royalty, stream, and working interests remained relatively stable, with additions and disposals impacting the balance in H1 2024 Royalty, Stream and Working Interests Carrying Value (June 30, 2024) | Category | Carrying Value ($M) | | :---------------- | :------------------ | | Mining royalties | 942.2 | | Streams | 1,310.8 | | Energy | 1,238.0 | | Advanced | 359.5 | | Exploration | 180.6 | | Total | 4,031.1 | Changes in Royalty, Stream and Working Interests (H1 2024) | Metric | Amount ($M) | | :------------------------- | :---------- | | Balance at January 1, 2024 | 4,027.1 | | Additions | 165.5 | | Disposals | (10.8) | | Depletion | (109.9) | | Impact of foreign exchange | (40.8) | | Balance at June 30, 2024 | 4,031.1 | [Disposals of Royalty Interests](index=19&type=section&id=Disposals%20of%20Royalty%20Interests) Disposals in H1 2024 included the buy-back of 0.6% NSR on the Séguéla mine and the exercise of an option by EMX on the Caserones mine - Disposals in **H1 2024** included the buy-back of **0.6% NSR** on the **Séguéla mine** by Fortuna for **$6.5 million** and the exercise of an option by EMX on the **Caserones mine** for **$4.7 million**[27](index=27&type=chunk) [Note 9 - Other Assets](index=19&type=section&id=Note%209%20-%20Other%20Assets) Other assets primarily consist of deposits related to CRA audits, which significantly increased in H1 2024 Other Assets (June 30, 2024 vs. December 31, 2023) | Metric | June 30, 2024 ($M) | December 31, 2023 ($M) | | :--------------------------- | :----------------- | :--------------------- | | Deposits related to CRA audits | 44.7 | 27.7 | | Energy well equipment, net | 5.7 | 5.8 | | Right-of-use assets, net | 0.3 | 0.6 | | Debt issue costs | 1.7 | 1.1 | | Furniture and fixtures, net | 0.3 | 0.2 | | Total | 52.7 | 35.4 | - Deposits related to **CRA** audits increased by **$17.0 million** to **$44.7 million** as of **June 30, 2024**, due to an additional cash deposit of **$18.2 million**[27](index=27&type=chunk) [Note 10 - Debt](index=20&type=section&id=Note%2010%20-%20Debt) The Company maintains a $1.0 billion unsecured revolving term credit facility, which was extended to June 3, 2029, with no amounts drawn - The Company has a **$1.0 billion** unsecured revolving term credit facility, extended to **June 3, 2029**, with a **$250.0 million** accordion[28](index=28&type=chunk) - As of **June 30, 2024**, no amounts were drawn from the Corporate Revolver, but **$18.6 million** in standby letters of credit reduce the available balance[29](index=29&type=chunk) [Note 11 - Revenue](index=21&type=section&id=Note%2011%20-%20Revenue) Total revenue decreased in Q2 and H1 2024 compared to the prior year, primarily driven by lower revenue from royalty, streams, and working interests Total Revenue (Q2 2024 vs. Q2 2023 and H1 2024 vs. H1 2023) | Metric | Q2 2024 ($M) | Q2 2023 ($M) | H1 2024 ($M) | H1 2023 ($M) | | :------------ | :----------- | :----------- | :----------- | :----------- | | Total Revenue | 260.1 | 329.9 | 516.9 | 606.2 | Revenue by Commodity (Q2 2024 vs. Q2 2023) | Commodity | Q2 2024 ($M) | Q2 2023 ($M) | Change ($M) | Change (%) | | :------------------ | :----------- | :----------- | :---------- | :--------- | | Gold | 156.9 | 213.9 | (57.0) | -26.6% | | Silver | 28.1 | 35.4 | (7.3) | -20.6% | | Platinum group metals | 8.0 | 9.9 | (1.9) | -19.2% | | Iron ore | 12.0 | 10.1 | 1.9 | 18.8% | | Other mining assets | 1.7 | 5.1 | (3.4) | -66.7% | | Mining Total | 206.7 | 274.4 | (67.7) | -24.7% | | Oil | 35.9 | 36.9 | (1.0) | -2.7% | | Gas | 10.8 | 14.2 | (3.4) | -23.9% | | Natural gas liquids | 4.2 | 4.4 | (0.2) | -4.5% | | Energy Total | 50.9 | 55.5 | (4.6) | -8.3% | Revenue by Geography (Q2 2024 vs. Q2 2023) | Geography | Q2 2024 ($M) | Q2 2023 ($M) | Change ($M) | Change (%) | | :--------------------- | :----------- | :----------- | :---------- | :--------- | | South America | 93.6 | 106.0 | (12.4) | -11.7% | | Central America & Mexico | 16.8 | 86.3 | (69.5) | -80.5% | | United States | 51.2 | 57.8 | (6.6) | -11.4% | | Canada | 51.3 | 43.1 | 8.2 | 19.0% | | Rest of World | 47.2 | 36.7 | 10.5 | 28.6% | [Note 12 - Costs of Sales](index=24&type=section&id=Note%2012%20-%20Costs%20of%20Sales) Costs of sales, excluding depletion and depreciation, decreased in Q2 and H1 2024 compared to the prior year periods, driven by lower costs of stream sales Costs of Sales (Q2 2024 vs. Q2 2023 and H1 2024 vs. H1 2023) | Metric | Q2 2024 ($M) | Q2 2023 ($M) | H1 2024 ($M) | H1 2023 ($M) | | :----------------------- | :----------- | :----------- | :----------- | :----------- | | Costs of stream sales | 25.9 | 43.2 | 56.0 | 78.2 | | Mineral production taxes | 0.7 | 0.6 | 1.2 | 1.0 | | Mining costs of sales | 26.6 | 43.8 | 57.2 | 79.2 | | Energy costs of sales | 2.5 | 3.3 | 5.5 | 6.1 | | Total | 29.1 | 47.1 | 62.7 | 85.3 | - **Total costs of sales decreased** by **$18.0 million (38.2%)** in **Q2 2024** and **$22.6 million (26.5%)** in **H1 2024**[32](index=32&type=chunk) [Note 13 – General and Administrative Expenses](index=24&type=section&id=Note%2013%20–%20General%20and%20Administrative%20Expenses) General and administrative expenses increased in Q2 and H1 2024, primarily due to higher professional fees and the inclusion of Cobre Panama arbitration expenses General and Administrative Expenses (Q2 2024 vs. Q2 2023 and H1 2024 vs. H1 2023) | Metric | Q2 2024 ($M) | Q2 2023 ($M) | H1 2024 ($M) | H1 2023 ($M) | | :--------------------------- | :----------- | :----------- | :----------- | :----------- | | Salaries and benefits | 2.5 | 2.7 | 5.0 | 5.3 | | Professional fees | 2.3 | 1.5 | 3.7 | 3.1 | | Cobre Panama arbitration expenses | 0.8 | — | 2.3 | — | | Community contributions | 0.3 | — | 0.4 | 0.1 | | Board of Directors' costs | 0.1 | 0.2 | 0.2 | 0.3 | | Office, insurance and other expenses | 2.4 | 1.8 | 2.5 | 3.6 | | Total | 8.4 | 6.2 | 14.1 | 12.4 | - **General and administrative expenses increased** by **$2.2 million (35.5%)** in **Q2 2024** and **$1.7 million (13.7%)** in **H1 2024**[33](index=33&type=chunk) - **Cobre Panama arbitration expenses accounted for $2.3 million** in **H1 2024**[33](index=33&type=chunk) [Note 14 - Share-Based Compensation Expenses](index=24&type=section&id=Note%2014%20-%20Share-Based%20Compensation%20Expenses) Share-based compensation expenses decreased in Q2 and H1 2024, primarily due to lower expenses related to deferred share units Share-Based Compensation Expenses (Q2 2024 vs. Q2 2023 and H1 2024 vs. H1 2023) | Metric | Q2 2024 ($M) | Q2 2023 ($M) | H1 2024 ($M) | H1 2023 ($M) | | :------------------------------- | :----------- | :----------- | :----------- | :----------- | | Stock options and restricted share units | 1.5 | 1.7 | 2.9 | 3.2 | | Deferred share units | 0.3 | 0.7 | 1.7 | 2.4 | | Total | 1.8 | 2.4 | 4.6 | 5.6 | - **Total share-based compensation expenses decreased** by **$0.6 million (25.0%)** in **Q2 2024** and **$1.0 million (17.9%)** in **H1 2024**[34](index=34&type=chunk) [Note 15 - Related Party Disclosures](index=24&type=section&id=Note%2015%20-%20Related%20Party%20Disclosures) Compensation for key management personnel, including the Board of Directors and executive management, increased slightly in H1 2024 Key Management Personnel Compensation (Q2 2024 vs. Q2 2023 and H1 2024 vs. H1 2023) | Metric | Q2 2024 ($M) | Q2 2023 ($M) | H1 2024 ($M) | H1 2023 ($M) | | :--------------------- | :----------- | :----------- | :----------- | :----------- | | Short-term benefits | 0.9 | 0.9 | 1.9 | 1.8 | | Share-based payments | 1.5 | 1.3 | 4.1 | 3.9 | | Total | 2.4 | 2.2 | 6.0 | 5.7 | - **Total compensation for key management personnel increased** by **$0.3 million (5.3%)** in **H1 2024**[36](index=36&type=chunk) [Note 16 - Finance Income and Expenses](index=25&type=section&id=Note%2016%20-%20Finance%20Income%20and%20Expenses) Finance income increased significantly in Q2 and H1 2024, primarily due to higher interest earned on cash and cash equivalents Finance Income and Expenses (Q2 2024 vs. Q2 2023 and H1 2024 vs. H1 2023) | Metric | Q2 2024 ($M) | Q2 2023 ($M) | H1 2024 ($M) | H1 2023 ($M) | | :------------------------------- | :----------- | :----------- | :----------- | :----------- | | Finance income (Interest) | 16.2 | 10.0 | 32.2 | 20.5 | | Finance expenses (Standby charges) | 0.5 | 0.6 | 1.0 | 1.2 | | Finance expenses (Amortization of debt issue costs) | 0.1 | 0.1 | 0.2 | 0.2 | | Total Finance expenses | 0.6 | 0.7 | 1.2 | 1.4 | - **Finance income increased** by **$6.2 million (62.0%)** in **Q2 2024** and **$11.7 million (57.1%)** in **H1 2024**[37](index=37&type=chunk) [Note 17 - Income Taxes](index=25&type=section&id=Note%2017%20-%20Income%20Taxes) Income tax expense significantly increased in Q2 and H1 2024, primarily due to the Barbados corporate tax reform and deferred tax expense [Income Tax Expense Overview](index=25&type=section&id=Income%20Tax%20Expense%20Overview) Total income tax expense significantly increased in Q2 and H1 2024, primarily due to current and deferred income tax expenses Income Tax Expense (Q2 2024 vs. Q2 2023 and H1 2024 vs. H1 2023) | Metric | Q2 2024 ($M) | Q2 2023 ($M) | H1 2024 ($M) | H1 2023 ($M) | | :------------------------- | :----------- | :----------- | :----------- | :----------- | | Current income tax expense | 44.4 | 20.0 | 66.5 | 39.5 | | Deferred income tax expense | 50.9 | 7.0 | 56.3 | 15.1 | | Total Income tax expense | 95.3 | 27.0 | 122.8 | 54.6 | - **Total income tax expense increased** by **$68.3 million (253.0%)** in **Q2 2024** and **$68.2 million (124.9%)** in **H1 2024**[38](index=38&type=chunk) [Global Minimum Tax](index=25&type=section&id=Global%20Minimum%20Tax) Canada enacted the Global Minimum Tax Act (GMTA) effective January 1, 2024, imposing a 15% global minimum tax on large multinational enterprise groups - Canada enacted the **Global Minimum Tax Act (GMTA)** on **June 20, 2024**, effective **January 1, 2024**, imposing a **15%** global minimum tax on large multinational enterprise groups[39](index=39&type=chunk) - No **current tax expense** was recognized for **GMTA** in **H1 2024** as all entities in the Franco-Nevada group had an effective tax rate of **at least 15%**[39](index=39&type=chunk) [Barbados Corporate Tax Reform](index=25&type=section&id=Barbados%20Corporate%20Tax%20Reform) Barbados increased its corporate tax rate to 9% effective January 1, 2024, resulting in a $49.1 million deferred tax expense from remeasurement - **Barbados increased its corporate tax rate to 9%** effective **January 1, 2024**, resulting in a **$49.1 million deferred tax expense** from remeasurement of **deferred tax liability** in **H1 2024**[39](index=39&type=chunk) - The Barbados subsidiary recognized a **total income tax expense** of **$70.7 million** in **H1 2024**, including **$25.1 million current tax** and **$45.6 million deferred tax**, due to the reform and a **Qualified Domestic Minimum Top-Up Tax**[40](index=40&type=chunk) [Canada Revenue Agency Audit](index=27&type=section&id=Canada%20Revenue%20Agency%20Audit) The Company is undergoing an audit by the Canada Revenue Agency for its 2013-2020 taxation years, as detailed in Note 23 (b) - The Company is undergoing an audit by the **Canada Revenue Agency** for its **2013-2020** taxation years, as detailed in **Note 23 (b)**[40](index=40&type=chunk) [Note 18 - Shareholders' Equity](index=27&type=section&id=Note%2018%20-%20Shareholders'%20Equity) Shareholders' equity increased in H1 2024, driven by share issuances from stock option exercises and the dividend reinvestment plan [Share Capital](index=27&type=section&id=Share%20Capital) Share capital increased by $25.7 million in H1 2024, primarily from the dividend reinvestment plan and stock option exercises Share Capital Changes (H1 2024) | Metric | Number of shares | Amount ($M) | | :------------------------------- | :--------------- | :---------- | | Balance at January 1, 2024 | 192,175,042 | 5,728.2 | | Exercise of stock options | 69,432 | 3.5 | | Vesting of restricted share units | 16,640 | 2.4 | | Dividend reinvestment plan | 165,583 | 19.8 | | Balance at June 30, 2024 | 192,426,697 | 5,753.9 | - **Share capital increased** by **$25.7 million** in **H1 2024**, primarily from the **dividend reinvestment plan**[41](index=41&type=chunk) [Dividends](index=27&type=section&id=Dividends) Dividends declared increased to $0.36 per common share in Q2 2024 and $0.72 per common share in H1 2024 Dividends Declared and Paid (Q2 2024 vs. Q2 2023 and H1 2024 vs. H1 2023) | Metric | Q2 2024 ($M) | Q2 2023 ($M) | H1 2024 ($M) | H1 2023 ($M) | | :------------- | :----------- | :----------- | :----------- | :----------- | | Dividends per common share | 0.36 | 0.34 | 0.72 | 0.68 | | Cash dividends | 60.3 | 58.6 | 119.2 | 116.4 | | DRIP dividends | 9.3 | 6.9 | 19.8 | 14.5 | | Total | 69.6 | 65.5 | 139.0 | 130.9 | - **Dividends declared increased** to **$0.36 per common share in Q2 2024** (from **$0.34** in **Q2 2023**) and **$0.72 per common share in H1 2024** (from **$0.68** in **H1 2023**)[42](index=42&type=chunk) [Note 19 - Earnings per Share ("EPS")](index=27&type=section&id=Note%2019%20-%20Earnings%20per%20Share%20(%22EPS%22)) Basic and diluted EPS decreased significantly in Q2 and H1 2024, reflecting the lower net income during these periods Earnings per Share (Q2 2024 vs. Q2 2023 and H1 2024 vs. H1 2023) | Metric | Q2 2024 ($) | Q2 2023 ($) | H1 2024 ($) | H1 2023 ($) | | :----------------------------------- | :---------- | :---------- | :---------- | :---------- | | Basic EPS | 0.41 | 0.96 | 1.17 | 1.78 | | Diluted EPS | 0.41 | 0.96 | 1.16 | 1.77 | | Weighted average shares outstanding (Basic, millions) | 192.3 | 191.9 | 192.2 | 191.9 | | Weighted average shares outstanding (Diluted, millions) | 192.5 | 192.2 | 192.4 | 192.2 | - **Basic EPS decreased** by **57.3% in Q2 2024** and **34.3% in H1 2024**[43](index=43&type=chunk)[45](index=45&type=chunk) [Note 20 - Segment Reporting](index=29&type=section&id=Note%2020%20-%20Segment%20Reporting) Both the Mining and Energy segments experienced a decrease in total revenue and segment gross profit in Q2 and H1 2024 compared to the prior year Segment Revenue and Gross Profit (Q2 2024 vs. Q2 2023) | Metric | Q2 2024 Mining ($M) | Q2 2024 Energy ($M) | Q2 2023 Mining ($M) | Q2 2023 Energy ($M) | | :----------------- | :------------------ | :------------------ | :------------------ | :------------------ | | Total Revenue | 209.2 | 50.9 | 274.4 | 55.5 | | Segment gross profit | 144.4 | 34.7 | 174.0 | 33.9 | Segment Revenue and Gross Profit (H1 2024 vs. H1 2023) | Metric | H1 2024 Mining ($M) | H1 2024 Energy ($M) | H1 2023 Mining ($M) | H1 2023 Energy ($M) | | :----------------- | :------------------ | :------------------ | :------------------ | :------------------ | | Total Revenue | 422.2 | 94.7 | 501.7 | 104.5 | | Segment gross profit | 285.5 | 58.8 | 319.1 | 66.0 | - **Mining segment revenue decreased** by **23.8% in Q2 2024** and **15.8% in H1 2024**[46](index=46&type=chunk) - **Energy segment revenue decreased** by **8.3% in Q2 2024** and **9.4% in H1 2024**[46](index=46&type=chunk) [Note 21 - Fair Value Measurements](index=30&type=section&id=Note%2021%20-%20Fair%20Value%20Measurements) The company classifies its financial instruments into a three-level fair value hierarchy, with most equity investments as Level 1 and warrants as Level 2 Assets Measured at Fair Value (June 30, 2024) | Metric | Level 1 ($M) | Level 2 ($M) | Level 3 ($M) | Aggregate Fair Value ($M) | | :----------------------------------- | :----------- | :----------- | :----------- | :------------------------ | | Equity investments | 263.0 | — | 4.5 | 267.5 | | Warrants | — | 10.5 | — | 10.5 | | Receivables from provisional concentrate sales | — | 4.6 | — | 4.6 | | Total | 263.0 | 15.1 | 4.5 | 282.6 | - The fair values of publicly-traded investments are classified as **Level 1**, while **warrants** and **receivables from provisional concentrate sales** are classified as **Level 2**[50](index=50&type=chunk) - The carrying values of the **G Mining Ventures Term Loan** and **SolGold Term Loan approximated their fair values** as of **June 30, 2024**[50](index=50&type=chunk) [Note 22 - Commitments](index=31&type=section&id=Note%2022%20-%20Commitments) Franco-Nevada has various commodity purchase commitments under its stream agreements and capital commitments for loan advances and mineral rights acquisitions [Commodity Purchase Commitments](index=31&type=section&id=Commodity%20Purchase%20Commitments) The Company has commodity purchase commitments for various precious metals streams, with terms typically extending for 40 years - The Company has **commodity purchase commitments** for various precious metals streams, with terms typically extending for **40 years**[51](index=51&type=chunk) - Purchase prices for gold and silver streams vary, often including fixed payments (e.g., **$400/ounce** for Candelaria gold) or a percentage of spot prices (e.g., **20%** for Condestable gold/silver)[51](index=51&type=chunk)[52](index=52&type=chunk) [Capital Commitments](index=33&type=section&id=Capital%20Commitments) Franco-Nevada has capital commitments totaling $91.2 million as of June 30, 2024, for loan advances and mineral rights acquisitions Capital Commitments (June 30, 2024) | Commitment | Amount ($M) | | :--------------------------------------- | :---------- | | EMX Term Loan | 35.0 | | Royalty Acquisition Venture (Continental) | 50.7 | | Joint acquisition of royalties (EMX) | 5.5 | | Total Capital Commitments | 91.2 | - **Contingent payments** include **$12.5 million** for Copper World royalty, **$8.0 million** for Rio Baker (Salares Norte) royalty, **$3.4 million** for Eskay Creek royalty, and **$1.3 million** for Rebecca royalty[53](index=53&type=chunk) - Subsequent to quarter-end, additional **capital commitments** arose from the Yanacocha Royalty and Cascabel Stream acquisitions[53](index=53&type=chunk) [Note 23 - Contingencies](index=33&type=section&id=Note%2023%20-%20Contingencies) The Company is actively pursuing legal avenues to protect its investment in Cobre Panama and is engaged in ongoing CRA audits regarding transfer pricing [Cobre Panama Arbitration Proceedings](index=33&type=section&id=Cobre%20Panama%20Arbitration%20Proceedings) Cobre Panama production has been halted since November 2023, leading to a full impairment of Franco-Nevada's Cobre Panama streams and arbitration proceedings - **Cobre Panama production has been halted** since **November 2023**, leading to a **full impairment of Franco-Nevada's Cobre Panama streams** of **$1,169.2 million** in **2023**[54](index=54&type=chunk)[55](index=55&type=chunk) - The Company filed a request for arbitration with the **International Centre for Settlement of Investment Disputes** on **June 27, 2024**, estimating damages of **at least $5 billion**[55](index=55&type=chunk) [Canada Revenue Agency Audit](index=34&type=section&id=Canada%20Revenue%20Agency%20Audit) The Company is engaged in ongoing audits and reassessments by the Canada Revenue Agency regarding transfer pricing for its Mexican and Barbadian subsidiaries [Transfer Pricing Reassessments (Mexico)](index=34&type=section&id=Transfer%20Pricing%20Reassessments%20(Mexico)) The CRA reassessed Franco-Nevada for 2013-2016 taxation years regarding its Mexican subsidiary, asserting additional taxes, penalties, and interest - The **CRA reassessed Franco-Nevada for 2013-2016 taxation years** regarding its Mexican subsidiary, asserting **$21.8 million in additional taxes, $8.8 million in transfer pricing penalties, and $15.9 million in interest and other penalties**[58](index=58&type=chunk) - The Company has filed formal Notices of Objection and commenced an appeal in the Tax Court of Canada, posting security for **50%** of reassessed amounts[58](index=58&type=chunk) [Transfer Pricing Reassessments (Barbados)](index=36&type=section&id=Transfer%20Pricing%20Reassessments%20(Barbados)) The CRA reassessed Franco-Nevada for 2014-2017 taxation years regarding its Barbadian subsidiary, asserting additional taxes, penalties, and interest, with further proposed reassessments - The **CRA reassessed Franco-Nevada for 2014-2017 taxation years** regarding its Barbadian subsidiary, asserting **$34.0 million in additional taxes, $12.8 million in transfer pricing penalties, and $15.8 million in interest and other penalties**[59](index=59&type=chunk) - The **CRA proposed reassessments for 2018 and 2019**, with estimated **additional taxes** of **$46.9 million and potential transfer pricing penalties of $17.8 million**[59](index=59&type=chunk) - If the **CRA reassesses 2020-2023** on the same basis, the **Company estimates potential additional Canadian tax of $234.6 million, transfer pricing penalties of $88.7 million, and interest/other penalties of $44.3 million**[59](index=59&type=chunk) [Note 24 – Subsequent Events](index=36&type=section&id=Note%2024%20–%20Subsequent%20Events) Subsequent to June 30, 2024, Franco-Nevada completed several significant transactions, including the acquisition of the Yanacocha Royalty and Cascabel Stream - **Acquired the Yanacocha Royalty** on **August 13, 2024**[60](index=60&type=chunk) - **Funded the EMX Term Loan** on **August 9, 2024**[60](index=60&type=chunk) - **Acquired the Cascabel Stream** on **July 15, 2024**[60](index=60&type=chunk) - **Received full repayment of the SolGold Term Loan** on **July 17, 2024**[60](index=60&type=chunk) - **Acquired additional common shares of G Mining Ventures** for **$25.0 million** on **July 12, 2024**[60](index=60&type=chunk)

Core Viewpoint - Franco-Nevada reported a decrease in year-over-year results primarily due to the absence of contributions from Cobre Panama and lower production at Candelaria and Antapaccay, despite benefiting from record gold prices in Q2 2024 [1][5]. Financial Highlights - In Q2 2024, Franco-Nevada sold 110,264 GEOs, a decrease of 35% compared to Q2 2023, with revenue of $260.1 million, down 21% [2][5]. - Adjusted EBITDA for Q2 2024 was $221.9 million, a decrease of 20% year-over-year, with net income of $79.5 million, down 57% [2][5]. - The company recognized an additional income tax expense of $69.8 million due to new tax measures related to the Global Minimum Tax initiative [2][8]. Sector-Leading ESG - Franco-Nevada is rated 1 in precious metals and gold by Sustainalytics, and has committed to the World Gold Council's Responsible Gold Mining Principles [3]. - The company has a diverse representation of 40% at the Board and top leadership levels [3]. Growth and Optionality - The company anticipates stronger contributions from Candelaria and new mines such as Tocantinzinho, Greenstone, and Salares Norte in the second half of 2024 [1][6]. - Franco-Nevada has added two long-life assets: a gold stream on SolGold's Cascabel project and a royalty on Newmont's Yanacocha operations [1][6]. Portfolio Updates - Precious Metal assets saw a decrease in GEOs sold from 132,033 in Q2 2023 to 82,350 in Q2 2024, with lower contributions from Cobre Panama, Antapaccay, and Candelaria [9]. - New projects like Tocantinzinho and Salares Norte are expected to ramp up production, contributing positively in H2 2024 [9][10]. Dividend Declaration - The Board of Directors declared a quarterly dividend of $0.36 per share, reflecting a 5.88% increase [2][14].

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