Franco-Nevada(FNV)2024-08-14 15:19Financial Data and Key Metrics Changes - Q2 2024 revenues were 329.9 million in Q2 2023, but up from 221.9 million, with adjusted net income at 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 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 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]