Franco-Nevada(US:FNV)2025-08-11 15:00Financial Data and Key Metrics Changes - Franco Nevada reported record financial results for Q2 2025, with total revenue increasing by 42% to $369.4 million compared to Q2 2024 [19][20] - Adjusted EBITDA also reached a record high, increasing by 65% to $365.7 million from $221.9 million in the prior year [20][22] - Adjusted net income was $238.5 million, or $1.24 per share, reflecting a 65% increase year-over-year [23] Business Line Data and Key Metrics Changes - Total GEOs sold increased by 2% to 112,093 in Q2 2025, with precious metal GEOs sold rising by 12% to 92,449 [17][19] - Revenue from precious metals accounted for 82% of total revenue, with Candelaria being the largest contributor at 15% [23][24] - Diversified GEOs sold decreased to 19,644 from 27,914 in the prior year, attributed to higher gold prices impacting the conversion of diversified revenue to GEOs [19] Market Data and Key Metrics Changes - Average gold prices increased by 40% year-over-year, while silver prices rose by 17% [16] - Prices for platinum and palladium rebounded, while iron ore and oil prices remained volatile and lower compared to the previous year [16] Company Strategy and Development Direction - The company is focused on long-term growth through the acquisition of high-quality gold assets, with a strong pipeline of potential deals [13][95] - Franco Nevada aims to benefit from the unlocking of mine permitting processes in the U.S., with several projects moving ahead [7] - The company is also exploring opportunities to support companies as a long-term financial backer, reducing their financial risk [39] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the potential restart of operations at Cobre Panama, viewing it as a significant upside opportunity [30][94] - The company remains well-capitalized with approximately $1.35 billion in available capital after recent acquisitions [25] - Management indicated that the current pricing environment for gold and silver is favorable, with guidance based on $3,250 gold and $37 silver prices [92] Other Important Information - The company acquired a royalty on IAMGOLD's Cote Gold Mine, which is expected to contribute significantly to future revenues [9][46] - Franco Nevada has begun receiving deliveries from Cobre Panama based on their stream agreement, expecting approximately 10,000 GEOs in Q3 [27] Q&A Session Summary Question: Why did Franco decide to suspend the arbitration proceeding for Cobre Panama? - Management indicated that the best outcome is to see the mine back in operation, and the suspension was requested by the government to find a new solution [30] Question: Will the available capital affect future deal sizes? - Management stated that the business continues to generate significant cash flow, and there are no constraints on capital for future transactions [31] Question: What impact will platinum price rebounds have on recent acquisitions? - Management noted that the rebound in platinum prices has positively affected operations and improved the economics of extension projects [36] Question: What is the outlook for the Permian asset base? - Management expressed that production levels may remain consistent but could soften slightly with lower oil prices [51] Question: How much gold inventory remains on the balance sheet? - The company reported having 2,469 gold ounces remaining in inventory as of June [55] Question: What is the expected contribution from the New Prosperity project? - Management indicated that the project could yield approximately 40,000 to 50,000 ounces of gold per year if developed [63] Question: What are the implications if Cobre Panama remains offline into 2026? - Management stated that they have not built Cobre Panama into their guidance, viewing it as a significant upside opportunity [94] Question: What is the strategy regarding asset acquisitions? - Management confirmed a focus on acquiring quality gold assets while remaining opportunistic for diversified assets [95][98]