Franco-Nevada revenue up on output from precious metals assets

Franco-Nevada reported revenue of US$309.5 million in the September 2023 quarter, up 2% from $304.2 million in the same period last year. The increased revenue is mainly due to the increase in gold equivalent ounces from its precious metals assets and higher gold prices, according to the gold-focused royalty and streaming company.

Precious metals accounted for 77.8% of Franco-Nevada's revenue, with gold responsible for 64.5%, silver for 10.2%, and PGM for 3.1%.

Net income was $175.1 million, or $0.91 per share, up 11% from $157.1 million, or 0.82 per share, year-on-year.

Franco-Nevada sold a total of 160,848oz of gold equivalent, of which 125,337oz were from precious metals, compared to 176,308oz and 120,542oz, respectively, last year.

"Our core precious metal assets anchored the quarter, resulting in increased revenue and earnings over the prior year period," chief executive Paul Brink said. "We are looking forward to added precious metal contributions from a number of new mines in 2024 and, in particular, from the Tocantinzinho stream where G Mining Ventures is progressing construction on time and budget. Franco-Nevada is debt-free and is growing its cash balances."

Cobre Panama

The royalty and streaming company said that the output delivered and sold by First Quantum's Cobre Panama mine in the September quarter was significantly higher than in the same quarter last year, driven by higher grades and expansion ramp-up.

Panama has been faced with nationwide protests following the approval of the revised Cobre Panama contract in October. In response to the protests, the government placed a moratorium on new mining in the country, and several lawsuits are challenging whether the new contract is constitutional.

Franco-Nevada has contributed $1.36 billion to the construction of Cobre Panama, and the mine was responsible for 17% of total revenue in 2022.

While production remains uninterrupted, Franco-Nevada said that the protests have caused disruptions on-site and shortages in certain supplies.

"Production at the Cobre Panama mine has not been impacted and we, along with the operator, First Quantum, are closely monitoring the unfolding situation," Franco-Nevada said.