Earnings call transcript: Franco-Nevada Q2 2025 sees earnings beat, stock dips

Franco-Nevada Corporation reported strong Q2 2025 earnings, with an earnings per share (EPS) of $1.28, surpassing analyst forecasts of $1.13, marking a 13.27% surprise. Despite this earnings beat, revenue fell slightly short of expectations, coming in at $369.4 million compared to the forecasted $375.91 million. In pre-market trading, Franco-Nevada’s stock saw a decline of 1.78%, with shares priced at $168.54. According to InvestingPro data, the company maintains a "GOOD" overall financial health score, with particularly strong cash flow and profitability metrics.

Key Takeaways

• Franco-Nevada’s Q2 2025 EPS exceeded expectations by 13.27%.
• Revenue increased by 42% year-over-year to $369.4 million.
• The stock price dropped 1.78% in pre-market trading despite strong earnings.
• Gold prices surged 40% year-over-year, benefiting the company’s revenue.
• Franco-Nevada’s acquisitions and project developments are set to bolster future growth.

Company Performance

Franco-Nevada achieved record financial results in Q2 2025, with total revenue increasing by 42% year-over-year. The company’s diversification strategy and focus on precious metals have paid off, with 82% of revenue derived from these assets. Strong performances from key projects like Guadalupe and Candelaria, along with new royalties from IAMGOLD’s Cote Gold Mine, contributed to this robust growth. The company boasts impressive gross profit margins of 89.17% and has maintained dividend payments for 18 consecutive years, demonstrating operational excellence and commitment to shareholder returns.

Financial Highlights

• Revenue: $369.4 million, a 42% increase year-over-year.
• Adjusted EBITDA: $365.7 million, up 65% from the previous year.
• Adjusted net income: $238.5 million, translating to $1.24 per share, a 65% increase.
• Total GEOs sold: 112,093, a 2% year-over-year increase.

Earnings vs. Forecast

Franco-Nevada’s EPS of $1.28 surpassed the forecasted $1.13, resulting in a 13.27% earnings surprise. However, the company’s revenue of $369.4 million was slightly below the expected $375.91 million, reflecting a 1.73% shortfall. This mixed result highlights the company’s strong earnings capability despite facing revenue challenges.

Market Reaction

In pre-market trading, Franco-Nevada’s stock decreased by 1.78%, with shares priced at $168.54. This decline occurred despite the company’s earnings beat, possibly due to the revenue miss and broader market dynamics. The stock remains near its 52-week high of $179.99, having delivered a strong year-to-date return of 46.64%. InvestingPro analysis shows the stock generally trades with low price volatility, with analyst targets ranging from $180 to $210 per share. For deeper insights into Franco-Nevada’s valuation and growth potential, investors can access comprehensive Pro Research Reports, available exclusively on InvestingPro.

Outlook & Guidance

Franco-Nevada maintains a positive outlook for the remainder of 2025, projecting total GEOs to range between 465,000 and 525,000. The company is leveraging a $3,250 gold price assumption, with potential upside from projects like Cascubel and Castle Mountain. Future EPS forecasts for Q3 and Q4 2025 are set at $1.32 and $1.41, respectively.

Executive Commentary

CEO Paul Brink emphasized Franco-Nevada’s strategic focus, stating, "We want to be the go-to gold stock." He also highlighted the significance of the Cobre Panama project, describing it as "the biggest free option you can get in the royalty and streaming industry." These statements reflect the company’s commitment to expanding its gold asset portfolio.

Risks and Challenges

• Fluctuating gold prices pose a risk to revenue stability.
• Potential delays in project developments could impact future earnings.
• Market volatility may affect stock performance and investor sentiment.
• Currency fluctuations could impact international revenue streams.
• Regulatory changes in key markets may pose operational challenges.

Q&A

During the earnings call, analysts inquired about the suspended Cobre Panama arbitration, to which executives responded that it was to facilitate a potential restart. Questions also focused on the company’s strategy of supporting mining companies financially and the potential for developing the Prosperity project in the next 2-3 years.

Full transcript - Franco Nev Corp (FNV) Q2 2025:

Joanna, Conference Operator: Good morning, and welcome to Franco Nevada Corporation’s Second Quarter twenty twenty five Results Conference Call and Webcast. This call is being recorded on 08/11/2025. At this time, all lines are in a listen only mode. Following the presentation, we will conduct a Q and A session where you may ask a question through the phone line or webcast. If you are joining by webcast, you may submit a written question for the Q and A session at any time during this call by typing your question in the Q and A section of the webcast platform.

I would now like to turn the conference over to your host, Candida Hayden, Senior Analyst Investor Relations. Please go ahead.

Candida Hayden, Senior Analyst Investor Relations, Franco Nevada: Thank you, Joanna. Good morning, everyone. Thank you for joining us today to discuss Franco Nevada’s Second Quarter twenty twenty five Results. Accompanying this call is a presentation which is available on our website at franconevada.com, where you will also find our full financial results. The presentation is also available to view on the webcast.

During our call this morning, Paul Brink, President and CEO of Franco Nevada, will provide introductory remarks, followed by Sandy Brenna, Chief Financial Officer, who will provide a brief review of our results. This will be followed by a Q and A period. Our full executive team is available to answer any questions. Participants may submit questions by telephone or via the webcast. We would like to remind participants that some of today’s commentary may contain forward looking information, and we refer you to our detailed cautionary note on slide two of this presentation.

I will now turn over the call to Paul Brink, President and CEO of Franco Nevada.

Paul Brink, President and CEO, Franco Nevada: Thank you, Candida, and good morning all. For Q1 this year, we announced record financial results. And now for Q2, we’re surpassing those with new records. Our portfolio largely produced as expected for the quarter, and high gold prices drove record revenue, operating cash flow, adjusted EBITDA margins, and earnings. We also saw constructive developments in Panama, including approval of the preservation and safe maintenance plan and shipment of the remaining concentrate from Cobre Panama.

Sentiment in country continues to shift in favor of a restart of the operation, and I am encouraged by the Molina government’s continued commitment to resolving the situation. We have attractive growth over the next five years from our existing portfolio. In particular, we’ll be big beneficiaries of the move to unlock mine permitting process in The U. S. Three projects in our outlook and are moving ahead: Perpetua’s Stipnite Gold, Hudbay’s Copper World, and the news this morning is that Castle Mountain has been included in the FAST 41 permitting process.

One project that’s potentially new to our five year outlook is Cascubel. The new management team at Solgold has been starting approaches to accelerate production and is now indicating first production may occur as soon as 2028. One longer term development is worth noting. There’s been a positive shift in relations with the Chukotun First Nation at New Prosperity. You may recall that Franco has a stream financing agreement to acquire a 22% gold stream.

This could be a very meaningful growth driver for Franco if the Jilkutans decide to support mine development. During the quarter, we acquired a royalty on IAMGOLD’s Cote Gold Mine, one of Canada’s newest large scale gold mines, and we’re off to a good start. Since our acquisition, IAMGOLD has achieved nameplate throughput ahead of schedule and positive grade reconciliation. Cote and Gosselin have 16,000,000 ounces of M and I and more than 4,000,000 ounces of inferred resources. IAMGOLD is targeting more than 20,000,000 ounces of M and I and an updated resource expected in the 2026.

The current mill is undersized for that scale of resource, and Imgold’s planning to publish an updated technical report in 2026 with expansion scenarios. Our team believes something in the order of 20,000,000 tons per annum throughput would be better suited to the size of the ore body. Post quarter end, we acquired a royalty on AngloGold’s Arthur project, comprised of the Merlin and Silicon deposits, which together form one of the largest gold discoveries in recent years in Nevada. AngloGold has rapidly expanded the resources in the last couple of years, and I wouldn’t be surprised if the current resource, which stands at 3,400,000 ounces indicated and 12,900,000 ounces inferred, grows at a similar trajectory to Goldstrike or Cortez in their heyday. Since our acquisition, AngloGold has announced a transaction to further consolidate the district and has pointed to ongoing high grade drilling success.

The Merlin initial assessment outlines the first number of years of production at 1,000,000 ounces per annum, and if more high grade is found, that production rate could be maintained for an extended period. The scale of the operation contemplated is already in the league of Goldstrike and Cortez. The last two years have been some of our most productive adding assets to the portfolio. Last year, we added interest in some of the world’s biggest mineral endowments: the Monsieuracocha operations in Peru, Zabania’s PGM operations in the western limb of the Bushveld in South Africa, and SolGold’s Cascobal Copper Gold development project in Ecuador. This year, we’ve expanded our exposure in Canada and The U.

S, adding current production from the Porcupine and Corte operations in Ontario, and the Arthur project, as mentioned, in our namesake state Nevada. Combined, the acquisition over the last two years have transformed our longer term growth outlook. Add the potential of a Cobre restart and longer term development of new prosperity, and you have the most exciting growth outlook in the space. The deal pipeline continues to be strong. We’ve dipped into our corporate revolver to complete the Arthur acquisition, and we’re happy to use this facility for transactions, for the transactions we see ahead of us.

With roughly $1,300,000,000 in annual cash flow generation, we can repay the facility rapidly. With that, I’ll pass the call over to Sandy.

Sandy Brenna, Chief Financial Officer, Franco Nevada: Thank you, Paul. Good morning, everyone. As Paul mentioned, Franco Nevada reported record financial results for second quarter ended 06/30/2025. Our portfolio generally performed in line with expectations and we continue to benefit from higher precious metal prices. Precious metal prices with gold in particular continued to be strong.

On slide four, you will see the comparison of commodity prices for Q2 twenty twenty five and Q2 twenty twenty four. Gold and silver prices increased significantly year over year with the average gold price higher by 40% in the quarter and average silver price higher by 17%. We’ve also seen a rebound in prices for platinum and palladium. Prices for iron ore and oil continue to be volatile and were lower compared to prior year. However, you did see a significant increase in natural gas prices.

On slide five, we highlight some of the key metrics used to measure performance, total GEO sold, net GEO sold, revenue, and adjusted EBITDA. Total geos sold increased 2% to $112,093 in the quarter compared to $110,264 in second quarter twenty twenty four. Precious metal geos sold in the quarter were 92,449 higher by 12% compared to prior year. For the quarter, we did receive strong contributions from Guadalupe and Candelaria and continued to benefit from the recent acquisitions made at Yanacocha and West Flint. During the quarter, we recorded our first revenues related to the recently acquired royalties on Porcupine operated by Discovery Silver and Cote Gold operated by M.

We look forward to a full quarter of revenue from these assets in Q3. In addition to the better performance from Guadalupe and Candelaria and receiving GEOs from the recent acquisitions, we also benefited from continued ramp ups of operations at new mines, Tokonzinho, Greenstone and Salares Norte. With respect to the Hemlo NPI, it was another strong quarter showcasing the leverage of the NPI to higher gold prices. However, the NPI can vary depending on how much production comes from the area covered by our NPI lands. One asset that was lower than our expectation was Antapaccay, but this was solely due to timing of deliveries.

We expect a stronger second half of the year from this asset. Diversified geos sold were 19,644 for the quarter compared to 27,914 for prior year quarter, despite diversified revenue being slightly lower year over year, 62,700,000.0 versus $64,600,000 The GEO sold reduction is due to the impact of higher gold prices when converting diversified revenue to GEOs. As you can see on the chart, total revenue increased 42% for the quarter to $369,400,000 which is a record for Franklin, Nevada. Precious Metals accounted for 82% of revenue. Adjusted EBITDA, also a record, was 65 higher for the quarter at $365,700,000 compared to $221,900,000 in second quarter twenty twenty four.

Slide six details the key financial metrics reported by the company. As mentioned, total GEO sold were 112,093, generating $369,400,000 in record revenue in the quarter. As you know, Franco Nevada is a royalty and streaming company. For royalties, we typically receive payment in cash. However, for some of our royalties, we do take payment in kind rather than cash and have been accumulating the inventory over time.

To fund the Cote Gold royalty acquisition, we liquidated the majority of our inventory position. This resulted in a gain on sale of gold bullion of $42,200,000 as the average cost of the gold ounces we sold was approximately $2,350 per ounce. At the June, we still have 2,469 gold ounces remaining in inventory. With respect to costs, we did have an increase in cost of sales compared to Q2 twenty twenty four due to higher stream ounces sold. Cost of sales was $33,500,000 versus $29,100,000 last year.

Depletion increased to $64,000,000 versus $52,900,000 a year ago, as we received more GEOs from Candelaria and began depleting our recent transactions Yanacocha, Western Limb and Porcupine. This impacted depletion as those assets are currently higher per ounce depletion assets. Adjusted net income was $238,500,000 or $1.24 per share for the quarter, both up 65% versus prior year. Slide seven highlights the continued diversification of the portfolio. 82% of our Q2 twenty twenty five revenue was generated by precious metals with revenue being sourced 86% from The Americas.

And our largest contributor to revenue was Candelaria at 15% for the quarter. Slide eight illustrates the strength of our business model to continue to generate high margins. For second quarter twenty twenty five, the cash cost per GEO is $299 per GEO. This compares to $264 per GEO in prior year. As the gold price has risen, Franco Nevada has seen a significant increase in our margin per GEO.

Margin was just shy of $3,000 per GEO in the quarter. Slide nine summarizes the financial resources available to the company. The company had $160,300,000 in cash and cash equivalents on hand at the June. When including our credit facility of $1,000,000,000 and our equity investments, total available capital at 06/30/2025 is $1,600,000,000 However, in July, we did fund the acquisition of a royalty on AngloGold’s Arthur project in Nevada as mentioned by Paul for $250,000,000 in upfront cash. We did draw on our credit facility for $175,000,000 to assist in funding this acquisition.

This results in total available capital of approximately $1,350,000,000 currently. The company continues to remain well capitalized to continue to add long life, high quality assets to the portfolio. And before I turn it over to Joanne to take questions, I would like to remind you of our guidance ranges for the year. Our original guidance was 465,000 to 525,000 total GEOs for 2025 with 385,000 to 425,000 precious metal GEOs. This was using 2,800 per ounce gold price.

By updating price assumptions with current commodity prices, we continue to remain on pace to achieve our total GEOs and precious metals GEO guidance ranges. Also, as mentioned, we will recognize revenue from Cobre Panama in third quarter. As the concentrate on-site has now been shipped, Franco Nevada has begun to receive deliveries of gold and silver from Cobre Panama based on our stream agreement. We expect to receive approximately 10,000 GEOs in Q3. And with that, I will pass it over to Joanna, and we’re happy to answer any questions you may have.

Joanna, Conference Operator: Of course. If you are joining us on the webcast, please submit your question through the Q and A section of the webcast platform. First question on the phone is from Fahad Tariq at Jefferies. Please go ahead.

Fahad Tariq, Analyst, Jefferies: Hi, thanks for taking my question. On Cobre Panama, can you maybe give some more color on why Franco decided to suspend the arbitration proceeding?

Paul Brink, President and CEO, Franco Nevada: Fahad, it’s Paul. The best outcome for us at Cobre Panama, and I’d say for First Quantum as well, is to see that mine get back into operation. So I think between First Quantum, the government themselves, we’re all like minded to try and see a positive resolution. It had been a request of the asset from the Molino government that the arbitrations be suspended to give the space to try and find a new solution. So we are very amenable to working with the government to allow that to happen.

Fahad Tariq, Analyst, Jefferies: Okay. And then maybe switching gears to corporate development. Given the available capital is now lowered, you had some pretty large transactions particularly Cote. Does that change how you think about deal size over the next year or so?

Paul Brink, President and CEO, Franco Nevada: No, I don’t think so. Our business continues to generate more and more cash every year. Currently, it’s around 1,300,000,000.0 a year. So no constraints on the capital side between the available capital with our revolver, between the amount of cash we’re generating. We’ve got plenty of firepower.

I don’t think it restricts us in any ways.

Fahad Tariq, Analyst, Jefferies: Okay, great. Thank you.

Joanna, Conference Operator: Thank you. The next question comes from Larry Liu, CIBC. Please go ahead.

Larry Liu, Analyst, CIBC: Good morning, Paul. Good morning, Sandeep. Thanks for taking my questions, and congrats on another financial strong quarter. I guess I’ll start off my question asking about platinum. Paul, earlier you mentioned that platinum prices have rebound and last December Franco did a Sibanye and Western Limb acquisition.

I’m just wondering what kind of positive impact would that have on the asset and what’s that factor in when the acquisition was first happened?

Ian Gray, Executive, Franco Nevada: Hi there, it’s Ian Gray speaking. Thanks for the question. Yes, we’ve been very pleasantly surprised versus our expectations with platinum. The price has moved up very significantly. We believe this provides an excellent tailwind to those operations and should allow a number of the extension projects that which we spoke about at the time to have much improved economics, increases our confidence in the long term of those assets.

Larry Liu, Analyst, CIBC: For sure. That makes sense. Thanks, Ian. While I have you as well, I’m gonna follow Fahad and ask about corporate development as well. I know it’s been there’s historical precedents as well.

Franklin Nevada sometimes takes shares in the companies such as G mining or Discovery Silver. I’m wondering has that strategy changed in an upcoming time with gold prices hitting record high? And I guess second part of that question is what’s the intention of those shares? I see earlier it’s been factored into the potential capital available for further acquisitions.

Paul Brink, President and CEO, Franco Nevada: Thanks for the question. And maybe getting to heart of it, it’s part of a longer term strategy. And as a business, we compete in auctions to buy streaming assets and royalties. One area of the business we’ve been trying to develop is to say, how can we be not just transactional, but a financial backer to companies? If we can find great assets, great management teams that we want to support for the longer term, how can we do that?

And so that strategy has played out with GMEN, it’s played out with Discovery. We think that for those players, can differentiate them and be their backer so that we can reduce the financial risk of those companies. And we think in doing that, we can increase their valuations and their ability to be successful over time. So far that strategy has worked out terrifically. And so we plan to continue it both with those players.

Also if there are other teams that fit that mold, we’d love to do more deals in that. But our overall objective is how do we support them as a long term financial backer?

Larry Liu, Analyst, CIBC: For sure, yeah. That strategy definitely worked out really well for Franco Nevada. I guess my last question is focused more around the long term guidance, if I may. So earlier in the call, Paul, you mentioned that there is a potential upward revision because of Cascabot now could potentially be included in the five year guidance. We’re wondering if there’s any more assets that could potentially be a surprise and included in your future five year guidance?

And when can we expect an updated five year guidance? Would that be next year?

Paul Brink, President and CEO, Franco Nevada: Yes, we always we do the guidance in the first part of the year along with our annual results. So that’s when we’re updated. The two bits of positive news there, obviously on Casketball, looking at scenarios to get things up and running sooner. There’s two parts to that. The one is Tandayama, the open pit deposit.

They’ve been drilling it up, having good success, moving up some high grade areas. So potentially that can be early material to the mill. Also looking at scenarios to start with sublevel caving rather than a block cave. I think they’re making good progress on both of those, and that’s increasing their confidence that they can get it in production sooner. The other good news I mentioned today, it is in our five year growth outlook.

It’s just the certainty of what’s going ahead. It’s Castle Mountain. We do have two royalties on that, 2.65% royalty that covers the whole property. We’ve got a further 2% royalty that covers one of the pits in particular, that hopefully will be at the front end of the mine plan, taking that up to 4.65 on par of the ore body. It’s about a 200,000 ounce per year producer.

So it could be a meaningful kicker in the back end of our five year guidance.

Larry Liu, Analyst, CIBC: Perfect. Sounds good. Sounds like there’s more upside investors can look for, for sure. Thanks, Paul. Thanks, Ian, and thanks, Sandeep.

Thanks for taking my question. Thank you.

Joanna, Conference Operator: Thank you. The next question comes from Matthew Murphy at BMO Capital Markets. Please go ahead.

Matthew Murphy, Analyst, BMO Capital Markets: Hi. Big deal during the quarter on the Cote royalty. Just wondering if you can elaborate a bit on your view on the asset. What gave you the confidence and the due diligence to take on a profits based royalty? And are you willing to share your views on Cote’s path to being a low cost gold mine?

Ian Gray, Executive, Franco Nevada: Thank you Matthew. It’s Ian Gray again here. So I guess first of all it’s worth highlighting that we did work with Ionbold on the acquisition, so that gave us unique insight into how it’s currently operating and the long term for the asset. This honestly was one of the most exciting opportunities that we’ve looked at in quite some time. The scale of the resource is quite impressive, and if you refer to I’m Gold’s call last week, they’re starting to talk about a super fit between Cote and Gosselin.

So the potential of this to mirror some of the production profiles you’ve seen in assets like Detour Malartic, we see as quite robust, and that’s based on being able to actually look at the data with I’m GOLD and make that assessment. So we see as a result fantastic opportunity going forward for the expansion and throughput to suit the scale of the resource, and what is also very exciting is that hopefully there’s some news for you relatively near term on this as well as I’m both has identified that they’ll be putting up to out an updated resource in the first half of next year, then hopefully a technical report identifying some of the production scenarios to follow. So we were able to get a sneak peek into the asset with the fact that we were able to uniquely do due diligence with Ion Bolt, and that gave us the confidence to transact. And in terms of the cost profile, it’s a good question, this is a new highly automated line with best practices and a team that we see as really first class led by Renault. And so as a result, we have a high level of confidence in the costs and you will note this is you know a gross margin royalty, so the deductions are fairly limited and we’re able to work again with IAMGOL to craft a form of agreement that we’re very happy with.

So overall an extremely exciting opportunity which we think will add low risk growth to Franco Nevada over the long term.

Matthew Murphy, Analyst, BMO Capital Markets: Okay, thank you for that. Also a question just on the quarter, you were a bit higher than expected on geos from oil and gas and I guess Permian was one of the drivers. What’s the outlook for your Permian asset base back half of the year?

Paul Brink, President and CEO, Franco Nevada: Hi, it’s Jason O’Connell speaking. We were pleasantly surprised by the performance of our Permian assets in the quarter. We had increased volumes over what we’ve seen last year. Part of that is a result of drilling on our lands and at times operators will hit areas of higher royalty rates across our acreage footprint. So we benefited a little bit from that.

Going forward, those assets in the Permian are usually fairly reflective of the overall performance of the basin. So it will depend on oil prices and how active drillers are. You will have seen oil prices have pulled back a little bit in recent months. So I would expect that production levels and drilling activity will likely stay reasonably consistent, perhaps soften slightly with the lower price.

Matthew Murphy, Analyst, BMO Capital Markets: Okay. Thank you.

Joanna, Conference Operator: Thank you. The next question comes from Daniel Major at UBS. Please go ahead.

Daniel Major, Analyst, UBS: Hi. Yes, thanks. Thanks for the questions. Just first one to clarify, Sandeep, how much gold did you say you still had on the balance sheet in terms of inventory? I just didn’t quite catch that.

Sandy Brenna, Chief Financial Officer, Franco Nevada: Hey, Daniel. So at the June, we had 2,469 gold ounces still remaining in inventory.

Daniel Major, Analyst, UBS: Okay. So quite small. Okay. Thanks. Yeah.

And then the second question, just thinking about the guidance. So both the precious metal and the total GEOs is unchanged, yet you added about 20,000 ounces of additional sales that wasn’t in the previous guidance from Cote and from Cobre Panama. What’s the offset? Because I guess the implied non gold GEOs is the same even after the change in the gold price assumption from 2,800 to 3,200. So what’s the offset in the portfolio that means there’s not a net upgrade to the precious metal GEO guidance?

Sandy Brenna, Chief Financial Officer, Franco Nevada: Yeah. So I guess the key message there is that even without Cobre Panama and Cote, we’re still within the guidance ranges. Anything from Cote and Cobre Panama is all incremental.

Daniel Major, Analyst, UBS: Right. So does that mean that all else equal production is likely to be more skewed to the upper end of the range if you’ve added 20,000?

Sandy Brenna, Chief Financial Officer, Franco Nevada: Yeah. That’s a fair assumption.

Daniel Major, Analyst, UBS: Got it. Okay. Thanks. And then the yeah. The final question.

The new Prosperity option, the 22% gold stream, I’m not particularly familiar with this project. Can you give us a bit of a sense of quantum of what the contribution to Franco Nevada might be?

Paul Brink, President and CEO, Franco Nevada: Prosperity is a large copper gold porphyry system in BC. The transaction that we had done was back in 2012. At the time they were trying to get it permitted, They had received a BC permit, but weren’t able to get a federal permit. Part of the issue was that they didn’t have support of the Chalkotin First Nation at the time. So the project has effectively been parked for many years since then.

The shift that came out in June is they have an agreement with Achalgopin. The ownership of just over 20% of the project is being provided to the Chilkooten Nation. The BC government is providing the funding, which is the payment that goes to Taseko for that transfer. And the Chilkooten will spend the next couple of years in a land use planning process to decide how they would like to proceed or not proceed with any project there. Our agreement, if I have it right, it’s a 22% gold stream.

The deposit is roughly half copper, half gold. I would have to check my numbers, but it’s in the order of 40,000, 50,000 ounces per year of gold that you would get from it.

Daniel Major, Analyst, UBS: Great. Thanks for that. I’ll let someone else have a go.

Joanna, Conference Operator: Thank you. The next question comes from Tanya Jakusconek at Scotiabank. Please go ahead.

Tanya Jakusconek, Analyst, Scotiabank: Great. Good morning, everybody. Thank you so much for taking my questions. Just to finish off, Sandeep, on the gold bullion. I mean, it’s only like about $8,000,000 that thereabout.

Why wasn’t it just all sold?

Sandy Brenna, Chief Financial Officer, Franco Nevada: We sold what we felt was needed to fund the Cote transaction, Tanya. Plus, we do accumulate over time, like the bullion that we’ve had in inventory, roughly 45,000 ounces has been built up over time. Every quarter we do receive gold royalty payments in kind from some of our assets and we will continue to do so. So that balance could potentially grow again, depending upon what the deliveries are.

Tanya Jakusconek, Analyst, Scotiabank: Okay. And remind me which ones do you take in kind, which royalties?

Sandy Brenna, Chief Financial Officer, Franco Nevada: So there’s a handful. We take Detour, Tasiast, Kirkland Lake, Porcupine, and Magino in kind.

Tanya Jakusconek, Analyst, Scotiabank: Okay. All right. So, maybe we can start building a bit of an inventory there. Okay. Thank you for that.

And just maybe just looking again at your guidance, is it safe to assume, like I’m reading our previous notes, I think we were saying that Q3 was supposed to be generally equal to Q4 or thereabout. And with that 10,000 GEOs coming now in Q3 from Cobre Panama, is that a bit of a skew? Should I be thinking a little bit higher in Q3 and lower in Q4 on that forty seven point five three percent first half, second half?

Sandy Brenna, Chief Financial Officer, Franco Nevada: I think that’s a fair assumption. Obviously, we expect to get the bulk of the deliveries in Colvard Panama in Q3. Some could push into the early part of Q4. It just depends upon where the shipments go. But in terms of just overall, that’s a fair assumption.

Tanya Jakusconek, Analyst, Scotiabank: And I hate asking this, but any guidance on that HAMLO and PI?

Sandy Brenna, Chief Financial Officer, Franco Nevada: Your guess is as good as mine.

Tanya Jakusconek, Analyst, Scotiabank: Okay. And then can I be reminded, I saw the Solaris buyback, Goldfield bought back that 1%? Can you just remind me which of your which ones have royalty streams have some of these buybacks that are potentially coming due? It’s just there’s a lot of money available now that gold price is high, so there’s potential for these buybacks. Can you just remind me which ones are you have and what are coming up on buybacks?

Ian Gray, Executive, Franco Nevada: Hi, Tanya. It’s Ian again here. Perhaps some of the most relevant for you, and I would say, first of the asset handbook does a pretty good job summarizing for the full set, but some of the more relevant Cote has a buyback with IAMGOLD, which is up to 50% and that’s fairly significant in the scheme of things. Porcupine also has that mechanism in it as well. So those would be relevant assets to keep track of.

Tanya Jakusconek, Analyst, Scotiabank: Sorry, I missed the first one, the IAMGOLD one.

Ian Gray, Executive, Franco Nevada: Yes, yes.

Tanya Jakusconek, Analyst, Scotiabank: Yes, sorry, missed

Ian Gray, Executive, Franco Nevada: the Sorry, did you have a follow-up?

Tanya Jakusconek, Analyst, Scotiabank: Yes, I’m sorry. Missed

Ian Gray, Executive, Franco Nevada: yeah, on Cote, the recent transactions that both Cote and Porcupine have that feature.

Tanya Jakusconek, Analyst, Scotiabank: Perfect. And maybe since I have you on the line, just wanted to come back about the opportunities that you are seeing out there. I ask everyone in terms of what, how they’re looking at to their portfolio. You’ve done a couple, you’ve got a good mix between development and obviously production. The last two that you’ve done are adding right away.

Arthur Gold is further out. What are you seeing out there in terms of mix between production opportunities versus development? And I think the size had been in that 100,000,000 to $500,000,000 range. Is that still a good mix for you?

Ian Gray, Executive, Franco Nevada: Thank you, Tanya, for the question. I’d say, first of all, we’re extremely happy with how we’ve been able to deliver on our business development plan adding what we think are excellent assets with fantastic upside in North America. So we’ll continue to focus on assets similar to what you have seen, I would say Tanya in terms of size size and scale in the last twelve months being a very productive twelve months, we continue to see more of the same going forward. And so we’re hopeful we’ll be able to add significant growth to the portfolio. You’re right, we’ve had a couple of cash flowing assets and whenever we have the opportunity to transact on those, that’s first prize, but I think in terms of managing the overall portfolio, we need to have a balance and have some longer term growth.

So we’ll do both types of transactions as we move forward. At the moment, focus really is on precious metals growth and we have what I see as a very healthy pipeline of that moving forward and we’re focused on those private deals.

Tanya Jakusconek, Analyst, Scotiabank: Okay. And maybe, Paul, if I could squeeze one in for you, just on the Prosperity option. Gosh, $20.12 seems like a long time ago. I remember did we write that asset off at the time? Was it written off?

Paul Brink, President and CEO, Franco Nevada: So Tanya, the deal we had was to say we’d put up 300,000,000, I believe is the number for the financing if and when it got permitted. So haven’t had any capital that’s been expended on it. So no need to write anything off.

Sandy Brenna, Chief Financial Officer, Franco Nevada: Yeah. We took a small impairment at the time, Tanya, a few million dollars, which was just the costs associated with the asset. But, yeah, as Paul highlighted, nothing was funded under the capital commitment.

Tanya Jakusconek, Analyst, Scotiabank: Okay. All right. That was just what I was trying to understand. And then, Paul, I think you mentioned you think it’s going to take a couple of years in terms of getting this to the table. Is that what I understood?

Paul Brink, President and CEO, Franco Nevada: Yes. So to move the project forward, it needs the support of the Shokohu Nation. They have opposed mining in the past. Now they have an ownership stake in the project. So I think there’s obviously very material benefits that they could get if the mine does go ahead.

I have no idea of timeline other than to say, you know, I can only imagine that it will take some time for them to consider the change in circumstance and before they would make any decisions on how to move ahead.

Tanya Jakusconek, Analyst, Scotiabank: Okay. Well, thank you. It’s obviously positive if we can have more projects permitted in Canada and especially BC. Great. Thank you so much.

Joanna, Conference Operator: Thank you. The next question comes from Brian MacArthur at Raymond James. Please go ahead.

Candida Hayden, Senior Analyst Investor Relations, Franco Nevada0: Good morning. Thank you. Tanya asked a few of my questions, but can I just ask about Muscle White as well? You highlighted the NPI model leverage and again Hemmel is the one we’ve always focused on, but Muscle White was up pretty substantially this quarter. Is there anything other than just a straight gold price leverage going there with that 5% NPA, like the two up, you never got anything from the 2% NSR or anything yet?

Sandy Brenna, Chief Financial Officer, Franco Nevada: Hi, Brian, Sandy. Nothing from the NSR, but with respect to the NPI, it’s gold price leverage as well. There was a small catch up payment related to 2024 that we recorded in the quarter as well. So we were unrecruited with what we had estimated for last year. So part of that increase, but the bulk of it is just better production from Orla at the mine and just better operations and then obviously the leverage of the gold price.

Candida Hayden, Senior Analyst Investor Relations, Franco Nevada0: So just going forward, I mean, you did 7.7 this quarter. Should I think if these gold prices are the same and costs remain the same, everything’s the same, it should be more like $6,000,000 a quarter? Is that reasonable? You had $1,500,000 catch up? Or just ballpark, what might it be?

Sandy Brenna, Chief Financial Officer, Franco Nevada: I think $4,000,000 is reasonable.

Paul Brink, President and CEO, Franco Nevada: Okay.

Candida Hayden, Senior Analyst Investor Relations, Franco Nevada0: Thank you very much. That helps.

Paul Brink, President and CEO, Franco Nevada: Thank

Joanna, Conference Operator: you. There are no further questions on the phone line. I will turn the Q and A session over to Candida Hayden, who will take questions from the webcast.

Candida Hayden, Senior Analyst Investor Relations, Franco Nevada: Thank you, Joanna. Our first question comes from Lyle Green, a shareholder of the company. Precious metals prices have been a strong tailwind this quarter. Could you outline the assumed price environment underpinning your guidance and how sensitive your outlook is to the gold and silver price fluctuation? Also, are there any thresholds or scenarios under which asset allocation or hedging strategies might shift?

Sandy Brenna, Chief Financial Officer, Franco Nevada: Sure. So, Sandeep here, the pricing that we used for the guidance that we’ve given is $3,250 gold price and a $37 silver price. In terms of sensitivity, dollars 100 increase in the price of gold essentially results in about 4,700 GEOs lower for the other commodities when converting to GEOs. And with respect to hedging, we do not hedge, so we sell our gold at spot.

Candida Hayden, Senior Analyst Investor Relations, Franco Nevada: Our next question is from Lyle Green as well. What are the financial and strategic implications for Franco Nevada if the Cobre Panama asset remains offline into 2026? And how are you adjusting your portfolio risk exposure accordingly?

Paul Brink, President and CEO, Franco Nevada: Well, thanks for your question. The, you know, as you’ll recall, Cobre was shut down, we had impaired the asset fully. So, we haven’t built it into our guidance that it would be coming online in the near term. We’re very hopeful that the company will be able to find a resolution with the government that would see the mine come back into the operation. But it’s all upside to us.

We consider it the biggest free option that you can get in the royalty and streaming industry is investing in Franco on the option of Cobre coming back. We’re not dependent on it in any way. We have an extremely robust portfolio. We’ve got the most diversified portfolio in the space. So we look forward to Cobre coming back online, but it’s all upside.

Candida Hayden, Senior Analyst Investor Relations, Franco Nevada: The next question is from Bernie Pichy from Palisade Capital. Putting the last two quarters together, a pattern seems to be emerging. One, more aggressive business development M and A. Two, less interest in non precious metals. Three, greater focus on North America.

Is this the result of an overt strategy shift?

Paul Brink, President and CEO, Franco Nevada: Good question. Is there a strategy shift? No, there is. And maybe to reiterate, you know, what is our overall strategy? It’s we want to be the go to gold stock.

And so that means at any point in time, we want to be looking to add gold assets. As you go through, and I mean, through the cycle adding gold assets, as you go through the cycle, you do want to have a gut sense of where you are in the cycle. Are you in the top half of the cycle? Are you in the bottom half of the cycle? You want to keep adding gold assets through the cycle.

Where do you want to spend a lot of money? That’s at the bottom of the cycle. So gold has done very well. We’re keen to keep adding gold. You know, these prices, the key is you want to get into quality assets that are going to last for long term so that you can participate as the gold price appreciates over many decades.

So that is probably, hopefully what you see in all the deals that we’ve done is a real focus on long dated quality gold assets as we go through the cycle. Our diversification strategy is also unchanged. And the summary of it is it’s opportunistic for diversified assets. It’s, you know, does a great asset come to market like the royalty we have on Vale’s iron ore operations, where they just are some of the best iron ore bodies in the world. If those assets come along, we’ll buy them.

The other is if you have a downturn in industry and you can get a really good entry point into those commodities. So We don’t have to do it. We’re just patient. We do it where we can get good value.

So more of the deals that have come out in the mix is as a function of what’s available to us.

Candida Hayden, Senior Analyst Investor Relations, Franco Nevada: Thank you, Paul. There are no further questions from the webcast. This concludes our second quarter twenty twenty five results conference call and webcast. We expect to release our third quarter twenty twenty five results after market close on November 3. Thank you for your interest in Frank and Nevada.

Joanna, Conference Operator: Ladies and gentlemen, this concludes your conference call for today. We thank you for participating, and we ask that you please disconnect your lines.

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