Canadian Mining Journal


GOLD: Franco-Nevada posts record results

The plant at First Quantum Minerals' Cobre Panama mine in Panama. Credit: First Quantum Minerals

The plant at First Quantum Minerals’ Cobre Panama mine in Panama. Credit: First Quantum Minerals

TORONTO – Royalty and streaming company Franco-Nevada just had its best year ever, reporting revenue of US$844.1 million on the sale of 516,438 gold-equivalent oz.

Net income for the year was US$344.1 million or $1.83 per share.

The final quarter of 2019 was also the company’s best quarter ever, with revenue of US$258.1 million on sales of 153,396 gold-equivalent oz. Cash costs were a low US$287 per gold-equivalent oz. sold.

The strong results were boosted by production from First Quantum Minerals‘ Cobre Panama mine in Panama where Franco-Nevada has a gold and silver stream. Commercial production at the mine began in fall 2019. Franco-Nevada sold 43,554 gold-equivalent oz. from the mine last year, with sales expected to increase to 90,000-110,000 gold-equivalent oz. this year.

“Results benefited from the start of precious metals deliveries from Cobre Panama, strong production at other key assets and higher precious metals prices,” said Franco-Nevada CEO David Harquail in a release. ”Thanks to our diversified portfolio, we expect good overall growth in 2020 mostly driven by the continued Cobre Panama ramp-up despite a more conservative outlook for our energy assets. Franco-Nevada is generating substantial free cash flow and, post year-end, is now debt free. Franco-Nevada continues to be the gold investment that works.”

For 2020, Franco-Nevada expects even stronger results; the company is projecting attributable royalty and stream sales of between 550,000 and 580,000 gold-equivalent oz. for the year.

In addition to royalty and streaming revenue from gold (the majority of its revenue at US$545.8 million), silver, platinum group metals and other mining assets, Franco-Nevada has investments of energy that brought in US$86 million last year. The company has a target of no more than 20% of its revenue coming from energy.

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