Full Year 2023 Franco-Nevada Corp Earnings Call
The guidance range.
Also within the guidance range for precious metals with 488189 Geos sold.
The diversified assets, which include our non precious metal mining assets and energy assets.
<unk> and just under 140000 Geos sold for the year.
Okay.
Before I get further into the financial results I wanted to speak about Cobra, Panama turning to slide five.
Cobra, Panama as Franco, Nevada, as largest investment and has generated approximately 20% of revenue.
Before the Holton production. The mine was operating very well, having successfully completed its expansion to 100 million tons per year.
We were delivered 28318 geos during fourth quarter, and just shy of 129000 geos for the full year.
However, as previously disclosed Cobra, Panama, Hodgkin and preservation and safe management with production halted since November 2023.
On November 28, 2023, following protests and present <unk> called for a mining moratorium.
Supreme Court of Justice of Panama, released its ruling declaring lawful ROE six unconstitutional.
In light of these events, we carried out an impairment assessment of our Cobra Panama streams at December 31, 2023.
The recording of impairments as a judgment made by management based on available information at a point in time, which are used to determine the accounting treatment.
We took a prudent approach in our judgment of the facts and circumstances and based on the halting of production and the political environment surrounding the ruling by the Supreme Court.
As well as the significant share price impact we determined the recoverable recoverable amount under applicable accounting standards to be nil as at December 31, 2023.
As a result, we recognized a full noncash impairment loss of approximately $1 2 billion.
As previously disclosed we have provided a notice of intent to commence arbitration against the state of Panama.
While we believe in the strength of our claims the potential proceeds from the arbitration were not reflected in our impairment evaluation.
Our streams on Cobra, Panama remain valid and we are hopeful of a resolution between first quantum and the state of Panama and a restart of the mine at which time our deliveries would restart.
A situation, we would assess the recoverable amount of Cobra, Panama streams at that point in time.
Which may lead to a reversal of part or all of the impairment loss we recognized.
Moving on to the financial performance for the quarter on slide six we highlight the gold equivalent ounces sold for the last five quarters as well as the last five years.
Total geos sold were lower when compared to prior year with Q4, 2023, Geo sold being 152351 compared to 183886% and fourth quarter of 2022.
All of this precious metals Geos were 119, <unk> hundred 81 down approximately 8% from prior year.
For the quarter, the largest contributors to the lower precious metal Geos, where Cobra, Panama due to the halt in production as mentioned Stillwater, which was due to the impact of converting weaker platinum palladium revenue to Geos and candle area, which had lower production during the quarter.
The lower Geos from these assets was partially offset by a stronger production from both antibody and.
And <unk>, both of which had very strong fourth quarter.
Russias metal Geos represented 79% of total deals for the quarter and 78% for the full year.
Our diversified Geos are ballet royalty resulted in an increase in geos for the quarter compared to prior year due to higher iron ore prices.
As you know each quarter, we make an estimate of what the royalty will be with the actual amount being announced by Vale in late March and September each year. As a result, you will see adjustments to accruals twice a year in the first and third quarter each year.
Energy Geos were significantly lower at 25640, Geos for Q4 compared to <unk> 47713, a year ago. This was the result of lower energy prices natural gas in particular.
2023 saw continued volatility in commodity prices as you can see on slide seven gold and silver prices were higher for the quarter and year with gold higher by over 14% for the quarter and almost 8% for the year.
<unk> prices were significantly lower year over year, which did negatively impact conversion of PGM revenues to geos.
Energy prices were weak during 2023 coming off multiyear highs from 2022.
Slide eight highlights our total revenue and adjusted EBITDA amounts for the last five quarters as you can see from the bar charts revenue and adjusted EBITDA has decreased slightly Q4 2023 compared to prior year the.
Company reported $303 $3 million in revenue during the quarter and $254 6 million in adjusted EBITDA.
Margin of 83, 9% was achieved for the quarter.
As you turn to slide nine you will see the key financial results for the company as mentioned total Geos were 627045 generating $1 $2 billion in revenue.
On the cost side, we did have a slight decrease in cost of sales compared to Q4 2022 due to lower energy costs.
Also cost of sales is dependent on which assets deliver stream ounces not all fixed payments per stream ounce are equal.
Depletion decreased to $68 9 million versus $73 5 million a year ago depletion is based on actual mining geos sold in barrels of oil equivalent received on the energy side of the business as we received last Geos from Cobra, Panama and to Mena and cancel area. This impacted depletion as those assets are higher per ounce dupuis.
<unk> assets.
We did record a net loss for the quarter of $982 5 million or $5 11 per share due to the impairment recorded on cobre Panama. This.
This compares to net income of $165 million or <unk> 86 per share in the prior year.
However, adjusted net income was $172 9 million or <unk> 90 per share for the quarter up 5% and five 8% respectively versus prior year.
Slide 10 highlights the continued diversification of the portfolio from the charts you can see that 78% of our full year 2023 revenue was generated by precious metals with revenue being sourced 88% from the Americas with Canada, and the United States being the largest.
Slide 11 illustrates the strength of our business model to generate high margins for 2023, the cash cost per Geo, which is essentially cost of sales divided by gold equivalent ounces sold is $286 per Geo. This compares to 242 per geo in 2022.
This amount will fluctuate depending on the mix of royalty versus stream geos, including mining and energy.
But as you can see at current average gold prices the company generates significant margins.
Margin was over $600 per ounce in 2023.
In a rising commodity price environment, we expect to benefit benefit fully as the cost per geo sold should not increase significantly with.
We consider our cost structure to essentially be fixed.
The other cost component for the company. Besides the besides the cost of sales as our corporate administration costs.
The royalty streaming business model is a scalable model our corporate administration costs have increased at a much slower rate than our revenue.
Revenue has increased eight fold from 2008, while corporate admin cost is less than doubled over the same period.
Management believes we can continue to add to our portfolio and grow our business without adding significant overhead to the company.
With respect to guidance going forward. Please refer to slide 13 for 2024, we are guiding to total geos sold of between 480000 to 540000 Geos sold.
Of this total Geos, we are guiding to 360000 to 400000 precious metals geos for the year.
The balance would be geos from our diversified assets of which we expect energy to account for about 75% for 2024.
Please note that for all guidance ranges, we have excluded Cobra, Panama and our Geo sold numbers had Cobra Panama remained in production, we would've expected deliveries and sales of between 130000 to 150000 Geos annually.
The overall main drivers for Geos year over year are for precious metals, we will benefit from initial ounces from new mines being completed in 2024 tokens in young greenstone marrow Rosa and Soliris <unk>.
We'll have full year deliveries for <unk> and <unk> whaler and we expect an increase in Geos from Candy leery up based on the guidance from the operator.
However, we are anticipating lower production at <unk> based on the mine plan for lower rates.
Our guidance has been calculated using $19 50 per ounce gold $22 50 for silver $850 per platinum 900, Palladium and had 115 per ton, 62% iron ore.
Obviously prices are volatile and as they change it will impact of conversion of non gold commodities to geos.
Also please note that we expect to reach our Geo Capa MW S by the end of 2024.
On the energy side, we are using a price of $75 per barrel wty and $2 50.
<unk> <unk> natural gas.
This provides a range of 85 to 105000 geos from our energy assets.
As we look forward over the next few years, we do forecast 2026 as the current high for Geo sold based upon what we know today.
Thereafter, we will have the step down for can delivery in 2027, and then <unk> in 2028.
Our outlook for $2028 $540 to 600000 Geos sold.
Of this range precious metals will be 385000 to 425000 geos.
Main contributors will be higher production from <unk> and Guadalupe based on latest mine plans.
Do you mind starts from Valentine gold tip Night Gold SK Creek and Castle Mountain Phase II.
For diversified Geos, we do expect an increase in geos from our valet royalty as attributable production should increase with the royalty on the southeastern system, becoming payable.
For the energy assets, we do assume an increase in production over the next five years, resulting in increase in Geos.
Also we have held energy prices flat at $75, a barrel <unk> and $2 50, Mcf natural gas for the period.
Overall, when you look at the outlook for Geos sold the company has approximately 15% built in organic growth from 2023 to 2028 at budgeted commodity prices, excluding cobre Panama.
It also assumes that no additional assets are added to the portfolio.
Two additional items to note with.
With the legal proceedings that we will move forward related to Cobra, Panama, we are expecting to incur annual costs of between $10 million to $15 million per year.
These costs will be disclosed separately in our financials going forward.
And with the proposed implementation of the global minimum tax sometime in 2024, we are projecting that our effective tax rate will increase to approximately 18% to 19% going forward.
The global minimum tax will be retroactive to January one 2024.
Effective tax rate will fluctuate based on the jurisdictions that generate taxable income.
And lastly, slightly slide 14 summarizes the financial resources available to the company.
When including our credit facility of $1 billion.
Total available capital at December 31, 2023 is $2 4 billion.
And now I'll pass it over to Laura and we were happy to answer any questions.
Of course, thank you during the Q&A session. If you would like to ask a question simply press Star then the number one on your telephone keypad.
I would like to invite a question. Please press star followed by the number.
Joining us on the webcast. Please submit your questions later Q&A section at the webcast.
Yeah.
Our first question comes from the line of Josh Wolfson from RBC capital markets. Please go ahead.
Okay. Thanks, very much first question just on the long term guidance.
The structure of the deals the company has signed a lot of its cornerstone assets incorporates these step downs, which to which I guess you are coming into play here for the five year guidance.
When you look at the outlook for growth and and the replacement of some of its production how do you sort of factor the step Tien tsin for the timing of deals or is there any motivation.
Sort of structure. These deals so this consistent growth on a year over year basis longer term.
Josh It's Paul.
Sure.
At the time, we can do we do the deals.
It's more looking at what the reserves are and what Youre confident will be mined over time and making sure that we get.
At a minimum return.
At a minimum estimated return based on that.
And then also sizing of the long term of the deal so that you've got unacceptable burden on the assets that youre going to maximize the optionality.
So it really is deal by deal.
You are trying to strike that balance.
<unk>.
The obviously, it's a negotiation we would love to push that out further in time.
But you see what you can achieve on each transaction.
Okay.
And then on Cobra.
My understanding is there is some volume of concentrate on site that could.
Will it be sold down.
This has already been recorded at all in terms of value I guess.
Franco and if there was any concentrate sales with that registers as production to Franco to share.
So Josh.
The concentrate has not yet been shipped no deliveries have been made to Franco for our share of the gold and silver there.
Under our agreement, we are entitled to deliveries of gold and silver based on that concentrate.
Okay, and then last question again on the five $5 billion damages value.
Just so I understand your position as a separate case that would be in addition to the first quantum arbitration for $20 billion.
It is in addition guests so we're both we're pursuing.
Independent operations.
So the two numbers are accurate.
Okay, and then under the under the stream agreement.
Franco would be entitled to as well to the proportional share for that $20 billion I hope it doesn't come to that.
That situation, but is that is that means if I understand you still correct there.
So I mean that was the one approach that we could've taken was just first quantum pursuit and then we get a share of proceeds.
The approach that we've agreed to take between US is that we would each independently pursue it.
Assuming we're both successful.
Sure on their side as well.
Okay. Okay. Thank you very much.
Our next question comes from the line of Lawson Winder from Bank of America. Please go ahead.
Thank you very much operator.
Hello, everybody and thank you for the call today.
I wanted to ask about cobre, Panama as well how much of the upfront between the two streams.
The core is in the in the.
First quantum stream has been paid back up to today and.
Before any potential concentrate sales.
It's roughly half Lawson.
Off the top of my head, it's close to about $700 million.
Okay, perfect and then sometimes with these agreements.
Partner guarantees, where any sort of outstanding upfront that hasn't been paid back in the event the mine closure.
The operator, then would be on the hook for that is that a feature of this agreement.
Yes. It is there is an uncredited balance so as I said the 135 that we invested we've received.
Half of that back the remainder is an uncredited balance that we would be entitled to at the end of the contract.
Okay.
Will you be seeking that.
Now that you've written the yes.
Yes.
Will you be seeking that now going forward from first quantum.
Not at this time.
We want the contract to remain valid and.
We are hopeful of a restart at which time the mine resumes production and we receive our deliveries.
Okay Perfect and then I also wanted to ask about Palmer Al are you, which mine plan are you assuming are you assuming a reserve only mine plan or is there some resources in the mine plan that you've assumed with the <unk>.
Yes.
Reserves and resources based on our mine plan at the operators provided to us.
So with that.
Their most recent technical report.
I'd have to double check.
Okay formation, we've received.
Okay fair enough. Thanks, very much for that I appreciate it good luck guys.
Our next question comes from the line of Cosmos <unk> from CIBC. Please go ahead.
Thanks, Paul and Sandeep.
Ken if I can ask about the write down of coal with animal.
I just find it interesting that when first.
First quantum reported about two weeks ago now they didn't take a write down and then on the other hand yesterday night.
Did take a write down on Kobe Panama.
And I checked same auditors Pwc Toronto, So I'm just wondering about the different approach and should we be at all concerned about the security that you have.
Economic interests on the assets.
Cosmos.
As I said.
Recording impairments is a management judgment, it's based on the information at that point in time and based on the facts we would.
We opted to be prudent and recorded an impairment.
It does not question the validity of our stream agreement our stream agreement is in place and if the mine does resume production, which we're hopeful that it does.
We would look to reverse that impairment.
Of course.
And then as you mentioned earlier, there is a $10 million to $15 million of ongoing costs annually.
Could you.
Just legal cost what kind of cost all right.
Could you maybe give us a bit more color.
Sure So as you know.
We have filed notice of arbitration with the state of Panama under the Canada, Panama Free trade agreement.
Going forward. If this arbitration is pursued and the mine is not restarted.
You are basically having lawyer legal fees and other.
Consulting fees associated with that arbitration. So another scenario, where this arbitration does actually proceed.
That's our estimate right now on an annual basis.
Okay, and then maybe one last question on 2024 guidance as you mentioned.
There is a number of assets coming on.
Alright, that's why it is growing.
Year over year without Cobra Panama.
Could you maybe talk about.
Is there any kind of lag between production and when Franco Nevada received starts Rajiv receiving a stream or royalty payments on those assets and how much.
Conservatism how much.
Kind of leg have you factored in just in case, there is any kind of delay in the startup of some of these assets.
Obviously, we're basing our projections of what the operators with the developers.
<unk> released publicly.
EMS or delays of receiving ounces there shouldnt be.
Greenstone and time is.
As a royalty as a soliris <unk> and.
<unk> adds a stream, where we should get deliveries.
On a regular basis, so I don't anticipate any timing delays.
Great.
Those are all the questions I have thanks again for answering my questions. Thank you.
Our next question comes from the line of Danielle can disconnect from the Scotia Bank. Please go ahead.
Thanks, Good morning, everybody. Thank you for taking my question just wanted to follow up on that write down so peer sandy.
How you answered the question for Cosmo says that you guys decided that you wanted to take the write down full amount.
Even before having any visibility on the new government is that a fair assumption.
Yes, as I said, it's a management judgment based on information.
Available to us and that was the decision we made.
So you wanted to go that route rather than take a little bit every quarter would that be a fair statement. That's the first thing.
Okay. Thank.
Thank you for that and then $10 million to $15 million would be expense in the income statement that we would put in for this year, assuming the mine comes back up next year.
Correct, yes, yes, so obviously those costs or if it doesn't we start yes.
And then just on the global minimum tax we can see that bar.
<unk> has implemented and when you've given us attach rate for the year is it safe to assume that Sofia.
Q1 should have a lower tax rate and then we would have a top up back up to that 18, 19% sometime in 2024.
So Barbados has not.
Our beta says it's not substantially enacted so for us in Q1, we would have a lower tax rate until it actually is implemented in Canada.
Key here is for Canada to implement the global minimum tax, which then puts Barbados in effect and then our tax rate would change.
Okay. So let's assume that doesn't downhill may Gary go into Q quarter is that the lower tax rate and then we go back up to the higher tax rate and potentially then have to go back to last me state for Q1 and Q2.
So wouldn't be restated would be a catch up adjustment catch up okay.
Thank you for that as well and just on the guidance if I could ask I mean, we were a bit higher on 8% higher from your midpoint. So I. Appreciate all the assets that are doing well and we have all of those you mentioned and to put kind that is coming off.
Any other assets like <unk> as a whole I mean, we are always off on Paul is there any other assets within the portfolio that you can help us understand what would be weaker this year versus last.
In our guidance, we've highlighted the material ones, obviously other assets theyre small movements positive or negative, but I think we've highlighted the large large movers.
Okay.
And it's fair to assume that.
If you look at your.
Second half weighted with the better.
Coming on with some of the P&L till kenzie no's than Soliris arcades et cetera that is correct.
Okay, and then if I could ask on just.
The natural gas acquisition that you did is there any guidance that can be provided on these royalties contribution and our other like is there anything you can help us with on that.
Yes, Hi, Tanya it's Jason here.
As noted that acquisition.
End of last year was $125 million that we spent.
On assets in the Haynesville, there a complementary set of assets to what we already own.
In the Haynesville.
In terms of contribution.
What I can tell you is last year on an annualized basis. The royalties that we acquired generated about $6 5 million Mcf.
And so depending on your gas price. So if you had a $2 50 gas price that would be a little over $16 million in revenue.
There are some deductions and costs associated with that so you'd have to deduct those but that's a rough guide as to how the assets performed last year.
We would expect volumes to be sort of in a similar range. This year, although they do depend on drilling activity and and operators have been a little bit more conservative in their drilling activity or drilling pace. So far this year, but that's sort of a rough rough estimate.
So somewhere in that if we want to be conservative $10 million to $15 million for 2024 and enter the 2028 relate be somewhere in there on the revenue line.
Yes, I think thats, a reasonable estimates and our best guess in terms of five year guidance would be similar to the coming year.
Okay. Okay, and then just lastly, maybe if I can just address some of the M&A opportunity.
Out there I would assume and maybe you can correct me if I'm wrong that that focus will shift back to precious metals or maybe someone can you tell me. How you are looking at transactions right now from either.
Commodity base.
Producers developer is helping on the funding of these assets.
Assets potentially for sale from Newmont and arent, maybe corporate transactions.
Sidelines that would be very helpful. Thank you.
Thank you for the question Danielle <unk> speaking I think those are very astute observations.
I'd say, we're spending the majority of our time on precious metals for a soft, but we do look at other commodities and increasingly I think we see a lot of opportunity there. So.
Coming out of the last couple of weeks of conferences.
We see good opportunities kind of across commodities, but we are spending the majority of our time on precious metals.
In terms of the types of transactions I would say this is certainly a bent towards project finance.
Getting things constructed but M&A finance of course is also.
Premier of the front of the package versus potential transactions, so looking at that carefully as well.
And would it be fair to assume from what you said that Youre looking at project financing to help fund that that also corporate transaction from an M&A standpoint, yes.
Yes, yes, certainly.
I would say in terms of volume, though there is more project financing from <unk>.
Acquisition financings.
In terms of the pipeline.
And size wise that Ian if I could what youre seeing out there.
I don't think it's changed much since we last spoke probably more towards the kind of medium.
<unk>.
June $300 million.
I would say the typical kind of size of those transactions there are some smaller.
We don't mind doing some of the smaller transactions that they give us good torque on resource.
That's the general.
Kind of medium size.
Thank you so much and thank you for taking all my questions that could go on but I should lead.
With someone else. Thank you.
Yes.
Yes.
Our next question comes from the line of Martin <unk> from Daycare. Please go ahead.
Yes. Thank you.
My first question is in terms of the arbitration.
Is there any legally established time will it be arbitration to take time I mean.
Is it like two years, one year or there is no limit on how long. This can go on.
Yes.
Hi, Martin and fluid hauling.
There is no must route prescribed timeline for these things.
As a general rule I think you should probably expect.
Total conclusion, it will take several years.
And the second question would be.
How enforceable woolen arbitration.
Because these things like other countries.
Legal rulings against them.
People will never be able to influence it.
Yes, so in terms of the recognition of the award.
Pursuant to international conventions that would be treated as if it were a final judgment to the highest court.
Maybe given country, that's a party to that convention.
Collection following that as something that would have to be pursued.
Okay.
In terms of.
Sure.
When this tablet.
Can you provide some guidance would you expect on that money.
So Congress to operate there is that there is a minimum delivery in place.
It's roughly 11000 Geos a year.
But I can call you afterwards to give you the specifics.
Okay.
Thank you.
Sure.
Our next question comes from the line of Jackie.
<unk> <unk> from BMO. Please go ahead.
Thanks, very much for taking my question I guess I wanted to ask you about your arbitration claim.
The amount that you disclosed a $5 billion is just it seemed like it was higher than I guess than what we would've expected in terms of.
In terms of the amount.
Okay.
Oh to you in arbitration for Cobra, Panama and I was wondering if you might just be able to walk us through.
How you arrived at that number and what that represents 2% to Franco Nevada.
Thank you Paul.
So under the under the.
Canada, Panama trade agreement the in terms of our claim and what we've got a right to recoveries.
The loading is full reparations format full amount of the damages are solid.
There are a number of ways, if you get to that in terms of calculating the value of the asset.
Within our company.
One of those measures as any loss of market valuation.
That for US is a minimum of $5 billion.
But we expect as we work through the details.
We'll finalize what that number is but.
But I expect it will be well supported by the valuation for the asset.
Be a minimum of $5 billion.
That's super helpful I hadn't hadn't factored that in so thank you for clarifying that.
And then maybe just one other question.
This is probably.
Unlikely, but I'm going to ask anyway.
Is there any recourse to to you if.
If you don't collect on arbitration arbitration doesn't it doesn't conclude favorably is there any other recourse to you could you or would you.
Put a direct lawsuit against first quantum is that something thats available or would you consider that.
We haven't considered that Jackie Lee in terms of.
<unk> is a negotiated solution to get the mine restarted.
Plan B would be the arbitration.
Alright, Thank you very much.
All my other questions have been answered. So thanks. Thanks, that's all for me.
Our next question comes from the line of Greg Barnes from TD. Please go ahead.
Thank you Sandy if I'm going to apologize I'm going to ask about the impairments as well.
Are there any tax issues that went into you deciding to take the impairment now just seems rather early.
And what are the factors maybe went into your thinking given that the managements decision.
Hey, Greg.
No tax had nothing to do with it.
As I've said, it's a management judgment based on the impact on our share price based on the Supreme Court decision based on the mine being halted all triggers.
And our analysis of recording an impairment.
Got it.
<unk> tried to be prudent and thats.
This decision that management team.
Okay, Okay fair enough.
The share price reaction may have been one of the biggest factors in that decision.
It was part of it.
Okay. That's it for me.
We have a follow up question coming from the line of Martin <unk> from Baird. Please go ahead, yes.
Yes, just one question about the balance that you could have some recourse against first quantum if I understood understood correctly.
Good.
Probably go for like 650 million. If my math is correct, but that you didn't you didn't count on any of that when you did your impairment.
Correct, we did not factor that into our analysis.
But as a potential cause of action.
It is yes.
Alright. Thanks.
I've said it is not.
Soft our plan wherever we are hopeful that there is the potential for restart so we.
Wouldn't want to terminate the contract to make that claim.
To keep it open.
Hope for success.
Perfect. Thank you very much.
We have a follow up question coming from the line of Lawson Winder from Bank of America Securities. Please go ahead.
Alright, Thanks, operator, and thank you guys for taking the question again I just wanted to follow up on the discussion around.
Deal flow and ask whether or not youre seeing any.
Deal flow in terms of transactions, where there is a balance sheet repair elements I mean, obviously.
Those are some of the biggest transactions you guys have done and are you seeing any signs of close in.
Your discussions thanks very much.
How often is in again.
Yes.
The short answer we do have some of those we're currently looking at.
You may have.
Our typical deal flow with higher interest rates I think continuing.
Matt.
Likely to remain part of what we do on extra awhile.
And so when you discussed the various sizes of those transactions would that fall into that sort of.
Hundreds of millions of dollars ranges or are some of those.
Getting bigger leg.
<unk> had been in sort of the two.
2015 to 2017.
It varies there are some out there that would be meaningfully larger as I said that was kind of the median.
Size of what we're looking at.
And there are some that are smaller.
That's still fall into that category.
Okay, well that's intriguing thank you very much.
There are a couple of things driving it there.
It is the cost of debt and our people have got that and rates are high and I'm struggling to repay that.
The other areas the availability of equity.
So there are folks where they were hoping to raise the next set of funds to advance their projects to feasibility of due to the next stage of economic study.
And then just not able to get that money in the equity market. So the industry is feeling a squeeze and so.
The.
As I characterize the portfolio, it's very active right now.
Because of the need for capital.
Thanks, Paul Thank you.
Yeah.
There are no further questions in the phone line I will now turn to Q&A session.
Indeed, Haden, who will take questions from the webcast.
Our first question comes from Michael Fine up investing for retirees.
What have you learned from the Cobra, Panama experienced and how are you applying that to your business strategy.
So Michael it's Paul.
So we didn't at the time anticipated.
The political risk.
In Panama.
<unk>.
Part of that as the World has changed.
In terms of what women.
Went on we see how despite having a government that was supportive of the mine.
Renegotiating contracts with the company.
There was a populist uprising lettuce.
Of course, these issues and so as we look at countries going forward that is the new world. We're in and we got to take that into account.
Our next question is from your lender Friedman Islands.
How does the current market environment, and finding new high quality streams in royalties and.
And how is the competition for the opportunity.
Thank you for the question I think we've covered a lot of that.
<unk> and losses question.
I would say competition remains relatively.
Hey, Chris.
<unk>.
I think we are.
Significantly from our strong liquidity and cash flow position vis vis some of our peers larger balance sheet helps us compete on a number of transactions and also we've demonstrated I think in a number of cases.
Partner of choice as people look towards project financing that we can offer a unique and very helpful solution. As you saw at the time, Virginia transaction.
That was.
Very well conceived and I think received by the market.
Thank you Ann there are no further questions from the webcast. This concludes our 2023 results year end results conference call and webcast, we expect to release, our first quarter 2024 results after market close on May one.
The conference call held the following morning. Thank you for your interest in Franco Nevada Goodbye.
Yeah.
Yeah.