Q2 2025 Franco-Nevada Corp Earnings Call
Good morning and welcome to Franco-Nevada Corporation's second quarter 2025 results conference call and webcast.
This call is being recorded on August 11, 2025.
At this time, all lines are now in listen-only mode. Following the presentation, we will conduct a Q&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 during the Q&A session at any time by typing your question in the Q&A section of the webcast platform. If you require immediate assistance during this call, please press *0 at any time for the operator.
I would now turn the conference over to your host, Candida Hayden, Senior Analyst, Investor Relations. Please go ahead.
Thank you, Joanna. Good morning, everyone.
Thank you for joining us today to discuss Franco-Nevada's second quarter 2025 results.
Accompanying this call is the presentation, which is available on our website at franco-nevada.com.
We 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 Brena, Chief Financial Officer, who will provide a brief review of our results.
This will be followed by a Q&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 2 of this presentation.
I will now turn over the call to Paul Brink, President and CEO of 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 pro record, revenue operating cash flow adjusted, EBITDA margins and earnings.
We also saw constructive developments in Panama, including the approval of the preservation and safe maintenance plan, and the shipment of the remaining concentrate from corporate Panama.
Sentiment in country continues to shift in favor of a restart of the operation. And I'm encouraged by the Molina government's continued commitment, to resolving the situation.
We have attractive growth over the next five years from my existing portfolio.
In particular will be big beneficiaries of the move to unlock mine permitting process in the US.
Free projects in our Outlook, and we're moving ahead.
Perpetual step night gold.
At base copper world.
And the news this morning is the cost of mountain has been included in the fast 41 permitting process.
1 Project that's potentially new to our 5 year outlook. Is casket belt.
The new management team at Sold Gold has been studying approaches to accelerate production.
and is now indicating first production may occur as soon as 2028.
1 longer-term development is worth noting.
There's been a positive shift in relations with a Chokan First Nation.
At new prosperity.
You may recall that Franco, as a stream financing agreement, acquired 22% of Fullscreen.
This could be a very meaningful growth driver for Franco. If the Chokin decide to support my development,
During the quarter, we acquired a royalty on Iron Gold's Cote Gold Mine, one of Canada's newest large-scale gold mines, and we're off to a good start. Since our acquisition, I'm glad to achieve name play, throughput ahead of schedule, and positive grade reconciliation.
Cote and Gostlin have 16 million ounces of MNI and more than 4 million ounces of inferred resources.
I'm Gold is targeting more than 20 million oz of MNI in an updated resource expected in the first half of 2026.
The current mill is undersized for that scale of resource. And Gold's planning to polish and update a technical report in 2026 with expansion scenarios.
Post-quarter end, we're quite enthusiastic about Royalty on Angle Gold's Arthur Project, which is comprised of the Merlin and Silicon deposits. Together, these deposits form one of the largest gold discoveries in recent years in Nevada.
AngloGold is rapidly expanding its resources in the last couple of years.
And I wouldn't be surprised if the current resource, which stands at 3.4 million oz indicated and 12.9 million oz inferred.
Grows at a similar trajectory to Gold Strike or Cortez in their heyday.
Since our acquisition angle, Golds announced the 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 million oz per annum.
And if more hydrated is found, that production rate could be maintained for an extended period.
The scale of the operation contemplated is already in the league of Gold Strike and Cortez.
The last two years have been some of our most productive, adding assets to the portfolio last year. We added interest and some of the world's biggest mineral endowments.
New once again, cochart operations in Peru. In the years PGM operations. In the western limb of the Bushveld in South Africa.
And so, Gold's casket about a cup of gold development project in Ecuador.
This year, we've expanded 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 of the last two years has transformed our longer-term growth outlook.
As the potential of a cobra restart and longer-term development of new prosperity, 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 that we see ahead of us.
With roughly $1.3 billion in annual cash flow generation, we can repay the facility rapidly.
With that, I'll pass the call over to Sandy.
Thank you, Paul. Good morning, everyone. As Paul mentioned, Franco-Nevada reported record financial results for the second quarter ended June 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 4, you will see the comparison of commodity prices for Q2 2025 and Q2 2024. Gold and silver prices increased significantly year-over-year, with the average gold price higher by 40% in the quarter and the average silver price higher by 17%.
We've also seen a rebound in prices for platinum and palladium. Prices for iron ore and oil continued to be volatile and are lower compared to the prior year. However, you did see a significant increase in natural gas prices.
On flight 5, we highlight some of the key metrics used to measure performance: total GEO, sold net, GEO sold revenue, and adjusted IBA.
Total GEO sold increased 2% to 112,093 in the quarter compared to 110,264 in the second quarter of 2024.
Precious metal GEO sold in the quarter was 92,449, higher by 12% compared to the prior year for the quarter. We did receive strong contributions from Guadalupe and Candelaria and continue to benefit from the recent acquisitions made at Yanicko and Western WH.
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 On Gold.
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 gains from the recent acquisitions, we also benefited from continued ramp-ups of operations at new mines, including tokens Eno, Greenstone, and Solaris Norte.
With respect to the Hemlo MPI, it was another strong quarter, showcasing the leverage of the MPI to higher gold prices.
However, the NPI can vary depending on how much production comes from the area covered by our MPI lands.
One asset that was lower than our expectations wasn't due to Pakai, but this was solely due to the timing of deliveries.
We expect a stronger second half of the year from this asset.
Versus 64.6 million.
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 $369.4 million, which is a record for Franco Nevada.
Precious metals accounted for 82% of revenue.
Adjusted IBA. Also, a record was 65% higher for the quarter at $365.7 million compared to $221.9 million in Q2 2024.
Slide 6 details the key financial metrics reported by the company.
As mentioned, a total of GEO sold were 112,093, generating $369.4 million 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 code, we took old royalty acquisition. We liquidated the majority of our inventory position.
This resulted in a gain on sale of gold, bullion of 42.2 million. As the average cost of the gold Oz, we sold was approximately 2,350 per ounce.
At the end of June, we still have 2,469 gold oz remaining in inventory.
With respect to costs, we did have an increase in the cost of sales compared to Q2 2024 due to higher stream amounts sold. The cost of sales was $33.5 million versus $29.1 million last year.
Depletion increased to 64 million versus 52.9 million a year ago, as you received more GEOS from Candelaria and began depleting. Our recent transactions, the Anaco Western Limb and Porcupine, disinfected depletion. As those assets are currently higher per ounce, depletion assets.
Adjusted net income was $238.5 million, or $1.24 per share, for the quarter, both up 65% versus the prior year.
Slide 7 highlights the continued diversification of the portfolio. Eighty-two percent of our Q2 2025 revenue was generated by precious metals.
With revenue being sourced 86% from the Americas.
Our largest contributor to revenue was candidly at 15% for the quarter.
Slide 8 illustrates the business model to continue to generate High margins. For sacking quarter 2025, the cash cost per Geo is 299 per Geo, this compares to 264 per Geo and prior year,
As the gold prices have risen, Franklin, Nevada has seen a significant increase in our margin per Geo.
Margin was just shy of $3,000 per Geo in the quarter.
Slide 9 summarizes the financial resources available to the company.
The company had 160.3 million in cash and cash equivalents on hand at the end of June.
When including our credit facility of $1 billion and our equity investments, total available capital at June 30, 2025, is $1.6 billion.
However, in July, we did fund the acquisition of a royalty on Angled Gold's Arthur project in Nevada, as mentioned by Paul.
For $250 million and upfront cash.
We did draw on our credit facility for $175 million to assist in funding this acquisition.
This results in total available capital of approximately 1.35 billion. 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 for 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 full price.
By updating price assumptions with current commodity prices, we continue to remain on pace to achieve our total Gold and precious metals GEO guidance ranges.
Also, as mentioned, we will recognize revenue from Cobra Panama in the third quarter. As a concentrate on site has now been shipped, Franco from Nevada has begun to receive deliveries of gold and silver from Cobra Panama based on our stream agreement.
We expect to receive a proximately 10,000 Gio's in Q3.
And with that, I will pass it over to Joanna, and we're happy to answer any questions you may have.
Please submit your question through the Q&A section of the webcast platform.
First question on the phone is from Fahad Tariq at Jefferies. Please go ahead.
Hi, thanks for taking my question on corporate Panama. Can you maybe give some more color on why Franco decided to suspend the arbitration proceeding?
Uh, for Q2 2025, Paul, the...
The best outcome for us at Cobra Panama, and I'd say for First Quantum as well, is to see that mine get back into operation.
Uh, so I think, uh, I think, you know, between the first Quantum, the government themselves, we're all like-minded to try and see a positive resolution.
Uh, it had been a request at the outset from the Molino government that, uh, the arbitrations be suspended to give the space to try and find a new solution.
Uh, so we are very amenable to working with the government to, uh, allow that to happen.
Okay, and then maybe switching gears to corporate development. Um,
Given that the available capital is now lower, you know, you had some pretty large transactions, particularly the COT. Does that change how you think about deal size over the next?
Let’s say a year or so.
uh no, I don't think so the
A business continues to generate more and more cash every year here. Currently, it's around $1.3 billion a year.
So, there are no constraints on the capital site. Between the available capital with a revolver and the amount of cash we’re generating, we’ve got plenty of firepower. I don’t think that restricts us in any way.
Okay, great. Thank you.
Thank you. The next question comes from. Larry Lou CIBC please. Go ahead.
Morning, Paul, morning, Sunday. Thanks for taking my question and congrats on another financially strong quarter. I guess I'll start off my question, asking about Platinum. Paul earlier, you mentioned that platinum prices at rebound and last, the last December Franco, did a Saab in Western limb acquisition. I'm just wondering what kind of positive impact would that have on the asset and once that factored in, when the acquisition was, uh, first happened,
Hi there. Seeing Grace speaking, thank you for the question.
Yes. We've been, uh, very pleasantly surprised by Cesar's 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 we spoke about at the time.
To have much, uh, much improved economics, so increases our confidence in the long-term, uh, of those assets.
For sure, that makes sense. Thanks Ian, while I have you as well, I'm going to follow for hot and ask about corporate development as well. I know it's been, uh, there's historical precedents as well. Frank Nevada. Sometimes takes shares in the companies, such as stream mining or Discovery silver. I'm wondering has that, um, has a 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 uh, for the requisitions.
Uh, thanks for the question and and.
Maybe it's getting a bit hard. It's part of a longer-term strategy and, you know, 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 how we can be not just transactional, but a financial backer to companies. If we can find great assets and great management teams that we want to support for the longer term.
Um, how can we do that? And so that strategy has played out with Gmail, and it's played out with Discovery.
Uh, we think that for those players, we can differentiate them. Um,
And and be their backer so that we can reduce the financial risk of those companies. And and and we think in doing that, we can increase their valuations and their ability to be successful over time. Uh, so far that strategy has worked out terrifically. And uh, so we we plan to continue both with those players. And and also, if there are other teams that fit that mold, we we'd love to do more deals in that. Uh, but our overall objective is, is you know, how do we support them as a long-term financial backer?
Earlier in the call Paul, you mentioned that there is a potential upward revision because of casabo now could potentially be in included in the 5-year. Guidance. We're wondering if there's any more assets that could potentially be a surprise and included in your future 5-year, guidance. And when can we expect a updated 5-year guidance? Would that be next year?
Yeah, we always, uh, we we do the guidance, um, in the, in the first part of the Year along with our annual results. So so that's when we're updated.
Um,
The, the 2 bits of positive news there.
Uh, obviously on C Bell, looking at scenarios to...
uh,
Get things up and running sooner. But there's two parts to that. The first is Tandy Yama, the open pit deposit. They've been drilling it up and having good success.
We're moving up some high-grade areas, so potentially that can be early material to the mill. We're also looking at scenarios to start with sublevel caving while in a block cave.
Uh, 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.
Uh, they they are the good news I mentioned today. I mean it is in our 5 year growth Outlook. It's just a certainty of its going ahead. It's it's cost them out and we do have we have 2 royalties on that uh at 2.65% royalty that covers the whole property. Uh, we've got a further 2% royalty that covers
Uh, one of the pits in particular that hopefully will be at the front end of the mine plan, taking that up to 4.651.
Perfect. Sounds good. It sounds like there's more upside investors can look for, for sure. Thank you, Paul. Thank you, Ian. And thank you, indeed. Thanks for taking my question.
Thank you. The next question comes from Matthew Murphy at BMO Capital Markets. Please go ahead.
Hi. Um, big uh deal during the quarter on the, uh, the POE on royalty. Um, just wondering if you, uh, can elaborate a bit on your view on the asset, what gave you the confidence in the due diligence to, to take on a profits-based royalty? And are you willing to share your views on KOT's path to a, uh, being a low-cost, uh, gold mine?
Thank you, Matthew. It's Ian Gray again here.
So I guess, first of all, it's worth highlighting that we did work with on gold on the acquisition. So that gave us unique insight into how it's currently operating and the long term for the asset. And this honestly was one of the most exciting opportunities that we've looked at.
In quite some time the scale uh of the resource is is quite impressive and if you refer to, I'm Gold's call last week uh they're starting to talk about a super bit between cot and Gosselin.
So the, the potential of this to mirror, some of the production profiles you've seen in assets like, uh, detour malerich, uh, we see as as quite, uh, quite robust, and that's based on being able to actually look at the data, uh, with I'm gold and and make that assessment.
So we we see as a result, fantastic opportunity going forward for the expansion in throughput, uh, to suit uh, the scale of the resource. And uh, what is also very exciting is that hopefully there's there's some news for you relatively near-term on this as well as I'm gold has identified. That they'll be putting up to out an updated resource in the first half of next year and hopefully a technical report. Identifying some of the production scenarios to follow. So we were able to get, you know, sneak peek into the asset with the fact that we we're able to uniquely do due diligence with IM gold and that gave us a confidence to transact. And in terms of the cost profile, you know 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 in the costs. Uh, and you will note that this is
You know, gross margin royalty. The deductions are fairly limited, and we're able to work again with our goal to craft a form of agreement that we're very happy with. Overall, it's an extremely exciting opportunity that we think will add low-risk growth to Franco Nevada over the long term.
Videos from oil and gas. And I guess Permian uh was 1 of the drivers. What's the outlook for your puran asset base back half of the year?
I'm Matthew. It's Jason O'Connell speaking. Uh, we were pleasantly surprised by the performance of Perrine Assets. Uh, in the court, we had increased volumes over what we'd seen last year.
Uh, part of that is, uh, a result of drilling on our lands. At times, um, operators will hit areas of higher royalty rates across our in full print.
So, we benefited a little bit from that.
Uh, going forward, you know, those assets in the Perrine are usually fairly reflective of the overall performance of the Basin. So it will depend on.
Uh, you know, oil prices and how active Drillers are.
Uh, Eagle has seen oil prices pull back a little bit in recent months. So, I would suspect that production levels and drilling activity will likely stay reasonably consistent, perhaps often slightly lower with the lower price.
Okay, thank you.
Thank you. The next question comes from Daniel Major at UBS. Please go ahead.
Hi. Yeah, thanks. Um, thanks for the questions. Um, just first want to clarify, Sandip. How much gold did you say you still had on the balance sheet? Um, in terms of inventory, I just didn't quite catch that.
Hey Daniel. Um, so at the end of June, we had um, 2,469 gold Oz still remaining in inventory.
Okay.
So, quite small. Uh, okay, thanks. Um, yeah. And then, um, the second question, just thinking about the guidance, so both the precious metal and the total GEOs is unchanged. Yeah, you added about 20,000 ounces of additional sales that weren't in the previous guidance, um, from Cote and from Cobra Panama. Um, what's the offset? Because, um, I guess the implied non-gold GEOs is the same, uh, 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?
Yeah, so I guess the key message there is that, even without Cobra Panama and Cote, we're still within the guidance ranges.
Anything from Cobra. Panama is all incremental.
Right. So, does that mean that all else being equal, production is likely to be more skewed to the upper end of the range? If you've added $20,000...
Yeah, that's a fair assumption.
Got it. Okay, thanks. Uh, and then, um, the final question. The new Prosperity option, the 28% Goldstream, I'm not particularly familiar with this project. Can you give us a bit of a sense of, uh, the quantum of what the contribution to, um?
Frank and Nevada might be.
um,
New Prosperity is a large.
Proper gold or free system in BC. The transaction that we had done was back in 2012.
At the time, they were trying to get it permitted. Um,
They had, uh, received a BC permit but were unable to get a federal permit. Uh, part of the issue was that they...
Uh, we didn't have the support of the First Nation at the time. Um, so the project has effectively been parked for many years since then. Uh, that shift that came out in June is that they have an agreement with the Chilton.
Um,
The ownership of just over 20% of the project is being provided to the Chilton Nation.
Uh the BC government is is is uh providing the funding which is the payment that goes to to Seco for that transfer. And that Cho cotton will
Uh spend the next couple of years. Um in land use planning process to the side, how they would like to proceed or not proceed with any project there. Um, our agreement that I have it right is it's a 22% Goldstream. Uh, it it is, uh, it's a, it's a deposit is roughly half copper, half gold. Um,
I could, I would have to check my numbers, but it's in the order of 40 to 50 oz per year of gold that you would get from it.
Thanks for that. I'll, uh, let someone else have a go.
Thank you. The next question comes from Tanya, Jakis, Sonic at Scotiabank. Please go ahead.
Oh great, good morning everybody. Thank you so much for taking my questions. Um, just to finish off, uh, Sandy on the gold bullion. I mean, it's only like about 8 million dollars. Is there about? Why wasn't it just all sold?
Uh, just we, at the end, we sold what we felt was needed to, uh,
Uh, fund the coate transaction Tanya plus, you know, we do accumulate over time like the bullion that we've had in inventory. Roughly 45,000 Oz has been has been built up over time. Um, every quarter we do receive gold inventory, uh, gold royalty payments in kind for, from some of our assets, and we will continue to do so, so that balance could potentially grow again. Uh, depending upon, um, you know what, what the deliveries are
Okay. And remind me which ones you take in kind.
Which royalties?
Uh, so there's a handful. We take a detour, uh, toss.
Kirkland, Lake Porcupine, and Maginot in kind.
Okay.
All right, so maybe we can start building a bit of an inventory there.
Okay, thank you for that. Um, and just maybe looking again at your guidance.
Is it safe to assume? Like I'm I'm reading our previous note, I think we were saying that Q3 was supposed to be generally equal to Q4 or thereabout and um with that 10,000 gals coming. Now in Q3 from Cobra Panama, is that a bit of a skew? Should I be thinking a little bit higher in Q3 and lower in Q4 on that 4753 first half second half,
Um, I think that's that's a fair assumption. Um obviously we expect you know, to get the bulk of the delivery sink over rate kind of in Q3. Some could push into the early part of Q4, it just depends upon where the shipments go.
Um, but in terms of just overall uh, that's a fair assumption.
I hate asking.
Low MPI.
Your guess is as good as mine.
Okay.
Um, and then can I be reminded? I saw the Solaris buyback. Uh, Goldfield bought back, uh, that, uh, 1%. Can you just remind me, um, which of your, you know, which ones have royalty screens have? Some of, of these BuyBacks that are potentially coming due? It's just, you know, there's a lot of money available now that Google 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?
Hi Jenny. It's Ian again here. Um, perhaps some of the most relevant uh for you. Um and I would say first of all, the asset handbook does a pretty good job summarizing um, for the the full set. But some of the more relevant Cote has a, has a buyback with IM gold, which is, uh, up to 50% and that. So that's that's fairly significant. Um, in in the scheme of things porcupine also has uh has that mechanism in it um as well. So those would be relevant assets to uh to keep track of
Sorry, I missed the first one. I'm Gold 1.
Yeah, yes.
Yes, yes. Sorry I missed. I need to do a follow-up.
Uh, yes, I'm sorry. Oh yeah. Uh, on Koti, the recent transactions that both Cain and Porcupine have, that feature.
Perfect. And maybe if I, since I have you on the line, um, just wanted to come back about the opportunities that you are seeing out there. I ask everyone in terms of what, you know,
How they're they're looking at their portfolio. Um, you've done a couple. Um, we've got a good mix between, you know, development and and and obviously uh production. And the last 2 that you've done are are are adding right away. Um Arthur gold is further out, what are you seeing out there in terms of mix between you know production Avail uh opportunities versus development? And I think the size had been in that 100 to 500 million range. Is that still a
In North America. Uh, so we'll continue to focus on assets similar to what you have seen. I, I would say, Tanya in terms of size and size and scale in the last 12 months, being a very productive, 12 months. Uh, we could continue to see more of the same uh, going forward. And so we're hopeful we'll be at be able to add significant growth to the portfolio. Uh, you're right. We've had a couple of cash flowing assets and whenever we have the opportunity to transact on those, uh, that's first prize. But I think in terms of managing the overall portfolio, um, you know, we need to have a balance and have some longer term growth. So, uh, we'll do both, uh, types of transactions as we move forward at the moment, you know, Focus really is on precious metals growth. And we have, what I see is a very healthy pipeline of that moving forward, and we're focused on those private deals.
Okay.
And maybe Paul, if I could.
For you just on the prosperity option. I, you know, gosh, 2012 seems like a long, long time ago. Um, I remember, did we write that asset off?
Um, at the time, was it written off?
all right, so tell me the the deal we had was to say we'd put up 300 million I believe is the number for the financing uh if and when it got permitted so um
Haven't had any Capital that's been expended on it. So so no. No need to write anything off. Yeah. We, we, we took a small impairment at the time, Tanya, a few million dollars, which was just the cost associated with the, with the asset, right? Okay. Yeah. That's all highlighted. Nothing was funded under the capital commitment. Okay. All right. That that was just uh 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, uh, you know, to the table, is that what I understood?
Yes, you know. So the um
To move the project forward, it needs the support of the nation.
Um, they have opposed mining, uh, in the past.
Um, now they have an ownership stake in the project. Um, so I think there's obviously very material benefits that they could get if a mine does go ahead.
um,
I I I have no idea of timeline other than to say, you know, I can only imagine that that, uh, it will take some time for them to
To consider the change in circumstances and, you know, before they would make any decisions on how to move ahead.
Okay. Well, thank you. It's, you know, obviously positive. If we can have more projects permitted in Canada, and especially BC.
Great, thank you so much.
Thank you. The next question comes from Brian MacArthur at Raymond James. Please go ahead.
Oh, good morning. Um, 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, Hemlo 1. We've always focused on Butt Muscle. Weight 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 of you never got anything from the 2% NSR or anything yet.
Uh hi Brian Sandy uh nothing from the NSR but with respect to the NPI it's you know gold price leverage as well. Uh there was a small catch up payment related to 2024 that we recorded in the quarter as well. So we were we were unrecorded with what we had estimated for last year. So part of that that increase but the bulk of it is just better production from Orla um at the mine.
And just, um, better operations. And then obviously the leverage of the growth price.
So just going forward, I mean you did $7.7 million 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 million a quarter? Is that reasonable? You had $1.5 million catch-up or just ballpark what, what might it be? I think $4 million is reasonable.
Thank you very much; that helps.
Thank you, though. No further questions on the phone line. I'll turn the Q&A session over to Candida Hayden, who will take questions from the webcast.
Thank you, Joanna. Our first question comes from Lyall Green, a shareholder of the company.
That allocation we're hedging strategies might shift.
Sure. Um, so Sandy pure, uh, the pricing that we used for up for the guidance that, uh, we've given is 3,250 gold price and a 37, uh, silver price. Um, in terms of sensitivity, uh, a hundred dollar increase in the price of gold, uh, essentially, uh, results in about 4,700 G's lower for the, for the other Commodities, uh, when converting to GEOS, um, and with respect to Hanging, uh, we do not hedge. Uh, so we we sell our goals, um, at spot
Our next question is from L. Green as well. What are the financial and strategic implications for Franco-Nevada if the Cobra Panama asset remains offline into 2026? How are you adjusting your portfolio risk exposure accordingly?
Well, thanks for your question.
The, you're right, as you'll recall, when, when, uh, of course when October break was shut down, we had we had impaired, the asset fully. So, we, we have, we haven't built it into our guidance. Um,
That 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 operation.
But it's all upside to us when we consider it. The biggest free option that you can get in the royalty and streaming industry is investing in Franco and the option of Cobra coming back.
Um, 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.
Um,
So we look forward to COBRA coming back online, but it's all upside.
The next question is from Bernie Peachy from Palace Capital.
Putting the last 2 quarters together or pattern. Seems to be emerging 1. More aggressive Business Development. M&a. 2 less interest in non-precious metals.
3. Greater focus on North America. Is this the result of an overt strategy shift?
Yeah, good question. Uh, is there a strategy shift now? There is the—and maybe we should reiterate, you know, what is our overall strategy? It's...
We want to be the go-to gold stock.
and uh,
So that means at any point in time, we want to be looking to add gold assets.
uh, you know, as we go through and and and I mean, through the cycle, add in Gold assets, you know, as you go through the cycle, the
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? Um, you want to keep adding all assets through the cycle. Um, where do you want to spend a lot of money? Uh, you know, where that's at the bottom of the cycle? Um, so gold has done very well. We're keen to keep adding gold.
Um, you know, at these prices, the key is you want to get into quality assets that are, again, built for the long term.
Um, so that you can participate as the gold price appreciates over many decades. So
That is probably, you know, 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.
Uh our diversification strategy is is also unchanged and 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 on ballay assign or operations where they just are
Some of the best buying of all bodies in the world. If those assets come along, we'll buy them. The other is, if you have a downturn in an industry and you can get a really good entry point into those commodities. So it's strategy. We don't have to do it. We're just patient. We do it where we can get good value.
Um, so it, you know, more of the deals that have come out in the mix is, is a function of what was available to us.
Thank you, Paul. There are no further questions from the webcast. This concludes our second quarter 2025 results conference call and webcast. We expect to release our third quarter 2025 results after market close on November 3rd. Thank you for your interest in Franco-Nevada.
Ladies and gentlemen, this concludes your conference call for today. We thank you for participating, and we ask that you please disconnect your lines.