Franco-Nevada Reports Record Q3 2025 Results

Franco-Nevada announced record financial results for the third quarter of 2025. Key highlights include: - Record Financials: Revenue reached a record $487.7 million, a 77% increase year-over-year. Net income was a record $287.5 million, an 89% increase. Operating cash flow was $348.0 million. - GEOs Sold: The company sold 138,772 Gold Equivalent Ounces (GEOs), with 125,115 being Net GEOs. Precious metals accounted for $416.5 million of revenue. - Upward Guidance Revision: The company narrowed its full-year 2025 guidance towards the higher end, now expecting total GEO sales between 495,000 and 525,000 GEOs (up from a floor of 465,000). Precious metal GEOs are now guided to between 420,000 and 440,000 (up from a floor of 385,000). This revision is based on strong commodity prices, with assumed gold at $3,800/oz. - Portfolio Updates: The company received 11,208 GEOs from the Cobre Panama concentrate shipment and earned 5,343 GEOs from the newly acquired Côté Gold royalty. - Dividend: A quarterly dividend of $0.38 per share was declared, consistent with the prior quarter. - CRA Settlement: The company confirmed a settlement with the Canada Revenue Agency (CRA) regarding transfer pricing for 2013-2019, which resulted in no tax payment required on the foreign earnings of its Barbadian and Mexican subsidiaries. - Executive Departure: Jason O'Connell, Senior Vice President, Diversified, is leaving the company to pursue other opportunities.

The Q3 2025 results are materially positive and exceed the already high expectations set by the company's record-breaking performance in the first half of the year.

• Progression of Projections: The company has consistently beaten expectations throughout 2025. After a challenging 2024 due to the Cobre Panama shutdown, Franco-Nevada reported record results in Q1, surpassed them in Q2, and has now set a new, much higher bar in Q3. The performance demonstrates the strength and diversification of the underlying portfolio, which is firing on all cylinders, amplified by record gold prices.

• Comparison to Expectations:

  • Cobre Panama: During the Q2 2025 earnings call on August 11, management guided for approximately 10,000 GEOs from the Cobre Panama concentrate shipment in Q3. The actual delivery of 11,208 GEOs is directly in line with this projection. This contribution was expected and is now realized.
  • Core Portfolio Performance: The significant beat on revenue and earnings, along with the substantial upward revision of the guidance floor, indicates the core portfolio is outperforming. New assets like Côté Gold, Porcupine, and Yanacocha are ramping up and contributing meaningfully, as anticipated in prior quarters.
  • Financial Strength: The company continues to generate massive cash flow, allowing it to easily manage the $175 million drawn on its credit facility for the Arthur project acquisition in July.

• Key Developments:

  • The CRA settlement, first announced on September 11, 2025, is a significant de-risking event. It removes a multi-year tax uncertainty and potential liability, providing greater investment certainty.
  • The executive departure in the Diversified segment is a minor negative. While likely manageable, it represents a loss of expertise and continuity in a portfolio segment that provides important commodity diversification.

In summary, the news confirms that the company's growth strategy of acquiring high-quality, long-life assets is paying off. The core business is performing exceptionally well, new assets are contributing as planned, and a major legal risk has been favorably resolved. The results solidify Franco-Nevada's position as a best-in-class operator.

Franco-Nevada is the leading gold-focused royalty and streaming company. It manages a large, diversified portfolio of cash-flow producing assets across various commodities (gold, silver, PGMs, oil & gas, iron ore), geographic locations, and operators. The business model provides investors with exposure to commodity prices and exploration upside with limited exposure to operating and capital cost inflation.

The company's most significant asset in terms of potential future contribution, Cobre Panama, is currently on care and maintenance due to a dispute with the Panamanian government. While not currently producing (aside from the recent one-time concentrate shipment), a future restart represents the single largest catalyst for the company.