Franco-Nevada Reports Record Q2 2025 Results

Executive Summary

• Franco-Nevada reported record financial results for Q2 and H1 2025, driven by record gold prices and contributions from recently acquired or producing assets.
• The company announced significant portfolio acquisitions, including a royalty on AngloGold Ashanti’s Arthur Project and IAMGOLD’s Côté Gold Mine, positioning the company for long-term growth.
• Cobre Panama shipments were completed, with Franco-Nevada expecting approximately 10,000 GEOs from the stored concentrate, while the company suspended its arbitration against the Government of Panama.

Key Details

• Q2 2025 Financial Highlights:
  • Revenue: $369.4 million (record, +42% YoY).
  • Operating Cash Flow: $430.3 million (record, +121% YoY).
  • Adjusted EBITDA: $365.7 million or $1.90/share (record, +65% YoY).
  • Net Income: $247.1 million or $1.28/share (record, +211% YoY).
  • Adjusted Net Income: $238.5 million or $1.24/share (record, +65% YoY).
• H1 2025 Financial Highlights:
  • Revenue: $737.8 million (record, +43% YoY).
  • Operating Cash Flow: $719.2 million (record, +93% YoY).
  • Adjusted EBITDA: $687.6 million or $3.57/share (record, +57% YoY).
  • Net Income: $456.9 million or $2.37/share (record, +104% YoY).
• GEO Sales:
  • Q2 2025: 112,093 GEOs sold (+2% YoY); 101,876 Net GEOs (+4% YoY).
  • H1 2025: 238,678 GEOs sold (+2% YoY); 215,014 Net GEOs (+5% YoY).
• Portfolio Acquisitions:
  • Arthur Gold Project: Acquired 1.0% NSR (of existing 1.5% NSR) on AngloGold Ashanti’s Arthur Project for $250.0 million cash plus $25.0 million contingent payment. Funded via cash on hand and $175.0 million draw from revolving credit facility.
  • Gold Quarry Gold Mine: Acquired additional 1.62% NSR for $10.5 million plus $1.0 million contingent payment. Franco-Nevada now holds a combined 8.91% NSR.
  • Côté Gold Mine: Acquired 7.5% gross margin royalty for $1,050.0 million. Includes buy-down option for operators (IAMGOLD/Sumitomo) to acquire up to 50% of the royalty.
  • Porcupine Complex: Acquired 4.25% NSR for $300.0 million; committed to $100.0 million senior secured term loan and $48.6 million equity financing for Discovery Silver Corp.
• Cobre Panama Update:
  • Shipment of remaining copper concentrate (121,000 dry metric tonnes) completed under the Preservation and Safe Management plan.
  • Franco-Nevada expects ~10,000 GEOs (9,000 oz Au, 105,000 oz Ag) from these shipments, largely expected in Q3 2025.
  • Recorded a partial impairment reversal of $4.1 million in Q2 2025.
  • Arbitration against the Government of Panama suspended as of June 18, 2025.
• Dividend:
  • Declared quarterly dividend of $0.38 per share.
  • Payment date: September 25, 2025; Record Date: September 11, 2025.
• Guidance:
  • 2025 Total GEO Sales Guidance: 465,000 to 525,000 GEOs.
  • 2025 Precious Metal GEO Sales Guidance: 385,000 to 425,000 GEOs.
  • Assumed commodity prices for guidance: $3,250/oz Au, $37/oz Ag, $1,300/oz Pt, $1,150/oz Pd, $90/tonne Fe, $65/bbl WTI, $3.00/mcf Henry Hub.
• Portfolio Performance Notes:
  • Precious Metals: 82% of Q2 revenue. Strong deliveries from Guadalupe-Palmarejo, Tocantinzinho, and Hemlo.
  • Diversified: 14% energy, 4% iron ore/other. Revenue slightly lower due to lower commodity prices in energy/iron ore, offset by gold price outperformance.
  • Specific Asset Updates:
    • Antapaccay: Lower Q2 GEOs due to shipment delay; stronger Q3 expected.
    • Antamina: Silver production higher; operations ramped up after April fatality/shutdown.
    • Tocantinzinho: Reached nameplate capacity of 12,890 tonnes/day in July 2025.
    • Salares Norte: Gold Fields exercised option to buy back 1% NSR for $6.0 million cumulative payments.
    • Cascabel: SolGold released execution plan for 2028 first production; Franco-Nevada disbursed second $23.3M pre-construction payment.
    • Greenstone: Equinox reduced 2025 guidance to 220,000-260,000 oz due to slower ramp-up.
    • Valentine Gold: First ore expected late August 2025; first gold ~1 month later.
    • Copper World: Hudbay seeking JV partner; feasibility study/construction decision in 2026.
    • Stibnite: Perpetua Resources received final Clean Water Act permit and raised $474M equity.

Notable Quotes

• "I am very pleased with our record financial results this quarter... Our portfolio largely produced as expected for the quarter and higher gold prices contributed to record revenue, operating cash flow, Adjusted EBITDA margins and earnings." – Paul Brink, CEO