Record Revenues and High Margins
(in U.S. dollars unless otherwise noted)
TORONTO, May 5, 2021 /PRNewswire/ - "Franco-Nevada's
diversified portfolio outperformed in the first quarter generating
record revenues and an 85% Adjusted EBITDA Margin," stated
Paul Brink, President and CEO.
"Antamina, Cobre Panama, and Hemlo
made strong contributions along with our Energy assets that
benefitted from a recovery in prices. We were delighted, post
quarter-end, to acquire the Vale Royalty Debentures that,
along with our Labrador Iron Ore Royalty Company investment, add to
our base of low-risk long-life cash flow. The transaction adds to
the diversity of our portfolio while it remains more than 80%
precious metals focused. Following the acquisition, we have revised
our guidance and outlook and now expect 25% growth in revenue over
the next five years. Our primary focus is on adding further
precious metal assets to the portfolio."
At today's annual meeting, the Hon. David R. Peterson stepped down as the Chair of
the Compensation and ESG Committee and, after more than 13 years,
as a Director of Franco-Nevada. The Board thanked Mr. Peterson for
his outstanding leadership, consensus-building contributions and
many years of service.
|
|
|
Q1/2021
|
|
Strong Q1
results
|
vs
|
|
|
Q1/2020
|
GEOs1
sold
|
149,575
|
+11%
|
Revenue
|
$308.9
million
|
+28%
|
Net income
|
$171.5 million
($0.90/share)
|
+274%
|
Adjusted Net
Income2
|
$160.9 million
($0.84/share)
|
+47%
|
Adjusted
EBITDA3
|
$262.7
million
|
+36%
|
Margin4
|
85.0%
|
+6%
|
Strong Financial Position
- No net debt and $1.2 billion in
available capital as at May 5,
2021
- Generated $224.3 million in
operating cash flow for the quarter
- Quarterly dividend increased 15.4% to $0.30/share
Sector-Leading ESG
- Ranked #1 gold company by Sustainalytics, AA by MSCI and Prime
by ISS ESG
- Committed to the World Gold Council's "Responsible Gold Mining
Principles"
- Contributing to help communities through the COVID-19
crisis
- Goal of 40% diverse representation at the Board and top
leadership levels
Diverse, Long-Life Portfolio
- Most diverse portfolio by asset, operator and country
- Core assets outperforming
- Growth in long-life reserves
Growth and Optionality
- Acquisitions, mine expansions and new mines driving growth
- Numerous exploration successes in the portfolio
- Long-term options in gold and copper
- Guiding to 25% growth in revenue over 5 years
|
Quarterly
revenue and GEOs Sold by commodity
|
|
Q1/2021
|
Q1/2020
|
|
GEOs
Sold
|
Revenue
|
GEOs
Sold
|
Revenue
|
|
#
|
(in millions)
|
#
|
(in millions)
|
Gold
|
107,005
|
$
|
190.0
|
105,751
|
$
|
167.0
|
Silver
|
27,466
|
|
47.7
|
13,882
|
|
22.1
|
PGMs
|
11,498
|
|
19.5
|
13,879
|
|
22.6
|
Other Mining
Assets
|
3,606
|
|
6.6
|
1,429
|
|
2.3
|
Mining
|
149,575
|
$
|
263.8
|
134,941
|
$
|
214.0
|
Oil
|
—
|
|
25.9
|
—
|
|
17.2
|
Gas
|
—
|
|
14.5
|
—
|
|
5.8
|
NGL
|
—
|
|
4.7
|
—
|
|
3.5
|
|
149,575
|
$
|
308.9
|
134,941
|
$
|
240.5
|
For Q1/2021, revenue was sourced 85.4% from gold and gold
equivalents (61.6% gold, 15.4% silver, 6.3% PGM and 2.1% other
mining assets). Geographically, revenue was sourced 90.4% from the
Americas (28.8% South America,
22.1% Central America &
Mexico, 21.5% U.S. and 18.0%
Canada).
Portfolio Additions
- Vale Royalty Debentures: As previously announced, on
April 16, 2021, the Company acquired
57 million of Vale S.A.'s ("Vale") outstanding participating
debentures ("Royalty Debentures") for $538
million. Royalty payments are made on a semi-annual basis on
March 31st and September 30th of each year reflecting sales in
the preceding half calendar year period. The first payment for
H1/2021 will be payable to Franco-Nevada on September 30, 2021, reflecting a net sales
royalty for the period January 1,
2021 to June 30, 2021.
- Investment in Labrador Iron Ore Royalty Corporation: As
previously announced, Franco-Nevada has accumulated a 9.9% equity
investment in Labrador Iron Ore Royalty Corporation ("LIORC").
LIORC normally pays cash dividends from net income derived from
Iron Ore Company of Canada to the
maximum extent possible, while maintaining appropriate levels of
working capital.
- Séguéla Royalty: On March 30,
2021, the Company acquired a 1.2% NSR on Roxgold Inc.'s
("Roxgold") Séguéla gold project in Côte d'Ivoire for $15.2 million (A$20.0
million). The royalty agreement is subject to a buy-back at
the option of Roxgold of up to 50% of the royalty at a pro rata
portion of the purchase price for a period of up to three years
after closing. In April 2021, Fortuna
Silver Mines agreed to acquire Roxgold.
Revised 2021 Guidance and 5-Year Outlook
As previously announced, reflecting the acquisition of the Vale
Royalty Debentures, Franco-Nevada now expects attributable royalty
and stream sales in 2021 to total 580,000 to 615,000 GEOs from our
Mining assets, an increase from 555,000 to 585,000 GEOs previously
and additional revenue of $115 to
$135 million from our Energy assets.
For 2021 guidance, silver, platinum, palladium and iron ore prices
have been converted to GEOs using commodity prices of $1,750/oz Au, $25.00/oz Ag, $1,100/oz Pt, $2,200/oz Pd, and $150/t Fe 65%. The WTI oil price and Henry Hub
natural gas price are assumed to average $55 per barrel and $2.50 per mcf. We estimate depletion expense to
be $265 to $300 million.
For its 5-year outlook, Franco-Nevada now expects its
attributable GEO sales to be between 630,000 and 660,000 GEOs by
2025, an increase from 600,000 to 630,000 GEOs stated previously
and additional revenue of $150 to
$170 million from our Energy assets.
The commodity price assumptions (excluding Fe 65% at $89/t) are the same as those used for our 2021
guidance and we assumed no other acquisitions other than the
Condestable stream, Séguéla royalty and Royalty Debentures.
Please see our annual MD&A for more details on our
guidance.
Q1/2021 Portfolio Updates
Gold Equivalent Ounces Sold: GEOs sold for the
quarter were 149,575, an increase of 10.8% from the 134,941 sold in
Q1/2020. Higher contributions from Antamina, Hemlo, Cobre Panama and the recently acquired
Condestable stream were partly offset by lower contributions from
Sudbury and
Guadalupe-Palmarejo.
South America:
- Antamina (22.5% silver stream) – GEOs delivered and sold
were higher in Q1/2021, reflecting an increase in ounces sold and
higher silver prices than one year earlier.
- Antapaccay (gold and silver stream) – GEOs delivered and
sold were higher in Q1/2021 than one year earlier due to variations
in the copper concentrate shipments.
- Candelaria (gold and silver
stream) – GEOs delivered and sold in Q1/2021 were relatively
consistent with Q1/2020. Production at Candeleria was higher this
quarter than in the previous year due to higher mill throughput,
but deliveries to Franco-Nevada remained flat due to timing of
concentrate shipments. Precious metal production is expected at
higher rates later in the year as the mine plan accesses higher
grade ore.
- Condestable (gold and silver stream) – Franco-Nevada
received its first deliveries from the recently acquired stream,
with the asset contributing an incremental 3,255 GEOs in the
quarter.
- Cerro Moro (2% royalty) –
Yamana reported that Cerro Moro
returned to a more normalized activity level during the quarter
following COVID-19 challenges in the prior year, and expects
further improvements as the vaccination program ramps up in
Argentina.
- Taca Taca (1% royalty) –
In November 2020, First Quantum
declared a maiden Mineral Reserve of over 7.7 million tonnes of
contained copper and, in March 2021,
filed an updated technical report. First Quantum is continuing with
pre-development and feasibility activities.
Central America &
Mexico:
- Cobre Panama (gold and silver stream) – GEOs delivered
and sold were higher in Q1/2021 than one year earlier, as the mine
continues its ramp-up. First Quantum reported record production at
the mine in Q1/2021. 19.6 Mt of ore was processed in the quarter.
Mining is expected to transition to softer ore later in the year
and First Quantum is targeting 85 Mtpa of throughput for 2021.
- Guadalupe-Palmarejo (50% gold stream) – Sales from
Guadalupe-Palmarejo were lower than in the same quarter in 2020.
GEOs sold in the prior year period benefitted from higher feed
grades and included 1,695 GEOs held in inventory at December 31, 2019.
U.S.:
- Stillwater (5% royalty)
– GEOs from Stillwater increased
from one year earlier, reflecting higher PGM production and strong
platinum and palladium prices during the quarter.
- South Arturo (4-9% royalty) – In April 2021, i-80 Gold announced positive results
from its drill programs at El Niño, Phase 1 open pit and Phase 3
project. At El Niño, development of a ramp to access the deeper
mineralization is under way and is expected to be completed in Q1
2023.
- Castle Mountain (2.65% royalty) – In March 2021, Equinox Gold announced a positive
feasibility study for the Phase 2 expansion. The Phase 2 project
will expand run-of-mine heap leaching and incorporate milling of
higher-grade ore, increasing production to an average of 218,000
ounces per year for 14 years followed by leach pad rinsing to
recover residual gold. Life-of-mine production is estimated at 3.4
million ounces of gold.
- Marigold (1.75-5% royalties): In March 2021, SSR Mining announced updated Mineral
Reserves and Mineral Resources as at December 31, 2020. Including pad inventory,
Mineral Reserves of 3.69 million gold ounces were reported, with
M&I Resources inclusive of Reserves of 5.38 million gold ounces
and Inferred Resources of 334,000 gold ounces.
- Rosemont (1.5%
royalty): As Hudbay evaluates its next steps for the
Rosemont project, drilling
activities advance at the Copper World deposits which are largely
on private land and covered by Franco-Nevada's royalty. Hudbay
believes Copper World has the potential to host at least four
economic deposits with a relatively low strip ratio and may prove
to be a viable open-pit operation that is either separate from or
additive to the Rosemont
project.
Canada:
- Sudbury (50% gold and PGM
stream): In February 2021, KGHM
approved an updated life of mine plan which extends mining
operations at the McCreedy West mine for another 5 years.
- Detour Lake (2% royalty) – In March 2021, Kirkland Lake
Gold filed a technical report which included a new life of
mine plan under which production is expected to average 680,000 to
720,000 ounces from 2021 to 2024, before increasing to 800,000
ounces in 2025 and reaching over 900,000 ounces in 2032.
Kirkland Lake Gold also reported
continued exploration success, including intersections in the
Central Saddle Zone containing exceptional grades and widths.
- Hemlo (3% royalty & 50%
NPI) – Revenue from Hemlo
increased significantly relative to the same quarter in 2020 as the
50% NPI on Interlake benefitted from higher gold prices and
increased production from grounds where Franco-Nevada has royalty
interests. In addition, the Company recorded royalties of
$8 million related to prior periods
during the quarter.
- Kirkland Lake (1.5-5.5%
royalty & 20% NPI) – Kirkland Lake
Gold reported that the Macassa #4 Shaft remains ahead of
schedule with shaft sinking reaching the 5,000-foot level at the
end of the quarter.
- Canadian Malartic (1.5%
royalty) – In March 2021, Agnico
Eagle and Yamana filed an updated technical report. Development of
the Barnat pit extension was completed in 2020 and mining will
gradually transition from the Canadian Malartic pit to the Barnat
pit. Based on current Mineral Reserves, the open-pit life of mine
extends to 2028 after which mining will gradually transition from
the open pit to underground. The Odyssey underground project is
expected to extend the life of the complex to at least 2039.
- Hardrock (3% royalty) – In April
2021, Equinox Gold completed its acquisition of Premier Gold
and the acquisition of an additional 10% interest in Hardrock,
increasing its stake to 60%. Orion will hold the remaining 40%
interest in the project.
- Red Lake (Bateman) (2% royalty) – In March 2021, Evolution Mining agreed to acquire
all of the issued and outstanding shares of Battle North. The
acquisition is expected to create synergies between the
Bateman project and Evolution's
existing operations in the region.
- Valentine Lake (2%
royalty) – In March 2021,
Marathon Gold completed a feasibility study that outlines a 13-year
mine life with an average production profile of 173,000 ounces of
gold per year between 2024 and 2033 and 56,000 ounces of gold per
year between 2034 and 2036 from the processing of low-grade
stockpiles. Marathon Gold also reported a maiden Inferred Mineral
Resource estimate for the new Berry Deposit of 638,700 ounces.
Rest of World:
- Aği Daği (2% royalty) – In April
2021, Alamos announced its
filing of an investment treaty claim against the Republic of
Turkey for failing to grant
routine renewals of key licenses and permits for Alamos' Kirazli gold mine. Though
Franco-Nevada does not have a royalty on the Kirazli mine,
cessation of development activities at Kirazli are expected to
negatively impact the advancement of the Aği Daği project.
Energy: Revenue from the Energy assets increased to
$45.1 million in Q1/2021 compared to
$26.5 million in Q1/2020. Revenues
were positively impacted by higher oil and gas prices and the
addition of royalty interests in the Haynesville shale play.
U.S.:
- Haynesville (various royalty rates) – The recently
acquired portfolio of assets contributed $7.2 million of incremental revenue in
Q1/2021.
- Permian Basin (various royalty rates) – Revenue from
Franco-Nevada's interests in the Permian Basin increased compared
to the same quarter in the prior year due to incremental volumes
from new wells and higher realized commodity prices.
- Marcellus (1% royalty) – The royalty contributed
$7.6 million to revenue in Q1/2021,
an increase from Q1/2020, reflecting higher realized prices.
- SCOOP/STACK (various royalty rates) – Royalties from
SCOOP/STACK were relatively flat compared to Q1/2020 with higher
realized pricing being offset by reduced drilling by the operators
on royalty lands.
Canada:
- Weyburn (NRI, ORR, WI)
– Revenue from Weyburn contributed
$9.1 million in Q1/2021 compared to
$4.2 million in Q1/2020, reflecting
the NRI royalty's leverage to increasing oil prices.
- Orion (4% GORR) – Revenue from Orion increased compared
to Q1/2020 due to higher realized prices and despite slightly lower
production levels for the quarter.
Dividend increase
Franco-Nevada is pleased to
announce that its Board of Directors has declared a quarterly
dividend of $0.30 per share as had
been previously announced. The dividend will be a 15.4% increase
from the previous $0.26 per share
quarterly dividend and will mark the 14th consecutive annual
dividend increase for Franco-Nevada shareholders. The dividend will
be paid on June 24, 2021 to
shareholders of record on June 10,
2021 (the "Record Date"). The Canadian dollar equivalent is
to be determined based on the daily average rate posted by the Bank
of Canada on the Record Date.
Under Canadian tax legislation, Canadian resident individuals who
receive "eligible dividends" are entitled to an enhanced gross-up
and dividend tax credit on such dividends.
The Company has a Dividend Reinvestment Plan (the "DRIP").
Participation in the DRIP is optional. The Company will issue
additional common shares through treasury at a 3% discount to the
Average Market Price, as defined in the DRIP. However, the Company
may, from time to time, in its discretion, change or eliminate the
discount applicable to treasury acquisitions or direct that such
common shares be purchased in market acquisitions at the prevailing
market price, any of which would be publicly announced. The DRIP
and enrollment forms are available on the Company's website at
www.franco-nevada.com. Canadian and U.S. registered shareholders
may also enroll in the DRIP online through the plan agent's
self-service web portal at www.investorcentre.com/franco-nevada.
Canadian and U.S. beneficial shareholders should contact their
financial intermediary to arrange enrollment. Non-Canadian and
non-U.S. shareholders may potentially participate in the DRIP,
subject to the satisfaction of certain conditions. Non-Canadian and
non-U.S. shareholders should contact the Company to determine
whether they satisfy the necessary conditions to participate in the
DRIP.
This press release is not an offer to sell or a solicitation of
an offer of securities. A registration statement relating to the
DRIP has been filed with the U.S. Securities and Exchange
Commission and may be obtained under the Company's profile on the
U.S. Securities and Exchange Commission's website at
www.sec.gov.
Shareholder Information
The complete unaudited Consolidated Financial Statements and
Management's Discussion and Analysis can be found today on
Franco–Nevada's website at www.franco-nevada.com, on SEDAR at
www.sedar.com and on EDGAR at www.sec.gov.
Management will host a conference call tomorrow, Thursday, May 6, 2021 at 10:00 a.m. Eastern
Time to review Franco–Nevada's Q1/2021 results.
Interested investors are invited to participate as follows:
- Via Conference Call: Toll-Free: (888) 390-0546;
International: (416) 764-8688
- Conference Call Replay until May 13,
2021: Toll-Free (888) 390-0541; International (416)
764-8677; Code 928928 #
- Webcast: A live audio webcast will be accessible at
www.franco-nevada.com
Corporate Summary
Franco-Nevada Corporation is the leading gold-focused royalty
and streaming company with the largest and most diversified
portfolio of cash-flow producing assets. Its business model
provides investors with gold price and exploration optionality
while limiting exposure to cost inflation. Franco-Nevada uses
its free cash flow to expand its portfolio and pay dividends.
It trades under the symbol FNV on both the Toronto and New
York stock exchanges. Franco-Nevada is the gold
investment that works.
Forward-Looking Statements
This press release contains "forward-looking information" and
"forward-looking statements" within the meaning of applicable
Canadian securities laws and the United States Private Securities
Litigation Reform Act of 1995, respectively, which may include, but
are not limited to, statements with respect to future events or
future performance, management's expectations regarding
Franco-Nevada's growth, results of operations, estimated future
revenues, performance guidance, carrying value of assets, future
dividends and requirements for additional capital, mineral reserve
and mineral resource estimates, production estimates, production
costs and revenue, future demand for and prices of commodities,
expected mining sequences, business prospects and opportunities,
the performance and plans of third party operators, audits being
conducted by the Canada Revenue Agency, the expected exposure for
current and future assessments and available remedies, the remedies
relating to and consequences of the ruling of the Supreme Court of
Panama in relation to the Cobre
Panama project, the aggregate value of Common Shares which may be
issued pursuant to the Company's at-the-market equity program (the
"ATM Program"), and the Company's expected use of the net proceeds
of the ATM Program, if any. In addition, statements (including data
in tables) relating to reserves and resources including reserves
and resources covered by a royalty, stream or other interest, GEOs
or mine lives are forward-looking statements, as they involve
implied assessment, based on certain estimates and assumptions, and
no assurance can be given that the estimates and assumptions are
accurate and that such reserves and resources, mine lives and GEOs
will be realized. Such forward-looking statements reflect
management's current beliefs and are based on information currently
available to management. Often, but not always, forward-looking
statements can be identified by the use of words such as "plans",
"expects", "is expected", "budgets", "potential for", "scheduled",
"estimates", "forecasts", "predicts", "projects", "intends",
"targets", "aims", "anticipates" or "believes" or variations
(including negative variations) of such words and phrases or may be
identified by statements to the effect that certain actions "may",
"could", "should", "would", "might" or "will" be taken, occur or be
achieved. Forward-looking statements involve known and unknown
risks, uncertainties and other factors, which may cause the actual
results, performance or achievements of Franco-Nevada to be
materially different from any future results, performance or
achievements expressed or implied by the forward-looking
statements. A number of factors could cause actual events or
results to differ materially from any forward-looking statement,
including, without limitation: the price at which Common Shares are
sold in the ATM Program and the aggregate net proceeds received by
the Company as a result of the ATM Program; fluctuations in the
prices of the primary commodities that drive royalty and stream
revenue (gold, platinum group metals, copper, nickel, uranium,
silver, iron-ore and oil and gas); fluctuations in the value of the
Canadian and Australian dollar, Mexican peso and any other currency
in which revenue is generated, relative to the U.S. dollar; changes
in national and local government legislation, including permitting
and licensing regimes and taxation policies and the enforcement
thereof; regulatory, political or economic developments in any of
the countries where properties in which Franco-Nevada holds a
royalty, stream or other interest are located or through which they
are held; risks related to the operators of the properties in which
Franco-Nevada holds a royalty, stream or other interest, including
changes in the ownership and control of such operators;
relinquishment or sale of mineral properties; influence of
macroeconomic developments; business opportunities that become
available to, or are pursued by Franco-Nevada; reduced access to
debt and equity capital; litigation; title, permit or license
disputes related to interests on any of the properties in which
Franco-Nevada holds a royalty, stream or other interest; whether or
not the Company is determined to have "passive foreign investment
company" ("PFIC") status as defined in Section 1297 of the United
States Internal Revenue Code of 1986, as amended; potential changes
in Canadian tax treatment of offshore streams; excessive cost
escalation as well as development, permitting, infrastructure,
operating or technical difficulties on any of the properties in
which Franco-Nevada holds a royalty, stream or other interest;
access to sufficient pipeline capacity; actual mineral content may
differ from the reserves and resources contained in technical
reports; rate and timing of production differences from resource
estimates, other technical reports and mine plans; risks and
hazards associated with the business of development and mining on
any of the properties in which Franco-Nevada holds a royalty,
stream or other interest, including, but not limited to unusual or
unexpected geological and metallurgical conditions, slope failures
or cave-ins, flooding and other natural disasters, terrorism, civil
unrest or an outbreak of contagious disease; the impact of the
COVID-19 (coronavirus) pandemic; and the integration of acquired
assets. The forward-looking statements contained in this press
release are based upon assumptions management believes to be
reasonable, including, without limitation: the ongoing operation of
the properties in which Franco-Nevada holds a royalty, stream or
other interest by the owners or operators of such properties in a
manner consistent with past practice; the accuracy of public
statements and disclosures made by the owners or operators of such
underlying properties; no material adverse change in the market
price of the commodities that underlie the asset portfolio; the
Company's ongoing income and assets relating to determination of
its PFIC status; no material changes to existing tax
treatment; the expected application of tax laws and
regulations by taxation authorities; the expected assessment and
outcome of any audit by any taxation authority; no adverse
development in respect of any significant property in which
Franco-Nevada holds a royalty, stream or other interest; the
accuracy of publicly disclosed expectations for the development of
underlying properties that are not yet in production; integration
of acquired assets; and the absence of any other factors that could
cause actions, events or results to differ from those anticipated,
estimated or intended. However, there can be no assurance that
forward-looking statements will prove to be accurate, as actual
results and future events could differ materially from those
anticipated in such statements. Investors are cautioned that
forward-looking statements are not guarantees of future
performance. In addition, there can be no assurance as to the
outcome of the ongoing audit by the CRA or the Company's exposure
as a result thereof. Franco-Nevada
cannot assure investors that actual results will be consistent with
these forward-looking statements. Accordingly, investors should not
place undue reliance on forward-looking statements due to the
inherent uncertainty therein.
For additional information with respect to risks,
uncertainties and assumptions, please refer to Franco-Nevada's most
recent Annual Information Form filed with the Canadian securities
regulatory authorities on www.sedar.com and Franco-Nevada's most
recent Annual Report filed on Form 40-F filed with the SEC on
www.sec.gov. The forward-looking statements herein are made as of
the date of this press release only and Franco-Nevada does not
assume any obligation to update or revise them to reflect new
information, estimates or opinions, future events or results or
otherwise, except as required by applicable law.
NON-IFRS MEASURES: Cash Costs, Adjusted EBITDA, and
Adjusted Net Income are intended to provide additional information
only and do not have any standardized meaning prescribed under IFRS
and should not be considered in isolation or as a substitute for
measures of performance prepared in accordance with
IFRS. These measures are not necessarily indicative of
operating profit or cash flow from operations as determined under
IFRS. Other companies may calculate these measures
differently. For a reconciliation of these measures to various IFRS
measures, please see below or the Company's current MD&A
disclosure found on the Company's website, on SEDAR and on EDGAR.
Comparative information has been recalculated to conform to current
presentation.
- GEOs include Franco-Nevada's attributable share of
production from our Mining assets, after applicable recovery and
payability factors, and do not include Energy assets. GEOs are
estimated on a gross basis for NSR royalties and, in the case of
stream ounces, before the payment of the per ounce contractual
price paid by the Company. For NPI royalties, GEOs are calculated
taking into account the NPI economics. Silver, platinum, palladium
and other mining commodities are converted to GEOs by dividing
associated revenue, which includes settlement adjustments, by the
relevant gold price. The price used in the computation of GEOs
earned from a particular asset varies depending on the royalty or
stream agreement, which may make reference to the market price
realized by the operator, or the average price for the month,
quarter, or year in which the mining commodity was produced or
sold. For Q1/2021, the average commodity prices were as follows:
$1,794 gold (Q1/2020 - $1,583), $26.26
silver (Q1/2020 - $16.90),
$1,161 platinum (Q1/2020 -
$903) and $2,405 palladium (Q1/2020 - $2,284).
- Adjusted Net Income and Adjusted Net Income per
share are non-IFRS financial measures, which exclude the
following from net income and earnings per share ("EPS"):
impairment charges related to royalty, stream and working interests
and investments; gains/losses on the sale of royalty, stream and
working interests and investments; foreign exchange gains/losses
and other income/expenses; unusual non-recurring items; and the
impact of income taxes on these items.
- Adjusted EBITDA and Adjusted EBITDA per share are
non-IFRS financial measures, which exclude the following from net
income and EPS: income tax expense/recovery; finance expenses and
finance income; depletion and depreciation; non-cash costs of
sales; impairment charges related to royalty, stream and working
interests and investments; gains/losses on the sale of royalty,
stream and working interests and investments; foreign exchange
gains/losses and other income/expenses; and unusual non-recurring
items.
- Margin is a non-IFRS financial measure which is
defined by the Company as Adjusted EBITDA divided by revenue.
Reconciliation to IFRS measures:
|
|
For the three
months ended
|
|
March 31,
|
(expressed in
millions, except per share amounts)
|
2021
|
2020
|
Net income
(loss)
|
$
|
171.5
|
$
|
(98.8)
|
Impairment charges
(reversals)
|
|
—
|
|
271.7
|
Foreign exchange
(gains)/losses and other (income)/expenses
|
|
0.1
|
|
0.1
|
Tax effect of
adjustments
|
|
(0.1)
|
|
(63.8)
|
Other tax related
adjustments:
|
|
|
|
|
Recognition of
previously unrecognized deferred tax assets
|
|
(10.6)
|
|
—
|
Adjusted Net
Income
|
$
|
160.9
|
$
|
109.2
|
Basic weighted
average shares outstanding
|
|
191.0
|
|
189.4
|
Adjusted Net
Income
|
$
|
0.84
|
$
|
0.58
|
|
|
For the three
months ended
|
|
March 31,
|
(expressed in
millions, except per share amounts)
|
2021
|
2020
|
Net income
(loss)
|
$
|
171.5
|
$
|
(98.8)
|
Income tax expense
(recovery)
|
|
19.8
|
|
(44.9)
|
Finance
expenses
|
|
0.8
|
|
1.1
|
Finance
income
|
|
(0.7)
|
|
(0.9)
|
Depletion and
depreciation
|
|
71.2
|
|
64.4
|
Impairment charges
(reversals)
|
|
—
|
|
271.7
|
Foreign exchange
(gains)/losses and other (income)/expenses
|
|
0.1
|
|
0.1
|
Adjusted
EBITDA
|
$
|
262.7
|
$
|
192.7
|
Basic weighted
average shares outstanding
|
|
191.0
|
|
189.4
|
Adjusted EBITDA
per share
|
$
|
1.37
|
$
|
1.02
|
|
|
For the three
months ended
|
|
March 31,
|
(expressed in
millions, except Margin)
|
2021
|
2020
|
Net income
(loss)
|
$
|
171.5
|
$
|
(98.8)
|
Income tax expense
(recovery)
|
|
19.8
|
|
(44.9)
|
Finance
expenses
|
|
0.8
|
|
1.1
|
Finance
income
|
|
(0.7)
|
|
(0.9)
|
Depletion and
depreciation
|
|
71.2
|
|
64.4
|
Impairment charges
(reversals)
|
|
—
|
|
271.7
|
Foreign exchange
(gains)/losses and other (income)/expenses
|
|
0.1
|
|
0.1
|
Adjusted
EBITDA
|
$
|
262.7
|
$
|
192.7
|
Revenue
|
|
308.9
|
|
240.5
|
Margin
|
|
85.0%
|
|
80.1%
|
FRANCO-NEVADA
CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF
FINANCIAL POSITION
(unaudited, in millions of U.S.
dollars)
|
|
At
March 31,
|
At
December 31,
|
|
2021
|
2020
|
ASSETS
|
|
|
|
|
Cash and cash
equivalents (note 4)
|
$
|
538.5
|
$
|
534.2
|
Receivables
|
|
102.3
|
|
93.4
|
Prepaid expenses and
other (note 6)
|
|
36.2
|
|
36.1
|
Current
assets
|
$
|
677.0
|
$
|
663.7
|
|
|
|
|
|
Royalty, stream and
working interests, net (note 7)
|
$
|
4,748.7
|
$
|
4,632.1
|
Investments and loan
receivable (note 5)
|
|
250.7
|
|
238.4
|
Deferred income tax
assets
|
|
51.8
|
|
45.1
|
Other assets (note
8)
|
|
19.0
|
|
13.6
|
Total
assets
|
$
|
5,747.2
|
$
|
5,592.9
|
|
|
|
|
|
LIABILITIES
|
|
|
|
|
Accounts payable and
accrued liabilities
|
$
|
33.8
|
$
|
40.8
|
Current income tax
liabilities
|
|
7.5
|
|
12.4
|
Current
liabilities
|
$
|
41.3
|
$
|
53.2
|
|
|
|
|
|
Deferred income tax
liabilities
|
|
98.4
|
|
91.5
|
Other
liabilities
|
|
4.4
|
|
4.4
|
Total
liabilities
|
$
|
144.1
|
$
|
149.1
|
|
|
|
|
|
SHAREHOLDERS'
EQUITY
|
|
|
|
|
Share capital (note
15)
|
$
|
5,588.2
|
$
|
5,580.1
|
Contributed
surplus
|
|
15.6
|
|
14.0
|
Retained earnings
(deficit)
|
|
93.8
|
|
(34.4)
|
Accumulated other
comprehensive loss
|
|
(94.5)
|
|
(115.9)
|
Total shareholders'
equity
|
$
|
5,603.1
|
$
|
5,443.8
|
Total liabilities and
shareholders' equity
|
$
|
5,747.2
|
$
|
5,592.9
|
|
|
|
|
|
|
|
|
|
|
Commitments and
contingencies (notes 19 and 20)
|
Subsequent
events (note 21)
|
The accompanying notes are an integral part of
these consolidated financial statements and can be found in
Q1/2021
Quarterly Report available on our
website
FRANCO-NEVADA
CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(LOSS) AND COMPREHENSIVE INCOME
(LOSS)
(unaudited, in millions of U.S. dollars and
shares, except per share amounts)
|
|
For the three months ended
|
|
March 31,
|
|
2021
|
2020
|
Revenue (note
10)
|
$
|
308.9
|
$
|
240.5
|
|
|
|
|
|
Costs of
sales
|
|
|
|
|
Costs of sales (note
11)
|
$
|
40.6
|
$
|
43.6
|
Depletion and
depreciation
|
|
71.2
|
|
64.4
|
Total costs of
sales
|
$
|
111.8
|
$
|
108.0
|
Gross
profit
|
$
|
197.1
|
$
|
132.5
|
|
|
|
|
|
Other operating
expenses (income)
|
|
|
|
|
Impairment charges
(reversals) (note 7)
|
$
|
—
|
$
|
271.7
|
General and
administrative expenses
|
|
6.2
|
|
6.2
|
Gain on sale of gold
bullion
|
|
(0.6)
|
|
(2.0)
|
Total other operating
expenses (income)
|
$
|
5.6
|
$
|
275.9
|
Operating income
(loss)
|
$
|
191.5
|
$
|
(143.4)
|
Foreign exchange gain
(loss) and other income (expenses)
|
$
|
(0.1)
|
$
|
(0.1)
|
|
|
|
|
|
Income (loss) before
finance items and income taxes
|
$
|
191.4
|
$
|
(143.5)
|
|
|
|
|
|
Finance items
(note 13)
|
|
|
|
|
Finance
income
|
$
|
0.7
|
$
|
0.9
|
Finance
expenses
|
|
(0.8)
|
|
(1.1)
|
Net income (loss)
before income taxes
|
$
|
191.3
|
$
|
(143.7)
|
|
|
|
|
|
Income tax expense
(recovery) (note 14)
|
|
19.8
|
|
(44.9)
|
Net income
(loss)
|
$
|
171.5
|
$
|
(98.8)
|
|
|
|
|
|
Other
comprehensive income (loss)
|
|
|
|
|
|
|
|
|
|
Items that may be
reclassified subsequently to profit and loss:
|
|
|
|
|
Currency translation
adjustment
|
$
|
9.4
|
$
|
(63.6)
|
|
|
|
|
|
Items that will
not be reclassified subsequently to profit and loss:
|
|
|
|
|
Gain (loss) on changes
in the fair value of equity investments
|
|
|
|
|
at fair value through
other comprehensive income ("FVTOCI"),
|
|
|
|
|
net of income tax
(note 5)
|
|
18.6
|
|
(35.3)
|
Other comprehensive
income (loss)
|
$
|
28.0
|
$
|
(98.9)
|
|
|
|
|
|
Comprehensive
income (loss)
|
$
|
199.5
|
$
|
(197.7)
|
|
|
|
|
|
Earnings (loss) per
share (note 16)
|
|
|
|
|
Basic
|
$
|
0.90
|
$
|
(0.52)
|
Diluted
|
$
|
0.90
|
$
|
(0.52)
|
Weighted average
number of shares outstanding (note 16)
|
|
|
|
|
Basic
|
|
191.0
|
|
189.4
|
Diluted
|
|
191.3
|
|
189.8
|
|
|
|
|
|
The accompanying notes are an integral part of
these consolidated financial statements and can be found in our
Q1/2021
Quarterly Report available on our website
FRANCO-NEVADA
CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH
FLOWS
unaudited, in millions of U.S. dollars)
|
|
For the three months ended
|
|
March 31,
|
|
2021
|
2020
|
Cash flows from
operating activities
|
|
|
|
|
Net income
(loss)
|
$
|
171.5
|
$
|
(98.8)
|
Adjustments to
reconcile net income (loss) to net cash provided by operating
activities:
|
|
|
|
|
Depletion and
depreciation
|
|
71.2
|
|
64.4
|
Share-based
payments
|
|
1.4
|
|
1.2
|
Impairment charges
(reversals)
|
|
—
|
|
271.7
|
Unrealized foreign
exchange loss
|
|
0.1
|
|
0.5
|
Deferred income tax
recovery
|
|
(2.3)
|
|
(59.3)
|
Other non-cash
items
|
|
(1.2)
|
|
(2.5)
|
Acquisition of gold
bullion
|
|
(10.5)
|
|
(8.8)
|
Proceeds from sale of
gold bullion
|
|
7.5
|
|
13.5
|
Operating cash flows
before changes in non-cash working capital
|
$
|
237.7
|
$
|
181.9
|
Changes in non-cash
working capital:
|
|
|
|
|
(Increase) decrease in
receivables
|
$
|
(8.9)
|
$
|
14.7
|
(Increase) decrease in
prepaid expenses and other
|
|
(2.2)
|
|
7.1
|
Decrease in
current liabilities
|
|
(2.3)
|
|
(8.5)
|
Net cash provided by
operating activities
|
$
|
224.3
|
$
|
195.2
|
|
|
|
|
|
Cash flows from
investing activities
|
|
|
|
|
Acquisition of
royalty, stream and working interests
|
$
|
(190.3)
|
$
|
(34.3)
|
Acquisition of energy
well equipment
|
|
(0.3)
|
|
(0.2)
|
Proceeds from sale of
investments
|
|
12.2
|
|
—
|
Net cash used in
investing activities
|
$
|
(178.4)
|
$
|
(34.5)
|
|
|
|
|
|
Cash flows from
financing activities
|
|
|
|
|
Payment of
dividends
|
$
|
(41.8)
|
$
|
(36.2)
|
Repayment of term
loan
|
|
—
|
|
(80.0)
|
Proceeds from
at-the-market equity offerings
|
|
—
|
|
37.5
|
Credit facility
amendment costs
|
|
(0.1)
|
|
—
|
Proceeds from exercise
of stock options
|
|
—
|
|
1.2
|
Net cash used in
financing activities
|
$
|
(41.9)
|
$
|
(77.5)
|
Effect of exchange
rate changes on cash and cash equivalents
|
$
|
0.3
|
$
|
(5.5)
|
Net change in cash
and cash equivalents
|
$
|
4.3
|
$
|
77.7
|
Cash and cash
equivalents at beginning of period
|
$
|
534.2
|
$
|
132.1
|
Cash and cash
equivalents at end of period
|
$
|
538.5
|
$
|
209.8
|
|
|
|
|
|
Supplemental cash
flow information:
|
|
|
|
|
Dividend income
received
|
$
|
9.0
|
$
|
5.1
|
Interest and standby
fees paid
|
$
|
0.6
|
$
|
0.8
|
Income taxes
paid
|
$
|
21.6
|
$
|
18.4
|
The accompanying notes are an integral part of
these consolidated financial statements and can be found in our
Q1/2021
Quarterly Report available on our
website
For more information, please go to our website at
www.franco-nevada.com or contact:
View original
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SOURCE Franco-Nevada Corporation