Franco-Nevada Corporation Q2 FY2025 earnings call

• Q2 2025 surpasses Q1 2025 records with high gold prices driving record revenue, operating cash flow, adjusted-EBITDA margins, and earnings.
• Constructive developments in Panama, including approval of preservation and safe maintenance plan, shipment of remaining copper concentrate from Cobre Panama, and Panamanian government's commitment to resolving the situation for a potential restart.
• Attractive growth over the next 5 years from existing portfolio, with 3 projects moving ahead including Perpetua's Stibinte Gold, Hudbay's Copper World, and Castle Mountain in the FAST-41 permitting process. Cascabel's new management team indicating first production as soon as 2028.
• Acquired royalty on IAMGOLD's Cote Gold Mine, which achieved nameplate throughput ahead of schedule and positive grade reconciliation. Also acquired royalty on AngloGold's Arthur project in Nevada.
• Benefited from strong contributions from Guadalupe and Candelaria, ramp-up of operations at Tocantinzinho, Greenstone, and Salares Norte, and first revenues from recently acquired royalties on Porcupine and Cote Gold.

For the second quarter of 2025, Franco-Nevada reported record financial results. Total GEOs sold were 112,093, an increase of 2% from the second quarter of 2024. Precious metal GEOs sold were 92,449, higher by 12% year-over-year. Precious metals accounted for 82% of revenue. Total revenue for the quarter was $369.4 million, a record, with adjusted EBITDA at $365.7 million, which was 65% higher than the second quarter of 2024. Diversified GEOs sold were 19,644 for the quarter compared to 29,914 in the prior year quarter, with diversified revenue slightly lower at $62.7 million versus $64.6 million in the prior year quarter.

• Original guidance for 2025 was 465,000 to 525,000 total GEOs and 385,000 to 425,000 precious metal GEOs using $2,800 per ounce gold price. With current commodity prices, remains on pace to achieve guidance ranges.
• Expect to recognize revenue from Cobre Panama in Q3, with approximately 10,000 GEOs expected in Q3.
• Will recognize full quarter revenue from recently acquired royalties on Porcupine and Cote Gold in Q3.

• Antapaccay was lower than expected solely due to timing of deliveries, but expected to be stronger in the second half of the year.
• Volatility in commodity prices, such as iron ore and oil, which were lower compared to prior year, though natural gas prices increased.

Q: On Cobre Panama, can you maybe give some more color on why Franco decided to suspend the arbitration proceeding?

A: The best outcome for us at Cobre Panama and First Quantum is to see the mine get back into operation. The Panamanian government requested suspension of arbitrations to give space to find a new solution, and we are amenable to working with the government to allow that to happen.

Q: On Cote royalty, what gave you the confidence in the due diligence to take on a profits-based royalty?

A: We worked with IAMGOLD on the acquisition, giving unique insight into the asset. The scale of the resource is impressive, and IAMGOLD is talking about a super pit between Cote and Gosselin, providing robust production profiles. We have high confidence in the cost profile with a new highly automated line and first-class team.

Q: On the new Prosperity option, the 22% gold stream, can you give a sense of quantum of contribution?

A: Prosperity is a large copper gold prophyry system in BC. The deposit is roughly half copper, half gold, with an order of 40,000-50,000 ounces per year of gold potential. The Chukotun First Nation now has an ownership stake, and it will take a couple of years for them to consider the change in circumstance before deciding on moving ahead.