Franco-Nevada Corp. Q3 FY2026 earnings call

• Strong Financial Performance: Revenue, cash flow, and earnings were all higher than the prior year period, driven by stronger gold and oil prices. The company is tracking towards the mid-range of its annual guidance.
• Portfolio Exploration Success: Exceptional exploration results were reported across the portfolio, including at Porcupine Complex (Panmore and Dome), Stibnite, Garupi, Musselwhite, Banyan's ORMAC, Mineral 260's Bulla Bulling, and I-80's Mineral Point Deposit.
• Project Advancements: Glencore completed surface land acquisitions for Corcovaco; Hud Bay and Mitsubishi sanctioned Copper World construction; the federal government matched provincial funding for the Ring of Fire Road.
• Panamanian Operations: The Ministerial Commission recommended beginning formal negotiations with First Quantum regarding COBRE. Response to the earthquake has taken priority, but negotiations are expected to resume once addressed.
• Australian Business Growth: Franco Nevada took another step in growing its Australian business with a second tranche of financing for the development of the Bulla Bulling deposit.
• Sustainability Initiatives: Expanded mining industry scholarship program to support 23 students. Entered multi-year commitments for community development and environmental initiatives at COBRE Panama and renewed commitment to Ensenia Peru's education initiative.
• Capital Position: The company holds $4.8 billion in available capital with no debt, providing strong capacity to pursue new deals.

The company reported record financial results for the first nine months of 2026. Total revenue increased 13% to $549.3 million, with precious metals accounting for 84% of this revenue. Adjusted EBITDA rose 15% to $493.9 million, and adjusted net income grew 33% to $364.5 million ($1.89 per share). The diversified (energy) segment saw significant outperformance, with revenue increasing 29% year-over-year to $86.8 million, driven primarily by higher oil prices rather than volume increases. Precious metal GEOs sold decreased by 7% to just over 110,000 ounces compared to the prior year, though contributions from South Arturo, Valentine, and Casa Berardi helped offset declines from Cobre Panama, Guadalupe, and Antipakai.

• Total GEO Sold Guidance: Narrowed the range to 525,000 to 555,000 ounces for the full year 2026. This includes approximately 10,000 GEOs from Cobre Panama related to stockpile ore processing, which were not included in the original March guidance.
• Diversified Revenue Guidance: Updated expectation for diversified assets revenue is now between $300 million and $330 million, representing a significant increase due to strong oil prices.
• Individual Segment Guidance: Ranges for individual segments (gold, silver, and PGMs) have also been narrowed to reflect current performance projections.

• Operational Disruptions: Production at Guadalupe was impacted by heavy rainfall causing supply chain issues. Deliveries at Antipakai were lower due to timing issues.
• Regulatory/Political Risk: COBRE Panama operations are subject to ongoing negotiations and regulatory processes following the Ministerial Commission's recommendation. Earthquake response has temporarily prioritized attention away from these negotiations.
• Commodity Price Volatility: While current prices are favorable, the company notes that precious metal prices are off all-time highs reached in Q1 2026. Oil prices remain volatile despite being above $85/barrel.

Q: Analyst asked about the drivers of the increased diversified revenue guidance, specifically how much is attributable to oil vs. iron ore, pricing vs. volumes, and the Continental venture. / A: CFO confirmed the entire revenue increase is tied to energy, as iron ore prices are flat year-over-year. The majority of the increase is strictly price-driven, although some production increases on unaffected lands contribute slightly.

Q: Analyst asked for Q4 2026 GEO trends for Guadalupe given variability and recent issues with lower grade zones and supply chains. / A: CFO noted it is difficult to model precisely but expects Q4 GEOs to trend between 8,000 to 9,000 ounces, noting that historically Guadalupe has delivered what was expected despite recent challenges.

Q: Analyst asked about the size, value range, and urgency/timeline of the deal pipeline mentioned in the written release. / A: VP Corporate Development stated the pipeline is exceptionally vibrant and diverse, with more larger deals present compared to a year ago. While specific timelines are hard to comment on, the company expects to be quite active over the next 12 months.

Q: Analyst asked if the potential half-million ounce production from Discovery's Porcupine projects (Dome/Panmore) accrues directly to Franco Nevada, and about the prospectivity of the new Paymaster acquisition investment. / A: CEO passed to VP Corporate Development, who expressed delight in working with Discovery and described the new acquisition ground as very prospective and accretive, though exact timing for inclusion in the portfolio remains uncertain.

Q: Analyst asked about the accounting calculation behind the $10.6 million impairment reversal at Cobre Panama, questioning why it was so low given the estimated 30,000 GEOs from stockpile processing. / A: CFO explained that depletion is calculated by dividing the original asset cost by total expected GEOs. The reversal reflects the mathematical adjustment for the specific stockpile processing GEOs. No further reversals are expected until Cobre Panama restarts full operations.