Royalty and streaming company Franco-Nevada just had its best year ever, reporting revenue of $844.1 million on the sale of 516,438 gold-equivalent oz.
Net income for the year was $344.1 million, or $1.83 per share.
The final quarter of 2019 was also the company’s best quarter ever, with revenue of $258.1 million on sales of 153,396 gold-equivalent oz. Cash costs were a low $287 per gold-equivalent oz. sold.
The strong results were boosted by production from First Quantum Minerals’ Cobre Panama mine
The strong results were boosted by production from First Quantum Minerals’ Cobre Panama mine in Panama, where Franco-Nevada has a gold and silver stream. Commercial production at the mine began in fall 2019. Franco-Nevada sold 43,554 gold-equivalent oz. from the mine last year, with sales expected to increase to 90,000-110,000 gold-equivalent oz. this year.
“Results benefited from the start of precious metals deliveries from Cobre Panama, strong production at other key assets and higher precious metals prices,” said Franco-Nevada CEO David Harquail in a release.
“Thanks to our diversified portfolio, we expect good overall growth in 2020 mostly driven by the continued Cobre Panama ramp-up despite a more conservative outlook for our energy assets. Franco-Nevada is generating substantial free cash flow and, post year-end, is now debt free.”
For 2020, Franco-Nevada expects even stronger results; the company is projecting attributable royalty and stream sales of between 550,000 and 580,000 gold-equivalent oz. for the year.
In addition to royalty and streaming revenue from gold (the majority of its revenue at $545.8 million), silver, platinum group metals and other mining assets, Franco-Nevada has investments of energy that brought in $86 million last year. The company has a target of no more than 20% of its revenue coming from energy.
(This article first appeared in the Canadian Mining
Journal)