FRANCO-NEVADA---a low risk exposure to gold through this royalty/streaming leader.

 FNV FY24

A very active year for FNV. Perhaps due to the bullion price getting companies to expand and start gold operations and allowing FNV to back them.

Interestingly, some positive news on CP, although it looks to be a medium-term rather than short-term term opportunity.

An interesting new slide, being the comparison of streaming and royalty. Streaming is bigger revenues, circa $170m vs. $150m, but are lower margin given the cogs moves with the commodity price to some extent, eg pay 10% of the gold price.

Mixed results around the operations, which is usual. Some declines are forecast as a couple of mines end stated life around 2028, but could revise plans. As usual.

The company remains net cash even after acquisitions, appears more likely to chase PM revenues and is seeing opportunities.

Guidance 2025 +7% on reasonable assumptions and 2029 +12% on reasonable assumptions.

Valuation

The streamers and royalty companies are the closest instruments to bullion. Having more risk than bullion but also more growth. The discount rate should be very low, given the low-risk revenues.

My view is that the apparent closure of CP by the Panamanian government offered a once-in-a-generation buying point for this royalty leader. FNV is now recovering, enacting agreements, and there is a good chance that value is retrieved from CP at some point.

A pe of 45X implies a yield of 2.2% plus organic growth of 3%. The biggest risk is FNV investing in a series of poor mines or as we have seen, the closure of a mine due to political or nationalistic reasons. FNV is coming off this occurrence now. There is a chance that CP in Panama is worth a considerable amount and adds some value. To generate a 10%pa return a share price of $120 is required and is the buy price. Ave entry price is $115.

FNV is held as a low-risk way of gaining gold exposure. It is a higher risk than bullion but offers some growth. FNV is not exposed to operating costs. A gold price of $2800/oz underwrites this valuation.

 

 

CALL SUMMARY

Paul Brink CEO

2024 was the most active year in our history for business development. …more than $1.3 billion in acquisitions and commitments during the year.

Transactions included a gold stream investment in Cascabel in Ecuador, a royalty on the Yanacocha gold mine in Peru, and a principally gold stream on Sibanye’s western limb PGM operations in South Africa. All of them are high-quality ore bodies with the potential to be very long-life mines. One of our largest portfolio successes in 2024 was the completion of the construction and commercial operation of Tocantinzinho in Brazil, where we have a 12.5% gold stream. No surprise the mine built by the G mining team was on time and on budget. Rather than just providing stream financing, Franco-Nevada is the financial banker of G Mining Ventures, having provided stream debt and equity components. These add is only the first many mines G Mining will build and Franco buy a strong financial backing.

In January we announced a second partnership based on the same principles, a financing package to support Discovery Silver's acquisition of Newmont's Porcupine Complex in Timmins, including a royalty credit facility and backing for their equity raise. . This is possibly only the first move to consolidate operations in the camp. And with financial backing from Franco, Discovery is well positioned for those next steps.

The acquisitions of the last 12 months have the potential to add 85,000 to 95,000 GEOs per annum to our medium-term production profile, almost all gold ounces.  For 2025, the new contributions from Sibanye's Western Limb operations and Porcupine and full-year contributions from Yanacocha, Greenstone, and Salares Norte will have a big impact.

Some of the highlights for the longer term outlook are higher silver contributions from Antamina and new gold ounces from the startup of Valentine Gold, Eskay Creek, and Stibnite Gold. With Sandip's management of our balance sheet, all the acquisitions were or will be when the discovery deal closes, funded from our cash balances, and we'll still have no debt and a substantial cash balance.

We have actual opportunities that could add more attractive assets this year. Finally, I'm very encouraged by the developments in Panama. President Mulino has indicated a willingness to discuss corporate Panama this year. And sentiment in Panama now appears more supportive of restarting the line. I think there are good odds we'll see positive progress this year.

With that, I'll hand the call over to Sandip.

Sandip Rana CFO

Gold and Silver prices increased significantly for both periods, with gold higher by 34.7% in the quarter and 22.9% for the year. Prices for palladium, iron ore, and oil continue to be volatile and were lower year-over-year.

The updated guidance for 2024 provided for a range of 445,000 to 465,000 total GEO sold. Of this total, the company guided 340,000 to 360,000 precious metal GEOs, with the balance being from diversified assets.

With the strong finish at the end of the year, the company ended the year with 463,334 GEO sold, which was near the top end of the guidance range. We were also at the top end of the guidance range for precious metals with 355,000 to 180,000 sold. The diversified assets, which include our non-precious metal mining assets and energy assets, resulted in just over 108,000 GEOs sold for the year.

I'd like to point out that the revenue generated from our diverse site assets was actually in-line with our expectations for the year. However, with a 37% higher average gold price in 2024 than our $1950 budgeted gold price, when converting to GEO sold, it actually resulted in the loss of 21,000 GEOs than if the goal price had remained at our budget prices.

Precious metals accounted for 79% of revenue. Royalty GEOs are higher margin GEOs as there's minimal cost associated with each GEO sold versus a stream where ongoing fixed payment is required.

With respect to costs, we did have a decrease in cost of sales compared to Q4 2023, due to less stream ounces sold, which is predominantly related to the absence of Cobre Panama.

76.5% of our full year 2024 revenue was generated by precious metals, with revenue being sourced 83.9% from the Americas. Our largest contributor to revenue was Candelaria at 14.6% for the full year.  For full year 2024 cash cost per GEO, which is essentially cost of sales divided by gold equivalent ounces sold, is $278 per GEO. This compares to $286 per GEO in 2023.

For 2025, we're guiding total GEOs sold of between 465,000 to 525,000, which is a 7% increase over 2024. If you use constant pricing between 2025 and 2024, the increase would be 13% year-over-year. On this range, we are guiding 385,000 to 425,000 precious metal GEOs for the year. This is a 14% increase in precious metal GEOs over 2024. The overall main drivers for GEOs year-over-year are for precious metals will benefit from contributions from recent acquisitions, Sibanye Western Limb mining operations stream, Porcupine Complex royalty, and Yanacocha royalty.

We will continue to benefit from the ramp up of new mines that began production in 2024. Tocantinzinho, Greenstone and Salares Norte. And we will begin to receive initial ounces from the currently under construction Valentine Gold Mine in the second half of 2025. Please note we will no longer be receiving gold ounces from Mine Waste Solutions, as the cap was reached in October 2024. Our guidance has been calculated using $2,800 per ounce for gold, $31 for silver, $950 platinum, $950 for palladium, and $100 iron ore.

On the energy side, we're using a price of $70 per barrel WTI and $3 MCF natural gas. Using our budgeted goal price of $2,800 per ounce and the midpoint of our total GEOs guidance range, we expect a 25% increase in 2025 revenue over 2024. As you look forward over the next few years, we do forecast 2028, as the current high for GEOs sold based upon the information we have to-date.

For 2029, our outlook is 490,000 to 550,000 GEOs sold. Of this range, precious metals would be 375,000 to 415,000 GEOs. Main contributors would be higher production from Antamina due to access to higher grade ore based on the latest mine plan. Full year contributions from Valentine Gold. And new mine starts from Stibnite Gold, Eskay Creek, Castle Mountain, and Copper World. We've also assumed the startup of Taca Taca, with a partial year contribution.

We assume mine expansions for Candelaria, Coroccohuayco and Antapaccay, and Magino. For the energy assets, we do assume an increase in production over the next 5 years, resulting in an increase in GEOs. Also, we've held energy prices flat at $70 a barrel WTI and $3 in MCF natural gas. Overall, when you look at the outlook for GEO sold, the company has approximately 12% built-in organic growth from 2024 to 2029 at budgeted commodity prices, excluding Cobre Panama. This also assumes that no additional assets are added to the portfolio.

At Cobre Panama remained in production, we would have expected deliveries and sales of between 130,000 and 150,000 GEOs annually. One additional item to note with the legal proceedings that will move forward related to Cobre Panama, we're expecting to incur annual costs of approximately $10 million per year.

After year end, we have funded the $500 million Sibanye Western Limb Complex acquisition and expect to fund the Porcupine Royalty acquisition during second quarter.

Question-and-Answer Session

Re CP, we're financiers here, not owners. So on the legalities of it, any change in ownership doesn't change the way that our stream is calculated. Any increase in taxes in country or any increase in royalties, none of that changes the way that our royalty is written.

Calculate equiv GEO, So essentially, at a high level, we'll take our non-gold revenue and we will divide by the average gold price for the quarter. So obviously, you saw last year gold prices increased and it impacted the number of GEOs or diversified assets generated even though the revenue was the same as what we had expected for the year.

CP--And I think I noticed that your meeting is October 2026. I think First Quantum had mentioned at their meetings in February 2026. First Quantum has the option of going either under the ICC, which they're going under. They could also go under the Canada Panama free trade agreement, which is what we are going under. So our only option is under the Canada to Panama. The different tribunals have different time frames that they work under. The difference in timing is just versus the different processes.

2029 Guidance--Candelaria underground expansion, they talked about it going from 14,000 tons per day to 22,000 tons per day, and they'll likely make a decision later this year. So we -- obviously, we've made the assumption that they will go ahead with that, but they have to disclose whether they will or not. On Taca Taca, we just looked at where First Quantum is. And with everything going in Argentina, it would likely be their next project that they develop. In 2029, we've assumed a partial ramp up. It works out to about 4,000 GEOs to Franco in the total, so it's not significant.

So for Palmarejo, From 2025 to 2028, it is pretty consistent, and then it's about a 50% drop in 2029, those operations have had a great history of being able to replace ounces. So that's what's in the mine plan today. We hope that in the interim, there will be the ability to extend that mine plan.

the key driver for the moderation in the guidance 2029 versus 2028? Really, the main adjustment is Guadalupe, Palmarejo, where you essentially -- based on the mine plan that we have right now. And as Paul mentioned, the mine continues to be extended over time. So we're hopeful that the mine life will continue be extended. You get a 50% drop in GEO, and that's essentially the drop in 2029….So if you lose ounces from Antapaccay in 2029. So between Guadalupe and Antapaccay, you lose some ounces. And then on the other side, you've got Copper World, you've got Taca Taca, that will pick up some of that difference.

Sibanye deal -- at this kind of asset towards the upper end of the cost curve, obviously, a large reserve life. But in the context of a commodity with potentially challenging longer-term fundamentals…..I actually think that when you look at the cost curve, you'll see there more towards the middle, especially when you account for byproducts. Relative to the Platreef, you have very significant non-PJM byproducts coming out of the UG2, which Sibanye is focused on. So things like from iridium, ruthenium have kind of on catalytic uses. So that stands to benefit these operations relatively compared to some of the others.

your assumption for Stillwater because as you are aware, we have a quite a drop in 2025…Stillwater, as the operator has guided, it's 265,000 PGM ounces for 2025. We've assumed that for three years, and then it ramps back up subsequent to that to 500k

For '29, off the top of my head, I'd say energy is around 16%, 17% of GEOs.

I think core pillar of our business development efforts is project finance. I think we've got a strong team to do that, and we're well placed with our balance sheet. So we continue to focus very much on trying to do significant project financing deals.

So for 2025, Valentine will be ramping up in the second half of the year. So it's minimal. It's 1,500 to 2,000 GEOs. Tocantinzinho, fully ramped up by just over 20,000 GEOs.

At the end of the day, you got to be invested in good ore bodies and the -- our overall objective is to make sure that we do that. And anything that we added to the portfolio is a great quality ore body. The ore bodies will develop and grow over time, commodity prices will change over time. So the focus is on the quality of the ore bodies, getting the right ones in the portfolio. You know how we think about it, which is we're prepared to accept the low rate of return for what you can see today on those ore bodies. But if you pick the ones that have got the best odds of getting bigger over time, that's really where we make our return. So the focus is what are the ore bodies with great economics that we can be very comfortable we are going to get our money back. And then what are we exposing ourselves to what's the potential optionality, what's the multiple of our money that we can make if our hopes and dreams come true for the expansion of ore bodies.

On the Discovery deal, I guess, first of all, what matters to us is relationships. And so we are very much trying to support Tony in his efforts. And as he's alluded to, to the market, he has very ambitious plans for that camp and we want to be there to support him on those. We agreed some partnership clauses in the agreement to provide us certain rights in circumstances, but we are, I would say, more as a kind of commercial relationship, we had a very key to help them, as he looks at the one -- there are many other opportunities, not just one in the area. So we're keen to help them evaluate how we may be able to maximize value for Discovery shareholders, of which, of course, we are one. So it's an exciting opportunity for us.

Our objective is to be a low risk weight. Investors can invest in the industry, gold and the benefit of exploration upside. The approach geopolitically is you got to make sure that most of your assets are in great countries and we're blessed to have so many assets Canada, U.S., Australia. There are a lot of other good mining countries in the world, and so we are also exposed in Chile, Peru, Brazil. We do have assets in West Africa, and we have had assets in South Africa, in particular, for many years, we had interest in mine waste. It wasn't planned this way, but actually the mine waste deal has ended, it was about 20-plus thousand ounces a year in GEOs and we're able to do the Sibanye deal, similar amount over the long term. So our exposure to South Africa is about the same as it was previously. South Africa is different from much of Africa. It is a very well-developed mining economy. It is got a long history. It's got a good labor force, good suppliers, and it does have a good rule or as opposed to -- for mining. So in terms of the amount of exposure that we've got, roughly the 500 million, are comfortable in putting that in South Africa. It does have its risks and its political risks. I actually think it's on the uptick in recent years. You had the change in government. The AMC is still leading it, but for the first time, it's a government of National Unity and I think that's put some checks and balance on the AMC and there is a good level of optimism in country that it has – there is a change in direction in terms of the quality of government management.

We haven't done the math recently. Depends on what the gold price is at the time, obviously, but that roughly the value there that we are due to receive is 15 million to 20 million.—concentrate CP.