Full Transcript: Franco-Nevada Q2 2026 Earnings Call

On Wednesday, Franco-Nevada (NYSE: FNV ) discussed second-quarter financial results during its earnings call. The full transcript is provided below. This transcript is brought to you APIs. For real-time access to our entire catalog, please visit for a consultation.

The full earnings call is available at Summary Franco-Nevada Corporation reported a strong Q2 2026 with an 18% increase in GEOs sold, driven by higher production and new contributions from recent acquisitions. The company is tracking towards the upper half of its annual guidance range for 2026, with expectations of stronger performance in the second half from assets like Candelaria and Côté. Financial performance was robust, with a 57% increase in revenue, 45% rise in adjusted EBITDA, and 46% growth in adjusted net income year over year.

Franco-Nevada's revenue was highly diversified, with 86% generated from precious metals and no single asset contributing more than 10% to total revenue. 3 billion in available capital, positioning it for future acquisitions and expansions. Management highlighted significant progress in mine expansions and exploration across several assets, with a focus on organic growth during favorable market conditions. Franco-Nevada's sustainability efforts were recognized with an A rating from CDP and inclusion in Corporate Knights' Best 50 Corporate Citizens in Canada for 2026.

The company noted a robust pipeline of opportunities, particularly in project finance, and expects to leverage its capital to acquire attractive new assets. S. oil rig counts. Full Transcript OPERATOR Good morning and welcome to Franco-Nevada Corporation Second Quarter 2026 Results Conference Call and Webcast.

This call is being recorded on August 12, 2026. At this time, all participants are in a listen-only mode. Following the presentation, we will conduct a Q&A session where you may ask a question through the phone line or webcast. If you are joining by webcast, you may submit a written question for the Q&A session anytime during this call by typing your question in the Q&A section of the webcast platform.

If you require immediate assistance during this call, please press star zero anytime for the operator. I would now like to turn the conference over to your host, Bonavie Tek, Vice President, Finance and Investor Relations. Please go ahead. Bonavie Tek, Vice President, Finance and Investor Relations Thank you, and good morning everyone.

Thank you for joining us today to discuss Franco-Nevada's second quarter 2026 results. com where you will also find our full financial results. The presentation is also available to view on the webcast. During our call this morning, Paul Brink, President and CEO of Franco-Nevada, will provide introductory remarks followed by Sandip Rana, Chief Financial Officer, who will provide a brief review of our results.

This will be followed by a Q&A period. Our executive team is available to answer any questions. Participants may submit questions by telephone or via the webcast. We would like to remind participants that some of today's commentary may contain forward-looking information and we refer you to a detailed cautionary note on slide 2 of this presentation.

I will now turn the call over to Paul Brink, President and CEO of Franco-Nevada. Paul Brink, President and CEO Thank you, Bonavie, and good morning. We had a strong second quarter with GEOs sold up 18% year over year due to higher production at Antapaccay and Antamina and South Arturo, new contributions from the recently acquired Côté Gold and Casa Berardi interests, and start of production at Valentine Gold. In addition to record gold prices in the quarter, we saw strong oil prices with the higher energy contribution and the processing of stockpiles at Cobre Panama.

We're tracking towards the upper half of our annual guidance range for 2026. At Cobre Panama, the environmental audit was completed indicating no major findings and an overall compliance rate by the operation of 80%. The government then established a commission of senior ministers to evaluate both the environmental aspects and the economic contribution of a potential mine restart. Simply put, in our business you want to grow through acquisition in the bear market and organically in a bull market.

In particular, with our deep royalty portfolio, that organic growth can be very powerful. Q2 is the spring quarter, and we saw green shoots across the portfolio. We received good news on future mine expansions at all of Côté, Detour, Magino, Valentine, Conestable, Casa Ronis and Séguéla. At Candelaria, we had news of a potential pushback and at Porcupine we had the Kidd acquisition that may ultimately allow a doubling of output.

Guadalupe, Hemlo, Bulabulling and ORMAC all announced resource expansions. There was positive progress on mine development at Copper World and Stibnite Gold. Crawford Nickel received its federal approval and PSJ Mendocino, previously San Jorge, its Argentinian RIGA approval, and lastly success at the drill bit. Great exploration results in the Porcupine Camp, Borden, Hoyle, Owl Creek and others.

Midas, where Hecla are considering a restart; Stibnite, where they started drilling again after more than a decade; and at ORMAC and Bulabulling, where we have new interests. Energy revenue was up on stronger oil prices while operator capital discipline prevails. S. oil rig rates, 450 rigs now up from 423 months ago in the Lower 48.

S. producers are moving up, 55% now on average versus 51% earlier in the year, both of which bode well for higher future production rates. The leverage on the NPI and our Weyburn interest in Canada gave a nice boost to our Canadian Energy segment. On the sustainability front, we continue to expand our engagement with and contributions to communities at mine sites.

Franco-Nevada was recognized as one of Corporate Knights' Best 50 Corporate Citizens in Canada for 2026 and achieved an A rating from CDP. We're in the process of evaluating candidates for our expanded scholarship program and are delighted with a bumper crop of excellent applicants this year. 3 billion, so we're well positioned to add attractive new assets to the portfolio. With that, I'll hand the call over to Sandy.

Sandip Rana, Chief Financial Officer Thanks, Paul. Good morning everyone. Franco-Nevada reported another quarter of solid financial results as our portfolio of royalty and stream assets continued to perform well and in line with our expectations. The performance during the quarter continues the very strong start to the year, with record financial results achieved for revenue, adjusted EBITDA, adjusted net income and operating cash flow for the first six months of 2026.

On slide 4, you will see a summary of commodity prices for second quarter 2026 and 2025. Precious metal prices have increased significantly year over year with the average gold price higher by 38% and silver by 118% in the quarter. However, both gold and silver prices have retreated from the highs reached during first quarter. For the diversified commodities, with the continued conflict in the Middle East, oil price has seen a sharp increase over prior year.

The WTI price has been volatile over the last few months but remains above $80 a barrel. Energy revenues did benefit from the higher price in the quarter and we expect this to carry through the third quarter. Slide 5 provides an overview of our key financial results. The performance from our assets combined with stronger commodity prices resulted in an increase in revenue of 57%, adjusted EBITDA of 45% and adjusted net income of 46%.

Total GEOs sold for the quarter increased by 18% to 132,405 compared to just over 112,000 in second quarter 2025. Precious metal GEOs sold in the quarter were 114,111, higher by 23% compared to prior year. 56% of total GEOs sold during the quarter were sourced directly from mines where precious metals are the primary commodity. For the quarter, we received strong contributions from several assets.

4 million this quarter. For Antapaccay, we benefited from the processing of higher grade ore, which we expect to continue in the second half of 2026. At South Arturo, we had a significant increase in GEOs as we benefited from the Phase 1 production of the open pit. Please note this strong performance was always weighted towards the first half of the year.

At Candelaria, production at the mine was lower compared to prior year, as last year the mine had the benefit of higher grade ore from Phase 11. Lundin Mining expects production to be weighted towards the second half of 2026 due to increased availability of higher grade Phase 12 ore combined with increased underground mining rates as the underground insourcing initiative nears completion. 2 million. The decrease in GEOs is the result of converting revenue to GEOs at a higher gold price.

As you know, we are converting GEOs using a fixed gold price of 4,500 per ounce. With respect to cost, we did have an increase in cost of sales compared to Q2 2025 due to higher fixed costs paid for stream ounces, as a portion of our streams have a fixed cost based on a percentage of the gold price. 5 million last year. Depletion increased to $84 million versus $64 million a year ago, the increase being due to depletion being recorded on some of our recent transactions: Yanacocha, Casa Berardi, Porcupine and Côté.

These assets are higher per-ounce depletion assets. We expect the depletion rate to decrease over time as the reserves on the properties grow. 81 per share for the quarter, both higher by 46% year over year. Slide 6 highlights the continued diversification of the portfolio.

86% of our second quarter revenue was generated by precious metals with revenue being sourced 88% from the Americas and no one asset generated more than 10% of revenue. As we have one of the most diverse portfolios in the industry, the model continues to be a very high margin business. As shown on slide 7, the margin per GEO has increased from 1,559 per GEO in 2022 to 4,352 per GEO in 2026, a 179% increase, while during this time the gold price has increased 160%. As we turn to dividends on slide 8, the company continues to pay a quarterly dividend with $84 million being paid to shareholders during the quarter.

With respect to our guidance summarized on slide 9, we are guided to 510,000 to 570,000 total GEOs sold for the full year 2026. With the strong performance of our portfolio for the first six months of 2026, with approximately 269,000 GEOs sold, and an expected stronger second half of the year, we are tracking towards the upper half of the annual guidance range. We expect stronger second half performance from several assets including Candelaria, Tocantinzinho, Côté and Valentine.

We expect to receive between 9,000 and 10,000 GEOs from Cobre Panama as First Quantum has begun processing stockpile ore, and with the continued strong oil price, we expect energy revenue to remain strong in the second half of the year. And lastly, slide 10 highlights our available capital. 2 billion in liquid marketable securities. The company continues to remain debt free and is well capitalized to continue to add good quality assets to the portfolio.

And with that I will pass it over to Annis, as management is happy to answer any questions. OPERATOR During this Q&A session, if you'd like to ask a question, simply press star and the number one on your telephone keypad. If you'd like to withdraw your question, please press star followed by two. If you are joining us on the webcast, please submit your questions through the Q&A section of the webcast platform.

One moment please for your first question. Your first question comes from Cosmos Chiu with CIBC. Please go ahead. Cosmos Chiu, Analyst at CIBC Thanks, Paul and Sandip, for taking my questions.

Maybe my first questions. On the NPIs I noticed that Hemlo was down quarter-over-quarter whereas the Musselwhite NPI was up quarter-over-quarter. I guess it is always volatile in terms of these NPIs but, you know, how should we look at it based on what we know in Q1 and Q2 on what we should expect in Q3 and Q4? Sandip Rana, Chief Financial Officer Sure.

Hi, Cosmos, thanks for the questions. Hey, you said it correctly, they are volatile and, you know, for us a lot of it is based on visibility. At Hemlo in Q2, Hemlo Mining produced less on our interlaced plans than previous quarters, which impacted the NPI. I think for the second half of the year, from what we gather, production should increase.

Does it hit what was achieved in Q1? I don't know, but it should be higher than Q2. So I would expect a slightly higher NPI for the second half of the year from Hemlo. Obviously that's all contingent upon commodity prices as well.

At Musselwhite we did have strong performance in Q2. A large component of that was a Catch-up entry for 2025 for Musselwhite. We have limited visibility, and then there's a finalization of the MPI calculation that happens in the following year. So in Q2 is when we got that final number and we recorded that.

But considering where commodity prices are right now, I would expect a very strong NPI for Musselwhite for 2026. Cosmos Chiu, Analyst at CIBC Great. And then maybe diving a little bit deeper into Hemlo—last night, I guess they reported earnings and they're deferring formal guidance, production guidance from sometime in 2026 into 2027. You know, from where you're standing—and there's a lot of moving pieces—it's based on actual production from the asset but also, you know, the Interlake component.

But any concerns in terms of that deferral of guidance? It seems like things are kind of ramping up potentially slower than expected. Paul Brink, President and CEO I think Hemlo—the team's doing a very good job there. You know, they just took over the asset last year.

From our perspective, we're pretty confident that mining on Interlake will continue for the next number of years. Obviously it'll be volatile just depending upon how development is going. But we're pretty confident that the MPI will be there for the foreseeable future. Cosmos Chiu, Analyst at CIBC Great.

And maybe switching gears a little bit to Guadalupe on Palmarejo. As you mentioned in your prepared remarks, it continues to be one of the larger contributors of GEOs. But I guess my question is when we talk to Coeur Mining and, you know, the management team continues to remind us that exploration continues beyond the Franco-Nevada area of influence. I guess from that perspective, how should we look at it?

Is there any kind of near-term concerns to Franco-Nevada? Paul Brink, President and CEO They've had very good exploration results both on stream ground and off stream ground. On our ground, specifically Hidalgo, you know, based upon what we've seen, you know, production on our land will continue for the foreseeable future. You know, a large portion of their production is still on Franco-Nevada stream ground.

Obviously they are trying to find, you know, additional resources on adjacent lands where the stream doesn't apply. But right now we don't have any concern. Cosmos Chiu, Analyst at CIBC Great. And then maybe one last question.

Tracking your margins here and just—I think we did a good job in terms of looking at the margin expansion. Another way I looked at it was the adjusted EBITDA margin. 2%. Again, the adjusted EBITDA margin, is that just a function of, I guess, the increase in commodity prices, you know, coupled with, you know, not as much of an increase or no increase at all to cost, and is that, you know, a percentage that you track yourself?

2% right now? Sandip Rana, Chief Financial Officer Yeah, no, it's—it's—you know we are a very high-margin business. Obviously it's composed of a number of factors. One is, you know, how much of our GP revenue and EBITDA is being generated by streams.

It just so happens right now in our recent deals we've done have been more royalty deals, and there are obviously limited or no costs associated with those. So it's just the leverage of the portfolio overall. Cosmos Chiu, Analyst at CIBC Great. Those are all the questions I have.

Thanks again to Sandeep and Paul for answering all my questions. OPERATOR Thank you. Your next question comes from Lawson Winder with Bank of America Securities. Please go ahead.

Lawson Winder, Analyst at Bank of America Securities Thank you, operator. Good morning, Paul and Sandeep, thank you for today's update. Can I start with the 2026 guidance and your expectation to be in the top half of the range, and that includes Cobre Panama, potentially stronger oil prices. 5 GEOs, and then you assume higher oil prices, I think you could comfortably get above the range.