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Franco-Nevada Corporation

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Royalty and Streaming - Precious MetalsFranco-Nevada (FNV) is the largest company within the Royalty market. April 2021, TORONTO, April 19, 2021 /PRNewswire/ - Franco-Nevada has acquired 14.7% of Vale's outstanding Participating Debentures ("Royalty Debentures") from the Brazilian Development Bank ("BNDES") and the Government of Brazil for $538M. The Royalty Debentures provide holders with life of mine net sales royalties on Vale's Northern and Southeastern Iron Ore Systems and on certain copper and gold operations (together, the "Royalty"). This transaction provides royalty exposure to some of the world's largest and most profitable integrated iron ore mines with reserve weighted mine lives of 30 years and potential for multiple additional decades through reserve growth. The Royalty covers a total of 15.6 thousand square kilometers of mineral properties held by Vale in Brazil, also offering exposure to a number of development properties. The Royalty currently generates an annualized pre-tax cash yield of 10% based on acquisition cost and the most recent semi-annual Royalty Debenture payment. The amount of production capacity subject to the Royalty is expected to grow by approximately +60% by 2026 which would imply an 8% yield on investment at that time, assuming consensus long term iron ore prices. Vox Royalty (OTCPK:VOXCF) www.voxroyalty.com − BULONG (Gold) (Black Cat Syndicate) Western Australian open pit gold project, mining commencement targeted for Q4 2021 with 1.5Mtpa mill optioned for purchase in Feb-2021 − BRITS (Vanadium) (Bushveld Minerals) Adjacent to producing open pit vanadium mine, royalty covers outcropping Brits deposit with “potential to provide additional feed tonnage for Vametco and, if required, concentrate feed for the Vanchem plant” − MT IDA (Gold) (Aurenne Ularring) Western Australian toll-treatment open pit gold operation targeted by former ASX operator Alt Resources Ltd, prior to $32M takeover by Private Equity group Aurenne in 2020 − PITOMBEIRAS (Vanadium) (Jangada Mines) Brazilian direct-ship open pit vanadium project targeting first production in Q1 2022 in PEA − OTTO BORE (Gold) (Northern Star) Toll-treatment feed for Thunderbox gold mine − LYNN LAKE (Gold) (Alamos Gold) Feasibility stage Canadian project (2018 study, 10 year mine life) in advanced permitting, royalty covers part of MacLellan deposit, +17000m drilling program in 2021, construction decision targeted for 2022 − BOWDENS (Silver) (Silver Mines Ltd) Feasibility stage project (2018 study, 16 year mine life), largest undeveloped primary silver project in Australia, 275Moz Ag Equivalent resource, progressing final permitting − GRAPHMADA (Graphite) (Bass Metals) Graphite mine in production 2019/2020, currently on care & maintenance post COVID19, operator reviewing feasibility on expanded restart scenario − ASHBURTON (Gold) (Kalamazoo Resources) Former Northern Star Resources project, 1.65Moz @ 2.5g/t Au resource (Feb-2013), management targeting 2Moz – 3Moz exploration target and “advancing development plans” − PEDRA BRANCA (PGM) (ValOre Metals) World class PGM resource in Brazil, mineral resource of 1.1Moz @ 1.22 g/t PGE+Au Inferred (May 2019), 2018 PEA targeted annual production of 64Koz PGM+Au over 13 year mine life − SULPHUR SPRINGS (Cu-Zn-Ag) (Venturex) Feasibility stage project (2018 study), 10 year mine life targeted, in Western Australia in final stages of permitting & optimization − MONTANORE (Silver-Copper) (Hecla Mining) 3rd largest silver-copper deposit in USA, permitting update expected in mid-2021, historical 2011 PEA targeted 15 year mine life Royal Gold (RGLD) May 2021 DENVER--(BUSINESS WIRE)-- Royal Gold, Inc. (NASDAQ: RGLD) (together with its subsidiaries, “Royal Gold” or the “Company,” “we,” “us,” or “our”) reports net income of $54.0 million, or $0.82 per share, on revenue of $142.6 million in its third quarter of fiscal 2021 ended March 31, 2021 (“third quarter”). Adjusted net income1 was $55.2 million, or $0.84 per share, after excluding discrete tax expense items of $0.04 per share and a $0.03 per share gain on the change in fair value of equity securities, and a reversal of $0.01 per share for the tax effected change in fair value of equity securities. Third Quarter 2021 Highlights: Revenue of $142.6 million, an increase of 5% over the prior year quarter 68% of revenue from gold and 12% from silver at average prices of $1,794 per ounce of gold and $26 per ounce of silver Operating cash flow of $92.2 million Volume of 79,500 GEOs2 $150 million of debt, net cash3 of $220 million, with available liquidity of $1.2 billion Paid quarterly dividend of$0.30 per share, a 7% increase over the prior year quarter Khoemacau construction 92% complete, 80% base silver stream fully funded Advanced meaningful social initiatives with Pueblo Viejo joint venture and Golden Star Post-Quarter Events: Debt free after repayment of credit facility balance on April 1 Khoemacau stream rate increased to 84% of payable silver Osisko Gold Royalties (OR) Financial Highlights Earned 19,960 GEOs1 (Q1 2020 –18,159 GEOs) Record revenues from royalties and streams of $49.0 million (Q1 2020 – $37.8 million) Cash margin4 of 94% from royalty and stream interests (Q1 2020 – 91%) Consolidated cash flows from operating activities of $21.3 million (Q1 2020 – $23.8 million) Operating cash flows from the royalty and stream segment2 of $36.7 million Operating cash flows from the mining exploration and development segment3 (i.e. Osisko Development Corp. – TSX-V:ODV) of ($15.4) million Net earnings attributable to Osisko’s shareholders of $10.6 million, or $0.06 per basic share (Q1 2020 – net loss of $13.3 million, or $0.09 per basic share) Adjusted earnings5 of $18.4 million, or $0.11 per basic share3 (Q1 2020 – $7.5 million, or $0.05 per basic share) Adjusted earnings5 from the royalty and stream segment2 of $23.4 million, or $0.14 per basic share5 Adjusted loss5 from the mining exploration and development segment4 of $5.0 million, or $0.03 per basic share5 Sandstorm Gold (SAND) released its Q1 2021 financial results. www.sandstormgold.com ELY Gold Royalties (OTCQX:ELYGF) announced the acquisition of three patented mining claims within the Tonopah West property. In FY 2020, ELY generated gross revenues of C$4.12 million ($3.34 million). Its cash balance increased to C$7.38 million ($6 million).
NYSE:FNV
by TH_Analysis
$FNV trend is your friendUsing a VWAP anchored tp the Sep 2018 low, I see 2 pullbacks and subsequent prolonged rallies from the green VWAP line. I would not want to bet that this 3rd pullback will not produce a prolonged rally. Additionally FNV is down 36% peak to trough from the Aug 2020 high, the stock was down 37% peak to trough during the covid crash in March 2020. FNV is breaking the linear regression downtrend (blue channel) and above that red downtrend line I think sh*t gets wild. The evidence is piling up that gold miners are about to go on another massive rally, FNV is certainly a sure way to capitalize on it.
NYSE:FNVLong
by ETrades1
Why Precious metals streaming and royalty companies make senseI am always looking out for opportunities to diversify my small but growing portfolio. I came across streaming and royalty companies during the course of my research into ways of investing in precious metals and was blown away by the business model. There is a plethora of information on the web on streaming and royalty companies business models. I will attempt to summarise the most important ones here: - Under a streaming agreement, a streaming company pays upfront for the right to acquire future physical deliveries of metals (at predefined percentage). - A royalty company on the other hand provide funds for mines in exchange for future profits (by receiving a fixed percentage of the revenue generated by the mine) - Streaming and royalty companies do no have the same underlying risks with physical mine operations as do the mining companies, and consequently they have a very small management team/staff and huge profit potentials - Royalty companies have traditionally reported very high revenue per employee, which dwarfs all mining companies combined including tech giants (comparing to others outside the mining industry). I recommend reading Kitco's analysis titled "This is the Rolls-Royce of the precious metals business" for charts that perfectly illustrates this. The list below contains the biggest streaming and mining companies: - Franco-Nevada Corp (FNV) - Wheaton Precious Metals Corp (WPM) - Royal Gold Inc (RGLD) - Osisko Gold Royalties (OR) - Sandstorm Gold (SAND) - Metalla Royalty and Streaming (MTA) - ELY Gold Royalties (ELYGF) - Abitibi Royalties - EMX Royalty Corporation (EMX) - Maverix Metals - Sailfish Royalty Corp - Nomad Royalty Co Ltd From the list above, I have selected the following as my favourites: - Franco-Nevada Corp (FNV) - Wheaton Precious Metals Corp (WPM) - Royal Gold (RGLD) - Osisko Gold Royalties (OR) - Sandstorm Gold (SAND). Unfortunately, my broker platform doesn't list Osisko Gold Royalties so will only invest in the 4 others to diversify my portfolio. These will be in addition to my other high quality gold stocks: - Barrick Gold - Newmont Corporation - Newcrest Mining Limited - Agnico Eagle Mines Limited (waiting for buying opportunity). - Jubilee Metals (a small industry player - an interesting speculative play in precious metals scrap recovery/conversion to sellable products)
NYSE:FNVLong
by aderoy
Buy FNV at $151 and belowFNV is a leveraged play on gold, although much of their revenues come from other materials. During this bull cycle, the run up from March-June produced a ~19% rise in gold and a ~58% rise in FNV. After a consolidation, a similar run in July produced ~20% rise in gold and ~34% rise in FNV. We are now in a consolidation. I believe this underperformance is primarily due to two issues: 1. investors are skeptical of the rise in gold and expect a significant retracement and 2. mine shutdowns due to COVID19 are temporarily suspending cash flows. Because FNV is a royalty company they are valued more by their cash flow than their assets so royalty companies are disproportionately impacted by mine closures accompanying a rising gold price. I expect the gold price to continue its bull run, with normal corrections, and FNV will eventually catch up in price which it has been lagging. If gold prices remain at these levels and shutdowns improve, by next quarter's earnings report this catch up may occur. Looking at Fib retracement, the 0.382 level closely corresponds with support level of $150. This may be broken to test the 0.5 Fib level, I wouldn't be surprised. If you're looking for entry, I would buy in tranches starting at $151 and below.
NYSE:FNVLong
by gold_gary
Gold shares to catchup on gold price breakoutIt will probably take over a year to go back to pre-covid economic levels. Central banks and government will keep pumping money to support the economy, which is a long-term tailwind for Gold. The precious metal will also continue to be attractive as a portfolio diversifier, its cost to hold is cheap considering low or negative interest rates. Gold hit fresh highs on rising momentum (left chart). Gold shares should be catching up after emerging out of a double bottom (right chart of Newmont mining) Focus on large cap, open pit low-cost producers (Barrick GOLD, Newmont NEM) or gold streaming companies like Franco-Nevada FNV or Royal Gold RGLD.
NYSE:FNVLong
by AndreasRuhlmann
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