Franco-Nevada Q1 2024 Earnings Call Transcript

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Provided by Quartr
May 2, 2024

There are 12 speakers on the call.

Operator

Good morning, and welcome to Franco Nevada Corporation's First Quarter 2024 Results Conference Call and Webcast. This call is being recorded on May 2, 2024. At this time, all lines are in a listen only mode. Following the presentation, we will conduct a Q and A session where you may ask a question through the phone line or webcast. If you're joining by webcast, you may submit a written question for the Q and A session over to your host, Candida Hayden, Senior Analyst, Investor Relations.

Operator

Please go ahead.

Speaker 1

Thank you, Julie. Good morning, everyone. Thank you for joining us today to discuss Franco Nevada's Q1 2024 results. Accompanying this call is a presentation, which is available on our website atfrancoe Nevada.com, where you will also find our full financial results. The presentation is also available to view on the webcast.

Speaker 1

During our call this morning, Paul Brink, President and CEO of Franco Nevada, will provide introductory remarks followed by Sandeep Rana, Chief Financial Officer, who will provide a brief review of our results. This will be followed by a Q and A period. Our full executive team is available to answer any questions. Participants may submit questions via the 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 our detailed cautionary note on Slide 2 of this presentation.

Speaker 1

I will now turn over the call to Paul Brink, President and CEO of Franco Nevada.

Speaker 2

Thank you, Candida, and good morning. Yesterday, we held our AGM here in Toronto and we're pleased to have Hugo Drylund join our Board. Hugo has for many years led Rothschild's Metal and Mining Advisory business and amongst other areas has extensive experience in project finance and international arbitration. Hugo fills the seat left empty after Randall Oliphant sadly passed away last year. Our diversified portfolio performed well and production for the quarter met our expectations and the Pacai Geo sales were above and Candelaria Geo sales slightly below our expectations.

Speaker 2

Elevated gold prices boosted our revenue and translated directly into some of our highest ever margins. Adjusted EBITDA margin was 84.2% and adjusted net income margin was 56.9%. Royalties on new mines continue to contribute to our growth. During the quarter, goldfields for the 1st gold at Salares Norte and Hothschild at Maroosa. Equinox and G Mining are on track for first production at Greenstone and Tocco de Zinho respectively in the coming months.

Speaker 2

Alamos' planned acquisition of Argonaut will help realize the full potential of the Magino and the Island deposits including a potential expansion of the Magino Mill facility. Caliper reported good progress on the construction of Ballantyne Gold and production there is expected to start in the first half of twenty twenty five. While Cobre Panama Panamanian election takes place this Sunday, May 5. On the business development front, we closed the previously announced acquisition of natural gas royalties in the Haynesville and added a number of smaller interests. Incremental royalty on Pascua Lama, a royalty on Scotty Resources property in the Golden Triangle BC, an increase to the Condestable gold stream in Peru and a silver royalty on Perpetra's Stidmite gold property in Idaho.

Speaker 2

Our organic growth typically accelerates on the back of higher gold prices. A highlight for the quarter is the success that Agnico Eagle continues to have expanding the Detour Lake Goldbody and also the East Goldie Goldbody at Canadian Malartic. To wrap up, we have no debt, dollars 2,300,000,000 in available capital and an active deal pipeline. I'll hand the call over to Sandeep.

Speaker 3

Thank you, Paul. Good morning, everyone. As mentioned by Paul, our portfolio of assets continued to perform well and were in line with expectations for Q1 20 24. With respect to performance in the quarter, on Slide 4, we highlight the gold equivalent ounces sold for the last 5 quarters. As you are aware, Cobre Panama has not contributed any GEOs or revenue for 2024 as it is under preservation and safe management.

Speaker 3

On the slide, we've highlighted Cobre Panama separately for prior periods. Total GEO sold were 122,897 for Q1 2024. This compares to 145,331 for the same period in 2023. Of this, precious metal GEOs were $93,018 compared to $111,238 in the prior year. However, if Cobre Panama is excluded from prior year comparatives, precious metals geos were actually higher year over year at 93,018 versus 80 2,575 geos.

Speaker 3

This increase was due to strong contributions from Ansepukai, Guadalupe and Savica, all of which had strong production in Q1 of 2024. This increase was partially offset by lower GEO sold for Sudbury due to lower production and Stillwater, which was due to the impact of converting weaker platinum palladium revenue to GEOs. In addition, we were delivered approximately 3,000 GEOs for Condestable, which remain in inventory at the end of the quarter. These ounces were not sold during Q1 and have subsequently been sold post quarter end. Precious metal geos represented approximately 76% of total GEOs for the quarter.

Speaker 3

For diversified GEOs, our valet royalty contributed an increase in GEOs for the quarter compared to prior year due to a higher than anticipated royalty payment, reflecting higher iron ore sales during the second half of twenty twenty three. As you know, each quarter, we make an estimate of what the royalty will be with the actual amount being announced by Vale in late March September each year. As a result, you will see adjustments to revenue twice a year in the 1st and third quarter each year. Energy GEOs were lower at $21,082 for Q1 compared to compared to $25,952 a year ago. The decrease in GEOs is a combination of lower revenue due to weaker natural gas prices, but also the impact of converting energy revenue to geos using higher gold prices.

Speaker 3

Q1 2024 saw continued movement in average commodity prices. As you see on Slide 5, gold and silver prices were higher for the quarter when compared to prior year. However, platinum and in particular palladium prices were significantly lower year over year, which did negatively impact conversion of PGM revenues to GEOs. Oil prices were relatively flat with natural gas being sharply lower. Slide 6 highlights our total revenue and adjusted EBITDA amounts for the last 5 quarters.

Speaker 3

As you can see from the bar charts, revenue and adjusted EBITDA are lower in Q1 2024 compared to prior quarters. The company recorded $256,800,000 in revenue in Q1 and $216,100,000 adjusted EBITDA. A margin of 84.2% was achieved for the quarter. The lower revenue and adjusted EBITDA are due to less GEO sold during the quarter compared to prior year. The impact on both revenue and adjusted EBITDA of the lower geos was partially offset by higher gold and silver prices.

Speaker 3

In fact, while geos sold are lower by 15% year over year, total revenue was lower by 7%. As you turn to Slide 7, you'll see the key financial results for the company. As mentioned, total GEOs were 122,897, generating $256,800,000 in revenue and $216,100,000 in adjusted EBITDA. On the cost side, we did have a decrease in cost of sales compared to prior year as we did not incur the ongoing fixed cost per ounces delivered by Cobre Panama. Also, cost of sales is dependent on which assets deliver stream ounces as not all fixed payments per stream are equal.

Speaker 3

Depletion decreased to $58,200,000 versus $61,000,000 a year ago. The decrease in depletion was a combination of no depletion being recorded for Cobre Panama, being partially offset by higher depletion for Antipakai and the new Haynesville Natural Gas acquisition. Adjusted net income was $146,000,000 compared to $152,200,000 in Q1 2023, and adjusted EPS was $0.76 per share for the quarter, lower by 3.8% versus prior year. Slide 8 highlights the continued diversification of the portfolio. From the chart, you can see that $76,000,000 of our first quarter 2024 revenue was generated by precious metals, with revenue being sourced 83% from the Americas.

Speaker 3

Slide 9 illustrates the strength of our business model to generate high margins. For Q1 twenty twenty four, the cash cost per GEO, which is essentially cost of sales divided by gold equivalent ounces sold, was $2.73 per geo. This compares to $2.63 per geo in Q1 2023. Margin was approximately $1800 per ounce in the 1st quarter. The average gold price was higher by $183 per ounce for Q1 2024 compared to Q1 2023.

Speaker 3

At the same time, Franco Nevada's margin was higher by $173 per ounce or 95% of the gold price increase in the same period. A rising commodity price environment, we expect to benefit fully as the cost per geo sold should not increase significantly. The other cost component for the company besides cost of sales is our corporate administration costs. The royalty streaming business model is a scalable model. Our corporate admin costs have increased at a much slower rate than our revenue.

Speaker 3

Revenue has increased ninefold from Q1 2008, while corporate admin cost has increased by 2.5x for the same period. Management believes we can continue to add to our portfolio and grow our business without adding significant overhead to the company. Earlier this year, we had guided to $10,000,000 to $15,000,000 in estimated costs for the Cobre Panama arbitration. For Q1, we incurred $1,400,000 in costs. We expect the costs to be weighted more towards the second half of the year.

Speaker 3

And lastly, Slide 11 summarizes the financial resources available to the company. When including our credit facility of $1,000,000,000 total available capital as at March 31, 2024, is $2,300,000,000 And now I'll pass it over to Gilly, and we're happy to answer any questions.

Operator

Your first question comes from Brian MacArthur from Raymond James. Please go ahead.

Speaker 4

Good morning and thank you for taking my question. You've left guidance of GEOs unchanged, but there's a lot of different assumptions, which you sort of talked about commodity prices moving in the Q1. I mean, now you're much higher gold price assumptions going forward, much lower gas prices. My question really is, is there anything on a volume basis that significantly changed that you're seeing in your portfolio since the beginning of the year and maybe it's oil and gas because gas prices are have gone down? And secondly, it looked like Antakapai versus what you give on a gold geo basis had a pretty good first quarter.

Speaker 4

Is that sustainable? Or does it fall off through the year? It kind of goes into the overall volume question.

Speaker 3

Thanks for the question, Brian. On a production basis, as we said, the assets, both mining and energy, from a production volume basis are in line with expectations. So right now, from a production standpoint, they're in line. Obviously, commodity prices are moving around, but we are within our guidance range at this point. With respect to Antibakai, I would expect or we do expect Antibakai to fall off towards for the rest of the year and still be within that guidance range we provided as part of our year end results.

Speaker 4

Thank you. And my second question just relates to Condestable and the increase from up to 37.5% and 25%. I assume everything else, the points where it kicks in are all still the same. So it will be kind of middle 2030s or if you can guide when that 30 you see that 25% to 37.5% kicking in, please?

Speaker 5

Hi, Brian. It's Ian speaking. Good morning. Yes, the change really just relates to the final race. So we wouldn't expect the rest to change meaningfully in the near to medium term.

Speaker 4

And is mid-two thousand and thirty sort of where you see that now kicking up? I just don't have the date on how that's developed since the original deal?

Speaker 5

Yes. I don't have that immediately handy. We are fixed deliveries. I think it was for the 5 years. Those come off and it goes to a variable percentage in terms of the exact estimate as to when those the second variable percentage kicks in.

Speaker 5

I don't have that offhand, unfortunately. We can chat offline.

Speaker 4

Great. Thank you. Maybe my final question, just Sandeep, on the accounting for the taxes on a global basis, can you just review how you're going to do that given when it technically gets enacted?

Speaker 3

So right now, it's not enacted, neither Barbados nor Canada. So for the foreseeable future, our effective tax rate will be 15% roughly. But when it is enacted, assuming it's retroactive, there will be an adjustment in that quarter, which we did highlight. It will be an adjustment to taxes of about 47,000,000 dollars And as guided at the end of the year, we expect our effective tax rate to be about 19% going forward.

Speaker 4

Thank you very much. I appreciate it.

Operator

Your next question comes from Heiko Hill from H. C. Wainwright. Please go ahead.

Speaker 6

Hey there. Thanks for taking my questions. You've made quite a meaningful number of acquisitions here in the last few months. In your intro to earnings release, you also state that you still have an active steel pipeline. Unsurprising, but still good to hear.

Speaker 6

Conceptually, are you seeing pricing improvement from sellers streams that are more willing to negotiate right now? And if so, are you seeing this phenomenon more in mining or more in energy?

Speaker 2

Heiko, it's Paul. I'd say the in this environment, probably the main impact is with gold prices moving up, players that have got precious metal byproducts, it's very attractive environment for them to raise capital through the sale of a precious metal stream. So I'd say that's the predominant trend right now and that's making for an active deal pipeline.

Speaker 6

Fair enough. Building on that last question, I mean with gold prices where they are, inflation levels where they are, has there been a bit of a shift with sellers looking for fixed fees versus a percentage of spot pricing as your cash payment? Or is there is it just the same and they more or

Speaker 7

less take whatever they can get?

Speaker 5

Hi, Echo. It's Ian. Good morning. I would say generally the market has shifted towards the percentage in terms of the fee we pay to the seller. Fixed is far less common these days, and I haven't seen any trend there recently other than to kind of maintain that.

Speaker 6

Fair enough. That's helpful. Thank you guys for your time.

Operator

Your next question comes from Cosmos Chiu from CIBC. Please go ahead.

Speaker 8

Thanks, Paul, Sandeep, Ben and team. Maybe my first question is on Panama. As you know, the election is coming up this weekend on May 5. Is this something that you're watching closely? Any variables that you might be watching for?

Speaker 8

And do you see a potential outcome that could impact Franco Nevada in the near term? Or is it really a longer term sort of event too?

Speaker 2

Cosmos, yes. We're watching it closely in the lead up to the election and no surprise given what happened in the country and the popular sentiment against mining and against the mine. I'd say all the candidates have been quite circumspect in terms of commenting on what their approach might be. So we're hopeful that with a new government in place that there can be a new dialogue. And I'm sure that First Quantum will be engaging with whoever that is to see if there is a route to find a way to reopen the line.

Speaker 8

Of course. Thank you. And going to your financial statements here, I noticed that your finance income $16,000,000 has increased quite a bit year over year and quarter over quarter as well. I just want to make sure, is that just due to the G Mining term loan? And if that's the case, what else is in there?

Speaker 3

So Cosmos, the interest income is in 2 places on the financials this quarter. Up in revenue, you'll see interest income that relates to actual interest on the G Mining loan as well as the Skeena convertible note that we did at the end of last year. So any loans we've made up, that interest income is up in revenue now. And it was about $1,200,000 for the quarter. The finance income you're referring to, the $16,000,000 that is the interest we're earning on our cash balance.

Speaker 9

Okay.

Speaker 8

Okay. And is there a reason why you separate those 2? Or just really accounting?

Speaker 3

It's all accounting, technical related. The loan interest because it's related to mining assets and up in revenue, and we intend to do more debt like structures going forward. So we've included that up top.

Speaker 8

Okay. Sounds good. And then maybe one question again on the accounting side as well. I know Brian asked it earlier in terms of the global minimum taxes, but it sounds like now Barbados has their own legislation and Canada also has their own sort of legislation that's going through. Is there a situation where in terms of timing when legislation in the 2 countries are being enacted?

Speaker 8

Is there a chance that things can get really complicated later on if they're enacted at different times, different quarters? Or is that something that we don't really need to worry about?

Speaker 3

So our understanding right now, neither one has enacted the laws. Barbados effective tax rate will be 15% going forward once the law is enacted. But our understanding is it's contingent on Canada implementing the GMT. So they should both come into play at the same time, but obviously we'll have to wait and see.

Speaker 8

Okay, great. Thanks Sandeep and Paul, those are the questions I have.

Operator

Your next Your next question comes from Tanya Jakusconek from Scotiabank. Please go ahead.

Speaker 10

Good morning, everybody. Some of my questions have been answered. But I've got to come back to just Hamlo, Sandeep. How should we be thinking of this royalty because this one's always quite variable? What guidance can you give us for the year?

Speaker 3

Tanya, it was lower than I expected in Q1 considering where commodity prices were. And I think per Barrick's release yesterday, they had higher costs. So going forward, I think we stick with what we had guided to as part of our year end guidance. It's probably going to be at this stage similar to last year, but we'll have to see how the year unfolds.

Speaker 10

Okay. And then for mine waste solution that we're getting to the cap, so that would imply the rest of the year a bit lower. Would that seem fair?

Speaker 3

Yes. So we do anticipate to reach the cap in Q4 this year, depending upon how the next two quarters play out. It could be early in Q4.

Speaker 10

Okay. No, that's what we have as well. And then as we look at the year, with everything said and done and appreciate a lot of variability, but should we be thinking that a slightly better second half with some of the new mines coming in? And can you just remind me for Q2 and Q3 when the new contributions are coming in? So, 1st stronger second half, should we be thinking like 52%, 53% of GEOs and then the new mines?

Speaker 10

If you can remind me what who's coming in Q2, Q3?

Speaker 3

Sure. Yes. So we do expect a stronger second half and not just because, as you said, the new mines will be online. In Q2, Greenstone is pouring sorry, yes, Equinox is pouring 1st gold for Greenstone. And in 2nd quarter, Solaris Norte, tokens in Neo with G Mining is Q3.

Speaker 3

I don't have the specific split as to whether it's 52, 48 or what have you, But definitely a stronger second half.

Speaker 10

Okay. No, that's helpful. I just want to make sure because production, I mean, you get paid exactly when they start producing. There is no deferral, if I from my understanding, even if they're noncommercial ounces?

Speaker 3

Yes. So on the royalties, we accrue the revenue. If ounces have been produced, we're entitled to it. So we will accrue even if we haven't been paid, but we will accrue.

Speaker 10

Okay, perfect. And then just on the environment, I think, Paul, you mentioned that what you're seeing right now is mainly streams on non gold assets for precious metals, so base metal producers. Can you just come back and verify that we're looking at that sort of like 100 to 300,000,000 range. Is that still the range

Speaker 3

that

Speaker 10

you're thinking about for these streams?

Speaker 2

I'm going to hand that over to Ian, Tanya.

Speaker 10

Sorry, Ian, sorry. Yes.

Speaker 5

Good morning, Tanya. Good question. As Paul noted, it's an active pipeline. It's been evolving over the course of the year so far. I'd say generally the size has scaled up a bit, Tania, beyond 300, we're seeing more potential for larger transactions as well.

Speaker 5

So we're quite encouraged by that.

Speaker 10

And when you say larger transaction, are we talking in over $500,000,000 or still under 5

Speaker 5

$1,000,000? There are transactions at the $500,000,000 and above level that are possible. So that's perhaps been the change versus the last time we spoke. There still are smaller transactions. And as Paul said, byproduct transactions are more common than they were.

Speaker 5

That said, with capital still constrained to the gold space, with gold producers, I think there's still decent latitude to transact.

Speaker 10

I would assume, Ian, with the higher gold price for gold producers that would want to put some sort of royalty or stream on their gold assets with this higher gold price, their overall view on their valuation has gone up. Would that be a fair statement to say?

Speaker 5

Yes, I think so. Byproducts, precious metals producers probably also have a similar elevated view. We'll have to take a balanced view on gold price, but certainly constructive on that as well.

Speaker 10

Okay. And then, Ian, maybe just on I know in your Investor Day, I think it was Paul that mentioned that you are looking at lithium central transaction and other non gold transactions. Can you just comment on where you are on that? Whether we're still those are in the pipeline and whether we can see those in 2024 or is the focus still gold ahead of these non gold?

Speaker 7

Hi, Tanya. It's Jason speaking.

Speaker 2

I would say that the focus still is on gold.

Speaker 7

I think that's where we spend the majority of our time.

Speaker 5

That said, there are a lot of

Speaker 7

opportunities in many different commodities right now. Lithium is one that is interesting to us just given where we are in the price cycle. There's obviously been a significant pullback in the lithium price, which has created a bit of a challenge for developers looking to finance new mines. And so there is, as a consequence, potentially a role there for us to play a part. And so it's something that we're spending time on and we may be active this year, it depends on the opportunities that are in front of us.

Speaker 10

And what size would those opportunities be in Jason?

Speaker 7

It's a range. I think probably the sweet spot for us would be $50,000,000 to maybe up to $300,000,000 $400,000,000 if we did something very sizable.

Speaker 10

Okay. And my last question, if I could, just on uranium, we've seen volatility in that space as well. Anything in terms of looking at uranium for you guys?

Speaker 7

We do look at uranium from time to time. There aren't as many assets available for us to participate in. There's a couple that we keep our eye on, but it's not something that we're spending a lot of time on despite the change in commodity price.

Speaker 10

Okay. Appreciate that. I'll leave it for someone else to ask questions and really appreciate you answering my questions. Thank you.

Operator

Your next question comes from John Tumazos from John Tumazos Very Independent Research. Please go ahead.

Speaker 9

Thank you very much. It's always hard to figure out how to value things. Presumably, Franco, as you approach new transactions, values them at the spot gold price or today $2,300 ish and then you put a capitalization rate based on the mine life and quality. And maybe that would have been 8 or 10 times revenue for a simple royalty or adjusting for how much in the money a stream is. But gold stocks are actually a little bit lower even though gold is higher.

Speaker 9

And now there's the minimum tax rate, which equips your return a little bit. So is it fair to assume that given the valuation of gold stocks and the tax status, not only at Franco, but your peers as well, that you'd be capitalizing revenue at a lower rate going forward than you might have a couple of years ago. Also interest rates are higher. That's another factor. Excuse me.

Speaker 2

John, it's Paul. A lot of things in there, Lee. I'm one thing anytime we're looking at the properties, it's less so commodity prices. It's more figuring out what are we comfortable with there, happy to pry, happy to pry, pay a fulsome price for what we're comfortable we'll get produced and then want to participate in the upside. And it's really getting the calls right and being able to participate in the upside that generally has the greatest impact on our returns.

Speaker 2

So the vast majority of our work though is figuring out what are we comfortable with getting produced. Particularly when you're looking at development projects, it's sometimes our view is less than what you can see in reserves, sometimes it's far more. That's by far the biggest determinant. In terms of commodity prices, we're trying to price deals in the context of the market. The trick is you don't want to get caught when prices run up sharply and paying peak prices.

Speaker 2

And on the other hand, when the market turns down that's really where you want to get your deals done. You don't want to get caught up using bear market prices because you undervalue everything. So it's in a sense it's trying to take a longer term view of prices regardless of where the market has moved to in the time. On your last comment in terms of rates and how do we think about rates, We think of it as a bit of a competitive advantage and the competitive advantage is we don't have much debt. So with so many parties their cost of capital is moving up and down with their cost of debt.

Speaker 2

We don't really have that. So we think it's an advantage. We can do deals in the market and we can extend capital to people at a more consistent rate than other players over time. And so particularly when other folks are forced to use a higher cost of capital, we don't have to. And I think that's a bit of a competitive advantage.

Speaker 9

Thank you.

Operator

Your next question comes from Tanya Jakusconek from Scotiabank. Please go ahead.

Speaker 10

Good morning again. Sorry, I forgot to ask about Cobre Panama. I know Cosmos asked about it, the election happening on May 5. But can you just review for us, when did the parties actually then get into office? Are we talking like July ish or thereabouts?

Speaker 10

And once they get into office, are we expecting more clarity? So maybe just a bit of time frame for us on getting some news out on Cobre Panama.

Speaker 2

Tanya, you're exactly right. Election is coming up now, but the actual official change of government will only happen in July. So that's the first time that they could they're in a position of power. It doesn't mean that you can't have dialogue with them before that. But to your point, I don't expect any news, any direction on Cobre until later in the summer.

Speaker 10

Okay. That's very helpful because we maybe all be waiting Sunday night and then Monday morning thinking something might be said, but probably realistically, it's probably not until the end of the summer.

Speaker 2

We hope more sooner, but you got to be realistic.

Speaker 10

Yes. I appreciate that. Yes, thank you so much and good luck.

Speaker 2

Thank you.

Operator

There are no further question on the phone line. I will now do Q and A session over to Candida Hayden, who will take questions from the webcast.

Speaker 1

Our first question comes from Deepankar Nayak. Do you plan to do any share buybacks in 2024?

Speaker 3

Thanks for the question. We do have a large cash balance on our balance sheet, but our number one priority is to add assets to the portfolio. It comes down to what's the best use of a dollar and for us to continue to add assets. So now there we don't intend to do a share buyback.

Speaker 1

Your second question also comes from Deepankar Nayak. Do you have any option of storing physical gold assuming price would go up in the medium term?

Speaker 3

We do have the option. It comes down to streams versus royalties. Streams, we do get physical credits of precious metals to Franco Nevada. But for accounting to book revenue, we have to sell that metal. So that's what we do on a quarterly basis.

Speaker 3

There are some royalties that we actually do receive in kind. And so on any given time, we have roughly 20,000 to 25,000 ounces of gold to our account held in various refineries around the world. But there is no plan to increase that level at this stage.

Speaker 1

Next question comes from Diego Tormeterra from Noster Capital Management. What are the next steps to consider in the Cobre Panama arbitration? And could the election have any impact on the process of arbitration?

Speaker 11

Thanks for the question, Diego. It's Lloyd Hong. In terms of the next steps, as we previously disclosed, we have filed a notice of intent to initiate arbitration. And the next step following that would be to actually file a request for arbitration to formally kick that off. In terms of the election process, as Paul had mentioned, I mean, we are we hope for the first one will be able to engage in a constructive dialogue with the new government once it's elected, which could lead to the potential restart of the mine.

Speaker 11

And obviously, that would impact whether the arbitration proceeds or not.

Speaker 1

Thank you. The next question comes from Bernie Picci at Palisade Capital. BHP's interest in acquiring Anglo makes me wonder if Franco Nevada has opportunities in the current mining industry M and A environment, knowing this has not been your traditional area of opportunity?

Speaker 2

Thanks for the question. I would say when I saw that potential acquisition, my first thought is that's huge positive for the copper price. If BHP is acquiring assets rather than building assets, it doesn't add to the world's copper supply. So I'm not surprised to see that the copper price is running up on the back of it. Could there be assets that come out of that that would be create some deal activity for us possibly.

Speaker 2

More actionable though and is transaction that's already happened and that's Newmont acquiring Newcrest. They've announced that there are asset sales that they are doing. So I think there should be some opportunities that come out of that M and A process.

Speaker 1

Thank you. There are no further questions from the webcast. This concludes our Q1 results conference call and webcast. We expect to release our Q2 2024 results after market close on August 13 with the conference call held the following morning. Thank you for your interest in Franco Nevada.

Speaker 1

Goodbye.

Operator

Ladies and gentlemen, this concludes today's conference call. You may now disconnect. Thank

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