Corporate Profile
Franco-Nevada Corporation is the leading gold-focused royalty and streaming company. We do not operate mines, develop projects or conduct exploration. Instead, we own and continue to grow a large, diversified portfolio of royalties and streams that provide:
Royalties and streams expose Franco-Nevada to the exploration and price optionality inherent with geologically favourable properties. They can often be registered on title to a property or in a secure fashion with less exposure to government resource nationalisation. They are not subject to operating or capital cash calls, making this a free cash flow business. Franco-Nevada can provide yield along with more upside than a gold ETF with less risk than an operating company.
Business Model Advantages
- This business is truly a free cash flow business. We are effectively free of the need to directly fund unscheduled mining capital expenditures and other costs.
- Typically, we participate at the revenue line of operations and are not directly impacted by cost inflation. This allows our margins to fully benefit from rising commodity prices.
- Our business is high margin with low overheads enabling us to generate cash through the entire commodity cycle.
- Our many assets provide exploration optionality by covering over 44,000 square kilometres of geologically prospective lands without any direct carrying, exploration or development costs.
- Our business is scalable allowing for the acquisition of more interests than an operating company can effectively manage. A more diversified portfolio reduces overall risk.
- Management has the benefit to be able to focus on growth as we do not have responsibility for day-to-day operational or development decisions.
Our Track Record
Since our IPO in December 2007, Franco-Nevada’s share price has outperformed both gold and other gold equities. Over those ten years our margins have remained high, our overhead has remained low and our effective tax rate has remained stable. The Company has been able to increase dividends in each of the past ten years.
Our History
Franco-Nevada Corporation’s roots go back to the early 1980s when Seymour Schulich and Pierre Lassonde founded the original Franco-Nevada with an initial capitalization of $2 million. That company created the mining royalty business. It was the leading public mining royalty company until 2002 when it was acquired by Newmont Mining for $2.5 billion.
The original Franco-Nevada team continued to manage royalty assets as part of Newmont Capital. In 2007, Newmont offered a package of many original Franco-Nevada royalties along with other royalties for sale. The original Franco-Nevada team incorporated a new Franco-Nevada, launched an initial public offering (IPO) and on December 20, 2007 acquired the royalty portfolio for $1.2 billion. It trades under the symbol FNV on both the Toronto and New York stock exchanges.
Franco-Nevada has expanded the original IPO portfolio to become the leading gold royalty and streaming company with a year-end market capitalization of over $14 billion. Its business model provides investors with gold price and exploration optionality with less exposure to operating risks. It uses its strong free cash flow to expand its portfolio and pay dividends. Since its IPO, Franco-Nevada’s share price has outperformed the gold price and all relevant gold equity benchmarks.
1983–2001
- 1983 Seymour Schulich and Pierre Lassonde form the original “Franco-Nevada Mining Corporation Limited”
- 1985 acquisition of the Goldstrike royalty–start of royalty focus
- 1996 Midas discovery in Nevada
- 2001 Newmont Mining bids to acquire Franco-Nevada for $2.5 billion
2002–2007
- 2002 Newmont acquires original Franco-Nevada
- Original Franco-Nevada team continues royalty business under Newmont Capital led by David Harquail
- 2007 Newmont decides to sell portfolio of royalty assets
- The new “Franco-Nevada Corporation” is incorporated
- Successful IPO process leads to Franco-Nevada acquiring the Newmont royalty portfolio for $1.2 billion
- Dec 20th celebrated listing of FNV on the Toronto Stock Exchange
2008
- Market capitalization > $2 billion
- Dividend initiated
- Gold Quarry royalty acquisition
2009
- Market capitalization > $3 billion
- Dividend increased
- Palmarejo gold stream acquisition
- Subika royalty acquisition
2010
- Market capitalization > $4 billion
- Dividend increased
- Detour and Tasiast +20 million ounce projects
- Board strategic session
2011
- Market capitalization > $5 billion
- Dividend increased
- $1.2 billion invested in new precious metals assets
- Listed on the NYSE
2012
- Market capitalization > $7 billion
- Dividend increased
- $1 billion Cobre Panama precious metals stream deal
- C$400 million Weyburn oil acquisition
2013
- Market capitalization of $6 billion
- Dividend increased
- Added to GDX and Aristocrat indices
- Open house at new offices
2014
- Market capitalization > $7 billion
- Dividend increased
- $648 million Candelaria precious metals stream deal
- Over $900 million committed in total
2015
- Market capitalization > $7 billion
- Dividend increased
- Inclusion in TSX 60 Index
- $610 million Antamina stream deal
- Start of Cobre Panama funding
2016
- Market Capitalization > $10 billion
- Dividend increased
- $500 million Antapaccay transaction
- $100 million initial STACK oil acquisition
- $920 million bought deal financing
2017
- Market capitalization > $14 billion
- Dividend increased for 10th consecutive year
- $178 million for increased Cobre Panama stream (increased to $356 million in early 2018)
- $225 million for Permian shale O&G royalties
- $74 million for Alberta Orion SAGD oil royalty
- Dec 20th celebrated 10 years on the Toronto Stock Exchange
2018
- Market capitalization > $13 billion
- Dividend increased for 11th consecutive year
- $520 million Oklahoma royalty venture with Continental Resources
- Expanded Cobre Panama stream
- $101 million for energy royalties in the Delaware basin