Franco-Nevada Corporation

Good morning, ladies and gentlemen, and welcome to the Franco Nevada Corporation Q1 2021 results conference call. At this time, all lines are in listen-only mode. Following the presentation, we will conduct a question and answer session. If at any time during this call you require immediate assistance, please press star zero for the operator. This call is being recorded on May 6, 2021. I would now like to turn the conference over to your host, Jason Picciotti. Please go ahead.

Thank you, Chris. Good morning, everyone. Thank you for joining us today to discuss Franco Nevada's first quarter 2021 results. Accompanying this call is a presentation which is available on our website at FrancoNevada.com where you will also find our full financial results. Paul Brink, President and CEO of Franco Nevada, will provide some introductory remarks, followed by Sandeep Rana, CFO of Franco Nevada, who will provide a brief review of our results. This will be followed by a Q&A period. Our full executive team are available to answer any questions. 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 two of this presentation. I will now turn the call over to Paul Brink, President and CEO of Franco Nevada.

Thanks, Jason. Good morning. A diversified portfolio outperformed in the first quarter, generating record revenues and near-record margins. An 85% adjusted EBITDA margin and a 52% adjusted net income margin. Gold equivalent ounces for the quarter were ahead of our expectations. Strong deliveries from Andamena, ongoing ramp up at Cobre Panama, and leverage to gold prices at Hemlo made for the largest increases over Q1 2020. As we progress through the year, we expect high contributions from each of Cobre Panama and Candelaria due to increased throughput and high grades respectively. Energy revenues for the quarter were well ahead of our guided annual run rate, a strong initial contribution from Haynesville, some high-interest wells in the Permian, and high energy prices were the drivers. We're committed to ensuring that Frankenvato is the gold investment that works for all our stakeholders, including our shareholders, our operating partners, and our communities. Along with our asset handbook, we recently published our annual ESG report. Highlights of the ESG report are our sector-leading rankings, promoting responsible mining through our capital allocation, ongoing contribution to communities, and our increased commitment to diversity in our board and top leadership. During the quarter, we added two attractive precious metal assets, a royalty on rocks called Seguela Gold Development Project in Cote d'Ivoire, and a precious metal stream on the Condensable Copper Mine in Peru. Both assets with excellent upside potential. We were delighted, post-quarter end, to acquire a tranche of Vale iron ore royalty debentures. The Vale interests, along with our Labrador iron ore royalty company investment, add to our base of low-risk, long-life cash flows and further enhance the diversity of our portfolio. With the additions, the portfolio remains more than 80% precious metal focused. Our recently published asset handbook highlights the year-on-year growth in our reserves and long-reserve lives. The iron ore assets will further extend both measures. Turning now to our outlook, 2021 is expected to be a strong growth year for Franco Nevada, with new acquisitions, mine expansions, and new mines all contributing. We continue to see numerous exploration successes in the portfolio. Most recently, success at the Copper World satellites to the Rosemont deposit, ongoing expansion of Skeena's Eskay Creek deposit, extensions of East Goldie at Canadian Mallardic, and high-grade step-up holes at Walbridge's Fenelon deposit. This week, Kirkland Lake provided the latest drilling update on their 270,000-meter drill program at Detour Lake. The likely expansion of the resource at Detour should be a catalyst for our stock this year. Strong gold prices and near-record copper prices are boosting the development outlook for our pipeline of gold and copper interests. the Hard Rock, Valentine Lake, and Stibnite Gold projects, and the Alpala and Takataka Cockle projects, amongst others. Following the Vale Royalty debenture acquisition, we revised our guidance and outlook, and now expect 25% growth in revenue over the next five years. We announced with our year-end results an increased quarterly dividend to 30 cents a share. This was our 14th successive annual dividend increase. The Board has now declared the first of those dividends payable June 24th. The 15% increase is larger than typical and reflects the growth in our business due to Cobra Panama. A note on Board succession and renewal. At yesterday's Annual Meeting, the Honorable David Peterson stepped down as Chair of the Compensation and ESG Committee and after more than 13 years as the Director of Franca Nevada. The Board and I would like to thank David for his outstanding leadership and many years of service. We will no doubt miss his unique abilities for building unity within the Board. In terms of renewal, you'll recall that Maureen Jensen joined the Board at this time last year. Maureen has a strong governance background, having previously led the Ontario Securities Commission. To sum up, our portfolio continues to outperform. It has built in growth and tremendous long-term optionality. We're in a net cash position of $1.2 billion in available capital and are now generating EBITDA at a rate of $1 billion per year. We're focused on precious metal acquisitions and see good prospects for adding to the portfolio. I'll now hand it over to our CFO, Sandra Brenner.