Franco-Nevada Corporation

Good morning, ladies and gentlemen, and welcome to the Franco-Nevada Corporation 2021 Year-End Results Conference Call and Webcast. This call is being recorded on March 10, 2022. At this time, all lines are in a listen-only mode. Following the presentation, we will conduct a question-and-answer session where you may ask questions through the phone line or webcast. If joining by webcast, you may submit written questions for the Q&A session at any time during this call. If you require assistance during this conference, please press star zero for operator assistance. And I would now like to turn the conference call over to your host, Ms. Bonaviv Tech, Vice President of Finance. Please go ahead.

Thank you, Pam. Good morning, everyone. Thank you for joining us today to discuss Franco Nevada's 2021 year-end results. Accompanying this call is a presentation, which is available on our website at franco-nevada.com, where you will also find our full financial results. The presentation is also available to view on the webcast. Paul Brink, President and CEO of Franco Nevada, will provide some introductory remarks, followed by Sandy Grana, Chief Financial Officer 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 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 our detailed cautionary notes on slide two of this presentation. I will now turn the call over to Paul Brink, President and CEO of Franklin, Nevada.

Thanks, Bonnevie, and good morning. I'm delighted to be reporting Franklin, Nevada's best-ever annual results, both top line and bottom line. Our diversified portfolio served us well. with good contributions across precious metals, energy, and iron ore, driving a 27% increase in revenue to $1.3 billion. Precious metal growth was driven by an increased contribution from Cobra Panama, outperformance by Antemina, and the first-year contribution from the Condesabre acquisition. Iron ore prices spiked during the year, and we generated strong revenues from our iron ore holdings. Energy prices recovered from their pandemic lows in 2020, That, along with the newly acquired Hainesville natural gas royalties, saw our energy revenue more than double. The benefit of our top-line business is most apparent during periods of cost inflation. Our revenue growth translated directly into expanded margins and record earnings. Our efforts on ESG continue to be well received. We recently had our top rating reaffirmed by Sustainalytics, and we're once again highly ranked in the Globe and Mail's annual governance ratings. We also made progress on our diversity goals in 2021 and through promotion have increased the diversity of our senior management. The growth in our business prompted our 15th consecutive annual dividend increase announced this January. The 6.7% increase takes our quarterly dividend to $0.32 per share in U.S. dollar terms. Our board also moved their annual dividend review earlier in the year. So the increase will for the first time apply for each of our four quarterly dividends this year, an effective 10% annual dividend increase. Turning to outlook, it goes without saying with the terrible war in Ukraine, markets and commodity prices are very volatile and there's a wide range of revenue outcomes. After the 27% growth in 2021, we expect a slightly lower production profile in 2022. The outlook reflects an expected lower contribution from Guadalupe, a normalized grade at Antamina, and a dip in the grades at Antakai for the year before recovering again in 2023. At the same time, prices for gold, PGMs, nickel, energy, and iron ore are currently all high, and if sustained, will boost revenues for the year. We expect our growth to continue in 2023, with the largest driver being Cobre Panama. First, Quantum plans to expand the mine from the current 85 million ton per annum and achieve 100 million ton per annum by the end of 2023. We're guiding to roughly 10% organic growth in our business by 2026 over 2021 levels, with a similar commodity mix between precious metals and diversified over the period. Growth will come from mine expansions and new mines. Expansions are expected to deter Thaddeus Stillwater and Barley's iron ore operations along with that at Cobra Panama. Of the new mines expected to contribute, Solaris Norte, Siguela, and Greenstone are already under construction. Strong commodity markets inevitably drive organic growth in our portfolio. Along with a deep portfolio of royalties on gold exploration properties, we have royalties on what are likely some of the next generation of copper and nickel mines. Our business development team is very active, principally with the financing of new gold mines, but also on diversified assets. To wrap up, I'm proud of what our team has achieved, resulting in yet another record year that builds on the track record of Franklin, Nevada. Over to you, Sandy.