Franco-Nevada Corporation

Good morning and welcome to Franco Nevada Corporation's 2022 Year End Results Conference Call and Webcast. This call is being recorded on March 16, 2023. At this time, all lines are in a listen-only mode. Following the presentation, we will conduct a Q&A session where you may ask a question through the phone line or the webcast. If you are joining by webcast, you may submit a written question for the Q&A session at any time during this call by typing your question in the Q&A section of the webcast platform. If you require immediate assistance during this call, please press star zero at any time for the operator. I would now like to turn the conference over to your host, Candida Hayden, Senior Analyst, Investor Relations. Please go ahead.

Candida Hayden Thank you, Michelle. Good morning, everyone. Thank you for joining us today to discuss Franco Nevada's 2022 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. During this call, During our call this morning, Paul Brink, President and CEO of Franco Nevada, will provide introductory remarks, followed by Sandy Brana, our Chief Financial Officer, 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 note on slide three of this presentation. I will now turn the call over to Paul Brink, President and CEO of Franco Nevada.

Thanks, Candida, and good morning. I'm pleased to report strong fourth quarter and annual results for 2022. Our diversified assets outperformed driven by elevated energy prices in the year. The benefit of our top-line business was again apparent. While inflation impacted the margins of many operating companies, our EBITDA margins actually expanded slightly, and our business generated record profits. It's good to see our efforts on ESG being well received. Most recently, we were awarded a Sustainalytics Global Top 50 rating, given to the top 50 companies in their ratings universe. This January, we announced our 16th consecutive annual dividend increase. The roughly 6% increase takes our quarterly dividend to $0.34 US per share. Many of our largest shareholders have held the stock since the IPO, and they're now realizing a 12% yield in Canadian dollars or almost 9% in US dollars. The renegotiation of the Cobre Panama concession contract over the last few months and the brief production halt caused some sleepless nights. It was a relief, I'm sure, for everyone last week when First Quantum and the government reached agreement on a refreshed contract. We hope it moves swiftly through public consultation and parliamentary approval. Turning to Outlook. For 2023, our precious metal geos and our diversified production are expected to be consistent with 2022, although total geos are expected to be lower as current energy prices are off from the highs of last year. We're looking forward to Cobre Panama reaching its expanded throughput capacity of 100 million ton per annum by year end, and also to initial contributions from three new gold mines during the year, Megino, Segwella, and Solaris Norte. Our five-year outlook shows ongoing growth in the business. This organic growth comes from both mine expansions and new mines. The most significant new additions during the period are expected from Toca Tocino, Vale's southeastern iron ore system, and Hard Rock in Ontario. We expect Mineway Solutions will have reached its cap in 2024 and also a step down in the Candelaria stream rate in 2027. Resource optionality continues to drive our business. Success at the drill bit will provide one of our biggest annual increases in reserves from our underlying assets. The biggest impacts are reserve increases at Detour Lake and Cascabel. We'll publish our tributable royalty ounces with our asset handbook in April. The global drive for electrification will be good for Franco Nevada's longer-term outlook. 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 seeing good opportunities for precious metal financings, in particular financing new gold mines. We expanded the scope of our financing package with the Toco de Senor transaction with G Mining Ventures last year and are seeing good interest in similar structures. To wrap up, Franco Nevada has no debt, $2.2 billion in available capital, and in these uncertain markets, couldn't be better positioned to continue its growth record. I'll now hand over the call to Sandy.

Thanks, Paul. Good morning, everyone. As mentioned by Paul, Franklin, Nevada ended 2022 with a strong fourth quarter, resulting in record financial results for the full year. The company saw strong underlying production from our diverse portfolio of assets during the quarter. The majority of our mining assets performed in line with our expectations. However, revenue and earnings were impacted by weaker precious metal commodity prices. and timing of deliveries for certain assets. The one area of the business that continued to deliver strong financial results was the energy assets. As you turn to slide four, you can see how the company performed against the guidance that was issued for 2022. The initial guidance provided by the company for the year was 680,000 to 740,000 total geos. Of this total, we guided to 510,000 to 550,000 precious metal geos, with the balance being from diversified assets. The company ended the year with 729,960 total geos sold, which is at the high end of the guidance range. However, we were at the lower end of the range for precious metals, with just over 510,000 geos sold. This was due to lower geos than expected from Stillwater and Tamina and Cobra Panama, with a portion of the lower geos being related to price impact on conversion of non-gold commodities to geos. The diversified assets had a strong year driven by higher energy prices. This resulted in coming in ahead of our expected guidance with 219,575 total diversified geos. On slide five, we highlight the gold equivalent ounces sold for the last five quarters as well as the previous five years. Overall geos sold were relatively flat when compared to prior year with Q4 2022 geos sold being 183,886. compared to 182,543 in fourth quarter last year. Of this precious metal, geos were 129,642, down 6.6% from prior year. For the quarter, the largest contributors to the lower precious metals were Cobre Panama and Tepecay and Guadalupe. At Cobre Panama, First Quantum had another strong quarter as it moves towards production of 100 million tons per year. However, for the quarter, due to timing of shipments, Gold and silver deliveries and ounces sold were lower than expected for the company. As we look to Q1 2023, we do expect a delay in precious metal deliveries from Kobe, Panama, due to the temporary production curtailment that did occur. We expect to have a stronger Q2. Antipakai delivered less ounces than prior year, but was in line with our expectations for the quarter. And the operator at Guadalupe mined less ounces on lands to which our stream applies, resulting in lower geos delivered. Partially offsetting lower precious metal geos from these assets mentioned were Hemlo and Tassius, where we had strong fourth quarters. For diversified geos, our valet royalty resulted in just over 4,000 geos for the quarter. This was lower than prior year due to lower production and lower iron ore prices. As you know, each quarter we make an estimate of what the royalty will be, with the actual amount being announced by valet in late March and September each year. As a result, you will see adjustments to our accruals twice a year in Q1 and Q3. The strong fourth quarter closed out the year with 729,960 geos sold for 2022, the highest annual level thus far for Franco, Nevada. Precious metal geos represented approximately 70% of total geos for the quarter and for the full year. 2022 saw continued volatility in commodity prices. As you see on slide six, most precious metal prices were lower for the quarter and the year. This did impact the conversion of metals to geos. Energy prices were again strong in 2022, reaching multi-year highs. However, oil and especially natural gas prices have both retreated in the first part of 2023. Slide seven highlights our total revenue and adjusted EBITDA amounts for the three and 12 months ended December 31st, 2022 and 21. As you can see from the bar charts, revenue in adjusted EBITDA has decreased slightly for Q4 2022 compared to prior year. The company recorded $320.4 million in revenue in fourth quarter and $262.4 million in adjusted EBITDA. A margin of 81.9% was achieved. Fourth quarter continued the strong contribution from the energy assets as revenue increased from $62 million a year ago to $82.7 million this quarter. The increase was due to the continued strong energy prices, especially natural gas. West Texas intermediate oil price averaged $82.65 a barrel in the quarter. Natural gas prices increased significantly with Henry Hub averaging over $6 in MCF in fourth quarter compared to $4.85 in MCF a year ago. For the full year, the company recorded $1.31 billion in revenue and $1.1 billion in adjusted EBITDA, both records for the company. As you turn to slide 8, you'll see the key financial results for the company. Although GEOs were slightly higher for the quarter, revenue was lower because of lower precious metal prices. On the cost side, we did have a decrease in cost of sales as less stream ounces were delivered and sold compared to prior year. Cost of sales is dependent on which assets deliver stream ounces as not all fixed payments per stream ounce are equal. Depletion decreased to $73.5 million versus $78.2 million a year ago. Depletion is based on actual mining geos sold in barrels of oil equivalent received on the energy side. As we received less geos from Antipakai, Cobre, Panama, and Valais, this impacted depletion as those assets are higher per ounce depletion assets. For the full year 2022, adjusted net income was $697.6 million. Slide 9 highlights the continued diversification of the portfolio. As shown, 70% of our 2022 revenue was generated by precious metals. The geographic revenue profile has revenue being sourced 91% from the Americas, with Canada and the U.S. being the largest. And with respect to asset diversification, Cobre Panama was again our largest revenue generator at 17% of total revenue, followed by Candelaria and Antifakai. Cobre Panama is the only asset greater than 10% of revenue. The last chart highlights our operator diversity. Our largest exposure to revenue being generated by any one operator is 17%, which is First Quantum, who operates Cobre Panama. Slide 10 illustrates the strength of our business model to generate high margins. For 2022, the cash cost per geo, which is essentially cost of sales divided by gold equivalent ounces sold, is $242 per geo. This compares to $245 per geo in 2021. This amount will fluctuate depending on the mix of royalty versus stream geos, including mining and energy, but as you can see at current average gold prices, the company generates significant margins. The margin was over $1,500 per ounce in 2022. In a rising commodity price environment, we expect to benefit fully as the cost per geo sold should not increase significantly. We consider our cost structure to be essentially fixed. The other cost component of the company, besides cost of sales, is our corporate administration costs. The chart on slide 11 highlights our quarterly revenues and quarterly corporate administration and share-based comp expenses since our IPO. As you can see, revenues have grown significantly over the period shown, while corporate costs have remained fairly stable. For 2022, corporate administration, including share-based comp, was $32.6 million, or less than 3% of revenue. We continue to believe we can add to our portfolio and grow our business without adding significant overhead to the company. As you can see on slide 12, for 2023, we are guiding to lower total geos sold, with the range being 640,000 to 700,000 geos sold. Of this total, we are guiding to 490,000 to 530,000 precious metal geos for the year. The balance would be geos from our diversified assets of which we expect energy to account for about 70% for 2020. The overall main drivers for geos year-over-year are for precious metals. We do expect higher geos from Antipokai, MWS, Tassius, and Muscle White, where the NPI should be payable for the full year. At Cobre Panama, we've guided for a range of 115,000 to 135,000 geos, accounting for the recent production curtailment and timing of deliveries. We expect first deliveries from new mines Maginot, Seguela, and Solaris Norte. We are anticipating that less mining will occur on our streamlands at Antamina and Candelaria, and expect the Hemel MPI to be less in 2023. Our guidance has been calculated using $1,800 per ounce for gold, $21 for silver, $900 platinum, $1,500 palladium, and $120 per tonne iron ore. Obviously, prices are volatile and as they change, it will impact the conversion of non-gold commodities to geos. On the energy side, we're using $80 per barrel WTI and $3 MCF natural gas. This provides a range of 105,000 to 125,000 geos from our energy assets. As we look forward to 2027, we're proud of the built-in growth that the company already has in place. Our outlook for 2027 is 760,000 to 820,000 geos sold. Of this range, precious metals will be 565,000 to 5,000 geos. Main contributors will be Cobre Panama, ramped up to 100 million tons per year. We will benefit from expansions at Stillwater, Detour, and Tazziast. We're expecting a number of new mines to be in production by 2027, TZ, Greenstone, Valentine Gold, Stivnite, and SK Creek. Also, we do expect MacReady West and Sudbury to remain in production. at 2022 levels until 2027. The initial step down in geos at Candelaria will occur during this timeframe in 2027. Also, it should be noted that mine waste solutions will reach its cap at the end of 2024. For diversified geos, we do expect an increase in geos from our valet royalty as attributable production should increase with planned expansions. And for the energy assets, we've assumed a slight increase in production over the next five years, resulting in a marginal increase in geos Also, we've held energy prices flat at $80 a barrel WTI and $3 in MCF natural gas for the period. Overall, when you look at the outlook for GeoSold, the company has over 18% built-in organic growth to 2027 at budgeted commodity prices. This assumes that no additional assets are added to the portfolio. Finally, slide 13 summarizes the financial resources available to the company when including our credit facility of $1 billion. Total available capital at December 31, 2022 is $2.2 billion. And with that, I will pass it over to the operator and we're happy to take your questions.

Thank you. During this Q&A session, if you would like to ask a question, simply press star then the number 1 on your telephone keypad. If you would like to withdraw your question, please press star 2. If you are joining on the webcast, please submit your question through the Q&A section of the webcast platform. One moment, please, for our first question. First question comes from Hikal Ila of HC Wainwright. Please go ahead.

Hey there. Thanks for taking my questions, and congratulations on the recent corporate Panama News. Not surprised it all worked out, but it's still good to see ink on paper here. Speaking of Cobra Panama and given the importance of that asset to your franchise as a whole, can you provide some color on how much mine production has shifted backwards in time versus just changed for good, or as you see it right now? And I assume that given how fast this all happened, I assume that there'll be limited loss and the inefficiencies that are encouraged should be somewhat limited just because of timing. I know there is no scientific answer to this. I'm just trying to gauge the longer-term impact and also the timing part, given that you're still expecting $115,000 to $135,000 this year, please. Thank you.

Hi, Heiko. How are you? Yeah, so at a high level, obviously, First Quantum has not adjusted their guidance for the year. So even though the mine was shut down roughly for three weeks, they think they can make it up. And during that period, they did do some maintenance activities on some of the lines. So from our standpoint, in Q1, we will be impacted. I would say of our range of 115,000 to 135,000 geos, roughly 20% of that will come through Q1. There will be the catch-up deliveries in Q2, and then it will be even in Q3 and Q4. That's our sense. But obviously, it will all be dependent on how the mine ramps up. But from my understanding, it's back to normal operations.

Very good. Okay. And Paul, I mean, you were talking earlier on this call. One of your quotes was, in these uncertain markets, you're still able to contribute or continue your growth. I mean, gold's at 19.30 an ounce right now. And we've discussed in the past that the net royalties is quite high. Do you also plan a ballpark bigger than many of the other people? You are nonetheless diversified into energy assets as well. Is it maybe fair to say that management has been spending more time lately on non-gold or even energy acquisitions?

No, the focus most recently has been on precious metal assets. There is a range of things that we're looking at, but by far the most of it is precious metal related. By my comment, more of where I was going is we're providing capital to the mining industry, particularly the gold mining industry. And what we've seen for the last number of years, we've been in a world awash with cash and cheap capital. And that is drying up the cost of funds to many developers is higher than it was. And particularly with the The current liquidity issues in the market, I expect it will only go higher. So those are all very good tailwinds for us being able to deploy more funds and to do it with good returns.

Okay. That's what I assumed you were trying to say, but I just want to clarify. And that was it on my end. Thank you very much.

Thank you. The next question comes from Aaron Kyle of CIBC. Please go ahead.

Thanks, Paul and Sandeep, and congratulations on a strong fourth quarter. Maybe my first question here is just on your five-year outlook, starting with Valet. Your outlook points to increased production from the northern and southeastern system. Could you maybe comment on when you expect the southeastern system to start contributing? We have about mid-2024 in our model. Does that sound right?

Hi there. It's Ian speaking. Yes, so Volley, as Sandeep indicated, at the end of this quarter will provide an update, typically as to when they expect the southeastern system to begin contributing. As you know, there's a threshold of production that needs to be met. The last time they provided an update was in September, and they indicated between 2024 and 2025. I think our expectation is for towards the end of 2024, but that's the range that is available.

Okay. Thank you, Ian. And then maybe just switching gears here, Heiko touched on this briefly in terms of the deal environment, but debt financing remains difficult to access for junior miners and developers with rising interest rates. So could we maybe expect more deals in the future structured similar to the deal that you did with G-Mining, comprised of stream debt and equity components, or are we focused primarily on stream?

Dean, again, happy to answer that question. I think that transaction was well received and provided an elegant solution to financing in that particular case. So we are following up with others with that type of structure, and we're hopeful we'll be able to do more deals like that. That's not exclusively what we're looking at. We're looking at things across the spectrum, but we are hopeful that will be an avenue for growth.

Okay, great. Thank you. And then maybe my last question here is just to the extent that you can comment on it. What type of size of deals are you seeing? Are they primarily in the $100 to $400 million range, or... Are you seeing primarily royalty packages, or is it primarily streaming deals that you're seeing?

Sure. I guess a couple comments. First off, the pipeline is active. Yes, there are kind of more medium-sized deals, and that is kind of sub-400, I would say. as a mix of primary gold and byproduct. But I guess one trend is we're seeing more and more project financing type transactions online to what I just mentioned.

Okay, great. Thank you. That's all the questions I have. Thanks again.

Thank you. The next question comes from Greg Barnes, TD Security. Please go ahead.

Yes, thank you. Sandy, the Muscle White MPI, any idea what kind of number we're talking about there?

It's paid in Canadian dollars. It could range, my guess at this stage or my estimate is 5 million Canadian to 7 million Canadian based on a full year of production.

Great. And I assume your guidance for the five-year regarding Candelaria does not include the potential for them to go underground. I assume when they do go underground, that would be captured under the streaming deal you have there. or increase underground, I should say, increase the underground production.

Yeah, Greg, it's Paul. So they don't yet have the increase in the underground in their mine plan. Our assumptions reflect the mine plan that they've put out there and their guidance, so that if they do go ahead with the underground expansion, that's upside on what we're currently guiding. Okay, great.

Thank you. Thank you. The next question comes from John Tomassos, private investor. Please go ahead.

Thank you. Could you explain which of your projects had bigger reserve and resource extensions? Just looking down the list, Detour Lake, Bruce Jack, for example, had reserve gains or discoveries last year. Also, your revenues rose 1%, but your depreciation fell 4.5%. Would that imply a 5% increase to your reserve life?

So, John, I'll take the first part here. The big changes for the year in reserves will be Detroit Lake, Cascabel, where they moved M&I into the reserve category. Next on the list is the increase in reserves at Melartic with the underground, and then the new assets that we have, Tocco di Zinio and also Maginot. So those will be the biggest increases.

And then, John, just on depletion, yes, revenue was higher, but that was driven off of higher energy prices, essentially. Production was slightly higher on the energy side. But on the mining side, we did have lower production, which results in lower depletion, and the lower production was from high depletion assets, Cobre Panama, Antipakai, and Antamina. And as a result, we had lower depletion. The additional reserves and resources, that'll impact depletion for 2023 going forward.

Thank you.

Thank you. The next question comes from Lawson Winder of Bank of America Securities. Please go ahead.

Thank you very much, operator, and good morning, Franco Nevada team. Just two questions for me. So one, just in terms of operator concentration, so obviously the issues at Cobra and Panama highlighted the benefits of the first quantum, or sorry, Franco Nevada, pardon me, diversified asset base. However, I mean, Cobre Panama remains a relatively large proportion of the asset base. Sandeep, I think you mentioned 17% of 23. And I think with net asset value or using that as a basis, it would be a bit higher. Does this experience increase FNV's desire to potentially reduce the exposure to any individual operator? And what's your latest thinking in terms of sort of concentration risk with operators?

So, Lawson, we're trying to be a low-risk way for investors to invest in the gold sector. And so, obviously, the more diversified, the better. But at the same time, we're trying to expose our investors to that resource optionality and the ability for assets to expand over time. And often those two things, they go in different directions. Our experience has been it's the big ore bodies that get better over time, that are the most likely to be expanded, and often that have the longest lives and the greatest long-term potential. So it's a reality of our business. I have to say, if there was another Cobre Panama that came along and we had the opportunity to invest in it, we would do it in an instant to expose ourselves to that growth. And as our portfolio grows and we add more assets, so we... dilute the individual influence of each of them. It's the nature of the business that assets will go through these bumps in the road, but we think our business is well set up. We have no financial leverage. The nature of our investments is such that the impact of these events is fairly minimal, and so if they're big assets that we can bring on board, we'll do it again.

With the same operators. Is that what I'm hearing?

You know, on all aspects, if it's political risk, if it's assets, if it's operators, we try and diversify it. But again, if they're great assets that come along, you've got to bring them on board when you have the chance. Okay.

Thanks. That's very clear. And then just secondly on MetalMix, So gold in 2022 was about 55% of the overall revenue mix. What is your thinking on where gold should be, how low it can go, or how much higher you would want it to go?

Thanks. Again, our focus is on precious metal. We would love to do as much precious metal as we can and as much gold as we can in the portfolio. But as we've always said, we recognize that the business is cyclical and There are times where it's better to invest in other commodities, and also there's some great ore bodies that are in other commodities, and if we can get exposure to it, we would do it. You know, we have last year, we're up to roughly 30% diversified. It's not the target, but if there were great assets that we needed to bring on board that were diversified and we're at that level, we're comfortable with that.

Fantastic. Thanks very much, Paul.

Thank you. Once again, ladies and gentlemen, if you do have a question, please press star 1 at this time. Next question comes from Tanya Jakoskonek of Scotiabank. Please go ahead.

Good morning, everyone. Can you hear me?

Coming through clearly, Tanya.

Okay, great. Thank you for taking my questions. So the first one, maybe just to finish off with Sandeep, if I could. Just looking at the year, Sandeep, you mentioned Q1 is going to be weaker on Cobre Panama because of the shipment coming through 20% of that annual production. Any other assets within the portfolio that are going to be weighted either way to first, second, third that we should think about as we go through the year?

Cobre Panama is probably the largest. Antipakai was the shut down for about 11 days earlier in January because of some protests. It's up and running normal operations right now. So that's had a little bit of impact on production. Other than that, top of mind, I don't really think there's much more. On valet, we've always guided that production is usually less in the first six months of the year versus the second six months. It's usually like 45, 55, so... you can take that into consideration. But other than that, everything else is operating as expected. Okay, thank you. Stillwater had an incident at Stillwater West, so that section of the mine is shut down for four weeks. So that will impact the royalty there a little bit for Q1 as well.

No, I appreciate that. And then just looking at your 2027 guidance and appreciate, you know, was a bit higher than our expectations, but I really think it was down to two assets that we may differ on. So, I just wanted to review Stibnite and the Rosemont Copper World. Can you just give me an idea in your 2027 number what, I mean, Stibnite would be about 8,000 GEOs, and I just wondered on the Rosemont Copper World, world, what you have there. We're a bit more conservative in production starting later, so I just wondered what you had there for that asset.

Yeah, I'd have to check the details, Tanya. I can get back to you separately on that one.

Okay, great. Thank you for that. And then just lastly on transactions, and thank you for the color on looking at the both project development, both on precious metal and also on byproduct credits from other producers. Just wanted to ask what your appetite is right now, given that 70-30 precious metals to non-precious metals. What is your appetite for non-gold deals and where does lithium fit into your transaction, if at all?

So the preference is precious metal, and most of what we're active on is precious metal. As I say, on the diversified side, it's more about are they great assets? Often we look at it and say, are there things that we can do in diversified assets that we can't do in gold? And so that's often either great old bodies or old bodies with very long lives. Those are the sort of things we're looking for. We have been spending time on lithium. There's a lot of capital that will get spent building lithium mines over the next five or ten years. I'm not expecting to get anything done in the short term. With spot prices roughly four times higher than consensus on long-term prices, it's hard to get the bid and the ask to match at present. But if there's a great lithium deposit and we could get a deal done based on longer-term prices where we can honestly believe there's more upside than downside, we'd be interested in doing something.

Okay. So would it be fair to say then, Paul, that on the non-gold or non-precious metal side, it is not in energy. It would be in assets like would you increase further iron ore, lithium, and other electrification metals rather than the energy side?

Yeah, on energy, as you know, we've got it to 20% is where we're comfortable on energy. We wouldn't look to acquire energy above that level. Obviously, when prices run as they did last year, then energy gives you a greater contribution, and that's all upside. That's why you do it. So at our current levels, we're not looking to add more energy. But there's no bright line in the sand. In due course, if it was a lower percentage of our portfolio, we may consider it again.

I appreciate that. Thank you so much and look forward to hearing from you, Sandeep, on the Rosemont and Copper world.

Thanks, Tanya.

Thank you. There are no further questions on the phone lines. I will now turn the Q&A session over to Candida Hayden, who will take questions from the webcast.

Thank you, Michelle. Our first question comes from Barry Dunaway from America First Investment Advisors. Will the first quantum agreement on Cobre Panama lead to any change in terms on your contract with them?

It's Paul speaking. No, so the terms that have been negotiated and there's a draft agreement on principally relate to the taxation on First Quantum or NPSA, the entity that operates in-country, so no direct impact on our contract that we have.

Thank you. Our next question comes from Bernard Pichi, Palisade Capital. Other than delay in deliveries of TGEOs in Q1, is there any impact on FNB? for the higher cost that first quantum will incur at the operation.

So again, a similar comment before. There's no direct impact there. For us to do well over time in the asset, you're obviously hoping that the operators will spend capital and expand the asset over time, spend money exploring the asset. that obviously is impacted by the overall economics of the asset. So a higher tax burden can be a detriment. But I think that the tax rate that has been agreed, given the margins on the asset, shouldn't be a disincentive. So I don't expect a longer-term impact.

Thank you, Paul. There are no further questions from the webcast. This concludes our 2022 results conference call and webcast. We expect to release our first quarter 2023 results after market close on May 2nd, with the conference call held the following morning. Thank you for your interest in Franklin, Nevada.

Ladies and gentlemen, this does conclude the conference call for today. We thank you for your participation and ask that you please disconnect your lines.