Franco-Nevada Corporation

Good morning and welcome to Franco Nevada Corporation's second quarter 2025 results conference call and webcast. This call is being recorded on August 11, 2025. At this time, all lines are in listen-only mode. Following the presentation, we will conduct a Q&A session where you may ask a question through the phone line or 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.

Thank you, Joanna. Good morning, everyone. Thank you for joining us today to discuss Franklin, Nevada's second quarter 2025 results. Accompanying this call is a presentation, which is available on our website at franco-nevada.com. We will also find our full financial results. The presentation is also available to view on the webcast. During our call this morning, Paul Brink, President and CEO of Franco Nevada, will provide introductory remarks, followed by Sandy Brenna, 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 two of this presentation. I will now turn over the call to Paul Brink, President and CEO of Franco Nevada.

Thank you, Candida, and good morning all. For Q1 this year, we announced record financial results, and now for Q2, we're surpassing those with new records. Our portfolio largely produced as expected for the quarter, and high gold prices drove record revenue, operating cash flow, adjusted EBITDA margins, and earnings. We also saw constructive developments in Panama, including approval of the preservation and safe maintenance plan and shipment of the remaining copper concentrate from Cobre, Panama. Sentiment in country continues to shift in favor of a restart of the operation, and I'm encouraged by the Molina government's continued commitment to resolving the situation. We have attractive growth over the next five years from our existing portfolio. In particular, we'll be big beneficiaries of the move to unlock mine permitting process in the U.S. Three projects in our outlook are now moving ahead. Perpetua's Stibnite Gold, Hutt Bay's Copper World, and the news this morning is that Castle Mountain has been included in the FAST 41 permitting process. One project that's potentially new to our five-year outlook is Caskabel. The new management team at Solgold has been starting approaches to accelerate production and is now indicating first production may occur as soon as 2028. One longer term development is worth noting. There's been a positive shift in relations with the Chilcotin First Nation at New Prosperity. You may recall that Franco has a stream financing agreement to acquire a 22% gold stream. This could be a very meaningful growth driver for Franco if the Chilkootin decide to decide to support mine development. During the quarter, we acquired a royalty on Ion Gold's Cote gold mine, one of Canada's newest large scale gold mines. And we're off to a good start since our acquisition, Ion Gold has achieved nameplate throughput ahead of schedule and positive grade reconciliation. Cote and Gosselin have 16 million ounces of M&I and more than 4 million ounces of inferred resources. IAMGOLD's targeting more than 20 million ounces of M&I in an updated resource expected in the first half of 2026. The current mill is undersized for that scale of resource, and IAMGOLD's planning to publish an updated technical report in 2026 with expansion scenarios. Our team believes something in the order of 20 million tons per annum of throughput would be better suited to the size of your body. Post-quarter end, we acquired a royalty on Anglegold's Arthur project, comprised of the Merlin and silicon deposits, which together form one of the largest gold discoveries in recent years in Nevada. Anglegold has rapidly expanded the resources in the last couple of years. And I wouldn't be surprised if the current resource, which stands at 3.4 million ounces indicated and 12.9 million ounces inferred grows at a similar trajectory to Goldstrike or Cortez in their heyday. Since our acquisition, Angle Gold has announced a transaction to further consolidate the district and has pointed to ongoing high-grade drilling success. The Merlin initial assessment outlines the first number of years of production at 1 million ounces per annum, and if more high-grade is found, that production rate could be maintained for an extended period. The scale of the operation contemplated is already in the league of GoldStrike and Cortez. The last two years have been some of our most productive adding assets to the portfolio. Last year, we added interest from some of the world's biggest mineral endowments. New Marciana culture operations in Peru, Sabanier's PGM operations in the western limb of the Bushveldt in South Africa, and Solgold's Cascabel copper gold development project in Ecuador. This year, we've expanded our exposure in Canada and the U.S., adding current production from the Porcupine and Cote operations in Ontario and the Arthur project, as mentioned, in our namesake state, Nevada. Combined, the acquisition over the last two years have transformed our longer-term growth outlook. Add the potential of a COBRE restart and longer-term development of new prosperity, and you have the most exciting growth outlook in the space. The deal pipeline continues to be strong. We've dipped into our corporate revolver to complete the author acquisition, and we're happy to use this facility for the transactions we see ahead of us. With roughly $1.3 billion in annual cash flow generation, we can repay the facility rapidly. With that, I'll pass the call over to Sandy.

Thank you, Paul. Good morning, everyone. As Paul mentioned, Franklin, Nevada reported record financial results for second quarter ended June 30th, 2025. Our portfolio generally performed in line with expectations and we continue to benefit from higher precious metal prices. Precious metal prices with gold in particular continue to be strong. On slide four, you will see the comparison of commodity prices for Q2 2025 and Q2 2024. Gold and silver prices increased significantly year over year with the average gold price higher by 40% in the quarter and average silver price higher by 17%. We've also seen a rebound in prices for platinum and palladium. Prices for iron ore and oil continue to be volatile and were lower compared to prior year. However, you did see a significant increase in natural gas prices. On slide five, we highlight some of the key metrics used to measure performance, total geo sold, net geo sold, revenue, and adjusted EBITDA. Total GEO sold increased 2% to $112,093 in the quarter compared to $110,264 in second quarter 2024. Precious metal GEO sold in the quarter were $92,449, higher by 12% compared to prior year. For the quarter, we did receive strong contributions from Guadalupe and Candelaria and continue to benefit from the recent acquisitions made at Yanacocha and Western Flint. During the quarter, we recorded our first revenues related to the recently acquired royalties on Porcupine, operated by Discovery Silver, and Cote Gold, operated by Engold. We look forward to a full quarter of revenue from these assets in Q3. In addition to the better performance from Guadalupe and Candelaria, and receiving geos from the recent acquisitions, we also benefited from continued ramp-ups of operations at new mines, Tocantinio, Greenstone, and Solaris Nautic. With respect to the Hemlo MPI, it was another strong quarter, showcasing the leverage of the MPI to higher gold prices. However, the MPI can vary depending on how much production comes from the area covered by our MPI lands. One asset that was lower than our expectation was Antipokai, but this was solely due to timing of deliveries. We expect a stronger second half of the year from this asset. Diversified geos sold were $19,644 for the quarter compared to $27,914 for prior year quarter, despite diversified revenue being slightly lower year-over-year, $62.7 million versus $64.6 million. The geos sold reduction is due to the impact of higher gold prices when converting diversified revenue to geos. As you can see on the chart, total revenue increased 42% for the quarter to $369.4 million, which is a record for Franklin, Nevada. Precious metals accounted for 82% of revenue. Adjusted EBITDA, also a record, was 65% higher for the quarter at $365.7 million compared to $221.9 million in second quarter 2024. Slide six details the key financial metrics reported by the company. As mentioned, total GEO sold were $112,093, generating $369.4 million in record revenue in a quarter. As you know, Franklin, Nevada is a royalty and streaming company. For royalties, we typically receive payment in cash. However, for some of our royalties, we do take payment in kind rather than cash and have been accumulating the inventory over time. To fund the Cote Gold royalty acquisition, we liquidated the majority of our inventory position. This resulted in a gain on sale of gold bullion of 42.2 million, as the average cost of the gold ounces we sold was approximately 2,350 per ounce. At the end of June, we still have 2,469 gold ounces remaining in inventory. With respect to costs, we did have an increase in cost of sales compared to Q2 2024, due to higher stream ounces sold. Cost of sales was $33.5 million versus $29.1 million last year. Depletion increased to $64 million versus $52.9 million a year ago as we received more geos from Candelaria and began depleting our recent transactions. Yanakocha, Western Limb, and Porcupine disimpacted depletion as those assets are currently higher per ounce depletion assets. Adjusted net income was $238.5 million, or $1.24 per share for the quarter, both up 65% versus prior year. Slide 7 highlights the continued diversification of the portfolio. 82% of our Q2 2025 revenue was generated by precious metals, with revenue being sourced 86% from the Americas. And our largest contributor to revenue was Candelaria at 15% for the quarter. Slide 8 illustrates the strength of our business model to continue to generate high margins. For second quarter 2025, the cash cost per geo is $299 per geo. This compares to $264 per geo in prior year. As the gold price has risen, Franklin, Nevada has seen a significant increase in our margin per geo. Margin was just shy of $3,000 per geo in the quarter. Slide 9 summarizes the financial resources available to the company. The company had $160.3 million in cash and cash equivalents on hand at the end of June. When including our credit facility of $1 billion and our equity investments, total available capital at June 30th, 2025 is $1.6 billion. However, in July, we did fund the acquisition of a royalty on Angle Gold's Arthur Project in Nevada, as mentioned by Paul, for $250 million in upfront cash. We did draw on our credit facility for $175 million to assist in funding this acquisition. This results in total available capital of approximately $1.35 billion currently. The company continues to remain well capitalized to continue to add long life, high quality assets to the portfolio. And before I turn it over to Joanne to take questions, I would like to remind you of our guidance ranges for the year. Our original guidance was for $465,000 to $525,000 total geos for 2025, with $385,000 to $425,000 precious metal geos. This was using $2,800 per ounce gold price. By updating price assumptions with current commodity prices, we continue to remain on pace to achieve our total geos and precious metal geo guidance ranges. Also, as mentioned, we will recognize revenue from Cobre Panama in third quarter, As the concentrate on-site has now been shipped, Franklin, Nevada has begun to receive deliveries of gold and silver from Cobre Panama based on our stream agreement. We expect to receive approximately 10,000 geos in Q3. And with that, I will pass it over to Joanna, and we're happy to answer any questions you may have.

Of course. 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 us on the webcast, please submit your question through the Q&A section of the webcast platform. First question on the phone is from Fahad Tariq at Jefferies. Please go ahead.

Hi, thanks for taking my question. On corporate Panama, can you maybe give some more color on why Franco decided to suspend the arbitration proceedings?

Fahad, it's Paul.

The best outcome for us at Cobre Panama, and I'd say for First Quantum as well, is to see that mine get back into operation. So I think, you know, between the First Quantum, the government themselves, we're all like-minded to try and see a positive resolution. It had been a request at the outset from the Molino government that the arbitrations be suspended to give the space to try and find a new solution. So we are very amenable to working with the government to allow that to happen.

Okay, and then maybe switching gears to corporate development.

Given the available capital is now lower, you had some pretty large transactions, particularly Cote. Does that change how you think about deal size over the next year or so?

No, I don't think so.

Our business continues to generate more and more cash every year. Currently, it's around $1.3 billion a year. So no constraints on the capital side. Between the available capital with our revolver, between the amount of cash we're generating, we've got plenty of firepower.

I don't think it restricts us in any ways. Okay, great. Thank you.

Thank you.

The next question comes from Larry Liu, CIBC. Please go ahead.

Morning, Paul. Morning, Sandeep. Thanks for taking my question, and congrats on another financially strong quarter. I guess I'll start off my question asking about platinum. Paul, earlier you mentioned that platinum prices have rebound, and last December, Franco did a Sabanian Western Limb acquisition. I'm just wondering, what kind of positive impact would that have on the asset, and what's that factor in when the acquisition first happened?

Hi there, it's Ian Gray speaking. Thank you for the question. Yes, we've been very pleasantly surprised versus our expectations with platinum. The price has moved up very significantly. We believe this provides an excellent tailwind to those operations and should allow a number of the extension projects that which we spoke about at the time to have much much improved economics. increases our confidence in the long term of those assets.

For sure, that makes sense. Thanks, Ian. While I have you as well, I'm going to follow Fahad and ask about corporate development as well. I know there's historical precedence as well. Franklin, Nevada sometimes takes shares in the companies, such as G Mining or Discovery Silver. I'm wondering, has that strategy changed in an upcoming time with gold prices hitting record high? And I guess the second part of that question is, What's the intention of those shares? I see earlier it's been factored into the potential capital available for further acquisitions.

Thanks for the question. And maybe getting hard of it, it's part of a longer-term strategy. And it's, you know, as a business, we compete in auctions to buy streaming assets and royalties. One area of the business we've been trying to develop is to say, how can we be not just transactional, but a financial backer to companies? If we can find great assets, great management teams that we want to support for the longer term, how can we do that? And so that strategy has played out with GMIN. It's played out with Discovery. We think that for those players, we can differentiate them and be their backer. so that we can reduce the financial risk of those companies. And we think in doing that, we can increase their valuations and their ability to be successful over time. So far, that strategy has worked out terrifically. And so we plan to continue both with those players and also if there are other teams that fit that mold, we'd love to do more deals in that. But our overall objective is, you know, how do we support them as a long-term financial backer?

For sure, yeah, that strategy definitely worked out really well for Franco Nevada. I guess my last question is focused more around the long-term guidance, if I may. So earlier in the call, Paul, you mentioned that there is a potential upward revision because of Casco Bowl now could potentially be included in the five-year guidance. We're wondering if there's any more assets that could potentially be a surprise and included in your future five-year guidance. And when can we expect a updated five-year guidance? Would that be next year?

Yeah, we always do the guidance in the first part of the year, along with our annual results, so that's when we're updated. The two bits of positive news there, obviously on Cascabel, looking at scenarios to get things up and running sooner. There's two parts to that. The one is Tandayama, the open pit deposit. They've been drilling it up, having good success. moving up some high-grade areas, so potentially that can be early material to the mill. Also looking at scenarios to start with sub-level caving rather than a block cave. I think they're making good progress on both of those, and that's increasing their confidence that they can get it in production sooner. The other good news I'd mention today, and it is in our five-year growth outlook, it's just the certainty of it's going ahead, is Castle Mountain. We have two royalties on that, a 2.65% royalty that covers the whole property. We've got a further 2% royalty that covers one of the pits in particular that hopefully will be at the front end of the mine plan, taking that up to 4.65% on part of the ore body. It's about a 200,000 ounce per year producer, so it could be a meaningful kicker in the back end of our five-year guidance.

Perfect. Sounds good. Sounds like there's more upside investors can look for, for sure. Thanks, Paul. Thanks, Ian. And thanks, indeed. Thanks for taking my question. Thank you.

Thank you. The next question comes from Matthew Murphy at BMO Capital Markets. Please go ahead.

Hi. Big deal during the quarter on the Cote Royalty. Just wondering if you can elaborate a bit on your view on the asset. What gave you the confidence and the due diligence to take on a profits-based royalty? And are you willing to share your views on Cote's path to being a low-cost gold mine? Thank you, Matthew. It's Ian Gray again here.

So I guess, first of all, it's worth highlighting that we did work with Ion Gold on the acquisition. So that gave us unique insight into how it's currently operating and the long term for the asset. And this honestly was one of the most exciting opportunities that we've looked at in quite some time. The scale of the resource is quite impressive. And if you refer to Imgold's call last week, they're starting to talk about a super pit between Cote and Gosselin. So the potential of this to mirror some of the production profiles you've seen in assets like Detour and Malarctic, we see as quite robust. And that's based on being able to actually look at the data with iMbold and make that assessment. So we see as a result, fantastic opportunity going forward for the expansion and throughput to suit the scale of the resource. And what is also very exciting is that hopefully there's some news for you relatively near term on this as well. As IAMGOLD has identified that they'll be putting out an updated resource in the first half of next year, then hopefully a technical report identifying some of the production scenarios to follow. So we were able to get a sneak peek into the asset with the fact that we were able to uniquely do due diligence with IAMGOLD, and that gave us the confidence to transact. And in terms of the cost profile, you know, it's a good question. This is a new, highly automated line with best practices and a team that we see as really first class led by Renault. And so as a result, we have a high level of confidence in the costs. And you will note this is, you know, gross margin royalty. So the deductions are fairly limited and we're able to work again with IMGOL to craft a form of agreement that we're very happy with. So overall, an extremely exciting opportunity, which we think will add low risk growth to Franco Nevada over the long term.

OK, thank you for that. Also a question just on the corridor. You were a bit higher than expected on geos from oil and gas, and I guess Permian was one of the drivers. What's the outlook for your Permian asset base back half of the year?

Hi, Matthew. It's Jason O'Connell speaking. We were pleasantly surprised by the performance of our fermine assets in the quarter. We had increased volumes over what we'd seen last year. Part of that is a result of drilling on our lands. And at times, operators will hit areas of higher royalty rates across our acreage footprint. So we benefited a little bit from that. Going forward, those assets in the Permian are usually fairly reflective of the overall performance of the basin, so it will depend on oil prices and how active drillers are. You will have seen oil prices have pulled back a little bit in recent months, so I would expect that production levels and drilling activity will likely stay reasonably consistent, perhaps soften slightly with the lower price.

Okay, thank you.

Thank you. The next question comes from Daniel Major at UBS.

Please go ahead.

Hi. Yeah, thanks. Thanks for the question. Just first wanted to clarify, Sandeep, how much gold did you say you still had on the balance sheet in terms of inventory? I just didn't quite catch that.

Hey, Daniel. So at the end of June, we had 2,469 gold ounces still remaining in inventory.

Okay. So quite small. Okay. Thanks. Yeah. And then the second question, just thinking about the guidance. So both the precious metal and the total GEOs is unchanged, yet you added about 20,000 ounces of additional sales that wasn't in the previous guidance from Cote and from Cobra Panama. What's the offset? Because I guess the implied non-gold GEOs is the same, even after the change in the gold price assumption from 2800 to 3200. So what's the offset in the portfolio that means there's not a net upgrade to the precious metal GEO guidance?

Yeah, so I guess the key message there is that even without Cobre, Panama, and Cote, we're still within the guidance ranges. Anything from Cote and Cobre, Panama is all incremental.

Right, so does that mean that all else equal production is likely to be more skewed to the upper end of the range if you've added 20,000?

Yeah, that's a fair assumption.

Got it. Okay, thanks. And then the... Yeah, the final question. The New Prosperity option, the 22% gold stream, I'm not particularly familiar with this project. Can you give us a bit of a sense of quantum of what the contribution to Franklin, Nevada might be?

New Prosperity is a large proper gold offering system in BC. The transaction that we had done was back in 2012. At the time they were trying to get it permitted. They had received a BC permit but weren't able to get a federal permit. Part of the issue was that they didn't have support of the Chilcotin First Nation at the time. So the project has effectively been parked for many years since then. The shift that came out in June is they have an agreement with the Chilcotin. The ownership of just over 20% of the project is being provided to the Chilcotin nation. The BC government is providing the funding, which is the payment that goes to TSECO for that transfer, and the Chilcotin will spend the next couple of years in land use planning process to decide how they would like to proceed or not proceed with any project there. Our agreement, if I have it right, it's a 22% gold stream. The deposit is roughly half copper, half gold. I would have to check my numbers, but it's in the order of

of 40,000, 50,000 ounces per year of gold that you would get from it. Great. Thanks for that. I'll let someone else have a go.

Thank you. The next question comes from Tanya Jakusonic at Scotiabank. Please go ahead. Great. Good morning, everybody.

Thank you so much for taking my questions. Just to finish off, Sandeep, on the gold bullion, I mean, it's only like about $8 million that they're about. Why wasn't it just all sold?

Just we, at the end, we sold what we felt was needed to fund the Cote transaction, Tanya. Plus, you know, we do accumulate over time. Like the bullion that we've had in inventory, roughly 45,000 ounces, has been built up over time. Every quarter, we do receive gold royalty payments in kind from some of our assets, and we will continue to do so. So, that balance could potentially grow again, depending upon, you know, what the deliveries are.

Okay. And remind me, which ones do you take in kind? Which royalties?

So, there's a handful. We take Detour, Tassiest, Brooklyn Lake, porcupine, and magino in kind.

Okay. All right. So maybe we can start building a bit of an inventory there. Okay. Thank you for that. And just maybe just looking again at your guidance, is it safe to assume, like I'm reading our previous notes, I think we were saying that Q3 was supposed to be generally equal to Q4 or thereabout. With that 10,000 GEOs coming now in Q3 from Colbury Panama, is that a bit of a skew? Should I be thinking a little bit higher in Q3 and lower in Q4 on that 47.53 first half, second half?

I think that's a fair assumption. Obviously, we expect to get the bulk of the deliveries from Colbury Panama in Q3. Some could push into the early part of Q4. It just depends upon where the shipments go. But in terms of just overall, that's a fair assumption.

And I hate asking this, but any guidance on that HEMLO MPI?

Your guess is as good as mine.

Okay.

And then can I be reminded, I saw the Solaris buyback, Goldfield bought back that 1%. Can you just remind me which ones have royalty streams have some of these buybacks that are potentially coming due. It's just, you know, there's a lot of money available now that the gold price is high, so there's potential for these buybacks. Can you just remind me which ones you have and what are coming up on buybacks?

Hi, Tanya. It's Ian again here. Perhaps some of the most relevant for you. I would say, first of all, the asset handbook does a pretty good job summarizing for the full set, but some of the more relevant, Cote, has a buyback with IOM Gold, which is up to 50%. So that's fairly significant in the scheme of things. Porcupine also has that mechanism in it as well. So those would be relevant assets to keep track of.

Sorry, I missed the first one, the IAM Gold one.

Yes?

Yes, sorry, I missed the first one.

Sorry, Jenny, did you have a follow-up?

Yes, I'm sorry, I missed the first one.

Oh, yeah, on Cote, the recent transactions, both Cote and Porcupine have that feature.

Perfect. And maybe, since I have you on the line, I just wanted to come back about the opportunities that you are seeing out there. I ask everyone in terms of how they're looking at their portfolio. You've done a couple. You've got a good mix between development and obviously production. The last two that you've done are adding right away. Arthur Gold is further out. What are you seeing out there in terms of mix between you know, production opportunities versus development. And I think the size had been in that 100 to 500 million range. Is that still a good mix for you?

Thank you, Tanya, for the question. First of all, we're extremely happy with how we've been able to deliver on our business development plan, adding what we think are excellent assets with fantastic upside in North America. So we'll continue to focus on assets similar to what you have seen. I would say, Tanya, in terms of size and scale in the last 12 months, being a very productive 12 months, we continue to see more of the same going forward. And so we're hopeful we'll be able to add significant growth to the portfolio. You're right. We've had a couple of cash flowing assets. And whenever we have the opportunity to transact on those assets, That's first prize, but I think in terms of managing the overall portfolio, we need to have a balance and have some longer-term growth. So we'll do both types of transactions as we move forward. At the moment, the focus really is on precious metals growth, and we have what I see as a very healthy pipeline of that moving forward, and we're focused on those private deals.

Okay. And maybe, Paul, if I could squeeze one in for you just on the prosperity option. You know, gosh, 2012 seems like a long time ago. I remember, did we write that asset off at the time? Was it written off?

So, Tanya, the deal we had was to say we'd put up $300 million, I believe is the number, for the financing if and when it got permitted. haven't had any capital that's been expended on it, so no need to write anything off.

Yeah, we took a small impairment at the time, Tanya, a few million dollars, which was just the cost associated with the asset. But yeah, as Paul highlighted, nothing was funded under the capital commitment.

Okay, all right. That was just what I was trying to understand. And then, Paul, I think you mentioned you think it's going to take a couple of years in terms of getting this to the table? Is that what I understood?

Yes. To move the project forward, it needs the support of the Chilcot Nation.

They have opposed mining in the past. Now they have an ownership stake in the project. So I think there's obviously very material benefits that they could get if a mine does go ahead. I have no idea of timeline other than to say, you know, I can only imagine that it will take some time for them to consider the change in circumstance and, you know, before they would make any decisions on how to move ahead.

Okay. Well, thank you. It's, you know, obviously positive if we can have more projects permitted in Canada and especially BC. Great. Thank you so much.

Thank you. The next question comes from Brian MacArthur at Raymond James. Please go ahead.

Oh, good morning. Thank you. Tanya asked a few of my questions, but can I just ask about Muscle White as well? You highlighted the NPEI model leverage, and again, HEMLO is the one we've always focused on, but Muscle White was up pretty substantially this quarter. Is there anything other than just a straight gold price leverage going there with that 5% MPA? You never got anything from the 2% NSR or anything yet?

Hi, Brian, Sandy. Nothing from the NSR, but with respect to the MPI, it's gold price leverage as well. There was a small catch-up payment related to 2024 that we recorded in the quarter as well. So we were under-recruited with what we had estimated for last year. So part of that increase But the bulk of it is just better production from Orla at the mine and just better operations and then obviously the leverage to the gold price.

So just going forward, I mean, you did 7.7 this quarter. Should I think if these gold prices are the same and costs remain the same, everything's the same, it should be more like 6 million a quarter? Is that reasonable? You had 1.5 catch up or just ballpark? What might it be?

I think 4 million is reasonable.

Okay.

Thank you very much. That helps.

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

Thank you, Joanna. Our first question comes from Lyle Green, a shareholder of the company. Precious metals prices have been a strong tailwind this quarter. Could you outline the assumed price environment underpinning your guidance and how sensitive your outlook is to the gold and silver price fluctuation? Also, are there any thresholds or scenarios under which asset allocation or hedging strategies might shift?

Sure. So Sandeep here. The pricing that we used for the guidance that we've given is $3,250 gold price and a $37 silver price. In terms of sensitivity, $100 increase in the price of gold essentially results in about 4,700 geos lower for the other commodities when converting to geos. And with respect to hedging, we do not hedge, so we sell our gold at spot.

Our next question is from Lyle Green as well. What are the financial and strategic implications for Franco Nevada if the Cobre Panama asset remains offline into 2026? And how are you adjusting your portfolio risk exposure accordingly?

Well, thanks for your question. As you'll recall, when Cobre was shut down, we had impaired the asset fully. So we haven't built it into our guidance that it would be coming online in the near term. We're very hopeful that the company will be able to find a resolution with the government that would see the mine come back into the operation. But it's all upside to us. We consider it the biggest free option that you can get in the royalty and streaming industry is investing in Franco and the option of Cobra coming back. We're not dependent on it in any way. We have an extremely robust portfolio. We've got the most diversified portfolio in the space. So we look forward to COBRE coming back online, but it's all upside.

The next question is from Bernie Pichi from Palisade Capital. Putting the last two quarters together, a pattern seems to be emerging. One, more aggressive business development M&A. Two, less

interest in non-precious metals three greater focus on north america is this the result of an overt strategy shift uh good question uh is there a strategy shift no there is the and maybe to reiterate you know what what is our overall strategy it's it's we want to be the go-to gold stock and uh that means at any point in time we want to be looking to add gold assets uh you know as you go through and and that means through the cycle adding gold assets you know as you go through the cycle the you do want to have a gut sense of where you are in the cycle are you in the top half of the cycle are you in the bottom half of the cycle um you want to keep adding gold assets through the cycle Where do you want to spend a lot of money? That's at the bottom of the cycle. So gold has done very well. We're keen to keep adding gold. These prices, the key is you want to get into quality assets that are going to last for long term so that you can participate as the gold price appreciates over many decades. That is probably, you know, hopefully what you see in all the deals that we've done is a real focus on long-dated quality gold assets as we go through the cycle. Our diversification strategy is also unchanged and the summary of it is it's opportunistic for diversified assets. It's, you know, does a great asset come to market like the royalty we have on Barley's iron ore operations where they just are Some of the best iron ore bodies in the world, if those assets come along, we'll buy them. The other is if you have a downturn in industry and you can get a really good entry point into those commodities. So it's a strategy. We don't have to do it. We're just patient. We do it where we can get good value. So more of the deals that have come out in the mix is a function of what was available to us.

Thank you, Paul. There are no further questions from the webcast. This concludes our second quarter 2025 results conference call and webcast. We expect to release our third quarter 2025 results after market close on November 3rd. Thank you for your interest in Franklin, Nevada.

Ladies and gentlemen, this concludes your conference call for today. We thank you for participating and we ask that you please disconnect your lines.