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Franco-Nevada shares slide on disappointing guidance, Q4 loss
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20th March 2013
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TORONTO ( – Canadian gold streaming and royalty firm Franco-Nevada’s Toronto-listed shares on Wednesday morning slid by as much as 6.4%, following the release of its fourth quarter and year-end results late on Tuesday.

The Toronto-based firm said it expected to receive between 215 000 gold-equivalent ounces (GEO) and 235 000 GEO from its mineral assets this year and between $55-million and $65-million in revenue from its oil and gas assets.

This compared to about 230 000 oz of GEO received from mineral assets and $40.9-million in revenue recorded from oil and gas assets in 2012.

The company said it expected fewer gold ounces this year from Goldcorp’s Goldstrike mine, in Nevada, from Kinross Gold’s Tasiast mine, in Mauritania, and fewer platinum-group metals ounces from KGHM International, which had decided to place the Podolsky mine, in Ontario, on care and maintenance.

Franco-Nevada did, however, foresee a 38% increase in GEOs receivable by 2017, saying it expected its existing portfolio to generate between 300 000 GEO and 325 000 GEO and $70-million to $80-million in oil and gas revenues.

CEO David Harquail added the company saw “good” opportunities for acquisitions. “We continue to see good opportunities to further supplement this growth with further investments and, with our recently expanded credit facility, we are well-positioned with approximately $1.4-billion of capital available for further investments,” he said in a statement.

The company posted a loss of $33.1-million or 23c a share for the quarter ended December 31, after being hit by a $74.1-million impairment charge on the value of its Arctic Gas assets, in Northern Canada, and an $8.6-million charge on other long-term investments.

Adjusted net income for the quarter was $47-million or 32c a share, below analyst expectations of 34c a share.

Revenue in the quarter was also down nearly 4% to $114.1-million.

The company also declared a monthly dividend of 6c a share for April, May and June.

On Wednesday afternoon the company’s shares traded down 4.58% at C$45.24 apiece.

Edited by: Creamer Media Reporter


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