TORONTO (miningweekly.com) –  Resources royalty firm Franco-Nevada is focused on growing its portfolio, and has the financial muscle to back it up, CEO David Harquail assured delegates at the Denver Gold Forum on Tuesday.

“We see the best pipeline of quality opportunities open in front of us right now and we don't intend to stand still; we intend to build further growth onto this portfolio,” he said in a presentation broadcast over the Internet.

The company had $567-million in “firepower” - cash and liquid investments  - at the end of the second quarter, plus a credit facility of another $150-million, not to mention some $150-million in annual cash flow.

Although Franco-Nevada is becoming increasingly focused on gold – precious metals will contribute almost 90% of revenue by later this year – Harquail said the company is not ruling out deals in other commodities.

The firm also plans to hold onto the platinum-group metals, base-metals, oil and gas assets that it already has, despite the commodities' poor performance relative to gold over the last year.

“They provide a lot of additional commodity optionality to our shareholders,” Harquail said.

“They have contributed substantial revenues to us in the past and we expect that opportunity is going to be made available to our investors again in the future.”

The company also wants to maintain the flexibility of a multicommodity portfolio.

“At some point we might run out of gold royalties and we believe being able to invest in other commodities is important at certain periods in the resource cycle. And we have that flexibility.”

Further, while Franco-Nevada will not constrain itself to a single commodity, Harquail is also not ruling out anything when it comes to the structure of a potential transaction.

“We will buy existing royalties, we will create new royalties, we are willing to do an net smelter returns gross royalty, we are willing to do net profits interests, scale royalties, index royalties, or we will do stream deals.

“The focus has to be growth, and maintaining maximum flexibility in the business model is core to our company and we intend to continue in that fashion,” he said.

The company's transactions over the last 12 months have included a royalty on Newmont Mining's Gold Quarry mine, in Nevada, as well as an agreement in January to buy 50% of the life-of-mine gold produced at Coeur d'Alene Mines' new Palmarejo silver and gold mine, in Mexico.

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