VANCOUVER (miningweekly.com) – Investors have rewarded precious metals royalty and streaming firm Franco-Nevada by pushing its NYSE-listed equity up 6.5% on Monday, following the company reporting a stronger-than-expected third-quarter profit.
Headquartered in Toronto, Franco-Nevada reported adjusted net income of $55.3-million, or $0.30 a share, for the three-months ended September, an increase of 3.4% compared with $53.5-million, or $0.30 a share, in the comparable period of 2016.
Net income for the period was $60-million, or $0.32 a share, compared with $54.4-million, or $0.31 a share, for the same period in 2016. The company advised that the increased earnings were driven by lower income tax and depletion expenses.
Revenue fell marginally year-on-year to $171.5-million.
Franco-Nevada said that gold-equivalent ounces (GEOs) sold in the third quarter totalled 123 787, compared with 123 065 GEOs sold in the comparable period of 2016. Revenue was derived from 88.8% precious metals, compared with 94% in the year-earlier period, while revenue from the Americas was down to 81.5% in the period under review, compared with 83.4% a year earlier.
The proportion of revenue earned from precious metals assets fell year-on-year as a result of higher oil and gas revenues which benefited from higher prices and production levels, as well as the recent additions of the STACK, Midland and Orion royalties within the last year.
Franco-Nevada has $1.9-billion in available capital as at the end of the quarter, which it intends to use to fund the company’s additional stream from the Cobre Panama project. The Cobre Panama project is expected to close by year-end. With its available capital the company will also fund the Delaware and the Sooner Trend, as well as the Anadarko Basin, Canadian and Kingfisher counties (STACK) US Oil and Gas royalty portfolios.
Franco-Nevada expects to achieve the higher end of its full-year GEO guidance of 470 000 to 500 000 GEOs, as well as hit the top end of its oil and gas revenue forecast of $35-million to $45-million.
The company's NYSE-listed stock reached an intraday high of $84.85.