Franco-Nevada Corp T.FNV

Alternate Symbol(s): FNV

Metals & Mining Gold

Franco-Nevada Corporation is a Canada-based gold-focused royalty and streaming company with a diversified portfolio of cash-flow producing assets. The Company's business model provides investors with gold price and exploration optionality while limiting exposure to cost inflation. The Company is debt-free and uses its free cash flow to expand its portfolio and pay dividends. Its segments include Mining and Energy. The Company owns a portfolio of royalty, stream and working interests, covering properties at various stages, from production to early exploration located in South America, Central America and Mexico, United States, Canada, Australia, Europe and Africa. It invests in various commodities, including gold, silver, platinum group metals (PGM), iron ore, other mining assets, oil, gas and natural gas liquids (NGL). Its portfolio consists of approximately 419 assets covering 66,000 square kilometers (km2).

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Franco-Nevada Corp

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Post by retiredcfon Mar 15, 2022 8:29am

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Post# 34514284

TD

Franco-Nevada Corp.

(FNV-N, FNV-T) US$153.45 | C$196.77

GEOs Down Slightly Y/Y in 2022; 12% GEO Growth by 2026 Event

We have updated our model following the release of FNV's Q4/21 results, and 2022 and five-year guidance.

Impact: NEUTRAL

FNV is projecting 2022 total GEOs produced of between 680-740 kozs (TD: 730 kozs) and 765-825 kozs by 2026 (TD: 780 kozs). For the 2022 and five-year outlook, FNV is assuming prices of: $1,800/oz Au, $23.00/oz Ag, $1,000/oz Pt, $2,100/oz Pd, $125/tonne Fe 62% CFR China, $85/bbl WTI oil, and $3.75/mcf Henry Hub natural gas.
For 2022, precious metal GEOs are forecast at 510,000-550,000 ozs (TD: 576,000 ozs). Diversified mining GEOs (mostly iron ore) for 2022 are expected to be 35,000-55,000 ozs (TD: 32,400 ozs) and oil and gas GEOs are projected at 125,000-145,000 ozs (TD: 121,400 ozs).
At the midpoint, 2022 GEO guidance (710 kozs) is slightly lower than 2021 GEOs sold. Management expects a lower contribution from the Guadalupe-Palmarejo stream and lower grades at Antamina and Antapaccay in 2022.
FNV is forecasting GEO production of between 765,000-825,000 GEOs by 2026, of which 570,000-610,000 GEOs are expected to be generated from Precious Metal assets. At the midpoint, FNV is expecting that annual GEOs produced will increase by ~12% by 2026 relative to 2022.
The five-year outlook assumes that Cobre Panama will have expanded its mill throughput capacity to 100 million tonnes per year in 2023. It also assumes the commencement of production at Salares Norte, Greenstone (Hardrock), Rosemont (all of which are included in our forecasts), plus Valentine Lake, and Eskay Creek, continued deliveries from Sudbury through 2026, and that the stream at MWS will have reached its cap in 2024.

TD Investment Conclusion

We are maintaining our BUY recommendation and US$185.00 target price.