Franco-Nevada Corporation (NYSE:FNV) Q4 2022 Earnings Call Transcript

Eaun Gray: Hi Erin, it’s Eaun speaking. So Vale, as Sandip indicated at the end of this quarter, we will provide an update typically as to when they expect the Southeastern system to begin contributing. As you know, there is a threshold of production that needs to be met. The last time they provided an update was in September, and they indicated between 2024 and 2025. I think our expectation is for €“ towards the end of 2024. But that’s the range that is available.

Erin Kyle: Okay. Thank you, Eaun. And then maybe just switching gears here, Heiko touched on this briefly in terms of the BPO environment, but that financing remains difficult to access for junior miners and developers with rising interest rates. So could we maybe expect more deals in the future structured similar to the deal that you did with G Mining comprised of streamed debt and equity components or are you focused primarily on stream?

Eaun Gray: Eaun again. Happy to answer that question. I think that transaction was well received and provided an elegant solution to financing in that particular case. So we are following up with others in €“ with that type of structure, and we’re hopeful we will be able to do more deals like that. That’s not exclusively what we’re looking at. We’re looking at things across the spectrum. But we are hopeful that will be an avenue for growth.

Erin Kyle: Okay. Great. Thank you. And then maybe my last question here is just to the extent that you can comment on it, what sort of €“ what type of size of deals are you seeing? Are they primarily in the $100 million to $400 million range? Or are you seeing primarily royalty packages? Or is it primarily streaming deals that you’re seeing?

Eaun Gray: Sure. I guess a couple of comments. So first off, the pipeline is active. Yes, there are kind of more medium-sized deals. And that is kind of sub $400 million I would say is a mix of primary gold and byproduct but I guess, one trend is we’re seeing more and more project financing type transactions on lines of what I just mentioned.

Erin Kyle: Okay. Great. Thank you. That’s all the questions I have. Thanks, again.

Operator: Thank you. The next question comes from Greg Barnes, TD Securities. Please go ahead.

Greg Barnes: Yes, thank you. Sandip, the Musselwhite NPI any idea what kind of number we are talking about there?

Sandip Rana: It’s paid in Canadian dollars. It could range my guess at this stage or my estimate is, CAD5 million to CAD7 million based on the full year production.

Greg Barnes: Okay great. And I assume your guidance for the 5-year regarding Candelaria does not include the potential for them to go underground. And I assume when they do go underground, that would be captured under the streaming deal you have there €“ or increase underground €“ I should say increase the underground production?

Paul Brink: Ye, Greg, it’s Paul. So, they don’t yet have the increase in the underground in their mine plan. Our assumptions reflect that the mine plan that they have put out there in their guidance, so that if they do go ahead with the underground expansion, that’s upside on what we are currently going.

Greg Barnes: Okay, that’s great. Thank you.

Operator: Thank you. The next question comes from John Tamazos, Private Investor. Please go ahead.

John Tamazos: Thank you. Could you explain which of your projects had bigger reserve and resource extensions, just looking down the list Detour Lake, Bruce Jack for example had reserve gains or discoveries last year. Your revenues rose 1%, but your depreciation fell 4.5%, would that imply a 5% increase to your reserve life?