Franco-Nevada CorporationFNVNYSE
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Operator: Good morning, and welcome to Franco-Nevada Corporation's Third Quarter 2025 Results Conference Call. This call is being recorded on November 4, 2025. [Operator Instructions] I would now like to turn the conference over to your host, Candida Hayden, Senior Analyst, Investor Relations. Thank you. Please go ahead.
Candida Hayden: Thank you, Ina. Good morning, everyone. Thank you for joining us today to discuss Franco-Nevada's Third Quarter 2025 Results. Accompanying this call is a presentation, which is available on our website at franco-nevada.com, where you will also find our full financial results. During our call this morning, Paul Brink, President and CEO of Franco-Nevada, will provide introductory remarks followed by Sandip Rana, Chief Financial Officer, who will provide a brief review of our results. This will be followed by a Q&A period. Our full executive team is available to answer any questions. We would like to remind participants that some of today's commentary may contain forward-looking information, and we refer you to our detailed cautionary note on Slide 2 of this presentation. I will now turn over the call to Paul Brink, President and CEO of Franco-Nevada.
Paul Brink: Thank you, Candida, and good day to all. For the third time this year, we're announcing record quarterly results. The new benchmark set this quarter were driven by high gold prices, strong operations, new acquisitions and the sale of Cobre Panama stockpiles. Over the last 18 months, we've made 6 acquisitions of meaningful new gold interests. Yanacocha, Cascabel, Sibanye's Western Limb, Porcupine, Côté and Arthur, all large ore bodies that will contribute to our growth for many decades. Of the 6 Porcupine, Yanacocha and Western Limb are also producing. That will impact our 5-year growth and have boosted our gold price exposure. 85% of our revenue was from precious metals in the quarter. The last of the acquisitions in July this year was a royalty on the Arthur Gold project in Nevada, operated by AngloGold. We did draw on our corporate revolver to fund the acquisition with our strong cash flow generation and the proceeds from equity sales, the company was once again debt-free by quarter end. During the quarter, we saw progress on the ground at Cobre Panama, completion of the concentrate shipments, pre-commissioning of the power plant for restart with the aim to provide power to the Panamanian grid, and formal notice to SGS to commence the environmental audit work. Perhaps just as important, we're encouraged by the recent constructive comments by the President of Panama towards resolution of the Cobre mine closure. If Cobre does come back online and with the contributions from our recent acquisitions, we're positioned for roughly 50% growth in GEOs over 5 years compared to last year. For the long-term assets we've added, we can then maintain that level of production for many years thereafter. Our deal pipeline remains very active. Although with this run-up in gold prices, we're also expecting good organic growth. With roughly half our revenue coming from principal gold assets, we expect this to be a powerful driver. Operators have strong cash flow for mine expansions, some ongoing by Detour and others now planned at Côté, Magino and Valentine. Developers have been able to raise capital for new builds, in particular, Skeena and Perpetua were both successful tapping the equity markets to ensure that they can advance Eskay Creek and Stibnite Gold. And the drills are turning on our large portfolio of exploration stage royalties. Recognition of the importance of critical minerals has also unlocked a number of permitting processes, giving the green light to construction to Copper World and Stibnite Gold. Castle Mountain is also now included in the U.S. FAST-41 permitting process. On that same note, I've been impressed to see the profile that the Ring of Fire is getting in the Ontario government's Critical Mineral Strategy. In the last few years, we've added new avenue to grow our company. That is finding good teams and good projects and not just providing royalty or stream financing, but being their financial banker. The first was G Mining Ventures with Tocantinzinho and the second, the discovery team with Porcupine. Both are best-in-class and are proving to be highly successful. We are delighted to have played a role in their success. We're looking forward to supporting them going forward and to find other strong teams to bank. With that, I'll hand the call over to Sandip to discuss the quarter.
Sandip Rana: Thanks, Paul. Good day, everyone. As Paul mentioned, Franco-Nevada reported record financial results for the third quarter ended September 30, 2025. Our diverse portfolio of royalty and stream assets performed ahead of recent expectations, and we continue to benefit from higher precious metal prices. Precious metal prices with gold in particular, continue to be strong. On Slide 4, you will see the comparison of commodity prices for Q3 2025 and Q3 2024. Gold and silver prices increased significantly year-over-year with the average gold price higher by 40% in the quarter and average silver price higher by 34%. We also saw a rebound in prices for platinum and palladium, while prices for iron ore remained flat year-over-year, lower for oil, but we saw a significant increase in natural gas prices year-over-year. On Slide 5, we highlight some of the key financial metrics used to measure performance, total GEOs sold, net GEOs sold, revenue and adjusted EBITDA. Total GEOs sold increased 26% to 138,772 in the quarter compared to 110,110 in third quarter 2024. Precious metal GEOs sold in the quarter were 119,109, higher by 41% compared to prior year. Also, just under 50% of total GEOs sold were sourced directly from mines where precious metals are the primary commodity. For the quarter, we received strong contributions from a number of our key assets, Cobre Panama, Guadalupe and Candelaria, and we also benefited from our recent acquisitions, Western Limb, Yanacocha, Porcupine and Côté. This quarter, we recorded our first full quarter of revenue for both Porcupine and Côté. Approximately 11,000 GEOs were delivered and sold from Cobre Panama as we received GEOs related to the concentrate that had been stored on site since November 2023. In addition to better performance from Guadalupe and Candelaria and receiving GEOs from recent acquisitions, we also benefited from the continued ramp-up of operations at new mines, Tocantinzinho, Greenstone and Salares Norte. With respect to the Hemlo NPI, the NPI was not as strong this quarter compared to earlier quarters this year due to lower production on Franco's Interlake claims on the property. Barrick is in the process of selling Hemlo, and we look forward to seeing what improvements the new team has planned for the mine. Diversified GEOs sold were 19,663 for the quarter compared to 25,733 for prior year despite diversified revenue being higher year-over-year, $67.1 million versus $61.2 million. The GEO sold reduction is due to the impact of higher gold prices when converting revenue to GEOs. For Q3 2025, net GEOs were 125,115 for Franco compared to 97,232 in Q3 2024. Net GEOs removes the cost of sales component for all GEOs so that GEOs sold are represented after cost. As you know, royalty GEOs are higher margin than stream GEOs. As you can see from the chart, total revenue increased by 77% for the quarter to $487.7 million, which is a record for Franco-Nevada. Precious metals accounted for 85% of revenue. Adjusted EBITDA, also a record, was 81% higher for the quarter at $427.3 million compared to $236.2 million in third quarter of 2024. Slide 6 details the key financial metrics reported by the company. As mentioned, total GEOs sold were 138,772, generating $487.7 million in revenue in the third quarter. With respect to costs, we did have an increase in cost of sales compared to prior year due to higher stream ounces sold, particularly Cobre Panama. Cost of sales was $47.2 million versus $31.9 million last year. Depletion increased to $87 million versus $54.2 million as we received more GEOs from Candelaria, Cobre Panama and began depleting our recent transactions. This impacted depletion as those assets are currently higher per ounce depletion assets. Adjusted net income was $275 million or $1.43 per share for the quarter, both up 79% versus prior year. One other transaction that did occur during the quarter was the sale of some equity investments. We sold a portion of our equity investment in Discovery Silver and received total proceeds of $84.4 million with a gain of $67.4 million recorded on the sale. Under our accounting policies, these gains are reported in other comprehensive income and not reflected in our earnings per share. However, the gain would have generated an additional earnings per share of $0.30. Slide 7 highlights the continued diversification of the portfolio. As mentioned, 85% of our revenue was generated by precious metals, with revenue being sourced 88% from the Americas. No asset contributed more than 10% of our revenue. Slide 8 illustrates the strength of our business model to continue to generate high margins. For third quarter 2025, the cash cost per GEO is $340 per GEO. This compares to $290 per GEO last year. As the gold price has risen, Franco has seen a significant increase in our margin per GEO. Margin was $3,116 per GEO in the quarter, an increase of 42% year-over-year. Slide 9 summarizes our updated guidance. We have benefited from an increase in GEOs from Cobre Panama and Côté during the first 9 months of 2025. That along with record gold prices has resulted in record financial results for the first 9 months. Based on GEOs sold to date and what our expectations are for Q4 2025, we expect to be at the higher end of our initial guidance range, which was 465,000 to 525,000. We've narrowed this range to the higher end and now expect total GEOs sold to be between 495,000 to 525,000. With respect to precious metals GEO sold guidance, our original guidance range was 385,000 to 425,000. With asset performance to date and precious metal GEOs received from Cobre Panama and Côté, we now expect to exceed the top end of the original guidance range. As a result, our updated guidance range for precious metal GEOs is 420,000 to 440,000. Slide 10 summarizes the financial resources available to the company. The company had $236.7 million in cash and cash equivalents on hand at the end of the quarter. When including our credit facility of approximately $1 billion and our equity investments, total available capital at September 30, 2025, is in excess of $1.8 billion. As well, we continue to be debt free. And before I turn it over to the operator, I would just like to summarize the recent CRA Settlement that we achieved. On September 11, 2025, we reached a settlement with the Canada Revenue Agency, which provided for a final resolution of Franco-Nevada's tax dispute in connection with the reassessments under transfer pricing rules for the years 2013 to 2019 for our Mexican and Barbadian subsidiaries. Under the terms of the settlement, no payment of any tax in Canada is required on these foreign earnings for the subsidiaries for this period. We're glad to have this matter behind us and are very pleased with the settlement reached. And with that, I will pass it over to the operator, and we're happy to answer any questions.
Operator: [Operator Instructions] And your first question comes from the line of Fahad Tariq from Jefferies.
Fahad Tariq: On the deal pipeline, can you talk a little bit more about the commodity focus? There were some articles recently talking about maybe expanding the gold business in Australia specifically. But at the same time, I know historically, Franco's strategy has been to try to be as countercyclical as possible. So just curious what the commodity focus is given where gold prices are today?
Paul Brink: Fahad, it's Paul. Thanks for the question. It's a good one. As usual, our #1 commodity focus is on precious metals here. The pipeline is good. So I think there's some good prospects of adding more gold deals. That said, gold prices are high. I think we are better positioned than most, 2 reasons. The one that I spoke a bit about in my comments there is in this environment, we expect strong organic growth. The second is we always have a bit of our business open to diversify it. And so we always have the discipline in this environment, if there are better deals to do on the diversified side, we've got some room to do that. But as I say, most of the pipeline is currently gold. On Australia, I was down there visiting recently. We and speaking to the number of Australian investors and the press about our plans there, we have added a new person to our team in Australia, Matt Selby out of Perth, who's driving our business development there. We would like to grow our business in Australia. As you know, we have a ton of royalties that cover a huge amount of land in Australia, but it's not yet a big part of our revenue. I think they are particularly good prospects and very keen to find good teams in Australia that we can back and potentially do something similar to what we've done with G Mining or Discovery in the country.
Fahad Tariq: Okay. Great. And maybe just as a follow-up, there were some comments probably now 2 months ago about looking at natural gas, given where natural gas prices were, maybe lithium brine transactions, given where lithium prices are and maybe oil, although the last time, I think Franco-Nevada did the oil royalty was when oil was below $50 a barrel, so we're not quite there yet. Just maybe comments on those 3 commodities specifically.
Paul Brink: We're open to all 3. The -- as I said, right now, as we look at what is ahead of us in the pipeline, the most actionable is on the gold side. But we're -- on the other commodities, it's less driven by the commodities. It's more driven by asset quality and being able to get good value. So if there is good value in either of those areas, we'd be open to it.
Operator: And your next question comes from the line of Sathish Kasinathan from Bank of America.
Sathish Kasinathan: This is Sathish on Lawson Winder's team. Just a follow-up on the pipeline. So you highlighted that you have a strong growth potential on the organic side with all the projects that you have under your portfolio. Does that mean that going forward, the focus is going to be more on the organic side instead of deals? Or how should we look at it?
Paul Brink: No. As I just said on my last comment, there's a good pipeline. We're always focused on getting new deals done. I make the comment on organic growth really just in respect of discipline. You don't -- the market is bullish. We don't need to overpay for assets in this environment because we know that we're going to have good organic growth. So we know we've got a baseline there. The acquisitions on top of that are incremental. But the confidence that we'll have good organic growth allows us to keep our discipline.
Sathish Kasinathan: Okay. That is clear. Just one follow-up on Palmarejo. So it had a huge quarter this quarter. It seems it is driven by a higher proportion of ore from the region that is covered by the stream. How should we look at Q4?
Sandip Rana: It's Sandip here. Yes, I would expect similar levels to what we've averaged for the first 9 months of the year. Our projection for the year is anywhere between 40,000 to 50,000 GEOs from Palmarejo. So that's the guidance at this stage.
Operator: And your next question comes from the line of Heiko Ihle from H.C. Wainwright.
Case Bongirne: This is Case calling in for Heiko as he's on another call. Just on our end, we're thinking out loud here, 3 months ago, gold was just below $3,400. Today, we're just below $4,000. Obviously, a pretty huge change in price, not really expected by most. You guys have been a huge benefactor of this, probably have more cash flows now than you budgeted for in recent past. So the question is, has the recent gold price environment maybe changed your mind a bit in regard to shareholder returns as it relates to the higher dividend, potential share buyback or continued M&A given the pricing environment?
Sandip Rana: Sure. Really, no, it's business as usual. As Paul highlighted, our priority is to continue to add good quality assets to the portfolio, focus on precious metals and then adding diversified if there's very good opportunities available to us. So that is the #1 priority for capital deployment. With respect to the dividend, it's a decision we sit down with our Board at the beginning of every year and go through what's in the pipeline, what our cash flow projections are and make a recommendation on how much we should increase that dividend. Our philosophy on the dividend is sustainable and progressive, raise it every year, never be in a position where you cut it regardless of what's happening with commodity prices. So we will be increasing it next year. The quantum is still yet to be determined, but there will definitely be an increase. As for buybacks, that it comes down to what's the best use of a dollar. And for us, we think the best use of a dollar is still adding good quality assets to the portfolio. So share buybacks is not something that we're considering at this time.
Operator: [Operator Instructions] And your next question comes from the line of Cosmos Chiu from CIBC.
Cosmos Chiu: This is Cosmos from Cosmos' team at CIBC. Maybe my first question is on the NPIs. Paul and Sandip, as you know, I'd like to ask about these NPIs during periods of more robust precious metal prices. But as you mentioned, Hemlo did not have the best quarter in Q3, in part due to less ore being mined at Interlake. I guess my question is, I'm just wondering how much visibility do you have in terms of what's being mined from the different areas into Q4 and potentially into 2026 as well? And how is the potential change in ownership going to potentially change that thinking?
Sandip Rana: Cosmos, so in terms of visibility, it's limited. Obviously, there's a mine plan put in place at the beginning of each year and a budget that the operator does. So in this case, Barrick you can move away from that and sometimes based on timing, and that was what's happened in Q3. In this environment at these gold prices, we do expect the NPI to do quite well, and it did in the first part of this year. I think part of the impact of Q3 was also with the sale going through and just probably some impact to efficiency with the mining on site. With respect to the new ownership group and that transaction has not closed yet, obviously, they're seeing something there to be spending over $1 billion to acquire that asset. So that is encouraging. We -- it's a wait-and-see approach at this time as to what changes or improvements they will make. But we're excited to see what their plan is and what they envision, and I think we'll have more information over the next few months.
Cosmos Chiu: And how about the Musselwhite 5% NPI. Again, I'm seeing Q3, it didn't really increase that much from previous quarters in 2025. Like when does that one kick in? How should we look at that one at Musselwhite?
Sandip Rana: Yes. So Musselwhite is a -- again, it's a profit calculation. We have limited visibility at this time. We get paid once a year, which is after year-end. So right now, what you're seeing from our numbers is just an estimate. We haven't seen what capital is being spent. We'll get the calculation, as I said, post year-end, and there'll be a true-up there. We're a conservative group. So our numbers are conservative. So I'm hopeful that the actual number that comes out at the end of the year is much higher. But at this stage, it's our best estimate.
Paul Brink: It's early days on both of those assets, Cosmos. But I got to say, delighted with the change in ownership in both. Bob Quartermain and their team. Bob, as you probably know, started his career at Hemlo, drilled some of the original discovery holes there. So having that team in place led by Bob, there's no doubt in my mind that they are going to drill and expand that ore body, which I think is going to do terrifically well for us over time. Similarly, on Musselwhite, delighted that it's the older team led by Jason Simpson, very capable group, also very aggressive, having great success in drilling out the strike extension of that deposit. So all these things take a little bit of time before it starts showing up as cash flow. But I think very positive that you've got both those teams focused on expanding those assets.
Cosmos Chiu: Great. I do agree as well. Maybe switching gears a little bit. I noticed that and as Sandip you mentioned, you sold some -- or the company sold some Discovery shares in the quarter. How much of that was kind of related to your desire to be debt-free by the end of the quarter, especially since you had drawn $175 million on your credit facilities to pay for the Expanded Silicon acquisition. So how much of that was due to you wanting to be debt-free and number one? And number two, what's kind of like the plan now for the remaining Discovery shares or for that matter, your G Mining shares?
Paul Brink: Cosmos, it's Paul. The -- so first of all, with G Mining and Discovery, the -- our plan is to be their financial bankers, not just with stream and royalties, but also to be in the equity. So we will be long-term holders. That said, the equity side of our business, as we all know, it's not the core side. So we do plan to take profits over time. With Discovery, there were a couple of things there. The one is we had very good share price performance. And you're absolutely right. The other part of it was we had some debt outstanding. And so those 2 things together, we sold a small part of our position. We're able to realize a good gain and repay the debt. But we -- but longer term, we will continue to be holders of their stock and supporters of the company.
Cosmos Chiu: And then one last question, Western Limb, I saw that it had good results in Q3. And you had mentioned that platinum prices -- PGM prices -- sorry, PGM prices have actually outperformed gold since the acquisition, which is good. But I just want to understand because I know this is a bit of a complicated transaction. And so I know that gold is actually based on PGM production. The delivery is actually pegged to the 4E PGM production. So -- and then you also mentioned in the MD&A that right now, it's 82% and 18% gold versus PGM. And I think the press release that came out earlier this year during the acquisition was 70 and 30. That was a split. So I guess I'm trying to confirm PGM prices have outperformed gold. Does that benefit your stream? And if so, how does it benefit?
Eaun Gray: Cosmos, it's Eaun speaking. Thank you for the question. I think it's a very good question. I would say, first of all, delighted with the performance of platinum. It has outpaced gold to a certain degree. And we do benefit from that both directly and indirectly. So you'll note that there is a portion of the stream that is platinum. So we do enjoy the appreciation in those platinum revenues immediately. And then secondarily, you're quite right that what we've done is we've linked the gold deliveries to the 4E PGM production. So as the basket improves, as Sibanye looks at options for the assets, we would benefit indirectly from that as well. And -- as you'll probably know, there are 2 distinct ore bodies in these deposits, the UG2 and the Merensky. And this structure mitigates any risk of volatility for mining from one versus the other for us and provides a more stable stream of gold revenues to Franco. So that's why that was done.
Cosmos Chiu: Congrats on a very strong Q3.
Operator: And your next question comes from the line of Tanya Jakusconek from Scotia Bank.
Tanya Jakusconek: I just wanted to come back to the transaction environment in a little more detail. I guess it's divided into 3 sections. I'm going to start on the precious metals opportunities that you're seeing out there. When we last spoke because lots of things have happened with this rapid rise in the gold price, the opportunities were in the $100 million to $500 million range. I'm trying to understand if that's still what you're seeing out there. And is it still for funding of asset sales or still funding for asset builds? I'm just wondering if that has changed at all? And are you seeing more competition now in the market with Zijin coming in and other players? And are you finding it's taking longer to get deals done? That's my first question on the precious metals.
Eaun Gray: Okay. Thank you, Tanya. It's Eaun speaking again. It's a very good question. When we last spoke, I indicated a similar environment to what we had seen in prior quarters. And I would reiterate that, that continues to be the case. In terms of deal size, certainly, and also in terms of the type of transaction. So we do see good opportunities in asset sales as likely over the coming quarters. Likewise, good potential project financings as well. And I think those are 2 kind of legs of the stool, and we look to back teams in both of those types of financings, utilizing similar structures to what we would have done with Discovery or G Mining. So we're quite optimistic about more of those transactions as we move forward. There are also some high-quality third-party royalties that are out there, and we continue to look at those and selectively execute on transactions like that when they come available. Hopefully, that's helpful.
Tanya Jakusconek: And are you finding that there is more competition and taking longer to complete deals with this higher gold price? I'm just trying to understand on how tight that market is?
Eaun Gray: Sure. I would say not a noticeable change in the competitive landscape really from my perspective. What has defined recent period is volatility, volatility in prices and volatility in terms of a number of other factors at play in the market. And as things kind of settle down and find more of a base, I think we'll see more transactions happen. And when you have significant moves in metal prices, of course, for any type of transaction on the short term, it makes it a bit more difficult to execute. But I think we'll see hopefully some more stability as we move forward.
Tanya Jakusconek: Okay. Thank you Eaun for that on the precious metal side. On the nonprecious metal side, I know we talked about lithium and natural gas and oil. So I wanted to ask whether that extends to also iron ore, if that's still something you're looking at? And also what's the size in a nonprecious metals deal are you seeing transactions similarly in that $100 million to $500 million range? And does iron ore or maybe potash also fit within that at this point?
Paul Brink: So Tanya, Paul, the -- as my comments were earlier on, what we're looking at that's immediately actionable in the pipeline is precious metal focused. We -- but all those commodities that you mentioned there lithium, oil and gas, iron ore, we're open to those if there are transactions with good value. On the potash side, you do know we did it. We were able to acquire an option on the Autazes potash project down in Brazil. So that is -- if and when that project reaches a project financing, we've got the option to buy a royalty on that one. So all of those are our future prospects.
Tanya Jakusconek: And size-wise, Paul, what are we looking at in those types of transactions?
Paul Brink: As I say, they were open in concept to transactions. The -- nothing that I can say is immediate in the pipeline. And -- but you know what our guidance is on diversified. It's a limited part of our portfolio. So I don't expect anything large.
Tanya Jakusconek: Okay. So under $500 million. Okay. And then maybe just on my third portion of this is, are you -- as you look at the landscape out there, how do you assess corporate transaction vis-a-vis some of these other opportunities?
Paul Brink: We always run our pencil over the other companies, Tanya, to see if there is good value. And the -- nothing has changed from what we've said in the past. It comes down to you've got $1 to spend and where are you going to get the best return for your dollar. We typically find that, that is in doing private deals. And I'd say that's where we currently are again.
Tanya Jakusconek: Okay. And then just maybe if I could ask on the equity interest, I think $625 million of equity investments. Just with the sale of the Discovery Silver, and I don't know what else may have been sold. Can you just kind of remind me, Sandip, what are the biggest portion of that $625 million, Discovery Silver, G Mining, is there anything else that's public?
Sandip Rana: Sorry, Tanya, Labrador Iron Ore Royalty, LIF. Those are the 3 largest positions.
Tanya Jakusconek: Okay. So the Labrador is in there as well. Okay. No, that's very good. And congrats on a good quarter.
Operator: And your next question comes from the line of John Tumazos from John Tumazos Independent Research.
John Tumazos: Could you elaborate on the extra royalty on Gold Quarry buy-in? It's famously discovered over 40 years ago. Is the coverage the underground mining from the feeder zone with the open pit oxide all used up? Or are there more oxides that are economic because gold is $4,000. I'm wondering what the sizzle is there.
Eaun Gray: John, it's Eaun speaking. Thanks for the question. I'd say, first of all, we're very happy to add to our position on Gold Quarry. This is incremental to what we already have there. And so in reality, this royalty is structured with a minimum, which is based on a number of factors, one of which is the amount of reserves. So as those change based on a number of assumptions, one of which often would, of course, be gold price, that can trigger a change in the minimums. So in terms of what makes it attractive to us, there's that potential for sure. And I think as well, based on the current level of payments, it provides a very healthy rate of return. So very pleased to add that and the coverage is the same as set out for the existing royalty in the asset handbook, which I would have you referred to.
Paul Brink: And John, there's a pushback of the pit wall to the north and the east that's been contemplated over time, not something that's currently on the books, but the hopes and dreams are with high gold prices that, that is something that would go ahead and that we could get a lot more from that royalty.
John Tumazos: If I could ask one more. On Discovery, the quick calculation I made was that you sold 27.8 million shares and had 52.2 million left and that you received USD 3.04 per share. Is that about right?
Sandip Rana: So John, we sold 26 million shares.
John Tumazos: So you got a little more for it.
Operator: And your next question comes from the line of Daniel Major from UBS.
Daniel Major: Can you hear me okay?
Paul Brink: Yes, loud and clear.
Daniel Major: Yes, my first one, apologies, I was slightly late joining the call if it's already been asked. But just the first one on Cobre Panama and from a, I guess, significantly involved party, but not directly at the table. I mean when you look at the catalysts that need to occur to trigger a restart the environmental audit, the renegotiation of fiscal terms, remobilizing the workforce, et cetera, what do you think kind of feels most likely to be the bottleneck in the process? And I heard the -- some commentary out of Argentina that there's still a belief that the environmental audit and the fiscal terms can be negotiated by the end of the year. Do you think that's realistic?
Paul Brink: That is -- Daniel, that's the time line that President Mulino had put out there as his objective. These things can always take longer, but they've been consistent on saying that is what they're aiming for. The audit is underway. There are no formal negotiations at this stage, although I know the company and the government have engaged in getting set for that. So it is -- I think it's still possible that, that kind of time line gets met. We're encouraged by -- you probably would have seen the recent press comments by President Mulino, also comments by Tristan Pascall on acknowledging that the state would remain the owner of the minerals. And agreement on trying to negotiate on that basis. So I take that as a strong positive. The government comments is that, that has been received well. So I think that news is positive. The other positive news has been coming out of country is just the shift in sentiments where you saw 70%, 80% of folks post protest were anti-mining in any form, and that has shifted to a slight majority now that are open and also a good amount that I think would be supportive under the right terms, the right participation for the government of Panama, the right amount of transparency. So I think things are definitely trending in the right direction. As we mentioned, there is movement on the ground with the government approving the various aspects of preservation and safe maintenance, the shipping of the concentrate, the power plant. The company has been rehiring folks so that they can start some of those activities. They've had a very strong response, a lot of folks looking to acquire those jobs. And I think that has also helped shift sentiment as people realize the value of the mine to the economy.
Daniel Major: Okay. The second one on the Arthur Gold project. I mean, how do you see the initial scope of the project? And obviously, we've seen some initial kind of projections, et cetera. But I mean, yes, from your perspective, how do you envisage the time line and the initial scope of the project if you have to kind of hazard a range of expectations?
Eaun Gray: Thank you, Daniel. It's Eaun Gray speaking here. First of all, we're thrilled to be involved in this project with AngloGold. We think the geological upside on the royalty grounds over time is phenomenal. In terms of first steps in permitting, I understand that they need to start somewhere, even though the full deposit, in our view, likely hasn't emerged. So they -- I think AngloGold's disclosure is around Merlin-focused plan to start and then exploration, hopefully continuing from there. We have also been very happy to see the U.S. permitting environment has evolved quite positively over the last little while and projects such as Stibnite where we're involved have moved along quite well. So in terms of permitting, we're hopeful on the time frame as to when that when that can happen. I think there's got to be a significant over-under in exactly when that happens with any regulatory process, but we're hopeful that the mine would start in the early portion of the 2030s.
Operator: And your next question comes from the line of Derick Ma from TD Cowen.
Derick Ma: At current gold prices, is there more leverage in royalties and streams on primary gold mines versus byproduct gold streams? And does that factor into the way you look at your portfolio, or your decision-making when assessing new opportunities?
Paul Brink: Good question, Derick. And yes, is the short answer. Obviously, when the gold price is running on a primary gold deposit, the -- it allows operators when they look at their reserves, and that's kind of -- I think a lot of operators are looking at the reserves right now to figure out what price are they going to use at year-end. I think at the end of last year, the average for the industry was about $1,800 an ounce. I'm guessing at this, but I think the industry will be over $2,000 an ounce for the gold reserves. It means lower cutoff grades, and it means a lot of material that's going to move into the mine plan. Put that forward just a couple of years, let's just assume we're at $4,000 gold in 3 years' time. You could easily see the industry at [ '26, '28 ], $3,000 gold for reserves. So even if the gold price stayed flat in that scenario, our stock price would be worth a lot more because you get a huge amount of ounces that get moved into reserves. And so that's -- on our portfolio, about half the assets are gold streams on copper mines. Half the assets are royalties on principal gold assets. So I think that's a big driver. On the other side, copper prices are doing great, too. So the same thing applies for a copper asset, higher copper prices, you'll get a lot more material moved into those mine plans. So on both sides, I think we should see great organic growth.
Derick Ma: Okay. Great. And maybe a question on Argentina. Two of your longer-term growth assets that you've listed, Taca Taca and San Jorge are in Argentina, midterm elections are behind us now. What are your current views on Argentina as a mining jurisdiction and as an investment destination for Franco-Nevada going forward? And then maybe a follow-up on top of that is how many GEOs for Taca Taca and San Jorge are in your 2029 outlook?
Paul Brink: Yes. Maybe I'll just speak about the assets and then Sandip can comment on the guidance. The San Jorge is a, I'd call it, a midsized but good grade copper gold asset in Mendoza. The company tried to get a permit probably more than a decade ago, didn't quite get there at the time. Things have changed materially. In meetings early this year, I met with the Governor for Natural Resources in Mendoza, and she was very encouraging saying, San Jorge could be the very first of the assets to move ahead under the new RIGI program. So we're very encouraged by that. No, the company is working on raising financing to move that forward. Next up, Taca Taca. We're very hopeful that, that is the next big copper asset that First Quantum will build. I think as we all know, RIGI is a 2-year window to get your applications in, and we're a year into that. So there's another 12 months to get that application in and then companies need to start spending and their minimum spends over the next 2 years. So I think this is highly likely that you'll see spending going ahead on Taca Taca in the short term. For Argentina, we don't need to invest anything on those assets. We already own those interests. So that will happen regardless. For Argentina, it is the big question. Huge amount of assets there that are going to attract a lot of investment dollars. So we will consider Argentina. The -- what has been put forward in RIGI is very positive. It addresses the 2 big issues you have. The one is currency convertibility. That does get guaranteed if you enter into the RIGI program. And then the second thing is to make sure that it has teeth that survives through multiple regimes, you do need rights to international arbitration and RIGI does afford that, too. So both those things go a long way to making Argentina an attractive destination.
Sandip Rana: And Derick, just in terms of the 2029 guidance for those 2 assets, obviously, they still have to be built. So we were conservative in our estimates, but on a combined basis, it's about 5,000 GEOs.
Operator: [Operator Instructions] There are no further questions on the phone line. I will now turn the conference over to Candida Hayden for any closing remarks.
Candida Hayden: This concludes our third quarter 2025 results conference call. We expect to release our year-end 2025 results after market close on March 10. Thank you for your interest in Franco-Nevada. Goodbye.
Operator: And this concludes today's call. Thank you for participating. You may all disconnect.