MINING FINANCE / INVESTMENT

Major gold royalty company Franco-Nevada will continue to pursue acquisitions

Franco-Nevada says it has significant capital available and is "actively pursuing and developing new (gold) investment opportunities."

Author: Dorothy Kosich
Posted: Friday , 26 Mar 2010

RENO, NV - 

STRAP HEADLINE: SIGNIFICANT ACQUISITION ACTIVITY IN 2010

HEADLINE: Major gold royalty company Franco-Nevada will continue to pursue acquisitions

Dorothy Kosich

Franco-Nevada says it has significant capital available and is "actively pursuing and developing new (gold) investment opportunities."

RENO, NV

In financial results released Thursday, Toronto-based royalty company Franco-Nevada said it "anticipates significant acquisition activity in 2010," despite the fact Franco was defeated in its 2009 bid for rival International Royalty Corp. by white knight Royal Gold.

"The company has significant capital available in which to invest in additional royalties, and is actively pursuing and developing new investment opportunities, with a concentrated focus on gold," Franco said.

Franco estimates its royalty revenue will range between $155 and $170 million this year with 70% earned from gold assets. As of June 30, 2009, Franco Nevada held 488 mining and oil and gas royalties.

Royalty revenue from Coeur d'Alene's Palmarejo mine's gold stream in Mexico is expected to increase this year as it will be the first full year of production compared to the seven months of production in 2009. 

Meanwhile, royalty revenue is expected to remain consistent at Barrick's flagship Goldstrike mine until waste stripping is completed in the first half of this year.

However, Newmont announced a geotechnical event at its Gold Quarry mine, which will curtail production this year and next. Franco officials said the royalty includes a minimum royalty clause which means Franco does not anticipate "a significant decrease" in royalty revenue at Gold Quarry.

Quadra Mining, which is now undergoing a friendly merger with FNX Mining, announced its 2010 production guidance at the Robinson mine to be 135 million pounds of copper and 80,000 ounces of gold. This guidance would trigger the company's gold and copper royalties, Franco advised.

FINANCIALS

In its financial results, Franco said royalty revenue for the fourth quarter of 2009 was a record high of $44.3 million. Royalty revenue for the full year was $142.8 million. During the last year 94% of royalty revenue came from North America.

The adjusted net income for the fourth quarter of 2009 was $22.8 million or 20-cents per share, compared to $23 million or 23-cents/sh for fourth-quarter 2008.

For the full year of 2009, adjusted net income was reported at $32 million or 30-cents per share, a decline from the $47.3 million or 48-cents/sh revenue reported for 2008.

 

Metatags: Franco-Nevada, Franco-Nevada financials, gold mining royalties, mining royalties