|TSX: FNV (2007)|
NYSE: FNV (2011)
S&P/TSX 60 component
Oil & gas
|Predecessor||Newmont Mining Corporation|
|David Harquail (Chair), Paul Brink (President & CEO), Sandip Rana (CFO)|
|Products||Gold Royalties and Streams|
|Revenue||US$1,020 million (2020)|
|US$337 million (2020)|
|US$326 million (2020)|
|Total assets||$5,580 mil.(2020)|
|Total equity||$5,444 mil. (2020)|
Franco-Nevada Corporation is a Toronto, Ontario, Canada-based company that owns royalties and streams in gold mining and other commodity and natural resource investments. It is traded on the Toronto Stock Exchange and New York Stock Exchange.
The 'Old Franco-Nevada' was a publicly listed company on the Toronto Stock Exchange from 1983 to 2002. In 1986, Old Franco-Nevada made its first royalty acquisition, and acquired or created additional royalties and resource investments from 1986 to 2002. Following several royalty acquisitions in the 1980s and 1990s, Old Franco-Nevada sold its only mining property to Normandy Mining in exchange for 19.9% of the company's shares.
In 2002, Newmont acquired 100% of Franco-Nevada as part of a three-way combination of Newmont, Normandy and Old Franco-Nevada. Newmont maintained Franco-Nevada as a royalty holding division, transferring numerous other royalties to it over the five-year period following the acquisition, building its portfolio of royalties to include investments in almost 300 royalties (two-thirds in bases and precious metal miners, and one-third in oil and natural gas). In 2007 Newmont spun off Franco-Nevada in an initial public offering.
Franco-Nevada initially began trading as a public gold exploration company in 1983 and was led by executives Seymour Schulich and Pierre Lassonde. At the time, oil and gas royalty ownership—but not gold royalty ownership—was an established business strategy. In 1985 Franco-Nevada raised $930,000 to purchase gold royalties in a follow-on offering. The company made its first royalty investment in 1986, spending half the corporate treasury ($2 million) to acquire 4% of revenues from a mine in Nevada owned by Western States Minerals. The mine had an annual production of 44,000 ounces (1,200,000 g) of gold. Franco-Nevada assumed that known reserves would allow the royalty to pay for itself regardless of additional exploration results. By 2002 the property generated $23 million annually for Franco-Nevada.
In 1988 Franco-Nevada purchased a royalty on the Castle Mountain mine in California. Despite the Castle Mountain mine being unsuccessful, losing money and eventually closing, Franco-Nevada collected triple its investment of $2.8 million.
Franco-Nevada further went on to purchase royalties in various other commodities, but continued its focus on gold.
Newmont take over
In April 2001, Franco-Nevada sold the Nevada Midas mine, its only wholly owned mine, to Normandy Mining in exchange for 20% of Normandy and a five-percent royalty on the mine. That September, Anglo Gold made a bid for Normandy at a valuation 60% greater than Franco-Nevada's acquisition cost. Seeing the potential to take advantage of Newmont's rivalry with Anglo, Schulich and Lassonde approached Newmont Mining Corporation to discuss purchasing Franco-Nevada and Normandy, striking a deal richer than Anglo's offer, and ultimately valuing Franco-Nevada shares at a 22% premium.
Split from Newmont
In 2007 Franco-Nevada launched an initial public offering on the Toronto Stock Exchange, raising CA$1.1 billion which helped fund the US$1.2 billion acquisition of a large portfolio of royalties from Newmont. The listing was one of the largest in Canadian history, second only to the 2000 Sun Life IPO, and the largest mining IPO in North American History.
In December 2010, Franco-Nevada took over Gold Wheaton, a purchaser of gold byproducts, for $830 million.
In August 2012, Franco-Nevada partnered with Inmet Mining to invest $1 billion in various metal streams from the Cobre Panama Copper Project. In 2013, Franco-Nevada took over Inmet Mining. At the end of January 2018, the subsidiary Franco-Nevada (Barbados) acquired an additional precious metals stream on Korea Resources Corp. interest in the Cobre Panama project (Cobre Panama) for US$178 million. After this transaction, FNB has precious metal stream interests covering 100% of the ownership of Cobre Panama. FNB has funded already a total of $1.33 billion of its $1.356 billion funding commitment towards the estimated $6.8 billion Cobre Panama project as of September 2018. In June 2019, Cobre Panama started shipping ore concentrate. An announcement of a Panamanian Supreme Court ruling in connection to the constitutionality of Law 9 of 1997 is raising questions concerning Minera Panama S. A.., the holder of the Cobre Panama concession.
In December 2016, Franco-Nevada spent $100 million to get the royalty rights from the Oklahoma STACK play.
In 2020, Franco-Nevada invested $314 million in additional acquisitions.
In April 2021, the company acquired 57 million of Vale S.A.’s outstanding participating debentures (Royalty Debentures) for $538 million.
- 2020 Annual Report. franco-nevada.com. Retrieved 12 March 2021
- Condon, Bernard (February 18, 2002). "Kings of royalty". Forbes. Retrieved 2009-11-02.
- Bernard, Condon (February 18, 2002). "Royalty Kings (page 2)". Forbes. Retrieved 2009-11-02.
- Simon, Bernard (November 15, 2001). "Newmont Pursues 2 Buyouts, Aiming to Be No. 1 in Gold". New York Times. Retrieved 2009-11-02.
- Bailey, Stewart; Doug Alexander (December 3, 2007). "Franco-Nevada Unchanged in Stock Debut After IPO". Bloomberg. Retrieved 2009-11-02.
- French, Cameron (November 21, 2007). "Newmont's Franco-Nevada launches Canada IPO". Reuters. Retrieved 2009-11-02.
- Koven, Peter (January 31, 2008). "Franco-Nevada swelled 2007 IPO statistics". Financial Post. Archived from the original on June 28, 2007. Retrieved 2009-11-02.
- Vlastelica, Ryan (December 20, 2007). "Newmont Mining sells $1.3 billion in assets to Franco-Nevada". Thomas Financial. Archived from the original on July 22, 2011. Retrieved November 2, 2009.
- "Gold Wheaton to be acquired in $830M deal". Cbc.ca. 13 December 2010. Retrieved 29 April 2019.
- "Franco-Nevada and Inmet Agree to a $1 Billion Precious Metals Stream Financing for the Cobre mine, Panama". Prnewswire.com. 20 August 2012. Retrieved 29 April 2019.
- Franco-Nevada acquires an additional precious metals stream on Cobre Panama from KORES for US$178 million. News Release, Franco-Nevada, 22 January 2018. Retrieved 29 April 2019
- Franco-Nevada Cobre Panama Update. News Release, Franco-Nevada, 25 September 2018. Retrieved 29 April 2019
- "Franco-Nevada to buy Weyburn Oil stake for $400-million". Theglobeandmail.com. 6 November 2012. Retrieved 29 April 2019.
- "Franco-Nevada to Acquire a Gold & Silver Stream on Candelaria from Lundin Mining for US$648 million". Prnewswire.com. 6 October 2014. Retrieved 29 April 2019.
- Neha Chamaria (29 September 2017). "5 Fast Facts About 5-Bagger Franco-Nevada". Fool.com. Retrieved 29 April 2019.