Franco-Nevada Corp (NYSE:FNV) stock fell 7.99% (As on August 14, 11:22:24 AM UTC-4, Source: Google Finance) after the company announced the acquisition of a 1.8% net smelter return (NSR) royalty on Newmont‘s Yanacocha operations in Peru, touted as one of South America’s largest gold mines. This transaction includes a cash consideration of $210m (C$287.96m) at closing and a contingent payment of $15m in shares, based on the fulfilment of various conditions. The company now also holds a right of first refusal on further sales of Buenaventura’s royalty interests. Additionally, the deal enhances Franco-Nevada’s portfolio with immediate gold equivalent ounces and long-term growth potential.

Meanwhile, the company has missed the earnings expectations for the second quarter of FY 24. During the quarter, the company benefited from record gold prices, offset by lower contributions from Antapaccay, Candelaria and our Energy assets. Precious Metal revenue accounted for 74.2% of the revenue (60.3% gold, 10.8% silver, 3.1% PGM). Revenue was sourced 81.8% from the Americas (35.9% South America, 6.5% Central America & Mexico, 19.7% U.S. and 19.7% Canada).

FNV in the second quarter of FY 24 has reported the adjusted earnings per share of 75 cents, missing the analysts’ estimates for the adjusted earnings per share of 78 cents, according to Zacks Investment Research. The company had reported the adjusted revenue decline of 21 percent to $260.1 million in the second quarter of FY 24. The company has reported $221.9 million in Adjusted EBITDA, or $1.15/share, a decrease of 20% (2% increase excluding Cobre Panama), generated $194.4 million in operating cash flow, a decrease of 26% and incurred $69.8 million of additional income tax expense resulting from tax measures enacted in relation to the Global Minimum Tax (“GMT”) initiative, of which $23.9 million is current tax expense and $45.9 million is non-cash deferred tax expense.

The company expect to be at the lower end of the 2024 Total GEO sales guidance range of 480,000 to 540,000 GEOs. The Diversified assets are expected to contribute fewer GEOs than initially anticipated based on the revised commodity prices the company assumes for the remainder of the year ($2,300/oz Au, $27.50/oz Ag, $950/oz Pt, $900/oz Pd, $110/tonne Fe 62% CFR China, $75/bbl WTI oil and $2.25/mcf Henry Hub natural gas). With respect to the Precious Metal assets, the company anticipates stronger deliveries in the later half of the year. Production at Candelaria is forecasted to be more heavily weighted to H2 2024, and the company expects to benefit from the ramp-up of production at several new mines, including Tocantinzinho, Greenstone and Salares Norte.