Franco Nevada Corp (NYSE: FNV) stock rose over 1.3% in the after-hours session of March 11th, 2021 (Source: Google finance) after the company posted higher than expected earnings for the fourth quarter of FY 20 and increased the quarterly dividend to $0.30/share starting with the second quarter dividend payment in June which will be declared in May.
The company announced a new precious metals stream on the Condestable copper mine in Peru and the acquisition of a portfolio of natural gas royalties in the Haynesville play in Texas. Effective from January 1, 2021, FNV will receive deliveries of 8,760 ounces of gold and 291,000 ounces of silver annually until December 31, 2025, after thereafter by variable deliveries based on a percentage of gold and silver in concentrate. The company will pay 20% of the spot price for gold and silver for each ounce delivered under the stream. Further, the company has also acquired a royalty portfolio in the Haynesville natural gas play, in Texas, from Mesa Minerals Partners LLC, a Quantum Energy Partners portfolio company, for $135 million. The Haynesville is one of the most active gas plays in North America due to its strong underlying economics and proximity to the U.S. Gulf Coast, which reduces transport costs. Overall, the company anticipates strong growth in 2021 and over the next 5 years, on the back of the ongoing Cobre Panama ramp-up, the two newly acquired assets and from broad organic growth across the portfolio.
FNV in the fourth quarter of FY 20 has reported the adjusted earnings per share of 85 cents, beating the analysts’ estimates for the adjusted earnings per share of 69 cents, according to Zacks Investment Research. The company had reported the adjusted revenue growth of 18 percent to $304.5 million in the fourth quarter of FY 20. For the fourth quarter of 2020, revenue was sourced 90.9% from gold and gold equivalents (68.4% gold, 12.5% silver, 6.9% PGM and 3.1% other mining assets). Geographically, revenue was sourced 88.4% from the Americas (55.0% Latin America, 14.5% U.S. and 18.9% Canada).
For fiscal 2021, the company expects attributable royalty and stream sales to total 555,000 to 585,000 GEOs from our Mining assets and additional revenue of $115 to $135 million from the Energy assets. The WTI oil price and Henry Hub natural gas price are expected to average $55 per barrel and $2.50 per mcf. FNV expects its existing portfolio to produce between 600,000 and 630,000 GEOs by 2025, and additional revenue of $150 and $170 million from the Energy assets.