Franco-Nevada Corporation (NYSE: FNV) reported third-quarter adjusted earnings above analysts' expectations on Wednesday, as higher gold and oil prices more than offset a 6% decline in the volume of metal and energy it sold. The Toronto-based royalty and streaming company posted adjusted net income of $1.89 per share, up from $1.43 a year earlier, while revenue rose 13% to $549.3 million.
Analysts polled by FactSet had expected adjusted earnings of $1.74 per share. The result came even as gold equivalent ounces (GEOs), the company's measure of output from all its interests converted into gold, fell to 130,435 from 138,772. Franco-Nevada attributed the gains in revenue, cash flow and earnings to stronger gold and oil prices.
"Precious metal GEO deliveries were slightly below expectations in the period, although strong oil prices boosted our diversified revenue, and we are now tracking towards the mid-range of our annual guidance," Paul Brink, President and CEO, said in the earnings release.
Net income rose 38% to $395.5 million, or $2.05 per share, including a $10.3 million partial impairment reversal on the Cobre Panamá stream. Operating cash flow increased 23% to $429.2 million, and the board declared a quarterly dividend of $0.44 per share, payable Dec. 17.
#Franco-Nevada Trims Gold Sales Forecast, Raises Diversified Revenue Outlook
Franco-Nevada provides upfront funding to miners and energy producers in exchange for royalties or streams, which give it a share of their revenue or production. Precious metals made up 84% of its third-quarter revenue, with 89% sourced from the Americas.
The company narrowed its 2026 forecast for GEOs sold to 525,000 to 555,000 from 510,000 to 570,000, leaving the midpoint unchanged at 540,000. It cut its gold sales range to 355,000 to 385,000 ounces from 360,000 to 400,000, while raising expected diversified revenue to $300 million to $330 million from $245 million to $285 million.
Franco-Nevada said lower-than-expected production at Guadalupe-Palmarejo in Mexico and Candelaria in Chile reduced precious metal deliveries. Heavy rainfall from severe winter storms in Chile's Atacama region left Candelaria processing lower-grade stockpiled ore, the company said, while Coeur Mining reported that rain-related delays in construction materials at Guadalupe-Palmarejo affected planned mining in higher-grade areas.
Energy interests partly filled the gap. Revenue from U.S. energy assets rose to $50.8 million from $33.8 million, which the company linked to new well activity in the Permian Basin, a larger share of production from its interests with Continental Resources and stronger realized prices.
#Franco-Nevada to Receive at Least $525 Million From Côté Royalty Buyback
IAMGOLD notified Franco-Nevada on Nov. 5 that it would exercise its right to buy back half of Franco-Nevada's 7.5% gross margin royalty on the Côté Gold mine in Ontario. Franco-Nevada said it expects to receive at least $525 million, equal to its initial attributable purchase price, with the transaction expected to close in December.
The royalty rate, which is paid on the mine's gross margin, will fall to 3.75% from Jan. 1, 2027. Côté produced 92,000 ounces of gold in the third quarter, down from 106,000 a year earlier, reflecting an extended annual shutdown in August and a shift to owner-only crushing, the company said.
In Australia, Franco-Nevada paid $121 million (A$170 million) in September for an additional 1.45% gross royalty on Minerals 260's Bullabulling gold project, raising its total royalty there to 3.9%. Minerals 260 has since secured A$410 million in debt facilities, and Franco-Nevada said the project is now fully funded through to first production.
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#Panama Commission Recommends Talks on Cobre Panamá as Decision Awaits
Cobre Panamá, a copper mine on which Franco-Nevada holds a gold and silver stream, remains under preservation and safe management with production halted. The government approved processing of stockpiled ore, and Franco-Nevada received 3,716 GEOs from the mine in the quarter.
Brink said in the release that "the Panamanian Interministerial Commission recommended that the Government begin formal negotiations with First Quantum regarding the future of the mine." Panama's President is reviewing the report with the Cabinet and legal advisers, and a decision is expected by year-end, according to the company.
Franco-Nevada said the commission recommended assessing the feasibility of a new agreement with First Quantum that would settle outstanding arbitration proceedings and set conditions for a potential restart designed to achieve an orderly, self-financed closure. It expects stockpile processing to deliver about 23,100 gold ounces and 265,000 silver ounces in total.
Other operators flagged setbacks. Sibanye-Stillwater cut 2026 guidance for its Stillwater mine in Montana to 245,000 to 255,000 ounces of platinum and palladium after a roughly five-week strike, Lundin Mining lowered its Caserones copper outlook after winter storms, and Antamina in Peru reported a fatal accident that is under investigation.
Management said Franco-Nevada is tracking toward the midpoint of its 2026 guidance and held $4.8 billion in available capital with no debt at Sept. 30, though commodity prices, operator performance, weather disruptions and Panama's decision on Cobre Panamá remain key risks to that outlook.