Franco-Nevada Q3 2026 Earnings Call Transcript

Franco-Nevada (NYSE:FNV) reported third-quarter financial results on Thursday. The transcript from the company’s third-quarter earnings call has been provided below.

This transcript is brought to you by Benzinga APIs. For real-time access to our entire catalog, please visit https://www.benzinga.com/apis/ for a consultation.

View the webcast at https://app.webinar.net/8p0a7p87wxg

Summary

Franco-Nevada Corporation reported strong Q3 2026 financial results, with increased revenue, cash flow and earnings driven by strong gold and oil prices despite slightly below expected precious metal GEOs deliveries.

The company is tracking toward the mid-range of its annual guidance, with notable progress in its Australian business and several project advancements, including investments in the Bulla Balling deposit and the Ring of Fire road project.

Updated guidance narrows total GEOs sold to 525,000-555,000, with diversified revenue expected to be between $300 million and $330 million due to strong performance in the energy portfolio.

Significant exploration success was noted across the portfolio, particularly at the Porcupine Complex and Musselwhite, with expectations of increased resources and potential production boosts.

Franco-Nevada remains debt-free with $4.8 billion in available capital, positioning it well for future deal opportunities while maintaining a strong dividend track record with ongoing increases expected.

Management highlighted a vibrant and diverse pipeline of potential deals, both large and small, with continued emphasis on sustainable, high-margin business models and strategic partnerships.

Full Transcript

OPERATOR

Good morning and welcome to Franco-Nevada Corporation’s third quarter 2026 results conference call and webcast. This call is being recorded on November 12, 2026. At this time, we will enter listen-only mode. Following the presentation, we will conduct a question-and-answer session where you may ask questions through the phone line or webcast. If you are joining by webcast, you may submit a written question for the Q&A session at any time during this call by typing your questions in the Q&A section of the webcast platform. If you require media assistance during this call, please press star 0 at any time for the operator.

I would now like to turn the conference over to your host, Barnaby, Vice President of Finance and Investor Relations. Please go ahead.

Barnaby (Vice President of Finance and Investor Relations)

Thank you, Anna. Good morning, everyone. Thank you for joining us today to discuss Franco-Nevada’s third quarter 2026 results. Accompanying this call is a presentation which is available on our website at franco-nevada.com, where you will also find our full financial results. The presentation is also available to view on the webcast. During our call this morning, Paul Brink, President and CEO of Franco-Nevada, will provide introductory remarks, followed by Sandy Branagh, Chief Financial Officer, who will provide an overview of our results. This will be followed by a Q&A period. Our executive team is available to answer any questions. Participants may submit questions by telephone or via the webcast.

We would like to remind participants that some of today’s commentary may contain forward-looking information, and we refer you to a detailed cautionary note on slide 2 of this presentation. I will now turn the call over to Paul Brink, President and CEO of Franco-Nevada.

Paul Brink (President and Chief Executive Officer)

Thank you, Barnaby. Good morning. Franco-Nevada generated strong Q3 financial results. Revenue, cash flow, and earnings were all higher than the prior-year period, driven by stronger gold and oil prices, while precious metal GEOs deliveries were slightly below expectations. Strong oil prices boosted our diversified revenue, and we’re now tracking towards the mid-range of our annual guidance. During the quarter, the Panamanian ministerial commission recommended the government begin formal negotiations with First Quantum regarding Cobre Panamá. Response to the earthquake has obviously taken priority since then, although we hope the process will resume once that’s addressed.

During the quarter, we took another step in growing our Australian business with a second tranche of financing for the development of the Bulla Balling deposit. We also saw several project advancements in our portfolio during the period. Glencore announced they’d completed surface land acquisitions for the Coroccohuayco project at Antapaccay and reiterated their timeline to achieve first production. Hudbay and Mitsubishi sanctioned construction of Copper World, and the federal government stepped up with 100 billion—sorry, with a billion—of funding for the Ring of Fire road, matching the billion commitment from the province.

We keep seeing exceptional exploration success across the portfolio. It’s not my normal, but I can’t help myself—I’m going to speak about some of it. At the Porcupine Complex, discovery continues to expand mineralization at Pamour both east and west of the existing pit, and also at the newly discovered north contact zone at Dome extended mineralization up to 600 meters to the south. Updated resources for both are expected in early 2027. The Dome resource is already about 11 million ounces, and it’s getting bigger.

But even more exciting, with the success at Pamour, I believe that resource will expand dramatically. The company is indicating that together with a potential large central mill, this exploration success could ultimately support annual production of 500,000 to a million ounces of gold. At Stibnite, Perpetua identified new high-grade gold-antimony mineralization along the Clark Tunnel fault zone. At Yellow Pine, mineralization starts from surface. They also found a new gold-tungsten zone between Yellow Pine and West End. At Garoupi, Siemens drill results extended the existing Mando, Cow, and Blanket deposits and confirmed the near-surface Grander Cal discovery. Their PEA remains targeted for year-end 2026.

I think the best single result came from Musselwhite, where Equinox is drilling to confirm the two-kilometer mine trend extension from existing operations. The intercept came from the PQ extension. It was 22.9 meters grading 10 grams per tonne. With this success and the exploration success we mentioned last quarter at Banyan’s AurMac at Benlot 260’s Border Bowling at i-80’s Mineral Point deposit, I honestly can’t recall a period in the past where there’s been so much exploration success across our portfolio.

On the sustainability front, we expanded our mining industry scholarship program by awarding eight new scholarships, four each to university and trade programs. Franco-Nevada is now supporting a total of 23 students, seven of whom are expected to graduate from their programs next year. Subsequent to quarter-end, we entered a multi-year commitment at Cobre Panamá supporting community development and environmental initiatives led by Minera Panamá, including education, workforce development, health infrastructure, reforestation, and marine conservation.

We also renewed our commitment to Enseña Perú’s education initiative, which supports students and teachers across the Ancash region of Peru in which Antamina is located. To conclude, with $4.8 billion in available capital and no debt, the company has ample firepower to take advantage of a strong pipeline of deals. I’ll now hand the call to Sandy.

Sandeep

Great. Thanks, Paul. Good morning, everyone. As Paul mentioned, Franco-Nevada reported strong financial results for third quarter 2026 after market close yesterday. The quarter highlighted the strength of having the largest diversified portfolio in the industry, not just by asset but also by commodity. Slightly weaker performance from some of our assets during the quarter was offset by receiving our initial GEOs from Cobre Panama related to the processing of stockpile ore by First Quantum.

As well, we benefited from strong performance from the energy portfolio which had a strong quarter with a significant increase in revenue over 2025. The performance during third quarter combined with the strong performance for the first half of 2026 has resulted in record financial results year to date. September 30 for revenue, adjusted EBITDA, adjusted net income and operating cash flow. As we turn to slide 4, it provides an update on our guidance for the year. Based on the performance for the first nine months of the year and our projections for fourth quarter, we’ve narrowed our total GEOs sold guidance range to 525,000 to 555,000. As part of our updated guidance, we’ve also narrowed the ranges for the individual segments gold, silver and PGMs. The guidance does include GEOs from Cobre Panama for the processing of stockpile ore which we had not included in our original guidance back in March.

We estimate being delivered approximately 10,000 GEOs from Cobre Panama in 2026. As you will see from the slide, we’re expecting a significant increase in our diversified revenue which has been a significant outperformer for us this year due to strong oil prices. The expected revenue from our diversified assets is now expected to be between 300 million and 330 million. On slide 5 you’ll see a summary of commodity prices for third quarter 2026 and 2025. Precious metal prices have increased year over year with the average gold price higher by 24% and silver by 59% in the quarter, but are off the all-time highs which were reached in first quarter 2026. For diversified commodities, with the continued conflict in the Middle East, the oil price continues to see a significant increase over prior year. The WTI price has been volatile over the last few months but remains above $85 a barrel.

As mentioned, energy revenues did benefit from this higher oil price and we expect this to carry through the fourth quarter. Slide 6 provides an overview of our key financial results. The performance from our assets combined with stronger commodity prices over prior year resulted in an increase in revenue of 13%, adjusted EBITDA of 15% and adjusted net income of 33%. Total GEOs sold for the quarter were 130,435 compared to 138,772 in third quarter 2025. Precious metal GEOs sold in the quarter were just over 110,000, lower by 7% compared to prior year. Over 50% of total GEOs sold during the quarter were sourced directly from mines where precious metals are the primary commodity for the quarter.

We did receive strong contributions from South Arturo due to higher production from the open pit Valentine as the mine continues to ramp up and Casa Berardi, which is a new stream we entered into in 2026. Some assets which delivered less GEOs than prior year include Guadalupe, Antapaccay, and Cobre Panama. At Cobre Panama, although we did receive and sell 3,716 GEOs related to the processing of stockpile ore, you will recall that in prior year we had received approximately 11,000 GEOs related to the shipment of concentrates which had been on site at the time of the mine being closed.

At Guadalupe, production was impacted due to heavy rainfall which resulted in supply chain issues preventing mining in high grade areas and at Antapaccay, deliveries were lower in third quarter due to timing of deliveries. Diversified GEOs sold were 19,531 for the quarter compared to 19,663 for prior year despite diversified revenue being 29% higher year over year at 86.8 million. The slight decrease in GEOs was due to the impact of converting revenue to GEOs at a higher gold price. As you know, we are now converting to GEOs using a fixed gold price of $4,500 per ounce. As you can see from the chart, total revenue increased 13% to $549.3 million. Adjusted EBITDA was 15% higher for the quarter at 493.9 million compared to 427.3 million in third quarter 2025.

With respect to costs, we did have a decrease in cost of sales compared to prior year as fewer stream ounces were delivered during the quarter. Cost of sales was 43.1 million versus 47.2 million last year and depletion decreased to 78.6 million versus 87 million a year ago. Again, the decrease is due to lower depletion being recorded for Cobre Panama and Antapaccay. Finally, adjusted net income was higher by 33% at 364.5 million or $1.89 per share.

We did recognize a tax benefit during the quarter. We had previously recorded a tax expense related to the implementation of the qualified domestic minimum top up tax in Barbados. As we were finalizing the calculation and returns this year, it became clear that the tax did not apply to us for 2024. As a result, we’ve reversed the expense of 32.8 million related to that year. Slide 7 highlights the continued diversification of the portfolio. 84% of our third quarter revenue was generated by precious metals with revenue being sourced 89% from the Americas. Candelaria was the only asset which generated more than 10% of revenue. As we have one of the most diverse portfolios in the industry, our business model continues to be very high margin business. As shown on slide 8, the margin per GEO has increased from 1,559 per GEO in 2022 to just over 4,200 per GEO in 2026, an increase of 2.7 times.

As we turn to dividends on slide 9, the company continues to pay a quarterly dividend with 84.1 million being paid to shareholders during the quarter. 2026 was the 19th consecutive year we’ve increased the dividend with it currently being $1.76 per share annualized. And lastly, Slide 10 highlights our available capital. As at September 30, 2026, total available capital is 4.8 billion, comprised of 1.2 billion in cash, 2.25 billion with our credit facility including the accordions and 1.3 billion in liquid marketable securities. Also after quarter end, IAMGOLD gave notice that it will be exercising its 50% buyback right on the Cote gross margin royalty. We expect to receive approximately $525 million in early December.

The company continues to be debt free and is well capitalized to continue to add good quality assets to the portfolio. And with that I’ll pass it over to Anais as management is happy to answer any questions.

OPERATOR

Of course, during this Q&A session, if you’d like to ask a question, please press star then the number one on your telephone keypad. If you’d like to withdraw your question, please press star then the number two. If you are joining us on the webcast, please submit your question through the Q&A section of the webcast platform. One moment please. We’ll compile the roster. The first question comes from Lawson Wender with Bank of America. Please go ahead.

Lawson Wender (Analyst at Bank of America)

Yep, thank you very much, operator. Good morning, Paul and Sandeep, and thank you for today’s update. The oil and gas performance was very remarkable in the quarter and I guess I would ask, just with respect to the increase in the diversified revenue guidance, how much of that is oil and gas? And then if you disaggregate that into the different components, how much is pricing, how much is just increased volumes on your unaffected property, and then how much of that would be related to an increase related to the royalty acquisition venture you guys have with Continental?

Sandeep

So in terms of the increase in diversified revenue, Lawson, it’s all energy. You know, the iron ore price, as you know, has retreated a little bit this year, so that will be flat year over year. So the increase in revenue, the significant increase in revenue, is tied to energy. You are seeing some production increases on our lands, but the majority of that revenue increase is strictly price driven.

Lawson Wender (Analyst at Bank of America)

Okay, that’s very helpful. With Guadalupe-Palmarejo, this one is a tough one to model just given the variability of where mining takes place quarter to quarter. Can you provide us with a little guidance on where you expect Q4 ’26 GEOs likely to trend relative to Q3 ’26 based on your knowledge of the mine plan?

Sandeep

Yeah, it’s tough for us as well. And obviously they’ve had some issues this year, just into lower grade zones as well as supply chain. Historically, Guadalupe has been a very strong performer in terms of what was expected has been delivered. For Q4, I would say between 8 to 9,000 GEOs is sort of the range that we’d expect.

Lawson Wender (Analyst at Bank of America)

Great. Thank you for that. And then just finally, you made some pointed comments in the written part of the release on the pipeline. Could you maybe just provide us with a sense of the size of the pipeline in terms of number of deals you’re seeing and the range of values? But where I’d be very keenly interested to understand the pipeline is just on the urgency or timeline associated with that. I mean, any color there would be very helpful.

Ian

Thank you, Lawson. Ian here. I would say overall the pipeline is exceptionally vibrant. It’s quite diverse in terms of size and type of deal. There are some more larger deals in the pipeline versus perhaps a year ago. But in terms of timeline, really hard to comment on that. I think we expect to be quite active over the next 12 months.

Lawson Wender (Analyst at Bank of America)

Okay, thanks, Ian. Thank you, Sandeep.

OPERATOR

Thank you. Your next question comes from Kasma Chu with CIBC. Please go ahead.

Kasma Chu (Analyst at CIBC)

Thanks, Paul, Sandeep, and Ian. Congrats on a strong Q3. I know Paul usually doesn’t do it, but I thank you for talking about the development pipeline that you have in your portfolio. You mentioned Discovery, you mentioned, you know, what’s happening at Pamour and Dome. Could you maybe elaborate, you know, does that accrue directly to Franco-Nevada? If they do get to that half a million ounces, you know, Discovery is even talking up maybe half a million ounces just coming from Dome.

Number one. And number two, you made an additional investment, $8 million investment into Paymaster with Discovery and their acquisition. Could you maybe talk about the prospectivity of that new acquisition as well within Porcupine?

Paul Brink (President and Chief Executive Officer)

Thanks, Kasma. We’re very excited about everything that’s happening at Porcupine. Ian was the guy who led that deal, so I’m going to pass it to him. Good job, Ian.

Ian

Look, I would say, first of all, we’re delighted to continue to work with Tony and the team at Discovery as they continue to enhance their holdings around Timmins. And so I think that’s probably first and foremost. I think that is a very prospective piece of ground and you can see where it’s located vis-à-vis some of the existing properties. Hard to, you know, in the broader context of everything that’s going on there, handicap exactly when that might come in.

But I would say it’s certainly accretive and we’re again very happy to be working with the team there.

Kasma Chu (Analyst at CIBC)

Great. Thanks, Ian. Maybe following on your growth pipeline here, Paul, one asset you did not mention was Heva Hosko. Could you remind us, you know, with your agreement with Orzone, if Heva Hosko is a part of it? I know Casa Berardi was a main part. Is Heva Hosko a part of it? My understanding is that Orzone might be putting out a technical report on Heva Hosko fairly shortly. How do you view that?

Paul Brink (President and Chief Executive Officer)

Looking forward to that report, Kasma. And yes, our interests do cover Heva Hosko and so very interested to see if Orzone is able to advance those deposits.

Sandeep

The way the depletion calculation works is you take what you paid for the asset originally, so the stream acquisition back in the day, and then you divide it by how many GEOs you expect over the life and you come up with a depletion per GEO. And so based on the 30,000 GEOs that we’re expecting as part of the stockpile processing, just a mathematical calculation. Correct. So we did the impairment reversal for the full stockpile processing GEOs that we expect to receive. So the next impairment reversal would be if Cobre Panama restarts and we would have a reversal at that time.

Paul Brink (President and Chief Executive Officer)

So, first of all, yes, it was expected in that it makes a ton of sense that IAMGOLD is doing this. They’ve had great success with the drilling around the deposits. It’s going to be bigger than we both expected at the time that we did that deal. Second, obviously gold prices performed well. So I can fully understand why it is that they’re exercising that buyback. We were very happy to provide it to them. You’ll recall when we did that deal, they gave us access to due diligence and that really is what allowed us to secure the interest that we have in the deposit.

In terms of the buyback returns, the way it was structured, we would get a minimum of 10% return, but it could be a bit higher depending on any payments that happened in the interim. And so as still some payments that are due, I think that’s what gives you the variability. And it may be slightly higher—it’s not materially higher—but we won’t know until the final payments are in.

OPERATOR

Thank you. The next question comes from Tanya Jakusconek with Scotiabank. Please go ahead.

Tanya Jakusconek (Analyst at Scotiabank)

Oh great. Thank you for taking my questions. Some have been answered. Just maybe finishing up on Cobre Panama. I just want to make sure you have one-third of the ounces coming in this year and is the two-thirds coming in in 1H27? Sandeep, is that how I should be thinking of it?

Sandeep

Yeah. So, Tanya, you know, our estimate’s around 27 to 28,000. And so right now we’re estimating about 10,000. We’re a little ahead in Q3 than we expected. So 10,000 with the balance in 2027, likely over the first two quarters of next year.

Tanya Jakusconek (Analyst at Scotiabank)

Okay, thank you for that. And then once the mine reopened, I understood that that’s when you could reverse your write-down on the entire—would it be the entire value that you took down minus—

Sandeep

Yeah, in all likelihood it would be the full reversal of the outstanding balance.

Tanya Jakusconek (Analyst at Scotiabank)

Okay. I wanted to come back to—you’ve got a lot of money, you know, building a lot of cash. How should I be thinking about the dividend in January? You know, you have a progressive dividend, but, you know, barring any, you know, transactions. And I’ll get to the transactions with Ian, but we’re building a lot of cash. So how should I be thinking about the dividend in terms of, you know, that, you know, above the average that you’ve been doing?

Sandeep

Yeah. So, Tanya, it’s a decision. We sit down with the board every year in January and we look at, you know, what’s the cash on the balance sheet, what’s in front of us in terms of the deal pipeline. As Ian has highlighted, it’s very active and we make a decision at that point. As you know, our philosophy has always been sustainable and progressive—raise it every single year. And we’re proud of our track record, you know, of 19 years in a row. You know, next year will be our 20th increase.

So at this time, all I know is we will be raising it. As to the quantum, as I said, we’ll sit down with the board in January and make the decision at that point.

Tanya Jakusconek (Analyst at Scotiabank)

Yeah, I think it’s, you know, all the history, it’s the most amount of cash and liquidity you had, right? Yeah. Okay. Maybe just thinking then about 2027 and before getting to Ian on the transaction side. You know, there are some assets that are going to be contributing. I just wanted to make sure, you know, barring, you know, the pricing that’s going to be used and that we’ll know early next year. But I just—I’m trying to get a handle of how I see my GEOs progressing year on year. I just want to make sure that, you know, we have the production contributions.

So I just want to review with you. We have obviously Eskay Creek coming in in H1 of ’27. Valentine is ramping up. I think Porcupine full year. Maybe you can go through some of them that are going to, you know, help us get that GEO number correct.

Sandeep

Yes. So, Tanya, I think you’ve got the major changes there. Obviously Eskay Creek, as you mentioned, Valentine ramping up and then obviously the other piece will be energy prices—if they remain at these elevated levels, will contribute more GEOs next year than they did this year. So that’s another element there. But overall those are the moving pieces for next year. The one piece that obviously is going to come in next year is the Candelaria step-down.

Tanya Jakusconek (Analyst at Scotiabank)

Yeah, Candelaria step-down. And then the Côté—right—decline and—

Sandeep

Côté coming back, and then we’ll have a full year of Casa Berardi. This year Casa Berardi was only for three quarters, so we’ll have a full year next year.

Tanya Jakusconek (Analyst at Scotiabank)

Okay. If I put all of these in, hopefully I’ll get the right number. And just finally on Ian, I mean you mentioned that you have a lot of, you know, a lot of opportunities out there and some big, some small. Like would your big opportunities be the one over a billion and, Ian, are the smaller ones in that 200 to 500 range? I’m trying to understand the range on the precious metal side and then I think the non-precious you had given was in the 200 to 500.

Just trying to understand if that’s still the case.

Ian

Yes, Tanya, I think you’re spot on in terms of the scale of opportunities for all the classes that you identified.

Tanya Jakusconek (Analyst at Scotiabank)

Okay. And then as you think about these opportunities, are a lot of them still in Australia since that seems to be the new territory and sort of the opportunities that companies there now are open to doing streaming? Or should I be thinking about also, you know, obviously the bigger ones I’m assuming are the, you know, the diversified, you know, large international players.

Ian

It’s a great question, Tanya. I would say first of all we’re very happy with the progress of the business in Australia. Obviously the Minerals 260 transaction has really been a landmark transaction. We think for gold developers, they are getting a lot more interest on the back of that. But my overall take on the market is it seems like we’ve had market growth year over year in terms of the number of opportunities and the overall quantum, both in terms of dollars to be deployed and GEOs potentially to add to the portfolio.

So geographically that breaks out globally in North America, in Australia, incrementally, potentially in Africa and Latin America. So I think you should expect a wide-ranging geographic assortment of deals. But I think the two big comments there are probably overall market growth and skewing towards larger transactions over time as well.

Tanya Jakusconek (Analyst at Scotiabank)

And how should I be thinking of the deal structures? So the smaller ones, should I be thinking that those are more for the development opportunities? And so it would be a package of like a stream plus equity plus debt financing, whereas the larger ones with the multinational, they just want cash. Should I be thinking of it in that way for the structures of these deals?

Ian

I think broadly speaking, yes. We’re very happy with our financial backer strategy, is what we call it. And you’ve seen that with groups like Discovery and G Mining, where we’ve worked across the capital structure and provided some pretty great results for the shareholders of the company that we’re working with and of course for Franco-Nevada shareholders. So we’ll continue to emphasize that as much as we possibly can as it’s been generating some quite impressive returns.

Tanya Jakusconek (Analyst at Scotiabank)

Okay, and then my final question—just, you know, Paul mentioned a lot of—thanks, Paul, for talking about exploration in the streaming company. Sometimes we forget the upside that you have on your properties. Given Paul’s comment, is there anything I should take from that in context of changing the structure of your deals in terms of adding above and beyond, like anything more that you could add on the land package in terms of being able to include all of these additional potentials?

Ian

You know, I don’t think it changes anything for us, Tanya, other than we like the structure of our business with both the stream deals and the royalty deals that we’ve been able to do. I think that gives us the broadest number of avenues that we can get deals done by. And as you go through the cycles, you have different opportunities. In this cycle, where you’ve got both the gold and the copper producers producing great cash flow that turns into capital that gets spent in the ground—and while it benefits our streams—some of the most exciting developments are on those royalty properties, as you can hear.

So delighted to have both streams and royalties in our portfolio.

Tanya Jakusconek (Analyst at Scotiabank)

And I’m just thinking more on the land position. Like as you think about these deals, can you extend more—like, you know, add more land than you usually have in your other contracts, capture all of these, you know, potential, the upside potential just from drilling longer term—or have you—

Ian

I wouldn’t say it’s a general trend. You know, usually the property position is the property position. You know, with a strategy we’ve been following in recent years, which is, you know, build our partnerships, we’re trying to find that balance that our model is a win-win model. I think the deal with Discovery is a great indication where there is potential for them to expand their sphere of influence, and we’re pleased that they are working with us to help finance that acquisition and it gives them added exposure and us added exposure.

The other one, Tanya, would be Minerals 260, which you probably noticed we added to the land position pretty meaningfully with the second transaction. And, you know, from our perspective it is very important as we structure new transactions to have that type of optionality. And that is of course reflected in how we price and structure deals.

Tanya Jakusconek (Analyst at Scotiabank)

Yeah, and that’s what I was alluding to, as I saw that and thought that maybe because of what Paul had been saying on exploration, all of the new deals now are going to have more land position structure to us. Anyways, we can take it offline. It’s okay. Thank you.

OPERATOR

Thank you. Your next question comes from Jack Baxter with Bloomberg Intelligence. Please go ahead, Jack.

Jack Baxter (Analyst at Bloomberg Intelligence)

Hi. Thank you, Paul. Thank you. Sandeep and Ian, just wanted to look at the — and it’s probably asked in a lot of these calls, but I’ll just ask it again. On the 112 million dollar bullion inventory, which I know you’ve said in the past the timing of those sales depends on pricing and liquidity needs. But maybe following on from what Tanya said, balance sheet is very strong. So I’m just wondering, what is the motivation for holding that bullion as opposed to monetizing it when it’s received?

Sandeep

Hi Jack. So we receive that bullion inventory on the balance sheet relates predominantly to our royalty interest where we do receive ounces in kind — so like Detour, Tasiast and a few others. And we sell that on a regular basis. So it’ll fluctuate, you know, a few ounces each quarter depending upon how sales have been going and also obviously on the closing price at the end of the quarter. But for the most part we’re selling on a regular basis right now.

There’s no intention on our part to build up that balance.

Jack Baxter (Analyst at Bloomberg Intelligence)

Maybe just a follow-up then. So just for accounting, is my understanding correct that as that bullion comes in with the royalties that’s booked as revenue at that time, with future gains on the sale at the point of sale, when you do eventually make it, then the gain is booked as further sales, is that correct?

Sandeep

Yeah. So the way it works is when you receive the ounces, yes, you’re correct. You book it as revenue and then as inventory, and then when you sell it, any difference between what it’s on your books for and what your actual sales price is is a gain or loss. You’ll see a line item on our income statement, gain/loss on sale of bullion. And, you know, I think it’s 2.1 million for the year so far of a gain. That’s where the difference will get recorded.

Jack Baxter (Analyst at Bloomberg Intelligence)

Got you. Thank you very much for that clarity.

OPERATOR

Thank you. Your next question comes from John Tomasis with John Tomasis Independent Research. Please go ahead, John.

John Tomasis (Analyst at John Tomasis Independent Research)

Thank you. I’m trying to compare the prettiest girls at the dance. And Agnico at Detour West had a 499 gram-meter hole that they released November 11th. I-80 at Mineral Point had a 426 gram-meter hole that they released September 22nd. At Pamour, October 7th, hole 138 was 219, and hole 263 was 216 gram-meters. The one you referenced, Paul, is your favorite. At Musselwhite, 22 meters around 10 grams would be around 220 gram-meters. So how do you figure out which is the prettiest girl at the prom?

Paul Brink (President and Chief Executive Officer)

John, we gotta hire you for our IR department. You’re much more meticulous about following these draw results than I am. So I love what you’re saying.

John Tomasis (Analyst at John Tomasis Independent Research)

Okay. I just don’t want to miss one of the pretty girls at the dance. Thank you.

Paul Brink (President and Chief Executive Officer)

Thank you, John. Thank you, everyone. There are no further questions on the phone line. I will now turn the Q&A session over to Barnaby, who will take questions from the webcast.

Barnaby (Vice President of Finance and Investor Relations)

Thank you. There are no questions from the webcast. So this concludes our third quarter 2026 conference call and webcast. We expect to release our year-end 2026 results after market close on March 9, 2027, with the conference call held the following morning. Thank you for your interest in Franco-Nevada.

OPERATOR

Ladies and gentlemen, this concludes your conference call for today. We thank you for participating and ask that you please disconnect your lines. Please have a great day.

Disclaimer: This transcript is provided for informational purposes only. While we strive for accuracy, there may be errors or omissions in this automated transcription. For official company statements and financial information, please refer to the company’s SEC filings and official press releases. Corporate participants’ and analysts’ statements reflect their views as of the date of this call and are subject to change without notice.