/NOT FOR DISTRIBUTION TO US NEWSWIRE SERVICES OR DISSEMINATION IN THE
UNITED STATES/
This press release contains forward-looking statements. Reference
should be made to the "Cautionary Statement on Forward-looking
Information" at the end of this press release.
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Fourth Quarter Highlights (US dollars) for the three months ended
December 31, 2008
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- Record revenues of $42.5 million and net income of $15.4 million
($0.15 per share).
- Free cash flow(1) of $37.7 million ($0.38 per share) or 89% of
revenue.
- Dividends paid in quarter were $10.0 million (Cdn$0.12 per share).
- Closed the acquisition of the Gold Quarry royalty for $103.5 million
in December 2008.
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2008 Highlights (US dollars) for the year ended December 31, 2008
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- Revenues of $151.0 million and net income of $40.3 million ($0.41 per
share).
- Free cash flow(1) of $131.7 million ($1.34 per share) or 87% of
revenue.
- Dividends paid in the year were $21.8 million (Cdn$0.24 per share).
- At year end, Franco-Nevada had $239.1 million in working capital, no
debt or hedges and total shareholders' equity of $1.43 billion.
- Subsequent to year end, closed the acquisition of the Palmarejo gold
royalty stream for $75 million in cash and $5 million in special
warrants.
-------------------------------------------------------------------------TORONTO, March 26 /CNW/ - Franco-Nevada Corporation (TSX:FNV) today
reported its financial results for the three months and year ended December
31, 2008. All figures are in US dollars unless otherwise noted. The complete
Financial Statements, Management's Discussion and Analysis and Annual
Information Form ("AIF") which includes the statement of reserves data and
other oil and gas information as required under National Instrument 51-101
Standards of Disclosure for Oil and Gas Activities can be found today on
Franco-Nevada's website at www.franco-nevada.com and by tomorrow on
www.sedar.com.
On December 20, 2007, Franco-Nevada completed its initial public
offering, listed on the Toronto Stock Exchange and purchased a royalty
portfolio and other assets. A comparison of financial results for the period
ended December 31, 2007 to those for the year ended December 31, 2008 is not
meaningful as Franco-Nevada was in operation for only 11 days in 2007 and
during that period incurred significant non-recurring expenses related to the
start-up of the Company. Both annual and quarterly information for 2008 have
been provided below.
Franco-Nevada's revenues benefited from increasingly strong gold revenues
in each successive quarter which substantially offset declining commodity
prices in the second half of 2008. Key aspects of our revenues in 2008 were:- For the year, revenues were 56% precious metals (47% from gold and 9%
from platinum group metals) and 36% from oil & gas (23% oil and 13%
gas). The balance was from base metals and other minerals. The gold
contribution increased throughout the year and represented 52% of
revenues in the fourth quarter. Platinum group metals declined to 4%
in the fourth quarter.
- 97% of revenues for the year were sourced from the US, Canada and
Australia.
- The strong contributors in the latter part of the year were Barrick's
Goldstrike operation as it mined better grades and Quadra's Robinson
operation as it exceeded certain royalty thresholds.Franco-Nevada's net income for the year reflected $16.5 million of net
tax recoveries offset by $8.5 million of non cash impairments of investments
and smaller royalty interests. Most of these adjustments occurred in the
fourth quarter.
A more detailed review of Franco-Nevada's assets is planned for our
analyst day presentation on April 15th. In summary, assuming current commodity
prices, for 2009 Franco-Nevada is expecting:- An increase in contribution from gold to overall revenues due to
higher gold prices and added contributions from our Gold Quarry
royalty acquisition beginning in the first quarter of 2009 and from
our Palmarejo gold royalty stream with a material contribution
beginning in the third quarter of 2009:
- A lower contribution from our Goldstrike royalties as the operation
mines lower grades and Barrick invests capital on our royalty ground:
- A less significant contribution from our Robinson copper royalty. In
2008, Franco-Nevada realized $10.5 million from a copper royalty that
is contingent on, among other things, exceeding an indexed copper
price. At current copper prices, royalty revenues from this copper
royalty are not expected to be as significant in 2009; and
- Lower revenues from our non-gold royalties as those commodity prices
have declined below fourth quarter averages. We expect that this will
also result in some deferred oil & gas production as operators reduce
their capital expenditures.Overall, gold revenues are expected to become the dominant driver of
Franco-Nevada's revenues in 2009. Assuming recent commodity prices, we expect
that by the third quarter gold will represent over 75% of Franco-Nevada's
revenues. Precious metals, which include platinum group metals, are expected
to represent over 80% of Franco-Nevada revenues by the third quarter.Selected Annual Financial Information:
(thousands of US dollars except per share amounts)
For the
For the Period
Year Ended Ended
December 31, December 31,
2008 2007
-------------------------
Statement of Operation
Total revenue $ 151,041 $ 3,281
Depletion and depreciation 87,525 2,388
Net income (loss) 40,347 (33,079)
Basic and diluted earnings (loss) per share $ 0.41 $ (0.38)
Statement of Cash Flows
Net cash provided by (used in) operating
activities, before changes in non-cash
assets and liabilities $ 132,047 $ (418)
As at As at
December 31, December 31,
2008 2007
------------ ------------
Balance Sheet
Cash and cash equivalents $ 73,249 $ 12,894
Short-term investments 141,576 -
Total assets 1,503,786 1,336,656
Total shareholders' equity 1,433,599 1,287,054
Selected Quarterly Financial Information:
(thousands of US dollars except per share amounts)
Dec. 20,
2007 to
Q4 Q3 Q2 Q1 Dec. 31,
2008 2008 2008 2008 2007
-------------------------------------------------------------------------
Total
revenue $ 42,483 $ 40,023 $ 40,987 $ 27,548 $ 3,281
Net
income
(loss) 15,377 9,893 9,876 5,201 (33,079)
Basic
earnings
(loss)
per
share $ 0.15 $ 0.10 $ 0.10 $ 0.06 $ (0.38)
-------------------------------------------------------------------------
Free cash
flow(1) $ 37,664 $ 35,392 $ 35,334 $ 23,373 $ (5,246)
Free cash
flow(1)
per
share $ 0.38 $ 0.35 $ 0.35 $ 0.26 $ (0.06)
-------------------------------------------------------------------------
Total
assets $ 1,503,786 $ 1,571,200 $ 1,591,763 $ 1,579,871 $ 1,336,656
Total
share-
holders'
equity $ 1,433,599 $ 1,513,503 $ 1,537,078 $ 1,528,840 $ 1,287,054
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(1) Free cash flow is defined by the Company as operating income plus
depletion and depreciation, non-cash charges and any impairment of
investments and royalty interestsShareholder Information
The complete Financial Statements, Management's Discussion and Analysis
and Annual Information Form ("AIF") which includes the statement of reserves
data and other oil and gas information as required under National Instrument
51-101 Standards of Disclosure for Oil and Gas Activities can be found today
on Franco-Nevada's website at www.franco-nevada.com and by tomorrow on
www.sedar.com. Additional oil and gas information is also being posted on
Franco-Nevada's web site. Management will host a conference call today at 4:00
pm Toronto time to review the results. Interested investors are invited to
participate as follows:- Conference Call: Local: 416-644-3418; Toll-Free: 800-732-6179;
Conference call title: Franco-Nevada Corporation Fiscal 2008
Financial Results
- Conference Call Replay: A recording of the conference call will be
available until April 2, 2009 at the following numbers: Local: 416-
640-1917; Toll-Free: 877-289-8525; Pass code: 21298174 followed by
the number sign
- Webcast: A live audio webcast of the conference call will be
accessible on the Company's website
- Slides: A presentation to accompany the conference call will be
available on the Company's websiteManagement will also host an analyst working session on April 15, 2009 at
4:00 pm Toronto time to review further details on the Company's assets. The
session will be held in Salon 2 on the 19th floor of the Royal York Hotel, 100
Front Street West, Toronto. Analysts and interested investors are invited to
participate as follows:- In person by RSVPing to Jason O'Connell at
oconnell@franco-nevada.com or 416-306-6310
- Conference Call: Local: 416-644-3414; Toll-Free: 800-733-7560;
Conference call title: Franco-Nevada Corporation Analyst Working
Session
- Conference Call Replay until April 22, 2009 at the following numbers:
Local: 416-640-1917; Toll-Free: 877-289-8525; Pass code: 21298176
followed by the number sign
- Webcast: A live audio webcast of the conference call will be
accessible on the Company's website
- Slides: A presentation to accompany the conference call will be
available on the Company's websiteOn May 20, 2009 at 4:00 pm Toronto time, Franco-Nevada will hold its
Annual General and Special Meeting at the TSX Broadcast Centre in the Exchange
Tower, 130 King Street West, Toronto. An audio webcast and slides from the AGM
will be available via the Franco-Nevada website.
Corporate Summary
Franco-Nevada Corporation (TSX: FNV) is a gold focused royalty company
with additional interests in platinum group metals, oil & gas and other
assets. It is the leading gold royalty company as measured by gold revenues,
number of gold royalties and free cash flow margins. Its portfolio of
high-margin cash flow producing assets is located principally in the United
States, Canada and Australia. The Company also holds a pipeline of potential
future cash flowing assets that are under development or being explored.
CAUTIONARY STATEMENT ON FORWARD-LOOKING INFORMATION
Certain information contained in this Press Release, including any
information as to future financial or operating performance and other
statements that express management's expectations or estimates of future
performance, constitute "forward-looking statements". All statements, other
than statements of historical fact, are forward-looking statements. The words
"estimate", "expect", "expects", "expected" and similar expressions identify
forward-looking statements. Forward-looking statements are necessarily based
upon a number of estimates and assumptions that, while considered reasonable
by management, are inherently subject to significant business, economic and
competitive uncertainties and contingencies. The Company cautions the reader
that such forward-looking statements involve known and unknown risks,
uncertainties and other factors that may cause the actual financial results,
performance or achievements of Franco-Nevada to be materially different from
the Company's estimated future results, performance or achievements expressed
or implied by those forward-looking statements and the forward-looking
statements are not guarantees of future performance. These risks,
uncertainties and other factors include, but are not limited to: fluctuations
in the prices of the primary commodities that drive the Company's royalty
revenue (gold, platinum group metals, copper, nickel, oil and gas);
fluctuations in the value of the Canadian and Australian dollar, and any other
currency in which the Company generates revenue, relative to the US dollar;
changes in national and local government legislation, including taxation
policies; regulations and political or economic developments in any of the
countries where the Company holds interests in mineral and oil and gas
properties; influence of macroeconomic developments; business opportunities
that become available to, or are pursued by us; reduced access to debt and
equity capital; litigation; title disputes related to our interests or any of
the properties; operating or technical difficulties on any of the properties
underlying; risks and hazards associated with the business of development and
mining on any of the properties, including, but not limited to unusual or
unexpected geological formations, cave-ins, flooding and other natural
disasters or civil unrest. The forward-looking statements contained in this
Press Release are based upon assumptions management believes to be reasonable,
including, without limitation, the ongoing operation of the properties by the
owners or operators of such properties in a manner consistent with past
practice, the accuracy of public statements and disclosures made by the owners
or operators of such underlying properties, no material adverse change in the
market price of the commodities, and any other factors that cause actions,
events or results to differ from those anticipated, estimated or intended.
Accordingly, Readers should not place undue reliance on forward-looking
statements because of the inherent uncertainty. For additional information
with respect to risks, uncertainties and assumptions, please also refer to the
"Risk Factors" section of our most recent Annual Information Form filed with
the Canadian securities regulatory authorities on www.sedar.com, as well as
our Annual MD&A. The forward-looking statements herein are made as of the date
of this Press Release only and Franco-Nevada does not assume any obligation to
update or revise them to reflect new information, estimates or opinions,
future events or results or otherwise, except as required by applicable law.
For further information: please go to our web site at
www.franco-nevada.com or contact: David Harquail, President & CEO, (416)
306-6300; Alex Morrison, Chief Financial Officer, (303) 317-6335
