Franco-Nevada Corporation (NYSE:FNV) Q1 2023 Earnings Call Transcript

Franco-Nevada Corporation (NYSE:FNV) Q1 2023 Earnings Call Transcript May 3, 2023

Operator: Good morning, and welcome to Franco-Nevada Corporation’s First Quarter 2023 Results Conference Call and Webcast. This call is being recorded on May 3, 2023. . I would now like to turn the conference over to your host, Candida Hayden, Senior Analyst, Investor Relations. Please go ahead.

Candida Hayden: Thank you, Joanna. Good morning, everyone. Thank you for joining us today to discuss Franco-Nevada’s first quarter 2023 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 Sandip Rana, Chief Financial Officer, who will provide a brief review of our results. This will be followed by a Q&A period. Our full 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 our detailed cautionary note on Slide 3 of this presentation.

I will now turn over the call to Paul Brink, President and CEO of Franco-Nevada.

Paul Brink: Thank you, Candida, and good morning. I’ll start with a note on our ongoing director succession. At our AGM yesterday, we were sad to mark the retirement of two of our directors, Louis Gignac and Elliott Pew. Louis was one of the original Directors of Franco-Nevada and his expertise and guidance has been the foundation of many of our investment decisions. Elliott joined our Board in 2019 and was key to directing our oil and gas investments. Thank you, Louis and Elliott, for the enormous contribution that you’ve made to our success. Turning now to the first quarter results. Our diversified portfolio continues to generate strong cash flow and high margins, though the quarter was impacted by production disruptions at Cobre Panama and Antapaccay as well as lower energy prices.

Stronger precious metal deliveries are anticipated in Q2 with the social disruptions at Antapaccay having subsided and First Quantum in the government of Panama having agreed on terms for a refreshed concession contract. The results for the quarter while lower bring home to me the robustness of our business. Despite the production impacts, the business still generated an 83% adjusted EBITDA margin and a 55% adjusted net income margin. We have no fixed costs related to our royalty and stream assets, so a temporary production hold is largely a deferral of revenue. We like to see great ore bodies get even better over time. And I think that will apply to both Cobre Panama and Antapaccay. During the quarter, we published our 2023 ESG report. Highlights include an outline of our ESG due diligence focus, increased community contributions, new board diversity goals, disclosure of Scope 3 finance emissions and details of our new climate action policy.

We also published our annual asset handbook. A few numbers in the handbook stood out to me. We now have interest in 419 assets, of which 113 are cash flow producing. Those assets generated $1.3 billion of revenue in 2022. That’s 8.7x the revenue of our first full year in 2018. At year-end ’22, we had $18.8 million M&I resource royalty ounces. Those are ounces that are cost free to Franco. At current production rates, our M&I resource mine life stands at 34 years. Those numbers don’t include our energy assets, our exploration assets or obviously, the upside potential of the producing assets. In total, our assets cover 66,000 square kilometers on some of the world’s best mineral trains. Looking forward to the balance of 2023, the expansion of Cobre Panama will be a big driver.

I was impressed that despite the disruptions, First Quantum completed construction for the CP 100 expansion project ahead of schedule. They’re now ramping up throughput to achieve 100 million tonnes per annum by year-end. There are three new mine starts we’re looking forward to this year. Magino in Ontario, Seguela in Cote d’Ivoire and Salares Norte in Chile and during the quarter, we commenced funding that Tocantinzinho stream deposit. The G Mining Ventures team are targeting first production in the back half of 2024, driving our next leg of growth. Lastly, our business development team is seeing good opportunities for financing new gold mines, and I’m confident they will further add to our 5-year growth outlook. With that, I’ll hand it over to Sandip.

Sandip Rana: Thank you, Paul. Good morning, everyone. As mentioned by Paul, our diverse portfolio continued to generate strong cash flows and high margins during first quarter 2023. However, our gold equivalent ounce deliveries and financial results were impacted by temporary production curtailments at two core assets, Cobre Panama and Antapaccay. In addition, with the retreated energy prices, specifically natural gas, this did result in a reduction in energy revenues and associated GEOs in first quarter 2023 compared to prior year. On Slide 5, we highlight the gold equivalent ounces sold for the last 5 quarters. Overall, GEOs sold for the first quarter were 145,331 down from first quarter of 2022 and fourth quarter of 2022.

Of this total, precious metal GEOs were 111,238 down 14% from prior year. For the quarter, the largest contributors to the lower precious metal GEOs were Antapaccay, Antamina, Guadalupe and Goldstrike. At Antapaccay, GEOs delivered and sold were lower in Q1 2023 compared to prior year due to sociopolitical tensions in Peru that impacted operating activities and constrained logistics during the period. We do expect strong deliveries from Antapaccay in second quarter. For Antamina, we had lower GEOs sold in prior year as the operators currently mining lower grade ore, but this was expected with actuals for the first quarter being in line with our expectations. At Guadalupe, the operator mined less ounces from stream lands, resulting in lower GEOs delivered and sold.

And at Goldstrike, the NPI was lower due to lower production from roaster maintenance and higher capital costs with the conversion of the autoclave to a conventional carbon-in-leach process. Partially offsetting the lower GEOs from the assets mentioned were stronger GEOs from Bald Mountain and Marigold. At Cobre Panama, we earned 28,663 GEOs compared to 29,495 in Q1 2022. As guided, deliveries were impacted by the temporary curtailment of operations in the quarter, partly offset by the receipt of GEOs from shipments related to Q4 2022. We do expect strong deliveries from Cobre Panama in the second quarter. For diversified assets, we recorded lower GEOs and revenue for both iron ore and energy assets as both iron ore and energy prices were lower in first quarter 2023 compared to first quarter of 2022.

Q1 2023 saw continued volatility in commodity prices. Other than the gold price, average commodity prices were lower year-over-year as seen on Slide 6. Palladium and energy prices were down significantly. This volatility did impact our financial results for the quarter. The lower energy prices resulted in a sharp reduction in energy revenue for the quarter with energy revenue being $49 million compared to $75.6 million in prior year. Also, with the increase in the price of gold year-over-year and lower non-gold commodity prices, it did impact the conversion of non-gold commodities to GEOs. Slide 7 highlights our total revenue and adjusted EBITDA amounts for the 5 quarters beginning Q1 2022. As you can see from the bar charts, revenue and adjusted EBITDA were consistently above $300 million per quarter, but did have a pullback this quarter for the reasons explained earlier.

However, our margins remained consistent and adjusted EBITDA margin being 83% in the quarter. Revenue for the quarter was $276.3 million, while adjusted EBITDA was $229.4 million. As you turn to Slide 8, you will see the key financial results for the company. As mentioned, GEOs and revenue were lower in the quarter compared to prior year. On the cost side, we had a decrease in cost of sales which was $38.2 million compared to $43.6 million in Q1 2022. The largest component of this is the per ounce fixed cost we pay for stream ounces. We sold 82,181 stream ounces in first quarter compared to 96,740 a year ago. Depletion decreased to $61 million versus $74.6 million a year ago. Depletion is based on actual mining GEO sold and barrels of oil equivalent received on the energy side of the business as we received less GEOs from Antapaccay, Antamina and Vale, which are higher per ounce depletion assets, this resulted in lower overall depletion expense.

For first quarter 2023, adjusted net income was $152.2 million or $0.79 per share. Slide 9 highlights the continued diversification of the portfolio. As shown, 77% of our Q1 2023 revenue was generated by precious metals. The geographic revenue profile has revenue being sourced 89% from the Americas, with Canada and the U.S. being the largest. With respect to asset diversification, Cobre Panama was again our largest revenue generator at 20% of total revenue. The last chart highlights our operator diversity. Our largest exposure to revenue being generated by any one operator is 20%, which is First Quantum who operates Cobre Panama. Slide 10 illustrates the strength of our business to generate high margins. On the slide, you can see that cost of sales has remained fairly consistent over the period shown.

The amount of cost of sales will depend on the mix of royalty versus stream GEOs, including mining and energy. During first quarter 2023, the cash cost per GEO, which is essentially cost of sales divided by gold equivalent ounces sold, was $263 per GEO. Corporate administration costs, including stock-based compensation, was less than 4% of revenue for the quarter. The total can fluctuate quarter-over-quarter but has tended to average approximately $8 million each quarter historically. In a rising commodity price environment, we expect to benefit fully as we do not expect our cost structure to change significantly. Slide 11 summarizes the financial resources available to the company. When including our credit facility of $1 billion, total available capital at March 31, 2023 is $2.2 billion.

The company continues to be debt free. And before I turn it over to the operator, on Slide 12, we provide an update on our audit status with CRA. As you are aware, there were 3 disputes ongoing with CRA, foreign accrual property income, domestic and transfer pricing. I’m pleased to say that on April 28, we reached a settlement with the CRA on the domestic and FAPI reassessments. CRA will be vacating the reassessments entirely. The potential tax exposure related to the reassessments to be vacated was CAD 26.5 million for the domestic and CAD 11.6 million for the FAPI, including interest and penalties. With respect to the transfer pricing reassessment, the company continues to believe that these reassessments are not supported by Canadian tax law and intends to defend its tax filing position.

We will continue to provide updates as needed. And now I’ll pass it over to the operator as we’re happy to answer any questions.

Q&A Session

Operator: . First question comes from Cosmos Chiu at CIBC.

Cosmos Chiu: Great. Thanks, Paul, Sandip. Maybe my first question is on taxes and it’s certainly good to see a CRA resolution here and FAPI and also the domestic reassessment. I guess my question is, is there any kind of read-through from the CRA resolution on April 28 into the transfer pricing for its subsidiary file at least any kind of read-through in terms of timing?

Sandip Rana: Thanks for the question, Cosmos. There’s no read through. They’re all separate. So FAPI and domestic have been settled. We’re going through the process on the transfer pricing would likely discovery later this year, early next year, but no read-through.

Cosmos Chiu: Got it. Tony asked this, I guess, I believe all the three different issues all came out at about the same time. So — but I guess my other question is, Sandip, if I can follow up. This transfer pricing kind of foreign subsidiary file. Has that always been more sort of complex or contentious? Or would you not say that?

Sandip Rana: I wouldn’t say it’s complex. It’s just a different set of facts and circumstances, different legislation that CRA is looking at and making an interpretation of. So as I said, we believe we’ve got a very good fact pattern, and we will defend our position, but they’re all independent.

Cosmos Chiu: Of course. Without sounding too much like a tax mode show, maybe another question on taxes. As you mentioned in your press release, a global minimum tax, you made a statement on global minimum taxes pillar too. It looks like it is going ahead. As you mentioned, there’s no legislation yet. You need to review the legislation when it becomes available and take a look at the impact, potential impact of Franco-Nevada. But maybe I’ll ask this question anyways. If I look at the taxes paid in Q1, $23.9 million, your net income before taxes, $184 million. So that works out to about 13% global minimum tax is 15%. Is that how I should approach it in terms of potential impact? Or is that just too simplest?

Sandip Rana: I guess the easiest way is whatever you have as your income taxes related to the Barbados assets because that’s the only entity that they would apply to, which is approximately 50% of our revenue. And there, we pay a low tax rate less than 2% or at least that’s what we record. So the incremental 13% would be related to those assets, and then you would adjust for that.

Cosmos Chiu: Got it. And I guess you — I don’t know if you’ve thought about this yet, but I guess it is somewhat complex. But when the time comes and you — when you’re presenting us with the impact — potential impact, I guess, have you thought about how you’re presented? Or are you going to go, I guess, to details of the Barbados subsidiary. Have you given any thought in terms of how you will present that impact to the market to us and also investors?

Sandip Rana: Yes. So obviously, we’ll have to wait to see what the legislation entails. Once we’ve seen that, whatever disclosure is required by us going forward to explain that in our financial statements and MD&A and other filings, we’ll do so. But at a high level, we have run some internal numbers and if it is enacted the way that the legislation internationally has been proposed, it’s about a 4% — 3% to 4% impact on NAV.

Cosmos Chiu: Got it. And then maybe switching gears a little bit. You sold 111,000 ounces precious metals GEOs in Q1. You’ve maintained your guidance, $490 million to $530 million for the year my own writing. Clearly, that means that Q2 was better, H2 is better. I think, Paul, you kind of mentioned that as well in terms of different factors going to it. Could you maybe help us in terms of giving us more color in terms of how that increase is going to happen? Are we going to see increases sort of quarter-over-quarter steadily? Or are we just going to see a big lift in Q2 now that Cobre and Antapaccay some of the issues are behind us?

Sandip Rana: Yes. So I think you’ll see a stronger Q2. Obviously, at Cobre Panama, they were not making any shipments. So that stockpile has to be shipped. And so we’ll see the benefit of that in the second quarter and we sort of have guided to that at the year-end call where we said that we did expect the second quarter stronger from Cobre compared to first quarter and quarters later on in the year. And then Antapaccay with the production curtailment there, again, there’ll be some catch-up deliveries in Q2. But overall, the rest of the portfolio is performing in line with our expectations. So I think you’ll see a stronger Q2 and a more even Q3, Q4.

Cosmos Chiu: Perfect. And then maybe one last question. As you mentioned, there’s some new streams or new royalties coming in new contributions coming in Magino, Seguela, Salares Norte. I guess my question is, we shouldn’t see any kind of lag, right, in terms of production versus revenue to Franco-Nevada? Because I believe these are all dory. So I just want to make sure that as they produce, it hits the revenue or hit as revenue to Franco-Nevada fairly quickly.

Sandip Rana: Yes. So they’re all royalties. So we will accrue the revenue whether we’ve received it in kind or in cash prior to the month or the quarter end, we will still be booking the revenue. There’s no timing delays.

Operator: The next question comes from Heiko Ihle at H.C. Wainright.

Heiko Ihle: Can you hear me okay?

Sandip Rana: Yes, we can hear you fine, Heiko.

Heiko Ihle: Perfect. Yes, apologies I’m sitting in an airport lounge. So thanks to Louis and Elliott for their services in the past. Question-wise, I mean, Chile has really been pushing their lithium industry lately. Obviously, there is no direct impact on you, but I’ve heard some folks be fearful on the impact on the mining industry in general. Cash-strapped governments around the world looking for an easy buck. 26% of your revenue in the most recent quarter was from Mexico and Central America, 29% was South America. I assume you haven’t seen or heard much that I haven’t, but maybe you have. But can you share some of your thoughts in regards to impact on your future M&A strategies?

Paul Brink: Thanks for that. It’s Paul. The — I think what you point to probably the most prominent thing there is, yes, that there has been both a shift to the left in recent years in Central and South America. Also with COVID, so many governments around the world are cash strapped. And so we’ve seen a lot of jurisdictions have moved to see how they can fund those budgets and an easy target is mining companies and in particular, international companies. So that has put pressure. And it does — as we think about allocating capital around the world, obviously, those things do factor in. In terms of our portfolio directly, we’re very fortunate that our big stream interest, most of them are structured so that we’re not paying taxes in country.

And so we’re fortunate we haven’t been a target for governments in those countries. So for the most part, have been able to avoid that. The — where are we in that process? The — I actually think that the pendulum swung fairly far. And I’d say over the last year, it’s actually moved back a bit towards the middle the initial proposals, much higher taxes in Chile were bolted down along with the rest of the constitutional changes. And so now the discussion seems to be a much more pragmatic discussion. And there will be a raise in mining taxes through that royalty, but it seems that it will be something that’s much more manageable. Similarly, in Peru, the government was pushing hard for mining reforms and now has backed off a bit on that. You’re absolutely right.

So much of the focus now in governance is on lithium. It is a new element that they’re turning to new potential and so many are thinking what their policy should be with regards to lithium, we don’t have any interest in that area to date. So as yet are not impacted.

Heiko Ihle: Okay. Fair enough. But it’s fair — I mean, your answer was very polite to be correct, and I appreciate that. But it’s fair to say that M&A might be shifting a little bit in the future?

Paul Brink: We’re trying to be a low risk weight for investors to invest in the gold market. One of the ways we do that is through diversification. And so we’re — unfortunately, with mining assets, they are where they are. And — but our approach is don’t put too many eggs in any one basket, but we know we will be exposed to some of these issues. We think we can ride out the bumps so long as we’re well diversified.

Heiko Ihle: Got it. And Cosmos asked my next question. But then one thing I just wanted to follow up on Slide 12 with the transfer pricing for Mexico subsidiaries in Mexico and Barbados. I appreciate the color on the exposure. Obviously, the interest and penalties are still accumulating. First of all, what’s the rate at which that accumulates? And also, it says, I mean, you’re vigorously defending your position not to understand it in a lawsuit. But are there settlement talks at all? Or will this become like an all or nothing outcome type of thing?

Sandip Rana: So we’re still in the process of going through discovery and working through what’s required under — when you do file a dispute with CRA. We’d be happy to settle at some point, but we’re not at that process yet. In terms of interest, the interest gets accrued at 8%.

Operator: Next question comes from Greg Barnes at TD Securities.

Greg Barnes: Sandip, I just want to get an idea of what Guadalupe looks like for the rest of the year. It’s a lot lower than us in the first quarter, and I’m wondering how it’s trending Q2, Q3, Q4.

Sandip Rana: So obviously, we get guidance from them on a full year basis of what the deliveries will be for Guadalupe. Q1 was short. But at this time, we’re still estimating that they’ll reach their plan, and that’s the best information we have.

Greg Barnes: And you don’t have a sense of where the production is coming from relative to your streamlines?

Sandip Rana: No. So it fluctuates quarter-to-quarter because the — our stream doesn’t cover the entire land package. But we sort of have a general percentage for the year. So at this time, we think they’ll make it up, but we’ll have a better idea as the year progresses. And we’ll provide an update on our guidance in the second quarter.

Operator: Thank you. Next question comes from Martin Pradier at Veritas.

Martin Pradier: I have just two questions. In terms of the CRA, did you settle at a certain cost? And if yes, what was the cost? Or was this like a — you won and you didn’t pay anything?

Sandip Rana: So with respect to the settlement, CRA basically vacated their reassessment. The only cost to us was the legal fees we incurred going through the process, but there was no other additional cost of Franco. So there were no interest or penalties paid nothing of that sort.

Martin Pradier: Okay. That’s what I wanted to confirm. And there was a $10 million income in the financial income that was much higher than before. I guess that is related to all your cash that you have today. Are you doing something different than in the past?

Sandip Rana: No. As you can see, our cash balance has been growing. We do invest that through short-term safe, secure term deposits and other avenues for investing which is the reason for the increase in finance income.

Martin Pradier: So we should see that going forward in the next couple of quarters?

Sandip Rana: As long as interest rates stay where they are, you should. Unless — and otherwise, if our cash balance decreases. But yes, if everything stays the same, you should see that going forward.

Operator: Next question comes from John Tumazos at John Tumazos Research.

John Tumazos: Thank you. Trying to understand this 15% global minimum tax. Presumably, your incremental tax payments because of the Barbados subsidiary would be paid to Ottawa, and I guess the monies would stay in Ottawa and fund the Canadian federal budget that might make someone in Peru or wherever, who’s not enjoying those tax revenues, frustrated. If the mining and exploitation is in one country and the tax revenue is in another, is there any way that you could voluntarily pay taxes in the country of origin to kind of remedy that in equity?

Sandip Rana: So for the first part, you are correct with the way it will be implemented with paying the lower single digit in the foreign jurisdiction, the incremental GMT payments will go to Ottawa and remain in Canada. As to the various local jurisdictions where our streams are, our streams are all offshore. They’re not in those specific countries. So voluntarily, it’s not something that we would do. We’re not directly linked in those jurisdictions. But as I said, we haven’t seen any of the legislation, and we’ll evaluate everything as time goes on.

Paul Brink: So John, for the countries, if you take Panama or Peru or Chile, what they see is we’re a metal purchaser. So it’s just like they’re selling the gold that they produce to some other party that is paying for that gold. So it’s just a metal sale from the perspective of the countries where the mines are.

John Tumazos: Thank you. In your press release, you give reference to higher production from three existing mines and three new mines in the next expansion in Panama. Some of us might be familiar with some of the companies, but not every one of the projects. Which of those developments might be more than a 1% impact on revenues? Or could you give us an idea as to which are the larger of the among these?

Paul Brink: As I mentioned, John, obviously, there’s stream interest, or the interest. So the — for new mines, it is Tocantinzinho, the G mining and building where we have a larger interest. The — in terms of ongoing growth in the business, it is a number of royalties. As you know, most of our royalties are 1%, 2% interest. But we’ve — over the next 5 years, the main mine expansions are Detour on up to 1 million ounces hopefully, from Agnico. You’ve got Kinross expanding Tasiast. Again, that’s a 2% royalty for us, and then the expansion of Stillwater. Stillwater is bigger. Our royalty there. It’s one of our biggest. It’s a 5% royalty. So that does obviously have a larger impact. For the new mines that are coming in, those are 1% to 2% interest. In total, if you count over the next 5 years, I think we’ve got nine new gold mines potentially if copper world goes ahead one copper mine in there. But most of those interests are 1% or 2% royalty interest.

Operator: Thank you. Next question comes from Ralph Profiti at Eight Capital.

Ralph Profiti: Just one question from me. Sandip, I apologize for coming back to the tax issue. But on the outstanding reassessment potential taxes and penalties, does the CRA ask you to place those monies in remittance or secure those against lines of credit? I’m just wondering what those potential impacts are in that available credit calculation of $2.2 billion.

Sandip Rana: Yes, they do. For the reassessments we’ve received, you have to put 50%. You can either make deposits directly with CRA or you can draw down on the credit facility to put a line of credit in place. We’ve done — sorry, letters of credit. We have done that for the reassessments we’ve been received so far. And the disclosures in the financial statements.

Operator: Next question comes from Tanya Jakusconek at Scotiabank.

Tanya Jakusconek: I just wanted to come back to the global minimum tax, Sandip. Is it — and I know we’re waiting for legislature to come through to have more clarity. But from a modeling perspective, would it be the safest or most conservative to assume it’s implemented in 2024?

Sandip Rana: I think that’s a safe bet I think that’s the direction the government has put forward that it will be implemented. So on a conservative basis, January 1, 2024, is a possible date that it could be implemented.

Tanya Jakusconek: That’s helpful. And just again, coming back on the modeling side. I know on the Q4 call, we had talked about the iron ore business being , first half and second half. Should I still kind of think that it was a bit low on the iron ore side, should I kind of still think about it in that ? Has that changed?

Sandip Rana: That has not changed.

Tanya Jakusconek: And then the oil division, are we going to see improvement quarter-over-quarter? Or is this just a weaker quarter because of the pricing?

Jason O’Connell: Tanya, it’s Jason speaking. I think going forward, I think you’d expect to see volumes fairly stable for the remainder of the year. Revenues will obviously be impacted by where prices go there, currently sitting below, I guess, the range at which we provided in our guidance, which I believe was $80 for oil and $3 for gas. So we’re a little bit under that right now. But in terms of performance, I would expect you to see reasonably stable performance throughout the year.

Tanya Jakusconek: That’s helpful, Jason. And just on the overall portfolio, Sandip, as I come back from a volume perspective. As I look at the portfolio, we have that uptick in Q2 and you said Q3 and Q4 are going to be relatively the same. Is Q2 going to be materially different than Q3, Q4 because when I look at our model, it’s not materially different.

Sandip Rana: I think Q2 will be definitely a better quarter just for the catch-up deliveries related to Cobre Panama and Antapaccay. I think Q3 and Q4 will be strong quarters as well. But at the end of the day, it depends on how operations are performing and deliveries, particularly with — related to the streams, which are our largest revenue source. So as I said, we’ll update our guidance in the second quarter as we have a better idea of how the year is going to progress.

Tanya Jakusconek: comment, I kind of read through that Q2 is going to be better than Q1, but Q3, Q4 are going to be better than Q2.

Sandip Rana: I would say Q3 and Q4 at this stage will be not as good as Q2 because Q2 has catch-up deliveries coming.

Tanya Jakusconek: Okay. No, that’s helpful. And my last question, I always have to come back to the transaction environment. Just want to circle back and make sure that we’re still looking at the same sort of transaction range of under $400 million and that we are still looking for precious metal opportunities. And again, it’s still for new mine builds for companies that are building new projects. I’m just circling back, if that’s still the same or has something changed?

Eaun Gray: Tanya, it’s Eaun here. I think you’re still accurate in your assessment there. That’s largely what we’re looking at.

Tanya Jakusconek: I’ll let someone else ask questions. Appreciate you taking lead time for my questions.

Operator: . Next question comes from Brian MacArthur at Raymond James.

Brian MacArthur: Sorry, most of my questions have been answered. But just back to the tax for a minute. You talked about getting back $9.9 million. A couple of questions. First of all, have you got that? Because I know it’s another company that’s been a long time getting money back from the CRA. And secondly, is that in other assets on your balance sheet in that $41 million? So net-net, you will convert that back into your cash position?

Sandip Rana: Brian, Sandip. Yes, we have not — sorry, we have not received it. We just finalized the settlement last Friday. So it is a process we have to go through. Yes, I am aware that getting cash back from CRA takes a bit of time. So we will follow the process. Hopefully, it will come back sooner for us. But at this point, we have not received it. And on the second piece, yes, it was sitting in our other assets on the balance sheet.

Operator: There are no further questions on the line. You may proceed.

Candida Hayden: Thank you, Joanna. There are no questions from the webcast. This concludes our first quarter 2023 results conference call and webcast. We expect to release our second quarter 2023 results after market close on August 8, with the conference call held the following morning. Thank you for your interest in Franco-Nevada. Goodbye.

Operator: Ladies and gentlemen, this concludes your conference call for today. We thank you for participating, and we ask that you please disconnect your lines.