Franco-Nevada Corporation (NYSE:FNV) Q3 2023 Earnings Call Transcript

They have very long lives, and we’ve also seen tremendous life expansion from those assets. Probably a good example is Candelaria. Candelaria when we helped finance Lundin to acquire that asset six or so years ago, it had a 14 year mine life. Lundin Mining said tremendous success with the exploration program. And when we look forward today, the go forward mine life is in the order of 25 years. So they are long-lifed assets, but also have the potential to get better over time. So it’s been a good business for us.

Candida Hayden: Our next question comes from a private investor. Any provisions taken on the Cobre Panama situation?

Sandip Rana: Hi. No provisions as is out there from first quantum and ourselves. The mine is still operating, operating very well, so there’s no provision, no review or impairment at this time.

Candida Hayden: Thank you, Sandip. Our next question comes from Vincenzo at Seven Pillars Capital Management. Could you please give me some color on the contingency plan? If first quantum Cobre Panama were to go into arbitration, how should we think about potential claims at Franco-Nevada might have on an arbitration results, or if any potential expropriation of Cobre Panama should occur, is there any insurance Franco Nevada can claim?

Paul Brink: Yes. So we hope it doesn’t go in that direction. But if the concession were taken away from the operators, the one route for them is arbitration. What we’ve seen in the past is in similar sort of circumstances. International arbiters have ruled in favor of the mining companies. So you typically have seen settlements for the companies. They have been meaningful. They do have real teeth. So they ultimately do get paid. Our agreement and our contracts is if there is a settlement, that we would get a proportionate share of that settlement.

Candida Hayden: Thank you, Paul. Next question is from Diego at Norster [ph] Capital Management. In a scenario where Cobre Panama is expropriated, what kind of actions would you legally expect to take?

Paul Brink: I would, the in terms of the comments that we’ve already made? The action to be taken is by the operators and arbitration is the most likely course for them. There, again, hope they don’t go down that course, and then our protections are as we’ve already outlined.

Candida Hayden: Thank you, Paul. There are no further questions from the webcast. This concludes our third quarter 2023 results conference call and webcast. We expect to release our yearend 2023 results after market close on March 5 with a conference call held the following morning. Thank you for your interest in Franco-Nevada.