TORONTO, Aug. 8, 2016 /CNW/ - Franco-Nevada
Corporation (TSX: FNV; NYSE: FNV) is pleased to report its
financial results for the second quarter of 2016. All figures
are in U.S. dollars unless noted and highlights include:
- 112,787 Gold Equivalent Ounces(1) ("GEOs") – a new
record
- $150.9 million in revenue – a new
record
- $118.9 million of Adjusted
EBITDA(3) or $0.67 per
share
- $42.3 million of Net Income or
$0.24 per share
- $40.0 million of Adjusted Net
Income(2) or $0.22 per
share
- $37.7 million of funding provided
to the Cobre Panama project during the quarter
- $225.8 million in cash at quarter
end and no debt
"Franco-Nevada's
diversified portfolio continues to perform very well.
With record GEO and revenue results, we are now expecting to
be close to the top end of our previously provided guidance ranges
for 2016," stated David Harquail,
CEO. "Even more exciting for the future, we are seeing
renewed activity and good news at many of our non-producing
advanced and exploration assets. In addition, our investment
opportunity pipeline remains very full."
REVENUES AND GEOs BY ASSET CATEGORIES
|
|
|
|
|
|
|
For the three months
ended June 30,
2016
|
|
For the three months
ended June 30,
2015
|
|
|
Revenue (in
millions)
|
GEOs(1) #
|
|
Revenue (in
millions)
|
GEOs(1) #
|
Precious
Metals
|
-
Gold
|
|
$108.2
|
85,724
|
|
$81.5
|
68,302
|
|
-
Silver
|
|
23.6
|
18,523
|
|
6.2
|
5,117
|
|
-
PGM
|
|
9.4
|
7,053
|
|
8.7
|
7,323
|
Precious
Metals
|
–
Total
|
|
$141.2
|
111,300
|
|
$96.4
|
80,742
|
Other
Minerals
|
|
1.9
|
1,487
|
|
2.7
|
2,298
|
Oil &
Gas
|
|
7.8
|
|
|
10.3
|
|
|
|
$150.9
|
112,787
|
|
$109.4
|
83,040
|
For the second quarter of 2016, revenue was sourced 94% from
precious metals (72% gold, 16% silver and 6% PGM) and 84% from the
Americas (14% U.S., 19% Canada and
51% Latin America). Costs and
expenses increased due to higher depletion and cost of sales as a
result of the recent Antamina and Antapaccay stream acquisitions.
Oil & gas production levels were stable but lower oil prices
resulted in lower revenue year-over-year. Cash provided by
operating activities before changes to working capital was
$109.9 million.
Portfolio Updates
- Precious Metals – U.S.: GEOs from U.S. precious
metals assets were flat year-over-year with increases from
Goldstrike largely offsetting decreases at Stillwater and Bald Mountain. GEOs received
from the U.S. assets were 16,707 GEOs.
- Bald Mountain (0.875-5% NSR/GR) – Kinross reported that first half 2016
production was weak due to higher than anticipated stripping.
It expects to almost double production for 2017 and 2018 and sees
further reserve upside.
- South Arturo (4-9% GR with AMR) – The project currently
being advanced by Barrick Gold and
Premier Gold Mines is expected to contribute revenue to
Franco-Nevada in the second half of 2016.
- Hollister (3-5% NSR) – Klondex Mines, Franco-Nevada's
partner at Fire Creek/Midas, announced it is acquiring the
Hollister Mine in Nevada on which
Franco-Nevada has up to a 5% NSR royalty.
- Castle Mountain (2.65% NSR) – NewCastle Gold has raised
additional funding to advance the Castle Mountain project in
California. Franco-Nevada renegotiated its royalty covering
the asset during the second quarter 2016 and now covers all
concessions with a 2.65% NSR.
- Precious Metals – Canada: GEOs from Canadian precious
metals assets increased by approximately 25% compared with the
second quarter 2015 to 14,919 GEOs. The main contributor to
the increase was the Sudbury
operation which benefitted from stronger production.
- Musselwhite (5% NPI) – Goldcorp has announced approval
for a materials handling project which it expects will increase
production by 20% over 2016-2018.
- Brucejack (1.2% NSR) – Pretium Resources reported an
increased resource estimate for the Brucejack project and that it
still expects to begin commissioning of the underground mine in
mid-2017.
- Timmins West (2.25% NSR) and
East Timmins (0.25-15% NSR) –
Operatorship of several Canadian royalties moved into stronger
hands with Lake Shore Gold being acquired by Tahoe Resources and St
Andrew Goldfields by Kirkland Lake
Gold.
- Hardrock (3% NSR) – A feasibility study for the Hardrock
project in Ontario, which is being
advanced by joint venture partners Premier Gold Mines and Centerra
Gold, is expected in the third quarter.
- Precious Metals – Latin
America: GEOs from Latin American precious metals
assets represented the largest year-over-year increase due to the
addition of the Antamina and Antapaccay streams. GEOs
delivered from Latin America were
60,899 GEOs.
- Antamina (22.5% silver stream) – Antamina delivered
11,898 GEOs during the quarter and 29,679 GEOs year to date.
With the year-to-date production results from Antamina, GEOs
received are now expected to be higher than Franco-Nevada's
original Antamina guidance for 2016 of 40,000 GEOs.
- Antapaccay (gold and silver stream) – Antapaccay
delivered 19,581 GEOs during the quarter with full year deliveries
still anticipated within the original 60,000 to 70,000 GEOs
guidance range.
- Candelaria (gold and silver stream) – As Franco-Nevada
expected, Candelaria deliveries decreased year-over-year to 16,247
GEOs from 24,192 GEOs in the second quarter 2015 mainly due to
mine sequencing.
- Palmarejo & Guadalupe (50% gold stream) – In
the third quarter, the 400,000 ounce minimum at Palmarejo was
met resulting in the termination of the original Palmarejo stream
agreement and the commencement of the Guadalupe stream
agreement. Under the new agreement, deliveries are based on
50% of the gold produced from the Palmarejo property (including the
new Guadalupe mine) with ongoing payments equal to the lesser of
$800 per ounce and the then
prevailing spot price for gold.
- Cobre Panama (gold and silver stream) – During the
quarter, Franco-Nevada contributed $37.7
million of its share of construction capital for the Cobre
Panama project and now estimates total funding between $120 - $140 million in 2016, down slightly from
the $130 - $150 million previously
estimated. Franco-Nevada has now contributed $376 million of its total $1 billion commitment to fund the
construction of Cobre Panama.
- Precious Metals – Rest of World: GEOs from Rest of
World precious metals assets increased year-over-year mainly due to
deliveries from the Karma fixed ounce obligation. GEOs from
the Rest of World were 18,775 GEOs during the quarter.
- Karma (fixed gold deliveries & 4.875% gold stream) –
True Gold, the operator of Karma, has been acquired by Endeavour
Mining. 2,500 GEOs were delivered in the quarter with
one month of deliveries to be carried into the third quarter
2016. The additional 1,250 GEOs will contribute to revenue in
the third quarter 2016.
- Ity (1.5% capped NSR) – Endeavour Mining also now owns
the Ity mine in Cote d'Ivoire and
reported an expansion of reserves.
- Sissingué (0.5% NSR) – Also in Cote d'Ivoire, Perseus Mining announced plans
for the full-scale development of its Sissingué project with first
production expected in late 2017.
- Duketon (2% NSR) – Regis Resources has announced reserve
increases at its Duketon belt projects.
- Tasiast (2% NSR) – Kinross announced that the suspension of
mining and processing operations at the Tasiast mine has been
resolved and that operations will resume in August.
Kinross continues to advance
development of the Tasiast Phase One expansion.
- Subika (2% NSR) – Newmont Mining is expected to make a
decision in the second half of 2016 regarding an Ahafo mill
expansion and the underground development of Subika.
- Oil & Gas: Revenue from oil & gas assets was
$7.8 million in the second quarter
2016 compared with $10.3 million in
the second quarter 2015. Production remains relatively
stable.
Dividend Declaration
Franco-Nevada is pleased to
announce that its Board of Directors has declared a quarterly
dividend of $0.22 per share.
The dividend will be paid on September 29,
2016 to shareholders of record on September 15, 2016. The Canadian dollar
equivalent is determined based on the noon rate posted by the Bank
of Canada on August 5, 2016. Under Canadian tax legislation,
Canadian resident individuals who receive "eligible dividends" are
entitled to an enhanced gross-up and dividend tax credit on such
dividends.
The Company adopted a Dividend Reinvestment Plan ("DRIP")
commencing with the October 2013
dividend. Participation in the DRIP is optional. The Company will
issue the additional common shares through treasury at a 3%
discount to the Average Market Price, as defined in the DRIP.
However, the Company may, from time to time, in its discretion,
change or eliminate the discount applicable to treasury
acquisitions or direct that such common shares be purchased in
market acquisitions at the prevailing market price, any of which
would be publicly announced. The DRIP and enrollment forms are
available on the Company's website at www.franco-nevada.com.
Registered shareholders may also enroll in the DRIP online through
the plan agent's self-service web portal at
www.investorcentre.com/franco-nevada. Beneficial shareholders
should contact their financial intermediary to arrange
enrollment.
This press release is not an offer to sell or a solicitation of
an offer of securities. A registration statement relating to the
DRIP has been filed with the U.S. Securities and Exchange
Commission and may be obtained under the Company's profile on the
U.S. Securities and Exchange Commission's website at
www.sec.gov.
Shareholder Information
The complete Condensed Interim Consolidated Financial Statements
and Management's Discussion and Analysis can be found today on
Franco-Nevada's website at www.franco-nevada.com, on SEDAR at
www.sedar.com and on EDGAR at www.sec.gov.
Management will host a conference call tomorrow, Tuesday, August 9, 2016 at 10:00 a.m. Eastern Time to review Franco-Nevada's
second quarter 2016 results. Interested investors are invited to
participate as follows:
- Via Conference Call: Toll-Free: (888) 231-8191;
International: (647) 427-7450
- Conference Call Replay until August
16: Toll-Free (855) 859-2056; International (416)
849-0833; Pass code 46496274
- Webcast: A live audio webcast will be accessible at
www.franco-nevada.com
Corporate Summary
Franco-Nevada Corporation is the leading gold-focused royalty
and stream company with the largest and most diversified portfolio
of cash-flow producing assets. Its business model provides
investors with gold price and exploration optionality while
limiting exposure to many of the risks of operating companies.
Franco-Nevada is debt free and
uses its free cash flow to expand its portfolio and pay dividends.
It trades under the symbol FNV on both the Toronto and New
York stock exchanges. Franco-Nevada is the gold investment that works.
Forward Looking Statements
This press release contains "forward looking information" and
"forward looking statements" within the meaning of applicable
Canadian securities laws and the United States Private Securities
Litigation Reform Act of 1995, respectively, which may include, but
are not limited to, statements with respect to future events or
future performance, management's expectations regarding
Franco-Nevada's growth, results of operations, estimated future
revenues, carrying value of assets, future dividends and
requirements for additional capital, mineral reserve and mineral
resource estimates, production estimates, production costs and
revenue, future demand for and prices of commodities, expected
mining sequences, business prospects and opportunities. In
addition, statements (including data in tables) relating to
reserves and resources and gold equivalent ounces ("GEOs") are
forward looking statements, as they involve implied assessment,
based on certain estimates and assumptions, and no assurance can be
given that the estimates and assumptions are accurate and that such
reserves and resources and GEOs will be realized. Such forward
looking statements reflect management's current beliefs and are
based on information currently available to management. Often, but
not always, forward looking statements can be identified by the use
of words such as "plans", "expects", "is expected", "budgets",
"scheduled", "estimates", "forecasts", "predicts", "projects",
"intends", "targets", "aims", "anticipates" or "believes" or
variations (including negative variations) of such words and
phrases or may be identified by statements to the effect that
certain actions "may", "could", "should", "would", "might" or
"will" be taken, occur or be achieved. Forward looking statements
involve known and unknown risks, uncertainties and other factors,
which may cause the actual results, performance or achievements of
Franco-Nevada to be materially different from any future results,
performance or achievements expressed or implied by the forward
looking statements. A number of factors could cause actual events
or results to differ materially from any forward looking statement,
including, without limitation: fluctuations in the prices of the
primary commodities that drive royalty and stream revenue (gold,
platinum group metals, copper, nickel, uranium, silver, iron-ore
and oil and gas); fluctuations in the value of the Canadian and
Australian dollar, Mexican peso, and any other currency in which
revenue is generated, relative to the U.S. dollar; changes in
national and local government legislation, including permitting and
licensing regimes and taxation policies and the enforcement
thereof; regulatory, political or economic developments in
any of the countries where properties in which Franco-Nevada holds
a royalty, stream or other interest are located or through which
they are held; risks related to the operators of the properties in
which Franco-Nevada holds a royalty, stream or other interest,
including changes in the ownership and control of such operators;
influence of macroeconomic developments; business opportunities
that become available to, or are pursued by Franco-Nevada; reduced
access to debt and equity capital; litigation; title, permit or
license disputes related to interests on any of the properties in
which Franco-Nevada holds a royalty, stream or other interest;
whether or not the Corporation is determined to have "passive
foreign investment company" ("PFIC") status as defined in Section
1297 of the United States Internal Revenue Code of 1986, as
amended; potential changes in Canadian tax treatment of offshore
streams; excessive cost escalation as well as development,
permitting, infrastructure, operating or technical difficulties on
any of the properties in which Franco-Nevada holds a royalty,
stream or other interest; actual mineral content may differ from
the reserves and resources contained in technical reports; rate and
timing of production differences from resource estimates, other
technical reports and mine plans; risks and hazards associated with
the business of development and mining on any of the properties in
which Franco-Nevada holds a royalty, stream or other interest,
including, but not limited to unusual or unexpected geological and
metallurgical conditions, slope failures or cave-ins, flooding and
other natural disasters, terrorism, civil unrest or an outbreak of
contagious diseases; and the integration of acquired assets. 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 in which Franco-Nevada holds a royalty, stream or other
interest 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 that underlie the asset portfolio; the Corporation's
ongoing income and assets relating to determination of its PFIC
status; no material changes to existing tax treatment; no adverse
development in respect of any significant property in which
Franco-Nevada holds a royalty, stream or other interest; the
accuracy of publicly disclosed expectations for the development of
underlying properties that are not yet in production; integration
of acquired assets; and the absence of any other factors that could
cause actions, events or results to differ from those anticipated,
estimated or intended. However, there can be no assurance that
forward looking statements will prove to be accurate, as actual
results and future events could differ materially from those
anticipated in such statements. Investors are cautioned that
forward looking statements are not guarantees of future
performance. Franco-Nevada cannot
assure investors that actual results will be consistent with these
forward looking statements and investors should not place undue
reliance on forward looking statements due to the inherent
uncertainty therein. For additional information with respect
to risks, uncertainties and assumptions, please refer to the "Risk
Factors" section of Franco-Nevada's most recent Annual Information
Form filed with the Canadian securities regulatory authorities
on www.sedar.com and Franco-Nevada's most recent
Annual Report filed on Form 40-F filed with the SEC on
www.sec.gov. 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.
NON-IFRS MEASURES: Adjusted Net Income and Adjusted
EBITDA are intended to provide additional information only and do
not have any standardized meaning prescribed under IFRS and should
not be considered in isolation or as a substitute for measures of
performance prepared in accordance with IFRS. These measures
are not necessarily indicative of operating profit or cash flow
from operations as determined under IFRS. Other companies may
calculate these measures differently. For a reconciliation of these
measures to various IFRS measures, please see below or the
Company's current MD&A disclosure found on the Company's
website, on SEDAR and on EDGAR.
(1)
|
GEOs include our
gold, silver, platinum, palladium and other mineral assets. GEOs
are estimated on a gross basis for NSR royalties and, in the case
of stream ounces, before the payment of the per ounce contractual
price paid by the Company. For NPI royalties, GEOs are calculated
taking into account the NPI economics. Platinum, palladium, silver
and other minerals were converted to GEOs by dividing associated
revenue, which includes settlement adjustments, by the average gold
price for the period. For Q2 2016, the average commodity prices
were as follows: $1,259/oz gold (2015 - $1,193/oz); $17.17/oz
silver (2015 - $16.41/oz); $1,004/oz platinum (2015 - $1,127/oz)
and $568/oz palladium (2015 -
$760/oz).
|
(2)
|
Adjusted Net Income and
Adjusted Net Income per share are non-IFRS financial measures,
which exclude the following from net income and earnings per share
("EPS"): foreign exchange gains/losses and other income/expenses;
gains/losses on the sale of investments; impairment charges related
to royalty, stream and working interests and investments; unusual
non-recurring items and; impact of income taxes on these
items.
|
(3)
|
Adjusted EBITDA and
Adjusted EBITDA per share are non-IFRS financial measures,
which exclude the following from net income and EPS: income tax
expense/recovery; finance expenses; finance income; depletion and
depreciation; non-cash costs of sales; impairment charges related
to royalty, stream and working interests and investments;
gains/losses on the sale of investments and; foreign exchange
gains/losses and other
income/expenses.
|
Reconciliation to IFRS measures:
|
Three months ended June
30,
|
(expressed in millions,
except per share
amounts)
|
|
2016
|
|
2015
|
Net Income
(Loss)
|
$
|
42.3
|
$
|
21.6
|
|
Income tax expense
(recovery)
|
|
11.3
|
|
11.3
|
|
Finance
expenses
|
|
0.8
|
|
0.5
|
|
Finance
income
|
|
(1.0)
|
|
(1.1)
|
|
Depletion and
depreciation
|
|
68.2
|
|
49.1
|
|
Non-cash costs of
sales
|
|
1.7
|
|
2.2
|
|
Impairment
charges
|
|
-
|
|
-
|
|
|
|
|
|
|
Gains/losses on sale of
investments
|
|
(2.8)
|
|
(0.9)
|
|
Foreign exchange
(gains)/losses and other
(income)/expenses
|
|
(1.6)
|
|
(0.5)
|
Adjusted
EBITDA
|
$
|
118.9
|
$
|
82.2
|
|
Basic Weighted Average
Shares
Outstanding
|
|
177.8
|
|
156.7
|
Adjusted EBITDA per
share
|
$
|
0.67
|
$
|
0.53
|
|
|
|
|
|
Three months ended June
30,
|
(expressed in millions,
except per share
amounts)
|
|
2016
|
|
2015
|
Net Income
(Loss)
|
$
|
42.3
|
$
|
21.6
|
|
Foreign exchange
(gains)/losses and other (Income)/expenses, net of income
tax
|
|
0.5
|
|
(0.4)
|
|
Mark to market change on
derivatives, net of income
tax
|
|
-
|
|
0.1
|
|
Gain on sale of
investments, net of income
tax
|
|
(2.5)
|
|
(0.6)
|
|
Impairment charges, net of
income
tax
|
|
-
|
|
-
|
|
Indexation
adjustment
|
|
-
|
|
-
|
|
Valuation
allowance
|
|
(0.6)
|
|
-
|
|
Impact of tax
increases
|
|
0.3
|
|
2.2
|
Adjusted Net
Income
|
$
|
40.0
|
$
|
22.9
|
Basic Weighted Average
Shares
Outstanding
|
|
177.8
|
|
156.7
|
|
|
|
|
|
Adjusted Net Income per
share
|
$
|
0.22
|
$
|
0.15
|
|
|
|
|
|
FRANCO-NEVADA
CORPORATION
|
CONSOLIDATED STATEMENTS
OF FINANCIAL
POSITION
|
(unaudited, in millions of
U.S.
dollars)
|
|
|
|
|
|
|
|
|
|
|
|
June 30,
2016
|
December 31,
2015
|
|
|
|
|
|
ASSETS
|
|
|
|
|
Cash and cash equivalents
(Note
4)
|
$
|
225.8
|
$
|
149.2
|
Short-term investments
(Notes 5 &
8)
|
|
-
|
|
18.8
|
Receivables (Note
8)
|
|
56.4
|
|
65.1
|
Prepaid expenses and other
(Note
6)
|
|
36.2
|
|
41.6
|
Current
assets
|
|
318.4
|
|
274.7
|
|
|
|
|
|
Royalty, stream and working
interests,
net
|
|
3,720.0
|
|
3,257.5
|
Investments (Notes 5 &
8)
|
|
123.4
|
|
94.8
|
Deferred income tax
assets
|
|
18.8
|
|
16.1
|
Other assets (Note
7)
|
|
29.3
|
|
31.2
|
|
|
|
|
|
Total
assets
|
$
|
4,209.9
|
$
|
3,674.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES
|
|
|
|
|
Accounts payable and
accrued
liabilities
|
$
|
19.3
|
$
|
18.0
|
Current income tax
liabilities
|
|
2.9
|
|
2.8
|
Current
liabilities
|
|
22.2
|
|
20.8
|
|
|
|
|
|
Debt (Note
13)
|
|
-
|
|
457.3
|
Deferred income tax
liabilities
|
|
29.8
|
|
33.2
|
Total
liabilities
|
|
52.0
|
|
511.3
|
|
|
|
|
|
SHAREHOLDERS' EQUITY
(Note
14)
|
|
|
|
|
Common
shares
|
|
4,643.9
|
|
3,709.0
|
Contributed
surplus
|
|
42.0
|
|
44.3
|
Deficit
|
|
(307.7)
|
|
(302.2)
|
Accumulated other
comprehensive
loss
|
|
(220.3)
|
|
(288.1)
|
Total shareholders'
equity
|
|
|
4,157.9
|
|
3,163.0
|
|
|
|
|
|
Total liabilities and
shareholders'
equity
|
$
|
4,209.9
|
$
|
3,674.3
|
|
|
|
|
|
The accompanying notes
are an integral part of these interim consolidated financial
statements and can
be found in our Q2 2016 Report available on our
website
|
FRANCO-NEVADA
CORPORATION
|
CONSOLIDATED STATEMENTS
OF INCOME AND COMPREHENSIVE INCOME
(LOSS)
|
(unaudited, in millions of
U.S. dollars, except per share
amounts)
|
|
|
|
For the three months
ended June
30,
|
|
For the six months
ended June
30,
|
|
2016
|
2015
|
|
2016
|
2015
|
|
|
|
|
|
|
|
|
|
|
Revenue (Note
9)
|
$
|
150.9
|
$
|
109.4
|
|
$
|
282.9
|
$
|
218.6
|
|
|
|
|
|
|
|
|
|
|
Costs and
expenses
|
|
|
|
|
|
|
|
|
|
|
Costs of sales (Note
10)
|
|
27.7
|
|
24.0
|
|
|
52.1
|
|
46.4
|
|
Depletion and
depreciation
|
|
68.2
|
|
49.1
|
|
|
133.7
|
|
100.8
|
|
Impairment of royalty,
stream and working
interests
|
|
-
|
|
-
|
|
|
-
|
|
0.1
|
|
Corporate administration
(Notes 11 &
14(c))
|
|
5.7
|
|
4.1
|
|
|
11.1
|
|
8.2
|
|
Business
development
|
|
0.3
|
|
1.3
|
|
|
0.6
|
|
1.8
|
|
|
101.9
|
|
78.5
|
|
|
197.5
|
|
157.3
|
|
|
|
|
|
|
|
|
|
|
|
Operating
income
|
|
49.0
|
|
30.9
|
|
|
85.4
|
|
61.3
|
|
|
|
|
|
|
|
|
|
|
|
Foreign exchange gain
(loss) and other income (expenses) (Note
5)
|
|
4.4
|
|
1.4
|
|
|
6.3
|
|
(1.2)
|
Income before finance items
and income
taxes
|
|
53.4
|
|
32.3
|
|
|
91.7
|
|
60.1
|
|
|
|
|
|
|
|
|
|
|
Finance
items
|
|
|
|
|
|
|
|
|
|
|
Finance
income
|
|
1.0
|
|
1.1
|
|
|
2.1
|
|
1.9
|
|
Finance
expenses
|
|
(0.8)
|
|
(0.5)
|
|
|
(2.1)
|
|
(0.9)
|
Net income before income
taxes
|
|
53.6
|
|
32.9
|
|
|
91.7
|
|
61.1
|
|
|
|
|
|
|
|
|
|
|
Income tax expense (Note
12)
|
|
11.3
|
|
11.3
|
|
|
19.4
|
|
20.3
|
|
|
|
|
|
|
|
|
|
|
Net
income
|
$
|
42.3
|
$
|
21.6
|
|
$
|
72.3
|
$
|
40.8
|
|
|
|
|
|
|
|
|
|
|
Other comprehensive
income
(loss):
|
|
|
|
|
|
|
|
|
|
Items that
may be reclassified subsequently to profit and
loss:
|
|
|
|
|
|
|
|
|
|
|
Unrealized gain (loss) in
the market value of
available-for-sale
|
|
|
|
|
|
|
|
|
|
|
investments, net of income
tax expense of $0.3, (2015 -income
tax
|
|
|
|
|
|
|
|
|
|
|
expense of $0.4), income tax expense of $0.5
(2015-income
tax
|
|
|
|
|
|
|
|
|
|
|
recovery of $0.7) (Note
5)
|
|
10.8
|
|
2.3
|
|
|
26.6
|
|
(4.4)
|
|
Realized change in market
value of available-for-sale
investments
|
|
(2.8)
|
|
(0.9)
|
|
|
(4.3)
|
|
(0.9)
|
|
Currency translation
adjustment
|
|
(4.0)
|
|
14.7
|
|
|
45.5
|
|
(74.5)
|
|
Other comprehensive income
(loss)
|
|
4.0
|
|
16.1
|
|
|
67.8
|
|
(79.8)
|
|
|
|
|
|
|
|
|
|
|
Total comprehensive
income
(loss)
|
$
|
46.3
|
$
|
37.7
|
|
$
|
140.1
|
$
|
(39.0)
|
|
|
|
|
|
|
|
|
|
|
Basic earnings per
share (Note
15)
|
$
|
0.24
|
$
|
0.14
|
|
$
|
0.41
|
$
|
0.26
|
Diluted earnings per
share (Note
15)
|
$
|
0.24
|
$
|
0.14
|
|
$
|
0.41
|
$
|
0.26
|
|
|
|
|
|
|
|
|
|
|
The accompanying notes
are an integral part of these interim consolidated financial
statements and can be found in our
Q2 2016 Report available on our
website
|
FRANCO-NEVADA
CORPORATION
|
CONSOLIDATED STATEMENTS OF CASH
FLOWS
|
(unaudited, in millions of U.S.
dollars)
|
For the six months ended June
30,
|
|
2016
|
2015
|
Cash flows from operating
activities
|
|
|
|
|
Net
income
|
$
|
72.3
|
$
|
40.8
|
Adjustments to reconcile net income to net cash
provided
|
|
|
|
|
|
by operating
activities:
|
|
|
|
|
|
Depletion and
depreciation
|
|
133.7
|
|
100.8
|
|
Other non-cash
items
|
|
(0.8)
|
|
0.2
|
|
Gain on sale of investments (Note
5)
|
|
(4.3)
|
|
(0.9)
|
|
Non-cash costs of sales (Note
10)
|
|
3.5
|
|
3.3
|
|
Deferred income tax expense (Note
12)
|
|
2.3
|
|
6.9
|
|
Share-based payments (Note
14(c))
|
|
2.4
|
|
2.7
|
|
Unrealized foreign exchange
loss
|
|
0.2
|
|
1.8
|
|
Mark-to-market on warrants (Note
5)
|
|
-
|
|
0.3
|
|
|
209.3
|
|
155.9
|
|
|
|
|
|
|
Changes in non-cash assets and
liabilities:
|
|
|
|
|
|
|
Decrease in
receivables
|
|
8.7
|
|
20.9
|
|
|
Increase in prepaid expenses and
other
|
|
(38.0)
|
|
(43.0)
|
|
|
Increase (decrease) in current
liabilities
|
|
1.4
|
|
(4.3)
|
Net cash provided by operating
activities
|
|
181.4
|
|
129.5
|
|
|
|
|
|
Cash flows from investing
activities
|
|
|
|
|
|
Proceeds from sale of
investments
|
|
23.6
|
|
24.7
|
|
Acquisition of
investments
|
|
(1.6)
|
|
(76.3)
|
|
Proceeds from sale of gold
bullion
|
|
46.1
|
|
26.9
|
|
Acquisition of royalty, stream and working
interests
|
|
(555.7)
|
|
(20.7)
|
|
Purchase of oil & gas well
equipment
|
|
(1.3)
|
|
(1.5)
|
Net cash used in investing
activities
|
|
(488.9)
|
|
(46.9)
|
|
|
|
|
|
Cash flows from financing
activities
|
|
|
|
|
|
Net proceeds from issuance of common shares (Note
14)
|
|
883.5
|
|
-
|
|
Repayment of Credit Facility (Note
13)
|
|
(460.0)
|
|
-
|
|
Credit facility amendment
costs
|
|
-
|
|
(1.2)
|
|
Payment of dividends (Note
14(b))
|
|
(57.5)
|
|
(47.2)
|
|
Proceeds from exercise of stock options (Note
14(a))
|
|
15.6
|
|
0.5
|
Net cash provided by (used in) financing
activities
|
|
381.6
|
|
(47.9)
|
Effect of exchange rate changes on cash and cash
equivalents
|
|
2.5
|
|
(16.4)
|
Net change in cash and cash
equivalents
|
|
76.6
|
|
18.3
|
Cash and cash equivalents at beginning of
period
|
|
149.2
|
|
592.5
|
Cash and cash equivalents at end of
period
|
$
|
225.8
|
$
|
610.8
|
|
|
|
|
|
Supplemental cash flow
information:
|
|
|
|
|
Cash paid for interest expense and loan standby fees
during the
period
|
$
|
1.8
|
$
|
0.7
|
Income taxes paid during the
period
|
$
|
21.4
|
$
|
20.9
|
|
|
|
|
|
The accompanying notes are an integral part of
these interim consolidated financial statements and can
be found in our Q2 2016 Report available on our
website
|
SOURCE Franco-Nevada Corporation