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In Q1/19, Royalty, Streaming Firm 'Delivers Even in a Poor Gold Market'
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A summary of the company's first quarter results were provided in an iA Securities report.

In a May 9, research note, iA Securities analyst George Topping reported that with a strong Q1/19, Franco-Nevada Corp. (FNV:TSX; FNV:NYSE) "continues to demonstrate that it can deliver even in a poor gold market."

Topping highlighted that the company achieved a beat during Q1/19 with respect to gold equivalent ounces (GEOs) added to its portfolio, EBITDA and cash flow per share (CFPS).

GEOs totaled 122,000 (122 Koz), exceeding iA's forecast of 105 Koz and representing a 16% quarter-over-quarter (QOQ) increase. Outperformance in Latin America and Canada drove this result.

EBITDA came in at $141 million, compared to consensus' estimate of $132 million. CFPS was $0.72 whereas consensus had projected $0.65 per share.

Q1/19 revenue for Franco-Nevada was $180 million, up 13% QOQ.

The recovery continues at Candelaria, and Cobre Panama is "coming online," Topping noted. As Cobre Panama ramps up to steady state production over the next five years, GEOs for Franco-Nevada should grow by an average of 6–7% annually, iA Securities estimated.

In other news, Topping indicated, the company's current chair, Pierre Lassonde, will leave the position as of Franco-Nevada's 2020 annual general meeting.

IA Securities has a Buy rating and a CA$115 per share target price on Franco-Nevada, whose stock is currently trading at around CA$94.78 per share.


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Disclosures from iA Securities, Franco-Nevada Corp., Research Update, May 9, 2019

Conflicts of Interest: The research analyst and or associates who prepared this report are compensated based upon (among other factors) the overall profitability of iA Securities, which may include the profitability of investment banking and related services. In the normal course of its business, iA Securities may provide financial advisory services for the issuers mentioned in this report. iA Securities may buy from or sell to customers the securities of issuers mentioned in this report on a principal basis.

Analyst's Certification: Each iA Securities research analyst whose name appears on the front page of this research report hereby certifies that (i) the recommendations and opinions expressed in the research report accurately reflect the research analyst's personal views about the issuer and securities that are the subject of this report and all other companies and securities mentioned in this report that are covered by such research analyst and (ii) no part of the research analyst's compensation was, is, or will be directly or indirectly, related to the specific recommendations or views expressed by such research analyst in this report.

Analyst Trading: iA Securities permits analysts to own and trade in the securities and or the derivatives of the issuer under their research coverage, subject to the following restrictions. No trades can be executed in anticipation of coverage for a period of 30 days prior to the issuance of the report and 5 days after the dissemination of the report to our clients. For a change in recommendation, no trading is allowed for a period of 24 hours after the dissemination of such information to our clients. A transaction against an analyst's recommendation can only be executed for a reason unrelated to the outlook of the stock for the issuer and with the prior approval of the Director of Research and the Chief Compliance Officer.

Company Related Disclosures:
Franco-Nevada: The analyst has visited the issuer's operations. No payment or reimbursement was received from the issuer for the associated travel costs.

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