Good morning, ladies and gentlemen. My name is Aaron, and I will be your operator today. At this time, I'd like to welcome everyone to the Franco-Nevada Corporation 2014 Second Quarter Results Conference Call. [Operator Instructions] I'd like to turn the call over to Mr. Stefan Axell, Director of Corporate Affairs. Mr. Axell, you may begin.

Thank you, Aaron. Good morning, everyone. We are pleased that you have joined us today for the Franco-Nevada second quarter 2014 results conference call. Accompanying our call today is a brief presentation, which is available on our website, where you'll also find our full MD&A and financial results. Before we begin formal remarks, we would like to remind participants that some of today's commentary may contain forward-looking information and I refer you to our detailed cautionary note on Slide 2 of our presentation. I will now turn the call over to Sandip Rana, CFO of Franco-Nevada, who will review our Q2 results, with our entire management team present during the Q&A period for any questions that you may have. Sandip?

Thank you, Stefan. Good morning, everyone. As you will have seen from the press release issued yesterday, the company had another solid quarter, which highlighted the diversification of our portfolio with strong contributions from our oil and gas division. In addition, our overall mineral royalty and stream operations continued to perform well. Turning to Slide 3, you will see 2 charts on the page. The first chart highlights the average gold price for each of the last 5 quarters. As you can see, it has been an overall a steady decline with the Q2 2014 gold price averaging $1,289 per ounce. This is an 8.8% decrease from Q2 2013 when the gold price averaged $1,414 per ounce. The first 6 months of 2014 continued to be a volatile period for the gold price with it trading as low as $1,221 per ounce and as high as $1,385 per ounce during the period. Platinum prices were also slightly lower in the quarter, with the average price being $1,447 per ounce. On the positive side, average prices for both palladium and oil were higher in the quarter compared to Q2 2013. Palladium was higher with the average price increasing by 14% to $815 per ounce. Oil also averaged higher during the quarter, with the price per barrel being over $100 per barrel. The volatility in commodity prices does impact the company's mineral asset revenue, which does not necessarily highlight the strength of the portfolio. As a result, beginning last year, we began reporting gold equivalent ounces as we believe this is a better metric for measuring the performance of our assets. As you can see on the bottom chart on Slide 3, the gold equivalent ounces, which we also refer to as GEOs, received by the company increased 15.4% to 64,734 GEOs…

[Operator Instructions] And your first question comes from the line of Andrew Quail from Goldman Sachs.

I've got a couple. Just on Palmarejo, when do you expect contribution from the new 50% gold stream to start? From the underground? And do you sort of see a minimum attributable ounces coming from the stream?

Andrew, it's David Harquail here. The way it works is the existing Palmarejo stream arrangement continues until the 400,000 ounces minimum is delivered to us, and then effectively, we convert into what we call the Guadalupe new arrangement. We expect that to occur sometime in August through September of 2016 is when we'll be doing the conversion. Right now, there's no change in the existing Palmarejo economics. It'll change effectively on the entire property starting once we've received our 400,000 ounces.

Okay. And obviously, a very strong quarter on Weyburn unit. And you mentioned that, obviously, [indiscernible] there was some volatility. Should we sort of expect sort of more normalized -- that Q2 '14 is a number we can expect is something we can model going forward?

With respect to going forward, Q2 '14, we had less capital spend. And that's mainly due to the harsh winter and the extent of breakup we had out in southeast Saskatchewan. So I'd say it was an exceptional quarter. I would expect that we'd have higher capital spend coming up in the upcoming quarters.

And that's Jeff Waterman speaking, who runs our oil and gas operations.

It's somewhere between the two, '13 and '14 Q2?

It's somewhere between the 2, yes.

Yes, yes. And last one, guys, just on tax, right? Significantly lower than Q2 '13. I know it's hard to sort of give some guidance. But is there anything you guys sort of think would be your effective tax rate sort of from here?

Yes. So we sort of estimate on a normal basis without any unusual inflation factors, because Mexico is a bit unusual, up 27%. And as we add additional assets and streams, we expect the tax rate to decrease. But for now, we project 27%.

[Operator Instructions] Your next question comes from the line of Cosmos Chiu from CIBC.

Maybe going back first to Palmarejo here. Looking through the press release today, you still call it a letter of intent to sort of change the royalty stream agreements. When will we expect it to get finalized? Are there any other steps that we should watch out for?

It's Lloyd here. We're looking towards getting the definitive agreements finalized and executed before the end of Q3.

Okay. So it's just mostly working through the paperwork and things like that? Nothing extraordinary in terms of what else needs to be done?

That's right. I mean, we've agreed on all the principal commercial terms, so it's just a matter of papering it now.

Okay. And then maybe stepping back. If we can -- maybe give us some more color in terms of maybe how the renegotiation started between Franco-Nevada and Coeur Mining. Was it Coeur that approached Franco? And what factors did Franco sort of consider in agreeing to the new terms?

Cosmos, it's -- we've been close to the mine since we made our investment back in early 2009. And we sort of watched the progression. I guess that in our minds, it was inevitable. We'd have to do some sort of adjustment because in order to have more capital to be invested in the property by the operator, there had to be some return to them. So we're watching in terms of what the economics were with the gold and silver prices. And in terms of capital for the new project, we were just always open when Coeur finally approached us. I think what really we needed was a definitive capital plan from Coeur. And so we've had some discussions earlier. They just had to decide really what was their development plan, especially the Guadalupe portion of the project. When they were able to make some commitments in terms of what that plan might look like, it made it very easy to do the adjustment to the formulas that we had on that property. So it was really just Coeur making a final call on how they wanted to advance and extend the life of the operation. Once we had that, it was easy to cut the deal.

Yes, of course. That's great. And maybe if I can switch gears a little bit, going to the audit at Hemlo, can you maybe give us a bit more color in terms of what happened? Certainly it sounds like there was some back payments, some underpayment in past quarters. And is there any kind of read-through to other sort of Barrick-operated royalties as well?

No. So because Hamilton is a component of an NSR and an NPI. And so with an NPI, you get operating cost deductions, you get capital cost deductions. And so it was just a case of negotiating with Barrick as to what's allowed to be deductible under the NPI. And it was going on for a bit of time. We finally agreed upon what's permissible. And it was just a catch-up payment related to that. And the other NPI we have is, obviously, Goldstrike's -- the NPI there. But that's been in existence for quite some time, and we're pretty consistent on how we proceed, in terms of deductions there, so no issues there right now.

Okay, great. And then maybe one last question. Maybe, David, could you maybe talk a little bit about your relationship with First Quantum? As we saw, First Quantum is now looking into acquiring Lumina Copper, and of course, Franco-Nevada also has a royalty on Lumina Copper's key asset. How would you characterize that relationship? Is it -- does that help that now there's more of a linkage alongside Lumina Copper as well?

Well, I like to joke we're the business development department for First Quantum since we seem to invest in projects before they do. We're just -- we're happy. I think it's a vindication of Taca Taca [ph], we think will be a great mine. We invested in that about 2 years ago. And now -- so we'll have an NSR and we think it'll be something sequential to Cobre Panama. And right now, with First Quantum, I think all the discussions are constructive. We've had another meeting with them recently. We're in discussions, I think -- one of the things -- there's certain dynamics in terms of there's other partners involved in Cobre Panama, we want to make it easier for us to negotiate something once we know what they elect to do going forward. So I still fully expect that we'll have a pragmatic new agreement with First Quantum in terms of -- that's effective for both them and ourselves before the end of the year. So there's nothing pressing on that matter right now. And as I say, it's a constructive relationship.

Your next question comes from the line of Greg Barnes from TD Securities.

Dave, I guess as a general question, we haven't seen a big streaming deal done in quite a while now. I think it sounds like there are a few hovering out there. But are there pressure or is there pressure on the terms? Are the vendors wanting higher payments than $400 an ounce? Do they want more value returned to them? Just wondering how things are evolving on that front?

Greg, I'm going to let Paul Brink address that.

Hey, Greg. I'd say overall, in terms of the environment, I'd say it's business as usual. And there are -- we're seeing deals that are royalty deals. There are opportunities that are the bigger byproduct-type streams. And then also transactions that are financing gold development companies into production. And I think there are good opportunities across the board. I'd say if there's anything different in this environment, it's really the shortage of debt and equity capital for the gold developers, which has really given us an additional area for growth. So we're working on all of those fronts. I'd say overall, in any transaction when you're negotiating terms, people are trying to get the best deal for them. But I don't think there's any significant change over time in terms of what the ultimate package looks like and what we think we can get as a long-term return on deals.

Just looking at the Palmarejo deal, you've changed that one, obviously. The payment going forward, I think, is $800 an ounce. I think, if I'm not mistaken. But seems to be some pressure on that payment, upward pressure.

Yes, I would say that was really specific to the particular transaction. And it was recognizing the sort of residual deposit on that property and what the economics are on that particular deposit. I don't think it's a change to the way that we think about stream deals and that ongoing price in general. You'll see on other deals that transfer price as being 20% of the spot price, which is effectively lower than the $400 per ounce in this environment. So I don't think it's -- that in itself is a driver of the returns long-term.

[Operator Instructions] And we're showing no further questions in the queue. I'll turn the call back over to the presenters.

Thank you, Aaron. Just a reminder, we plan to release our Q3 results on November 6 after market close with a conference call the following morning. And we want to thank you for your continued interest in Franco-Nevada.

This concludes today's conference call. You may now disconnect.