Good morning, ladies and gentlemen, and welcome to the Franco-Nevada Corporation Q1 2021 Results Conference Call. [Operator Instructions]. I would now like to turn the conference over to your host, Jason [indiscernible]. Please go ahead.

Thank you, Chris. Good morning, everyone. Thank you for joining us today to discuss Franco-Nevada's First Quarter 2021 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. Paul Brink, President and CEO of Franco-Nevada, will provide some introductory remarks, followed by Sandip Rana, CFO of Franco-Nevada, who will provide a brief review of our results. This will be followed by a Q&A period. Our full executive team are available to answer any questions. We would like to remind participants that some of today's commentaries may contain forward-looking information, and we refer you to our detailed cautionary note on Slide 2 of this presentation. I will now turn the call over to Paul Brink, President and CEO of Franco-Nevada.

Thanks, Jason. Good morning. Our diversified portfolio outperformed in the first quarter, generating record revenues and near record margins, an 85% adjusted EBITDA margin and a 52% adjusted net income margin. Gold equivalent ounces for the quarter were ahead of our expectations. Strong deliveries from Antamina, ongoing ramp-up at Cobre Panama, and leverage to gold prices at Hemlo made for the largest increases over Q1 2020. As we progress through the year, we expect higher contributions from each of Cobre Panama and Candelaria due to increased throughput and high grades, respectively. Energy revenues for the quarter were well ahead of our guided annual run rate. A strong initial contribution from Haynesville, some high interest wells in the Permian and higher energy prices were the drivers. We're committed to ensuring that Franco-Nevada is the gold investment that works for all our stakeholders, including our shareholders, our operating partners and our communities. Along with our asset handbook, we recently published our annual ESG report. Highlights of the ESG report are our sector-leading rankings, promoting responsible mining through our capital allocation, ongoing contribution to communities and our increased commitment to diversity in our Board and top leadership. During the quarter, we added two attractive precious metal assets, a royalty on Roxgold, Séguéla gold development project in Côte d'Ivoire and a precious metal stream on the Condestable copper mine in Peru. Both assets with excellent upside potential. We were delighted post quarter end to acquire a tranche of Vale Iron Ore Royalty Debentures. With royalty, the Vale interest, along with our Labrador Iron Ore Royalty Company investment add to our base of low-risk, long-life cash flows and further enhances diversity of our portfolio. With the additions, the portfolio remains more than 8% precious metal focused. Our recently published asset handbook highlights the year-on-year growth…

Thanks, Paul. Good morning, everyone. First quarter 2021 continued to build on the positive momentum that Franco-Nevada ended 2020 with. Our royalty and stream portfolio continues to perform well and ahead of expectations. Although the gold price in first quarter of 2021 was a little weaker than fourth quarter, Franco-Nevada still delivered a very strong financial quarter with record revenue and record adjusted EBITDA. On Slide 3, we have highlighted the gold and gold equivalent ounces sold for the 3 months ended March 31, 2021 and 2020. Overall, GEOs sold increased over 10% compared to prior year, with Q1 2021 GEOs sold being 149,575. We had a number of strong contributors during the quarter; Antamina, Hemlo, Cobre Panama and Condestable. The strong performance for Antamina was a combination of higher silver deliveries along with higher silver prices during the quarter. I'd like to highlight that for Antamina, Franco-Nevada is delivered silver ounces based on a 1 quarter lag for production. For example, the silver ounces we received in Q1 2021 were related to production from Antamina for fourth quarter 2020. We anticipate silver ounce production from Antamina to be at the high end of the 2.8 million to 3.2 million range previously provided for 2021. At Hemlo, we continue to benefit from mining on our 50% NPI ground. The company recorded 11,675 GEOs sold for the quarter, of which just over 4,400 GEOs related to prior periods. We do expect mining on NPI ground to decrease in the second half of the year. Cobre Panama had a strong first quarter for Franco-Nevada with GEOs sold of 29,622, as the project continues to ramp up. The deliveries were in line with the full year 105,000 to 125,000 GEOs sold guidance we have previously provided. Finally, we were delivered our first gold…

[Operator Instructions]. Your first question comes from Tyler Langton, JPMorgan.

Just starting with the energy revenues of the $45 million in the quarter. I know you mentioned kind of benefited from production and prices. Could you give us, I guess, a sense maybe if current prices hold where they are, just kind of what sort of the revenues could look like this year, just given, obviously, you're kind of well on track to hit the guidance? Jason O’Connell: Yes. Tyler, it's Jason O’Connell here. I appreciate the question. For Q1, we did have a higher than normal revenue number for energy. Part of that number came from revenue from prior periods. If you adjust for that prior period revenue, the number for the quarter would have been closer to about $40 million or so. So we had about $5 million coming from -- really it was wells that were producing last year, but we only received payment this year. With the higher prices, we do expect to have better revenue. The prices were a bit above the $55 per barrel WTI and $2.50 per mcf prices that we used in our guidance. So we benefited from that. If prices stay elevated for the rest of the year, I would expect that we would come in a bit higher than our guidance that we provided. During our Analyst Day, we provided a bit of information around the sensitivity to commodity prices. So there is a bit of leverage associated with our energy portfolio. If prices on average are 10% higher than the guidance that we gave, the revenue should increase by about 13%. So again, if prices remain higher, we expect revenues will be higher, and there will be a bit of leverage within that revenue number.

And I mean should that -- I guess, with this production, is there anything when I think of the longer-term guidance, where this is sort of a more temporary benefit for this year? Or is it -- should we not expect that? Jason O’Connell: I would say within the -- when you look at the quarter, again, there is the benefit of that prior period revenue that I would not expect to continue going forward. In addition to that, we did have a good quarter, production or volume-wise. But we continue to think that our guidance is still relevant that we provided at the beginning of the year. So some of those assets that had a good quarter made -- the wells on some of those assets will continue to decline throughout the year. So I was just cautioning not to take the revenue from the quarter and annualize that.

Okay. Perfect. And then just a final question on Hemlo. I know -- I guess, it was around close to 12,000 of GEOs in the quarter, and there was around a 4,000-ounce benefit. I think you talked about last quarter like a 20,000- to 30,000-ounce contribution. Makes -- and I know you mentioned that, I guess, the NPI should decrease in the second half. But just given sort of the Q1 results -- I guess, could you exceed that guidance or at least hit the high end of it for the year?

I think it's still too early to narrow it at this stage of that 12,000. Obviously, as you said, there's 4,000 related to prior period. Right now, I would say we're probably going to end up in the middle of that range. But because it is an NPI, and costs do impact the payment, and as expected, there should be lower production on the land towards the end of this year or in the second half of this year. Still comfortable with that range, not in a position to narrow it at this stage.

Your next question comes from Josh Wolfson, RBC Capital Markets.

Just looking at the Vale transaction and guidance, just so I understand clearly. So in the second quarter, you're planning to accrue production that would have started from January, is that correct?

Yes, that's correct. Because we didn't own them until April 16, 2021, but we're entitled to payments for production from January 1. So for June quarter end, we will be accruing 6 months' worth of production or sales.

Okay. And then the guidance for the -- I forgot what the exact number was, 25,000 to 35,000 ounces. Did that assume production from Jan or from April?

That's a full year's production, January 1 to December 31.

Okay. Understood. And then on the sort of lift shares, thank you for that disclosure. We've always had this large short-term investment dollar amount that we could never understand what it was, which looking back at that deal, it looks like those shares were acquired -- just started to be acquired at least maybe 5-plus years ago. We didn't get this at the Analyst Day. But strategically, what's Franco thinking about this, this large share position? Obviously, the current share price is a lot higher than where it was acquired. But what's the ultimate sort of goal here for the company?

Josh, we think of the investment really just as a royalty holding. Labrador Iron Ore income fund is run with very little G&A. So it's effectively just a straight pass-through of that interest. So we're very happy just with the current position we hold. But stock has traded very well. And so not looking to acquire anymore at these prices, as you know, for our focus on adding new assets really is on the precious metal side. But it is an attractive asset. If it was ever trading at a far lower prices, we would consider adding more.

[Operator Instructions]. Your next question comes from Cosmos Chiu, CIBC.

Maybe my first question is on LatAm, Latin America, here. Certainly, the COVID-19 situation isn't great in LatAm, and a number of your assets or royalty and streams are in Latin America. For example, I think there was a bit of an outbreak at Antamina. Could you maybe comment on your understanding of the situation right now? And has it impacted you in any way so far in Q1, or I guess, we're into Q2 now? And how have you factored that in?

Cosmos, you're absolutely right. The -- Latin America has been heavily impacted by COVID. Of the assets, the only outbreak we're aware of is at Antamina, but we haven't heard anything yet in terms of that impacting production either through the first quarter this year or through the rest of the year. So to date, as far as work, they're able to manage that without impacting production.

Okay. For sure. Maybe now moving from Antamina to West Africa here. You made a number of acquisitions in the past quarter. One that didn't really get a lot of attention was Séguéla. But I think it's actually one that could have good upside potential here, although it's really small. But I guess my question is in 2 parts. The first part is, with a recent combination or proposed combination of Fortuna Silver and Roxgold, they've really talked of potential here of some of the pits, [indiscernible] and some of the other ones. I just want to confirm that the Royalty is on all the different or the entire land package?

Cosmos, this is Eaun. Yes, you're right. It does cover the mining license, which covers all of those targets and prospects.

Great. And then, Eaun, are you getting more excited now with the proposed acquisition or merger of Fortuna Silver and Roxgold, potentially now with Séguéla being part of a larger company? Do you see more upside potential from here onwards?

We love the deposit. It starts and ends in terms of geology for us. And the technical team really liked it. And so we were very happy to partner with the team at Roxgold there. And we're also very happy to see Fortuna now come into the picture. Bigger company, lots of potential. And we hope to maintain good contact and relations and would also be keen to do something bigger there if ever needed.

Of course. And then on the flip side here, now that it is within a bigger company, could you, Eaun confirm with us, I believe there's a buy down right at the Royalty. How that works and -- within a larger company now? Do you think that buy down is going to get exercised more so than previously?

Sure. And so a little bit of background. There was another pre-existing royalty that existed on the properties prior to our transaction, and it had a 100% buy down. Our deal would allow the company to buyback half at a predefined price effectively equivalent to the price at which we bought in. And that was an arrangement that worked for both parties, and we were able to do due diligence. And obviously, you see some of the great things there like Sunbird ahead of time, which made it a very compelling acquisition for us. So it's a bit of back and forth in terms of negotiation, but we cut it at 50%, and it's very possible they'll do that, but we're still happy with the royalty and being part of the project.

Of course. Maybe one last question here. And coming back to Canada here. As you mentioned, Paul, in your opening remarks, there's been a new discovery made by Agnico Eagle and Yamana at East Gouldie at Canadian Malartic. I haven't gone through your entire sort of asset handbook yet. But I'm not sure how much you can comment at this point in time. But with that new discovery potentially fall within your royalty grounds, and can you talk about the extent of your Royalty on that land package here in terms of the area?

Thanks, Cosmos. The royalty claims that we have at Canadian Malartic don't cover the full property position. We've got -- I think, it's 5 separate claim blocks that we cover into a bit of a checkerboard. One of the claims covers what is our understanding that the center of the East Gouldie deposit. The extensions that they have now made are to the east of that. We do have another claim block that falls to the east. And so it's early days, but it looks like that part of that extension may be on one of our other claims, and so we're very excited about it.

Your next question comes from Brian MacArthur, Raymond James.

I just have two questions, both related to the 5-year guidance. There was a comment made earlier in the call today about Sudbury potentially being lower than expected. And I know originally when you gave that 2025 guidance, Sudbury, the assumption was it was going to continue out then. Is that still the case? And my second question is, can you just remind me when the MWS Royalty? Is it in the 2000 -- is it in the 5-year guidance too or does the 325,000-ounce cap kick in before then?

Brian, it's Sandip here. Sudbury, yes, it's going to continue mining on the McCreedy West till 2026, is the current life of mine plan. As we highlighted at the end as part of our year-end, it will be at half the rate it was for 2020. And so if you look at Q1, it's on pace for that profile. So it's within our expectations for 2021. So it will be about 10,000 to 12,000 GEOs per year for the next 5 years.

Great. So that hasn't changed at all...

That hasn't changed, that hasn't changed. It's just year-over-year. It's a lot less than it was last year, but that's the reason because they're mining at a reduced rate. With respect to mine waste solutions, we expect the cap to be reached in 2024. So it is not included in our 2025 5-year outlook.

There are no further questions at this time. Please proceed.

Thank you, Chris. We expect to release our Q2 2021 results after market close on August 10, with the conference call held the following morning. Thank you for your interest in Franco-Nevada.

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