Franco-Nevada Corporation (FNV) Q2 2025 Earnings Report, Transcript and Summary

Good morning, and welcome to Franco-Nevada Corporation's Second Quarter 2025 Results Conference Call and Webcast. This call is being recorded on August 11, 2025. [Operator Instructions] I would now like to turn the conference over to your host, Candida Hayden, Senior Analyst, Investor Relations. Please go ahead.

Thank you, Joanna. Good morning, everyone. Thank you for joining us today to discuss Franco-Nevada's Second Quarter 2025 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. The presentation is also available to you on the webcast. During our call this morning, Paul Brink, President and CEO of Franco-Nevada, will provide introductory remarks followed by Sandip Rana, Chief Financial Officer, who will provide a brief review of our results. This will be followed by a Q&A period. Our full executive team is available to answer any questions. Participants may submit questions by telephone or via webcast. We would like to remind participants that some of today's commentary may contain forward-looking information, and we refer you to our detailed cautionary note on Slide 2 of this presentation. I will now turn over the call to Paul Brink, President and CEO of Franco-Nevada.

Thank you, Candida, and good morning, all. For Q1 this year, we announced record financial results, and now for Q2, we're surpassing those with new records. Our portfolio largely produced as expected for the quarter and high gold prices drove record revenue, operating cash flow, adjusted-EBITDA margins and earnings. We also saw constructive developments in Panama, including approval of the preservation and safe maintenance plan, and shipment of the remaining copper concentrate from Cobre Panama. Sentiment in Country continues to shift in favor of a restart of the operation, and I'm encouraged by Panamanian government's continued commitment to resolving the situation. We have attractive growth over the next 5 years from our existing portfolio, in particular, will be big beneficiaries of the move to unlock mine permitting process in the U.S. 3 projects in our outlook are now moving ahead. Perpetua's Stibinte Gold, Hudbay's Copper World, And the news this morning that the Castle Mountain has been included in the FAST-41 permitting process. One project that's potentially new to our 5-year outlook is Cascabel. The new management team at SolGold has been starting approaches to accelerate production and is now indicating first production may occur as soon as 2028. One longer-term development is worth noting. There's been a positive shift in relations with the Chukotun First Nation at new prosperity. You may recall that Franco has a stream financing agreement to acquire a 22% pool stream. This could be a very meaningful growth driver for Franco if the Chukotun decide to support mine development. During the quarter, we acquired a royalty on IAMGOLD's’ Cote Gold Mine, 1 of Canada's newest large-scale gold mines, and we're off to a good start [indiscernible] since our acquisition, IAMGOLD's’ Cote Gold achieved nameplate throughput ahead of schedule and positive grade reconciliation. Cote and Gosselin had 16 million ounces of M&I and more than 12 million ounces of inferred resources. IAMGOLD's’ targeting more than 20 million ounces of M&I and an updated resource is expected in the first half of 2026. The current mill is on the size for that scale of resource and IAMGOLD's’ planning to publish an updated technical report in 2026 with expansion scenarios. Our team believes something in the order of 20 million tonnes per annum of throughput would be better suited to the size of the ore body. Post quarter end, we acquired a royalty on AngloGold's Arthur project comprised of the Merlin and Silicon deposits, which together form one of the largest oil discoveries in recent years in Nevada. AngloGold has rapidly expanded the resources in the last couple of years, and I wouldn't be surprised if the current resource, which stands at 3.4 million ounces indicated and 12.9 million ounce inferred rose at a similar trajectory to Goldstrike or Cortez in their heyday. Since our acquisition, AngloGold has announced a transaction to further consolidate the district and is pointed to ongoing high-grade drilling success. The Merlin initial assessment outlines the first number of years of production at 1 million ounces per annum. And if more high-grade is found, that production rate could be maintained for an extended period. The scale of the operation contemplated is already in the league of Goldstrike and Cortez. The last 2 years have been some of our most productive, adding assets to the portfolio. Last year, we added interest in some of the world's biggest mineral endowments. Newmont's Yanacocha operations in Peru; in Sibanye's PGM operations in the Western Limb of the Bushveld in South Africa; and SolGold's Cascabel Copper Gold development project in Equador. This year, we've expanded our exposure in Canada and the U.S., adding current production from the Porcupine and Cote operations in Ontario and the Arthur project, as mentioned in our namesake state, Nevada. Combined the acquisition over the last 2 years have transformed our longer-term growth outlook, has the potential of Cobre restart and long-term development of new prosperity, and you have the most exciting growth outlook in the space. The deal pipeline continues to be strong. We've dipped into our corporate revolver to complete the Arthur acquisition, and we're happy to use this facility for transactions -- for the transactions we see ahead of us, with roughly $1.3 billion in annual cash flow generation, we can repay the facility rapidly. With that, I'll pass the call over to Sandip.

Thank you, Paul. Good morning, everyone. As Paul mentioned, Franco-Nevada reported record financial results for second quarter ended June 30, 2025. Our portfolio generally performed in line with expectations, and we continue to benefit from higher precious metal prices. Precious metal prices, with gold in particular, continued to be strong. On Slide 4, you will see the conversion of commodity prices for Q2 2025 and Q2 2024. Gold and silver prices increased significantly year-over-year, with the average gold price higher by 40% in the quarter and average silver price higher by 17%. We've also seen a rebound in prices for platinum and palladium. Prices for iron ore and oil continue to be volatile and were lower compared to prior year. However, you did see a significant increase in natural gas prices. On Slide 5, we highlight some of the key metrics used to measure performance. total GEOs sold, net GEOs sold, revenue and adjusted EBITDA. Total GEOs sold increased 2% to 112,093 in the quarter compared to 110,264 in second quarter 2024. Precious metal GEOs sold in the quarter were 92,449, higher by 12% compared to prior year. For the quarter, we did receive strong contributions from Guadalupe and Candelaria and continue to benefit from the recent acquisitions made at Yanacocha and Western Limb. During the quarter, we recorded our first revenues related to the recently acquired royalties on Porcupine, operated by Discovery Silver and Cote Gold operated by IAMGOLD. We look forward to a full quarter of revenue from these assets in Q3. In addition to the better performance from Guadalupe Candelaria and receiving GEOs from recent acquisitions, we also benefited from continued ramp-up of operations at new mines, Tocantinzinho, Greenstone and Salares Norte. With respect to the Hemlo NPI, it was another strong quarter, showcasing the leverage of the NPI to higher gold prices. However, the NPI can vary depending on how much production comes from the area covered by our NPI lands. One asset that was lower than our expectation was Antapaccay, but this was solely due to timing of deliveries. We expect a stronger second half of the year from this asset. Diversified GEOs sold were 19,644 for the quarter compared to 29,914 for prior year quarter despite diversified revenue base slightly lower year-over-year, $62.7 million versus $64.6 million. The GEO sold reduction is due to the impact of higher gold prices when converting diversified revenue to GEOs. As you can see on the chart, total revenue increased 42% for the quarter to $369.4 million, which is a record for Franco-Nevada. Precious metals accounted for 82% of revenue. Adjusted EBITDA, also a record, was 65% higher for the quarter at $365.7 million compared to $221.9 million in second quarter 2024. Slide 6 details the key financial metrics reported by the company. As mentioned, total GEOs sold were 112,093 generated $369.4 million in record revenue in the quarter. As you know, Franco-Nevada is a royalty and streaming company. For royalties, we typically receive payment in cash. However, for some of our royalties, we do take payment in [ coin ] rather than cash, and have been accumulating the inventory over time. To fund the Cote Gold Royalty acquisition, we liquidated the majority of our inventory position. This resulted in a gain on sale of gold bullion of $42.2 million as the average cost of the gold ounces we sold was approximately $2,350 per ounce. At the end of June, we still have $2,469 gold ounces running in inventory. With respect to costs, we did have an increase in cost of sales compared to Q2, 2024 due to higher stream ounces sold. Cost of sales was $33.5 million versus $29.1 million last year. Depletion increased to $64 million versus $52.9 million a year ago as we received more GEOs from Candelaria and began completing our recent transactions Yanacocha, Western Limb and Porcupine. This impacted depletion as those assets are currently higher per ounce depletion assets. Adjusted net income was $238.5 million or $1.24 per share for the quarter, both up 65% versus prior year. Slide 7 highlights the continued diversification of the portfolio. 82% of our Q2 2025 revenue was generated by precious metals, with revenue being sourced 86% from the Americas. And our largest contributor to revenue was Candelaria at 15% for the quarter. Slide 8 illustrates the strength of our business model to continue to generate high margins. For second quarter 2025, the cash cost per GEO is $299 per GEO. This compares to $264 per GEO in the prior year. As the gold price has risen, Franco-Nevada has seen a significant increase in our margin per GEO. Margin was just shy of $3,000 per GEO in the quarter. Slide 9 summarizes the financial resources available to the company. The company had $160.3 million in cash and cash equivalents on hand at the end of June, when including our credit facility of $1 billion and our equity investment, total available capital at June 30, 2025, is $1.6 billion. However, in July, we did fund the acquisition of a Royalty and AngloGold's Arthur project in Nevada, as mentioned by Paul, for $250 million in upfront cash. We did draw on our credit facility for $175 million to assist in funding this acquisition. This results in total available capital of approximately $1.35 billion currently. The company continues to remain well capitalized to continue to add long-life, high-quality assets to the portfolio. And before I turn it over to Joanne to take questions, I would like to remind you of our guidance ranges for the year. Our original guidance was for 465,000 to 525,000 total GEOs for 2025, with 385,000 to 425,000 precious metal GEOs. This was using $2,800 per ounce gold price. By updating price assumptions with current commodity prices, we continue to remain on pace to achieve our total GEOs and precious metals GEO guidance ranges. Also, as mentioned, we will recognize revenue from Cobre Panama in third quarter as the concentrate on site has now been shipped, Franco-Nevada has begun to receive deliveries of gold and silver from Cobre Panama based on our stream agreement. We expect to receive approximately 10,000 GEOs in Q3. And with that, I will pass it over to Joanna, and we're happy to answer any questions you may have.

[Operator Instructions] First question on the phone is from Fahad Tariq at Jefferies.

On Cobre Panama, can you maybe give some more color on why Franco decided to suspend the arbitration proceeding?

Fahad, it's Paul. The best outcome for us at Cobre Panama and I'd say for First Quantum as well is to see that mine get back into operation. So I think between the First Quantum, the government themselves, we're all like-minded to try and see a positive resolution. It had been a request of the asset from the Magino government that the arbitrations be suspended, to give the space, to try and find a new solution. So we are very amenable to working with the government to allow that to happen.

Okay. And then maybe switching gears to corporate development. Given the available capital is now lower, you had some pretty less transactions, particularly Cote. Does that change how you think about GEO's size over the next year or so?

No, I don't think so. The -- our business continues to generate more and more cash every year. Currently, it's around $1.3 billion a year. So the -- no constraints on the capital side between the available capital with our revolver, between the amount of cash we're generating, we've got plenty of firepower, I don't think it restricts us in any ways.

The next question comes from Larry Liu, CIBC.

Congrats on another financially strong quarter. I guess I'll start off my question asking about platinum. Paul earlier, you mentioned that platinum prices have rebound. And last December, Franco did a Sibanye Western Limb acquisition. I'm just wondering what kind of positive impact would that have on the asset? And was that factored in when the acquisition was -- first happened?

Larry, it's Eaun Gray speaking. Thank you for the question. Yes, we've been very pleasantly surprised versus our expectations with platinum. The price has moved up very significantly. We believe this provides an excellent tailwind to those operations and should allow a number of the extension projects that -- which we spoke about at the time to have much improved economics. So it increases our confidence in the long term of those assets.

For sure. That makes sense. While I have you as well. I'm going to follow up Fahad and ask about corporate development as well. I know it's been -- there's historical precedent as well for Nevada sometimes take shares in the companies, such as G Mining or Discovery Silver. I'm wondering, how's that -- has that has the strategy changed in an upcoming time with gold prices hitting record high? And I guess second part of that question is, what's the intention of those shares? I see earlier, it's been factored into the potential capital available for further acquisitions?

Thanks for the question. And maybe getting part of it, it's part of a longer-term strategy, and it's -- as a business we compete in auctions to buy streaming assets and royalties. One area of the business we've been trying to develop is to say, how can we be not just transactional, but a financial backer to companies. If we can find great assets, great management teams, that we want to support for the longer term. How can we do that? And so that strategy has played out with G Mining, it's played out with Discovery. We think that for those players, we can differentiate them and be their backer so that we can reduce the financial risk of those companies. And we think in doing that, we can increase their valuations and their ability to be successful over time. so far, that strategy has worked out terrifically. And so we plan to continue both with those players and also there are other teams that fit that mold. We'd love to do more deals in that, but our overall objective is how do we support them as a long-term financial banker.

For sure. Yes. That strategy definitely worked out really well for Franco-Nevada. I guess my last question is focused more around the long-term guidance, if I may. So earlier in the call, Paul, you mentioned that there is a potential upward revision because the Cascabel now could potentially be included in the 5-year guidance. We're wondering if there's any more assets that could potentially be a surprise and included in your future 5-year guidance? And when can we expect an updated 5-year guidance? Would that be next year?

Yes. We always -- we do the guidance in the first part of the year, along with our annual results. So that's when we are updated. The 2 bits of positive news there. Obviously, on Cascabel, looking at scenarios to get things up and running sooner. There's 2 parts to that. The 1 is Tandayama, the open-pit deposit. They've been drilling it up, having good success moving up some high-grade areas. So potentially, that can be early material to the mill. Also looking at scenarios to start with sublevel caving rather than a block cave. I think they're making good progress on both of those, and that's increasing the confidence that they can get it in production sooner. The other good news I mentioned today, it is in our 5-year growth outlook, it's just the certainty of it's going ahead as Castle Mountain. We do have -- we have 2 royalties on that at 2.65% loyalty that covers the whole property. We've got a further 2% royalty that covers 1 of the pits in particular, that hopefully will be at the front end of the mine plan, taking that up to [ 4.65% ], one part of the ore body. It's about a 200,000 ounce per year producer. So it could be a meaningful kicker in the back end of our 5-year guidance.

Perfect. Sounds good. It sounds like there's more upside investors can look for, for sure.

The next question comes from Matthew Murphy at BMO Capital Markets.

Big deal during the quarter on the Cote royalty. Just wondering if you can elaborate a bit on your view on the asset, what gave you the confidence in the due diligence to take on a profits-based royalty? And are you willing to share your views on Cote's path to being a low-cost gold mine?

Thank you, Matthew. It's Eaun Gray, again here. So I guess, first of all, it's worth highlighting that we did work with IAMGOLD on the acquisition. So that gave us unique insight into how it's currently operating and the long term for the asset. And this honestly, was one of the most exciting opportunities that we've looked at in quite some time. The scale of the resource is quite impressive. And if you refer to IAMGOLD's call last week, they're starting to talk about a super pit between Cote and Gosselin. So the potential of this to your some of the production profiles you've seen in assets like Detour, Malartic, we see as quite robust. And that's based on being able to actually look at the data with IMGOLD and make that assessment. So we see as a result, fantastic opportunity going forward for the expansion and throughput to suit the scale of the resource, and what is also very exciting is that hopefully, there's some news for you relatively near term on this as well as IMGOLD has identified that they'll be putting out an updated resource in the first half of next year, then hopefully, a technical report identifying some of the production scenarios to follow. So we were able to get a sneak peek into the asset with the fact that were able to uniquely do due diligence with IMGOLD. And that gave us the confidence to transact. And in terms of the cost profile, it's a good question. This is a new highly automated line with best practices and a team that we see as really first-class led by [indiscernible]. And so as a result, we have a high level of confidence in the costs. And you will note this is a gross margin royalty, so the deductions are fairly limited, and we're able to work again with IMGOLD to craft a form of agreement that we're very happy with. So overall, an extremely exciting opportunity, which we think will add low-risk growth to Franco-Nevada over the long term.

Okay. Also a question just on the quarter. You were a bit higher than expected on GEOs from oil and gas and I guess, Permian was 1 of the drivers. What's the outlook for your Permian asset base back half of the year? Jason O’Connell: Matthew, it's Jason O'Connell speaking. We were pleasantly surprised by the performance of our Permian assets in the quarter. We had increased volumes over what we've seen last year. Part of that is a result of drilling on our lands. And at times, operators will hit areas of higher royalty rates across our acreage footprint. So we benefited a little bit from that. Going forward, those assets in the Permian are usually fairly reflective of the overall performance of the basin. So it will depend on oil prices and how active drillers are. You'll have seen oil prices have pulled back a little bit in recent months. So I would expect that production levels and drilling activity will likely stay reasonably consistent, perhaps soften slightly with the lower price.

The next question comes from Daniel Major at UBS.

Just first 1 to clarify, Sandip, how much gold did you say still had on the balance sheet in terms of inventory? I didn't quite catch that.

Daniel. So at the end of June, we had 2,469 gold ounces still remain in inventory.

Okay. So quite small. Okay. Yes. And then the second question, just thinking about the guidance. So both the precious metal and the total GEOs is unchanged, yet you added about 20,000 ounces of additional sales that wasn't in the previous guidance from Cote and from Cobre Panama. What's the offset? Because I guess the implied non-gold GEOs is the same even after the change in the gold price assumption from $2,800 to $3,200. So what's the offset in the portfolio that means there's not a net upgrade to the precious metal GEO guidance?

Yes. So I guess the key message there is that without -- even without Cobre Panama and Cote, we're still within the guidance ranges. Anything from Cote and Cobre Panama is all incremental.

Right. So does that mean that all else equal, production is likely to be more skewed to the upper end of the range if you've added 20,000.

Yes, that's a fair assumption.

Got it. Okay. And then the final question, the new Prosperity option, the 22% gold stream, I'm not particularly familiar with this project. Can you give us a bit of a sense of quantum of what the contribution to Franco-Nevada might be?

Prosperity is a -- it's a large copper gold prophyry system in BC, the transaction that we had done was back in 2012. At the time, they were trying to get it permitted. They had received a BC permit, but weren't able to get a federal permit. Part of the issue was that the didn't have support of the Chukotun First Nation at the time. So the project has effectively been parked for many years since then. But the shift that was -- came out in June is they have an agreement with a Chukotun. The ownership of just over 20% of projects is being provided to the Chukotun Nation. The BC government is providing the funding, which is the payment that goes to Taseko for that transfer and the Chukotun will spend the next couple of years in land use planning process to decide how they would like to proceed or not proceed with any project there. Our agreement, if I have it right, it's a 22% gold stream. It is -- it's a -- the deposit is roughly half copper, half gold. I would have to check my numbers, but it's in the order of 40,000, 50,000 ounces per year of gold that you would get from there.

The next question comes from Tanya Jakusconek at Scotiabank.

Just to finish off, Sandip, on the gold bullion. I mean it's only like about $8 million or thereabout. Why wasn't it just all sold?

Just we -- at the end, we sold what we felt was needed to fund the Cote transaction, Tanya -- plus we do accumulate over time, like the bullion that we've had in inventory, roughly 45,000 ounces has been built up over time. Every quarter, we do receive gold -- high gold royalty payments in kind for some of our assets, and we will continue to do so. So that balance could potentially grow again depending upon what the deliveries are.

Okay. And remind me which ones you're taking, [ kind of ] which royalties?

So there's a handful. We take Detour, Tasiast, Kirkland Lake, Porcupine and Magino in kind.

Okay. All right. So maybe we can start building a bit of an inventory there. Okay. And just maybe just looking again at your guidance. Is it safe to assume like I'm reading our previous note, I think we were saying that Q3 was supposed to be generally equal to Q4 or thereabout. And with that 10,000 GEOs coming now in Q3 from Cobre Panama, is that a bit of a skew. Should I be thinking a little bit higher in Q3 and lower in Q4 on that [ 47/53 ] first half, second half?

I think that's a fair assumption. Obviously, we expect to get the bulk of the deliveries in Cobre Panama in Q3, some could push into the early part of Q4. It just depends upon where the shipments go. But in terms of just overall, that's a fair assumption.

And I hate asking this, but any guidance on that Hemlo NPI.

Your guess is as good as mine.

Okay. And then can I be reminded, I saw the Salares buyback, Gold Fields bought back, that 1%. Can you just roughly remind me which of your -- which ones have royalty streams, have some of these buybacks that are potentially coming due. It's just there's a lot of money available now that gold price is high, so there's potential for these buybacks. Can you just remind me which ones you have and were coming up on buybacks?

Tanya, it's Eaun again here. Perhaps some of the most relevant for you. And I would say, first of all, the asset handbook does a pretty good job summarizing for the full set, but some of the more relevant Cote has a buyback with IAMGOLD, which is up to 50%. And so that's fairly significant in the scheme of things, Porcupine also has that [indiscernible] it as well. So those would be relevant assets to keep track of.

Yes. Sorry, I missed the first one, on the IAMGOLD one.

Yes. [indiscernible] Tanya, do you have a follow-up?

Yes, Eaun. I'm sorry, I missed the first...

Yes. On Cote, the recent transactions, both Cote and Porcupine have that feature.

Perfect. And maybe if I -- since I have you on the line, just wanted to come back about the opportunities that you are seeing out there. I ask everyone in terms of what -- how they're looking at their portfolio. You've done a couple, you've got a good mix between development and obviously, production. And the last 2 that you've done are adding right away, Arthur Gold is further out. What are you seeing out there in terms of mix between production opportunities versus development. And I think the size had been in that $100 million to $500 million range. Is that still a good mix for you?

Thanks, Tanya, for the question. So first of all, we're extremely happy with how we've been able to deliver on our business development plan, adding what we think are excellent assets with fantastic upside in North America. So we'll continue to focus on assets similar to what you have seen, I would say, Tanya, in terms of size and scale in the last 12 months being a very productive 12 months, we continue to see more of the same going forward. And so we're hopeful we'll be able to add significant growth to the portfolio. You're right, we've had a couple of cash flowing assets. And whenever we have the opportunity to transact on those, that's first prize. But I think in terms of managing the overall portfolio, we need to have a balanced and have some longer-term growth. So we'll do both types of transactions as we move forward. At the moment, focus really is on precious metals growth, and we have what I see is a very healthy pipeline of that moving forward, and we're focused on those private deals.

Okay. And maybe, Paul, if I could squeeze 1 in for you, just on the Prosperity option. Gosh, 2012 seems like a long time ago. I remember -- did we write that asset off at the time? Was it written off?

So Tanya, the deal we had was to say, we put up $300 million, I believe, is the number for the financing if and when it got permitted. So I haven't had any capital that's being expended on it. So, no need to write anything off.

Yes. We took a small impairment at the time, Tanya, a few million dollars, which was just the costs associated with the asset. But as Paul highlighted, nothing was funded under the capital commitment.

Okay. All right. That was just what I was trying to understand. And then, Paul, I think you mentioned -- you think it's going to take a couple of years in terms of getting this to the table? Is that what I understood?

Yes. So the -- to move the project forward, it needs the support of the Chukotun Nation. They have opposed mining in the past. Now they have an ownership stake in the project. So I think there's obviously very material benefits that they could get if the mine does go ahead. I have no idea of time line other than to say, I can only imagine that it will take some time for them to consider the change in circumstance and before they would make any decisions on how to move ahead.

It's obviously positive if we can have more projects permitted in Canada and especially B.C.

The next question comes from Brian MacArthur at Raymond James.

Tanya asked a few of my questions. But can I just ask about Musselwhite as well. You highlighted the NPI model leverage. And again, Hemlo is the one we've always focused on, but Musselwhite was up pretty substantially this quarter. Is there anything other than just a straight gold price leverage going there with that 5% NPA? Like the 2 -- you never got anything from the 2% NSR anything yet?

Brian, it's Sandip. Nothing from the NSR, but with respect to the NPI, gold price leverage as well, there was a catch -- small catch- up payment related to 2024 that we recorded in the quarter as well. So we were [ under-accrued ] with what we had estimated for last year. So part of that increase but the bulk of it is just better production from Orla at the mine and just better operations than obviously, the leverage to the gold price.

So just going forward, I mean, you did 7.7% this quarter. Should I think that these gold prices are the same and costs remain the same, everything is the same, it should be more like $6 million a quarter. Is that reasonably? You had $1.5 billion catch-up? Or just ballpark, what might it be?

I think $4 million is reasonable.

There are no further questions on the phone line. I will turn the Q&A session over to Candida Hayden, who will take questions from the webcast.

Thank you, Joanna. Our first question comes from Lyle Green, shareholder of the company. Precious metals prices have been a strong tailwind this quarter. Could you outline the assumed price environment underpinning your guidance? And how sensitive your outlook is to the gold and silver price fluctuation? Also, are there any thresholds or scenarios under which asset allocation or hedging strategies might shift?

Sure. so Sandip, here. The pricing that we used for the guidance that we've given is $3,250 gold price and a $37 silver price. In terms of sensitivity, $100 increase in the price of gold essentially results in about 4,700 GEOs lower for the other commodities when converting to GEOs. And with respect to hedging, we do not hedge. So we sell our gold at spot.

Our next question is from Lyle Green as well. What are the financial and strategic implications for Franco-Nevada if the Cobre Panama asset remains off-line into 2026? And how are you adjusting your portfolio risk exposure reporting base?

Lyle, thanks for your question. The -- as you recall, when Cobre was shut down, we had impaired the asset fully. So we have -- we haven't built it into our guidance that would be coming online in the near term. We're very hopeful that the company will be able to find a resolution with the government that would see mine come back into the operation. But it's all upside to us. We consider it -- the biggest free option that you can get in the royalty and streaming industry is investing in Franco and the option of Cobre coming back. we're not dependent on it in any way. But the -- we have an extremely robust portfolio. We've got the most diversified portfolio in the space. So we look forward to Cobre coming back online, but it's all upside.

The next question is from Bernie Picchi from Palisade Capital. Putting the last 2 quarters together, our pattern seems to be emerging. One, more aggressive business development M&A; two, less interest in non-precious metals; three, greater focus on North America. Is this the result of an over strategy shift?

Good question. Is there a strategy shift? No, there isn't. The -- and maybe to reiterate, what is our overall strategy. It's we want to be the go-to gold stock. And that means at any point in time, we want to be looking to add gold assets. As you go through -- and I think through the cycle, adding gold assets, as you go through the cycle, the -- you do want to have a gut sense of where you are in the cycle? Are you in the top half of the cycle? Are you in the bottom half of the cycle? You want to keep adding gold assets through the cycle. Where do you want to spend a lot of money where that's at the bottom of the cycle. So gold has done very well. We're keen to keep adding gold. These prices, the key is you want to get into quality assets that are going to last for long term so that you can participate as the gold price appreciates over many decades. So -- that is probably -- hopefully, what you see in all the deals that we've done is a real focus on long-dated quality gold assets as we go through the cycle. Our diversification strategy is also unchanged. And the summary of it is it's opportunistic. For diversified assets, it does a great asset come to market, like the royalty we have on Vale's iron ore operations where they just are some of the best iron ore bodies in the world, if those assets come along, we'll buy them. The other is if you have a downturn in an industry and you can get a really good entry point into those commodities. So it's a strategy. We don't have to do it. We're just patient. We do it where we can get good value. So it -- more of the deals that have come out in the mix is just is -- as a function of what it was available to us.

Thank you, Paul. There are no further questions from the webcast. this concludes our second quarter 2025 results conference call and webcast. We expect to release our third quarter 2025 results after market close on November 3. Thank you for your interest in Franco- Nevada.

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