Franco-Nevada Corporation (FNV) Q1 2026 Earnings Report, Transcript and Summary

Good morning, and welcome to Franco-Nevada Corporation's First Quarter 2026 Results Conference Call and Webcast. This call is being recorded on May 13, 2026. [Operator Instructions] I would now like to turn the conference over to your host, Bonavie Tek, VP, Finance and Investor Relations. Please go ahead.

Thank you, Vincent. Good morning, everyone. Thank you for joining us today to discuss Franco-Nevada's first quarter 2026 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 view 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 executive team is available to answer any questions. Participants may submit questions by telephone or via the webcast. We would like to remind participants that some of today's commentary may contain forward-looking information. 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.

Thank you, Bonavie. Good day, everyone. At yesterday's AGM, David Harquail gave his last address as Chair before taking on the title of Chair Emeritus. As shareholders, we're all tremendously grateful to David for the incredible value he's created over 18 years at Franco-Nevada. On behalf of the Board and the management team, I'd like to thank David for his vision, his leadership and his entrepreneurial drive that's created the success that we've all shared in. We're delighted to have Tom Albanese, who was most recently Lead Independent Director of Franco-Nevada, take on the Chair role. Many of you are already familiar with Tom from his prior CEO roles at both Rio Tinto plc and Vedanta Resources, and many other corporate director positions. His depth of experience and his intimate knowledge of Franco-Nevada from his many years of prior service on the Board position Tom ideally for the role. Turning to the first quarter, we once again realized record financial results, record revenue, operating cash flow, adjusted EBITDA and net income, driven by higher commodity prices and contributions from recent acquisitions. During the quarter, we also had a gain from a partial buyback of our Cascabel stream as it moved into the hands of Jiangxi Copper, a party we believe is very capable of building and operating a large-scale mine. Oil prices have traded 70%, 80% higher since the U.S. attack on Iran at the end of February. While not much of the higher prices accrued to Q1, it bodes well for our Q2 results and potentially through the rest of the year. Franco-Nevada is unique as a mining equity. Not only is our royalty and streaming model largely insulated from the effect of energy prices and cost inflation, but at current prices, oil and liquids can contribute meaningfully to our revenue mix. Q1 '26 was one of our most successful quarters growing our business with 4 new acquisitions, the gold stream with Orezone on Casa Berardi, royalty financings for i-80 Gold in Nevada and Minerals 260 in Western Australia and purchase of a third-party royalty on Banyan's AurMac. All assets were able to secure attractive resource optionality in good mining jurisdictions. We saw encouraging progress at Cobre Panama. The quarter saw coal shipments received for both power plant units restarted and power supplied to the grid. The government of Panama then proceeded to approve the processing of stockpiles. This was an important step as it allows the company to restart the mills, which has the immediate positive benefit of increasing employment in country. The audit -- the environmental audit carried out by SGS Global is ongoing with 5 interim reports having been published without any material deficiencies identified. The final report is due in Q2 of this year. On the sustainability front, we're expanding the reach of our diversity scholarships for college or trade school programs in collaboration with Young Mining Professionals. We continue to grow our community initiatives, renewed our support for Ensena Peru's education initiatives in Peru and also funded an education initiative with i-80 Gold in Nevada. Last week, we published our annual sustainability report which outlines our accomplishments in 2025 and our commitments to further our sustainability-related leadership. Report is available on our website. Our efforts are recognized by the major ESG rating agencies. In particular, during the quarter, we received an upgrade of our MSCI ESG rating from AA to AAA, placing us in the top tier amongst mining and precious metal players. Along with the sustainability report, we launched our annual asset handbook, which details, first and foremost, our 121 cash flow producing assets, the largest and most diversified portfolio of cash flow producing streams and royalties that exists. Included in the report is an asset-by-asset mine life detail, both operators' current mine plans and potential mine life based on M&I royalty ounces. In aggregate, for our mining portfolio at current production rates, M&I resources would support 34 years of mining and inferred resources a further 12 years. The report also profiles our development projects and our higher potential exploration projects. One stat that to me highlights the optionality of the portfolio is the total value of the ounces underpinning the value of the company. In all categories, ounces that are 100% attributable to Franco have a value of $124 billion at current gold prices. That's just shy of triple our current market cap. To finish, we currently have $3.4 billion in available capital and a robust pipeline of business development opportunities. With that, I'll hand the call to Sandy.

Thanks, Paul. Good morning, everyone. As Paul mentioned, Franco-Nevada reported record financial results for first quarter March 31, 2026. Our portfolio of royalty and stream assets continue to perform well with both the precious metals and diversified segments having a strong quarter. On Slide 4, you'll see a summary of commodity prices for first quarter 2026 and 2025. Gold and silver prices increased significantly year-over-year with the average gold price higher by 70% in the quarter. The 2 strongest performers year-over-year were silver and platinum, each up 165% and 128%, respectively. The strong silver price performance benefited our silver assets and in particular, Antamina, where we had a significant increase in revenue compared to prior year. This was both due to the increase in the silver price, but also significantly higher silver deliveries during the quarter. For the diversified commodities, most remained fairly flat year-over-year. However, with the conflict in the Middle East, the oil price has seen a sharp increase over the last 2 months. Current WTI prices have been hovering around $100 per barrel. This will positively impact our energy revenue for Q2, an increase of $10 relative to our assumed WTI price of $70 per barrel used in our guidance would be expected to increase our oil revenue by approximately 12%. The strong performance of our assets, combined with record gold and silver prices resulted in record financial results for the quarter. Revenue was higher by 77%, adjusted EBITDA, 84%, and adjusted net income, 123%. Total GEOs sold for the quarter increased 8% to 136,353 compared to 126,585 in the prior year. Precious metal GEOs sold in the quarter were 117,980, higher by 17% compared to prior year. 55% of our total GEOs sold were sourced directly from mines where precious metals is the primary commodity. For the quarter, we've received strong contributions from a number of key assets. Antamina, as mentioned, we benefited from both higher deliveries and also benefited from the higher silver price, resulting in an increase in revenue from $21.3 million last year to $82.3 million this quarter. At South Arturo, we had a 322% increase in GEOs as we benefited from the Phase 1 production of the open pit. Please note that the strong performance is weighted to the first half of this year. For Hemlo, we had an adjustment of CAD 10 million related to 2025 that flowed through Q1 2026. As you know, with the Hemlo NPI it's difficult to forecast as it depends on a number of factors, including how much mining is performed on Franco's Interlake lands along with how much is being spent on operating and capital costs. And finally, we're benefiting from asset acquisitions made last year, in particular, Cote and Porcupine, which together contributed approximately 6,500 GEOs or $31.5 million in revenue during the quarter. Diversified GEOs sold were 18,373 for the quarter compared to 25,962 for prior year despite diversified revenue actually being higher year-over-year at $82.6 million versus $74.8 million. The decrease in GEOs is due to the impact of the conversion of revenue to GEOs. As you know, we are now converting to GEOs using a fixed gold price of $4,500 per ounce. As you can see on the chart on Slide 5, total revenue increased by 77% for the quarter to $650.7 million, a record. Precious metals accounted for 85% of revenue. Adjusted EBITDA, also a record, was 84% higher at $591.9 million. With respect to costs, we did have an increase in cost of sales compared to prior year due to higher fixed costs paid for stream ounces as a portion of our streams have a fixed cost based on a percentage of the gold price. Cost of sales was $46.5 million versus $38.5 million last year. Depletion increased to $77.9 million versus $68.4 million a year ago. The increase is due to depletion being recorded on some of our recent transactions, Yanacocha, Western Limb, Porcupine and Cote. These assets are higher per ounce depletion assets. We expect the depletion rate to decrease over time as the reserves on the properties grow. And finally, adjusted net income was $458.3 million or $2.38 per share for the quarter, higher by 123% and 122%, respectively. As Paul mentioned, we did record a gain of $63.8 million, which is included in net income for the partial buyback of the Cascabel royalty and stream. 50% of the royalty was bought back for proceeds of $97.5 million, and 50% of the stream was bought back for net proceeds of $40.7 million. The proceeds for the stream were delivered through approximately 10,000 gold ounces, which remain in inventory at the end of the quarter. The Cascabel buyback is not reflected in GEOs revenue or adjusted EBITDA. Slide 7 highlights the continued diversification of the portfolio. 87% of our revenue was generated by precious metals and being sourced 87% from the Americas. Slide 8 illustrates the strength of our business model to continue to generate high margins. As you can see over the last number of quarters, as the gold prices increased, our margin per GEO has remained fairly consistent. Our cash cost per GEO has increased from $304 in first quarter 2025 to $341 per GEO in first quarter 2026, a roughly 12% increase over the period. However, the margin has increased from $2,559 per GEO to $4,534 per GEO this quarter, a 77% increase while during this period, the gold prices increased 70%. As we turn to dividends on Slide 9, the company continues to pay a quarterly dividend with $84.4 million being paid to shareholders during the quarter. We increased the dividend in January by 16% to $0.44 per share per quarter or $1.76 per share annualized. This was the 19th consecutive year we have increased the dividend. And lastly, Slide 10 highlights our available capital. As at March 31, 2026, the total available capital is $3.4 billion, comprised of $715 million in cash, $1.5 billion with our credit facility, including the accordion, and $1.2 billion in liquid marketable securities. In addition, subsequent to quarter end, our subsidiary, Franco-Nevada International, entered into a separate credit facility for $500 million and an additional $250 million accordion. This adds additional financial flexibility for the company. And with that, I will pass it over to Vincent as management is happy to answer any questions.

[Operator Instructions] Your first question comes from George Eadie from UBS.

Can I start by asking about the deal pipeline? Recent deals such as the Orezone Gold deal, the i-80 Gold sort of look like a backing more of mid-tier developers. Is that a sort of pivot you're seeing in the market? Or is that sort of reading into a trend too much?

George, it's Paul Brink speaking. Eaun is unfortunately on the road this morning. So I'll take the question. It is a trend we're seeing, but it's not the only trend. In this market with high gold prices, any operator is making fantastic cash flow. The great thing for us there is organic growth. But on the acquisition side for developers, it's still very attractive to access our capital and so that there are a number of them that are working to get projects over the line. So I'm hopeful that there'll be more of that through the year. But also at these strong prices, as we've seen, and is case with Casa Berardi and Orezone, the bigger players are looking at the portfolio saying, what are the smaller assets can they vend out. And in this environment, they can get very good value for those assets. So that is a second theme that's ongoing. And then the third is BHP in their sale of stream interest in Antamina, I think, really opened the eyes of the market of the hidden value that's in a lot of these portfolios, even big portfolios, that can be created through the sale of precious metal streams. So I think those are all themes that hopefully will play out through the year.

Right. So you guys think there could be more BHP Antamina type streams. Is that right?

Yes. I think a number of the large players are looking at that and saying, "Wow, what a great market reception BHP got." So I'm hopeful that there will be more transactions.

Yes. That's clear. And then maybe just one other on the operations. But Candelaria, can you remind us, please, on the step-down timing next year and just the latest thoughts on the potential underground expansion too, please?

Sure. Sandip here. So the step down will be in mid-2027, where it'll drop down from 68% down to 40%. And as for the underground expansion, I don't believe Lundin has made the formal decision to move forward with that. They're still reviewing it. But if they do, we were expecting it towards the end of this decade for the underground expansion.

Your next question comes from Fahad Tariq from Jefferies.

On Cobre Panama, can you provide some color on whether there's any discussion around potentially changing the stream terms?

On Cobre Panama, all the discussions are first quantum with the government. We are not involved in any of the discussions. The only interaction we have had with the government is obviously around our arbitration. Our overall position there is we're not operators, we're not on for operating risk. So we don't know what the outcome will be here, but I think it's unlikely that you'll see any material change.

Okay. Great. And then just thinking about growth. Just any commentary on potential consolidation in the royalty streaming subsector? I mean, there's a long list of junior royalty streaming companies that could be acquired. Just any thoughts on that versus looking at individual transactions.

From time to time, we run the numbers on the various royalty players. But inevitably, what we find is that there's better value in doing private transactions. Royalty players typically trade at a premium. So it's in terms of relative value, I think the most likely thing that we'd be doing is more private deals.

Next question comes from the line of Cosmos Chiu from CIBC.

Maybe my first question is on your portfolio of equity investments. As we've seen some of your -- in your peer group, they've started monetizing their own portfolio of equity investments, maybe thinking that it's a good time to finance larger acquisitions. You are a little bit different. You continue to add to your portfolio. You added [Audio Gap] and now, Sandip, as you mentioned, has grown to $1.3 billion. So I guess, my question is, could you maybe remind us of your philosophy and your strategy behind these holdings?

Sure, Cosmos. And the 2 largest holdings that we have are with GMIN and with Discovery Silver. And overall, our strategy with these companies has been, find really good teams, find the best mine builders, mine operators in the industry. And not just be transactional in providing them with a stream of royalty financing, but position ourselves as a financial banker for the company and try and differentiate them with that financial strength, with our endorsement, and that's worked tremendously well for those companies. So the first part of that is we see ourselves as supporting those companies for the long term and see ourselves as participating in the equity over the longer term. That said, we're in this to make money for shareholders. So at the right time, we will take some money off the table. When I think of both of those 2 plays with GMIN right now with the build of Oko, I think there's tremendous value that's going to be created as they bring their second mine into operation. Likewise, with Discovery Silver, that transaction, they've been able to do securing Kidd Creek, allows them to hopefully almost double production output coming out of that asset as they reroute the ores through Kidd Creek mill over time, and it opens up the incredible potential that they have at Dome and to start processing that ore through the Dome mill. So both plays, I think there's tremendous value that will be created over the next one.

Great. I guess as a follow-on, Paul, I did notice that you did not take an equity investment in Orezone. Maybe touch on that. And then further on, on Orezone, I saw that Casa Berardi, a lot of positive chatter out of Orezone, drilling, extending mine life beyond 2 years. They're talking about the gap between the West shaft and the East shaft. Just to confirm, it would be a direct benefit to Franco-Nevada if any of those kind of materialize? And also just curious, when you look at these deals, how much of this potential upside have you factored into original $100 million investment?

Cosmos, Matt Begeman was instrumental in that deal. So I'm going to let him speak to it.

Yes. So I think as far as the equity question, that was just sort of the capital structure they were looking for at the time, that wasn't a large part of the capital need they needed. And so we just played our a little bit smaller role just on the stream and they have the other source of funds from their other sources of capital. As far as the upside there, I think our view is there is extensive upside over time. Paddy has got a very extensive plan with the company to drill that out, to make that connections, and we will benefit from that. I mean, I think as you've noted, we're fixed ounces for the first 5 years, but thereafter a variable stream. And we think there's significant exploration upside over time, particularly in the underground where Paddy is going to be very actively looking to optimize that. So we're very optimistic for the growth there.

Great. Maybe one last question. Sandip, as you mentioned, there are some NPIs in your portfolio. One NPI is the Musselwhite NPI. And in your MD&A, you mentioned that a lot of exploration potential. The Camp Bay near surface target, for example. You might now be part of a larger company given the deal that happened, Equinox and Orla Mining today. So I guess, my question is, could you maybe remind us of the mechanics behind how NPIs work? And for example, if Musselwhite is able to bring Camp Bay something new into production, when could you start seeing some kind of contribution to Franco-Nevada?

Sure, Cosmos. So NPIs, they vary by contract. But it's not consistent. Sometimes it's -- you recover 100% of your capital. Other times, it's based on the profit, based on accounting. So as I said, they're not consistent. But with respect to Musselwhite, our NPI covers the entire land package. But if they were to develop that, they would be able to deduct whatever capital is required. So that would be a 100% deduction against it. So in terms of timing, it depends on the quantum of what capital would be applied against it.

So there will be a bit of a lag, but it all depends on how much is being spent.

Yes, exactly.

Sorry, maybe one last question, just quickly on Palmarejo, the 50% gold stream. As you mentioned, core mining has actually done fairly well or very well in terms of increasing gold reserves, extending the mine life by 5 years. My understanding is that there is the Franco concessions and there's land beyond the Franco concessions. So based on your understanding, how much of this upside that they are talking about at this point in time falls within the Franco concessions shorter term and also long term as well?

So they've been drilling -- so you're right. So our stream doesn't cover the entire land package. They have been drilling on Franco land where the stream applies as well as non-stream land. They've been successful on both. So based on the results of last year, they have been able to extend the mine life of Palmarejo/Guadalupe, where we do have our stream. So we don't know exactly at what point they will move completely off Franco land. But at this stage, our stream at the guidance that we provided runs out to at least the end of this decade, early 2030s.

That's great to hear. Congrats on a very strong start to 2026.

Thanks, Cosmos.

Your next question comes from the line of Tanya Jakusconek from Scotiabank.

I'm going to start just back on the transaction opportunities. Thank you, Paul, for giving us some sense of what is out there. I just want to flesh it out with, again, what is the main size that you're seeing. And number two, are most of the opportunities in silver, gold? Or are you still looking for non-precious metal transactions? And then are there big ones where you'd be open to syndication? So that's my first question.

Yes, a couple of things in there, Tanya. In terms of deal sizes, there's a whole range. In dealing with the project developers, it's that typical range, $200 million, $500 million. If there are some of the bigger players that do consider streams, those would be far, far bigger deals, but don't yet know what the scale of those could be. In terms of syndication, we're always open to syndication in terms of managing risk if the ticket size is too big, and we feel that, that will be the best balance in terms of exposure and risk, although nothing currently that we're contemplating on that front. And in terms of revenue mix, most of what we're looking at is precious metal. But as always, we're open to diversification. And so there are a couple of diversified deals that are also in the pipeline.

And Paul, when you say nothing is too big, like could you do a $4 billion on your own? Would you be comfortable doing that?

We've got $3.5 billion of available capital. So I think that is quite easily achievable. It's just a question of where is the asset, how much risk exposure do you want a particular asset, that's the circumstance that we think about syndication. But if you're dealing with a great asset, great jurisdiction, no need and plenty of capital.

Okay. Got it. And then for the non-precious metals, what size would that be?

There are a few things out there that -- some that are moderately sized, some that could be more meaningfully sized. It's also a range.

Okay, moderately sized. Okay. So would I be thinking $200 million to $500 million for those as well?

Yes.

Okay. I'm going to move over to Sandip, if I could. So you mentioned, Sandip, that there is 10,000 ounces that you are holding right now with the sale of the Cascabel. How should I be thinking of those 10,000 GEOs? Am I thinking those are to be sold in Q2? Or are you holding those for a while? And if so, do they then come into the -- how are you going to handle it from a disclosure? Would you put those ounces back into the -- your GEO ounces if you sold them and reported them?

Sure. So, Tanya, in terms of when we sell them, they're in inventory right now, they'll probably be sold throughout the rest of the year. It just depends on our gold trading strategy at the time. But when they are sold, they will not go through GEOs, they will not go through revenue. They'll be treated as we treat the royalty gold ounces that we sell where we book a gain or loss on the sale. So they'll flow through outside of revenue on that line item on the income statement.

Okay. So I should just think over the year, this 10,000 ounces will be gone.

Yes, yes.

And then just as I think about your -- you had a good quarter, how should I be thinking about the rest of the year as it develops in terms of is it back-end weighted? You did give guidance that stronger Q2 with the higher oil price. How should I be thinking about the rest of the portfolio?

So overall, the following quarters will be stronger, just especially as Paul also mentioned if the energy prices stay where they are because now that we are dividing by a fixed gold price of $4,500, as energy revenue increases, it will lead to additional GEOs. So from a top line metric, it should be stronger as the year progresses. In terms of specific assets, in Q1, we didn't have any deliveries from Condestable, Casa Berardi. You'll start to see those coming. You're going to see Cote ramp up as the year goes on as well. So I don't have specifics quarter-by-quarter, but the rest of the year will be stronger than Q1.

Okay. And as I think about it, as things are ramping up, would it be quarter-over-quarter sequential increases?

I think you should see a stronger Q2 and then probably pretty consistent for the remaining quarters, similar to Q2.

Okay. All right. Got it. So it's hard to forecast these quarters...

Yes. We have so many assets, right, Tanya, that one quarter, one can slightly underperform while another one outperforms. So it's hard to really go quarter-by-quarter.

Yes. No, I appreciate that. And then just, Sandip, on the increase in Barbados, when was the last time that you increased your credit facility in your Barbados division?

So we implemented a credit facility in 2018 for a few years. It was smaller in size. It was $100 million at the time, and I believe it expired in 2021, and we didn't renew it. Now we just -- we looked at our available capital. We always look for financial flexibility and the banks were very forthcoming with very good terms. And we thought it was a good opportunity to add some additional financial flexibility and additional tool for us. So we put in a $500 million credit facility.

$500 million with the $200 million accordion. So you have $750 million in Barbados...

Yes, and $1.5 billion at the parent level, so $2.25 billion in total.

Your next question comes from Heiko Ihle from H.C. Wainwright.

My questions, most have been answered in all fairness, but I got 2 more little follow-ups really. Exploration at Yanacocha, I mean, it looks like Newmont seems to be willing to spend at that site. Do you want to maybe give a bit of color on what you're seeing in your discussions with their team?

Overall, on that Yanacocha site, that property, you've got the oxides, the potential sulfides project. Going forward, you've got Conga, you've got Quilish. The big issue in the region is community support and their area of concern has always been around water quality. So Newmont has a huge program that they're investing in the order of $2 billion over the course of 4 years to try and address that issue, dealing with the water management, part of that is providing fresh water to the town of Cajamarca. So I think that, that's the program that I think will unlock all those deposits in time. Right now, sulfides is on pause. They're looking at some of the other projects. The easier one, and one that may have a higher return of capital is Quilish. So I don't know how they proceed, in what order they proceed with those projects. But in any discussions, they're very committed to the area and resolving those issues, building good social license, so that ultimately, they can develop all of those deposits. And the summary on Yanacocha is that they've mined 40 million ounces from that property, and there's at least 40 million ounces of gold equivalent ahead of them. So it's a price worth winning.

Fair enough. And then a completely different one. I mean, you got a very strong balance sheet, you got a high available capital, you got ongoing growth in GEO margins. Gold prices don't seem to be going down anytime soon. Has there been calls for a special dividend at the Board level? I know we sort of talked about M&A earlier, which is the exact opposite. But I mean, should we be more focused on elephant hunting? Or has there been meaningful calls at the Board level to make like a single time payout?

Sandip here. We do have the discussion. Our philosophy on the dividend has always been consistent. Overall, just in terms of where we use our cash, the priority is always adding good long-life assets to the portfolio. But with respect to the dividend, it's being sustainable and progressive, raise the dividend every single year regardless of what commodity prices are doing and be in a position to raise it for an extended period of time, and we're proud of the way we have handled the dividend, 19 years in a row in terms of increases. So that's the strategy. And I don't think you'll see any sort of special dividend coming from Franco.

Fair enough. I only brought it up because it's now come up in 2 investor calls over the past call it month.

Your next question comes from Brian MacArthur from Raymond James.

A lot of my questions have been answered. But can I ask, first of all, on the CRA, you got some money back and looking to the account, it looks like that's fully settled now, i.e., there's nothing outstanding that they owe you. Is that correct?

Brian, yes, that is correct. So any deposits that we had put down during proceeding with our disputes have now been returned by CRA along with interest. So there's nothing reflected on the balance sheet.

Okay. And then second thing, can you just, if you can, this whole federal government change here in Canada to transfer pricing, I know you say you're still evaluating it, but this is potentially bigger. Do you have anything you can comment on that?

We're still looking into it. I think at the end of the day, we were very successful with the settlement we reached with CRA. I think as they went through their process and actually got down into the details, we went through Discovery, they realized how good our structure is and the processes we have in place and the way we operate our business internationally. So the new transfer pricing rules, we're still evaluating, but we think we've got a very good structure in place.

Right. But this will only be, as you said, from 2026 forward. They can't go back on anything still or is that right?

Correct.

So then my next question is and following up what Tanya asked, so opening the facility in Barbados, does that give you -- other than obviously access for capital at good rates, does that give you any other advantages or like why put it there versus just more in Canada?

I mean, that was a decision by the Franco International Board. Franco-Nevada International, the Barbadian subsidiary, their Board wanted some additional flexibility. They requested it, and so we proceeded with it.

Perfect. And my last question, just you mentioned Condestable. You didn't get paid this quarter, but is that just -- if I remember that correctly, it's just you switched the way this works. So it's just one quarter you didn't get it. You make it up in Q2, and everything going forward is just on a one quarter lag. Is that how that works?

So, yes. So we were fixed deliveries up until the end of the year. And then once it's switched into variable production in Q1, our delivery is mid-April. So it was one quarter, but there is a lag. So we will now be getting deliveries in the first month of the quarter -- following quarter. So Q1 production is in April, Q2 production will get delivered in July and so on.

Okay. So it's just a timing issue really.

Yes, it was just a one quarter window there.

Your next question comes from the line of Derick Ma from TD Cowen.

I just wanted to ask one question on the second revolving facility in Barbados actually. Are you able to utilize that at the parent level for royalty and onshore transactions? Or does that get too messy from a structure perspective?

No, we're able to use both for whatever purpose we see in front of us. It doesn't matter if it's royalties or streams. Just a question of how you move the funds between companies, but it's open. There's no restrictions.

Your next question comes from John Tumazos from John Tumazos Very Independent Research.

Congratulations on all the records. Could you explain the accounting of the interest income that shows up in the revenue line versus the finance income that's below operating income next to finance expense and why both numbers were smaller this quarter than the prior period?

Sure. So John, this quarter at the top line revenue interest income was 0 compared to having an amount last year. that interest relates to any loans that we make. So we had provided financing to G Mining, to EMX and we were recording revenue or interest income associated with those loans. Those loans were repaid in Q4 of 2025. And so now we have no loans outstanding per se. But the interest income line that's below down at the bottom of the income statement is your typical interest that you earn on your cash in your bank accounts. And as you know, we deployed a significant amount of cash last year. So with that lower cash balance, the corresponding interest income was lower.

There are no further questions over the phone lines. I'll now turn the Q&A session over to Bonavie Tek, who will take questions from the webcast.

Thank you, Vincent. There are no questions from the webcast either. So this concludes our Q1 2026 results conference call and webcast. We expect to release our Q2 results on August 12 after market close, and we will have a conference call the following morning. Thank you for your interest in Franco-Nevada.

Ladies and gentlemen, this concludes today's conference call. Thank you for participating. You may now disconnect.