Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Management attributes the 18% year-over-year GEO growth to higher production at Antapaccay, Antamina, and South Arturo, alongside new contributions from Côté Gold and Valentine Gold.
The company is executing a 'green shoots' strategy, focusing on organic growth within its deep royalty portfolio during the current bull market through mine expansions and resource growth at key assets like Detour and Caserones. Performance at Candelaria was lower year-over-year due to a transition between mining phases, but management expects a stronger second half as higher-grade Phase 12 ore becomes available. Energy segment revenue increased due to stronger oil prices and a boost from the Weyburn NPI, with management noting a pickup in U.S. oil rig rates and reinvestment as leading indicators for future production.
The business model demonstrated significant leverage, with margins per GEO increasing 179% since 2022, outpacing the 160% increase in gold prices over the same period. Management maintains a robust $4.3 billion in available capital, positioning the company to act as a financial backer for new project developments in a lumpy but active M&A pipeline. Franco-Nevada is tracking towards the upper half of its 510,000 to 570,000 annual GEO guidance range, assuming continued strong performance from Candelaria, Côté, and Valentine in the second half.
Guidance includes an expected 9,000 to 10,000 GEOs from Cobre Panamá as the operator begins processing stockpile ore following a positive environmental audit. Management anticipates higher unit volumes in the energy portfolio by late 2026 or early 2027, assuming the current increase in rig counts translates to production after the typical six-month lag. The company expects the depletion rate to decrease over time as reserves grow on recently acquired higher-depletion assets like Yanacocha and Casa Berardi.
Strategic focus remains on project finance opportunities where Franco-Nevada can provide capital to teams building new mines, particularly in the $200 million to $500 million range for non-precious assets. At Cobre Panamá, an environmental audit showed 87.7% compliance; a government commission is now evaluating the mine's potential restart, though Franco-Nevada is not directly involved in fiscal negotiations. The company is pursuing legal remedies regarding the Karma asset in Burkina Faso but currently carries no book value for the interest, mitigating further balance sheet risk.
A step-down in the Candelaria stream is estimated for the first half of 2027, though the exact timing depends on the operator's production rates through the end of 2026. Management flagged volatility in Net Profit Interests (NPIs) at Hemlo and Musselwhite, with Musselwhite's Q2 results including a one-time catch-up entry for 2025. Nvidia-level potential. 30M+ investors trust Moby to find it first.
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