TORONTO, Feb. 23,
2023 /PRNewswire/ - Franco-Nevada Corporation
("Franco-Nevada" or the
"Company") (TSX: FNV) (NYSE: FNV) has been advised by its
partner First Quantum Minerals Ltd. ("First Quantum") that
First Quantum's subsidiary, Minera Panama, S.A. ("MPSA"),
has suspended ore processing operations at the Cobre Panama
mine. As previously announced, the Panama Maritime Authority
("AMP") issued a resolution on January 26, 2023 requiring the suspension of
concentrate loading operations at the Cobre Panama Port, Punta
Rincón, until certification of the calibration of the scales by an
accredited company had been initiated. Key updates as
reported by First Quantum include:
- MPSA believes it has complied with all requirements of the AMP
resolution but copper concentrate loading operations are still not
being permitted by the AMP
- MPSA will begin a partial demobilization of its workforce and
will take a systematic approach to reducing operations to ensure
the safety of its workforce, prevent damage and degradation of
equipment and preserve the integrity of the mine
- If the AMP is to permit the recommencement of concentrate
loading operations, MPSA could begin shipping concentrate and
resuming operations at the mine within hours
- Negotiations with the Government of Panama on a refreshed contract are continuing
and First Quantum remains committed to achieving an outcome that
will be to the benefit of all stakeholders and support the
long-term operations of the Cobre Panama mine.
Please refer to First Quantum's press release dated February 23, 2023 for further details.
Impact on Franco-Nevada
Franco-Nevada (Barbados) Corporation, a subsidiary of
Franco-Nevada, holds two precious metal streams indexed to the
copper-in-concentrate shipped by Cobre Panama. First
Quantum's 2023 guidance for uninterrupted production from Cobre
Panama provided on January 16, 2023
was for 350kt to 380kt of copper production. This would translate
into 131koz to 142koz of attributable GEO production to
Franco-Nevada (calculating gold equivalence using $1,800/oz Au and $21.00/oz Ag prices).
Provided operations resume at Cobre Panama, the impact to
Franco-Nevada of the suspension of operations should be limited to
a deferral of revenue as the streams do not bear any associated
carrying costs while operations are suspended.
Despite operations at the mine being suspended, Franco-Nevada
remains highly profitable, continues to generate substantial cash
flow, is debt-free, and has cash and working capital in excess of
US$1 billion, an undrawn US$1 billion credit facility and limited
financial commitments. Franco-Nevada remains in communication
with First Quantum and will provide further updates as they are
available.
Forward-Looking
Statements
This press release contains "forward-looking information" and
"forward-looking statements" within the meaning of applicable
Canadian securities laws and the United States Private Securities
Litigation Reform Act of 1995, respectively, which may include, but
are not limited to, statements with respect to future events or
future performance, management's expectations regarding
Franco-Nevada's growth, results of operations, estimated future
revenues, performance guidance, carrying value of assets, future
dividends and requirements for additional capital, mineral reserve
and mineral resource estimates, production estimates, production
costs and revenue, future demand for and prices of commodities,
expected mining sequences, business prospects and opportunities,
the performance and plans of third party operators, audits being
conducted by the CRA, the expected exposure for current and future
assessments and available remedies, the outcome of any discussions
between the Government of Panama
and the operator of the Cobre Panama mine and the remedies relating
to and consequence of any actions taken by the Government of
Panama or the operator of the
Cobre Panama mine. In addition, statements relating to reserves and
resources, gold equivalent ounces ("GEOs") and mine life are
forward-looking statements, as they involve implied assessment,
based on certain estimates and assumptions, and no assurance can be
given that the estimates and assumptions are accurate and that such
reserves and resources, GEOs or mine life will be realized. Such
forward-looking statements reflect management's current beliefs and
are based on information currently available to management. Often,
but not always, forward-looking statements can be identified by the
use of words such as "plans", "expects", "is expected", "budgets",
"potential for", "scheduled", "estimates", "forecasts", "predicts",
"projects", "intends", "targets", "aims", "anticipates" or
"believes" or variations (including negative variations) of such
words and phrases or may be identified by statements to the effect
that certain actions "may", "could", "should", "would", "might" or
"will" be taken, occur or be achieved. Forward-looking statements
involve known and unknown risks, uncertainties and other factors,
which may cause the actual results, performance or achievements of
Franco-Nevada to be materially different from any future results,
performance or achievements expressed or implied by the
forward-looking statements. A number of factors could cause actual
events or results to differ materially from any forward-looking
statement, including, without limitation: fluctuations in the
prices of the primary commodities that drive royalty and stream
revenue (gold, platinum group metals, copper, nickel, uranium,
silver, iron ore and oil and gas); fluctuations in the value of the
Canadian and Australian dollar, Mexican peso, and any other
currency in which revenue is generated, relative to the U.S.
dollar; changes in national and local government legislation,
including permitting and licensing regimes and taxation policies
and the enforcement thereof; the adoption of a global minimum tax
on corporations; regulatory, political or economic developments in
any of the countries where properties in which Franco-Nevada holds
a royalty, stream or other interest are located or through which
they are held; risks related to the operators of the properties in
which Franco-Nevada holds a royalty, stream or other interest,
including changes in the ownership and control of such operators;
relinquishment or sale of mineral properties; influence of
macroeconomic developments; business opportunities that become
available to, or are pursued by Franco-Nevada; reduced access to
debt and equity capital; litigation; title, permit or license
disputes related to interests on any of the properties in which
Franco-Nevada holds a royalty, stream or other interest; whether or
not the Company is determined to have "passive foreign investment
company" ("PFIC") status as defined in Section 1297 of the United
States Internal Revenue Code of 1986, as amended; potential changes
in Canadian tax treatment of offshore streams; excessive cost
escalation as well as development, permitting, infrastructure,
operating or technical difficulties on any of the properties in
which Franco-Nevada holds a royalty, stream or other interest;
access to sufficient pipeline capacity; actual mineral content may
differ from the reserves and resources contained in technical
reports; rate and timing of production differences from resource
estimates, other technical reports and mine plans; risks and
hazards associated with the business of development and mining on
any of the properties in which Franco-Nevada holds a royalty,
stream or other interest, including, but not limited to unusual or
unexpected geological and metallurgical conditions, slope failures
or cave-ins, flooding and other natural disasters, terrorism, civil
unrest or an outbreak of contagious disease; the impact of the
COVID-19 (coronavirus) pandemic; and the integration of acquired
assets. The forward-looking statements contained in this press
release are based upon assumptions management believes to be
reasonable, including, without limitation: the ongoing operation of
the properties in which Franco-Nevada holds a royalty, stream or
other interest by the owners or operators of such properties in a
manner consistent with past practice; the accuracy of public
statements and disclosures made by the owners or operators of such
underlying properties; no material adverse change in the market
price of the commodities that underlie the asset portfolio; the
Company's ongoing income and assets relating to determination of
its PFIC status; no material changes to existing tax treatment; the
expected application of tax laws and regulations by taxation
authorities; the expected assessment and outcome of any audit by
any taxation authority; no adverse development in respect of any
significant property in which Franco-Nevada holds a royalty, stream
or other interest; the accuracy of publicly disclosed expectations
for the development of underlying properties that are not yet in
production; integration of acquired assets; and the absence of any
other factors that could cause actions, events or results to differ
from those anticipated, estimated or intended. However, there can
be no assurance that forward-looking statements will prove to be
accurate, as actual results and future events could differ
materially from those anticipated in such statements. Investors are
cautioned that forward-looking statements are not guarantees of
future performance. In addition, there can be no assurance as to
the outcome of the ongoing audit by the CRA or the Company's
exposure as a result thereof. Franco-Nevada cannot assure investors that actual
results will be consistent with these forward-looking statements.
Accordingly, investors should not place undue reliance on
forward-looking statements due to the inherent uncertainty
therein.
For additional information with respect to risks,
uncertainties and assumptions, please refer to Franco-Nevada's most
recent Annual Information Form filed with the Canadian securities
regulatory authorities on www.sedar.com and Franco-Nevada's most
recent Annual Report filed on Form 40-F filed with the SEC on
www.sec.gov. The forward-looking statements herein are made as of
the date of this press release only and Franco-Nevada does not
assume any obligation to update or revise them to reflect new
information, estimates or opinions, future events or results or
otherwise, except as required by applicable law.
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SOURCE Franco-Nevada Corporation
