The company sold 104,330 ounces of gold-equivalent in the quarter compared with 107,774oz in the prior year period, at a cash costs of $259/oz gold-equivalent even though 15 of its 56 cash generating mining assets experienced some form of temporary curtailment related to COVID-19 measures. All assets except Golden Highway have since resumed operations.
Gold-equivalent ounces sales were down slightly from the same period a year ago, which was 107,774oz. The company said lower contributions from Antapaccay, Goldstrike and Sabodala were partly offset by higher contributions from Cobre Panama and Hemlo.
With a margin of 80.9%, the company expects to fully benefit from increases in precious metals prices. "Our cost structure is $250-300/oz. As gold prices continue to rise we expect to benefit fully as our cost per ounce should not rise," said CFO Sandip Rana during the results conference call.
President and CEO Paul Brink said with a close to 20-year reserve life and rising precious metals prices, its pipeline looked set to increase its metal sales.
"The pace of development at many assets in our portfolio has picked up ... the development of many projects is now more likely … as well as organic growth at no cost to us from our producing portfolio.
"We are looking at some smaller transactions in the short term and we are bidding on larger transactions in the medium term," he said.
Franco Nevada has US$1.7 billion in available capital including a $1.1 credit facility and $478 million in working capital.
Franco-Nevada re-issued its 2020 guidance with forecast sales of 475,000-505,000oz gold-equivalent. The company also declared a quarterly dividend of $0.26 per share.
Shares in Franco-Nevada are trading at C$214.70, valuing the company at $40.5 billion