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Franco-Nevada ups quarterly net income on higher oil and gas prices as precious metals revenue down

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(Kitco News) - Franco-Nevada (TSX: FNV), a leading gold-focused royalty and streaming company, yesterday announced that in Q1 2022, the company earned $338.8 million in revenue, up 10% from Q1 2021.

According to the company's statement, the growth in revenue was primarily driven by higher realized oil and gas prices from its Energy assets and revenue from its Vale Royalty.

These more than offset the decrease in Precious Metal revenue and resulted in 71.7% of the company's revenue being sourced from Precious Metal assets (55.4% gold, 12.1% silver, 4.2% PGM).

The company said that gold equivalent ounces (GEOs) from its Precious Metal assets were 128,627, compared to 145,969 GEOs sold in Q1 2021, as higher contributions from Guadalupe-Palmarejo and Candelaria were more than offset by lower deliveries from Hemlo, Antamina and Antapaccay.

Franco-Nevada's Diversified assets, primarily comprising its Iron Ore and Energy interests, generated $96.0 million in revenue, up from $51.7 million in Q1 2021. The increase is primarily due to higher realized oil and gas prices and the addition of the Vale Royalty in April 2021.


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The company also reported it generated Q1 2022 net income of $182 million (up 6% over Q1 2021), adjusted net income of $177.2 million (up 10% over Q1 2021), and operating cash flow of $230.6 million (Q1 2021: $224.3 million).

In addition, Franco-Nevada announced that its Board of Directors has declared a quarterly dividend of $0.32 per share. The dividend will be paid on June 30, 2022 to shareholders of record on June 16, 2022.

"I am pleased to announce another strong quarter demonstrating our high margin business", stated Paul Brink, President and CEO. "The portfolio benefited from strong precious metal, energy and iron ore prices. The Energy contribution was particularly strong, offset somewhat by lower precious metal deliveries. Total GEOs are on track to meet annual guidance."

Franco-Nevada is the leading gold-focused royalty and streaming company with the largest and most diversified portfolio of cash-flow producing assets. Franco-Nevada indicated that the company is debt-free and uses its free cash flow to expand its portfolio and pay dividends.

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