Franco-Nevada reports major growth in 2010 results, increases dividend 60%
Franco-Nevada forecasts revenue this year to be between US$325 million to $350 million this year, using consensus commodity price assumptions of US$1,400 gold, $1,750 platinum, $575 palladium and $80 oil.However, the company warned its expenses will be significantly higher in the first quarter of the year, as transaction costs associated with the acquisition of Gold Wheaton will be expensed under International Financial Reporting Standards (IFRS).On March 14, the company and Gold Wheaton completed a plan of arrangement in which Franco-Nevada acquired all of the shares of Gold Wheaton that it did not already own. Franco-Nevada issued 11,654,127 common shares and paid C$259.5 million in cash to shareholders of Gold Wheaton.During 2010 the company earned 81% of its royalty revenue from precious metals with gold contributing 74% and PGMs contributing 7%."With respect to our existing portfolio, the company expects overall growth in revenue based on consensus commodity prices," Franco said. Among the factors contributing to this growth is higher production at Palmarejo, which is expected to have higher gold production this year of which Franco-Nevada will receive 50%.Franco-Nevada also expects to benefit from higher average PGM prices at Stillwater.However, the company also anticipates lower production from Barrick’s Goldstrike and Gold Quarry operations, as well as lower royalty percentages from Quadra FNX Mining’s Robinson interest.Meanwhile, Franco expects to benefit from strengthening oil prices, as well as new or full year contributions from its interests in Tasiast, Duketon, Lounge Lizard, Hislop, Holt, Hemlo, Bronzewing, Admiral Hill, Ity and White Dam.For Fiscal 2010 Franco-Nevada reported an adjusted net income of US$58.9 million or 52-cents per share, a 84% increase over the adjusted net income of $32 million or 30-cents per share reporting during Fiscal 2009.For the fourth-quarter 2010, Franco reported an adjusted net income of US$24.8 million or 22-cents per share, up from adjusted net income of $22.8 million or 20-cents/sh reported during the same period of 2009.During 2010 the company reported a 44% increase in royalty revenue to US$205.4 million. Free Cash Flow increased 49% to $184.8 million.