Franco-Nevada Corp

TSX:FNV

Earnings Call Analysis

Franco-Nevada Adjusts Guidance Amid Commodity Price Fluctuations

In Q3 2024, Franco-Nevada reported revenues of $275.7 million, down from $309.5 million last year, primarily due to decreased gold equivalent ounces (GEOs) sold. Precious metals accounted for 77% of revenue, with cost per GEO reduced to $290. Adjusted EBITDA was $236.2 million. The company revised its 2024 full-year GEO guidance to 445,000 to 465,000, down from 480,000 to 540,000. Meanwhile, revenue is projected between $1 billion and $1.1 billion. Recovery is expected in Q4, particularly from Candelaria, while potential discussions about Cobre Panama may resume in early 2025.

Navigating Through Challenges

In the third quarter of 2024, Franco-Nevada faced several challenges that impacted its performance. The company reported total gold equivalent ounces (GEOs) sold of 110,110, down from 160,848 in the same quarter last year. This decline was largely due to the ongoing preservation of the Cobre Panama mine, which has yet to contribute to the company's output. At Candelaria, mining operations encountered difficulties related to geological conditions earlier in the year, leading to lower production levels. However, the recovery in production towards the end of Q3 gives optimism for a better performance in the upcoming quarter.

Financial Performance Review

Franco-Nevada's revenue for Q3 2024 stood at $275.7 million, a decrease from $309.5 million year-over-year. When excluding Cobre Panama's contributions from last year, revenue actually increased by $33.5 million or 14% year-over-year. Adjusted EBITDA also took a hit, falling to $236.2 million from $255.1 million in the prior year. The adjusted net income was recorded at $153.9 million or $0.80 per share, down from $175.1 million a year earlier. Despite this, the overall financial performance indicates resilience in a volatile market, especially with significant average prices for gold.

Costs and Margins

The company effectively managed its costs, as demonstrated by a reduction in cash costs to $290 per GEO, down from $304 a year ago. This resulted in a significant margin of approximately $2,200 per ounce due to a 28% year-over-year increase in average gold prices. The expected average tax rate going forward is about 20%, aiding in net profitability as the company remains debt-free and has over $2.3 billion in available capital.

Future Guidance and Expectations

Looking ahead, Franco-Nevada has revised its GEO guidance for 2024 to between 445,000 and 465,000 GEOs, down from previous estimates of 480,000 to 540,000 due to lower-than-anticipated gold deliveries and ramp-up issues at new mines. They expect the precious metal GEOs to range between 340,000 and 360,000. On a positive note, full-year revenues are anticipated to outperform earlier estimates, projected to fall between $1 billion and $1.1 billion.

Cobre Panama: A Potential Asset

The future of the Cobre Panama mine remains uncertain, but there are signs of potential reopening discussions starting early in 2025. This mine holds significant value, with estimates suggesting that its return to full production could lead to a 30% increase in the company's GEOs and revenues. Franco-Nevada is closely monitoring developments and plans to engage with the new administration in Panama to facilitate progress.

Diversification Efforts

Franco-Nevada is actively pursuing opportunities for diversification, including new royalties and investments in other commodities. The company is optimistic about growth potential from the Tocantinzinho mine in Brazil and the Greenstone project in Canada and has set up a robust pipeline for potential acquisitions. Plans also include investments in potash, which the management sees as a strategic fit to complement their gold portfolio.

Market Outlook and Opportunities

The current market conditions, characterized by high gold prices, are seen as favorable for Franco-Nevada. The company aims to leverage this environment by capitalizing on its strong balance sheet to pursue both precious metal and diversified asset transactions, looking for deals in the range of $300 million to over $400 million. This proactive approach positions the company to take advantage of favorable valuations and potential synergies in its operations.

Earnings Call Transcript 2024-Q3

[Operator]

Good morning, and welcome to Franco-Nevada Corporation's Third Quarter 2024 Results Conference Call and Webcast. This call is being recorded on November 7th, 2024. [Operator Instructions]. I would now like to turn the conference over to your host, Candida Hayden, Senior Analyst, Investor Relations. Please go ahead.

[Candida Hayden, executive]

Thank you, Chloe. Good morning, everyone. Thank you for joining us today to discuss Franco-Nevada's Third Quarter 2024 results. Accompanying this call is a presentation, which is available on our website at franco-nevada.com, where you will also find our full financial results. The presentation is also available to view on the webcast. During our call this morning, Paul Brink, President and CEO of Franco-Nevada, will provide introductory remarks; followed by Sandip Rana, Chief Financial Officer, who will provide a brief review of our results. This will be followed by a Q&A period. Our full executive team is available to answer any questions. Participants may submit questions by telephone or via the webcast. We'd like to remind participants that some of today's commentary may contain forward-looking information, and we refer you to our detailed cautionary note on Slide 2 of this presentation. I will now turn over the call to Paul Brink, President and CEO of Franco-Nevada.

[Paul Brink, executive]

Thank you, Candida, and good morning. Our inflation-protected business model is working well. Record gold prices, we generated higher revenues, EBITDA and earnings in Q3 compared to Q2 this year. The sales were stable compared to Q2, although lower compared to Q3, 2023, without the contribution from Cobre Panama. The quarter benefited from deliveries from the newly commissioned Tocantinzinho mine in Brazil, and increased contributions from royalties on the recently completed Greenstone mine and the newly acquired Yanacocha royalty. Candelaria reported an increase in copper and gold production for the quarter, with operations recovering after encountering underground voids in the open pit during Q2. Candelaria's copper output is now ahead of its initial expectations.

Gold grades have been below expectation in the period, and Lundin Mining has revised its 2024 gold production guidance for Candelaria at lower. In addition, using record gold prices, revenue from our diversified assets translates into lower GEOs. We've adjusted our 2024 GEO guidance as a result. Our full year revenue, however, is expected to be higher than when we provided our original guidance in March 2024. Our 2024 revenue is expected to be between $1 billion and $1.1 billion. Cobre Panama remains in preservation and safe management. President Molino took office in July this year and has indicated a willingness to discuss the reopening of the mine with the likely timing of discussions early in 2025. This administration is arranging for an audit of the mine by international experts. I think this is a good practical step to dispel some of the misconceptions about the mine that were touted during last year's protest.

For the new school year starting in the quarter, we were proud to grant diversity scholarships to four new mining engineering students. We now have a total of 13 students that we're supporting through their mining engineering studies. Business development team has been very busy. We have a strong deal pipeline and are confident we can add attractive precious metal assets to the portfolio in the coming months. There's also good potential to add incremental diversified assets. With that, I'll hand the call over to Sandip.

[Sandip Rana, executive]

Thank you, Paul. Good morning, everyone. I will turn to Slide 4 to give an overview of the financial results for the quarter. Overall GEOs sold were 110,110 for Q3 2024. This compares to 160,848 for the prior year quarter and 125,882 for the prior year quarter when Cobre Panama GEOs are excluded. As you are aware, Cobre Panama continues to be in preservation and safe management. In terms of operating assets and GEOs delivered and sold for the quarter, the main drivers of lower GEOs were Candelaria and Antapaccay. Candelaria GEOs delivered and sold in Q3 2024 were lower than those sold in prior year. In the first half of this year, mining rates were impacted by the interface of the open pit and historic underground mining stopes, requiring more stockpiled ore to be processed, which reduced grades and recoveries. While production in third quarter increased significantly due to accessing higher grade ore and improved run time of the SAG mill, GEO deliveries were still lower than prior year. However, this was partially due to timing of shipments as delivery of gold and silver was carried over into fourth quarter.

We do expect a stronger quarter for GEOs delivered and sold from Candelaria for Q4. At Antapaccay, although GEOs sold were lower in Q3 2024 compared to prior year, we did see a recovery of GEOs delivered compared to second quarter 2024. As a result, we expect full year deliveries to be between 50,000 to 60,000 GEOs as originally guided for the year. The Hemlo NPI was again weaker than expected. Our visibility is limited, and it continues to be difficult to estimate what the NPI will be going forward. With respect to new mines, we did receive our initial ounces from Tocantinzinho during the quarter and expect a stronger quarter from both Tocantinzinho and Greenstone in Q4. For the quarter, precious metal GEOs were 84,377. This compares to 90,370 in prior year when Cobre Panama GEOs are excluded. Precious metal GEOs represented approximately 77% of total GEOs for the quarter.

For diversified, total GEOs sold were 25,733 compared to 35,511 in prior year. Iron ore GEOs sold were slightly lower year-over-year, while energy GEOs were lower at 19,137. The decrease in energy GEOs is a combination of lower production and revenue due to weaker natural gas prices as well as the impact of converting energy revenue to GEOs by higher gold prices. As we look to total revenue, revenue was $275.7 million for Q3 2024 compared to $309.5 million in prior year. However, when you exclude Cobre Panama from prior year revenue, revenue was higher by $33.5 million or 14% year-over-year. Q3 saw -- Q3 2024 saw continued volatility in average commodity prices. As you see on Slide 5, gold and silver average prices were significantly higher for the quarter and year-to-date when compared to prior year.

Slide 6 highlights the financial results for the quarter and year-to-date 2024. As mentioned, GEOs sold were lower at 110,110 compared to prior year, and revenue was also lower year-over-year. Adjusted EBITDA was $236.2 million, while adjusted net income was $153.9 million. This compares to $255.1 million in adjusted EBITDA in Q3 2023 and adjusted net income of $175.1 million in Q3 2023. On a per share basis, adjusted net income was $0.80 for the quarter. On the cost side, we did have a decrease in cost of sales compared to Q3 2023 as we did not incur the ongoing fixed cost for ounces delivered by Cobre Panama, and had lower GEOs delivered and sold from Candelaria and Antapaccay. Also, cost of sales is dependent on which assets deliver stream ounces as not all fixed payments per stream ounce are equal. With respect to the arbitration costs for Cobre Panama, the company incurred costs of $1.9 million in Q3 2024 and have incurred $4.2 million year-to-date. We expect approximately $1.5 million to be incurred for the rest of the year.

Depletion decreased to $54.2 million versus $68.1 million a year ago. The decrease was due to 0 depletion recorded for Cobre Panama, as well as lower depletion recorded for Candelaria because of the lower deliveries in the quarter. Our effective tax rate was 21.6% in the quarter. We expect it to average around 20% going forward. Slide 7 highlights the continued diversification of the portfolio. From the charts, you can see that 77% of our third quarter 2024 revenue was generated by precious metals, with revenue being sourced 81% from the Americas. Slide 8 illustrates the strength of our business model to generate high margins. For Q3 2024, the cash cost per GEO, which is essentially cost of sales divided by gold equivalent ounces sold, was $290 per GEO. This compares to $304 per GEO in Q3 2023. This amount will fluctuate depending on the mix of royalty versus stream GEOs, including mining and energy. But as you can see, at current average gold prices, the company generates significant margins. Margin was approximately $2,200 per ounce in Q3 2024. When you compare Q3 '24 to Q3 2023, the average gold price increased 28% year-over-year. However, the margin per ounce Franco-Nevada achieved increased 35%.

In a rising commodity price environment, Franco-Nevada benefits fully as the cost per GEO sold will not increase significantly. As we turn to available capital, the company has $2.3 billion as at September 30, 2024. The company continues to be debt-free. Finally, with respect to guidance, we have benefited from record gold prices in the first 9 months of 2024 with revenue exceeding our initial expectations. However, lower-than-expected gold deliveries from Candelaria and slower ramp-ups at our newly contributing mines has resulted in fewer precious metal GEOs than originally anticipated. In addition, record gold prices in the current year have impacted the conversion of our non-gold revenue into GEOs. Our original guidance for 2024 was total GEOs sold of 480,000 to 540,000. Of this total, precious metal GEOs were estimated to be 360,000 to 400,000 GEOs sold. Based on performance of the portfolio year-to-date, as well as the increase in gold prices, we now estimate total GEOs sold for 2024 to be 445,000 to 465,000. Of this total, precious metal GEOs are estimated to be 340,000 to 360,000. And with that, I will now pass it over to the operator, and we're happy to answer any questions.

[Operator]

[Operator Instructions] Your first question comes from the line of Cosmos Chiu from CIBC.

[Cosmos Chiu, analyst]

Maybe if I can ask you on guidance first. You've revised guidance. We've now gone through about 9 months of production. But for the revised full year guidance, you've still given us a range of 20,000 ounces. I'm just wondering what could be a potential driver for you to either hit the higher end of that range or come in on the lower end? I think you mentioned that Candelaria will likely have a better Q4. Is that the driver? Or are there any other key assets that we should be aware of as well?

[Sandip Rana, executive]

Hy, Cosmos, it's Sandeep. Yes, so the range is 20,000. In terms of where we come in at the higher or lower end, one is obviously on the diversified with the gold price, depending on how gold price performs, that will either increase or reduce the diversified GEOs. So there is obviously variability there. The other is timing of deliveries. As you would have seen, Lundin had a really good Q3, 29,000 ounces of gold produced, but it is timing of delivery. So whether you get that in the production in Q4, in Q4, or if it carries on into 2025, that can impact what we realize in terms of GEO's sold.

[Cosmos Chiu, analyst]

Great. And then longer term, I noticed that despite the changes in 2024 guidance, you've maintained your guidance 5 years out or 4 years out, 2028. at 540,000 to 600,000 ounces. So I guess that's implying some of these issues that you've experienced in Q4 -- or in 2024, will be more short term and it shouldn't impact your longer-term sort of profile. Is my sort of deduction correct?

[Sandip Rana, executive]

Yes. The portfolio overall is performing well. Candelaria had a tough start to the year. But as you saw in Q3, it's done well. Antapaccay is going to meet its guidance from what we can see so far. So -- and the new mines, they're ramping up. And as you know, there's always issues when mines ramp up. So longer term, we have full confidence in our portfolio. We will be providing updated guidance in March when we release our year-end results for 2029, and we'll update at that time.

[Cosmos Chiu, analyst]

Great. And then maybe one last question and switching gears a little bit. I saw that you've invested $1 million for an off shipment to potentially acquire something in Potash. Paul, you kind of touched on it, diversification for the company. But maybe can you remind us in terms of Franco-Nevada's thinking in other commodities other than gold? And I guess, in this case, more specifically Potash. And maybe if you can comment on the opportunity -- potential opportunities out there? You mentioned the corporate development team is very busy and potential size of some of these transactions.

[Paul Brink, executive]

Sure, Cosmos. In terms of our interest in other commodities, we always like to be strategic. I think -- opportunities both when there's a downturn in commodity prices that gives us a good entry point into other commodities. But the other thing we look for is what can we get in other commodities that you can't get in gold. And with assets, as you've seen with iron ore and potentially with potash, you get interest on some very large deposits that have got reserve lives that are many, many decades. So we would be interested in getting into potash for that reason. I think that would complement the gold portfolio quite nicely. And the -- what we're contemplating here is an option that if and when that project goes ahead, we'd be able to buy a royalty on it, which I think would be a great addition to the portfolio.

[Operator]

Our next question comes from the line of Tanya Jakusconek from Scotiabank.

[Tanya Jakusconek, analyst]

Paul, I wanted to continue on the potash here. Just wondering if this is just a foothold in [indiscernible] or could we see other potash deals as well?

[Paul Brink, executive]

Over long term, Tanya, they -- we're open to all commodities. As I said, the -- those bulk commodities, iron ore, copper, potash, we like them because they're long-dated in nature. In terms of what's in front of us at the moment, this is the only immediate potash thing, but open over the longer term.

[Tanya Jakusconek, analyst]

And what sort of deal size would those ones be? I think when I asked last time, it was in the $50 million to $400 million range. Is that still the range for these non-gold or precious metal transactions?

[Paul Brink, executive]

Yes, that's an accurate range. They would -- We've got a couple of things that may be actionable, and those are sort of sizes.

[Tanya Jakusconek, analyst]

Okay. And then on the precious metal front, can you talk a little bit about sort of the size that you're seeing there? And has there been any change from the last quarter in terms of what else you're looking at in terms of funding for projects or operating cash flow assets that are coming up and/or any other structures that you're seeing out there that you may have to -- to look and change? And I guess that's the question as well. Are you looking at having to change some of the structure of your deals given the competitiveness of this environment?

[Paul Brink, executive]

I'm going to hand that over to Ian, Tanya.

[Unknown Executive]

I would say, overall, a number of markets and structural factors lend itself to this being a pretty active year on the precious metal side. I think you've probably seen it already. There have been a number of deals that have taken place. I see that continuing, Tanya. It remains quite robust, as Paul mentioned earlier, in terms of potential transactions, pretty meaningful size. Our structure, we have already evolved a little bit, but we continue to do that. Backing the team at G-Min. It's been a very successful transaction, and it's great to see that go into operation. So that's something we continue to look to replicate. And it's been quite constructive, I think, for the portfolio. So going forward, I expect to be quite active on the precious metal side with kind of pretty meaningful sized transactions overall.

[Tanya Jakusconek, analyst]

And those meaningful transactions for you? Were you [indiscernible] $300 million, but [indiscernible] that's not meaningful [indiscernible] not sure?

[Unknown Executive]

Yes. I would say $300 million is kind of a good medium-sized transaction. We're seeing more towards the mid- to higher end at the moment, but it's a spectrum. Where we look at smaller deals where we see good potential. I think it was a good point that you raised, Tanya. We do transactions where we see excellent optionality, but we're also quite focused on areas where we can add immediate cash flow and there's some good opportunities there as well.

[Tanya Jakusconek, analyst]

Okay. And when you said [indiscernible] mid to high, [indiscernible] would that mean plus $300 million? Because if you put mid at $300 million, upper end should be higher than that.

[Unknown Executive]

There are opportunities above that, yes.

[Tanya Jakusconek, analyst]

Ian, I wouldn't be surprised to see you in some of these competitive situations still take equity interest, provide debt financing. And potentially, I saw a deal that had collars involved as well in the initial start-up with that [indiscernible] as well?

[Unknown Executive]

We have used the balance sheet to kind of provide a full package like we did with G-Min, and it's been quite successful. So, as I said, I think that is the model on some transactions, not all. But where we can use that type of structure to help the company succeed, we will. And with that case study, the equity and debt have been quite complementary and provided good returns.

[Tanya Jakusconek, analyst]

[indiscernible] If I can move over to you and just ask [indiscernible] forecast of Hemlo [indiscernible] by the Hemlo contribution. Is there anything else within the portfolio that -- like I think that one we're very -- it's very hard for me to forecast that. So I appreciate that. But any other one within the portfolio that we talked about looking at longer term. I saw the Stillwater numbers as well. That looks like that asset is going to be down for a bit for a while. So, is that something when you thought -- when you think about your 5-year outlook that you kind of assume that mine comes back on to a normal rate? Or we're back at that 265,000 ounce GEO? I'm just trying to think of how you [indiscernible] assets that are hard [indiscernible].

[Sandip Rana, executive]

Sure. So obviously, the NPIs are always the most difficult to predict. Goldstrike is probably more -- easier to estimate just based on past history. Hemlo has always been the one that fluctuates a lot just because the NPI doesn't cover all the land or all the deposit as well as the cost impact there for development because it's underground. So it's tough to estimate for that. As for other assets, you mentioned Stillwater. Yes, Sibanye-Stillwater came out and has reduced their guidance for next year to around 265,000 ounces. Longer term, we do expect that to get back up to the half million mark. And unless Sibanye-Stillwater guides differently, that's what we've estimated. But other than that, the rest of the portfolio, there shouldn't be really any major surprises longer term.

[Tanya Jakusconek, analyst]

Yes. Obviously, the only other one would be when Cobre Panama comes into production. And I think the operator has mentioned that when it does come up into production, it's going to take a 6-month ramp-up. Is that your understanding?

[Sandip Rana, executive]

I think that's reasonable if that's what First Quantum has disclosed.

[Operator]

Our next question comes from the line of Derek Ma from TD Cowen.

[Derick Ma, analyst]

I just want a point of clarification. In terms of the CRA and tax audit exposure, with the GMT now in place, is there still potential tax exposure in terms of transfer pricing in 2024? Or is everything you're showing in the financial reports basically everything we're going to be looking at?

[Sandip Rana, executive]

In the financials, we've disclosed up until the end of 2023 our exposure in terms of transfer pricing. We had three audit issues outstanding with CRA, two have been dropped by CRA. That was earlier in the -- earlier in the year. With respect to transfer pricing, that process is still ongoing. So that has nothing to do with the GMT.

[Derick Ma, analyst]

So would there still be potential exposure in terms of transfer pricing in 2024? Or does the GMT cover that?

[Sandip Rana, executive]

No, there still would be.

[Derick Ma, analyst]

There still would be, okay.

[Sandip Rana, executive]

They're independent.

[Derick Ma, analyst]

Independent issues, okay, understood.

[Operator]

Our next question comes from the line of Heiko from H.C. Wainwright.

[Heiko Ihle, analyst]

The first two things I ask of you have already been answered, but just following up from an earlier question. You said there are some deals with immediate cash flow earlier in this Q&A session. Size-wise, how much will these deals move the needle, not just for you, but also for the operators that are offering them up? And have you seen any -- and just following up on that, have you seen any improvements in pricing for these deals in the current market environment? Or are the high gold prices that we've seen pretty much -- well, I was going to say all the way through yesterday, but all the way through today, really, just too good to -- and everyone is trying to get in?

[Sandip Rana, executive]

So in terms of near-term cash flow deals, as I said, it's across the spectrum. We've done some transactions that have more optionality. But I do see potential for meaningful transactions, both for us and the people that we would potentially be transacting with going forward. Sorry, Heiko, the second part of your question?

[Heiko Ihle, analyst]

Price-wise, have you -- price-wise, is the gold price just king and everyone is savoring to get in? Or have people been a little bit more willing to negotiate pricing?

[Sandip Rana, executive]

Again, it varies, but I do see overall a slightly more muted competitive environment at the moment, which is conducive to pricing better.

[Heiko Ihle, analyst]

And pricing depends on geopolitical risks as in maybe slightly more challenging places are easier to get in? Or is it just however desperate the operator is? Maybe desperate is the wrong word.

[Sandip Rana, executive]

Yes. No, that's another good question, Heiko. I would say, first off, every deal is a bit different. And it's important to do your diligence and then price the risk and upside appropriately. So we get the opportunity to review assets, to do site visits, and then we assess pricing in light of what we see as the risks and the upside. So it's a really balanced approach, and we're very thoughtful about that in each transaction.

[Operator]

[Operator Instructions] There are no further questions on the phone. I will now turn the Q&A session over to Candida Hayden, who will take questions from the webcast.

[Candida Hayden, executive]

Our first question comes from Diego [ Trimatera ] from Noster Capital Management: "Can you clarify a bit more what does adjusting the Cobre Panama mine in early 2025 mean? Are there any proactive measures you or First Quantum are taking to try and sit down with President Molino and his administration?"

[Paul Brink, executive]

Thanks, Diego. It's Paul. The --So President Molino has made comments to say he is open to discuss the mine. First item on his agenda, though, is pension reform, which they are currently trying to address. I believe there's a bill that's now in front of parliament to address that. So expect any discussions on the mine would be early next year. First Quantum is being proactive on a couple of fronts. One is trying to [ authorize ] Panamanians with the mine with the professional operation that they run in-country. I think that is going well. I think that is impacting sentiment in the country towards mining. They also are engaging with the government on a couple of fronts. Obviously, there are two things there. Both for them and for us, there's the potential for arbitration. So there are interactions on that front. It's not plan A for either of us. Plan A is to get the mine up and operating again. So they are engaging with the government on that. We are -- they're obviously the driver in this. We're very supportive of their efforts and engage very closely on them with it.

[Candida Hayden, executive]

The second part of Diego's question is: "if Cobre Panama remains in preservation and safe management mode for several years, is there anything you might consider doing with that stream, like selling it?"

[Paul Brink, executive]

We're very hopeful that the mine will return to operation, and it is -- has the potential to be a tremendous contributor to us. If and when it comes back at its full operating rate, that would be roughly a 30% increase in our GEOs and revenues. So we still believe it's a tremendously valuable asset. I think the full value of it has been taken out of our stock. So I think the -- probably the best optionality you can get in the royalty industry today is a free option on Cobre Panama coming back online.

[Candida Hayden, executive]

Our last question is from Heiko from H.C. Wainwright. "Wanted to see if you anticipate any near-term or long-term impact from the U.S. election given some of the geopolitical changes that might bring around the world?"

[Paul Brink, executive]

The -- I think potential for some positive impacts for us. Most immediately, we have a royalty on Stibnite mine. It's been moving through the permitting process, got notice that they should be receiving their record of decision by the end of this year. I think that is even more likely now. A second mine that we've got a royalty on is Copper World, also moving through permitting process. I think has its water permit now in hand, just waiting for one more permit. So I think this change will be positive. I hope that we will -- it will impact that side of our portfolio. As you know, we also have quite substantial oil and gas interests in the U.S. In particular, we have gas interests in the Haynesville. And the -- one of the drivers for that industry is LNG offtake off the Gulf Coast. And going into Europe, I think this can be potentially positive to see more developments on that front that will serve those assets well.

[Candida Hayden, executive]

There are no further questions from the webcast. This concludes our third quarter results conference call and webcast. Thank you for your interest in Franco-Nevada.