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Strategies & Market Trends : Dino's Bar & Grill
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To: Goose94 who wrote (58714)5/14/2019 8:01:09 PM
From: Goose94Read Replies (2) of 202110
 
Franco-Nevada (FNV-T) top pick from Mike Newton on BNN.ca Market Call 2nite Tuesday May 14th @ 1800ET

As a royalty streaming company, Franco-Nevada business model has several attractive features: It’s not exposed to uncertainty related to mine site costs; its cash operating margins are much higher and steadier than operating companies and hence it’s able to generate strong cash flow and pay increasing dividends throughout the commodity cycle; it’s very scalable (with low overhead) and hence it’s been able to develop a diversified portfolio; exploration upside on its land positions gives it a positively asymmetric risk profile since it generally doesn’t need to contribute additional capital (beyond its initial investment) to fund further exploration and development; and it has a naturally contrarian tilt because operators are generally more likely to seek royalty and stream financing in commodity bear markets, when other sources of capital are not typically available.

Franco-Nevada has a very strong and growing portfolio that includes many large positions in tier-1 assets that have low costs and long mine lives. Management expects its annual production rate to grow substantially over the next several years, in particular as Cobre Panama comes on-line. The company’s investment approach includes many smaller royalty investments in exploration assets, which provides significant optionality and its oil-and-gas segment provides some additional portfolio diversification.
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