Franco-Nevada Reports Record Year End Results
TORONTO, May 4 /CNW/ - Franco-Nevada (TSE:FN) reports record revenues,
earnings and cash flow for its fiscal year ended March 31, 2000 due to the
strong operating performance from its core royalties and the added
contribution from the new Ken Snyder Mine.
Financial Highlights (audited)
For the year ended March 31st
(millions of Cdn dollars except
per share data) 2000 1999
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Revenues $218.2 $135.6 +61%
Net earnings before tax 143.8 102.2 +41%
Net earnings after tax 97.6 68.5 +42%
Cash flow 138.3 105.9 +31%
Dividends 47.6 32.2 +48%
Debt nil nil
Earnings per share 0.62 0.45 +38%
Dividends per share 0.30 0.21 +43%
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other highlights
- Ken Snyder Mine made a significant contribution to cash flow and
earnings during the year producing 230,258 ounces at a cash cost of
US $98 per ounce.
- Core gold royalties performed well while higher commodity prices
benefited the Stillwater palladium-platinum royalty and oil and gas
royalties.
- Royalties at the Goldstrike complex increased 10% to $47 million.
- Cash and marketable investments approach $1 billion. Debt is nil.
- Franco-Nevada, as always, remains 100% unhedged.
Financial
The fiscal year ending March 31, 2000 was the first year end for the
newly merged Franco-Nevada since its business combination with Euro-Nevada
which became effective on September 20, 1999. Despite continued weakness in
the gold sector, Franco-Nevada achieved record earnings due to the strong
operating performance from its royalties and the added contribution from the
new Ken Snyder Mine at Midas.
Revenues, earnings and cash flow for the year were all at record levels.
Net income rose 42% to $97.6 million or $0.62 per share from $68.5 million or
$0.45 per share in the prior year. Operating cash flow rose 31% to $138.3
million compared to $105.9 million for the previous year. Revenues were up 61%
to $218.2 million compared to $135.6 million a year earlier.
The average price realized on Franco-Nevada's gold sales for the year was
US $287.02 per ounce versus the average spot price of US $279.17. The average
realized price was 2% lower than in the previous year. Franco-Nevada does not
hedge its gold production. Rather, the Company sells its gold at spot plus a
moderate premium. It has always been the Company's philosophy to remain
unhedged so shareholders can enjoy the upside that higher gold prices will
bring.
Franco-Nevada continues to have one of the strongest balance sheets in
the industry with no long-term liabilities and working capital and marketable
investments at March 31st valued at $961 million.
Midas
Franco-Nevada owns 100% of the Ken Snyder Mine in northern Nevada. Fiscal
2000 was the first full year of commercial production at the Ken Snyder Mine
with production of 230,258 ounces of gold equivalent. Even though gold prices
reached a 20 year low during the year, the mine generated over US $30 million
in pre-tax cash flow which represents approximately 30% of the capital cost of
the project.
For the year ended March 31, 2000, 219,347 tons of ore were milled at an
average rate of 591 tons per day with a head grade of 1.10 equivalent ounces
per ton. The mill recovered 95.6% of contained equivalent ounces. Cash
operating costs were US $98 per equivalent ounce while total production costs
including depreciation and amortization expenses, state tax and reclamation
costs were US $142 per equivalent ounce.
The previously announced US $2 million expansion of the mill production
capacity to 1,000 tons per day is on schedule and on budget. Improvements to
the crushing circuit have been completed, the new 350 ton per day verti-mill
has been installed, and modifications to the CCD thickener and Merrill-Crowe
circuits are approaching completion. The expansion should be fully operational
by June 2000 and will provide the operational flexibility and the ability to
further increase production upon a sustained improvement in gold price.
Franco-Nevada is the leading precious metals royalty company and, by
market capitalization, the fifth largest gold company in the world. The
Company has high margin producing properties and royalty interests in the
world's major gold camps and a total royalty portfolio spanning five million
acres in six countries. Franco-Nevada has growing profits, is completely
unhedged, remains debt free and has almost $1 billion of working capital and
marketable securities.
Franco-Nevada Consolidated Balance Sheets (audited)
As at March 31, 2000
(thousands except share amounts)
Assets 2000 1999
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Current assets
Cash and short-term investments $ 705,714 $ 707,507
Receivables 18,862 18,466
Precious metals 27,584 14,030
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752,160 740,003
Investments in marketable securities 248,869 218,319
Resource properties 349,364 360,244
Capital assets 70,498 70,959
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1,420,891 1,389,525
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Liabilities
Current liabilities
Accounts payable 4,382 3,736
Taxes payable 8,289 15,800
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12,671 19,536
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Deferred taxes 62,033 51,895
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Shareholders' equity
Capital stock (158,630,675 shares) 1,021,321 1,019,331
Retained earnings 303,601 253,554
Deferred foreign exchange gain 21,265 45,209
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1,346,187 1,318,094
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$ 1,420,891 $ 1,389,525
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Franco-Nevada Consolidated Statements of Earnings
For the periods ended March 31
(thousands except per share amounts)
Quarter (unaudited) Year (audited)
Revenues 2000 1999 2000 1999
---------- ---------- ---------- ----------
Resource $ 42,528 $ 33,261 $ 179,254 $ 92,227
Investment 8,868 10,316 38,982 43,369
---------- ---------- ---------- ----------
51,396 43,577 218,236 135,596
---------- ---------- ---------- ----------
Expenses
Operating costs 7,745 5,942 37,099 7,083
General and
administration 2,467 1,818 8,090 6,063
Depletion and
depreciation 9,223 7,175 29,243 20,263
---------- ---------- ---------- ----------
19,435 14,935 74,432 33,409
---------- ---------- ---------- ----------
Earnings before taxes 31,961 28,642 143,804 102,187
---------- ---------- ---------- ----------
Tax provision - current 5,153 5,998 34,761 16,512
- deferred 4,474 2,417 11,407 17,146
---------- ---------- ---------- ----------
9,627 8,415 46,168 33,658
---------- ---------- ---------- ----------
Net earnings $ 22,334 $ 20,227 $ 97,636 $ 68,529
---------- ---------- ---------- ----------
---------- ---------- ---------- ----------
Earnings per share $ 0.14 $ 0.14 $ 0.62 $ 0.45
---------- ---------- ---------- ----------
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Franco-Nevada Consolidated Statements of Cash Flows (audited)
For the years ended March 31
(thousands)
2000 1999
------------ ------------
Operating activities
Earnings for the period $ 97,636 $ 68,529
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Non-cash items
Depletion and depreciation 29,243 20,263
Deferred taxes 11,407 17,146
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Total non-cash items 40,650 37,409
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Cash flow from operations 138,286 105,938
Change in non-cash working capital (21,836) 4,953
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116,450 110,891
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Financing activities
Shares issued for cash 1,990 131,501
Dividends (47,589) (32,236)
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(45,599) 99,265
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Investing activities
Resource properties (21,452) (85,156)
Capital assets (6,615) (51,984)
Marketable securities (36,014) (144,809)
Short-term investments 28,891 (50,626)
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(35,190) (332,575)
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Foreign exchange gain (loss) (3,007) 8,905
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Increase (decrease) in cash &
cash equivalents 32,654 (113,514)
Cash & cash equivalents
- beginning of period 142,764 256,278
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Cash & cash equivalents - end of period 175,418 142,764
Short-term investments 530,296 564,743
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Cash and short-term investments
- end of year $ 705,714 $ 707,507
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-0- 05/04/2000
For further information: Ron Binns, Chief Financial Officer, Tel: (416) 480-6490; Sandip Rana, Treasurer, Tel: (416) 480-6495; franco-nevada.com |
