Royalties are high margin assets providing a direct interest in a mine's cash flow, with exposure to new discoveries and production growth, yet without capital obligations or environmental liabilities. The company has never had a major write-down as shown in its track record on continually increasing retained earnings. Despite the lowest gold prices in over two decades and a no hedging policy, Franco-Nevada's most recent fiscal year was a record in terms of revenue, earnings and dividends.
Management is optimistic on the outlook for the gold price.
Franco-Nevada remains committed to royalties on precious minerals and intends to use its strong balance sheet to further increase its leverage to gold with further strategic investments.