Franco-Nevada Mining
Corporation Limited
| PRICE |
FLOOR |
TARGET |
GAIN |
PAYS |
YIELD |
| 16.00 |
14.00 |
30.00+ |
87.5% |
0.30 |
1.94 |
Price is as at Apr 4, 2000, Floor is perceived chart support level.
Gain is price to target estimate. Pays is dividend or other income. |
|
A Perspective:
FRANCO-NEVADA MINING CORP. LTD. Franco-Nevada is the leading precious metals royalty company in the world. The Company has royalty interests in the world's major gold camps and a total royalty portfolio spanning 5 million acres in six countries. Franco-Nevada has growing profits, remains debt free and fully unhedged, and
has over $1 billion of working capital and marketable securities. It has working interests in the Carlin Gold Trend of Nevada, the Stillwater platinum and palladium complex and 50% of the Midas property at the nothern end of the Carlin Trend. It also holds large interests in the Hemlo and Kirkland Lake Gold Camps in Ontario.
On September 20th 1999, Franco-Nevada merged... with its sister company Euro-Nevada. Over the previous 16 years, both companies created and dominated the high margin gold royalty business. Franco-Nevada's focus had been North American gold royalties and other commodities. Euro-Nevada's focus had been international gold royalties. Together, the new Franco-Nevada is the dominant gold royalty company in the world and, with a market capitalization of over US$2.6 billion, it ranks as the fifth largest gold company in the world.
The new Franco-Nevada Mining Corporation.... has a portfolio of over 60 royalties spanning six countries. 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. Franco-Nevada's royalties provide it with a direct interest in major world class ore bodies operated by the best companies in the business.
The Board of Directors of Franco-Nevada... Mining
Corporation Limited declared the Company's annual dividend in the amount of Cdn. $0.30 per share. This dividend represents an increase to former Euro-Nevada shareholders from $0.08 per Euro common share paid last
year. It is also an increase from the pro-forma dividend level of last year of
$0.21 for the combined Franco-Nevada. The Board wished to make a strong
statement reflecting their confidence in the strength of the future revenue
and profit streams of the Company.
Franco-Nevada reports strong third quarter... and year-to-date
earnings despite Franco-Nevada's realized gold price being slightly lower than
last year. The increase in earnings is attributable to strong operating
performance from core royalties and the added contribution from the new Ken
Snyder Mine that began operations in January, 1999. The mine continues to
perform well, producing approximately 185,000 ounces of gold equivalent during
the nine months.
Price Action: (click on each item)
Long Term Price Chart
Having traveled from $6 in 1993 to a high of $39 in 1997, Franco declined in a very volatile fashion to a recent low of under $14. Considering it was a bit above $35 in September last, and that gold is well above its low of last August, the case for an extreme oversold condition is easily made.
Close Up of the last three months
$14 seems to have proven a firm footing and a break up to $16 today (Apr 4) may prove the reversal for this 6 month decline. In candlestick parlance today was a white inside out reversal with the price opening above its close of yesterday and closing above yesterday's opening price.
Current Price
Conclusion
The major portion of Franco-Nevada's royalty interests are NSR. NSR is a gross royalty based on the proceeds paid by a smelter or refinery to the miner. This type of royalty provides cash flow that is free of any operating or capital costs and environmental liabilities. This accounts for the higher margins enjoyed by FN and results a very sensitive response to movements in the price of gold.
With excellent world wide diversification and a pristine balance sheet, Franco-Nevada represents a pure leverage play on an emerging bull market in gold that may at last now be at hand.
Informative Internet Links : (click on each item)
67% pre-tax profit margins in 1999, click to compare
Breakout of royalty interests with
links to mine descriptions
Resources & Reserves
Quote, Chart & Latest News
The Franco Nevada Web Site
___________________ 30 ___________________
ROGERS & PARTNERS SECURITIES INC.,
A Perspective by:
Thomas A. Rogers, CIM, FCSI, CFP.
Investment Advisor: 416-463-6880, 1-800-730-6154
WEB Site,
E-Mail
Disclaimer:The information contained in this report, while obtained from sources we believe to be reliable, is not guaranteed either as to accuracy or completeness. Estimates and projections contained herein that have been prepared by Rogers & Partners Securities Inc. (RPS), and may have been based on conversations with the above mentioned company(s) and assumptions which we believe are reasonable, but are not guaranteed nor in providing them does RPS assume any liability. RPS, its officers, directors, shareholders, employees and companies with which they are associated may have a position in the securities mentioned herein, and may make purchases and/or sales from time to time. As RPS acts for public companies from time to time, it may have a relationship with the above mentioned company(s). Neither the information nor any opinion expressed herein constitutes a solicitation of the purchase or sale of any security. ROGERS & PARTNERS SECURITIES INC. - MEMBER CIPF
The comments and opinions expressed in this analysis that are the result of work done by Thomas A. Rogers may differ from the opinion of RPS Research, and, should not be considered as representative of RPS's belief, opinion or recommendations.
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