Good afternoon, everyone. Welcome to the 2024 Annual and Special Meeting of the Shareholders of Franco-Nevada Corporation. My name is David Harquail, and I'm Chair of the Board of Directors, and I'll be chairing today's meeting, at least the formal portion of it. Following that, Paul Brink, our President and CEO, will provide his much more entertaining presentation. Thank you for joining us. This is both a webcast and in-person meeting, and for sending us your proxies. I'm gonna start first with introductions, and I'm gonna introduce first the chair of the head table, Paul Brink, our President and Chief Executive Officer, and he'll be doing the presentation after me. Sandip Rana, our Chief Financial Officer, and Lloyd Hong, our Chief Legal Officer and Corporate Secretary. I'd also like to introduce a few members of our leadership team.
Eaun Gray, if you could just raise their hands. That's great. Senior Vice President of Business Development, and Jason O'Connell, our Senior Vice President of Diversified. Before I introduce our directors, I'd like to pay tribute to one director who is not here today. Randall Oliphant was one of the original IPO directors when we launched this company in 2007. Randall was supposed to retire at this meeting, and we were gonna celebrate at a dinner, his retirement and his service to the company. Unfortunately, he passed away last September at the age of 64, just before his first grandchild was born. Randall was a tremendous director. He was always thoughtful and measured. His opinions and advice were treasured by all of the board. He was also a friend, and he'll be missed.
So on that down note, I would like now to present the living directors. That are, we have all of them present here today, and as I introduce the directors, I'll ask each of them to stand as I say their names, and then, once they're recognized, they can sit down, and actually, if they could face the camera right here, that'd be ideal. Tom Albanese. Thank you. Derek Evans. Dr. Catharine Farrow. Maureen Jensen. Jennifer Maki. Jacques Perron. And also joining us today is Hugo Dryland, who is standing for election as a first-time nominee. So Hugo, I'm gonna make you stand a bit longer. Hugo joins us after serving 38 years of Rothschild & Co., most recently as Partner, Executive Vice Chairman, and Global Head of Mining and Metals.
We have worked with Hugo, and he has a very detailed understanding of our business, as well as extensive knowledge of the mining industry around the globe. You would be hard-pressed to find any significant project that Hugo has not touched. Your board feels that having Hugo on our board will greatly benefit this company as it continues to grow its portfolio. Thank you, Hugo, for joining us. I will now ask that Lloyd Hong act as Secretary of the meeting, and Chris Sinnott and Paul Allen, as representatives of Computershare, to act as scrutineers. The scrutineers will report on the number of shares represented at this meeting or by proxy. Proof of service of the notice calling the meeting has been filed. I directed a copy of the notice and affidavit providing service thereof be annexed to the minutes of this meeting.
I've been advised that there is a quorum and request that the scrutineers' report be annexed to the minutes of this meeting. I therefore declare that the meeting is regularly called and properly constituted for the transactions of business. I'll now ask our Chief Legal Officer, Mr. Hong, to provide details and logistics for this meeting.
Thank you, Mr. Chairman. This will be a hybrid meeting, allowing for both in-person and virtual participation. Please bear with us if any technical issues come up. Here are a few logistics for this meeting. If you are on the webcast, detailed instructions are displayed on how to vote, ask questions, and get technical assistance if necessary. If you require technical assistance with your electronic voting device, representatives from Lumi are available at the registration table to assist. If you're on the phone line, please note that you cannot vote or ask questions. We will conduct the votes on the matters before us by poll. On a poll, every shareholder entitled to vote on the matter has one vote in respect of each share held by that shareholder.
I would now ask Lumi to open the polls for voting on all of the matters of business for this meeting and keep the polls open until after all of the items of business have been presented and the chairman has asked for the polls to be closed. For those shareholders present in person, you should have been provided with an electronic voting device or a ballot form if you registered with the scrutineers on your arrival. If you are a registered holder or a duly appointed proxy holder and have not received an electronic voting device or a ballot form, please go to the registration desk now, and one will be provided for you. As the polls are all open, you are now able to cast your vote on all items of business until the chairman closes the polls at the end of the meeting.
You do not need to wait for each specific item of business to vote and are free to vote at any time.... Moving on to questions. For those here in person who have any questions on the items of business, please raise your hand at the appropriate time, and a microphone will be brought to you. If you are participating on the webcast and have any questions on the items of business, please type in your question or comment in the messaging section of the Lumi platform in advance, as there is a delay between the live meeting and the webcast, and I will read the question aloud. We will take applicable questions after each item of business.
If your questions are more general in nature, we would ask that you please wait until the formal business of the meeting has been concluded, as we will have a Q&A session afterwards. After all the matters of business have been presented and the voting has been closed, Computershare will tabulate the results, and the chairman will report them to the meeting. Mr. Chairman, back to you.
Thank you, Lloyd. The first matter of business is to confirm the receipt of the financial statements in the auditor's report. The consolidated financial statements of the company and subsidiaries for the year ended December 31st, 2023, and the reports of the directors and auditors thereon have been mailed to all shareholders who requested them, together with a notice of meeting. The financial statements are also available on our website, or you can request copies by phone or by email. The next matter of business is the election of directors. The nominees of management of the company were identified in the information circular mailed to each shareholder of the company. I introduced the directors earlier and had them stand. Can I have someone please nominate the directors? Nine directors are required to be nominated.
Mr. Chairman, my name is Eaun Gray, and I'm a shareholder of the company. I nominate David Harquail, Paul Brink, Tom Albanese, Hugo Dryland, Derek Evans, Dr. Catharine Farrow, Maureen Jensen, Jennifer Maki, and Jacques Perron as directors of the company to hold office until the next annual meeting of shareholders or until their successors are elected or appointed.
Thank you. Will someone else please second the nomination?
Mr. Chairman, my name is Matt Begeman, and I'm a shareholder of the company. I second the nominations.
Thank you. Are there any questions from the floor? Are there any from the webcast?
There are no questions from the webcast.
No. I declare the nominations closed, and so the next matter of business is the appointment of the company's auditors. Will someone please move a resolution for the appointment of auditors and to authorize the directors to fix the remuneration of such auditors?
Mr. Chairman, my name is Jason O'Connell, and I am a shareholder of the company. I move that PricewaterhouseCoopers LLP, Chartered Accountants, be appointed auditors of the company until such next annual meeting at such remuneration as may be fixed by the directors of the company. The directors being hereby authorized to fix such remuneration.
Thank you. And will someone second that?
Mr. Chairman, my name is Christian Thatcher, and I'm a shareholder of the company. I second the motion.
Thank you. Are there any questions from the floor? Any questions from the webcast?
No questions.
The next matter of business is the Say-on-Pay advisory resolution. Since the vote is advisory, it will not be binding on the board. However, the board will consider the outcome of the vote as part of its ongoing review of executive compensation matters. Will someone please move a resolution for the Say-on-Pay advisory resolution?
Mr. Chairman, my name is Candida Hayden, and I'm a shareholder of the company. I move that on an advisory basis, and not to diminish the role and responsibility of the board of directors of the company, the shareholders accept the approach to executive compensation as disclosed in the company's management information circular, dated March 14th, 2024.
Thank you. Could I have someone second that motion?
Mr. Chairman, my name is Adrian Wong, and I'm a shareholder of the company, and I second the motion.
Thank you. Are there any questions from the floor? Any questions from the webcast?
No.
Good. That was the final item of business for the formal portion of this meeting. If you have not yet voted on the motions that have been tabled, I would ask that you now complete your voting. We'll pause briefly for the final votes to come in. I declare the voting closed, and I'll ask the polls to be closed. For those using physical ballots, please raise your hand, and Computershare will collect your physical ballot and tabulate the preliminary results of the voting. Are there any other items of business that any shareholders in attendance would like to raise? There's nothing from the... Is there anything from the webcast?
Nothing from the webcast.
The formal business of this meeting is now completed. We have received the preliminary results and declare that each of the motions of this meeting have been carried by the votes cast. Congratulations, directors. Congratulations, Pricewaterhouse. I think a good, a positive outcome. I declare the persons nominated have been duly directed as elected as directors of Franco-Nevada Corporation. All the final results will be reported on SEDAR by tomorrow, but I can tell you, it's always the newest director that gets the highest votes. So it's... So we call that the honeymoon period. We'll see how that plays out. Congratulations, all. The formal part of the meeting is now concluded, and I'll now pass it over to Paul Brink for his presentation. Thank you.
Thank you, David. Welcome, everybody. Please heed any cautionary statements. I will have a couple. Our greatest assets are our team, and I mean that in the broadest sense. Many or all of you have contributed to the success of Franco-Nevada. Thank you all for being part of our team. Cobre Panama has caused a reset at our company. The asset was roughly 20% of our asset value, and the unprecedented events that happened at the back end of last year caused us to lose more than that in our share price value. While we're hopeful that the issues can be resolved, we've taken the asset off our books. We don't include it in our current guidance. But here's the good news. We like royalties because they can represent a free option.
For our shareholders right now, the greatest free option is Cobre Panama. In our business, value is so often created at the drill bit. In a bull market like we have right now in the gold price, the drills are turning, the operators, the developers, they're explorationists. Probably the best indication of that is the success that Agnico is having at Detour. Under Detour Gold, they revealed 20 million ounces at Detour. It moved on to Kirkland Lake, it got up to 30 million ounces. Today, Agnico has revealed 40 million ounces at Detour. Now, the number one success at Franco has always been Goldstrike. A $2 million investment at Goldstrike will yield more than $1.5 billion to Franco-Nevada. But at today's gold prices, David's $2 million investment in Detour is likely to surpass Pierre's $2 million investment in Goldstrike in terms of the value that it creates for Franco-Nevada. Now, that value will play out over many, many years. If we're an operator, we would be at risk that some of that value would be eroded by cost inflation. The beauty of our business is we're not subject to that cost inflation. 100% of that value will accrue to Franco-Nevada. Here's a snapshot of our track record, and it really is the best visual of how that top-line growth translates down to the bottom line. When you look at gross revenue, operating cash flow, it all translates into earnings per share, and that translates directly to the increase in our market capitalization.
We're confident in our ability to grow the business, and that's probably best reflected by the board's decision in January this year to increase our dividend for the seventeenth time. The total dividends that we've now paid are $2.2 billion. It was only a couple of years ago that we reached $1.2 billion, and $1.2 billion is important because that's the amount of money that we raised to buy these assets back from Newmont at our IPO. So I'm really looking forward to next year's meeting, because then we would have reached $2.4 billion, and I can boast that we would have paid out in dividends 2x what we paid to buy this business. On the ESG side, we've got five main focuses.
The first is responsibly allocating capital to operations that minimize their impact on the environment, that create net benefits for communities. We partner with our operators to make contributions to the communities to help build social license. We focus on good governance and shareholder alignment through owning stock, along with our shareholders. We look to be good employers, inclusive employers, and to grow the diversity of our workforce and our board, and we take climate action. Most of that is through how we allocate funds into the assets in which we invest, but also, we look to reduce the climate impact of our own office operations. That is a team effort.
Everyone from our board through our management is involved in all of those functions, although probably the toughest part of ESG is the disclosure and in dealing with the detailed requirements of all the agencies that seek to evaluate us. We're highly ranked by those agencies. This year, we're particularly proud we're the top-ranked company in the gold sector and in the precious metal sector globally by Sustainalytics. The person who does most of that work in providing that transparency is Christian Thatcher. Christian, please raise your hand. It's been 38 years now that Franco, in its various forms, has been acquiring royalties and streams, and we've built a portfolio that's unique in its breadth both in its holdings of royalties and streams.
We're able to build a business that is more diversified than you typically can as an operator. If we look at our assets this year, we expect no single asset will contribute more than 15%. If you look at the geographic spreads, the largest areas that we have exposure are Canada, the U.S., Chile, Peru, and Brazil. You couldn't find better countries in which to have mining and oil and gas assets. The beauty of a stream on a very long-dated resource is that you can often get your capital back and still have a go-forward NAV that's just as big as the time that you bought your deal. And on many of our largest investments, you see exactly that is playing out... Gold assets are a little different.
It's seldom that a gold operator will drill more than 10 years of reserves at any time. But what you do have is the ability over time, as you drill and mine deeper, to reveal a multiple of what you thought you had at the outset. The best example of that is the assets that we bought at IPO. Between what they've mined out and what they have in reserves today, there's 3.5x as much gold as when we started with our IPO. So to sum up, we have no debt. We've got $2.4 billion in available capital. We have an active deal pipeline, and we're absolutely committed to return this business to its premium valuation. So that'll end my comments, and I will open up the floor to any questions.
Hi, I'm Paul Durnin from Burlington. Do you have a, an investment in Seabridge Gold? Can you say something about that company, whether if you do or don't, or want it or don't want it?
Seabridge has a couple of assets. Probably the largest is KSM. Their second asset, also a very big asset, is Courageous Lake. And we hold a royalty on that asset, and they've recently updated their studies for their asset. It looks like an economically feasible mine. It is quite far up north, and so they would need to put in an ice road to get it developed. But we do like the asset and think there's a good prospect it'll get developed in due course.
They have done no construction at all. Am I right in saying that?
No, it's a development stage asset. Yeah.
Thank you.
Thank you. My name is Mike Amm. I have a question about lithium. We've seen the lithium price decrease significantly. We've seen lithium companies' share prices go with the commodity price, and I'm interested if you see any opportunities in that sector.
Thank you, Mike. Appreciate the question. I'm going to Jason O'Connell heads up the diversified side of our business. I'll pass it to Jason.
Thanks for the question, Mike. With the transition toward electric vehicles, there will be a continued demand for lithium batteries, and there will be a significant amount of capital that needs to be spent on new mines in the years to come. As a royalty holder, we love to position ourselves in front of that new capital and in front of what will likely be an increase in production and supply going forward. With the pullback in prices, traditional forms of financing are harder to come by for lithium companies, so we do see, as a consequence, increased opportunities for royalty financing. And if we can find good assets with good underlying economics, we think this is a good time to be countercyclical and potentially invest when lithium prices are low.
Thank you, Jason.
Hi, my name is Braden Jebson. My question is, how active is your deal pipeline, and how are you planning to replace the production from Cobre Panama?
Thank you. Thank you, Braden. I'm gonna pass that one to Eaun Gray. Eaun heads up our business development.
Thank you for the question, Braden. We've seen a uptick in activity in our deal pipeline. I'd say it's quite healthy at the moment. Notably, there are some larger transactions that we are hopeful will progress. In terms of Cobre Panama, given the healthy pipeline, I think over the short to medium term, there's good prospect that we'll be able to replace many of those ounces that we were expecting. So with time, I think we should have good success there, and as Paul points out, you know, we're quite hopeful in a positive result with Cobre Panama as well. Thank you.
Hi, my name is Andy. Just a general question: As your cash levels continue to grow, are you considering any form of special dividend?
Sandip, I'll hand that to you.
Sure. Thanks for the question, Andy. You're right, we do have a substantial amount of cash on the balance sheet, but, you know, our number one goal is to continue to add good assets to the portfolio. So the number one priority is deploying that on good acquisitions. Dividend is important for us, and as Paul highlighted, we've raised it for 17 years in a row, and our strategy is progressive and sustainable going forward. So right now we're not considering any sort of special dividend or tying it to some sort of formula. It's just long term, it's progressive and sustainable. Thanks.
I don't see any more questions from the floor. Lloyd, any questions from the webcast?
There are no questions from the webcast.
Great. Well, thank you. That'll close up the formal part of the session. As a reminder for those here in person... These are the questions instructions. We're past that. Before we close the meeting, a reminder, we'll be releasing our Q1 results later today, and a press release should cross the wire early this evening. We hope you'll be able to join us for our Q1 conference call, which is scheduled for 10 A.M. tomorrow morning. That concludes the formal events for the evening. The bar is now open. Please join our board and management for a refreshment out the back door.