To welcome Paul Brink, President and CEO.
Of Franco-Nevada to the podium.
Thank you.
Thank you, Candida. And welcome, everyone. It's very nice to see so many of you in person. I aim today to get everything done in two hours and then at the back of that we've got some refreshments. We'd love to chat with you after the events. Please heed the cautionary statement. We will be making some forward-looking statements during the presentation. I will start and give an overview of our strategy and our business. Eaun will go next and cover our business development strategy. Then primetime will be our partners. I told them this is like the football game, that they are the halftime show. They are the real reason that the audience is here today. After that, Jason will cover our diversified strategy. Sandip will finish off with our capital allocation, our guidance, and our outlook. We aspire to be the go-to- gold stock.
Two objectives that we see in getting ourselves there and the first is grow cash flow and NAV per share. The emphasis there is on per share. We're not in this just to get bigger. What we want to make sure is every single deal that we do, we're adding value to the stock. The second part of that is achieve a premium multiple. There are a lot of elements to that. Quality assets, good 10 year stable cash flows, long duration diversified portfolio, good countries. The number one thing we think in achieving a premium is making profitable investments. Not just collecting assets, but making investments that generate real returns for investors. How do we do that? The key way we think about it is number one, make sure you get your money back.
That is having strong technical teams, being able to look at assets, figure out what is economic, what will give us a return on our capital, making sure when we do our deals that we've got good tenure. The second part of it is how do you make a multiple of your money over time? That is picking the assets that expose you to that great optionality. None of us can see under the ground. We ultimately don't know how much is there, but it's figuring out what are the conditions that put you in a position to get lucky. We have got lucky at Franco-Nevada multiple times. What makes Franco-Nevada different? The first thing to us is ownership management. The board owns more than $200 million of stock, far more than any of our competitors.
We think that is the ultimate discipline that keeps us focused on making sure that anything we do is adding value to the share price, not just making the company bigger. The second is financial flexibility and it's how we think about our balance sheet. A lot of folks say to us, why don't you lever up the company? Debt is a lower cost of capital. You can get better returns that way. That's not our approach. We put more importance on financial flexibility than we do on cost of capital. What we found over time, the industry is highly cyclical. There are points in the cycle where the industry really needs capital. That's where you get your best deals done. For us, that's happened twice. The first was 2008 financial crisis. We had the capital available. We made some super investments. Palmari, Guadalupe was one of those.
The second time it happened was 2015, 2016. China slowed down. Many of the diversifieds were caught offside with their balance sheets. We were able to get stakes in terrific assets. Candelaria and Timmins and Tocantinzinho. That all came about because of the way Sandeep manages the balance sheet. We had the capital available to take advantage of that. Next up is being adaptable on investment style. The only thing we're certain about in the resource sector is it's highly cyclical. We don't know when commodities are going to go up and down. We know for sure they will go up and down. What that brings is different capital needs for our partners. We love gold, royalties and streams, but we don't want to run around with a hammer looking for a nail. We're capital providers to the industry.
We work with the operators when they got a capital need to say, how can we help? We're flexible in how we think about the capital that we provide. That same approach applies to diversification. While our focus is always if there are great gold deals to do, that's always our top priority. We don't want to be dogmatic about it. There are times when it's too expensive to do gold deals or there are just not a lot of gold deals to be done. That's where our diversified strategy comes in. We don't have to be in any diversified commodities, but as you go through the cycles, you sometimes get opportunities to invest in great assets at a really good entry point. We found we can generate even more value for shareholders by being adaptable. Last is asset selection. We work in the mining industry.
It's littered with people who've lost money. You have to have strong technical skills. I think so much of an advantage of our model is in any deal that we look at, we're doing detailed due diligence. It starts with a request to say, send over the drill-hole database, send over the block model. Let's form our own view of that. That technical strength is what helps us with the asset selection. In terms of ESG, we've got a very simple approach and number one, that is to say, invest in assets in operations that treat their workers well, that treat their communities well and treat the environment well. We also work with operators and their communities to find projects where we can contribute ourselves to help build the social license at those different operations. Governance. I've already mentioned ownership.
The key thing to us in terms of shareholder alignment is owning a lot of stock. The last final comment on is our own workforce. We aspire to be a good employer, an inclusive employer. You'll have a chance to meet a number of our employees afterwards. I hope that you'll get the same sense after speaking to them. We're delighted that the rating agencies recognize our achievements. We get top marks by all the major agencies, prime MSCI and in particular we're the top rated gold company globally by Sustainalytics. We're delighted that all our efforts have been reflected in our share price performance since our IPO. To put it in context and reminder for those of you who weren't there at the time, at the end of 2007 when we did our IPO, the issue price was $15.20.
Our major competitor, Silver Wheaton, at the time their share price was $17. So effectively the same number. Wheaton has done very well. Their share price today is about $75 a share. That's four and a half times over that period. Royal Gold, our other competitors, very similar rate of return to that. They've both done well. Franco-Nevada stock is $155. That's more than a 10 times return during that same period. We're very proud of that achievement. That compounded rate of return around 15% outstrips any major benchmark, whether it's the NASDAQ with the high flying tech stocks, the S&P 500. Gold over the same period has returned about 7% per annum.
One of the key things that helps drive that is what I think is so unique about our business is that we've got exposure both to a very large royalty portfolio as well as to our streams. I'll speak a bit about both. First up, in terms of royalties, most of the royalties that we have are on gold assets. We all know gold is precious. At a one gram per tonne open pit, that's one part per million. It's expensive to drill that out. The industry rarely drills out more than 10 or 12 years of reserves ahead of it. As you mine deeper, often you reveal ore bodies that are larger and sometimes far larger. Ten times larger, 100 times larger. We've been extremely fortunate at Franco-Nevada, the original Goldstrike investment.
is very conservative how he shows these numbers here. I like to just speak about the money we put in and the total revenues we can make over time. He is presenting the value of our investment and then the after-tax value of it today on a discounted basis. Even then, for Goldstrike, the value of it today is 500 times that initial investment. Detour, 250 times. You can see the list of them. Even a recent investment that we made, the royalty that we have on Equinox's Greenstone mine, the value of it today is 30 times what it was when we bought it six, seven years ago. The other side of our business is streaming. You can have streams on gold and silver mines. We do have some that have done terrifically well.
Guadalupe- Palmarejo is one that I have up there, exposing you to that incredible optionality. Many of the other ones and the big ones so often are in big copper mines. Copper is a much more massive mineral. It is far, far bigger deposits, far easier to drill them up. Quite often you can draw up 30 years of reserves, 40, 50 years of resources. They are fantastic assets in terms of when we make those investments that we can say we know Franco-Nevada is in business for the next 50 years, 70 years, we will be in business with positive cash flows. You do not get the same optionality. You are not going to make the same multiple on your money on a big copper deposit as you can on those gold deposits. That does not mean there is not a lot of upside. You will see whether it is Candelaria, Antapaccay and Timmins.
The value today of those investments is more than a double from the time that we made those. A great example is Candelaria mine was built by Freeport. It had operated for 20 years when Lundin bought it 10 years ago. At the time, the go forward mine life was 14 years. We thought we'd get a good return on that. If you look at their life of mine plans today, it's 10 years later, the life of mine plan goes out another 25 years. That 14 years has become 35 years in that time. These stream assets expose you to that same geological optionality and drive a lot of our upside. As I said before, the only thing you can be certain of in resource markets is the cyclical. As you go through the cycles, they generate different types of opportunities.
Our investment style has been flexible and that really has opened up a lot of different avenues for us to participate in different types of financing. We've done M&A type deals, recapitalizations, project financings, we financed exploration projects. All of that comes from being flexible and always being open to what is the next avenue for growth. We think there is a new avenue for growth. It really comes from a theme that we're all so familiar with. 15 years ago, 20 years ago, most of the capital allocation in our industry, in the gold industry, was done by the gold funds. Today there are far fewer gold funds. Those that remain have less capital than they had and so it's left a void.
You see that in terms of a lack of capital at the junior end of the market and also highly discounted valuations at the junior end of the market. We see a real role that we can play in that, in finding the good assets, finding the good teams and being a financial backer to those teams and not just doing that on a transactional basis where it's a single financing, but saying to those companies we want to back them for the full journey and we want the market to know that we are their financial backer. We think that can really help differentiate those companies and in a sense make our own luck by doing that. I think on the equity you can get tremendous returns.
We have some of our partners here today and they'll be telling you the stories and I hope all of that will ring true. The last thing that I'm going to comment on is Cobre Panama and I am extremely encouraged by the direction of travel for the potential restart of Cobre Panama. President Mulino's first item on his agenda was to deal with his pension reform; that has now been completed. He said the next thing he'd like to deal with is the potential reopening of the mine. He put a date on it. He said to his government he would like to start that internal dialogue on March 24. That was yesterday. You have seen already announcements to say he is open to allow the shipping of the concentrate and restart of the power plant. There are discussions with First Quantum on suspending their arbitration.
That is all moving in the right direction. More importantly though, and fundamentally the issue in Panama is less for the government and more public opinion about the mine. What really is important is that opinion is moving in the right direction. After the protests, the polling was showing 70%-80% of people were against the mine. That has shifted meaningfully over the last 12-18 months. The polls earlier this year were showing a small majority are now open to mining in some form in the country. There is a more recent poll of the communities right adjacent to the mine. 95% of the communities said that they would like to see the mine restarted. You have also got a domestic constituency that are now coming forward and being more vocal.
You had the contractors to the mine, 130 of them wrote a letter to Molino saying they were losing a huge amount of revenue each year, that they have more than 50,000 employees that they've had to lay off as a result of this and they'd like a discussion. Molino responded he was sympathetic. He acknowledged it's a big issue and he said that he will be doing something about it. I am very confident that we will see discussions this year between First Quantum and the government on the potential opening of Cobre Panama. That concludes my comments. I am going to hand over to Eaun who's going to speak about business.
Development.
Thank you, Paul. Very excited to be here after a very busy last 12 months of deal making within the business development team at Franco-Nevada. In terms of how we approach deals, we're focused on driving returns for shareholders by exposing them to optionality. I think Paul covered this pretty well. We do that while at the same time seeking to mitigate the risks associated with transactions. We seek out optionality. We seek it out in terms of resources where we think they can grow, assets where production rates can increase, but also finding assets with long duration where we can enjoy many commodity price cycles. As we know markets can be very cyclical. As we saw earlier. Our track record doing this has been fantastic.
If you go back to the days of Goldstrike or Detour, identifying that long-term potential in assets is something that I think we've done particularly well with our large transactions over the last year. I think we've employed this strategy again, whether it's with Yanacocha, Timmins, Cascabel or Sibanye-Stillwater. I really think we're just seeing the tip of the iceberg in terms of what we're modeling now. We seek to identify characteristics in these assets where production can increase pretty significantly over time. That is how we see real returns being generated. With each of those, we've noted that initial IRR can be very flawed. On day one, we see transactions get announced and likewise we model returns ourselves. There are so many things that change.
Those qualitative metrics that identify what has the potential to grow, what has the potential to do better over time are core to us making decisions. I would highlight that for the analyst.
Community.
Good. Case in point, which I'll touch on in a moment, is our investment. I just move the slide there. In Magino mine, we acquired two royalties. There we have a 3% NSR. Initially with Argonaut it looked like a fairly modest rate of return. Already we're seeing with Alamos now our estimates that that rate of return has probably quadrupled given the plans for the asset. To make these types of decisions, we need to harness the bench strength that we have within the team. We have a number of them here today and encourage you to meet with our management team. We have a technical group that has very, very strong skills in the area, years and years of experience, but also on the board. Our board includes many industry veterans that provide fantastic input into our decision making.
They really help us to pick the winners as we're making investments. We've seen as we participate in processes opposite our competitors, they'll often give away optionality on the cheap. It's not something we ever seek to do. We see the value in it and we seek to expose ourselves to it wherever we can. In order to harness that, what we really need to do is maintain tenure on an asset, as Paul has indicated. There are a lot of ways to do that. We often seek security when we're acquiring a stream or royalty. We'll look for guarantees of various types, not only that, you have to find the assets that have good margins that will produce throughout the cycle and those that have the license to operate within the country and community. That's really how you maintain tenure over time.
Recently there's been a lot made about parent guarantees. To be honest, it probably puzzles me a little bit really. We've seen fantastic benefit from either taking hard asset level security or getting guarantees down the chain. We're actually closer to the asset that lets you get ahead of corporate debt in a lot of cases. As is the case in Cobre Panama, which I think we've all seen the direction of travel improve pretty significantly, it actually lets us litigate an arbitration directly opposite the government of Panama. With the positive rumblings we hear down there, I think you probably all agree having the stream be able to survive, which that gives us a better shot at, is far superior than to a parent guarantee where we'd probably just be asking for our money back at some distant point in the future.
That is key to us maintaining tenure wherever we can. I spoke about arbitration. Maybe I can expand on that a little bit. Often the best assets are located in developing countries. In order to participate in the financing of those types of assets, we seek as a criteria, international arbitration wherever we can get it. Chris Stackhouse will be up in a moment to chat about SolGold and Ecuador. As an example, the various funding stage gates for SolGold are linked directly to international arbitration. What we are seeking to do there is to maintain the tenure to the asset so that we can enjoy cash flows for many decades to come. Now, moving on, I will chat a little bit about one of our recent transactions where we put this strategy to work, and that was with Sibanye-Stillwater.
We acquired a $500 million stream from Sibanye-Stillwater, closed in February. Although this stream is with reference to their Western Limb platinum mining operations, roughly 70% of the value is derived from gold, with the balance being platinum. The assets here are fantastic. They have large resources, well in excess of reserves. And the reserves alone provide a very long mine life. Not only that, but the basket of commodities is quite diverse. I think it's very important. When you look at any of the PGM operations, you have to look at the basket of commodities. Here you have things like rhodium, ruthenium, chromium. You don't see in all the deposits. That provides us a great deal of comfort in the margins over time, which helped us make this investment. Now, the operator, Sibanye-Stillwater, they have their boots on the ground in South Africa. They've done a great job.
What they have done here is they have rolled up three mining complexes, historical mining complexes. What they have now benefits from fantastic infrastructure and synergies. They have a smelter. They have great access to water. These are things that not all of the projects in the area have. You have to be careful when you look at a number of investments in the Bushveld to make sure they have access to those key requirements for production. Now, overall, what this does is it puts us in the middle of the cost curve, in our view, for these operations, especially once the K4 shaft fully ramps up over the next year or so. That is one of the newest shafts in the area to ramp up. Overall, we expect many years of cash flow to come from this operation.
It actually balances out some of the other transactions we did over the last year very well. Yanacocha being one of those where we have a medium term growth profile. The Yanacocha royalty acquisition we did in August of last year is already exceeding our expectations. We're very happy to see in Newmont's recent quarterly call Tom Palmer talk about the fact that they've produced 40 million ounces to date, but they're not even halfway there yet. When you look at the resource endowment that they have and from the benefit of due diligence which we had making the transaction, the exploration upside, I think he's right. A 22 year reserve life is what they've highlighted in their last presentation for the sulfides and that provides roughly about 500,000 ounces a year for the first several years.
Coincidentally, that's roughly what we expect in the course of 2025. We were very pleasantly surprised to see production guidance for this year be increased to 460,000 ounces. That's well above production last year and the year before's guidance. We are certainly quite pleased with the direction of travel on that particular investment. At some point the Sulfides project needs to be developed to maintain production and we take great comfort from the fact that Newmont is advancing with their water treatment projects in the area. That really is key to the license to operate with communities. For the sulfides project to get built, they really have to maintain that license to operate. There are also two fantastic projects on this property package besides the sulfides project, and that is Cerro Killis, which is probably one of the best gold oxide projects in Latin America.
Minas Conga, a fantastic copper gold porphyry. We see great potential here to exceed expectations decades into the future. I have touched on Magino already and really would like to congratulate Alamos on this fantastic acquisition. It did not surprise us that much when Alamos started talking about a mill expansion to up to 20,000 tons per day. When we looked at it, we saw a fantastic mineralized envelope at the deposit and we thought, geez, that would really work well for a larger bulk tonnage operation, especially if you could unlock some of the synergies in the area. We have been fantastically pleased to see that take place and we believe there will be decades to come from Magino in terms of cash flows. Sticking with Ontario, one of the transactions I am proudest of was our recent transaction with Tony Makuch here in the front row and Discovery Silver.
The acquisition of the Porcupine complex from Newmont is an example of us using kind of the one stop shop that Paul talked about where, similar to what we did with G Mining and Louis-Pierre, we brought to bear a royalty, a loan, and equity. This provided a runway for Tony and will continue to do so into the future by having a flexible financing structure that does not take too much and provides a patient approach to how the assets can be revitalized. We are really providing a tailwind for Tony and his plans on the assets. With that, I would like to welcome Tony to the stage. I am keen. I know Tony wanted a little bit of extra time to chat about the opportunity. I love the enthusiasm and look forward to hearing more on Porcupine. Thank you, Tony. Appreciate.
Excuse me. Appreciate the opportunity to come here and present. I'd like to believe that, you know, definitely Franco-Nevada is a great gold investment. I know my wife was keen when I was here because I know she's a shareholder. I think you're going to find out with the new discovery and what we're doing here, this is going to be a great gold investment and one that really, really works well. Lots of opportunity. Excuse me. Really appreciating part of being able to be successful and being able to execute here. I mean, we can have a lot of good ideas and we can understand, we have some good geology, et cetera. You do need the backing and the financial backing and support and really the support from Franco-Nevada in terms of getting here and the team here.
We spent a lot of nights working on whether it was doing due diligence or whether it was trying to work out the business side of the transaction and then dealing with the legal side. The legal side is the hard part, I guess. What we like to do is get on with it. We're not quite closed yet. We're hoping to close on Monday and then start in April. In terms of running the assets, etc. Price of gold, $3,000 an ounce. There is a lot of urgency. Sense of urgency there. At the same time, it could end up extending to the end of April, in terms of the closure. Anyway, excuse me. Just finishing up earlier. I appreciate this and yeah, I'll try not to. I mean, excuse me. I could talk for a lot longer.
I always think about when, you know, sometimes you got to think about. When I was in grade nine in high school where the teachers told me how, you know, you got to keep your presentations long enough to cover the subject and short enough to be interesting. I won't tell you all the background to that as a little bit more to it anyway, you know, in terms of Porcupine and you know, and it's, it is a, you know, 100 year old, 120 year old mining camp. There is, there's a lot of history and there's been over 70 million ounces mined here. You might sit there and think, you know, there's a lot of, lot of liabilities and it's all mined out.
I think, you know, we can, we can show you some things in terms of where maybe some of these liabilities are really assets and give you a sense on, you know, maybe there's not another 100 years ahead of ourselves. I think we could see a good, you know, 40-50 years ahead still of mining and some significant growth here. You know we did complete a PEA or just a technical report to support what we're looking at and we worked with the Newmont people. It was somewhat restricted to only some things we had at the time. It does show like 285,000 ounces a year, 10 years and mining going on till 2041. I think it was somewhat of a fairly conservative approach.
The valuation was in terms of what we see from a valuation point of view on the asset versus what we ended up acquire the asset for. I think a lot of opportunity for, for value creation. You know, in our industry, you know, in terms of what we do, there's really, you know, maybe, maybe some people talk maybe there's four parts of value creation. One is exploration and with a diamond drill bit and I think, you know, and that optionality you get from an exploration point of view as, as Paul and Eaun mentioned, you know, we think there's some, some significant exploration upside and you can create new value and new value per share with diamond drilling and we expect to be pretty aggressive on our exploration. Second aspect of what we do is there's always talk about what is ore is.
The definition of ore is rock that can be mined at a profit. What you got to do is you want to invest well, you got to build good mines and do it the right way in order to keep your cost down and take some of these nice colored looking rocks and turn it into ore. From the development point of view, capital investment into the mines, I think that's an important way we create new value, create, bring new NAV and NAV per share up. Third part is the standard of operation and we talk about, you know, you got to be responsible in terms of people, environment, community, where we are, and have a high standard in terms of operational performance.
If we build our mines well, and we benchmark ourselves in terms of, you know, trying to be in the lower half of the unit costs curve in the industry. It is a cyclical industry. Like you say, we're price takers, not price makers. We got to build good mines, we got to operate them at a very high standard that keeps us there for a long time. Excuse me, but also, excuse me, that keeps you in a cost curve where the price of gold does go down. Which, and you know, I don't like to be the naysayer here. You know, I know we're into $3,000 gold and everybody's excited, but it probably will go down again. That doesn't mean nothing. That doesn't mean that we should get on a pity party.
That just means that we should just, you know, continue doing what we're doing and get ready for the next cycle when it comes back up again. We think there's significant upside in terms of what we can do. If we execute on those three items then, you know, the fourth one was always what you do from an M&A and acquisition point of view in terms of value creation. You know, this slide just quickly in terms of showing what the acquisition was here from, from with Newmont and I showed you a previous slide but at a PFS with using consensus prices we came up at a valuation of $1.2 billion and that's costing in all, all the costs related to liabilities and dealing with closure and, and on the other liability.
You know, and that's using $2,150 gold in terms of long term gold price. If you use $2,700 gold, it's over $2 billion. Definitely the entry level, the acquisition price here at $275 million upfront consideration. You can see there's lots of value to be created in terms of what we have. And also, you know, again, you know, in terms of, you know, having, working with Franco-Nevada, you know, setting ourselves up to be properly financed so that we can actually execute. Because it's one thing to have the potential value here, but we got to be able to have the capital resources in order to execute and do the work. I think we have that and maybe, you know, just slide here just shows you what are some of the, you know, what are the assets.
I don't think people know like Hoyle Pond Mine. Hoyle Pond Mine is really one of the highest grade gold mines in all of Canada, probably, you know, and it is a higher grade gold mine than what Newmont's been mining it at. We think there's been, you know, there's not a lot of focus on grade control. Maybe there's a little bit more focus on mining tonnage. There are a lot of other areas within the mine that are maybe a little bit narrower, higher grade that we can, you know, if we come back with some traditional ways that we've been mining in the Porcupine camp where we can bring some of these on and bring production up. The production rate at Hoyle Pond is sitting somewhere around 500 tons a day.
I was a mine manager here back in the 1990s, and we had increased the production here to 1,500 tons a day. We think there's upside in actually just getting back to an optionality and getting. I was thinking about what Paul was mentioning about that. In 1997, Kinross asked me to go be the manager at Hoyle Pond. They said, after I signed up, oh, we forgot to tell you, there's only 35,000 ounces in reserves. We mined produced 172,000 ounces that year. Since then, it's produced over 3 million ounces. You know, we did do the PEA today. Sorry, we presented this back in January. We did with that PEA. It demonstrated what it's demonstrated in terms of mine life and grade.
If Pierre Rock, who led that PEA for us, he did the same thing in 2006 for Goldcorp, and it had the same amount of ounces in it. You get a sense that these things you just got to drill and you got to keep looking, and there's a lot of upside. Hoyle Pond Borden is. To me, Borden is actually somewhat of an exciting operation. It's a fairly new mine. It has been operated and, you know, they produce somewhere over 100,000 ounces a year, and it can do that for a good another nine years based on what we see now. You know, it is a campus and significant exploration potential. The geology is all pointing to a lot of things. You know, you might not have even found the ore body yet.
You know, I think there's a lot of upside here in terms of what we can do. We have Pamore as an open pit that can produce about 100,000 ounces-140,000 ounces, sorry, 100,000 and about 140,000 ounces a year till at least 2041. Currently there's upside on that because, you know, we do have to do some drilling here. We think we can, with a few things, moving some infrastructure and with some other drilling and looking at, you know, we did this all at $2,000 gold. If we look at a few things, you can have the chance to double the size of that pit. There is an extremely large resource at Dome that needs to be understood. This is just what we put in our PEA.
I'm not even talking about a lot of the other assets that are in Porcupine that aren't being touched here. This was a production profile that came out of our PEA. We think each one of Borden and Hoyle Pond can be extended in terms of mine life. We think that 100 tons a day at Hoyle Pond at those kind of grades is equivalent to 1,000 tons a day at Pamore. We do a couple hundred tons a day increments. The increments are it needs some ventilation. It needs ventilation reinvested and it needs its backfill system reinvested in. It needs some new equipment reinvested. It's not anything technically difficult. You need to access some of the other zones that are here. You have the opportunity to move things forward similar at Borden. You have the ability to.
To grow mine, to extend mine life at both of these assets, grow production at these assets. You have things like TVZ Zone that can add to this, the Dome pit that can add to this, and mill capacity. There is lots of opportunity that can be used to grow. I think we put this slide in here. We do see a sight line to production growth over 500,000 ounces. That might be conservative in terms of, is it a stretch. It might be something good to talk about for a year or two or three. We would be able to talk about something else. You know, just getting back to what I talked about, whether it was Hoyle Pond and increasing mining rate up to 1,000 tons a day, Borden, what we can do Pam or bring it on the Dome.
There is the whole refractory deposits in Timmins and there are lots of other different deposits in Timmins. You know, the Dome resource sits at almost 11 million ounces resource here. I know, Bobby, using up all my time here, but I'll just give you some things pretty quickly here. When you, you know, you get to see that this is sort of the Hoyle Pond Mine and trying to show you what is at Hoyle Pond. Then you put in things like, you know, the TVZ zone, which sits here as a refractory deposit, sitting here anywhere from 2.5 million ounces-4-7 million ounces. You have the current deposit that continues to extend at depth. You know, at Hoyle Pond itself, like the Hoyle Pond Mine, when I was here, the Hoyle Pond is two different deposits.
The Hoyle Pond deposit and then what we call which was Falconbridge Gold. There was a 1060 deposit which was Inco Gold. The Inco Gold stuff was refractories and was somewhat predictable. The Hoyle Pond material was a lot of very high grade quartz veins. You had to drill, sometimes they would be five feet in the wall. You would not know they are there unless you test hole. I know that over time they have mined less and less on the Hoyle Pond side and more and more on the Inco Gold side. You want to put it that we go back to some of the traditional exploration things that we learned out of the Dome group, some basics on test holing and bazooka drilling and really looking around and being creative.
I think we have the ability to bring a lot of new, new sources of production online. You have, sorry, I mean things are open. I mean, you know, I mentioned about the whole concept about the refractory deposits. You know, this slide here, I only showed you in the slide this part here about Hoyle Pond. You have this extension that goes all the way out to Bell Creek with numerous drill results and continuous mineralization and some pretty good high grade stuff at this Owl Creek, which was considered to be refractory. We did not attack it.
I can tell you that part of the reason when I was here back in the 1990s, the reason why we did not go after a lot of the stuff as you went to the west was only because we had a 1,500 ton a day mill, 1,000 ton a day mill that we grew to 1,500 tons a day. We could deliver 1,500 tons a day at 14 and 18 gram material. You had a whole bunch of seven, eight gram material. You did not even want to bother looking at it. It has not even been looked at over the last 20 years-25 years. We think there is significant upside in terms of growing production towards this way. It is the new mine trend in Porcupine. There are quickly some things about Borden, which they have been mining.
They really only mined along the one main ore zone at Borden. We think there's a lot of geological potential and a lot of work to just do some drilling. Some of this flat hole drilling, some surface drilling and some for looking at repeat extensions on the whole mineralizing system. There's repeat extension on this system, parallel systems that can be found as well. Looking down dip and besides going down plunch looking down strike. You know, we are somewhat excited about Pamore. A number of reasons. I mean this is. There's an existing pit at Pamore. The current pit that we have at Pamore is going to be somewhere around in here. Sorry, maybe I should bring this out. The current pit sits that we're going to have sits in here. There's ways to extend the pit.
If we move a highway, there's a rail line here, which is not being used as just a spur. We can move that, we can double the size of this pit. There is lots of upside in terms of what can be done at Pamor. Meantime, it already has mine life over 20 years at 140,000 ounces a year. It is, as much as I talk about it as being an open pit project, the history of the Porcupine camp in terms of what goes on here. This is the underground at Pamor. I'll just try to show you. Over here, it's not on this section, but over here down here is Hoyle Pond, over here is Hallnor. Right on strike. Never been explored, never been looked at.
It was just in mind the one section here at Pam, this is from us from an underground exploration point of view. We think this is one of the key areas. You talk to Eric and then, you know, again, without getting too far ahead of myself, I'll show you some stuff about what, what's that Dome? How much, how much further drilling. The Dome ran for a number of years and there were 3,000 just pulling, pulling old stopes as they were caving. And what could happen. You know, this is where there's significant upside. Yeah, you can build a, you can build a pit here and you can, you can, you could, you could build a pit here, a large pit and eventually move the mill. Right, but you can also, you can also. Excuse me, you can also do some underground here.
Let me just take this off and you get a sense on the size of an open size of a project. It's here in a greenfield site permitting. Et cetera is pretty much straightforward in terms of what you need to do because you're in an operating area anyway. I could go on with a lot of. I'm not even talking about a lot of the other potential deposits, known deposits in the camp that haven't been exploited. I guess to show you in a nutshell in terms of what can be done in terms of value creation here and definitely a very good investment from a Franco-Nevada point of view.
You got optionality, a lot of future upside both in production growth and sustainable production in its existing base, significant exploration upside in terms of what needs to be done, well financed, in terms of being able to execute and do that. You are in a going concerned mining camp with production capabilities and permitting already in place. I probably took up a lot more of my time. Sorry about.
Thank you, Tony. I was thinking back, I don't know how long ago, it was probably a year ago now that we had our first lunch where we sat down at Modus and talked about this idea together. What struck us at the time was just the fit. The fit between these assets and Tony's team and all that experience that you and the team have had in Ontario through your career at Kirkland Lake with Lakeshore Gold. It was the fit that I think is the real magic in the deal. Speaking about fit and teams, the next talker up is Louis-Pierre and about Tocantinzinho. As you know, so much of what G Mining is doing is in the Guiana Shield and again there's that fit and that history.
I'm sure so many of you are familiar about the history of Franco-Nevada and how they really cut their teeth building mines in this part of the world. LP, over to.
You. Thanks Paul. Yeah, we've had lots of experience in the Guyana Shield. Actually I did my first work term as an engineering student at, oh my, in 1997 or 1998. I guess that makes me a little older than I look. Yeah, 2024 was a year of great achievements for Tocantinzinho. Obviously we completed the construction on time and on budget. We produced our first gold in July and declared commercial production in September. Obviously it's great to be putting a new mine online with the gold prices making all-time highs. Like was pointed out, we want to hit the cycle but it feels like we couldn't have hit it better. We made our first gold sale at $2,400 an ounce which has been the lowest gold price sale we've made to date.
Our sensitivities that we did in our feasibility study were nowhere close to that. We had topped it up at $2,000 an ounce. Obviously quite excited about that. For us, successful project execution is really based on three main criteria. First and foremost is safety. Throughout the full project we had only one LTI which resulted in leading industry safety statistics. We completed the project within 24 months. It was essentially just in time engineering and execution. Had supply chains been more efficient, we could have likely completed it sooner. With on time delivery that really set us up well to deliver the project on budget for $456.9 million. Since our ramp up, it's been quite good. Process plant is operating really well. The last quarter of last year was our first full operational quarter.
We essentially achieved 80% of nameplate with gold recoveries being where we want them to be already. Obviously, you know, the next step for us is to continue ramping it, ramping it up. We're currently employing a grade segregation strategy so we feed higher grade to the plant and stockpile lower grade as we go for the coming years. We're guiding this year 175,000 ounces-200,000 ounces of production. It's mostly skewed to the second half of the year with 56% of our output planned as we access higher grade from deeper benches and get the plant up to nameplate capacity. The really remaining piece for us is getting plant availability where it should be. We'll be achieving that with transitioning from our current liner system to full metallic liners in the SAG mill.
We still have a little bit of sustaining CapEx which is really towards completing our mining fleet. We have our third and final shovel coming in place later in the first half which will allow us to ramp up our mining rate to achieve 77,000 tons per day in the second half. Even though Tocantinzinho is a young operation, we're striving for operational excellence which starts with putting in place best-in-class technology. We're implementing an expert control system that's going to operate in real time. The SAG mill, making sure it's fed properly and on the flotation circuit which will minimize variability and improve gold recoveries. We feel like we're really, really implementing the best-in-class technology to be an efficient producer.
This year we updated our reserves and with the drilling that we've done so far within the pit and our mining to date, we essentially replenished reserves. We continue to have a 2 million ounce reserve in front of us at the end of the year. Really as we look forward, now that we're generating operating cash flow, we'll be investing in exploration this year with $9 million within the regional package which is essentially very greenfield. We'll be keeping another $2 million surrounding the pit to drill off extensions and grow the current pit life that we have. Obviously successful exploration will be great for all our stakeholders including Franco-Nevada with the stream continuing to pay out over time. TZ has been our foundational asset that's really launched us from a development stage company to a producer.
Now looking forward to executing on Oko West starting this year to graduate to being a multi-asset producer with this second project in Guyana. Definitely thanks to the Franco-Nevada team for backing our journey so far to get us to where we are.
Today.
Thank you, LP. Just to give you a sense for the level of success that the G Mining team has had and how that's been recognized in Brazil. Their next project is Oko in Guyana. They have already lined up a third property, a property called Centro Gold or Garimpo, which is also in Brazil. We actually own a small royalty on it already. This was an asset, a good-sized gold asset that was held by OZ Minerals and ended up in BHP. When BHP saw what the G Mining team was capable of in Brazil, rather than sell them the asset, they gave them the asset. The only thing that BHP took back in that transaction is a small royalty on that asset.
I think it really is a great indication of what people think and what they think of the ability of this team to execute. We have spoken about one set of mining assets that have been mining for many, many decades. Another new mine that has been built and has been commissioned, and the next one in our lineup is Valentine Gold, currently in construction. Hopefully we will start producing sometime this year. Ryan, why do you not come up and tell us about it.
Excellent. Thank you very much Paul and the Franco-Nevada team. It's great to be here and give you all a bit of an update on Valentine. I will be making some forward looking statements. I'm sure you'd be surprised if I didn't. Please do take the time to read the details on the slide or it's also available on Calibre's website. It is a very exciting time for Calibre. We are in the midst of a merger deal with Equinox Gold that also Franco-Nevada owns royalties on. The key asset there is Greenstone in Canada and we're slightly behind Greenstone in that.
As Paul mentioned, we're on the cusp of completing and finalizing construction of the Valentine gold mine in Newfoundland, Canada and rolling into a Q2 first gold, first ore, and then rolling out to ramping up to nameplate capacity by the end of the year. Valentine, this is a greenfield site, so there has been no gold produced from this area before. In our view, there's a very prolific prospective exploration land package that surrounds Valentine. Here in three pits we've outlined 4 million ounces of measured and indicated resources, 2.7 million ounces of reserves. What culminated in those reserves and resources over the past, I'd say about 15 years is about 350,000 meters of drilling. Out of that drilling, 10% roughly of the 350,000 meters has been pure exploration drilling.
There is, as I'll talk about in the slide coming up, a tremendous opportunity for additional discoveries, resource expansion, and reserve expansion. Based on the 2022 feasibility study that was completed by Marathon Gold, and Marathon was the company that sold a total of a 3% NSR to the Franco-Nevada team here, a great deal. I believe he actually had a royalty earlier, much earlier, seeing the exploration potential, seeing the project potential many years ago. I think that was great foresight by the Franco team because we are in a shear gold hosted system, an orogenic system that looks like it has some tremendous potential. Based on that 2022 feasibility study, you can see in the one line here approximately 200,000 ounce a year production profile over the first 12 years of a 14 year reserve life.
Now we believe that that will expand, converting some of those indicated and measured resources to reserves as well as the inferred material. That is what it looked like in 2022. Now Calibre acquired Valentine in the first quarter of 2024. It was about 50% through construction. It was about approximately 60% through detailed engineering. We have done a lot of work over the last 12 months to bring it to where it is today, bringing engineering up to 99%, obviously bringing the construction profile. We are very close to completing the final construction. What we have also been doing along the way is quite a bit of infill or ore control drilling as we start to strip and start to mine first, first few benches.
What we're seeing so far in the ore control drilling, albeit as a subset of the overall reserve, is that in the Leprechaun pit. There are three pits along this massive shear system. Three pits. The southernmost pit is Leprechaun, the middle pit is Barry, and the further pit is Marathon. So far we have done ore control drilling at Leprechaun as well as Marathon. As you can see on the slide here, that ore control drilling has been very, very positive. Reconciliation not only on grade, but we've also outlined more ore tons as well. As we continue to do this nine by nine meter spaced ore control drilling. Leprechaun has led to 30% more contained ore in approximately 8 million tons. At the Marathon pit, a smaller subset of data has been collected.
When we benchmark it against the 2022 mineral reserve, we have seen a pretty substantial increase in grade. I think it's about a 47% increase in grades and a 44% increase in contained ounces. I'm not saying that's going to be the case through the whole ore body, although that would be nice. I do believe that there is some good potential as we get more data points and understand the deposit better. Calibre is fully funded through to first gold, the initial project capital, initial mine of 2.5 million ton throughput and a 4 million ton mine is, as you can see there, approximately CAD 750 million. Again, fully funded. We are absolutely on budget and we are on track for first gold in Q2. A couple of bullet points here as to where we are.
You know, the major uncertainty in building new mines a lot of times is foundations, footings, earthworks, tailings facilities, and tailings facility is ready to collect water. We're on track, we're completed. Structural steel is completed, essentially mass construction for the whole site is nearing completion. We are absolutely on track. Control room is all connected through fiber optics. We are starting to have communication through that fiber optics to all the different aspects of the plant. You can see CIL, leach tanks, piping, electrical nearing completion. We are now starting to hand off various subsets of the overall site to pre commissioning and commissioning. Actually, one of the things that Calibre did when we took over the asset was we layered on some additional contractors, Reliable Controls Corporation, to help us through the phase of commissioning and pre commissioning.
We actually brought them on about a year ago to start that process with us as we were advancing construction to have overlap at the same time. We employed what we believe is a very strong operating team. We wanted to have overlap with the operating team that also has commissioning experience to ensure that there was proper communication between the contractors, the construction team, aligning with the operators so that this would come together and deliver as we expect. Absolutely on track. One of the opportunities that presented itself as we were analyzing not only the due diligence, but the opportunity at the asset was the potential for additional throughput. The 2022 feasibility study outlined a phase one approach and a phase two. Phase one is, as we are constructing now, a 2.5 million ton throughput.
Phase two was expected to be completed in 2029, which would take the mill from 2.5 million tons to 4 million tons. We actually have now reviewed this very closely and believe there is a better opportunity to take it to 5 million tons. We are completing detailed engineering on that. We see a tremendous opportunity there. Capital is in line with the original 2022 feasibility study in terms of dollar per ton of CapEx per ton of increase. We will provide more details to the market as that progresses, but in a very good position to complete construction this year, see first gold this year, and then bring that construction team back for 2026 to start working immediately on that phase two approach and potentially by as early as 2027, be up to that plus 5 million ton throughput scenario.
More details to come on that. Now I'll talk a little bit about what we see from an exploration perspective. What we're looking at here is an aerial view of the overall concession of the Valentine lake property. The dotted lines might be hard to see, but the two lines going through the property represent major faults or huge shear systems. A shear hosted gold system, orogenic, and as I mentioned, 350,000 meters of drilling. Yet only 10% of that has been pure exploration, presenting in our view a very compelling opportunity. Just a little bit of history for you is that in 2010, 2011, Leprechaun was first discovered. It had outcrop and then Leprechaun, the pit, was discovered in, believe it was probably 2015, 2016. The Marathon pit a few kilometers away was discovered again following the shear system.
The team at the time felt we've got, you know, we've got a mine on our hands here. Let's start advancing engineering, permitting. Through the process of condemnation drilling, they discovered Barry. There are opportunities where we may have deposits blind undercover. In fact, Calibre did an exploration program through 2024. In the first 10 months we were able to discover about a kilometer and a half south of the Leprechaun pit. We hit some tremendous grades, some tremendous widths. You can see some of the grades and widths there. This is brand new, new discovery exploration potential. The Valentine Lake shear system is approximately 30 kilometers in strike potential. There is a lot of exploration upside that could come from this camp and you look at some of the analogies or analogous types of geological systems around the world.
Tony's talked a little bit about Timmins. We're talking about a scale and magnitude of if you look 30 km across the Timmins or Porcupine Destre fault, you would see hundreds of millions of ounces of resources and produced ounces. This is what is presented with Valentine and the opportunity in front of us. This year Calibre has the largest pure exploration and discovery drill program. Approximately $20 million will be investing in drilling this year. Very exciting times for the company. As we transition from construction to production, we have not given an outlook yet in terms of cost base, in terms of additional capital growth, capital for the year or production.
We would anticipate if you were to assume the life of mine average around 200,000 ounces a year, I think it's a safe bet to say we will be between 50 ounces-100,000 ounces of production coming out of Valentine this year and a full nameplate ramp up by the end of the year. Exciting time for the company and I think an exciting time for Franco-Nevada as they realize the value of this long term and long life asset in Canada. Thanks very much.
Ryan. Thank.
You.
As Ryan was talking there, I was thinking back. Our Chief Geologist was Kerry Sparks and this is seven, eight years ago when we had made our initial investment and at the time there was just the Leprechaun pit and Marathon. And Kerry had the foresight. Now he also had the advantage. Kerry actually worked on the property in his early days but when we looked at this he said it's that you know what you've got there, Leprechaun and Marathon is just the tip of the iceberg. He said that full structure that runs across the property is mineralized. He said it's just covered in bog and we haven't been, you know, nobody was ever able to drill it properly. When you get the infrastructure in there, when you can mobilize a proper drill program, you're going to find a whole lot more.
It is so incredible to see just how that is playing out. For the last of our presenters today, and it is last but not least, in fact it probably is of all of these properties, the biggest resource endowment, Chris welcome up. Chris is going to speak about.
Cascabel.
Thanks everyone. For the final act of the halftime show, we're going to have to get some other slides up here. Oh, do I have to click it? That's me. I'm Chris Stackhouse, the CFO of SolGold, and we'll talk to you today about a little bit about our Cascabel project. Like the other presentations, we're going to be doing some forward looking statements here. I urge you all to read the fine print here as we'll be making some forward looking statements.
Okay, SolGold really has two investment cases and we'll focus primarily today on Cascabel and I'll get into more detail on that later, but we have Cascabel and we have, and I'll talk less about it today, but a prolific land package that spans from the north of Ecuador and that's what's highlighted in orange there is the country of Ecuador all the way to the south. I bring this up for two reasons. We have these two investment cases and we announced a couple weeks ago the intention to split these into two to make two separate identifiable investment vehicles.
We think that's really attractive to all of our partners and stakeholders because it creates two vehicles that attract the right type of capital and the right type of investors because we have a pure greenfield exploration play on a prolific land package in an emerging frontier mining jurisdiction. Then we have this incredible Tier 1 copper-gold asset called Cascabel and require different types of investors and different pools of capital. Separate, they'll allow both vehicles to attract the capital in advance with a lot more management focus obviously on each one, which benefits all the stakeholders in country and our investors obviously as we are able to unlock the value in both those packages. This is not just a gold project like the other presentations today. This is a massive copper-gold porphyry and we'll get into some of the details later.
Twelve million tons of copper sitting in resource, 30 million ounces of gold sitting in resource. In today's dollars that's circa $200 billion of metal sitting in the ground that's been discovered and drilled off through 250,000 meters of drilling done over the last five or six years. The last 12 months. I think everyone's familiar with the Cascabel or most people in the room are probably familiar with the Cascabel project. Just to bring everyone up to speed, in the last 12 months there's been some, I'd say some significant advancements in the project. First being sort of. We republished the PFS in March of last year. So a relatively current pre feasibility study and you can see some of the key highlights at the bottom of the slide here.
The key objective of this study was to really re-envision how to develop Cascabel with a more capital-sensitive approach. The previous PEA and the previous PFS really started big and assumed big deep pockets, which we do not have as a company. The PFS looked at how we can start from, in a phased approach, start small and grow big. That was the big success. The PFS categorically said yes, you can start small and grow big into this project. The small starter project is just a 28-year mine life that delivers those types of economics, and that reflects about 20%-25% of the overall resource.
When Paul was talking about optionality and upside and ability to get multiple times of return on the investment, we think this checks that box in spades with a 30 year mine life or just under 30 year mine life representing a fraction of the overall resource. Not talking too much about exploration upside today, but proximal to the Cascabel tenement we do have some other really interesting targets and we are hoping to deploy some capital into that later this year. That does become interesting for Cascabel because then you get some interesting other development options that may materialize out of that. In any case you'll have shared infrastructure approaches which these assets could potentially or other potential discoveries proximal to the Cascabel tenement may provide some other interesting optionality to this project.
Next slide, we'll talk briefly on some recent executive changes we had in the company. Effectively, Cascabel with the PFS last year and some of our technical partners that we've brought on and I'll also speak about, we really have the ship now pointed technically we think in the right direction and now it needs capital to fuel it, to move it forward. You'll see that sort of reflected in the C-suite changes that we'll talk about on the next slide. We're in good company with SolGold and the Cascabel project, obviously with our partners. Franco-Nevada has also participated in the royalties and streams that are held on this project. We also have investment by great mining industry leaders. BHP owns about 10% of the company. Newcrest had done the original investment. Now Newmont owns about 10%.
Our most recent investor investment we announced last week, Jiangxi Copper added to their position and that was a really interesting deal. We announced last week, they put some equity into the project at a 45% premium to market, which is always exciting for me as a CFO. More money in at a premium. That's great. Just as important as the money coming in was Jiangxi committing to provide additional technical services to our project at their cost. We get sort of the big mining company mentality and technical services at this sort of critical stage as we enter the feasibility study to solidify the project parameters that would make sense to a big partner. Ecuador, a great mining jurisdiction. There's, you know, two large scale mining projects operating in country right now.
There's the Mirador mine, big copper mine, open pit mine operated by China Rail Construction and Tongguan Investment. That's a joint venture down in the south. I think everyone in the room is familiar with the Fruta del Norte project, which has just been an exceptional success. We benefit from those two mines and the permitting and the technical expertise that's been developed in country. We are slowly trying to poach those, those credible skill sets to, you know, have Cascabel benefit from the experience that's been generated in country. Like every project, mining project in the world, we've got to respect our neighbors and the country which we operate. To our local team, we have an incredible local management team, has done an excellent job on this front.
Franco and their due diligence team, I think saw that firsthand when they were visiting the Cascabel site last year. We have great local community relations, very supportive of, you know, they want the mine to get built, they want the jobs and they want the investment and that, that same sort of sentiment runs right up through the federal government. Lots of support in Ecuador and I won't bother repeating the economics down there at the last point, but this is a big project, you see, it's a multi billion dollar after tax NPV with a generous return. That's just on the first, as I said, 30 years of reserve. All right, I love the AI imagery here. That is me in AI form I guess, and a better hairline.
More importantly on the slide, Paul Smith and Dan Vuchkic were recently added to our executive team. Paul Smith, being our new Executive Chairman, Non-Executive Chairman, sorry, spent better part of a decade with Glencore, head of strategy, significant M&A transaction experience with Glencore and his career and obviously very plugged into capital markets. Dan Vuchkic, similar background, decades of experience in banking and capital markets, as you can see. Scott, our outgoing CEO who's still on the board of directors, mining engineer by trade and decades and decades of experience. He really helped set the ships as I said, we believe on the right course. You can see reflected here sort of now the focus of the company going forward to be a little bit more capital markets out facing. Standard checklist.
What are the core criteria for, you know, any sort of credible mining project around the world? You know you need a good ore body. You know, it has to be in a, in a country that, you know, has good, good location, good infrastructure, and supportive of mining. Of course you need credible technical skills to actually build the mine. The font here is a little bit hard to read for everyone in the room, but you know, suffice to say we, I think we have all of that: the ore body, you know, $200 million or billion, B, that's a, that's, that's with a B, billion dollars worth of metal, but the reserve even that is, you know, over 500 million tons coming out about 1% copper equivalent over the 28 year mine life.
Even that's over $50 billion of metal in the first in the reserve. That number is meaningful to this room because Franco owns an NSR on the royalty and then of course a stream as well. With the more recent transaction we did with Franco and Osisko Gold Royalties last summer. Do we have a sellable product? Absolutely. A lot of metallurgy has been done. The current flow sheet produces one product, just a copper concentrate and all the gold reports to the copper con, all the metallurgy work to date, there's no nasty deleterious elements in it. Very sellable product will go anywhere in Europe, will go anywhere in the world and is completely unencumbered today. That's a significant opportunity for us because we believe that concentrate home will is a key project lever for us in unlocking additional project financing. Good location. We've talked about Ecuador.
Ecuador is a great place to do business. I've been CFO for about two years of SolGold. I've done about two dozen trips down to Ecuador. Safe place. Walk to work. In Quito where our project's a four hour drive straight north on a paved road all the way you turn left and you're on the project boundary. It is great infrastructure in the country. Power runs up to this side of the property although power has some issues in general in the country right now there is grid and deep water port exists where we expect the product to go out and then proven mine builders. We are not proven mine builders ourselves. We are collecting the talent around us to bring that credibility in.
We announced in the fall of last year G Mining Services joining the team to help us support the project going forward on a technical capacity. I'll talk about some of our other technical partners that are joining the project as well. Really the theme is leveraging a lot of the experience that's been generated in Ecuador through Fruta del Norte, through the Mirador Mine and not reinventing the.
Here we.
Go. This is the path forward de-risking the project. You can see some of our world-class partners. As I said, we need credible financial backers and we've got that through Franco-Nevada and Osisko with the transactions that we've done with them. Very supportive. We also have G Mining Services. Great group. Not only do they have the experience with Fruta del Norte and the construction there, but they have a permanent office in Quito as well. We could leverage the talent that they've been building up and generating in Ecuador. We've recently appointed ENTRIX to lead our ESIA, same group that did Fruta del Norte. Again, we're leveraging the experience that's in country and then Jiangxi Copper. I briefly mentioned our financing that we did with Jiangxi Copper last week.
Concurrent with that and just as important or more important is Jiangxi's Copper commitment to providing technical services to us as well at their cost to help us sort of, you know, guide where there needs to be some sort of major project decisions where we may not have the experience. It's another view that we can incorporate into our project thinking as we move the project forward. Okay, last slide. Just the numbers from the PFS but I think just sort of like rounds out what we were talking about already. It's a lot of metal. It's a significant mine life, multi, multi decade. You can see there just under 30 years with a production profile that produces about 200,000 tons of copper equivalent a year. This room's gold focused so we'll move that to gold.
On a gold production basis, just average, you got a quarter million ounces of gold for a 30-year or 28-year mine life, which is what Franco-Nevada has the most exposure to on here. It is large scale, low cost. Even with sort of the financing structures that have been put in place on the Cascabel project already, it still sits around $1 per pound all-in sustaining cost, so well into the bottom quartile of the cash cost produced. You know, over this year of mine life, it gets to ride through and enjoy healthy margins even in a low, low metal price environment. Of course, at today's prices it would just be rocking if we were actually pulling metal out of the ground at the PFS prices.
The numbers in here are all based on the PFS metal price is $3.85 per pound copper and $1,750 gold. That's what generates those economics up there. One of the most exciting bullets for me is the first 10 years of free cash flow based on those metal prices around $7 billion, just over $7 billion. That number jumps to like $10 billion or $12 billion at today's metal prices. That $7 billion is after a doubling of production. We do a significant investment in the first eight years to double the expansion of the copper concentrator and produce. Still after that expansion, $7 billion of free cash flow. The takeaway for me there is that this is a financeable project because there's enough there to make this project go forward.
I think when Paul started, he said there's the key criteria that Franco looks for when it's investing in a new project. You know, cash flows. I think this proves categorically this will generate positive cash flows. It's got to be, you know, in a good country, Ecuador, you know, proven mining jurisdiction with two world class operations already mining there. Long life. This is 28 years, you know, and that's only a fraction of the resource. And then the ability for multiple times on the payback. I think that sits in the tremendous resource upside that's not reflected in these numbers. I'll end there and I'm happy to answer questions afterwards.
Reception.
Thanks.
Paul.
Thank you.
Very exciting project. As we're saying up front, the project's just so much bigger in scale and the gold projects, they're a huge undertaking. Takes a lot longer to get it there and very exciting journey. Casper has the potential to be a huge mover in the long term for Franco-Nevada. I'll speak about that once Jason has done his piece. First up, Jason will speak on our diversified.
Strategy.
Take a few minutes now just to walk you through our diversified strategy. As you know, we've long held a portfolio of diversified assets that we think are a very good complement to our core precious metals business. The key to our strategy is to use diversified assets to supplement our corporate growth during times when opportunities in precious metals are either scarce or sometimes expensive. Within that strategy, we do aim to keep to a maximum of 30% diversified revenue. Within that, we intend to keep to a maximum of 20% in energy revenue. We feel that that's an appropriate target in order to maintain our status as go to gold stock, but also to allow us the flexibility to add growth to the company.
In terms of when we're active in diversified, there are a couple of other drivers that dictate when we'll do acquisitions. The first of those is again, these are cyclical commodities and we do want to aim to be opportunistic within the cycle to amplify our returns. The other element is sometimes there are high quality or world class assets that come to market. We don't control the timing, but we will pursue those when they're available and look to maintain our balance over the longer term. Examples of each of those are energy assets where we have been opportunistic and then with our iron ore Vale assets. That's an example of pursuing assets when they become available.
We'll also look to leverage our skill set when we're acquiring assets, we'll use our team, our technical team and the board that Eaun mentioned to identify great quality assets that we think will complement our portfolio. On the whole, the slide on this page shows our diversified revenue as a contribution to total over time. It also shows when we have acquired our key diversified assets. There's a couple of points worth noting on the slide. Number one, you can see that on an annual basis, the revenue does vary quite a bit year to year. We have maintained that discipline over time of no more than 30% diversified over the long term. The other important point here is that I think it does demonstrate in our strategy to be opportunistic.
When you look at the period from 2014 to 2016, the oil price over that period went from a high of north of $100 a barrel down to a low of $30 a barrel. We saw that as an excellent opportunity. In 2016 we began to deploy significant capital into oil assets, really trying to take advantage of the growth in U.S. shale. Likewise, between 2018 and 2020, natural gas prices really softened. Prices dropped from $3 an MCF, sorry, $3 in MCF down to around $1.75 in MCF. In 2020, we made the first of our Haynesville investments. That investment over just a few years has nearly paid itself off on the back of what has been a rebound in natural gas prices. Going forward, the focus for adding assets remains in gold and precious metals.
We came out of 2024 with a commodity mix of about 23% diversified. We do have some latitude to add assets if there are quality opportunities to pursue. This slide looks at the diversification within our diversified portfolio. On the left hand side of the screen you'll see the oil weighted assets are highlighted in blue. On the right hand side you have gas weighted assets and our iron ore assets. Our energy assets are located geographically all the way from northern Alberta right down to Texas and the Louisiana Gulf Coast. They span almost all of the predominant or preeminent shale plays in North America and they are exposed to many different operators. Our iron ore assets are located in Canada and in Brazil. They're operated by Rio Tinto and Vale, two of the world's best.
If you look at all these assets in aggregate, they generate revenues of significant scale. These assets generated about $250 million for us in 2024. Another key highlight here is that the diversified portfolio consists of extremely long-dated or long-duration assets. At the top of the slide we look at our energy assets and what we have done is divided our reserve life on a 3P basis, or proven, probable, possible. We divided that by our production volumes for 2024. In other words, if you just hold volumes flat out into the future, these assets on average will generate a 22 year asset life. In addition to that, we do have exposure to multiple formations at depth that are not included here. Also, improvements in recovery that we hope will bear fruit on the I north side. Again, these are based on reserves alone.
These are multi decade assets that we think will get even longer as resources are converted to reserves over time. One last point that I think is worth making. We do cover an expansive land package. In our diversified portfolio we have exposure to over 10 million acres of land which to put that into context is roughly the size of Switzerland. Underneath that land position with what is the right geology, we think there's tremendous upside that should bear fruit well into the future. This slide looks at our energy revenues. You can see that they've ramped up quite significantly over time. In 2022 we had an exceptional year on the back of very strong natural gas prices that's since moderated a little bit. Going into 2025 we're expecting about $200 million or so in revenue. That implies 60,000 GEOs-70,000 GEOs at our forecasted prices.
That fits within the total diversified guidance that we have issued of 80,000 ounces-100,000 ounces. We do have growth over the next five years that we expect from the energy assets. That growth should come from increased volumes from our gas-weighted assets and also from increased distributions from our venture with Continental Resources. Another big contributor to the diversified GEOs is the Vale R and R assets. These are in Brazil. We think these are tremendous assets. They are truly world class. They are at the bottom of the cost curve. There are many decades of reserves. As I pointed out, in 2024 they delivered about 16,500 GEOs to our revenue base that came exclusively from the Northern system. You can see on the map the Northern and Southern system, Southeastern system are outlined.
During the course of this year we do expect to cross a volume threshold that will allow us to receive royalties as well on the Southeastern system. Once that happens on a volume basis that should generate roughly 30% growth over this year. I just want to finish up on this slide. What this is meant to show is in our minds there are a number of key attributes or characteristics that really drive a premium valuation in royalty portfolios. We think the diversified portfolio within Franco-Nevada ticks all those boxes. This is a portfolio of huge scale. It generates roughly a quarter of a billion dollars a year in revenue from a very diverse asset base, a diverse set of commodities.
Most of the assets are located in Canada and the U.S. It's underpinned by a very, very long life portfolio that will create cash flow for many decades. It's a portfolio that has demonstrated growth about sixfold over the last 10 years. As I've spoken about, we expect further growth through our energy and iron ore assets. In addition to that, in the years to come we expect additions from copper development assets like Copper World, Takatakka and others. Again, it's all underpinned by a very large land footprint. The chart at the bottom of the page is meant to convey an important point. If you look at the chart, you'll see that there are a number of royalty vehicles that are listed here, all of which trade at premium valuations. Those vehicles all have some attributes in common.
They are underpinned by very large scarce land bases that provide very, very long revenue duration. What they do not have is exposure to gold. The takeaway here is if you have a portfolio with the right attributes, you can trade at a premium multiple even outside the gold space. We think the Franco diversified portfolio has all those attributes. We think it is a tremendous complement to our precious metals business and we think it is deserving of a premium valuation. With that I will turn it over to Sandip.
Thanks, Jason. As Paul highlighted at the outset, I'm going to talk about available capital, the dividend and guidance. At the end of the year we had $1.45 billion in cash and cash equivalents. In December we announced a $500 million stream acquisition with Sibanye-Stillwater that has been fully funded in February. Recently we announced the acquisition with Discovery Silver on Porcupine. Total value there was $450 million. We have funded the $50 million in equity and the $300 million on the royalty, likely fund as Tony highlighted next week or sometime in April, the loan component that sometime in the future and that's at the option of Discovery if they wish to draw on that. When you net those balances out, we're down to about $600 million.
Obviously we've got the billion dollar credit facility which is essentially undrawn and then being a gold company, we actually hold gold and this is not really our stream ounces, this is royalty ounces. We actually accumulate royalty ounce gold ounces from some of our royalties and have built up that balance over the last number of years. It's helped out a lot in rising gold price environment. At the end of the year that gold was worth about $100 million. If needed we could easily liquidate that. In total we've got $1.7 billion of available capital with minimal commitments. The largest commitment out there is the stream that we did with SolGold but that will get funded later, later down the road. We really don't have significant commitments at this time.
In addition, where prices are right now we are generating $250 million to $300 million cash flow from operations on a quarterly basis. So very well capitalized. With respect to the credit facility, we use it as a financing tool and it's just there to add some financial flexibility, which is one of our core principles. As Paul outlined earlier, it's $1 billion. We've got a few credit letters against it for the CRA reassessments, but they're minimal. It does have an accordion feature for $250 million and five strong banks that support us with this facility. We're not opposed to using it as you can see with the red bars on the chart we have drawn on it. Again, we try to be opportunistic. As Paul highlighted, 2014, 2016, you had the base metal downturn. We drew down on the facility during that time we were very active.
One of the reasons was going into that downturn we had significant financial flexibility. Again, 2018, 2019, gas prices came down, oil was weaker. We were very active in the oil and gas space as Jason highlighted. Again, we drew down on the credit facility at that time and so our tendency is to draw down on it, but we pay it off as fast as possible so that we're ready for whenever the next downturn does occur. With our large cash generation, obviously the priority is always going to be adding long life great assets to the portfolio with significant amount of optionality. Returning capital to shareholders is just as important. We're very proud of the fact that we've raised our dividend 18 years in a row. Our last raise increase was in January.
We raised it by just under 6% to $0.38 US per share per quarter. $1.52 annualized. That's a 13% CAGR since 2008 in terms of dividend increases. For those shareholders from our IPO, they've done really well. Essentially U.S. shareholders getting 10, 10% yield right now. Our philosophy on the dividend is sustainable and progressive. We don't want to be in a position where we cut the dividend. Instead we want to be in a position where we can maintain it and increase it every single year. With our portfolio and the quality of our assets and the long life of them, we think we can keep this dividend and raise it for the long term just because of the portfolio that we do have and the cash flow generation that comes that the company does deliver.
A couple of weeks ago we did release our guidance 2025. We've got some significant growth from a GEO standpoint. Total GEOs, the range we're providing is 465,000-525,000. That's a 7% increase over 2024. Within that precious metals, 385,000-425,000. That's actually a 14% increase. Our diversified revenue is essentially flat because we're dividing by a higher gold price, it's equating to less GEOs. Still, when you look at the revenue numbers, we estimate a 25%+ increase in revenue in 2025 just based upon where commodity prices are. We used a $2,800 gold price for our guidance. The main components of our growth in 2025, you know the new mines, Tocantinzinho, Greenstone, Solaris Norte, we'll get a full year ramp up of those. You've got the new deals that have been done.
The Sibanye-Stillwater Western Limb Complex, Yanacocha as well as Porcupine. We'll get the benefit of those ounces in 2024 and then the new mine Valentine Gold, as was highlighted, will start production middle of this year. Good growth 2025 and as we move forward to 2029, further growth. If you look at 2024, we did 463,000 GEOs. Looking forward to 2029, we're guiding to 490,000 GEOs-550,000 GEOs. That's about a 12% increase over that time frame. Main components again, new mines starting Stibnite, Copper World, Eskay Creek and Takatakka, and then expansions at Vale, Antapaccay, Candelaria and Magino. When I look at that growth, I'm pretty confident most of that will materialize. We tend to be conservative in our guidance estimates, but I'm pretty confident that this growth is real and will deliver by 2029.
The other important point to make here is this is fully funded. There is no commitments associated with this growth. We've got solid gold which we have to fund but that's at a later point in time and that growth kicks in 2030 and beyond. This is fully funded. The cash flow that we generate going forward we can spend on new deals and add incremental growth to this. Above and beyond that is Cobre Panama. We know with Paul talking about the sentiment changing, hopefully by 2029 it's back in production and if it is it's 130,000 GEOs-250,000 GEOs. If you take the midpoint of that range and you add it to the organic growth we've already got, we've got over a 40% increase in GEOs over that timeframe. Significant growth ahead for Franco.
The one thing I will point out is that this outlook is based on GEO sold and not production. There is a difference. One of our core principles, and Paul highlighted it, was we want to increase cash flow per share and we want to increase NAV per share. We do not necessarily focus on top line growth. Obviously, we all like to have growth in GEOs over time, but for us it is on those two metrics: cash flow per share and NAV per share. What we have realized is that some of our peers use production GEOs as their guidance, others use GEOs sold. There is a difference. Production GEOs are before refining deductions, before recoverabilities, and before payabilities. GEOs sold are net of those. Our guidance is based on GEOs sold. Even within that, there is a difference. Not all GEOs are equal.
You've got stream GEOs and you've got royalty GEOs. Stream GEOs have a fixed cost for every single ounce that's being delivered. A royalty ounce is almost all margin, minimal cost. As you look at this chart you can see the cost element is much higher on the stream revenue than there is on the royalty revenue. You might have noticed that at the end of the year with our financial results we have started using a new metric called Net GEOs and the purpose is to make all GEOs equal. What we do is we are backing out the cost of sales element for all GEOs so that it's a level playing field and you will see more of that metric used by Franco-Nevada going forward. We will still report our numbers on GEOs sold but we will begin also reporting Net GEOs.
As I look forward to the growth that Franco has, it's almost all royalty driven, you know, Stibnite, Eskay Creek, Copper World, Vale. It is high margin growth ahead of us and if all things stay as is, I expect our margin to increase over time. With that I will pass it to Paul for closing.
Remarks. Thanks Sandeep. I'm going to wrap up but before I do I'm just going to touch a little bit on longer term optionality. Sorry that moved forward. Sandeep has been speaking about our five year outlook. Those are all the assets that are producing and that we expect to produce over the next five years. Obviously then there's Cobre Panama, we don't know but we're very hopeful that that will also start contributing over that same period. That is not all there is in the portfolio. There are a lot of assets that fall outside of that five year time frame. We've broken that into two groups. The first one, long term assets, those are, and what I've broken out are the large scale defined resource assets that we have and you can see that's what's shown in the pie chart there as we chatted about.
Cascabel has the potential to be a huge part of that. Pascal Armour is in there. You've got Congo, which is the copper gold property. That's a copper gold project that sits on the Yanacocha property. Nueva Union, big copper joint venture between Teck and Newmont in Chile. All the royalties that we have that cover the Ring of Fire, Vulcan Gold project in Chile and the Holt project. Tony, maybe you'll help us get the Holt project back going again up in Ontario. Amongst those projects, 4.9 million M&I royalty ounces and royalty ounces again, we have taken what we'll get from those properties and converted into a royalty ounce. So we get 100% of the economics on that basis. At today's gold prices, that's $15 billion of value that is sitting in that pie chart. That's just the bigger projects, the more advanced ones.
In addition to that, then other 15 small advanced projects and we've got 224 exploration assets. They're not included in any of that. People often ask, you know, what is the next best thing that's going to come out of that portfolio? Inevitably there are, especially when commodity prices are good and people have got the drills turning, you always get more that comes out of that portfolio. We had one that popped up last year. The asset is called Rogozna, it's in Serbia. The company Strickland Metals, they put out their first resource last year. It's a copper gold target. It was about 5 million ounces of gold equivalent. They drilled through the back end of the year. They put out their second resource a month or so ago, 6.7 million ounces. We've got a 1.5%-2% royalty on that.
The metal value of that more than $200 million at this stage. These are little pops. This is the optionality that you get out of that royalty portfolio. I'll wrap it up with that. Last thing to say is just in terms of the pipeline, I'm sure there'll be questions. We've got a very busy pipeline, very confident that we'll be adding more quality assets to the portfolio through the year. With that said, we've been doing all the talking. We would love now to field any questions that you've got for me or for the team. Candida has a microphone, so if you put your hand up, she will bring it over to you so that the folks on the webcast can hear the question.
Hey, Paul, thank you for today's presentation. Hello, everybody. Lawson Winder from Bank of America Securities. I just wanted to ask, when you think about transactions and suitable IRRs, at least on the upfront metrics, what gold price do you think is appropriate to use today? And then how do you think about Franco-Nevada's cost of.
Capital?
First up, in terms of the gold price, the different strategies that we use for gold and we use for the other metals, where we're trying to be more opportunistic, we're trying to make sure we invest in, say, the lower half of the price cycle in other commodities. With gold, we look to invest through the cycle. Our discipline going to our board is we always give them two decks. They get a deck on consensus prices, and they get a deck on what is close to spot prices. The art of doing the deal is you got to look at both scenarios. You don't know which one is going to play out, but you got to be happy with the outcome. In both scenarios, the art of doing the deal is put the pin in somewhere in between. That is. That's the secret of the source.
You know, to your point on rates of return, you know, that upfront investment, it is at a low rate of return, in a sense, call it wiggle room. One of the things we say to ourselves, when you invest in a mine, it's a spreadsheet. The only thing you know for certain is your spreadsheet is going to be wrong. The commodity prices will be different from whatever you assume in there. The key thing when we're looking at projects, are we highly confident that the project is economic, that we will get our money back? The number one thing that we think about as a business, as I said up front, is it's not the rate of return that you see on what's there today. It's investing in the right properties that can be a multiple of their size over time.
Because if they are multiple of their size, that ultimately is where you make your returns in this business. In terms of our cost of capital, I could not put a finger on our cost of capital. We know that it is low. Part of that is we do not typically use debt through the cycle. It is one of the elements in terms of how we bid our deals. People often ask us, as the cost of debt moves up and down, do you move the rate of return that you demand up and down? The answer is no. The way we think about ourselves is that we can provide capital to the industry at a consistent cost. There will be times when debt is very cheap, and then we cannot compete and we are happy not to compete on that level.
There are other times when debt is far more expensive and then we can compete. We prefer to think, you know, both when we're competing with debt and also with the equity markets, that we're at consistent cost of capital. The equity markets probably even more open and shut than the debt markets. There are some periods where they're wildly undervaluing assets, and there are other periods where they're overvaluing it. We just try and be consistent in what we find over time is, is when people really need our capital, it's when we get our deals done. That ends up being a very good.
Strategy.
If I could also ask one more question on Cobre Panama, your partner in that mine, First Quantum Minerals has started to invest pretty significantly into, I would call it, public relations in the country. A lot of the officials in the country have indicated that really they, the only thing standing in the way of that mine being shut down and that mine restarting is public opinion. Has Franco-Nevada given any thought to getting involved the way First Quantum has in terms of trying to get the good word out about that asset to the population of.
Panama?
We work very closely with First Quantum. We over the last 18 months have had a lot of discussions on that strategy. We have done a lot of work in country collecting our own information, intelligence. We share that all closely with First Quantum. Very open to helping them out on that. In terms of that current effort, no, First Quantum is leading that effort. They do need to lead the effort. They are the owner of the property, they are the face of the project in country. That is the name and the persona that the people in Panama get to see. They really are the best people to carry the message forward.
Thank you very much for the presentation.
I'm going to start with you, Paul, since you're up at the podium, just on that long term optionality of that 4.9 million ounces of M&I royalty ounces, how, how does that translate into what it could mean for your GEOs per annum? Like should I be thinking that that's, you know, 50,000, like I don't know how to take that 4.9 million ounces.
Yeah, you know, I don't know that you can, I don't, I myself can't. We don't know the timing on those projects. They all are longer term projects. So I don't know that you can quite translate it into an annual run rate at this stage.
What we've always found in the guidance of our company and we, you know, every year when we do our strategy session, we put out our own internal projections for the growth of the company and for the last 15 years the growth peaks five years out and then it comes off because that's the visibility you have on projects when they come online. Every year that we do that and internally we've got the graph, it shows that peak moving out and out and out and out. Every time that we do it I think the takeaway from that is there's lots of gas in the engine that's going to keep driving the GEO growth for many decades to come.
Maybe another way to ask it, that 4.9 million ounce M&I, when's the earliest do you think substantial portion of that would come in? Am I looking into like 2035 and beyond? Would that be reasonable?
Probably the biggest contributor, single contributor there is Cascabel, and you know, there's a lot of work that's being done now to move that project to feasibility and would love to see that being reached, you know, certainly within the next two years, and then that can move to a construction decision. It is a big block cave target, so you know that takes a long time to get that in production. There are options. They didn't speak much about it. There is an open pit on the project, Tandayama.
There is the scenario of starting the decline to the underground, building the mill, starting to feed the mill just like you did at OT from that open pit. It is quite conceivable that when you get into the early 2030s that you could see production coming out of that asset.
Okay, and can I also ask you on Cobre Panama as well, I think we saw that maybe, you know, First Quantum may be suspending arbitration with the government of Panama. Where are you on your arbitration with them?
As you know, they are separate arbitration processes. They are under the ICC. We are going forward under the Canada Panama Free Trade Agreement. Their process allows it to move faster than ours.
We are next steps in our process as we do to put in a detailed claim in May of this year and then that triggers a timetable that would put our hearing at about October of 2026. Okay, you have not suspended or done anything on that front? No, we have not been asked to at this stage. The plan A for both First Quantum and ourselves here is renegotiate the sod of the mine. We will be very pragmatic on any requests around the adaptation.
If I could squeeze another one in for Jason. That seems lonely over there. I wanted to ask you about your diversified strategy. You talked mostly about energy and iron ore.
My question for you is, is that sort of as you look at the landscape, should I be thinking that that's your focus on those two types of commodities or are you open to others like uranium and.
Lithium?
I'm just trying to understand what other asset mix could I see in there? And then what size of deals are you seeing in the space at this.
Point?
Yeah, and I think the answer to the question really is, you know, what, we do try to be opportunistic in the cycles. We're also focused squarely on the quality of the asset. Usually that's the number one driver as we look at what comes available. We're looking to add really good quality assets that complement the portfolio, not just, you know, a zinc asset. For the sake of adding a zinc asset. I think we will look at all different types of commodities. I don't think we have a specific focus at this time. Lithium is a good example of a commodity right now that is, you know, depressed in terms of pricing. It could be an interesting time within the cycle.
In terms of, you know, the sizes of opportunities that are out there, they really do range from very small to very large. We did do a small deal not too long ago where we acquired a $1 million option on a potash project down in Brazil. Small dollars, that could be something quite meaningful in the future. There are also bigger opportunities out there in various commodities that we'll look at from time to time.
Time. When you mean bigger, should I be thinking under $500 million or is that too.
Big?
Yeah, usually $500 million is a good number. We could go above or below that. I think we do, as I said earlier, want to maintain the commodity balance over time. If there are larger opportunities that come available that we execute on, we would look to rebalance as time goes.
Thank you. I'll just pass it.
Good afternoon and thank you for taking my question. Brian MacArthur, Raymond.
James. First of all, I think it's great you talked about.
Security. It's not something that's been talked about.
About a lot, I think, over the years. My question is really a few things. First of all, when you go into a deal, would you ever do a deal without security? Secondly, how do you price that in your rate of.
Returns? Third, maybe, Paul, since we've been around for a while, maybe you.
Can comment a little bit.
How. On whether you've seen that change over time. That is, security is less than maybe it was in the past. I get it, royalties are different than streams. I'd just be kind of curious how that's evolved because obviously it's become a bigger issue over the last number of years and it's an important part of how you structure deals. Maybe Jason, over to you. Obviously it's a little different in the base metals, you've got so
me equity.
Investments. How you think about it on that side. Thanks,
Brian. Maybe I'll give you the overview to say there have been some.
Changes.
Particularly on the streaming side over time in terms of the amount of security that people have taken, where they rank in the structure. The best guy to answer the question in detail is Eaun. I am going to hand it over to him.
Him.
Thanks, Brian. You know, I think first of all what we're really looking at and what you're focused on is kind of counterparty or credit risk and how you address that. I think first principles is to make sure that you've got, you know, from a risk perspective, a counterparty that will be solvent, will generate a lot of cash flow. And when we talk about guarantees and obligations, it's not necessarily hard asset security. Hard asset security, I would say, is more typically limited to the project financings, which are generally the higher risk investments and where you don't have a counterparty that has a strong balance sheet. In a lot of cases, what we'll first seek to do is assess the credit quality, what is reasonable, what measures we can take, what safeguards we can avail ourselves of to reduce the risk.
It is different in a case by case basis. There have been a lot of streams, streams that we have as well that are not hard asset security but have very strong guarantees. There is no panacea. Right. You have to look at each case separately. If you have a very strong parent, maybe the parent guarantee is a very good option. If not, maybe you take the hard asset security. Wherever possible, we seek to mitigate the risk because we want that tenure so we can see the optionality over time. It is a multifaceted approach.
Short.
Brian, maybe just follow up on your point on diversifieds, I think, you know, we're fortunate on the diversified piece of our portfolio in that a lot of what we own is mineral title, particularly on our energy assets in Canada and the U.S. That title is effectively a perpetual interest in the land. Regardless of what happens with an operator, if they go through a bankruptcy or a sales process, we own that mineral title, our ownership interest is preserved. We're fortunate there. In looking at acquiring new assets generally under diversified, the opportunities that we're looking at aren't generally as structured as what Eaun was talking about. We're typically acquiring royalty interests that have title.
We are also, because it is oftentimes not our primary commodity, not looking at situations where we are dealing with third party counterparts that are stressed, where we are worried about security. It is really more the third party royalties where you have an interest in the land.
Base.
Thank.
Any further questions from the room here? Not yet.
Lawson.
If I could just add a follow up on one of the slides that you guys presented. I found it pretty interesting that you were comparing some of the Franco-Nevada portfolio assets to woodlands and I guess it begs the question, I mean are you looking at potential transactions on woodlands or farmlands? I mean you can rent farmland out and have, you know, farmers, you.
know, so the land, I mean, is.
That something that's on the.
Radar?
I mean not on the radar at the moment. The two things there, you know, the first is, you know what our skill sets. Our skill sets are figuring out resources in the ground. We've got geologists, we've got engineers. So we're going to stick to our knitting. The reason for showing the slide is to show the valuation of portfolios where they've got all of those attributes that Jason spoke of. Long duration, good tenure, good diversification, growing cash flows. Really what we want to demonstrate is we think if you've got a portfolio with those attributes that you can command the sort of premium multiples that all those various plays are.
Getting.
I had to.
Ask. Bill Gates owns.
Farmland
not quite in his league.
Yet.
Thank.
You. Derek Matiti.
Cowan. I have a question on evaluating deals. Perhaps pre tax IRR is not.
A fair way to evaluate deals, protect potentially on these long multi decade assets. How should investors be evaluating your success in executing on deals from day one? Is there a better metric that we should be thinking about, whether it's payback or mine life or mineral.
Endowment?
Derek, I'll take that. Obviously anytime you do a deal, you've got to calculate what the returns look like day one. I know that everyone will always do it. I think the point to make is that's not the end of the race. That's the starting race. The assets have just crossed the start line. It's a marathon. Whether these assets do well is something that's going to play out over many, many decades. My suggestion would be track how the assets are doing over time is really a much better measure of, you know, how well companies are doing than what does the headline look on the day that the new deal gets cut. I don't see any more questions in the room, Lloyd. Lloyd is nodding his head. Doesn't look like we've got any on the webcast.
I'm looking that we're two minutes over time here. We'll wrap it all up and say thank you for all of your support, both analysts and investors. You all have contributed a huge amount to the success of Franco-Nevada. We really appreciate it. Thanks for coming today. Please join us for a drink.