Document and Entity Information
Document and Entity Information | 6 Months Ended |
Jun. 30, 2020 | |
Document and Entity Information | |
Entity Registrant Name | FRANCO NEVADA Corp |
Entity Central Index Key | 0001456346 |
Document Type | 6-K |
Document Period End Date | Jun. 30, 2020 |
Amendment Flag | false |
Current Fiscal Year End Date | --12-31 |
Document Fiscal Year Focus | 2020 |
Document Fiscal Period Focus | Q2 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION - USD ($) $ in Millions | Jun. 30, 2020 | Dec. 31, 2019 |
ASSETS | ||
Cash and cash equivalents (Note 4) | $ 378.5 | $ 132.1 |
Receivables | 78.4 | 97.8 |
Loan receivable (Note 5) | 15 | |
Prepaid expenses and other (Note 6) | 43.8 | 48.8 |
Current assets | 515.7 | 278.7 |
Royalty, stream and working interests, net (Note 7) | 4,423.8 | 4,797.8 |
Investments and loan receivable (Note 5) | 179.9 | 183.2 |
Deferred income tax assets | 54 | 6.8 |
Other assets (Note 8) | 8.8 | 14.1 |
Total assets | 5,182.2 | 5,280.6 |
LIABILITIES | ||
Accounts payable and accrued liabilities | 35.3 | 41.8 |
Current income tax liabilities | 2.8 | 11.6 |
Current liabilities | 38.1 | 53.4 |
Debt (Note 9) | 80 | |
Deferred income tax liabilities | 69.4 | 82.4 |
Other liabilities | 4.3 | 2.6 |
Total liabilities | 111.8 | 218.4 |
SHAREHOLDERS' EQUITY (Note 15) | ||
Share capital | 5,531.9 | 5,390.7 |
Contributed surplus | 15.1 | 14.2 |
Deficit | (265.8) | (164.4) |
Accumulated other comprehensive loss | (210.8) | (178.3) |
Total shareholders' equity | 5,070.4 | 5,062.2 |
Total liabilities and shareholders' equity | $ 5,182.2 | $ 5,280.6 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (LOSS) AND COMPREHENSIVE INCOME (LOSS) - USD ($) shares in Millions, $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (LOSS) AND COMPREHENSIVE INCOME (LOSS) | ||||
Revenue (Note 10) | $ 195.4 | $ 170.5 | $ 435.9 | $ 350.3 |
Costs of sales | ||||
Costs of sales (Note 11) | 28 | 27.4 | 71.6 | 59.8 |
Depletion and depreciation | 52.3 | 58.9 | 116.7 | 119.8 |
Total costs of sales | 80.3 | 86.3 | 188.3 | 179.6 |
Gross profit | 115.1 | 84.2 | 247.6 | 170.7 |
Other operating expenses (income) | ||||
Impairment of royalty, streams and working interests (Note 7) | 271.7 | |||
General and administrative expenses | 11.7 | 5.6 | 17.9 | 12.5 |
Gain on sale of gold bullion | (2.4) | (0.4) | (4.4) | (0.8) |
Total other operating expenses | 9.3 | 5.2 | 285.2 | 11.7 |
Operating income (loss) | 105.8 | 79 | (37.6) | 159 |
Foreign exchange gain (loss) and other income (expenses) | (0.1) | (0.2) | ||
Income (loss) before finance items and income taxes | 105.7 | 79 | (37.8) | 159 |
Finance items (Note 13) | ||||
Finance income | 1 | 1.2 | 1.9 | 1.9 |
Finance expenses | (0.8) | (2.5) | (1.9) | (5) |
Net income (loss) before income taxes | 105.9 | 77.7 | (37.8) | 155.9 |
Income tax expense (recovery) (Note 14) | 11.5 | 13.7 | (33.4) | 26.7 |
Net income (loss) | 94.4 | 64 | (4.4) | 129.2 |
Items that may be reclassified subsequently to profit and loss: | ||||
Currency translation adjustment | 29.4 | 14.1 | (34.2) | 28.1 |
Items that will not be reclassified subsequently to profit and loss: | ||||
Gain on changes in the fair value of equity investments at fair value through other comprehensive income (loss) ("FVTOCI"), net of income tax (Note 5) | 37 | 24.8 | 1.7 | 47.7 |
Other comprehensive income (loss) | 66.4 | 38.9 | (32.5) | 75.8 |
Comprehensive income (loss) | $ 160.8 | $ 102.9 | $ (36.9) | $ 205 |
Basic earnings (loss) per share (Note 16) (in dollars per share) | $ 0.50 | $ 0.34 | $ (0.02) | $ 0.69 |
Diluted earnings (loss) per share (Note 16) (in dollars per share) | $ 0.50 | $ 0.34 | $ (0.02) | $ 0.69 |
Weighted average basic number of shares outstanding (Note 16) | 190.2 | 187.2 | 189.6 | 187.1 |
Weighted average diluted number of shares outstanding (Note 16) | 190.6 | 187.5 | 189.6 | 187.4 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Millions | 6 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Cash flows from operating activities | ||
Net (loss) income | $ (4.4) | $ 129.2 |
Adjustments to reconcile net (loss) income to net cash provided by operating activities: | ||
Depletion and depreciation | 116.7 | 119.8 |
Share-based payments | 2.5 | 2.6 |
Impairment of royalty, stream and working interests | 271.7 | |
Unrealized foreign exchange loss (gain) | 0.4 | (0.1) |
Deferred income tax (recovery) expense | (57.9) | 5.3 |
Other non-cash items | (5.6) | (1.9) |
Acquisition of gold bullion | (17.6) | (15.6) |
Proceeds from sale of gold bullion | 28.1 | 17.9 |
Operating cash flows before changes in non-cash working capital | 333.9 | 257.2 |
Changes in non-cash working capital: | ||
Decrease in receivables | 19.4 | 4.7 |
Decrease (increase) in prepaid expenses and other | 2.3 | (5.4) |
(Decrease) increase in current liabilities | (10.2) | 6.2 |
Net cash provided by operating activities | 345.4 | 262.7 |
Cash flows from investing activities | ||
Acquisition of royalty, stream and working interests | (38.3) | (95.6) |
Acquisition of energy well equipment | (0.2) | (0.5) |
Issuance of loan receivable | (15) | |
Proceeds from sale of investments | 6.3 | |
Net cash used in investing activities | (53.5) | (89.8) |
Cash flows from financing activities | ||
Repayment of revolving credit facilities | (210) | |
Proceeds from draw of credit facilities | 275 | |
Proceeds from draw of term loan | 160 | |
Repayment of term loan | (80) | |
Proceeds from at-the-market equity offering | 107.3 | |
Credit facility amendment costs | (0.8) | |
Payment of dividends | (76) | (70) |
Proceeds from exercise of stock options | 6 | 2.5 |
Net cash (used in) provided by financing activities | (42.7) | 156.7 |
Effect of exchange rate changes on cash and cash equivalents | (2.8) | (0.4) |
Net change in cash and cash equivalents | 246.4 | 329.2 |
Cash and cash equivalents at beginning of period | 132.1 | 69.7 |
Cash and cash equivalents at end of period | 378.5 | 398.9 |
Supplemental cash flow information: | ||
Cash paid for interest expense and loan standby fees | 1.3 | 4.4 |
Income taxes paid | $ 33.5 | $ 25.1 |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY - USD ($) $ in Millions | Share Capital (Note 15) | Contributed Surplus | Accumulated Other Comprehensive Income (Loss) | Deficit | Total |
Balance at beginning of period at Dec. 31, 2018 | $ 5,158.3 | $ 15.6 | $ (220.3) | $ (321.7) | $ 4,631.9 |
Net income | 129.2 | 129.2 | |||
Other comprehensive (loss) income | 75.8 | 75.8 | |||
Total comprehensive (loss) income | 205 | ||||
Acquisition of Salares Norte | 27 | 27 | |||
Gain (loss) on disposal of equity investments at FVTOCI | 2.3 | (1.3) | 1 | ||
Exercise of stock options | 3.3 | (0.8) | 2.5 | ||
Share-based payments | 3 | 3 | |||
Dividend reinvestment plan | 22.3 | 22.3 | |||
Dividends declared | (92.3) | (92.3) | |||
Balance at end of period at Jun. 30, 2019 | 5,210.9 | 17.8 | (142.2) | (286.1) | 4,800.4 |
Balance at beginning of period at Dec. 31, 2018 | 5,158.3 | 15.6 | (220.3) | (321.7) | 4,631.9 |
Acquisition of Salares Norte | 27 | ||||
At-the-market equity offering | 136 | ||||
Exercise of stock options | 17.3 | ||||
Dividend reinvestment plan | 48.8 | ||||
Balance at end of period at Dec. 31, 2019 | 5,390.7 | 14.2 | (178.3) | (164.4) | 5,062.2 |
Net income | (4.4) | (4.4) | |||
Other comprehensive (loss) income | (32.5) | (32.5) | |||
Total comprehensive (loss) income | (36.9) | ||||
At-the-market equity offering | 112.3 | 112.3 | |||
Exercise of stock options | 7.9 | (1.9) | 6 | ||
Share-based payments | 2.8 | 2.8 | |||
Dividend reinvestment plan | 21 | 21 | |||
Dividends declared | (97) | (97) | |||
Balance at end of period at Jun. 30, 2020 | $ 5,531.9 | $ 15.1 | $ (210.8) | $ (265.8) | $ 5,070.4 |
Corporate Information
Corporate Information | 6 Months Ended |
Jun. 30, 2020 | |
Corporate Information | |
Corporate Information | Note 1 – Corporate Information Franco-Nevada Corporation (“Franco-Nevada”) is incorporated under the Canada Business Corporations Act. The Company is a royalty and stream company focused on precious metals (gold, silver, and platinum-group metals) and has a diversity of revenue sources with a target of no more than 20% of revenue from energy (oil, gas and natural gas liquids). The Company owns a portfolio of royalty, stream and working interests, covering properties at various stages, from production to early exploration located in Latin America, United States, Canada, Australia, Europe and Africa. The Company’s shares are listed on the Toronto Stock Exchange and the New York Stock Exchange and the Company is domiciled in Canada. The Company’s head and registered office is located at 199 Bay Street, Suite 2000, Toronto, Ontario, Canada. |
Significant accounting policies
Significant accounting policies | 6 Months Ended |
Jun. 30, 2020 | |
Significant accounting policies | |
Significant accounting policies | Note 2 – Significant accounting policies (a) These unaudited condensed consolidated interim financial statements include the accounts of Franco-Nevada and its wholly-owned subsidiaries (its “subsidiaries”) (hereinafter together with Franco-Nevada, the “Company”). These unaudited condensed consolidated interim financial statements have been prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”) applicable to the preparation of condensed interim financial statements, including IAS 34 Interim Financial Reporting. These condensed consolidated interim financial statements should be read in conjunction with the Company’s annual consolidated financial statements for the year ended December 31, 2019 and were prepared using the same accounting policies, method of computation and presentation as were applied in the annual consolidated financial statements for the year ended December 31, 2019, except as referenced in Note 2(c). These condensed interim consolidated financial statements were authorized for issuance by the Board of Directors on August 5, 2020. The financial information included herein reflects all adjustments, consisting only of normal recurring adjustments which, in the opinion of management, are necessary for a fair presentation of the results for the interim periods presented. The results of operations for the three and six months ended June 30, 2020 are not necessarily indicative of the results to be expected for the full year. Seasonality is not considered to have a significant impact over the condensed consolidated interim financial statements. Taxes on income in the interim period have been accrued using the tax rates that would be applicable to expected total annual income. (b) The preparation of consolidated financial statements in accordance with IFRS requires the Company to make judgments, estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. The areas of judgment and estimation are consistent with those reported in the annual consolidated financial statements for the year ended December 31, 2019 and include measurement uncertainty in assessments of impairment of royalty, stream and working interests which were impacted by the following developments during the first half of 2020. Impact of the COVID-19 pandemic The COVID-19 (coronavirus) global health pandemic is significantly impacting the global economy and commodity and financial markets. The full extent and impact of the COVID-19 pandemic is unknown and to date has included extreme volatility in financial markets, a slowdown in economic activity, extreme volatility in commodity prices (including gold, silver, palladium and oil and gas) and has raised the prospect of an extended global recession. As well, as efforts are undertaken to slow the spread of the COVID-19 pandemic, the operation and development of mining projects have been impacted. In March and April 2020, a number of mining projects, including certain of those in respect of which Franco-Nevada has assets, were suspended for precautionary purposes or as governments declared a state of emergency or taken other actions, but several operations have restarted since then. If the operation or development of one or more of the properties in which the Company holds a royalty, stream or other interest and from which it receives or expects to receive significant revenue remains suspended for an extended period, it may have a material adverse impact on the Company’s profitability, results of operations, financial condition and the trading price of the Company’s securities. The broader impact of the COVID-19 pandemic on investors, businesses, the global economy or financial and commodity markets may also have a material adverse impact on the Company’s profitability, results of operations, financial condition and the trading price of the Company’s securities. Impact of recent global and market developments on oil and gas prices In addition, a number of geopolitical and market factors impacting global energy markets (including those related to the COVID-19 pandemic) have contributed to extreme volatility and a significant decrease in the price of oil and gas (WTI, WCS and NYMEX). Excess supply relative to current demand and a lack of available storage have also created significant downward pressure on global energy markets, with oil prices and futures contracts reaching historic lows in April 2020. Prices have since rebounded from the lows. The lower oil and gas prices (WTI, WCS and NYMEX) may adversely impact potential future development as well as operators’ cashflow, ability to access additional capital and financial condition. The continuation of low oil and gas prices (WTI, WCS and NYMEX) for a prolonged period may have a material adverse impact on Franco-Nevada’s profitability, results of operations, financial condition and the trading price of Franco-Nevada’s securities. As a result of reduced production and capital spend by the operators of the Company’s Energy assets due to lower market expectations for oil and gas prices, the Company recorded impairments of $271.7 million at March 31, 2020, as detailed in Note 7(b) . There is heightened potential for further impairments of these assets or impairments of other assets or a reversal of these impairments over the remainder of 2020. In the current environment, assumptions about future commodity prices, interest rates and levels of supply and demand of commodities are subject to greater variability than normal, which could significantly affect the valuation of the Company’s financial and non-financial assets. (c) The following standard was effective and implemented for the annual period as of January 1, 2020. Amendments to IFRS 3 Business Combinations In October 2018, the IASB issued amendments to the definition of a business in IFRS 3 Business Combinations (“IFRS 3”). The amendments are intended to assist entities to determine whether a transaction should be accounted for as a business combination or as an asset acquisition. The amendments clarify the minimum requirements for a business, remove the assessment of whether market participants are capable of replacing any missing elements, add guidance to help entities assess whether an acquired process is substantive, narrow the definitions of a business and of outputs, and introduce an optional fair value concentration test. While it is generally expected that the application of the amendments will result in more acquisitions being accounted for as asset acquisitions, the Company will evaluate the impact of the amendments based on the nature and terms of acquisitions the Company may complete in future periods. |
Acquisitions and other transact
Acquisitions and other transactions | 6 Months Ended |
Jun. 30, 2020 | |
Acquisitions and other transactions | |
Acquisitions and other transactions | Note 3 – Acquisitions and other transactions (a) Acquisition of Alpala Royalty – Northern Ecuador On May 11, 2020, the Company entered into an agreement with SolGold plc (“SolGold”) to acquire a 1% NSR with reference to all minerals produced from the Alpala copper-gold-silver project in northern Ecuador for $100.0 million. The Alpala project is owned by Exploraciones Novomining SA, which is held 85% by SolGold and 15% by Cornerstone Capital Resource Inc. SolGold has the option to increase the size of the transaction to $150 million for a 1.5% NSR until January 11, 2021 and also has the option to buy-back 50% of the royalty for a period of time. Franco-Nevada is entitled to receive certain minimum royalty payments from 2028 and the Company also has the option to convert the NSR to a gold NSR for a period of time once Alpala is producing. The closing of the acquisition is subject various conditions. In May 2020, the Company provided SolGold with a bridge loan of $15 million for a period of up to 8 months. The royalty interest has not been recorded as at June 30, 2020 as the transaction has not yet closed. (b) Acquisition of Island Gold Royalty – Ontario, Canada On March 20, 2020, the Company acquired an existing 0.62% NSR on Alamos Gold Inc.’s Island Gold project in Finan Township in the Province of Ontario for $13.4 million (C$19.0 million). The acquisition of the Island Gold royalty has been accounted for as an asset acquisition. (c) Acquisition of U.S. Oil & Gas Mineral Rights with Continental Resources, Inc. (“Continental”) – SCOOP and STACK, Oklahoma, USA The Company, through a wholly-owned subsidiary, has a strategic relationship with Continental to acquire, through a jointly-owned entity (the “Royalty Acquisition Venture”), royalty rights in the SCOOP and STACK plays of Oklahoma. In the three and six months ended June 30, 2020, the Company recorded contributions to the Royalty Acquisition Venture of $2.5 million and $19.3 million, respectively (Q2/2019 - $35.1 million and $86.5 million, respectively for three and six months ended June 30, 2019), which includes $0.5 million included in accrued liabilities funded after period-end. As at June 30, 2020, the cumulative investment in the Royalty Acquisition Venture totalled $395.5 million and Franco-Nevada has remaining commitments of up to $124.5 million to be funded in future periods. In the first half of the year, Franco-Nevada and Continental have collectively agreed to reduce their capital funding commitments to the Royalty Acquisition Venture for 2020 to approximately total $30 million to $40 million. The Royalty Acquisition Venture is accounted for as a joint operation in accordance with IFRS 11 Joint Arrangements . |
Cash and cash equivalents
Cash and cash equivalents | 6 Months Ended |
Jun. 30, 2020 | |
Cash and cash equivalents | |
Cash and cash equivalents | Note 4 – Cash and cash equivalents As at June 30, 2020 and December 31, 2019, cash and cash equivalents were primarily held in interest-bearing deposits. Cash and cash equivalents comprised the following: At June 30, At December 31, Cash deposits $ 369.4 $ 118.7 Term deposits 9.1 13.4 $ 378.5 $ 132.1 |
Investments and loan receivable
Investments and loan receivable | 6 Months Ended |
Jun. 30, 2020 | |
Investments and loan receivable | |
Investments and loan receivable | Note 5 – Investments and loan receivable Investments comprise the following: (i) equity interests in various public and non-public entities which the Company acquired through the open market or through transactions; (ii) warrants in various publicly-listed companies; (iii) a loan receivable extended to SolGold in May 2020 for a period of up to 8 months as part of the Alpala Royalty acquisition transaction; and (iv) a loan receivable extended to Noront Resources Ltd. as part of the Company’s acquisition of royalty rights in the Ring of Fire mining district of Ontario, Canada, in April 2015. The loan to Noront has a maturity date of September 30, 2022. Investments and loan receivable comprised the following: At June 30, At December 31, Loan receivable - current $ 15.0 $ — $ 15.0 $ — Equity investments $ 141.1 $ 145.6 Loan receivable 35.9 34.6 Warrants 2.9 3.0 $ 179.9 $ 183.2 The change in the fair value of equity investments recognized in other comprehensive income (loss) for the periods ended June 30, 2020 and 2019 were as follows: For the three months ended For the six months ended June 30, June 30, 2020 Gain on change in the fair value of equity investments at FVTOCI $ 42.6 $ 28.2 $ 1.9 $ 54.5 Deferred tax expense in other comprehensive income (5.6) (3.4) (0.2) (6.8) Gain on change in the fair value of equity investments at FVTOCI, net of tax $ 37.0 24.8 $ 1.7 $ 47.7 |
Prepaid expenses and other curr
Prepaid expenses and other current assets | 6 Months Ended |
Jun. 30, 2020 | |
Prepaid expenses and other current assets. | |
Prepaid expenses and other current assets | Note 6 – Prepaid expenses and other current assets Prepaid expenses and other current assets comprised the following: At June 30, At December 31, Gold bullion $ 20.0 $ 26.2 Prepaid expenses 22.7 17.5 Stream ounces inventory 0.5 4.4 Debt issue costs 0.6 0.7 $ 43.8 $ 48.8 |
Royalty, stream and working int
Royalty, stream and working interests | 6 Months Ended |
Jun. 30, 2020 | |
Royalty, stream and working interests | |
Royalty, stream and working interests | Note 7 – Royalty, stream and working interests (a) Royalty, stream and working interests, net of accumulated depletion and impairment charges, comprised the following: Accumulated As at June 30, 2020 Cost Depletion (1) Impairment Carrying Value Mining royalties $ 1,038.0 $ (632.4) $ — $ 405.6 Streams 4,349.9 (1,622.5) — 2,727.4 Energy 1,745.0 (406.8) (267.7) 1,070.5 Advanced 199.8 (32.1) — 167.7 Exploration 64.7 (12.1) — 52.6 $ 7,397.4 $ (2,705.9) $ (267.7) $ 4,423.8 1. Accumulated depletion includes previously recognized impairment charges. Accumulated As at December 31, 2019 Cost Depletion (1) Impairment Carrying Value Mining royalties $ 1,035.7 $ (620.1) $ — $ 415.6 Streams 4,346.3 (1,542.3) — 2,804.0 Energy 1,756.4 (402.8) — 1,353.6 Advanced 203.2 (32.3) — 170.9 Exploration 66.2 (12.5) — 53.7 $ 7,407.8 $ (2,610.0) $ — $ 4,797.8 1. Accumulated depletion includes previously recognized impairment charges. Changes in royalty, stream and working interests for the periods ended June 30, 2020 and December 31, 2019 were as follows: Mining Royalties Streams Energy Advanced Exploration Total Balance at January 1, 2019 $ 450.1 $ 2,967.6 $ 966.6 $ 129.8 $ 41.5 $ 4,555.6 Additions — — 419.0 46.0 11.9 476.9 Transfers 5.9 — — (5.9) — — Depletion (46.0) (163.6) (49.0) (0.9) (0.2) (259.7) Impact of foreign exchange 5.6 — 17.0 1.9 0.5 25.0 Balance at December 31, 2019 $ 415.6 $ 2,804.0 $ 1,353.6 $ 170.9 $ 53.7 $ 4,797.8 Additions (Note 3) 13.4 (0.1) 21.3 — — 34.6 Impairments — — (267.7) — — (267.7) Depletion (17.1) (76.5) (21.5) (0.4) — (115.5) Impact of foreign exchange (6.3) — (15.2) (2.8) (1.1) (25.4) Balance at June 30, 2020 $ 405.6 $ 2,727.4 $ 1,070.5 $ 167.7 $ 52.6 $ 4,423.8 Of the total net book value as at June 30, 2020, $3,430.1 million (December 31, 2019 - $3,743.8 million) is depletable and $993.7 million (December 31, 2019 - $1,054.0 million) is non-depletable. (b) Royalties, stream and working interests are reviewed for impairment if there is an indication that the carrying amount may not be recoverable. As a result of reduced production and capital spend by the operators of the Company’s Energy assets due to lower market expectations for oil and gas prices, the Company noted the presence of impairment indicators as at March 31, 2020 and carried out an asset impairment analysis of its Energy assets. Impairments in the carrying value of each cash-generated unit (“CGU”) were measured and recorded to the extent that the carrying value of each CGU exceeds its estimated recoverable amount, which was the higher of fair value less costs of disposal (“FVLCD”) and value-in-use (“VIU”), which is generally calculated using an estimate of future discounted cash-flows. The Company recorded impairment charges at March 31, 2020 with respect to the following CGUs: SCOOP/STACK The Company’s interest in the SCOOP/STACK comprises acquisitions of royalty rights through the Royalty Acquisition Venture, a jointly-owned entity with Continental, as well as two packages of royalty rights acquired in December 2016 for a price of $100.0 million, and in November 2017 for $27.6 million. Weyburn The Company holds a 11.71% NRI, a 0.44% ORR and a 2.56% WI in the Weyburn Unit, which is located 129km southeast of Regina, Saskatchewan. The 11.71% NRI was acquired on November 13, 2012. The following table summarizes the impairment losses recorded at March 31, 2020 and estimated recoverable amount by CGU: Impairment Recoverable Amount Amount Royalty, stream and working interests, net SCOOP/STACK $ 207.2 $ 309.2 Weyburn 60.5 162.8 Other assets Oil well equipment $ 4.0 $ 4.7 $ 271.7 $ 476.7 Key assumptions and sensitivity analysis Key assumptions and estimates used in determining the recoverable amounts of the Company’s Energy assets are related to oil prices and discount rates. The future cash flows expected from each CGU were derived from a model developed by management using cash-flows prepared by an independent reserve engineer or a third-party advisor, and expected performance based on publicly-released technical information to predict future performance. For the SCOOP/STACK CGUs, the Company’s management made assumptions of future drilling activity to reflect the reduced capital spending by operators in the current environment. The Company’s management made assumptions of future West Texas Intermediate (“WTI”) prices to estimate future revenues, based on long-term consensus price estimates obtained from a sample of independent reserve evaluators. For the Weyburn CGU, the differential to Edmonton Light prices assumption was $8.55/barrel, and the U.S. dollar to Canadian dollar foreign exchange rate assumption was $0.72. Forecasted WTI prices as at March 31, 2020 used to determine future cash flows were as follows: Average Annual Remainder of Increase Thereafter WTI oil price (US$/barrel) $ 30.00 $ 41.18 $ 49.88 $ 55.87 $ 57.98 2 % The future cash-flows were discounted using an after-tax discount rate which reflects specific market risk factors associated with individual characteristics of the CGU. For the SCOOP/STACK CGUs, the discount rate ranged between 5% for proved producing reserves to 12% for undeveloped contingent resources. For the Weyburn CGU, the discount rate assumed was 9.5%. A sensitivity analysis showing the impact of a change, in isolation, in the WTI oil price and discount rate assumptions is shown below: Increase (Decrease) to Impairment Charges 1% Increase 1% Decrease 10% Decrease 10% Increase in the in the in WTI Oil in WTI Oil Discount Rate Discount Rate Price Price SCOOP/STACK $ 34.1 $ (39.9) $ 37.8 $ (37.3) Weyburn, including oil well equipment 16.9 (19.1) 39.8 (39.0) $ 51.0 $ (59.0) $ 77.6 $ (76.3) In the second quarter 2020, oil and gas prices rebounded from April 2020. There remains a level of uncertainty surrounding oil and gas prices, and the Company determined that this did not warrant a reversal in the previously recorded impairments. |
Other assets
Other assets | 6 Months Ended |
Jun. 30, 2020 | |
Other assets | |
Other assets | Note 8 – Other assets Other assets comprised the following: At June 30, At December 31, Energy well equipment, net $ 4.8 $ 9.3 Right-of-use assets, net 2.1 2.5 Furniture and fixtures, net 0.4 0.4 Debt issue costs 1.5 1.9 $ 8.8 $ 14.1 |
Debt
Debt | 6 Months Ended |
Jun. 30, 2020 | |
Debt | |
Debt | Note 9 – Debt Changes in obligations related to the Company’s credit facilities were as follows: Corporate Corporate FNBC Revolver Term Loan Revolver Total Size of facility $ 1,000.0 $ 160.0 $ 100.0 $ 1,260.0 Balance at January 1, 2019 $ 210.0 $ — $ — $ 210.0 Drawdowns 275.0 160.0 — 435.0 Repayment (485.0) (80.0) — (565.0) Balance at December 31, 2019 $ — $ 80.0 $ — $ 80.0 Repayment — (80.0) — (80.0) Balance at June 30, 2020 $ — $ — $ — $ — (a) The Company has a $1.0 billion unsecured revolving term credit facility (the “Corporate Revolver”). The Corporate Revolver has a maturity date of March 22, 2024. The Company has two standby letters of credit in the amount of $17.0 million (C$23.1 million) against the Corporate Revolver in relation to the audit by the Canada Revenue Agency (“CRA”) of its 2013–2015 taxation years, as referenced in Note 19 . Advances under the Corporate Revolver can be drawn as follows: U.S. dollars · Base rate advances with interest payable monthly at the Canadian Imperial Bank of Commerce (“CIBC”) base rate, plus between 0.00% and 1.05% per annum depending upon the Company’s leverage ratio; or · LIBOR loans for periods of 1, 2, 3 or 6 months with interest payable at a rate of LIBOR, plus between 1.00% and 2.05% per annum, depending on the Company’s leverage ratio. Canadian dollars · Prime rate advances with interest payable monthly at the CIBC prime rate, plus between 0.00% and 1.05% per annum, depending on the Company’s leverage ratio; or · Bankers’ acceptances for a period of 30 to 180 days with a stamping fee calculated on the face amount between 1.00% and 2.05%, depending on the Company’s leverage ratio. All loans are readily convertible into loans of other types, described above, on customary terms and upon provision of appropriate notice. Borrowings under the Corporate Revolver are guaranteed by certain of the Company’s subsidiaries and are unsecured. The Corporate Revolver is subject to a standby fee of 0.20% to 0.41% per annum, depending on the Company’s leverage ratio, even if no amounts are outstanding under the Corporate Revolver. (b) On April 17, 2019, the Company entered into an unsecured credit facility (the “Corporate Term Loan”) in the amount of $160.0 million to pay down amounts previously borrowed under the Corporate Revolver. The Corporate Term Loan had a maturity date of April 17, 2021. Advances were drawn as a one-month LIBOR loan with interest payable at a rate of LIBOR plus 0.85%. The Company has fully repaid the amount borrowed against the Corporate Term Loan. The Corporate Term Loan is a non-revolving facility, and is therefore no longer available to draw. (c) The Company’s subsidiary, Franco-Nevada (Barbados) Corporation (“FNBC”), has an unsecured revolving term credit facility (the “FNBC Revolver”). The FNBC Revolver provides for the availability of up to $100.0 million in borrowings over a one-year period. On March 10, 2020, the FNBC Revolver was amended to provide an extension of the maturity date by an additional year to March 20, 2021. Advances, under the amended terms of the FNBC Revolver, can be drawn in U.S. dollars as follows: · Base rate advances with interest payable monthly at the CIBC base rate, plus 0.25% per annum; or · LIBOR loans for periods of 1, 2, 3 or 6 months with interest payable at a rate of LIBOR plus 1.25% per annum. All loans are readily convertible into loans of other types on customary terms and upon provision of appropriate notice. The FNBC Revolver is subject to a standby fee of 0.25% per annum, even if no amounts are outstanding. |
Revenue
Revenue | 6 Months Ended |
Jun. 30, 2020 | |
Revenue. | |
Revenue | Note 10 – Revenue Revenue classified by commodity, geography and type comprised the following: For the three months ended For the six months ended June 30, June 30, Commodity Gold (1) $ 136.6 $ 105.9 $ 303.6 $ 219.9 Silver 20.2 16.6 42.3 36.6 Platinum-group metals (1) 21.4 14.7 44.0 33.8 Other mining commodities 2.6 5.7 4.9 11.6 Mining $ 180.8 $ 142.9 $ 394.8 $ 301.9 Energy 14.6 27.6 41.1 48.4 $ 195.4 $ 170.5 $ 435.9 $ 350.3 Geography Latin America $ 80.4 $ 60.9 $ 198.0 $ 135.9 United States 44.7 36.0 89.7 68.9 Canada (1) 35.7 39.7 82.1 78.5 Rest of World 34.6 33.9 66.1 67.0 $ 195.4 $ 170.5 $ 435.9 $ 350.3 Type Revenue-based royalties $ 65.1 $ 56.4 $ 133.5 $ 112.8 Streams (1) 112.6 88.1 263.4 192.8 Profit-based royalties 14.1 17.3 30.3 26.9 Other 3.6 8.7 8.7 17.8 $ 195.4 $ 170.5 $ 435.9 $ 350.3 1. Includes revenue of $0.0 million and $0.1 million of provisional pricing adjustments for gold and platinum-group metals, respectively for the three months ended June 30, 2020 (Q2/2019–$0.3 million and $0.8 million, respectively). For the six months ended June 30, 2020, includes revenue of $0.2 million and $3.2 million of gold and platinum-group metals, respectively. (H1/2019 – nil and $3.4 million, respectively). |
Costs of sales
Costs of sales | 6 Months Ended |
Jun. 30, 2020 | |
Costs of sales | |
Costs of sales | Note 11 – Costs of sales Costs of sales comprised the following: For the three months ended For the six months ended June 30, June 30, Costs of stream sales $ 26.2 $ 25.0 $ 67.0 $ 55.4 Mineral production taxes 0.8 0.6 1.5 1.2 Mining costs of sales $ 27.0 $ 25.6 $ 68.5 $ 56.6 Energy costs of sales 1.0 1.8 3.1 3.2 $ 28.0 $ 27.4 $ 71.6 $ 59.8 |
Related party disclosures
Related party disclosures | 6 Months Ended |
Jun. 30, 2020 | |
Related party disclosures | |
Related party disclosures | Note 12 – Related party disclosures Key management personnel are those persons having authority and responsibility for planning, directing and controlling the activities of the Company. Key management personnel include the Board of Directors and the executive management team. Compensation for key management personnel of the Company was as follows: For the three months ended For the six months ended June 30, June 30, Short-term benefits (1) $ 0.6 $ 0.8 $ 1.4 $ 1.6 Share-based payments (2) 6.4 2.0 8.0 3.4 $ 7.0 $ 2.8 $ 9.4 $ 5.0 1. Includes salary, benefits and short-term accrued incentives/other bonuses earned in the period. 2. Represents the expense of stock options and restricted share units, and mark-to-market charges on deferred share units during the period. |
Finance income and expenses
Finance income and expenses | 6 Months Ended |
Jun. 30, 2020 | |
Finance income and expenses | |
Finance income and expenses | Note 13 – Finance income and expenses Finance income and expenses for the periods ended June 30, 2020 and 2019 were as follows: For the three months ended For the six months ended June 30, June 30, Finance income Interest $ 1.0 $ 1.2 $ 1.9 $ 1.9 $ 1.0 $ 1.2 $ 1.9 $ 1.9 Finance expenses Interest $ — 1.7 $ 0.3 $ 3.6 Standby charges 0.5 $ 0.6 1.0 0.9 Amortization of debt issue costs 0.3 0.2 0.5 0.4 Accretion of lease liabilities — — 0.1 0.1 $ 0.8 $ 2.5 $ 1.9 $ 5.0 |
Income taxes
Income taxes | 6 Months Ended |
Jun. 30, 2020 | |
Income taxes | |
Income taxes | Note 14 - Income taxes Income tax expense for the periods ended June 30, 2020 and 2019 was as follows: For the three months ended For the six months ended June 30, June 30, Current income tax expense $ 10.1 11.7 $ 24.5 $ 21.4 Deferred income tax (recovery) expense 1.4 2.0 (57.9) 5.3 $ 11.5 $ 13.7 $ (33.4) $ 26.7 |
Shareholders' equity
Shareholders' equity | 6 Months Ended |
Jun. 30, 2020 | |
Shareholders' equity | |
Shareholders' equity | Note 15 – Shareholders’ equity (a) Share capital The Company’s authorized capital stock includes an unlimited number of common shares (190,588,491 common shares issued and outstanding as at June 30, 2020) having no par value and preferred shares issuable in series (issued - nil). Changes in share capital in the six months ended June 30, 2020 and year ended December 31, 2019 were as follows: Number of shares Amount Balance at January 1, 2019 186,692,481 $ 5,158.3 At-the-market equity offering 1,433,400 136.0 Acquisition of Salares Norte 366,499 27.0 Exercise of stock options 283,863 17.3 Vesting of restricted share units 46,375 3.3 Dividend reinvestment plan (Note 15(c)) 558,770 48.8 Balance at December 31, 2019 189,381,388 $ 5,390.7 At-the-market equity offering (Note 15(b)) 909,900 112.3 Exercise of stock options 124,404 7.9 Dividend reinvestment plan (Note 15(c)) 172,799 21.0 Balance at June 30, 2020 190,588,491 $ 5,531.9 (b) At-the-Market Equity Program On May 11, 2020, the Company established an at-the-market equity program (the “ATM Program”) permitting the Company to issue up to an aggregate of $300 million worth of common shares from treasury at prevailing market prices to the public through the Toronto Stock Exchange, the New York Stock Exchange or any other marketplace on which the common shares are listed, quoted or otherwise trade. The volume and timing of distributions under the ATM Program is determined at the Company’s sole discretion, subject to applicable regulatory limitations and blackout periods. The ATM Program will be effective until May 28, 2022 unless terminated prior to such date by the Company. The Company’s previous at-the-market equity program established July 19, 2019 that allowed the Corporation to issue up to $200 million worth of common shares was terminated on April 28, 2020. During the three months ended June 30, 2020, the Company issued 474,900 common shares under the ATM Program at an average price per common share of $143.58. The gross proceeds to the Company from these issuances were $68.2 million, and the net proceeds were $66.8 million after deducting agent commission costs of $0.7 million and other share issuance costs of $0.7 million. During the six months ended June 30, 2020, the Company issued 909,900 common shares under the ATM Program as defined and the previous at-the-market equity program at an average price per common share of $125.54. The gross proceeds to the Company from these issuances were $114.2 million, and the net proceeds were $112.3 million after deducting agent commission costs of $1.1 million and other share issuance costs of $0.8 million. (c) Dividends The Company declared dividends of $0.26 and $0.51 per common share respectively in the three and six months ended June 30, 2020 (Q1/2019 and H1/2019 - $0.25 and $0.49 per common share respectively). Dividends paid in cash and through the Company’s Dividend Reinvestment Plan (“DRIP”) were as follows: For the three months ended For the six months ended June 30, June 30, Cash dividends $ 39.8 $ 35.1 $ 76.0 $ 70.0 DRIP dividends 10.1 12.3 21.0 22.3 $ 49.9 $ 47.4 $ 97.0 $ 92.3 |
Earnings per share ("EPS")
Earnings per share ("EPS") | 6 Months Ended |
Jun. 30, 2020 | |
Earnings per share ("EPS") | |
Earnings per share ("EPS") | Note 16 – Earnings per share (“EPS”) For the three months ended June 30, 2020 2019 Shares Per Share Shares Per Share Net income (in millions) Amount Net income (in millions) Amount Basic earnings per share $ 94.4 190.2 $ 0.50 $ 64.0 187.2 $ 0.34 Effect of dilutive securities — 0.4 — — 0.3 — Diluted earnings per share $ 94.4 190.6 $ 0.50 $ 64.0 187.5 $ 0.34 For the six months ended June 30, 2020 2019 Shares Per Share Shares Per Share Net loss (in millions) Amount Net income (in millions) Amount Basic (loss) earnings per share $ (4.4) 189.6 $ (0.02) $ 129.2 187.1 $ 0.69 Effect of dilutive securities — — — — 0.3 — Diluted (loss) earnings per share $ (4.4) 189.6 $ (0.02) $ 129.2 187.4 $ 0.69 For the three months ended June 30, 2020, there were no stock options (Q1/2019 and H1/2019 – 251,613 stock options) excluded in the computation of diluted EPS due to being anti-dilutive. RSUs totaling 65,360 (Q1/2019 and H1/2019 - 69,442 RSUs) were excluded from the computation of diluted EPS for the three months ended June 30, 2020 due to the performance criteria for the vesting of the RSUs not being measurable as at June 30, 2020. |
Segment reporting
Segment reporting | 6 Months Ended |
Jun. 30, 2020 | |
Segment reporting | |
Segment reporting | Note 17 – Segment reporting The chief operating decision-maker organizes and manages the business under two operating segments, consisting of royalty, stream and working interests in each of the mining and energy sectors. The Company’s reportable segments for purposes of assessing performance are presented as follows: For the three months ended June 30, 2020 2019 Mining Energy Total Mining Energy Total Revenue $ 180.8 $ 14.6 $ 195.4 $ 142.9 $ 27.6 $ 170.5 Income/(expenses) Costs of sales $ 27.0 $ 1.0 $ 28.0 $ 25.6 $ 1.8 $ 27.4 Depletion and depreciation 42.1 9.8 51.9 46.7 11.4 58.1 Segment gross profit $ 111.7 $ 3.8 $ 115.5 $ 70.6 $ 14.4 $ 85.0 For the six months ended June 30, 2020 2019 Mining Energy Total Mining Energy Total Revenue $ 394.8 $ 41.1 $ 435.9 $ 301.9 $ 48.4 $ 350.3 Income/(expenses) Costs of sales $ 68.5 $ 3.1 $ 71.6 $ 56.6 $ 3.2 $ 59.8 Depletion and depreciation 94.0 21.5 115.5 97.3 20.8 118.1 Segment gross profit $ 232.3 $ 16.5 $ 248.8 $ 148.0 $ 24.4 $ 172.4 For the six months ended June 30, 2020, there were $1.2 million (H1/2019 - $1.7 million) of depreciation expenses on corporate assets. A reconciliation of total segment gross profit to consolidated net (loss) income before income taxes is presented below: For the three months ended For the six months ended June 30, June 30, Total segment gross profit $ $ 85.0 $ $ Other operating (income)/expenses Impairment of royalty, stream and working interests $ — $ — $ 271.7 $ — General and administrative expenses 11.7 5.6 17.9 12.5 Gain on sale of bullion (2.4) (0.4) (4.4) (0.8) Depreciation 0.4 0.8 1.2 1.7 Foreign exchange (gain) loss and other (income) expenses 0.1 — 0.2 — Income before finance items and income taxes $ 105.7 $ 79.0 $ (37.8) $ 159.0 Finance items Finance income $ 1.0 $ 1.2 $ 1.9 $ 1.9 Finance expenses (0.8) (2.5) (1.9) (5.0) Net income before income taxes $ 105.9 $ 77.7 $ (37.8) $ 155.9 |
Fair value measurements
Fair value measurements | 6 Months Ended |
Jun. 30, 2020 | |
Fair value measurements | |
Fair value measurements | Note 18 - Fair value measurements Fair value is a market-based measurement, not an entity-specific measurement. For some assets and liabilities, observable market transactions or market information might be available. For other assets and liabilities, observable market transactions and market information might not be available. However, the objective of a fair value measurement in both cases is the same - to estimate the price at which an orderly transaction to sell the asset or to transfer the liability would take place between market participants at the measurement date under current market conditions (i.e. an exit price at the measurement date from the perspective of a market participant that holds the asset or owes the liability). The fair value hierarchy establishes three levels to classify the inputs to valuation techniques used to measure fair value. · Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities. · Level 2 inputs are quoted prices in markets that are not active, quoted prices for similar assets or liabilities in active markets, inputs other than quoted prices observable for the asset or liability (for example, interest rate and yield curves observable at commonly quoted intervals, forward pricing curves used to value currency and commodity contracts and volatility measurements used to value option contracts), or inputs that are derived principally from or corroborated by observable market data or other means. · Level 3 inputs are unobservable (supported by little or no market activity). The fair value hierarchy gives the highest priority to Level 1 inputs and the lowest priority to Level 3 inputs. There were no transfers between the levels of the fair value hierarchy during the six months ended June 30, 2020. Assets and Liabilities Measured at Fair Value on a Recurring Basis: Quoted Prices in Significant Other Significant Active Markets for Observable Unobservable Identical Assets Inputs Inputs Aggregate As at June 30, 2020 (Level 1) (Level 2) (Level 3) Fair Value Receivables from provisional concentrate sales $ — $ 16.0 $ — $ 16.0 Equity investments 137.3 — 3.8 141.1 Warrants — 2.9 — 2.9 $ 137.3 $ 18.9 $ 3.8 $ 160.0 Quoted Prices in Significant Other Significant Active Markets for Observable Unobservable Identical Assets Inputs Inputs Aggregate As at December 31, 2019 (Level 1) (Level 2) (Level 3) Fair Value Receivables from provisional concentrate sales $ — $ 16.4 $ — $ 16.4 Equity investments 141.7 — 3.9 145.6 Warrants — 3.0 — 3.0 $ 141.7 $ 19.4 $ 3.9 $ 165.0 The valuation techniques that are used to measure fair value are as follows: (a) Receivables The fair values of receivables arising from gold and platinum-group metal concentrate sales contracts that contain provisional pricing mechanisms are determined using the appropriate quoted forward prices from the exchange that is the principal active market for the particular metal. As such, these receivables are classified within Level 2 of the fair value hierarchy. (b) Investments The fair values of publicly-traded investments are determined based on a market approach reflecting the closing prices of each particular security at the statement of financial position date. The closing prices are quoted market prices obtained from the exchange that is the principal active market for the particular security, and therefore are classified within Level 1 of the fair value hierarchy. The Company holds one equity investment that does not have a quoted market price in an active market. The Company has assessed the fair value of the instrument based on a valuation technique using unobservable discounted future cash flows. As a result, the fair value is classified within Level 3 of the fair value hierarchy. The fair values of warrants are estimated using the Black-Scholes pricing model which requires the use of inputs that are observable in the market. As such, these investments are classified within Level 2 of the fair value hierarchy. The fair values of the Company’s remaining financial assets and liabilities, which include cash and cash equivalents, receivables, loan receivables, accounts payable and accrued liabilities, and debt approximate their carrying values due to their short-term nature, historically negligible credit losses, fair value of collateral, or floating interest rate. The Company has not offset financial assets with financial liabilities. |
Contingencies
Contingencies | 6 Months Ended |
Jun. 30, 2020 | |
Contingencies | |
Contingencies | Note 19 – Contingencies Canada Revenue Agency Audit: The CRA is conducting an audit of Franco-Nevada’s 2012-2015 taxation years. (a) Canadian Domestic Tax Matters (2014-2015): In October 2019, certain wholly-owned Canadian subsidiaries of the Company received Notices of Reassessment for the 2014 and 2015 taxation years (the “Domestic Reassessments”) in which the CRA is seeking to increase income by adjusting the timing of the deduction of the upfront payments which were made in connection with precious metal stream agreements. The CRA’s position is that the upfront payment should be deducted for income tax purposes in a similar manner to how such upfront payment is expensed for financial statement purposes. Consequently, the CRA’s position results in a slower deduction of the upfront payment and an acceleration of the payment of Canadian taxes. This results in the Company being subject to an incremental payment of Federal and provincial income taxes for these years of $1.0 million (C$1.4 million) plus interest and applicable penalties (after applying available non-capital losses and other deductions). The Company has filed formal Notices of Objection with the CRA against the Domestic Reassessments. If the CRA were to audit and reassess the particular Canadian subsidiaries of the Company for taxation years 2016 through 2019 on the same basis, the Company estimates that it would be subject to an incremental payment of Canadian tax for these years of approximately $23.1 million (C$31.4 million) plus interest and applicable penalties (after applying available non-capital losses and other deductions). (b) Mexico (2013-2015): In December 2018, the Company received a Notice of Reassessment from the CRA for the 2013 taxation year (the “2013 Reassessment”) in relation to its Mexican subsidiary. The reassessment was made on the basis of the transfer pricing provisions in the Income Tax Act (Canada) (the “Act”) and asserts that a majority of the income earned by the Mexican subsidiary should have been included in the income of the Company and subject to tax in Canada. The 2013 Reassessment results in additional Federal and provincial income taxes of $8.0 million (C$10.8 million) plus interest and applicable penalties but before any relief under the Canada-Mexico tax treaty. In December 2019, the Company received Notices of Reassessment for the 2014 and 2015 taxation years (the “2014 and 2015 Reassessments”, and collectively with the Domestic Reassessments and the 2013 Reassessment, the “Reassessments”) on the same basis as the 2013 Reassessment, resulting in additional Federal and provincial income taxes of $10.3 million (C$14.1 million) plus interest and applicable penalties but before any relief under the Canada-Mexico tax treaty. The Company has filed formal Notices of Objection with the CRA against the 2013 Reassessment and the 2014 and 2015 Reassessments and has posted security in the form of a standby letter of credit for 50% of the reassessed amounts of tax, interest and penalties, as referenced in Note 9(a) . Further, the Company has commenced an appeal in the Tax Court of Canada with respect to the 2013 Reassessment and the 2014 and 2015 Reassessments. For taxation years 2013 through 2015, the Company’s Mexican subsidiary paid a total of $30.3 million (419.4 million Pesos) in cash taxes, at a 30% tax rate, to the Mexican tax authorities on income earned in Mexico. If required, the Company intends to seek relief from double taxation under the Canada-Mexico tax treaty. If the CRA were to audit and reassess the Company for taxation years 2016 through 2019 on the same basis, the Company estimates that it would be subject to additional Canadian tax for these years of approximately $3.4 million (C$4.6 million) plus interest and applicable penalties but before any relief under the Canada-Mexico tax treaty. During the years 2016 through 2019, the Company’s Mexican subsidiary paid $3.8 million (71.0 million Pesos) in cash taxes, at a 30% tax rate, to the Mexican tax authorities on income earned in Mexico. (c) Barbados (2014-2015): The 2014 and 2015 Reassessments also reassess the Company in relation to its Barbadian subsidiary. The reassessments were made on the basis of the transfer pricing provisions in the Act and assert that a majority of the income relating to certain precious metal streams earned by the Barbadian subsidiary should have been included in the income of the Company and subject to tax in Canada, resulting in additional Federal and provincial income taxes of $4.6 million (C$6.5 million) plus interest and applicable penalties. The Company has filed formal Notices of Objection with the CRA against the 2014 and 2015 Reassessments and has posted security in the form of a standby letter of credit for 50% of the reassessed amounts of tax, interest and penalties, as referenced in Note 9(a) . Further, the Company has commenced an appeal in the Tax Court of Canada with respect to the 2014 and 2015 Reassessments. If the CRA were to audit and reassess the Company for taxation years 2016 through 2019 on the same basis, the Company estimates that it would be subject to additional Canadian tax for these years of approximately $76.3 million (C$104.0 million), plus interest and applicable penalties. (d) Barbados (2012-2013): In July 2020, the Company received a letter from the CRA (the “Proposal Letter”) proposing to reassess the 2012 and 2013 taxation years in relation to its Barbadian subsidiary. The Proposal Letter asserts that a majority of the income relating to precious metal streams earned by the Barbadian subsidiary, in those years, should have been included in the income of its Canadian parent company and subject to tax in Canada as Foreign Accrual Property Income (“FAPI”). The Company does not agree with the Proposal Letter and has responded to the CRA requesting that the proposed reassessments not be issued. If the CRA issues the reaassessments proposed and is successful, the Company’s preliminary estimate is that it would be subject to additional Federal and provincial income taxes of $7.0 million plus interest and applicable penalties before applying available non-capital losses and other deductions. The Proposal Letter notes that CRA’s position may not extend beyond the 2013 taxation year. Management believes that the Company and its subsidiaries have filed their tax returns and paid all applicable taxes in compliance with Canadian and applicable foreign tax laws and, as a result, no amounts have been recorded in the financial statements of the Company for the Reassessments and Proposal Letter, or for any potential tax liability that may arise in respect of these matters. The Company does not believe that the Reassessments and Proposal Letter are supported by Canadian tax law and jurisprudence and intends to vigorously defend its tax filing positions. The CRA audit is ongoing and there can be no assurance that the CRA will not further challenge the manner in which the Company or any of its subsidiaries has filed its income tax returns and reported its income. In the event that the CRA successfully challenges the manner in which the Company or a subsidiary has filed its tax returns and reported its income, this could potentially result in additional income taxes, penalties and interest, which could have a material adverse effect on the Company . |
Significant accounting polici_2
Significant accounting policies (Policies) | 6 Months Ended |
Jun. 30, 2020 | |
Significant accounting policies | |
Basis of presentation | (a) These unaudited condensed consolidated interim financial statements include the accounts of Franco-Nevada and its wholly-owned subsidiaries (its “subsidiaries”) (hereinafter together with Franco-Nevada, the “Company”). These unaudited condensed consolidated interim financial statements have been prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”) applicable to the preparation of condensed interim financial statements, including IAS 34 Interim Financial Reporting. These condensed consolidated interim financial statements should be read in conjunction with the Company’s annual consolidated financial statements for the year ended December 31, 2019 and were prepared using the same accounting policies, method of computation and presentation as were applied in the annual consolidated financial statements for the year ended December 31, 2019, except as referenced in Note 2(c). These condensed interim consolidated financial statements were authorized for issuance by the Board of Directors on August 5, 2020. The financial information included herein reflects all adjustments, consisting only of normal recurring adjustments which, in the opinion of management, are necessary for a fair presentation of the results for the interim periods presented. The results of operations for the three and six months ended June 30, 2020 are not necessarily indicative of the results to be expected for the full year. Seasonality is not considered to have a significant impact over the condensed consolidated interim financial statements. Taxes on income in the interim period have been accrued using the tax rates that would be applicable to expected total annual income. |
Significant judgments, estimates and assumptions | (b) The preparation of consolidated financial statements in accordance with IFRS requires the Company to make judgments, estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. The areas of judgment and estimation are consistent with those reported in the annual consolidated financial statements for the year ended December 31, 2019 and include measurement uncertainty in assessments of impairment of royalty, stream and working interests which were impacted by the following developments during the first half of 2020. Impact of the COVID-19 pandemic The COVID-19 (coronavirus) global health pandemic is significantly impacting the global economy and commodity and financial markets. The full extent and impact of the COVID-19 pandemic is unknown and to date has included extreme volatility in financial markets, a slowdown in economic activity, extreme volatility in commodity prices (including gold, silver, palladium and oil and gas) and has raised the prospect of an extended global recession. As well, as efforts are undertaken to slow the spread of the COVID-19 pandemic, the operation and development of mining projects have been impacted. In March and April 2020, a number of mining projects, including certain of those in respect of which Franco-Nevada has assets, were suspended for precautionary purposes or as governments declared a state of emergency or taken other actions, but several operations have restarted since then. If the operation or development of one or more of the properties in which the Company holds a royalty, stream or other interest and from which it receives or expects to receive significant revenue remains suspended for an extended period, it may have a material adverse impact on the Company’s profitability, results of operations, financial condition and the trading price of the Company’s securities. The broader impact of the COVID-19 pandemic on investors, businesses, the global economy or financial and commodity markets may also have a material adverse impact on the Company’s profitability, results of operations, financial condition and the trading price of the Company’s securities. Impact of recent global and market developments on oil and gas prices In addition, a number of geopolitical and market factors impacting global energy markets (including those related to the COVID-19 pandemic) have contributed to extreme volatility and a significant decrease in the price of oil and gas (WTI, WCS and NYMEX). Excess supply relative to current demand and a lack of available storage have also created significant downward pressure on global energy markets, with oil prices and futures contracts reaching historic lows in April 2020. Prices have since rebounded from the lows. The lower oil and gas prices (WTI, WCS and NYMEX) may adversely impact potential future development as well as operators’ cashflow, ability to access additional capital and financial condition. The continuation of low oil and gas prices (WTI, WCS and NYMEX) for a prolonged period may have a material adverse impact on Franco-Nevada’s profitability, results of operations, financial condition and the trading price of Franco-Nevada’s securities. As a result of reduced production and capital spend by the operators of the Company’s Energy assets due to lower market expectations for oil and gas prices, the Company recorded impairments of $271.7 million at March 31, 2020, as detailed in Note 7(b) . There is heightened potential for further impairments of these assets or impairments of other assets or a reversal of these impairments over the remainder of 2020. In the current environment, assumptions about future commodity prices, interest rates and levels of supply and demand of commodities are subject to greater variability than normal, which could significantly affect the valuation of the Company’s financial and non-financial assets. |
New and amended standards adopted by the company | (c) The following standard was effective and implemented for the annual period as of January 1, 2020. Amendments to IFRS 3 Business Combinations In October 2018, the IASB issued amendments to the definition of a business in IFRS 3 Business Combinations (“IFRS 3”). The amendments are intended to assist entities to determine whether a transaction should be accounted for as a business combination or as an asset acquisition. The amendments clarify the minimum requirements for a business, remove the assessment of whether market participants are capable of replacing any missing elements, add guidance to help entities assess whether an acquired process is substantive, narrow the definitions of a business and of outputs, and introduce an optional fair value concentration test. While it is generally expected that the application of the amendments will result in more acquisitions being accounted for as asset acquisitions, the Company will evaluate the impact of the amendments based on the nature and terms of acquisitions the Company may complete in future periods. |
Cash and cash equivalents (Tabl
Cash and cash equivalents (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Cash and cash equivalents | |
Schedule of cash and cash equivalents | At June 30, At December 31, Cash deposits $ 369.4 $ 118.7 Term deposits 9.1 13.4 $ 378.5 $ 132.1 |
Investments and loan receivab_2
Investments and loan receivable (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Investments and loan receivable | |
Schedule of investments and loan receivable | At June 30, At December 31, Loan receivable - current $ 15.0 $ — $ 15.0 $ — Equity investments $ 141.1 $ 145.6 Loan receivable 35.9 34.6 Warrants 2.9 3.0 $ 179.9 $ 183.2 |
Schedule of unrealized gains (losses) on available-for-sale investments recognized in other comprehensive income | For the three months ended For the six months ended June 30, June 30, 2020 Gain on change in the fair value of equity investments at FVTOCI $ 42.6 $ 28.2 $ 1.9 $ 54.5 Deferred tax expense in other comprehensive income (5.6) (3.4) (0.2) (6.8) Gain on change in the fair value of equity investments at FVTOCI, net of tax $ 37.0 24.8 $ 1.7 $ 47.7 |
Prepaid expenses and other cu_2
Prepaid expenses and other current assets (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Prepaid expenses and other current assets. | |
The schedule of prepaid expenses and other current assets | At June 30, At December 31, Gold bullion $ 20.0 $ 26.2 Prepaid expenses 22.7 17.5 Stream ounces inventory 0.5 4.4 Debt issue costs 0.6 0.7 $ 43.8 $ 48.8 |
Royalty, stream and working i_2
Royalty, stream and working interests (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Royalty, stream and working interests | |
Disclosure of detailed information about royalty, stream and working interest, net | Accumulated As at June 30, 2020 Cost Depletion (1) Impairment Carrying Value Mining royalties $ 1,038.0 $ (632.4) $ — $ 405.6 Streams 4,349.9 (1,622.5) — 2,727.4 Energy 1,745.0 (406.8) (267.7) 1,070.5 Advanced 199.8 (32.1) — 167.7 Exploration 64.7 (12.1) — 52.6 $ 7,397.4 $ (2,705.9) $ (267.7) $ 4,423.8 1. Accumulated depletion includes previously recognized impairment charges. Accumulated As at December 31, 2019 Cost Depletion (1) Impairment Carrying Value Mining royalties $ 1,035.7 $ (620.1) $ — $ 415.6 Streams 4,346.3 (1,542.3) — 2,804.0 Energy 1,756.4 (402.8) — 1,353.6 Advanced 203.2 (32.3) — 170.9 Exploration 66.2 (12.5) — 53.7 $ 7,407.8 $ (2,610.0) $ — $ 4,797.8 1. Accumulated depletion includes previously recognized impairment charges. |
Disclosure of detailed information about royalty, stream and working interest, net rollforward | Mining Royalties Streams Energy Advanced Exploration Total Balance at January 1, 2019 $ 450.1 $ 2,967.6 $ 966.6 $ 129.8 $ 41.5 $ 4,555.6 Additions — — 419.0 46.0 11.9 476.9 Transfers 5.9 — — (5.9) — — Depletion (46.0) (163.6) (49.0) (0.9) (0.2) (259.7) Impact of foreign exchange 5.6 — 17.0 1.9 0.5 25.0 Balance at December 31, 2019 $ 415.6 $ 2,804.0 $ 1,353.6 $ 170.9 $ 53.7 $ 4,797.8 Additions (Note 3) 13.4 (0.1) 21.3 — — 34.6 Impairments — — (267.7) — — (267.7) Depletion (17.1) (76.5) (21.5) (0.4) — (115.5) Impact of foreign exchange (6.3) — (15.2) (2.8) (1.1) (25.4) Balance at June 30, 2020 $ 405.6 $ 2,727.4 $ 1,070.5 $ 167.7 $ 52.6 $ 4,423.8 |
Schedule of impairments of Royalty, Stream and Working Interests, Net | Impairment Recoverable Amount Amount Royalty, stream and working interests, net SCOOP/STACK $ 207.2 $ 309.2 Weyburn 60.5 162.8 Other assets Oil well equipment $ 4.0 $ 4.7 $ 271.7 $ 476.7 |
Schedule of key assumptions and sensitivity analysis | Average Annual Remainder of Increase Thereafter WTI oil price (US$/barrel) $ 30.00 $ 41.18 $ 49.88 $ 55.87 $ 57.98 2 % Increase (Decrease) to Impairment Charges 1% Increase 1% Decrease 10% Decrease 10% Increase in the in the in WTI Oil in WTI Oil Discount Rate Discount Rate Price Price SCOOP/STACK $ 34.1 $ (39.9) $ 37.8 $ (37.3) Weyburn, including oil well equipment 16.9 (19.1) 39.8 (39.0) $ 51.0 $ (59.0) $ 77.6 $ (76.3) |
Other assets (Tables)
Other assets (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Other assets | |
Schedule of Other assets | At June 30, At December 31, Energy well equipment, net $ 4.8 $ 9.3 Right-of-use assets, net 2.1 2.5 Furniture and fixtures, net 0.4 0.4 Debt issue costs 1.5 1.9 $ 8.8 $ 14.1 |
Debt (Tables)
Debt (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Debt | |
Schedule of changes in obligations related to the Credit Facility | Corporate Corporate FNBC Revolver Term Loan Revolver Total Size of facility $ 1,000.0 $ 160.0 $ 100.0 $ 1,260.0 Balance at January 1, 2019 $ 210.0 $ — $ — $ 210.0 Drawdowns 275.0 160.0 — 435.0 Repayment (485.0) (80.0) — (565.0) Balance at December 31, 2019 $ — $ 80.0 $ — $ 80.0 Repayment — (80.0) — (80.0) Balance at June 30, 2020 $ — $ — $ — $ — |
Revenue (Tables)
Revenue (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Revenue. | |
Schedule of Revenue | For the three months ended For the six months ended June 30, June 30, Commodity Gold (1) $ 136.6 $ 105.9 $ 303.6 $ 219.9 Silver 20.2 16.6 42.3 36.6 Platinum-group metals (1) 21.4 14.7 44.0 33.8 Other mining commodities 2.6 5.7 4.9 11.6 Mining $ 180.8 $ 142.9 $ 394.8 $ 301.9 Energy 14.6 27.6 41.1 48.4 $ 195.4 $ 170.5 $ 435.9 $ 350.3 Geography Latin America $ 80.4 $ 60.9 $ 198.0 $ 135.9 United States 44.7 36.0 89.7 68.9 Canada (1) 35.7 39.7 82.1 78.5 Rest of World 34.6 33.9 66.1 67.0 $ 195.4 $ 170.5 $ 435.9 $ 350.3 Type Revenue-based royalties $ 65.1 $ 56.4 $ 133.5 $ 112.8 Streams (1) 112.6 88.1 263.4 192.8 Profit-based royalties 14.1 17.3 30.3 26.9 Other 3.6 8.7 8.7 17.8 $ 195.4 $ 170.5 $ 435.9 $ 350.3 Includes revenue of $0.0 million and $0.1 million of provisional pricing adjustments for gold and platinum-group metals, respectively for the three months ended June 30, 2020 (Q2/2019–$0.3 million and $0.8 million, respectively). For the six months ended June 30, 2020, includes revenue of $0.2 million and $3.2 million of gold and platinum-group metals, respectively. (H1/2019 – nil and $3.4 million, respectively). |
Costs of sales (Tables)
Costs of sales (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Costs of sales | |
Schedule of Costs of sales | For the three months ended For the six months ended June 30, June 30, Costs of stream sales $ 26.2 $ 25.0 $ 67.0 $ 55.4 Mineral production taxes 0.8 0.6 1.5 1.2 Mining costs of sales $ 27.0 $ 25.6 $ 68.5 $ 56.6 Energy costs of sales 1.0 1.8 3.1 3.2 $ 28.0 $ 27.4 $ 71.6 $ 59.8 |
Related party disclosures (Tabl
Related party disclosures (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Related party disclosures | |
Schedule of compensation for key management personnel | Compensation for key management personnel of the Company was as follows: For the three months ended For the six months ended June 30, June 30, Short-term benefits (1) $ 0.6 $ 0.8 $ 1.4 $ 1.6 Share-based payments (2) 6.4 2.0 8.0 3.4 $ 7.0 $ 2.8 $ 9.4 $ 5.0 1. Includes salary, benefits and short-term accrued incentives/other bonuses earned in the period. 2. Represents the expense of stock options and restricted share units, and mark-to-market charges on deferred share units during the period. |
Finance income and expenses (Ta
Finance income and expenses (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Finance income and expenses | |
Schedule of finance income and expenses | For the three months ended For the six months ended June 30, June 30, Finance income Interest $ 1.0 $ 1.2 $ 1.9 $ 1.9 $ 1.0 $ 1.2 $ 1.9 $ 1.9 Finance expenses Interest $ — 1.7 $ 0.3 $ 3.6 Standby charges 0.5 $ 0.6 1.0 0.9 Amortization of debt issue costs 0.3 0.2 0.5 0.4 Accretion of lease liabilities — — 0.1 0.1 $ 0.8 $ 2.5 $ 1.9 $ 5.0 |
Income taxes (Tables)
Income taxes (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Income taxes | |
Schedule of income tax expense | For the three months ended For the six months ended June 30, June 30, Current income tax expense $ 10.1 11.7 $ 24.5 $ 21.4 Deferred income tax (recovery) expense 1.4 2.0 (57.9) 5.3 $ 11.5 $ 13.7 $ (33.4) $ 26.7 |
Shareholders' equity (Tables)
Shareholders' equity (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Shareholders' equity | |
Schedule of changes in share capital | Number of shares Amount Balance at January 1, 2019 186,692,481 $ 5,158.3 At-the-market equity offering 1,433,400 136.0 Acquisition of Salares Norte 366,499 27.0 Exercise of stock options 283,863 17.3 Vesting of restricted share units 46,375 3.3 Dividend reinvestment plan (Note 15(c)) 558,770 48.8 Balance at December 31, 2019 189,381,388 $ 5,390.7 At-the-market equity offering (Note 15(b)) 909,900 112.3 Exercise of stock options 124,404 7.9 Dividend reinvestment plan (Note 15(c)) 172,799 21.0 Balance at June 30, 2020 190,588,491 $ 5,531.9 |
Schedule of dividends paid | For the three months ended For the six months ended June 30, June 30, Cash dividends $ 39.8 $ 35.1 $ 76.0 $ 70.0 DRIP dividends 10.1 12.3 21.0 22.3 $ 49.9 $ 47.4 $ 97.0 $ 92.3 |
Earnings per share ("EPS") (Tab
Earnings per share ("EPS") (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Earnings per share ("EPS") | |
Schedule of basic and diluted EPS | For the three months ended June 30, 2020 2019 Shares Per Share Shares Per Share Net income (in millions) Amount Net income (in millions) Amount Basic earnings per share $ 94.4 190.2 $ 0.50 $ 64.0 187.2 $ 0.34 Effect of dilutive securities — 0.4 — — 0.3 — Diluted earnings per share $ 94.4 190.6 $ 0.50 $ 64.0 187.5 $ 0.34 For the six months ended June 30, 2020 2019 Shares Per Share Shares Per Share Net loss (in millions) Amount Net income (in millions) Amount Basic (loss) earnings per share $ (4.4) 189.6 $ (0.02) $ 129.2 187.1 $ 0.69 Effect of dilutive securities — — — — 0.3 — Diluted (loss) earnings per share $ (4.4) 189.6 $ (0.02) $ 129.2 187.4 $ 0.69 |
Segment reporting (Tables)
Segment reporting (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Segment reporting | |
Schedule of reportable segments for purposes of assessing performance | For the three months ended June 30, 2020 2019 Mining Energy Total Mining Energy Total Revenue $ 180.8 $ 14.6 $ 195.4 $ 142.9 $ 27.6 $ 170.5 Income/(expenses) Costs of sales $ 27.0 $ 1.0 $ 28.0 $ 25.6 $ 1.8 $ 27.4 Depletion and depreciation 42.1 9.8 51.9 46.7 11.4 58.1 Segment gross profit $ 111.7 $ 3.8 $ 115.5 $ 70.6 $ 14.4 $ 85.0 For the six months ended June 30, 2020 2019 Mining Energy Total Mining Energy Total Revenue $ 394.8 $ 41.1 $ 435.9 $ 301.9 $ 48.4 $ 350.3 Income/(expenses) Costs of sales $ 68.5 $ 3.1 $ 71.6 $ 56.6 $ 3.2 $ 59.8 Depletion and depreciation 94.0 21.5 115.5 97.3 20.8 118.1 Segment gross profit $ 232.3 $ 16.5 $ 248.8 $ 148.0 $ 24.4 $ 172.4 For the six months ended June 30, 2020, there were $1.2 million (H1/2019 - $1.7 million) of depreciation expenses on corporate assets. A reconciliation of total segment gross profit to consolidated net (loss) income before income taxes is presented below: For the three months ended For the six months ended June 30, June 30, Total segment gross profit $ $ 85.0 $ $ Other operating (income)/expenses Impairment of royalty, stream and working interests $ — $ — $ 271.7 $ — General and administrative expenses 11.7 5.6 17.9 12.5 Gain on sale of bullion (2.4) (0.4) (4.4) (0.8) Depreciation 0.4 0.8 1.2 1.7 Foreign exchange (gain) loss and other (income) expenses 0.1 — 0.2 — Income before finance items and income taxes $ 105.7 $ 79.0 $ (37.8) $ 159.0 Finance items Finance income $ 1.0 $ 1.2 $ 1.9 $ 1.9 Finance expenses (0.8) (2.5) (1.9) (5.0) Net income before income taxes $ 105.9 $ 77.7 $ (37.8) $ 155.9 |
Fair value measurements (Tables
Fair value measurements (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Recurring Basis | |
Fair value measurements | |
Schedule of Assets and Liabilities Measured at Fair Value | Quoted Prices in Significant Other Significant Active Markets for Observable Unobservable Identical Assets Inputs Inputs Aggregate As at June 30, 2020 (Level 1) (Level 2) (Level 3) Fair Value Receivables from provisional concentrate sales $ — $ 16.0 $ — $ 16.0 Equity investments 137.3 — 3.8 141.1 Warrants — 2.9 — 2.9 $ 137.3 $ 18.9 $ 3.8 $ 160.0 Quoted Prices in Significant Other Significant Active Markets for Observable Unobservable Identical Assets Inputs Inputs Aggregate As at December 31, 2019 (Level 1) (Level 2) (Level 3) Fair Value Receivables from provisional concentrate sales $ — $ 16.4 $ — $ 16.4 Equity investments 141.7 — 3.9 145.6 Warrants — 3.0 — 3.0 $ 141.7 $ 19.4 $ 3.9 $ 165.0 |
Corporate Information (Details)
Corporate Information (Details) | 6 Months Ended |
Jun. 30, 2020 | |
Corporate Information | |
Maximum energy streams target percentage (as a percent) | 20.00% |
Significant accounting polici_3
Significant accounting policies - Impact of recent global and market developments on oil and gas prices (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended |
Mar. 31, 2020 | Jun. 30, 2020 | |
Significant accounting policies | ||
Impairment of royalty, streams and working interests | $ 271.7 | $ 271.7 |
Acquisitions and other transa_2
Acquisitions and other transactions (Details) $ in Millions, $ in Millions | May 11, 2020USD ($) | Mar. 20, 2020CAD ($) | May 31, 2020 | Jun. 30, 2020USD ($) | Jun. 30, 2019USD ($) | Jun. 30, 2020USD ($) | Jun. 30, 2019USD ($) | Mar. 20, 2020USD ($) |
Acquisitions | ||||||||
Consideration transferred | $ 13.4 | |||||||
Alpala Royalty Northern Ecuador | ||||||||
Acquisitions | ||||||||
Percentage of NSR | 1.00% | |||||||
Consideration transferred | $ 100 | |||||||
Ownership percentage of the project by SolGold PLC | 85 | |||||||
Ownership percentage of the project by Cornerstone Capital Resource Inc. | 15 | |||||||
Maximum amount of funding that can be increased | $ 150 | |||||||
Increased Percentage of NSR | 1.5 | |||||||
Option to buy back of NSR (as a percent) | 50.00% | |||||||
Loan extended | $ 15 | |||||||
Loan extended term | 8 months | 8 months | ||||||
Island Gold Royalty Ontario, Canada | ||||||||
Acquisitions | ||||||||
Percentage of NSR | 0.62% | |||||||
Consideration transferred | $ 19 | |||||||
South Central Oklahoma Oil Province And Sooner Trend Anadarko Basin Canadian And Kingfisher Countries | ||||||||
Acquisitions | ||||||||
Total contributions made | $ 2.5 | $ 35.1 | $ 19.3 | $ 86.5 | ||||
Cumulative investment in royalty acquisition venture | 395.5 | 395.5 | ||||||
South Central Oklahoma Oil Province And Sooner Trend Anadarko Basin Canadian And Kingfisher Countries | Bottom | ||||||||
Acquisitions | ||||||||
Cumulative investment in royalty acquisition venture | 30 | 30 | ||||||
South Central Oklahoma Oil Province And Sooner Trend Anadarko Basin Canadian And Kingfisher Countries | Top | ||||||||
Acquisitions | ||||||||
Cumulative investment in royalty acquisition venture | 40 | 40 | ||||||
Total cumulative investment | 124.5 | 124.5 | ||||||
South Central Oklahoma Oil Province And Sooner Trend Anadarko Basin Canadian And Kingfisher Countries | Accounts payable | ||||||||
Acquisitions | ||||||||
Consideration transferred | $ 0.5 | $ 0.5 |
Cash and cash equivalents (Deta
Cash and cash equivalents (Details) - USD ($) $ in Millions | Jun. 30, 2020 | Dec. 31, 2019 | Jun. 30, 2019 | Dec. 31, 2018 |
Cash and cash equivalents | ||||
Cash deposits | $ 369.4 | $ 118.7 | ||
Term deposits | 9.1 | 13.4 | ||
Cash and cash equivalents | $ 378.5 | $ 132.1 | $ 398.9 | $ 69.7 |
Investments and loan receivab_3
Investments and loan receivable (Details) - USD ($) $ in Millions | May 11, 2020 | May 31, 2020 | Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2019 |
Investments and loan receivable | |||||||
Investments | $ 15 | $ 15 | |||||
Investments and loan receivable | 179.9 | 179.9 | $ 183.2 | ||||
Unrealized gains losses on available-for-sale investments | |||||||
Gain on change in the fair value of equity investments at FVTOCI | 42.6 | $ 28.2 | 1.9 | $ 54.5 | |||
Deferred tax expense in other comprehensive income | (5.6) | (3.4) | (0.2) | (6.8) | |||
Gain on change in the fair value of equity investments at FVTOCI, net of tax | 37 | $ 24.8 | 1.7 | $ 47.7 | |||
Alpala Royalty Northern Ecuador | |||||||
Investments and loan receivable | |||||||
Loan extended term | 8 months | 8 months | |||||
Equity investments | |||||||
Investments and loan receivable | |||||||
Investments and loan receivable | 141.1 | 141.1 | 145.6 | ||||
Loan receivable | |||||||
Investments and loan receivable | |||||||
Investments | 15 | 15 | |||||
Investments and loan receivable | 35.9 | 35.9 | 34.6 | ||||
Warrants | |||||||
Investments and loan receivable | |||||||
Investments and loan receivable | $ 2.9 | $ 2.9 | $ 3 |
Prepaid expenses and other cu_3
Prepaid expenses and other current assets (Details) - USD ($) $ in Millions | Jun. 30, 2020 | Dec. 31, 2019 |
Prepaid expenses and other current assets. | ||
Gold bullion | $ 20 | $ 26.2 |
Prepaid expenses | 22.7 | 17.5 |
Stream ounces inventory | 0.5 | 4.4 |
Debt issue costs | 0.6 | 0.7 |
Prepaid expenses and other current assets | $ 43.8 | $ 48.8 |
Royalty, stream and working i_3
Royalty, stream and working interests - Royalties, Streams and Working Interests (Details) - USD ($) $ in Millions | Jun. 30, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Royalty, Stream and Working Interests, Net | |||
Royalty, stream and working interests, net | $ 4,423.8 | $ 4,797.8 | $ 4,555.6 |
Royalty, stream and working interest, net depletable | 3,430.1 | 3,743.8 | |
Royalty, stream and working interest, net non-depletable | 993.7 | 1,054 | |
Cost | |||
Royalty, Stream and Working Interests, Net | |||
Royalty, stream and working interests, net | 7,397.4 | 7,407.8 | |
Accumulated Depletion | |||
Royalty, Stream and Working Interests, Net | |||
Royalty, stream and working interests, net | (2,705.9) | (2,610) | |
Impairment | |||
Royalty, Stream and Working Interests, Net | |||
Royalty, stream and working interests, net | (267.7) | ||
Mineral Royalties | |||
Royalty, Stream and Working Interests, Net | |||
Royalty, stream and working interests, net | 405.6 | 415.6 | 450.1 |
Mineral Royalties | Cost | |||
Royalty, Stream and Working Interests, Net | |||
Royalty, stream and working interests, net | 1,038 | 1,035.7 | |
Mineral Royalties | Accumulated Depletion | |||
Royalty, Stream and Working Interests, Net | |||
Royalty, stream and working interests, net | (632.4) | (620.1) | |
Streams | |||
Royalty, Stream and Working Interests, Net | |||
Royalty, stream and working interests, net | 2,727.4 | 2,804 | 2,967.6 |
Streams | Cost | |||
Royalty, Stream and Working Interests, Net | |||
Royalty, stream and working interests, net | 4,349.9 | 4,346.3 | |
Streams | Accumulated Depletion | |||
Royalty, Stream and Working Interests, Net | |||
Royalty, stream and working interests, net | (1,622.5) | (1,542.3) | |
Energy | |||
Royalty, Stream and Working Interests, Net | |||
Royalty, stream and working interests, net | 1,070.5 | 1,353.6 | 966.6 |
Energy | Cost | |||
Royalty, Stream and Working Interests, Net | |||
Royalty, stream and working interests, net | 1,745 | 1,756.4 | |
Energy | Accumulated Depletion | |||
Royalty, Stream and Working Interests, Net | |||
Royalty, stream and working interests, net | (406.8) | (402.8) | |
Energy | Impairment | |||
Royalty, Stream and Working Interests, Net | |||
Royalty, stream and working interests, net | (267.7) | ||
Advanced | |||
Royalty, Stream and Working Interests, Net | |||
Royalty, stream and working interests, net | 167.7 | 170.9 | 129.8 |
Advanced | Cost | |||
Royalty, Stream and Working Interests, Net | |||
Royalty, stream and working interests, net | 199.8 | 203.2 | |
Advanced | Accumulated Depletion | |||
Royalty, Stream and Working Interests, Net | |||
Royalty, stream and working interests, net | (32.1) | (32.3) | |
Exploration | |||
Royalty, Stream and Working Interests, Net | |||
Royalty, stream and working interests, net | 52.6 | 53.7 | $ 41.5 |
Exploration | Cost | |||
Royalty, Stream and Working Interests, Net | |||
Royalty, stream and working interests, net | 64.7 | 66.2 | |
Exploration | Accumulated Depletion | |||
Royalty, Stream and Working Interests, Net | |||
Royalty, stream and working interests, net | $ (12.1) | $ (12.5) |
Royalty, stream and working i_4
Royalty, stream and working interests - Rollforward (Details) - USD ($) $ in Millions | 6 Months Ended | 12 Months Ended |
Jun. 30, 2020 | Dec. 31, 2019 | |
Royalty, Stream and Working Interests, Net | ||
Balance at beginning of period | $ 4,797.8 | $ 4,555.6 |
Acquisitions | 34.6 | 476.9 |
Impairments | (267.7) | |
Depletion | (115.5) | (259.7) |
Impact of foreign exchange | (25.4) | 25 |
Balance at end of period | 4,423.8 | 4,797.8 |
Mineral Royalties | ||
Royalty, Stream and Working Interests, Net | ||
Balance at beginning of period | 415.6 | 450.1 |
Acquisitions | 13.4 | |
Transfers | 5.9 | |
Depletion | (17.1) | (46) |
Impact of foreign exchange | (6.3) | 5.6 |
Balance at end of period | 405.6 | 415.6 |
Streams | ||
Royalty, Stream and Working Interests, Net | ||
Balance at beginning of period | 2,804 | 2,967.6 |
Acquisitions | (0.1) | |
Depletion | (76.5) | (163.6) |
Balance at end of period | 2,727.4 | 2,804 |
Energy | ||
Royalty, Stream and Working Interests, Net | ||
Balance at beginning of period | 1,353.6 | 966.6 |
Acquisitions | 21.3 | 419 |
Impairments | (267.7) | |
Depletion | (21.5) | (49) |
Impact of foreign exchange | (15.2) | 17 |
Balance at end of period | 1,070.5 | 1,353.6 |
Advanced | ||
Royalty, Stream and Working Interests, Net | ||
Balance at beginning of period | 170.9 | 129.8 |
Acquisitions | 46 | |
Transfers | (5.9) | |
Depletion | (0.4) | (0.9) |
Impact of foreign exchange | (2.8) | 1.9 |
Balance at end of period | 167.7 | 170.9 |
Exploration | ||
Royalty, Stream and Working Interests, Net | ||
Balance at beginning of period | 53.7 | 41.5 |
Acquisitions | 11.9 | |
Depletion | (0.2) | |
Impact of foreign exchange | (1.1) | 0.5 |
Balance at end of period | $ 52.6 | $ 53.7 |
Royalty, stream and working i_5
Royalty, stream and working interests - Impairments of Royalties, Streams and Working Interests (Details) | 1 Months Ended | 3 Months Ended | 6 Months Ended | ||
Nov. 30, 2017USD ($) | Dec. 31, 2016USD ($) | Mar. 31, 2020USD ($) | Jun. 30, 2020USD ($)item$ / shares$ / bbl | Nov. 13, 2012 | |
Impairments | |||||
Impairment of royalty, streams and working interests | $ 271,700,000 | $ 271,700,000 | |||
Recoverable amount of cash generating unit | $ 476,700,000 | ||||
Edmonton Light prices (in US $/ barrels) | $ / bbl | 8.55 | ||||
Exchange rate (US $ / Canadian dollar) | $ / shares | $ 0.72 | ||||
WTI oil price increase (as percentage) | 2.00% | ||||
Discount Rate increase (Percentage) | 1.00% | ||||
Discount Rate decrease (Percentage) | 1.00% | ||||
WTI Oil Price decrease (Percentage) | 10.00% | ||||
WTI Oil Price increase (Percentage) | 10.00% | ||||
Increase (Decrease) to impairment charges due to 1% increase in discount rate | $ 51 | ||||
Increase (Decrease) to impairment charges due to 1% decrease in discount rate | (59) | ||||
Increase (Decrease) to impairment charges due to 10% increase in WTI oil prices | 77.6 | ||||
Increase (Decrease) to impairment charges due to 10% decrease in WTI oil prices | (76.3) | ||||
Remainder of 2020 | |||||
Impairments | |||||
WTI oil price (in US $/ barrels) | 30 | ||||
2021 | |||||
Impairments | |||||
WTI oil price (in US $/ barrels) | 41.18 | ||||
2022 | |||||
Impairments | |||||
WTI oil price (in US $/ barrels) | 49.88 | ||||
2023 | |||||
Impairments | |||||
WTI oil price (in US $/ barrels) | 55.87 | ||||
2024 | |||||
Impairments | |||||
WTI oil price (in US $/ barrels) | $ 57.98 | ||||
SCOOP/STACK | |||||
Impairments | |||||
Number of package acquired | item | 2 | ||||
Royalty rights acquired | $ 27,600,000 | $ 100,000,000 | |||
Impairment of royalty, streams and working interests | $ 207,200,000 | ||||
Recoverable amount of cash generating unit | 309,200,000 | ||||
Increase (Decrease) to impairment charges due to 1% increase in discount rate | 34.1 | ||||
Increase (Decrease) to impairment charges due to 1% decrease in discount rate | (39.9) | ||||
Increase (Decrease) to impairment charges due to 10% increase in WTI oil prices | 37.8 | ||||
Increase (Decrease) to impairment charges due to 10% decrease in WTI oil prices | $ (37.3) | ||||
Weyburn | |||||
Impairments | |||||
Percentage of NRI | 11.71% | ||||
Percentage of ORR | 0.44% | ||||
Percentage of WI | 2.56% | ||||
Impairment of royalty, streams and working interests | $ 60,500,000 | ||||
Recoverable amount of cash generating unit | $ 162,800,000 | ||||
Change In Discount Rate Assumptions Applied To Cash Flow Projection Impairment Analysis | 9.50% | ||||
Change in discount rate assumption for impairment analysis (as a percent) | 9.50% | ||||
Oil well equipment | |||||
Impairments | |||||
Impairment of royalty, streams and working interests | $ 4,000,000 | ||||
Recoverable amount of cash generating unit | 4,700,000 | ||||
Weyburn and oil well equipment | |||||
Impairments | |||||
Increase (Decrease) to impairment charges due to 1% increase in discount rate | 16.9 | ||||
Increase (Decrease) to impairment charges due to 1% decrease in discount rate | (19.1) | ||||
Increase (Decrease) to impairment charges due to 10% increase in WTI oil prices | 39.8 | ||||
Increase (Decrease) to impairment charges due to 10% decrease in WTI oil prices | $ (39) | ||||
Bottom | SCOOP/STACK | |||||
Impairments | |||||
Change In Discount Rate Assumptions Applied To Cash Flow Projection Impairment Analysis | 5.00% | ||||
Change in discount rate assumption for impairment analysis (as a percent) | 5.00% | ||||
Top | SCOOP/STACK | |||||
Impairments | |||||
Change In Discount Rate Assumptions Applied To Cash Flow Projection Impairment Analysis | 12.00% | ||||
Change in discount rate assumption for impairment analysis (as a percent) | 12.00% |
Other assets (Details)
Other assets (Details) - USD ($) $ in Millions | Jun. 30, 2020 | Dec. 31, 2019 |
Other assets | ||
Energy well equipment, net | $ 4.8 | $ 9.3 |
Right-of-use assets, net | 2.1 | 2.5 |
Furniture and fixtures, net | 0.4 | 0.4 |
Debt issue costs | 1.5 | 1.9 |
Other assets | $ 8.8 | $ 14.1 |
Debt (Details)
Debt (Details) $ in Millions | Mar. 20, 2017USD ($) | Jun. 30, 2020USD ($) | Dec. 31, 2019USD ($) | Jun. 30, 2020CAD ($) | Jun. 30, 2020USD ($) | Apr. 17, 2019USD ($) |
Revolving term credit facility | ||||||
Size of facility | $ 1,260,000,000 | |||||
Balance, beginning of year | $ 80,000,000 | $ 210,000,000 | ||||
Drawdowns | 435,000,000 | |||||
Repayments | (80,000,000) | (565,000,000) | ||||
Balance, end of year | 80,000,000 | |||||
Amount outstanding | $ 80,000,000 | 80,000,000 | ||||
Credit Facility | ||||||
Revolving term credit facility | ||||||
Balance, beginning of year | 210,000,000 | |||||
Drawdowns | 275,000,000 | |||||
Repayments | (485,000,000) | |||||
Maximum borrowing capacity | $ 1,000,000,000 | |||||
Amount outstanding | 210,000,000 | |||||
Credit Facility | Bottom | ||||||
Revolving term credit facility | ||||||
Bankers acceptance period under credit facility | 30 days | |||||
Stamping fee (as a percent) | 1.00% | |||||
Standby fee (as a percent) | 0.20% | |||||
Credit Facility | Top | ||||||
Revolving term credit facility | ||||||
Bankers acceptance period under credit facility | 180 days | |||||
Stamping fee (as a percent) | 2.05% | |||||
Standby fee (as a percent) | 0.41% | |||||
Credit Facility | CIBC | Bottom | ||||||
Revolving term credit facility | ||||||
Spread on variable rate (as a percent) | 0.00% | 0.00% | ||||
Credit Facility | CIBC | Top | ||||||
Revolving term credit facility | ||||||
Spread on variable rate (as a percent) | 1.05% | 1.05% | ||||
Credit Facility | LIBOR | Bottom | ||||||
Revolving term credit facility | ||||||
Spread on variable rate (as a percent) | 1.00% | 1.00% | ||||
Credit Facility | LIBOR | Top | ||||||
Revolving term credit facility | ||||||
Spread on variable rate (as a percent) | 2.05% | 2.05% | ||||
Credit Facility | Prime rate | Bottom | ||||||
Revolving term credit facility | ||||||
Spread on variable rate (as a percent) | 0.00% | 0.00% | ||||
Credit Facility | Prime rate | Top | ||||||
Revolving term credit facility | ||||||
Spread on variable rate (as a percent) | 1.05% | 1.05% | ||||
Term Loan | ||||||
Revolving term credit facility | ||||||
Balance, beginning of year | $ 80,000,000 | |||||
Drawdowns | 160,000,000 | |||||
Repayments | (80,000,000) | (80,000,000) | ||||
Balance, end of year | 80,000,000 | |||||
Amount outstanding | $ 80,000,000 | $ 80,000,000 | ||||
Borrowed amount | $ 160,000,000 | $ 160,000,000 | ||||
Term Loan | 30-day Libor | ||||||
Revolving term credit facility | ||||||
Spread on variable rate (as a percent) | 0.85% | |||||
FNBC Credit Facility | ||||||
Revolving term credit facility | ||||||
Maturity period | 1 year | |||||
Maximum borrowing capacity | $ 100,000,000 | $ 100,000,000 | ||||
Standby fee (as a percent) | 0.25% | |||||
FNBC Credit Facility | CIBC | ||||||
Revolving term credit facility | ||||||
Spread on variable rate (as a percent) | 0.25% | 0.25% | ||||
FNBC Credit Facility | LIBOR | ||||||
Revolving term credit facility | ||||||
Spread on variable rate (as a percent) | 1.25% | 1.25% | ||||
Letter of credit | ||||||
Revolving term credit facility | ||||||
Maximum borrowing capacity | $ 23.1 | $ 17,000,000 | ||||
Number of letter of credit | $ 2 |
Revenue (Details)
Revenue (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2019 | |
Revenue | |||||
Revenue | $ 195.4 | $ 170.5 | $ 435.9 | $ 350.3 | $ 350.3 |
Revenue-based royalties | |||||
Revenue | |||||
Revenue | 65.1 | 56.4 | 133.5 | 112.8 | |
Streams | |||||
Revenue | |||||
Revenue | 112.6 | 88.1 | 263.4 | 192.8 | |
Profit-based royalties | |||||
Revenue | |||||
Revenue | 14.1 | 17.3 | 30.3 | 26.9 | |
Other | |||||
Revenue | |||||
Revenue | 3.6 | 8.7 | 8.7 | 17.8 | |
Mining | |||||
Revenue | |||||
Revenue | 180.8 | 142.9 | 394.8 | 301.9 | |
Gold | |||||
Revenue | |||||
Revenue | 136.6 | 105.9 | 303.6 | 219.9 | |
Provisional price adjustment | 0 | 0.3 | 0.2 | 0 | |
Silver | |||||
Revenue | |||||
Revenue | 20.2 | 16.6 | 42.3 | 36.6 | |
Platinum-group metals | |||||
Revenue | |||||
Revenue | 21.4 | 14.7 | 44 | 33.8 | |
Provisional price adjustment | 0.1 | 0.8 | 3.2 | $ 3.4 | |
Other mining commodities | |||||
Revenue | |||||
Revenue | 2.6 | 5.7 | 4.9 | 11.6 | |
Energy | |||||
Revenue | |||||
Revenue | 14.6 | 27.6 | 41.1 | 48.4 | |
Latin American | |||||
Revenue | |||||
Revenue | 80.4 | 60.9 | 198 | 135.9 | |
United States | |||||
Revenue | |||||
Revenue | 44.7 | 36 | 89.7 | 68.9 | |
Canada | |||||
Revenue | |||||
Revenue | 35.7 | 39.7 | 82.1 | 78.5 | |
Rest of World | |||||
Revenue | |||||
Revenue | $ 34.6 | $ 33.9 | $ 66.1 | $ 67 |
Costs of sales (Details)
Costs of sales (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Costs of sales | ||||
Cost of stream sales | $ 26.2 | $ 25 | $ 67 | $ 55.4 |
Mineral production taxes | 0.8 | 0.6 | 1.5 | 1.2 |
Mining costs of sales | 27 | 25.6 | 68.5 | 56.6 |
Energy costs of sales | 1 | 1.8 | 3.1 | 3.2 |
Total costs of sales | $ 28 | $ 27.4 | $ 71.6 | $ 59.8 |
Related party disclosures (Deta
Related party disclosures (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Related party disclosures | ||||
Short-term benefits | $ 0.6 | $ 0.8 | $ 1.4 | $ 1.6 |
Share-based payments | 6.4 | 2 | 8 | 3.4 |
Total | $ 7 | $ 2.8 | $ 9.4 | $ 5 |
Finance income and expenses (De
Finance income and expenses (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Finance income | ||||
Interest | $ 1 | $ 1.2 | $ 1.9 | $ 1.9 |
Finance income | 1 | 1.2 | 1.9 | 1.9 |
Finance expenses | ||||
Interest | 1.7 | 0.3 | 3.6 | |
Standby charges | 0.5 | 0.6 | 1 | 0.9 |
Amortization of debt issue costs | 0.3 | 0.2 | 0.5 | 0.4 |
Accretion of lease liabilities | 0.1 | 0.1 | ||
Finance expenses | $ 0.8 | $ 2.5 | $ 1.9 | $ 5 |
Income taxes - Other (Details)
Income taxes - Other (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Income taxes | ||||
Current income tax expense | $ 10.1 | $ 11.7 | $ 24.5 | $ 21.4 |
Deferred income tax (recovery) expense | 1.4 | 2 | (57.9) | 5.3 |
Total income tax expense | $ 11.5 | $ 13.7 | $ (33.4) | $ 26.7 |
Shareholders' equity - Common S
Shareholders' equity - Common Shares (Details) | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2020USD ($)$ / sharesshares | Jun. 30, 2019USD ($) | Jun. 30, 2020USD ($)$ / sharesshares | Jun. 30, 2019USD ($)shares | Dec. 31, 2019USD ($)shares | |
Shareholders' equity | |||||
At-the-market equity offering | shares | 474,900 | 909,900 | |||
Balance at the beginning period | $ 5,390,700,000 | ||||
At-the-market equity offering | 112,300,000 | ||||
Amount of Acquisition of Salares Norte | $ 27,000,000 | ||||
Amount of Exercise of stock options | 6,000,000 | 2,500,000 | |||
Dividend reinvestment plan | $ (10,100,000) | $ (12,300,000) | (21,000,000) | $ (22,300,000) | |
Balance at the ending period | $ 5,531,900,000 | $ 5,531,900,000 | $ 5,390,700,000 | ||
Common shares | |||||
Shareholders' equity | |||||
Shares issued | shares | 190,588,491 | 190,588,491 | |||
Shares, par value (dollars per share) | $ / shares | $ 0 | $ 0 | |||
Preferred shares | |||||
Shareholders' equity | |||||
Shares issued | shares | 0 | 0 | |||
Share Capital (Note 15) | |||||
Shareholders' equity | |||||
Number of shares outstanding at beginning of period | shares | 189,381,388 | 186,692,481 | 186,692,481 | ||
At-the-market equity offering | shares | 909,900 | 1,433,400 | |||
Acquisition of Salares Norte | 366,499 | ||||
Exercise of stock options | shares | 124,404 | 283,863 | |||
Vesting of restricted share units | shares | 46,375 | ||||
Dividend reinvestment plan | shares | 172,799 | 558,770 | |||
Number of shares outstanding at end of period | shares | 190,588,491 | 190,588,491 | 189,381,388 | ||
Balance at the beginning period | $ 5,390,700,000 | $ 5,158,300,000 | $ 5,158,300,000 | ||
At-the-market equity offering | 112,300,000 | 136,000,000 | |||
Amount of Acquisition of Salares Norte | 27,000,000 | 27,000,000 | |||
Amount of Exercise of stock options | 7,900,000 | 3,300,000 | 17,300,000 | ||
Amount of Vesting of restricted share units | 3,300,000 | ||||
Dividend reinvestment plan | (21,000,000) | $ (22,300,000) | (48,800,000) | ||
Balance at the ending period | $ 5,531,900,000 | $ 5,531,900,000 | $ 5,390,700,000 |
Shareholders' equity - At-the-m
Shareholders' equity - At-the-market equity offering (Details) - USD ($) $ / shares in Units, $ in Millions | May 11, 2020 | Jul. 19, 2019 | Jun. 30, 2020 | Jun. 30, 2020 | Dec. 31, 2019 |
Shareholders' equity | |||||
Maximum value of shares that can be issued from treasury to public | 300,000,000 | 200,000,000 | |||
Number of shares issued at At-the-market equity offering | 474,900 | 909,900 | |||
Average price per common share | $ 143.58 | $ 125.54 | |||
Gross proceeds from share issues | $ 68.2 | $ 114.2 | |||
Net proceeds from share issues | 66.8 | 112.3 | |||
Share issuance agent commission costs | 0.7 | 1.1 | |||
Share issue costs and expense | $ 0.7 | $ 0.8 | |||
Share Capital (Note 15) | |||||
Shareholders' equity | |||||
Number of shares issued at At-the-market equity offering | 909,900 | 1,433,400 |
Shareholders' equity - Dividend
Shareholders' equity - Dividends (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Shareholders' equity | ||||
Dividend declared per share | $ 0.26 | $ 0.25 | $ 0.51 | $ 0.49 |
Cash dividends | $ 39.8 | $ 35.1 | $ 76 | $ 70 |
DRIP dividends | (10.1) | (12.3) | (21) | (22.3) |
Dividends declared | $ 49.9 | $ 47.4 | $ 97 | $ 92.3 |
Earnings per share ("EPS") (Det
Earnings per share ("EPS") (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Earnings per share | ||||
Basic EPS - (Loss) earnings | $ 94.4 | $ 64 | $ (4.4) | $ 129.2 |
Basic EPS - (in shares) | 190,200,000 | 187,200,000 | 189,600,000 | 187,100,000 |
Basic EPS (in dollars per share) | $ 0.50 | $ 0.34 | $ (0.02) | $ 0.69 |
Effect of dilutive securities - (in shares) | 400,000 | 300,000 | 300,000 | |
Diluted EPS - Loss) earnings | $ 94.4 | $ 64 | $ (4.4) | $ 129.2 |
Diluted EPS - (in shares) | 190,600,000 | 187,500,000 | 189,600,000 | 187,400,000 |
Diluted EPS (in dollars per share) | $ 0.50 | $ 0.34 | $ (0.02) | $ 0.69 |
Stock options | ||||
Earnings per share | ||||
Securities excluded from computation of diluted EPS (in shares) | 0 | 251,613 | 0 | 251,613 |
Restricted shares | ||||
Earnings per share | ||||
Securities excluded from computation of diluted EPS (in shares) | 65,360 | 69,442 | 65,360 | 69,442 |
Segment Reporting - Financials
Segment Reporting - Financials (Details) $ in Millions | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
Jun. 30, 2020USD ($) | Mar. 31, 2020USD ($) | Jun. 30, 2019USD ($) | Jun. 30, 2020USD ($)item | Jun. 30, 2019USD ($) | Dec. 31, 2019USD ($) | |
Segment Reporting | ||||||
Number of operating segments | item | 2 | |||||
Revenue | $ 195.4 | $ 170.5 | $ 435.9 | $ 350.3 | $ 350.3 | |
Income/(expenses) | ||||||
Costs of sales | 28 | 27.4 | 71.6 | 59.8 | ||
Depletion and depreciation | 52.3 | 58.9 | 116.7 | 119.8 | ||
Gross profit | 115.1 | 84.2 | 247.6 | 170.7 | ||
Other operating (income)/expenses | ||||||
General and administrative expenses | 11.7 | 5.6 | 17.9 | 12.5 | ||
Impairment of royalty, streams and working interests | $ 271.7 | 271.7 | ||||
Gain on sale of gold bullion | (2.4) | (0.4) | (4.4) | (0.8) | ||
Depreciation | 1.2 | 1.7 | ||||
Foreign exchange (gain) and other (income) expenses | 0.1 | 0.2 | ||||
Income (loss) before finance items and income taxes | 105.7 | 79 | (37.8) | 159 | ||
Finance items | ||||||
Finance income | 1 | 1.2 | 1.9 | 1.9 | ||
Finance expenses | (0.8) | (2.5) | (1.9) | (5) | ||
Net income (loss) before income taxes | 105.9 | 77.7 | (37.8) | 155.9 | ||
Operating Segments | ||||||
Segment Reporting | ||||||
Revenue | 195.4 | 170.5 | 435.9 | 350.3 | ||
Income/(expenses) | ||||||
Costs of sales | 28 | 27.4 | 71.6 | 59.8 | ||
Depletion and depreciation | 51.9 | 58.1 | 115.5 | 118.1 | ||
Gross profit | 115.5 | 85 | 248.8 | 172.4 | ||
Other operating (income)/expenses | ||||||
General and administrative expenses | 11.7 | 5.6 | 17.9 | 12.5 | ||
Impairment of royalty, streams and working interests | 271.7 | |||||
Gain on sale of gold bullion | (2.4) | (0.4) | (4.4) | (0.8) | ||
Depreciation | 0.4 | 0.8 | 1.2 | 1.7 | ||
Foreign exchange (gain) and other (income) expenses | 0.1 | 0.2 | ||||
Income (loss) before finance items and income taxes | 105.7 | 79 | (37.8) | 159 | ||
Finance items | ||||||
Finance income | 1 | 1.2 | 1.9 | 1.9 | ||
Finance expenses | (0.8) | (2.5) | (1.9) | (5) | ||
Net income (loss) before income taxes | 105.9 | 77.7 | (37.8) | 155.9 | ||
Operating Segments | Mining Segment | ||||||
Segment Reporting | ||||||
Revenue | 180.8 | 142.9 | 394.8 | 301.9 | ||
Income/(expenses) | ||||||
Costs of sales | 27 | 25.6 | 68.5 | 56.6 | ||
Depletion and depreciation | 42.1 | 46.7 | 94 | 97.3 | ||
Gross profit | 111.7 | 70.6 | 232.3 | 148 | ||
Operating Segments | Energy Segment | ||||||
Segment Reporting | ||||||
Revenue | 14.6 | 27.6 | 41.1 | 48.4 | ||
Income/(expenses) | ||||||
Costs of sales | 1 | 1.8 | 3.1 | 3.2 | ||
Depletion and depreciation | 9.8 | 11.4 | 21.5 | 20.8 | ||
Gross profit | $ 3.8 | $ 14.4 | $ 16.5 | $ 24.4 |
Fair value measurements (Detail
Fair value measurements (Details) | 6 Months Ended | |
Jun. 30, 2020USD ($)EquityInstruments | Dec. 31, 2019USD ($) | |
Fair value measurements | ||
Transfer from Level 1 to 2 of financial assets | $ 0 | |
Transfer from Level 2 to 1 of financial assets | 0 | |
Transfer from Level 1 to 2 of financial liabilities | 0 | |
Transfer from Level 2 to 1 of financial liabilities | 0 | |
Transfers Into Level 3 of financial assets | 0 | |
Transfers Out of Level 3 of financial assets | 0 | |
Transfers Into Level 3 of financial liabilities | 0 | |
Transfers Out of Level 3 of financial liabilities | 0 | |
Assets | $ 5,182,200,000 | $ 5,280,600,000 |
Number of investments with no quoted market price in an active market | EquityInstruments | 1 | |
Recurring Basis | ||
Fair value measurements | ||
Financial assets, at fair value | $ 160,000,000 | 165,000,000 |
Recurring Basis | Level 1 | ||
Fair value measurements | ||
Financial assets, at fair value | 137,300,000 | 141,700,000 |
Recurring Basis | Level 2 | ||
Fair value measurements | ||
Financial assets, at fair value | 18,900,000 | 19,400,000 |
Recurring Basis | Level 3 | ||
Fair value measurements | ||
Financial assets, at fair value | 3,800,000 | 3,900,000 |
Receivables from provisional concentrate sales | Recurring Basis | ||
Fair value measurements | ||
Financial assets, at fair value | 16,000,000 | 16,400,000 |
Receivables from provisional concentrate sales | Recurring Basis | Level 2 | ||
Fair value measurements | ||
Financial assets, at fair value | 16,000,000 | 16,400,000 |
Equity investments | Recurring Basis | ||
Fair value measurements | ||
Financial assets, at fair value | 141,100,000 | 145,600,000 |
Equity investments | Recurring Basis | Level 1 | ||
Fair value measurements | ||
Financial assets, at fair value | 137,300,000 | 141,700,000 |
Equity investments | Recurring Basis | Level 3 | ||
Fair value measurements | ||
Financial assets, at fair value | 3,800,000 | 3,900,000 |
Warrants | Recurring Basis | ||
Fair value measurements | ||
Financial assets, at fair value | 2,900,000 | 3,000,000 |
Warrants | Recurring Basis | Level 2 | ||
Fair value measurements | ||
Financial assets, at fair value | $ 2,900,000 | $ 3,000,000 |
Contingencies (Details)
Contingencies (Details) $ in Millions, $ in Millions, $ in Millions | 1 Months Ended | 6 Months Ended | ||||||||||
Dec. 31, 2019MXN ($) | Dec. 31, 2019CAD ($) | Dec. 31, 2019USD ($) | Dec. 31, 2018CAD ($) | Dec. 31, 2018USD ($) | Jun. 30, 2020USD ($) | Jun. 30, 2019USD ($) | Jun. 30, 2020CAD ($) | Jun. 30, 2020USD ($) | Dec. 31, 2019USD ($) | Oct. 31, 2019CAD ($) | Oct. 31, 2019USD ($) | |
Contingencies | ||||||||||||
Income taxes paid | $ 33.5 | $ 25.1 | ||||||||||
Canada Revenue Agency Reassessment Action | Reassessment for the 2014 and 2015 taxation years | Canada | ||||||||||||
Contingencies | ||||||||||||
Contingent liability recorded | $ 1.4 | $ 1 | ||||||||||
Canada Revenue Agency Reassessment Action | Reassessment for the 2014 and 2015 taxation years | Mexico | ||||||||||||
Contingencies | ||||||||||||
Provincial income taxes assessed | $ 14.1 | $ 10.3 | ||||||||||
Canada Revenue Agency Reassessment Action | Reassessment for the 2014 and 2015 taxation years | Barbados | ||||||||||||
Contingencies | ||||||||||||
Contingent liability recorded | $ 6.5 | $ 4.6 | ||||||||||
Percentage of security deposit for notice of objection against reassessment | 50.00% | 50.00% | ||||||||||
Canada Revenue Agency Reassessment Action | Reassessment for the 2013 and 2014 and 2015 taxation years | Mexico | ||||||||||||
Contingencies | ||||||||||||
Percentage of security deposit for notice of objection against reassessment | 50.00% | 50.00% | ||||||||||
Canada Revenue Agency Reassessment Action | Taxation years 2016 through 2019 | Canada | ||||||||||||
Contingencies | ||||||||||||
Contingent liability recorded | $ 31.4 | $ 23.1 | ||||||||||
Canada Revenue Agency Reassessment Action | Taxation years 2016 through 2019 | Mexico | ||||||||||||
Contingencies | ||||||||||||
Contingent liability recorded | $ 4.6 | $ 3.4 | ||||||||||
Income taxes paid | $ 71 | $ 3.8 | ||||||||||
Canada Revenue Agency Reassessment Action | Taxation years 2016 through 2019 | Barbados | ||||||||||||
Contingencies | ||||||||||||
Tax rate (as a percent) | 30.00% | 30.00% | 30.00% | |||||||||
Canada Revenue Agency Reassessment Action | Taxation year 2019 | Barbados | ||||||||||||
Contingencies | ||||||||||||
Contingent liability recorded | $ 104 | $ 76.3 | ||||||||||
Canada Revenue Agency Reassessment Action | 2013 taxation year | Mexico | ||||||||||||
Contingencies | ||||||||||||
Provincial income taxes assessed | $ 10.8 | $ 8 | ||||||||||
Income taxes paid | $ 419.4 | $ 30.3 | ||||||||||
Tax rate (as a percent) | 30.00% | 30.00% | 30.00% | |||||||||
Canada Revenue Agency Reassessment Action | Reassessment for the 2012 and 2013 | Barbados | ||||||||||||
Contingencies | ||||||||||||
Contingent liability recorded | $ 0 | |||||||||||
Provincial income taxes assessed | $ 7 |