Franco-Nevada Corporation
FNV
announced that its partner,
First Quantum Minerals Ltd.
FQVLF
, resumed formal discussions with the Government of Panama on Dec 26. The announcement stated that First Quantum’s subsidiary and operator of Cobre Panama, Minera Panama, S.A., is responding to the Ministry of Commerce and Industries’ direction to create a plan to put Cobre Panama on “care and maintenance.”
As a precaution, First Quantum and Minera Panama have taken measures through domestic legal proceedings in Panama and international arbitration. Currently, Cobre Panama’s operations remain unaffected.
On Dec 15, Panama’s government ordered FQVLF to pause operations in the mine. This came after First Quantum missed the deadline to finalize a deal with the government that would have raised payments to the government to $375 million annually.
Canada-based Franco-Nevada operates as a gold-focused royalty and stream company with additional interests in silver, platinum group metals, oil and gas, and other resource assets. Cobre Panama is one of the four larger cash-flowing assets of the company amongst 54 producing assets. It is one of the largest revenue drivers of Franco-Nevada. First Quantum is on track to expand Cobra Panama to up to a 100-million-ton per annum (mtpa) throughput by the end of 2023 from the current 85 mtpa.
In the third quarter, First Quantum reported a record quarterly copper production of 92,000 tons and a mill throughput of 22.4 million tons. However, Franco-Nevada received and sold fewer GEOs from the Cobre Panama mine than in third-quarter 2021 due to the timing of shipments. First Quantum expects copper production between 340,000 and 350,000 tons for 2022.
Franco-Nevada reported adjusted earnings of 83 cents per share in third-quarter 2022. The bottom line declined 5% year over year on lower metal prices. The same surpassed the Zacks Consensus Estimate of 82 cents per share. The company generated revenues of $304 million, down 4% year over year. The top line missed the Zacks Consensus Estimate of $311 million.
Price Performance
Franco-Nevada’s shares have lost 0.3% in the past year against the
industry
’s growth of 3%.
Image Source: Zacks Investment Research
Zacks Rank & Stocks to Consider
Franco-Nevada currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks from the basic materials space are
Sociedad Quimica y Minera
SQM
and
Reliance Steel
RS
. While SQM flaunts a Zacks Rank #1 (Strong Buy) at present, RS carries a Zacks Rank #2 (Buy). You can see
the complete list of today’s Zacks #1 Rank stocks here
.
The Zacks Consensus Estimate for Sociedad’s 2022 earnings per share is $13.13, suggesting 540.5% growth from the year-ago reported figure. Earnings estimates have moved 1.5% north in the past 60 days. SQM has a trailing four-quarter earnings surprise of 37.4%, on average. Its shares have gained 48% in the past year.
The Zacks Consensus Estimate for Reliance Steel’s earnings is pegged at $28.71 per share for the current year, indicating a year-over-year growth rate of 29.8%. The consensus estimate for RS’ current-year earnings has been revised 0.06% upward in the past 60 days. It has a trailing four-quarter average surprise of 13.6% on average. RS has gained 24.9% in a year.
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