Franco has banner year

For a company whose principal assets are unhedged gold royalties, Franco Nevada Mining (FN-T) had an unusually good year ended March 31.

The Toronto-based royalty company turned a $113.4-million profit (72 per share) on revenue of $284.3 million in its fiscal year, up from a $97.6-million profit on earnings of $218.2 million in the year ended March 31, 2000. Higher revenue from royalties on platinum and palladium production at the namesake operation of Stillwater Mining (SWC-X), in Montana, and a 72% increase in revenue from Franco’s oil-and-gas interests offset a decrease in returns from royalties on gold projects.

Franco’s wholly owned Ken Snyder mine produced 216,000 oz. gold and 2.1 million oz. silver in the fiscal year, its best production figure ever. Cash production costs increased, however, to US$114 per oz. from US$96 in the previous year.

Franco also took a $28.2-million charge on the carrying value of some of its gold assets, including writedowns of the value of some operations nearing closure. It booked gains on the sale of royalty trust units in the San Juan Basin oil field ($15.2 million) and on the sale of its Inco VBN-class shares to Inco (N-T).

Franco and Normandy Mining (NDY-T) are awaiting approval from Normandy’s shareholders for an agreement that would see Franco take a 19.9% interest in Normandy in exchange for US$48 million in cash, the Ken Snyder mine, and Franco’s Australian royalty interests. The shareholder meeting is being held May 23.