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TORONTO (miningweekly.com) – Alternative finance provider Franco-Nevada Corp late on Wednesday announced that it had changed its monthly dividend policy to a quarterly one in an attempt to reduce the foreign exchange exposure to shareholders.
As a result of the change, the company raised the dividend to $0.20 a share, resulting in an effective yearly dividend payout of $0.80 a share.
The precious metals streaming firm announced higher dividends despite reporting a wider loss for the three months ended December 31.
For the fourth quarter of 2013, Franco-Nevada realised a net loss of $80.6-million, or $0.55 a share, which included after-tax impairment charges of $108.1-million.
Excluding special items, the adjusted earnings for the quarter were $30.5-million, or $0.21 a share, just below Wall Street-analyst expectations of $0.22 a share.
The company booked an impairment charge of $107.9-million on its McCreedy precious metals stream, located in Sudbury, as KGHM International announced that it would stop contact nickel ores production after its offtake contract had been cancelled.
Franco-Nevada had also booked an impairment charge of $24.2-million on its interest in Falcondo, a ferronickel operation located in the Dominican Republic, after GlencoreXstrata had placed the operation on care and maintenance.
"In 2013, Franco-Nevada's portfolio performed very well despite lower gold prices. We exceeded guidance for both our projected gold equivalent ounces and oil and gas revenues.
“We expect our existing portfolio will continue to generate a growing number of ounces over the next five years. Franco-Nevada remains financially strong and debt-free and we expect to continue to grow with further investments,” Franco-Nevada president and CEO David Harquail said.
In a year where traditional mine funding avenues had become increasingly inaccessible to project developers, metals streaming firms such as Franco-Nevada were able to continue growing its reserve base, as it offers capital for future mine output.
During the fourth quarter, the company’s share of output at the mines it is invested in totalled 69 741 gold equivalent ounces, up 17.5% year-on-year.
For 2014, the company expects attributable royalty and stream production to total 245 000 to 265 000 gold equivalent ounces. Assuming that the company did not strike any further deals, its proportionate production portfolio would generate between 300 000 to 325 000 gold equivalent ounces by 2018.
In the past 12 months, Franco-Nevada’s NYSE-listed stock gained 8.43%, and on Thursday traded at $47.55 apiece.