TORONTO (miningweekly.com) – Canadian gold streaming and royalty firm Franco-Nevada on Wednesday reported a 24% drop in net profit for the first quarter of the year, as higher operating expenses took their toll.

The company reported net income of $35.4-million or $0.24 a share, compared with $46.8-million or $0.33 a share, for the same quarter in 2012. Adjusted net income for the quarter was $40.6-million, or $0.28 a share, compared with $43.6-million or $0.31 a share, for 2012. Analysts had expected adjusted earnings of $0.27 a share.

Revenue for the period increased by 3.6% to $108.8-million from $105-million in the same comparable period. Franco-Nevada said the increase was owing to higher revenue from gold, oil and other mineral assets.

Franco-Nevada gold-equivalent ounces (GEOs) reported a 5.1% year-on-year increase to 58 289 GEOs in the quarter, compared with 55 466 GEOs in the prior year. The company’s oil and gas assets generated $13.9-million in revenues during the quarter compared with $10.5-million a year earlier. Eighty-five per cent of the firm’s revenue was earned from precious metals.

Franco-Nevada said as at March 31, it had a strong financial position with cash, cash equivalents and short-term investments totalling $825.8-million and working capital of $867-million. The company said it had available an undrawn $500-million unsecured revolving credit facility, which took its total available capital to about $1.4-billion.

The firm said it was on the lookout for new royalty and metals streaming acquisitions, and had indeed started the year with two such deals.

The company had agreed to acquire an existing 1.2% net smelter royalty (NSR) covering Pretium Resources’ Brucejack gold project, in north-western British Columbia for $45-million in cash. The NSR would become payable after about 500 000 oz of gold had been produced. The project included two main deposits, the Valley of the Kings and the West zone, both of which had exploration potential.

Franco-Nevada had also agreed to acquire a newly created 1.7% NSR royalty covering Midas Gold’s project in Idaho for $15-million, subject to an option by Midas Gold to re-acquire one-third of the royalty for $9-million. As part of the transaction, Franco-Nevada had also subscribed for two-million Midas warrants, having a strike price of C$1.23 per warrant and a ten year term. This project benefits from a large resource base with upside potential.

The company said it expected to receive a total of 215 000 to 235 000 GEOs from its mineral assets and $55-million to $65-million in revenue from its oil and gas assets this year.

The company’s Toronto-listed shares traded at C$43.97 apiece on Wednesday.