Shares of Franco-Nevada (NYSE: FNV) rose 6% on the Toronto Stock Exchange -- more than 2.5% on the NYSE -- last month according to S&P Global Market Intelligence. The royalty and streaming company reported no news, which would explain the stock's movement. Instead, investors were likely responding to the development of projects in the company's portfolio.
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With the largest, most-diversified portfolio among royalty and streaming companies, Franco-Nevada's success isn't solely correlated to the success of any one project. As numerous mining companies reported quarterly earnings last month, though, Franco-Nevada's investors celebrated the development of several projects in the company's portfolio. Operated by First Quantum, the Cobre Panama project, for example, reached 63% completion during the third quarter. Cobre Panama -- of which Franco-Nevada has gold and silver streams -- remains on track to be commissioned in 2018 and to continue a ramp-up in production through 2019. Franco-Nevada identifies Cobre Panama as one of the world's largest copper-gold-silver porphyry deposits currently being constructed -- and one of its most recent cornerstone investments.
Investors also celebrated news from Yamana Gold (NYSE: AUY) that the development of Cerro Moro, another important project in Franco-Nevada's portfolio, remains on schedule and budget. Yamana expects Cerro Moro to contribute about 80,000 gold ounces as production begins in early 2018 and ramps up through the rest of the fiscal year. Franco-Nevada has a 2% royalty on the Argentine mine, which Yamana forecasts to produce 130,000 gold ounces and 9.9 million ounces in fiscal 2019.
Franco-Nevada also received encouraging news from Goldcorp (NYSE: GG) regarding Musselwhite, located in Canada. An mineral-producing mine, Musselwhite contributed $5.1 million to Franco-Nevada's revenue in fiscal 2016. But the company sees a more lustrous future for the project. Approving the Materials Handling project, Goldcorp is in the process of updating Musselwhite's infrastructure. According to Goldcorp, when the Materials Handling project is complete, Musselwhite is expected to see a 20% increase in production and an approximate 10% reduction in operating costs. The improved profitability comes to the delight of Franco-Nevada, which has a 5% profits-interest royalty on Musselwhite. In its third-quarter earnings report, Goldcorp acknowledged that completion of the Materials Handling project "remains on budget and on schedule and is expected in the first quarter of 2019."
Skyrocketing more than 735% over the past 10 years, Franco-Nevada has offered investors one of the best opportunities for investing in precious metals. And with a well-diversified portfolio -- one with 47 mineral-producing assets, 40 assets in advanced development, and 173 assets in the exploration phase -- the company will continue to offer investors a compelling opportunity. To ensure that it remains one, though, investors will have to confirm that the projects in its pipeline, as evident in October, continue to be successfully executed.
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