Why is there such a disconnect between the recent price movement of gold and FNV's performance

Hi Gentlemen
While I recognize that investment in a gold mining company is not a pure play on gold It is somewhat disconcerting the complete disconnect between the 2 over the last 3 months. Over that span gold has risen about 4.5% but Franco Nevada has dropped by almost 20%. I acknowledge that silver and energy are other components of FNV’s business but my understanding is that this is still primarily a gold streamer. Is this all related to concerns over Cobre Panama or are there other factors at play here?

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Asked on November 27, 2023 9:56 am

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Hi there,

The answer is pretty simple - it is the concerns over Cobre Panama. That is the main reason that is driving FNV's stock price down. After yesterday's news that Panama has ordered the mine to be shutdown, expect further downside as Panama accounts for ~20% of FNVs assets. So the ~20% drop is right inline with this.

There is the potential for arbitration awards in the future, but for now, I'm not sure the market will give much value to these assets given the news from yesterday.

Mat

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Posted by Mathieu Litalien

Answered on November 29, 2023 5:26 am

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Thank you Mat It looks like my question was 1 day too early. (:

(Rick Cosby at November 29, 2023 9:22 am)

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