Gold Company Earnings Strong Though Guidance Soft
Contributed Opinion

1. As of the date of this article, officers and/or employees of Streetwise Reports LLC (including members of their household) own securities of Barrick Mining Corp., Agnico Eagle Mines Ltd., Wheaton Precious Metals Corp., Franco-Nevada Corp., Pan American Silver Corp., OR Royalties, Metalla Royalty & Streaming Ltd., Lara Exploration Ltd., Orogen Royalties Inc., and Midland Exploration Inc.
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We have had a slew of earnings releases over the past two weeks, with many of the companies having pre-released certain information.

The gold companies, for the most part, reported strong fourth-quarter and full-year results, not only on revenue, as one would expect, but also on production. However, many provided soft guidance, including cost increases. We will comment on the results for each company on our list.

Newmont May Ruin Barrick's Plans

Barrick Mining Corp.'s (ABX:TSX; B:NYSE) plan to IPO part of its interest in its North American assets is running into potential stumbling blocks over Newmont Corp.'s (NEM:NYSE; NGT:TSX; NEM:ASX) rights in the Nevada Gold Mines (NGM) joint-venture. Newmont has a right of first refusal over a sale or transfer of ownership, and the agreement tightly defines "transfer" to include transfer of economic interest.

Newmont disclosed that it had earlier sent Barrick a notice of default alleging "evidence of mismanagement" at NGM, including "diversion of resources" from the joint-venture to Barrick's sole-owned Fourmile. It said it was exercising its audit rights, adding it continued to work with Barrick to improve performance at NGM.

Newmont emphasized that that action was not related to Barrick's IPO plans, but added that it has the right to veto the proposed IPO and wants the operations improved before any IPO. Whatever the legal conclusions, Newmont could make the IPO difficult for Barrick.

We are holding Barrick.

Agnico's 'Remarkable Year'

Agnico Eagle Mines Ltd. (AEM:TSX; AEM:NYSE) reported record results, with production in line with estimates, though costs were surprisingly higher than expected, though with an AISC of $1,339 they are still remarkable low, with just over half of the increase due to higher royalties paid.

The company ended the year with net cash of $2.67 billion, notwithstanding paying out over $800 million in dividends, and buying back $600 million in shares (half of them in the fourth quarter). Year-end reserves and resources across all categories, with reserves now valued at a low $1,600/oz.

CEO Ammar Al- Joundi called it, quite appropriately, "a remarkable year" in which the company delivered 95% of gold's upside, with costs increasing far less than the gold price. For this year, Agnico is accelerating some capex because of strong prices. Al-Joundi noted that the gold price could be cut in half and the company could still maintain its increased dividend.

Overall, Agnico once again demonstrated in its results, its commentary, and its guidance why it is the gold-standard of large mining companies, and a core holding for us. We would, however, look for a pullback before adding to positions.

Wheaton Makes Record-Breaking Acquisition

Wheaton Precious Metals Corp. (WPM:TSX; WPM:NYSE) announced the acquisition of a silver stream on BHP Billiton Ltd.'s (BHP:NYSE; BHPLF:OTCPK) interest in the Antamina copper mine in Peru for $4.3 billion in upfront cash, making it the largest-ever streaming deal, more than three times as large as the any previous transaction.

It is also the first stream sold by BHP. The stream is for one-third of BHP's share of silver until 100 million ounces have been delivered, after which it drops to 22.5%. Wheaton already holds a stream on Glencore Plc.'s (GLEN:LSE; GLN:JSE; GLCNF:OTCMKTS) interest in Antamina. This boosts Wheaton's exposure to Tier 1 assets with world-class partners, though the price tag appears fully valued. BHP has provided a corporate guarantee on the stream. The deal also boosts silver's share of Wheaton's revenue, reinforcing its position among miners and royalty companies with dominant silver exposure. Wheaton has borrowed $1.5 billion in addition to drawing $900 million on its credit line to pay.

Separately, Wheaton provided fourth-quarter GEO production, which was a strong beat, and released full-year guidance in line with expectations after factoring in the new stream. Full financials will be released next month.

With its 50% appreciation since November and a rich valuation, we are holding.

Franco Buys Another Nevada Royalty

Franco-Nevada Corp. (FNV:TSX; FNV:NYSE) also made another major acquisition, paying $250 million for a royalty on all of i-80's Nevada projects, as part of a recapitalization package for the junior.

Properties include producing, development and exploration projects.

The royalty starts at 1.5% and increases to 3% in 2031. The assets and jurisdiction are good and the potential returns very strong (IRR in mid-teens), with execution the biggest risk.

We are holding.

Pan American Follows Strong 2025 With Mixed Guidance

Pan American Silver Corp. (PAAS:TSX; PAAS:NYSE) reported higher production but also an increase in costs, with AISC still a very attractive $1,643 and particularly low $9.51 for gold and silver respectively, after pre-releasing production and guidance (Bulletin #996).

Guidance for 2026 has silver output increasing (by about 4%) but gold declining (by 2%). The company is also guiding for higher costs, by about 8% for gold at the mid-point of the range, while silver costs are expected to increase to a mid-range of $17, up 14% from full-year costs. The company ended the year with $1.2 billion in cash after buybacks; it boosted its dividend while planning over half-a-billion dollars in capex.

Discussions with potential partners on the La Colorada skarn deposit continue. There is no material update to the consultations over the Escobal project in Guatemala, but consultations continue, including direct discussions between the company and government.

We like Pan American with strong financial and operational management; a solid balance sheet; diversified assets and a strong pipeline with high optionality on Escobal. However, it is not inexpensive.

Hold.

Royal Has Mixed and Messy Results Following Acquisitions

Royal Gold Inc. (RGLD:NASDAQ) reported fourth-quarter slightly lower than expected; it had pre-released its streaming segment (Bulletin #995). The full-year financials were messy due to the Sandstorm acquisition, which caused lower free cash flow. The company will provide annual guidance in March.

Cash increased to $234 million at year end, up over $60 million from Q3, while current debt, after repayments this year, stands at $725 million, following last year's Horizon Copper acquisition.

We would like to see the company pay down this debt aggressively; it has paid down $175 million this year, so that's a strong start. A new technical report on Hod Madden, an interest in which Royal acquired when it bought Sandstorm, shows significantly improved economics though with higher capital costs, Royal's share of which is $273 million. Royal wants to convert its ownership interest into a royalty.

We are holding.

OR Has Soft 2026 Guidance but Stronger Thereafter

OR Royalties (OR:TSX; OR:NYSE) had pre-released both revenues and costs (see Bulletin #995) so there were few surprises in the fourth-quarter and full-year financials, other than slightly higher G&A costs; OR still ranks well on that metric. The more important reports was guidance for future GEOs, with this year lower than analysts were expecting and with essentially no growth (from the fourth-quarter run rate).

We should note, however, the potential for GEOs to be far higher if the silver price remains high and with a lower gold/silver ratio than OR has assumed (of 73:1). OR has about 30% of its revenues from silver, so this would be meaningful. And we expect OR to achieve or beat this guidance. Further out, however, OR is expecting a 50% increase by 2030 as new mines come online.

These mines include both Cariboo and Windfall, discovered and developed by Osisko Development Corp. (ODV:TSX.V) and Osisko Mining Corp. (OSK:TSX)Osisko Mining, justifying OR's investments in those affiliated companies. There are no contingent payments associated with that growth. The guidance excludes the important royalty of the shuttered Eagle Mine, which was OR's most important revenue earner outside Malartic when it was closed. The Yukon is administering a process to restart the mine, though the timing is uncertain. It ended the year in solid financial shape, with $142 million in cash as well as a portfolio of equity investments valued at $163 (though not necessarily for sale any time soon), plus a $650 million line of credit.

Separately, OR acquired a package of royalties from Gold Fields for $167 million. We think this is a solid acquisition, with lots of optionality from smaller project, backstopped by a currently cash-flowing royalty on a Buenaventura mine in Peru.

Given the stock's strong recent performance, and the currently flat annual guidance, we will look for better opportunities to add.

Triple Flag Has Soft Guidance for 2026, but Growth Thereafter

Triple Flag Precious Metals Corp. (TFPM:TSX; TFPM:NYSE) reported financials as expected, following its pre-release last month (Bulletin #995). It guided to a decline in production from the fourth-quarter run rate as the stream at Cerro Lindo steps down from 65% to 25%, partly offset from the ramp up of a new mine.

It forecasts a 40% increases by 2030, as new mines come onstream. It ended the year with a modest cash balance ($71 million) with access to unused $700 million credit facility. Separately, Triple Flag purchased a second gold and silver stream on Evolution's Northparkes Copper Mine for $84 million.

It is in addition to the company's flagship stream, which represents 25% of its NAV, a little less of near-term revenues.

The streams were purchased from the company. This is a solid transaction of a mine that Triple Flag knows well, in a top jurisdiction, helping to offset some of its political risk. Solid management with strong financial backing (from Elliott Management), Triple Flag is not inexpensive, with price-to-free cash flow nearly twice that of peer OR Royalties.

Hold.

Metalla's Production Soft, as Expected

Metalla Royalty & Streaming Ltd. (MTA:TSX.V; MTA:NYSE American) reported preliminary fourth-quarter results in line with expectations. The full year GEOs came in slightly below the company's guidance, though not surprisingly given a slow ramp-up and stoppage at Endeavor as well as crushing facility fire at Wharf.

Its 2026 guidance will be detailed with its full financial results at the end of next month.

We continue to buy Metalla, based on its low price-to-NAV, its long-dated, high- potential copper royalties not given sufficient value in the market (including Copper World and Taca Taca), and Tether's continued interest (see Bulletin #997).

Fortuna Sees Another Strong Quarter, With Costs to Decline

Fortuna Mining Corp. (FSM:NYSE; FVI:TSX; FVI:BVL; F4S:FSE) reported a strong four-quarter, with cash flow above estimates.

It ended the year with net cash of $382 million. Although costs were higher than the previous year, this has been explained (see Bulletin #995) and are expected to decline again in the second half with lower continuing capex. Fortuna remains a top holding for us, with solid financial and operational management, a strong balance sheet, and good growth pipeline.

CEO Jorge Ganoza said that the company's growth to 500,000 ounces of annual production is "visible, controlled, and executable".

Given the sharp stock jump on Friday, after releasing results, we are holding.

Lara Starts New Drill Campaign to Expand Planalto

Lara Exploration Ltd. (LRA:TSX.V) said it had resumed drilling on the Silica Cap at its Planalto Project following receipt of new permits. Drilling will test the immediate extension and then move to the 3 km target trend on the recently acquired Atlantica mineral license, adjacent to Planalto. (See Bulletin #996.)

Lara said it plans to mobilize additional drill rigs–there is one on site currently–to complete the program by the end of April this year. We anticipate, as previously discussed, that the company will need additional funding for the full program, whether from a strategic partner or an equity raise.

However, given the company's ability to make a little go a long way, as well as its key supportive shareholders, we would not anticipate any raise need be undertaken at a deep discount. Drilling the new Atlantica ground could meaningful increase the tonnage and resource, and thus the value of Planalto.

Lara is a strong buy ahead of drill results.

Nestlé Makes Strides as It Simplifies Business

Nestle SA (NESN:VX; NSRGY:OTC) reported full-year results, with real internal growth, a key metric for the company, positive in all regions and segments.

CEO Philipp Navratil said the company was accelerating its strategy, with an emphasis on four key business segments and leading brands, coffee, petcare, and nutrition, as well as food and snacks in certain markets. Nestlé's Health Sciences will be merged into the nutrition segment, while it expects to sell its remaining ice cream business shortly.

This includes Häagen- Dazs as well as products under its own name. Navratil said the company would regularly review its smaller non-core business with a view to possible disposals, and would work on strengthening its balance sheet, which has seen significant deterioration over the past decade.

It does hold about Euro 55 billion in shares in L'Oreal, the French cosmetics company, the sale of which would go a long way to repairing the balance sheet. It has already announced plans for a Chf 1 billion annual savings in staff costs (see Bulletin #984), and said it is ahead of target on those cuts.

We are cautiously encouraged by the progress under new management, but will continue to stand aside from additional buying for now.

Hold.

TOP BUYS this week, in addition to above, include Kingsmen Creatives Ltd. (KMEN:SI), Orogen Royalties Inc. (OGN:TSXV; OGNNF:OTC), and Midland Exploration Inc. (MD:TSX.V).