Franco-Nevada - Q1 2023
May 3, 2023
Transcript
Operator (participant)
Good morning, welcome to Franco-Nevada Corporation's Q1 2023 results conference call and webcast. This call is being recorded on May 3rd, 2023. At this time, all lines are in a listen only mode. Following the presentation, we will conduct a Q&A session where you may ask a question through the phone line or webcast. If you are joining by webcast, you may submit a written question for the Q&A session at any time during this call by typing your question in the Q&A section of the webcast platform. If you require immediate assistance during this call, please press star zero at any time for the operator. I would now like to turn the conference over to your host, Candida Hayden, Senior Analyst, Investor Relations. Please go ahead.
Candida Hayden (Senior Analyst, Investor Relations)
Thank you, Joanna. Good morning, everyone. Thank you for joining us today to discuss Franco-Nevada's Q1 2023 results. Accompanying this call is a presentation which is available on our website at franco-nevada.com, where you will also find our full financial results. The presentation is also available to view on the webcast. During our call this morning, Paul Brink, President and CEO of Franco-Nevada, will provide introductory remarks, followed by Sandip Rana, Chief Financial Officer, who will provide a brief review of our results. This will be followed by a Q&A period. Our full executive team is available to answer any questions. Participants may submit questions by telephone or via the webcast. We would like to remind participants that some of today's commentary may contain forward-looking information. We refer you to our detailed cautionary note on slide threee of this presentation.
I will now turn over the call to Paul Brink, President and CEO of Franco-Nevada.
Paul Brink (President and CEO)
Thank you, Candida, and good morning. I'll start with a note on our ongoing director succession. At our AGM yesterday, we were sad to mark the retirement of two of our directors, Louis Gignac and Elliott Pew. Louis was one of the original directors of Franco-Nevada, and his expertise and guidance has been the foundation of many of our investment decisions. Elliott joined our board in 2019 and was key to directing our oil and gas investments. Thank you, Louis and Elliott, for the enormous contribution that you've made to our success. Turning now to the Q1 results. Our diversified portfolio continues to generate strong cash flow and high margins, although the quarter was impacted by production disruptions at Cobre Panamá and Antamina, as well as lower energy prices.
Stronger precious metal deliveries are anticipated in Q2, with the social disruptions at Antamina having subsided and First Quantum and the government of Panama having agreed on terms for a refreshed concession contract. The results for the quarter, while lower, bring home to me the robustness of our business. Despite the production impacts, the business still generated an 83% adjusted EBITDA margin and a 55% adjusted net income margin. We have no fixed costs related to our royalty and stream assets, so a temporary production halt is largely a deferral of revenue. We like to say great ore bodies get even better over time, and I think that'll apply to both Cobre Panamá and Antamina. During the quarter, we published our 2023 ESG report.
Highlights include an outline of our ESG due diligence focus, increased community contributions, new board diversity goals, disclosure of Scope thre financed emissions, and details of our new climate action policy. We also published our annual asset handbook. A few numbers in the handbook stood out to me. We now have interest in 419 assets, of which 113 are cash flow producing. Those assets generated $1.3 billion of revenue in 2022. That's 8.7x the revenue of our first full year in 2008. At year-end 2022, we had 18.8 million M&I resource royalty ounces. Those are ounces that are cost-free to Franco. At current production rates, our M&I resource mine life stands at 34 years. Those numbers don't include our energy assets, our exploration assets, or obviously the upside potential of the producing assets.
In total, our assets cover 66,000 square kilometers on some of the world's best mineral trends. Looking forward to the balance of 2023, the expansion of Cobre Panamá will be a big driver. I was impressed that despite the disruptions, First Quantum completed construction for the CP100 expansion project ahead of schedule. They're now ramping up throughput to achieve 100 million tons per annum by year-end. There are three new mine starts we're looking forward to this year. Magino in Ontario, Séguéla in Côte d'Ivoire, and Salares Norte in Chile. During the quarter, we commenced funding the Tocantinzinho stream deposit. The three mining ventures team are targeting first production in the back half of 2024, driving our next leg of growth.
Our business development team is seeing good opportunities for financing new gold mines, and I'm confident they will further add to our five-year growth outlook. With that, I'll hand it over to Sandip.
Sandip Rana (CFO)
Thank you, Paul. Good morning, everyone. As mentioned by Paul, our diverse portfolio continued to generate strong cash flows and high margins during first quarter 2023. Our gold equivalent ounce deliveries and financial results were impacted by temporary production curtailment at two core assets, Cobre Panamá and Antamina. With the retreat in energy prices, specifically natural gas, this did result in a reduction in energy revenues and associated GEOs in Q1 2023 compared to prior year.
On slide five, we highlight the Gold Equivalent Ounces sold for the last five quarters. Overall, GEOs sold for the Q1 were 145,331, down from Q1 of 2022 and Q4 of 2022. Of this total, precious metal GEOs were 111,238, down 14% from prior year. For the quarter, the largest contributors to the lower precious metal GEOs were Antapaccay, Antamina, Guadalupe, and Goldstrike. At Antapaccay, GEOs delivered and sold were lower in Q1 2023 compared to prior year, due to sociopolitical tensions in Peru that impacted operating activities and constrained logistics during the period. We do expect strong deliveries from Antapaccay in Q2.
For Antamina, we had lower GEOs sold than prior year as the operator is currently mining lower-grade ore, but this was expected, with actuals for the first quarter being in line with our expectations. At Guadalupe, the operator mined less ounces from stream lands, resulting in lower GEOs delivered and sold. At Goldstrike, the NPI was lower due to lower production from roaster maintenance and higher capital costs, with the conversion of the autoclave to a conventional carbon-in-leach process. Partially offsetting the lower GEOs from the assets mentioned were stronger GEOs from Bald Mountain and Marigold. At Cobre Panamá, we earned 28,663 GEOs compared to 29,495 in Q1 2022.
As guided, deliveries were impacted by the temporary curtailment of operations in the quarter, partly offset by the receipt of GEOs from shipments related to Q4 2022. We do expect strong deliveries from Cobre Panamá in the second quarter. For diversified assets, we recorded lower GEOs and revenue for both iron ore and energy assets, as both iron ore and energy prices were lower in Q1 2023 compared to Q1 of 2022. Q1 2023 saw continued volatility in commodity prices. Other than the gold price, average commodity prices were lower year-over-year, as seen on slide six. Palladium and energy prices were down significantly. This volatility did impact our financial results for the quarter.
The lower energy prices resulted in a sharp reduction in energy revenue for the quarter, with energy revenue being $49 million compared to $75.6 million in prior year. With the increase in the price of gold year-over-year and lower non-gold commodity prices, it did impact the conversion of non-gold commodities to GEOs. Slide seven highlights our total revenue and adjusted EBITDA amounts for the five quarters, beginning Q1, 2022. As you can see from the bar charts, revenue and adjusted EBITDA were consistently above $300 million per quarter, but did have a pullback this quarter for the reasons explained earlier. However, our margins remained consistent and adjusted EBITDA margin being 83% in the quarter. Revenue for the quarter was $276.3 million, while adjusted EBITDA was $229.4 million.
As you turn to slide eight, you will see the key financial results for the company. As mentioned, GEOs and revenue were lower in the quarter compared to prior year. On the cost side, we had a decrease in cost of sales, which was $38.2 million compared to $43.6 million in Q1 2022. The largest component of this is the per ounce fixed cost we pay for stream ounces. We sold 82,181 stream ounces in Q1 compared to 96,740 a year ago. Depletion decreased to $61 million versus $74.6 million a year ago. Depletion is based on actual mining GEOs sold and barrels of oil equivalent received on the energy side of the business.
As we received less GEOs from Antapaccay, Antamina and Vale, which are higher per ounce depletion assets, this resulted in lower overall depletion expense. For Q1 2023, adjusted net income was $152.2 million or $0.79 per share. Slide nine highlights the continued diversification of the portfolio. As shown, 77% of our Q1 2023 revenue was generated by precious metals. The geographic revenue profile has revenue being sourced 89% from the Americas, with Canada and the U.S. being the largest. With respect to asset diversification, Cobre Panamá was again our largest revenue generator at 20% of total revenue. The last chart highlights our operator diversity. Our largest exposure is to revenue being generated by any one operator is 20%, which is First Quantum, who operates Cobre Panamá.
Slide 10 illustrates the strength of our business to generate high margins. On the slide, you can see that cost of sales has remained fairly consistent over the period shown. The amount of cost of sales will depend on the mix of royalty versus stream GEOs, including mining and energy. During first quarter 2023, the cash cost per GEO, which is essentially cost of sales divided by gold equivalent ounces sold, was $263 per GEO. Corporate administration costs, including stock-based compensation, was less than 4% of revenue for the quarter. The total can fluctuate quarter-over-quarter, but has tended to average approximately $8 million each quarter historically. In a rising commodity price environment, we expect to benefit fully as we do not expect our cost structure to change significantly. Slide 11 summarizes the financial resources available to the company.
When including our credit facility of $1 billion, total available capital at March 31st, 2023 is $2.2 billion. The company continues to be debt-free. Before I turn it over to the operator, on slide 12, we provide an update on our audit status with CRA. As you are aware, there were three disputes ongoing with CRA: foreign accrual property income, domestic, and transfer pricing. I'm pleased to say that on April 28th, we reached a settlement with the CRA on the domestic and FAPI reassessments. CRA will be vacating the reassessments entirely. The potential tax exposure related to the reassessments to be vacated was CAD 26.5 million for the domestic and CAD 11.6 million for the FAPI, including interest and penalties.
With respect to the transfer pricing reassessments, the company continues to believe that these reassessments are not supported by Canadian tax law, and intends to defend its tax filing position. We will continue to provide updates as needed. Now I'll pass it over to the operator, as we're happy to answer any questions.
Operator (participant)
Thank you. Ladies and gentlemen, we will now begin the question-and-answer session. Should you have a question on the phone, please press star followed by the one on your touchtone phone. You will hear a three-tone prompt acknowledging your request. If you are using a speakerphone, please lift the handset before pressing any keys. Again, if you'd like to ask a question over the web, you may do so by typing your question in the Q&A section of the webcast platform. One moment please for your first question. First question comes from Cosmos Chiu at CIBC. Please go ahead.
Cosmos Chiu (Executive Director, Institutional Equity Research)
Great. Thanks, Paul, Sandip, and thanks for taking my questions. Maybe my first question is on taxes and, you know, certainly good to see a CRA resolution here on FAPI and also the domestic reassessments. I guess my question is: Is there any kind of read-through from the, this CRA resolution on April 28th, into, you know, the transfer pricing foreign subsidiary file? At least, you know, any kind of read-through in terms of timing?
Sandip Rana (CFO)
Thanks for the question, Cosmos. There's no read-through. They're all separate. FAPI and domestic have been settled. We're going through the process on the transfer pricing, with likely discovery later this year, early next year. No read-through.
Cosmos Chiu (Executive Director, Institutional Equity Research)
Got it. I only ask 'cause, I guess I believe, you know, all the three different issues all came out at about the same time. I guess my other question is, Sandip, if I can follow up. You know, this transfer pricing, kind of foreign subsidiary file, has that always been more sort of complex or contentious, or would you, would you not say that?
Sandip Rana (CFO)
I wouldn't say it's complex. It's just a different set of facts and circumstances, different legislation that CRA is looking at and making an interpretation of. As I said, you know, we believe we've got a very good fact pattern, and we will defend our position, but they're all independent.
Cosmos Chiu (Executive Director, Institutional Equity Research)
Of course. Without sounding too much like a tax nerd here, maybe another question on taxes. As you mentioned in your press release, global minimum tax, you made a statement on global minimum taxes, Pillar Two. Looks like it is going ahead. As you mentioned, there's no legislation yet. You need to review the legislation when it becomes available and, you know, take a look at the impact, potential impact of Franco-Nevada. Maybe I'll ask this question anyways. If, if I look at, you know, the taxes paid in Q1, $23.9 million, your net income before taxes, 84. That works out to about 13%. You know, global minimum tax is 15%.
Is that how I should approach it in terms of, you know, potential impact, or is that just too simplistic?
Sandip Rana (CFO)
I guess the easiest way is whatever you have as your income, taxes related to the Barbados assets, 'cause that's the only entity that it would apply to, which is approximately 50% of our revenue. You know, there we pay a low tax rate, you know, less than 2%. At least that's what we record. The incremental 13% would be related to those assets, and then you would adjust for that.
Cosmos Chiu (Executive Director, Institutional Equity Research)
Got it. I guess you I don't know if you've thought about this yet, but I guess it is somewhat complex. When the time comes and you, when you're presenting us with the impact, potential impact or... I guess, have you thought about how you'll present it, or are you gonna go, I guess, to the details of the Barbados subsidiary? Have you given any thought in terms of how you will present that impact to the market, to us and also investors?
Sandip Rana (CFO)
Obviously we'll have to wait to see what the legislation entails. Once we've seen that, whatever disclosure is required by us going forward to explain that in our financial statements and MD&A and other filings, we'll do so. But at a high level, we have run some internal numbers, and if it is enacted the way that the legislation you know, internationally has been proposed, it's about a 4%, 3%-4% impact on NAV.
Cosmos Chiu (Executive Director, Institutional Equity Research)
Got it. Maybe switching gears a little bit, you sold 111,000 ounces Precious Metals GEOs in Q1. You've maintained your guidance, 490-530 for the year. Can't even read my own writing. Clearly that means that, you know, Q2 is better, H2 is better. I think, Paul, you kinda mentioned that as well in terms of different factors going to it. Could you maybe, you know, help us in terms of giving us more color in terms of how that increase is gonna happen? Are we gonna see increases sort of quarter-over-quarter steadily or are we just gonna see a big lift in Q2 now that Cobre and Toquepala, some of the issues are behind us?
Sandip Rana (CFO)
Yeah. I think you'll see a stronger Q2. obviously, you know, at Cobre Panamá, they were not making any shipments, so that stockpile had to be shipped, and so we'll see the benefit of that in second quarter, and we sort of had guided to that. At the year-end call where we said that we did expect a second quarter stronger from Cobre compared to first quarter and quarters later on in the year. Antamina with the production curtailment there again, there'll be some catch-up deliveries in Q2. you know, overall, the rest of the portfolio is performing in line with our expectations. I think you'll see a stronger Q2 and a more even Q3, Q4.
Cosmos Chiu (Executive Director, Institutional Equity Research)
Perfect. Maybe one last question. As you mentioned, there's some new streams new royalties coming in, new contributions coming in with Magino, Séguéla, Salares Norte. I guess my question is, we shouldn't see any kind of lag, right, in terms of production versus revenue to Franco-Nevada because I believe these are all dorés. I just wanna make sure that, you know, as they produce, it hits the revenue or hits as revenue to Franco-Nevada fairly quickly.
Sandip Rana (CFO)
Yes. They're all royalties. We will accrue the revenue, whether we've received it in kind or in cash prior to the month or the quarter end, we will still be booking the revenue. There's no timing delays.
Cosmos Chiu (Executive Director, Institutional Equity Research)
Perfect. Thank you, Sandip and Paul, again, for answering all my questions.
Operator (participant)
Thank you. The next question comes from Heiko Ihle at H.C. Wainwright. Please go ahead.
Heiko Ihle (Managing Director, Equity REsearch)
Hey, good morning. Can you hear me okay?
Sandip Rana (CFO)
Yes, we can hear you fine, Heiko.
Heiko Ihle (Managing Director, Equity REsearch)
Perfect. Yeah, apologies. I'm sitting in an airport lounge. Thanks to Louie and Elliott for their services in the past. Question-wise, I mean, Chile has really been pushing their lithium industry lately. Obviously, there's no direct impact on you, but I've heard some folks be fearful on the impact on the mining industry in general, you know, with cash-strapped governments around the world looking for an easy buck. 26% of your revenue in the most recent quarter was from Mexico and Central America. 29% was South America. I assume you haven't seen or heard much that I haven't, but maybe you have. Can you share some of your thoughts in regards to impact on your future M&A strategies?
Paul Brink (President and CEO)
Heiko, thanks for that. It's Paul. I think what you point to, and probably the most prominent thing there is, yes, that there has been a, you know, both a shift to the left in recent years in Central and South America. Also, with COVID, so many governments around the world are cash-strapped. We've seen a lot of jurisdictions have moved to see how they can fund those budgets, and an easy target is mining companies, and in particular, international companies. That has put pressure, and it does... You know, as we think about allocating capital around the world, obviously, those things do factor in. In terms of our portfolio directly, we're very fortunate.
Our big stream interests, most of them are structured so that we're not paying taxes in country. So we're fortunate we haven't been a target for governments in those countries. So for the most part, have been able to avoid that. You know, where are we in that process? I actually think that the pendulum swung fairly far, and I'd say over the, over the last year, it's actually moved back a bit towards the middle. The initial proposals for much higher taxes in Chile were voted down, along with the rest of the constitutional changes. So now the discussion seems to be a much more pragmatic discussion.
There will be a raise in mining taxes through that royalty, but it seems that it will be something that's much more manageable. You know, similarly in Peru, the government was pushing hard for mining reforms and now has backed off a bit on that. I mean, you're absolutely right. Much of the focus now in governments is on lithium. You know, it's, it is a new element that they're turning to, new potential, and so many are thinking what their policy should be with regards to lithium. We don't have any interests in that area to date.
Heiko Ihle (Managing Director, Equity REsearch)
Right.
Paul Brink (President and CEO)
As yet, are not impacted.
Heiko Ihle (Managing Director, Equity REsearch)
Okay, fair enough. I mean, your answer was very politically correct, and I appreciate that. It's fair to say that M&A might be shifting a little bit in the future?
Paul Brink (President and CEO)
We're trying to be a low-risk way for investors to invest in the gold market. One of the ways we do that is through diversification.
Heiko Ihle (Managing Director, Equity REsearch)
Fair enough.
Paul Brink (President and CEO)
Unfortunately, with mining assets, they are where they are. Our approach is don't put too many eggs in any one basket. We know, you know, we will be exposed to some of these issues. We think we can ride out the bumps so long as you're well-diversified.
Heiko Ihle (Managing Director, Equity REsearch)
Got it. Cosmos asked my next question, one thing I just wanted to follow up on slide 12 with the transfer pricing for Mexico, the subsidiaries in Mexico and Barbados. Appreciate the color on the exposure. Obviously, the interest and penalties are still accumulating. First of all, what's the rate at which that accumulates? Also, it says, I mean, you're vigorously defending your position, not too unstandard in a lawsuit. Are there settlement talks at all, or will this become like an all or nothing outcome type of thing?
Sandip Rana (CFO)
We're still in the process of going through discovery and working through what's required under, you know, when you, when you do file a dispute with CRA. You know, we'd be happy to settle at some point, but we're not at that process yet. In terms of interest, the interest gets accrued at 8%.
Heiko Ihle (Managing Director, Equity REsearch)
Perfect. That's all I needed. Thank you.
Operator (participant)
Thank you. Next question comes from Greg Barnes at TD Securities. Please go ahead.
Greg Barnes (Managing Director, Head of Mining Research)
Yes, thank you. Sandip, I just want to get an idea of what Guadalupe looks like for the rest of the year. It's a lot lower than us in the Q1, I'm wondering how it's trending Q2, Q3, Q4.
Sandip Rana (CFO)
Obviously we get guidance from them on a full year basis of what the, you know, deliveries will be for Guadalupe. Q1 was short, but at this time, you know, we're still estimating that they'll reach their plan, and that's the best information we have.
Greg Barnes (Managing Director, Head of Mining Research)
You don't have a sense of where the production's coming from relative to your stream lands?
Sandip Rana (CFO)
It fluctuates quarter to quarter because, you know, our stream doesn't cover the entire land package.
Greg Barnes (Managing Director, Head of Mining Research)
Right.
Sandip Rana (CFO)
You know, we sort of have a general percentage for the year. At this time, you know, we think they'll make it up, but, you know, we'll have a better idea as the year progresses, we'll provide an update on our guidance in second quarter.
Greg Barnes (Managing Director, Head of Mining Research)
Okay, fair enough. Thanks, Sandip.
Operator (participant)
Thank you. Next question comes from Martin Pradier at Veritas. Please go ahead.
Martin Pradier (Equity Research Analyst)
Thanks for taking my question. I have just two questions. In terms of the CRA, did you settle at a certain cost? If, if yes, what was the cost? Was this like a, you know, you won and you didn't pay anything?
Sandip Rana (CFO)
With respect to the settlement, it CRA basically vacated their reassessments. The only cost to us was the legal fees we incurred going through the process, but there was no other additional cost to Franco.
Martin Pradier (Equity Research Analyst)
Okay.
Sandip Rana (CFO)
Interests or penalties paid, nothing of that sort.
Martin Pradier (Equity Research Analyst)
Okay. That's what I wanted to confirm. There was a $10 million income in the financial income that was much higher than before. I guess that is related to, you know, all your cash that you have today. Are you doing something different than in the past?
Sandip Rana (CFO)
I know, as you can see, our cash balance has been growing. We do invest that, through, you know, short-term, safe, secure term deposits and other avenues for investing, which is the reason for the increase in finance income.
Martin Pradier (Equity Research Analyst)
We should see that, going forward in the next couple of quarters.
Sandip Rana (CFO)
As long as interest rates stay where they are, you should. Unless otherwise, if our cash balance decreases. Yes, if everything stays the same, you should see that going forward.
Martin Pradier (Equity Research Analyst)
Okay. That's it. Thank you very much.
Operator (participant)
Next question comes from John Tumazos at John Tumazos Research. Please go ahead.
John Tumazos (Managing Director, Principal and Director of Research)
Thank you. Trying to understand this 15% global minimum tax. Presumably, your incremental tax payments because of the Barbados subsidiary would be paid to Ottawa. I guess the monies would stay in Ottawa and fund the Canadian federal budget. That might make someone in Peru or wherever who's not enjoying those tax revenues frustrated if the mining and exploitation is in one country and the tax revenue is in another. Is there any way that you could voluntarily pay taxes in the country of origin to kind of remedy that inequity?
Sandip Rana (CFO)
For the first part, you are correct, with the way it'll be implemented, you know, with paying the lower single digit in the foreign jurisdiction, the incremental GMT payments will go to Ottawa and remain in Canada. As to the various local jurisdictions where our streams are, our streams are all offshore. They're not in those specific countries. Voluntarily, I, you know, it's not something that we would do. We're not directly linked in those jurisdictions. As I said, we haven't seen any of the legislation and, you know, we'll evaluate everything as time goes on.
Paul Brink (President and CEO)
John, for the countries, you know, if you take Panama or Peru or Chile, what they see is we're a metal purchaser, so it's just like they're selling the gold that they produce to some other party that is paying for that gold. It's just a metal sale from the perspective of the countries where the mines are.
John Tumazos (Managing Director, Principal and Director of Research)
Thank you. In your press release, you give reference to higher production from three existing mines and three new mines in the next expansion in Panama. Some of us might be familiar with some of the companies, but not every one of the projects. Which of those developments might be more than a 1% impact on revenues? Or could you give us an idea as to which are the larger of among these?
Paul Brink (President and CEO)
You know, of those I mentioned, John, obviously the stream interests or the larger interests or the for new mines, it is Tocantinzinho, the G Mining you're building, where we have a larger interest. You know, in terms of ongoing growth in the business, it is a number of royalties. As you know, most of our royalties are, you know, 1%, 2% interests.
Sandip Rana (CFO)
The, you know, over the next five years, the main mine expansions of Detour going up to 1 million ounces, hopefully from Agnico. You've got Kinross expanding Tasiast. Again, that's a 2% royalty for us. Then the expansion of Stillwater. Stillwater is bigger. Our royalty there is, it's one of our biggest, it's a 5% royalty. That does obviously have a larger impact. For the new mines that are coming in, you know, those are 1%-2% interests. They're, you know, in total, if you can, over the next five years, I think we've got nine new gold mines, potentially, if Copper World goes ahead, one copper mine in there. Most of those interests are 1% or 2% royalty interests.
John Tumazos (Managing Director, Principal and Director of Research)
Thank you very much.
Operator (participant)
Thank you. Next question comes from Ralph Profiti at Eight Capital. Please go ahead.
Ralph Profiti (Principal, Equity Research Analyst)
Thanks, operator. Just one question from me. Sandip, I apologize for coming back to the tax issue. On the outstanding, reassessment potential taxes and penalties, does the CRA ask you to place those monies in remittance or secure those against lines of credit? I'm just wondering what those potential impacts are in that available credit calculation of $2.2 billion.
Sandip Rana (CFO)
Yes, they do. For the reassessments we've received, you have to put 50%. You can either make deposits directly with CRA, or you can draw down on the credit facility and put a line of credit in place. We've done... Oh, sorry, letters of credit. We have done that for the reassessments we've been received so far.
Ralph Profiti (Principal, Equity Research Analyst)
Okay. Got you. Thanks very much.
Sandip Rana (CFO)
The disclosure's in the financial statements.
Ralph Profiti (Principal, Equity Research Analyst)
Understood. Thanks for that. That's it for me.
Operator (participant)
Next question comes from Tanya Jakusconek at Scotiabank. Please go ahead.
Tanya Jakusconek (Managing Director, Senior Equity Analyst)
Good morning, everyone. Thank you so much for taking my questions. Just wanted to come back to the global minimum tax. Sandip, I know we're waiting for legislature to come through to have more clarity, but, you know, from a modeling perspective, would it be the safest or most conservative to assume it's implemented in 2024?
Sandip Rana (CFO)
Hi, Tanya. You know, I think that's a safe bet. I think that's the direction the government has put forward, that it will be implemented. You know, on a conservative basis, January 1st, 2024 is a possible date that it could be implemented.
Tanya Jakusconek (Managing Director, Senior Equity Analyst)
That's helpful. Thank you. Just again, coming back on the modeling side, I know in the Q4 call, we had talked about the iron ore business, you know, being 45, 55, you know, first half and second half. Should I still kinda think, because I was a bit low on the iron ore side, should I kinda still think about it in that 45-55? Has that changed?
Sandip Rana (CFO)
That has not changed.
Tanya Jakusconek (Managing Director, Senior Equity Analyst)
The oil division, are we going to see improvements quarter-over-quarter? Or is this, you know, just was just a weaker quarter because of the pricing?
Jason O'Connell (SVP, Diversified)
Hi, Tanya. It's Jason speaking. I think going forward, I think you'd expect to see volumes fairly stable for the remainder of the year. Revenues will obviously be impacted by where prices go. They are currently sitting below, I guess, the range at which we provided our guidance, which I believe was $80 for oil and $3 for gas. We're a little bit under that right now. But in terms of, you know, performance, I would expect you to see reasonably stable performance throughout the year.
Tanya Jakusconek (Managing Director, Senior Equity Analyst)
That's helpful. Thank you, Jason. Just on the overall portfolio, Sandip, as I come back, you know, from a volume perspective, as I look at the portfolio, we have that, you know, uptake in Q-two, and you said Q-three and Q-four are gonna be relatively the same. Is Q-two gonna be, you know, materially different than Q-three, Q-four? Because when I look at our model, it's not materially different.
Sandip Rana (CFO)
You know, I think Q2 will be definitely a better quarter, just for the catch-up deliveries related to Cobre Panamá and Antamina. I think, you know, Q3 and Q4 will be, you know, strong quarters as well. At the end of the day, it depends on how operations are performing and deliveries, particularly with related to the streams, which are our largest revenue source. So, you know, as I said, we'll update our guidance, in second quarter as we have a better idea of how the year's gonna progress.
Tanya Jakusconek (Managing Director, Senior Equity Analyst)
Your comments, I kind of read through that Q2 is gonna be better than Q1, but Q3, Q4 are gonna be better than Q-two.
Sandip Rana (CFO)
I would say Q3and Q4 at this stage will be not as good as Q2, 'cause Q2 has catch-up deliveries coming.
Tanya Jakusconek (Managing Director, Senior Equity Analyst)
Okay. Okay. No, that's helpful. Thank you. My last question, I always have to come back to the transaction environment. Just wanted to, you know, circle back and make sure that we're still, you know, looking at the same, sort of, you know, transaction range of under $400 million, and that we're still looking for precious metal opportunities. Again, it's still for, you know, new mine builds for, you know, companies that are building new projects. I'm just circling back if that's still the same or has something changed?
Paul Brink (President and CEO)
Hi, Tanya. It's Ian here. I think you're still accurate in your assessment there. That's largely what we're looking at.
Tanya Jakusconek (Managing Director, Senior Equity Analyst)
Much, I'll let someone else ask questions. Appreciate you taking the time for my questions.
Sandip Rana (CFO)
Thanks, Tanya.
Operator (participant)
Thank you. As a reminder, should you have any questions, please press star one. Next question comes from Brian MacArthur at Raymond James. Please go ahead.
Brian MacArthur (Managing Director)
Good morning. Sorry, most of my questions have been answered, but just back to the tax for a minute. You talk about getting back $9.9 million. A couple of questions. First of all, have you got that? Because I know some other companies, it's been a long time getting money back from the CRA. Secondly, is that in other assets on your balance sheet in that 41? Net, net, you will convert that back into your cash position?
Sandip Rana (CFO)
Hi, Brian. Sandip. Yes. We have not received it. We just finalized the settlement last Friday. It is a process we have to go through. Yes, I am aware that, you know, getting cash back from CRA takes a bit of time. We will follow the process. Hopefully, it'll come back sooner for us. At this point, we have not received it. On the second piece, yes, it's sitting in our other assets on the balance sheet.
Brian MacArthur (Managing Director)
Great. Thanks very much.
Operator (participant)
Thank you. There are no further questions on the line. You may proceed.
Candida Hayden (Senior Analyst, Investor Relations)
Thank you, Joanna. There are no questions from the webcast. This concludes our Q1 2023 results conference call and webcast. We expect to release our Q2 2023 results after market close on August 8th, with a conference call held the following morning. Thank you for your interest in Franco-Nevada. Goodbye.
Operator (participant)
Ladies and gentlemen, this concludes your conference call for today. We thank you for participating, and we ask that you please disconnect your lines.