Franco-Nevada not dismissing platinum-palladium spin-off

As gold continues to push higher, Franco-Nevada, which buys royalties on precious metals production streams, is benefiting – and not ruling out the idea of spinning off its platinum-palladium interests.

CEO David Harquail says the company has royalties on six platinum-palladium operations, and that it’s big enough to create “an interesting platinum-palladium company with very little geo-political risk and the highest margins in the business.” He says the company would consider spinning off  its platinum-palladium assets if it would help push up their valuation.

The company gets a percentage of the gold that comes out of each operation – but unlike miners, it is not directly affected by cost overruns or problems that plague production. CEO David Harquail says in the Gold Wheaton transaction, it acquired interests in five different mines – a mix of platinum, palladium and gold.