Franco-nevada Corporation · TSX:FNV
Franco-nevada — Investor Presentation (January 2010)
20 slides from Franco-nevada's investor presentation, January 2010
Slide 1: Growing a High Margin Gold Business
Growing a High Margin Gold Business January, 2010
Slide 2: Cautionary Statement
Cautionary Statement Forward-Looking Statements This Presentation contains "forward-looking statements", which may include but are not limited to, statements with respect to future events or future performance, management's t' expectations t ti regarding di Franco-Nevada’s F N d ’ growth, th results
Slide 3: Franco-Nevada's Position of Strength
Franco-Nevada’s Franco Nevada s Position of Strength Leading gold royalty company by • gold revenues Goldstrike • number of gold royalties • free cash flow margins Growing Gold • delivered gold revenue growth Gold Quarry • pipeline of immediate gold growth Strong track record of acquisitions • p pre
Slide 4: Best Gold Investment Through the Commodity Cycle
Best Gold Investment Through the C Commodity dit Cycle C l Exposure to: Operators Explorers ETF Bullion Metal price appreciation D D D D D Earnings and dividends D D U U U New reserves D D D U U Expansion potential D D U U U Reduced Exposure to: Capital costs D U U D D Operating Costs D U U D D Envi
Slide 5: Diversified Quality Portfolio
Diversified Quality Portfolio % of Royalty Revenue (1) 61% 21% >300 royalties y with 82% of Royalty y y Revenue from US & Canada (1) Royalty Revenue is defined by the Company as cash received or receivable from operating royalty assets 5 earned during the period. Percentages above are for the 9 mont
Slide 6: Pipeline For Future Growth
Pipeline For Future Growth Current producers New in 2010-11 Near term 2012+ Longer term Goldstrike Holloway-Hislop y p Detour Pinson Palmarejo* Hollister Hemlo NPI Arturo Gold Quarry* Hemlo NSR Falcondo nickel Kirkland Lake Stillwater Tasiast Pandora p platinum Arctic Gas Marigold Holt Rosemont >145
Slide 7: Recent Results
Recent Results Royalty Revenue(1) Free Cash Flow(2) Byy Quarter Byy Quarter $40.0 $40.0 $36.4 $35.0 $35.0 89% $32.9 $32.5 5 $30.0 $30.0 85% $29.2 $27.9 85% $25.0 $25.0 Other 24.9 ns ns Million $2 Million O $20.0 $20.0 enue (1) Free Cash Flow (2) $15.0 $15.0 Royalty Reve $10.0 $10.0 Gold $5.0 $5.0 R
Slide 8: Gold Growth – IPO to Date
Gold Growth – IPO to Date 45 40 35 ons) Oil & Gas venue ($ millio 30 Base Metals & Other 25 PGM Gold Royalty Rev 20 15 77% Gold & PGMs as % 80% 56% 77% of total Royalty 55% 55% 10 Revenue 61% 5 0 Q1 2008 Q2 2008 Q3 2008 Q4 2008 Q1 2009 Q2 2009 Q3 2009 Gold Royalty Revenues have doubled since the IPO
Slide 9: Track Record of Acquisitions since IPO
Track Record of Acquisitions since IPO >90% of capital deployed into gold assets Amount Asset Royalty Commodity Operator Location $104m Gold Quarry 7.29% Gold Newmont Nevada Coeur $80m Palmarejo 50% Gold Mexico d’Alene Ahafo South $58m 2% Gold Newmont Ghana Mine $20m Marigold 2 5-5% 2.5-5% Gold Gold
Slide 10: Immediate Gold Growth
Immediate Gold Growth Franco-Nevada has potentially 15 growth assets generating incremental gold Royalty Revenue growth in the next 3 4 years(1) 3-4 Not Shown 100 • Any contribution 90 from >130 other 80 longer term gold 70 US$ (Millions) royalties 60 50 • Revenue from all 40 other 30 commodities 20
Slide 11: Added Growth Potential
Added Growth Potential Capital Resources @ September 30 30, 2009 US$ Millions Working Capital $559 Marketable securities $59 Available Credit Facility $150 Total Available Capital $768 No debt or hedges and limited capital obligations F Future acquisitions i ii prefunded f d d for f further f h grow
Slide 12: Significant Growth Opportunities
Significant Growth Opportunities New Incremental Precious Metals Royalty Revenues From Competitive bid to acquire IRC Franco Nevada and IRC Growth Assets(1) Franco-Nevada 140 • US$620M cash offer 120 • Provide longer term cash flow 100 IRC IRC IRC ons) p with exposure to exploration p & 80 US$ (Mill
Slide 13: Franco-Nevada Attributes
Franco-Nevada Franco Nevada Attributes Leading gold royalty company – Hi h t margins Highest i iin b business i – Generates free cash flow in all likely scenarios – Strong asset base in U.S. and Canada – Gro ing and increasingl Growing increasingly di diversified ersified gold re revenue en e Capita
Slide 14: Franco-Nevada Performance Since IPO
Franco-Nevada Performance Since IPO 120% 100% 93% 80% mance (%) 60% Share Price Perform 40% 20% 0% -20% -40% 40% Nov-07 Jan-08 Mar-08 May-08 Jul-08 Sep-08 Nov-08 Jan-09 Mar-09 May-09 Jul-09 Sep-09 Nov-09 S Source: Bloomberg Bl b Note: Share price performance based on Canadian dollars adjusted for di
Slide 15: Appendix - Comparables
Appendix - Comparables Royal Gold Silver Wheaton Commodity mix Mostly gold Mostly gold Mostly silver USA 60% USA 44% Mexico 51% (1) Revenues by geography Canada 22% Africa 28% Peru 17% Mexico 11% Mexico 17% Sweden 11% Number of mineral royalties 194 118 14 Market cap at Jan 6, 2010 $3,103m $2,046m $
Slide 16: Appendix - Comparables
Appendix - Comparables EV/CF 50 46.2 45 40 33.9 35 30 FNV 24.9 24.2 25 22.2 22.5 RGLD 19.3 17.8 19.0 19.4 20.1 20 SLW 15.7 15 NA Intermediate Average 10 5 0 EV/CF /C 2009 009 EV/CF /C 2010 0 0 EV/CF /C 2011 0 Assumes Franco-Nevada does not invest its >$700m in currently available capital R Royalties
Slide 17: Appendix - Franco-Nevada Corporation
Appendix - Franco Franco-Nevada Nevada Corporation Capital Structure: Common 112.0m shares outstanding (FNV-TSX) Warrants 5 75m @ C$32/sh Mar. 5.75m Mar 2012 (FNV.WT) (FNV WT) Warrants 5.75m @ C$75/sh June 2017 (FNV.WT.A) Warrants 0.32m Special Warrants Share Price Range(1) C$31.49 - C$11.62 Market
Slide 18: Appendix - Board of Directors
Appendix - Board of Directors Position with Franco-Nevada Current or Past Major Experience Pierre Lassonde Director, Chairman Chairman, World Gold Council Vice Chairman, Director and President, Newmont Mining Co-CEO and Co-Founder, Old Franco-Nevada David Harquail Director, President & CEO Executive
Slide 19: Appendix - Gold Growth Assets
Appendix - Gold Growth Assets Franco-Nevada stand-alone incremental gold growth revenues Annual Incremental Royalty Potential c Project Operator Royaltyd @ $1000 gold Palmarejo Coeur d’Alene 50% stream $15-19m eg Holloway–Hislop St Andrew Gold 4-5% NSR 3-4m e 2010 Hollister Great Basin Gold 3-5% 3 5
Slide 20: Dow vs Gold: Financial Assets vs Hard Assets
Dow vs Gold : Financial Assets vs Hard Assets 7/9 years 45 so far Peak 42 40 35 14 years 30 Peak 27 old 25 DOW/Go 5 years 20 Peak 17 15 10 5 0 20