Franco-nevada Corporation · TSX:FNV
Franco-nevada — Investor Presentation (March 2012)
24 slides from Franco-nevada's investor presentation, March 2012
Slide 1: March 2012 Update
STATESN {ERICA 9995 \ PLATINUM | March 2012 Update
Slide 2: Cautionary Statement
Cautionary Statement Forward-Looking Statements This presentation may contain certain information that may constitute “forward looking information” and “forward-looking statements” within the meaning of applicable Canadian securities laws and United States Private Securities Litigation Reform Act 19
Slide 3: Dow vs. Gold: Gold price has more potential
Dow vs. Gold: Gold price has more potential 3
Slide 4: Franco-Nevada (FNV)
Franco-Nevada (FNV) A gold focused royalty & stream company. Palmarejo Listed on the TSX & NYSE with a market capitalization it li ti off over $5 billion billi Growth > 75% expected revenue growth* Goldsttrike >$700M $700M cash and no debt World class discoveries Yield 1.1% yield 60% divid
Slide 5: Business Model Benefits
Business Model Benefits Gold ETF FNV Operators Dividend Yield <0% >1% 0-2% 0 2% Leverage to Gold Price 1 >1 >1 Exploration & Expansion upside 0% 100% 100% Reduced Exposure to: Capital costs* 0% 0% 100% Operating costs* 0% 0% 100% Environmental costs* 0% 0% 100% FNV provides yield and more upside tha
Slide 6: Outperforming other Gold Investments
Outperforming other Gold Investments * *30% compounded annual rate of return FNV and S&P/TSX Global Gold Index converted to USD. Chart to February 23, 2012 6
Slide 7: Current and Future Assets
Current and Future Assets Over 200 mineral royalties and streams* *Does not include Franco-Nevada’s 135 oil & gas assets and 157 undeveloped oil & gas interests 7
Slide 8: Our Key Assets
Our Key Assets GOLD ASSETS PGM’s U.S International Stillwater Goldstrike Tasiast Sudbury (3) Gold Quarry Palmarejo Pandora Marigold MWS Mesquite Ezulwini Other Hollister Subika Weyburn – oil Canada Cerro San Pedro Midale – oil Detour Edikan Edson – gas Sudbury (3) Australia Mt. Keith - nickel Golden
Slide 9: Secure and Diverse Revenue
Secure and Diverse Revenue* By Country By Asset1 >50% from U.S. and Canada >75% from North America >90% Precious Metals * Q3 2011 Revenue 1 Counts are for mineral assets and don’t include 135 producing O&G assets. 9
Slide 10: Growing Precious Metals Revenue
Growing Precious Metals Revenue 10
Slide 11: Key Near-Term Growth Assets
Key Near-Term Growth Assets Detour Lake - Ontario Detour (2% royalty) Ramping up production in 2013 to 649 koz/yr* Tasiast (2% royalty) Major expansion currently under feasibility S bik (2% royalty) Subika lt ) Tasiast - Mauritania Royalty expected to start in 2013 Duketon (2% royalty) Multiple mine
Slide 12: Acquisitions in Last Twelve Months
Acquisitions in Last Twelve Months Gold Wheaton (Quadra FNX; First Uranium) • Sudbury Basin, MWS and Ezulwini streams Canadian C di Malartic M l ti (Osisko (O i k Mining) Mi i ) • 1.5% gross royalty on portion Sudbury Basin – Ontario Edikan/Central Ashanti (Perseus Mining) • 1 5% gross royalty 1.5%
Slide 13: Growing Revenues ($1,600/oz Au)
Growing Revenues ($1,600/oz Au) ** 2012-13E includes: • Full year GLW assets • Tasiast , Detour & Subika • End of Goldstrike waste stripping • New Acquisitions • Organic growth risk adjusted Future excludes: • Permitting projects: • New Prosperity • Rosemont and • Perama Hill * Represents upper end
Slide 14: Capital for Future Acquisitions
Capital for Future Acquisitions Total cash & short-term investments (US$ Millions) Cash & short-term short term investments (Sept 30th, 2011) $372 Nov 2011 “bought deal” financing (net) $375 Total cash and short-term investments $747 More investment opportunities due to: Higher prices create more pr
Slide 15: Franco-Nevada is outperforming gold by:
Franco-Nevada is outperforming gold by: Growth (>75% revenue growth expected in 2011) Profits and Yield (60% dividend increase in 2011) Business model that minimizes inflationary cost risks 320% Participation in world class discoveries (Detour, Tasiast) FNV Strong balance sheet with >$700m for furth
Slide 16: Appendix
Appendix Goldstrike ‐ Barrick Palmarejo ‐ Coeur Detour – Detour Gold MWS – First Uranium Tasiast ‐ Kinross Mesquite – New Gold East Boulder ‐ Stillwater Sudbury – Quadra FNX Weyburn ‐ Cenovus 16
Slide 17: Q3 2011 Financial Highlights
Q3 2011 Financial Highlights (US $ millions except per share and %) Q3 ’11 Q3 ’10 VAR % Change Revenue $113.3 $55.0 $58.3 106% Precious Metals Revenue $103.3 46.5 56.8 122% Cost of Sales 16.2 7.9 8.3 105% Net Income 44 1 44.1 81 8.1 36 0 36.0 444% Earnings Per Share $0.35 $0.07 $0.28 400% EBITDA (1)
Slide 18: Non-IFRS Financial Reconciliation
Non-IFRS Financial Reconciliation Three h months h ended d d Sept 30, Nine i months h ended d d Sept 30, (Expressed in millions except per share amounts) 2011 2010 2011 2010 Net Income $44.1 $8.1 $98.6 $45.4 Income tax expense 19.5 8.7 41.4 31.3 Finance costs 0.2 0.6 2.1 1.6 Finance income (1 3) (1.
Slide 19: Growth of Portfolio
Growth of Portfolio # of Royalties/Streams generating revenue H2 H2: Expected • Tasiast H1 • Edikan/Central Ashanti • Canadian Malartic • Ity • Musselwhite • Macassa Increasingly diverse portfolio * Excludes Oil and Gas 19
Slide 20: Growth in the Near-Term
Growth in the Near-Term C Category A Asset O Operator R Royalty l S Startup1 P d1 A Prod Avg New • Lounge Lizard • Kagara Ltd • 2% NSR • Jan 2010 • 50,000 tpa mines: • Moolart Well • Regis Resources • 2% NSR • Sept 2010 • 89,509 oz • Canadian Malartic • Osisko Mining • 1.5% NSR* • Apr 2011 • 574,000
Slide 21: Precious Metals Growth
Precious Metals Growth Further growth in 2011 expected from: • Tasiast • Detour • Sudbury Basin • MWS • Ezulwini • Garden Well • Edikan/Central Ashanti • Canadian Malartic • Phoenix 53% growth in resources over 3 years 18% growth in reserves per share over 3 years Growth is ~74% 74% organic and ~26%
Slide 22: Growth in Gold Revenue
Growth in Gold Revenue Growth from from*:: ~ 25% gold price increase ~ 15% organic leverage ~ 60% new acquisitions * Q3 2011 vs. Q3 2010 22
Slide 23: Directors & Management
Directors & Management Directors Pierre Lassonde Director, Chairman D id Harquail David H il Di Director, t President P id t & CEO Derek Evans(1) Director – CEO, Pengrowth Energy Corporation Director – President , Strathcona Mineral Graham Farquharson(2) Services Louis Gignac(1) Director – Former CE
Slide 24: Franco-Nevada Corporation
Franco-Nevada Corporation Capital Structure (as of Feb 9, 2011) Analyst Coverage Shares Outstanding (FNV on TSX & NYSE) 138.4m BMO Capital Markets David Haughton 2012 Warrants (C$32 exercise price) 5.7m BOA/Merrill Lynch Mike Jalonen 2013 Warrants(1) (C$64.27 exercise price) 4.1m CIBC Capital Market