Franco-nevada Corporation · TSX:FNV
Franco-nevada — Investor Presentation (April 2012)
24 slides from Franco-nevada's investor presentation, April 2012
Slide 1: April 2012 Update
STATESN {ERICA 9995 PLATINUM | April 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 FNV 3
Slide 4: Franco-Nevada (FNV): A gold focused royalty & stream company
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 Goldsttrike Growth > 80% revenue growth in 2011 ~$1B $1B cashh andd no debt d b World class discoveries Yield 1.1% %y yield ed 60%
Slide 5: Management & Directors
Management & Directors Management David Harquail President & CEO Sandip Rana Chief Financial Officer Jacqueline Jones Chief Legal Officer Geoff Waterman Chief Operating Officer Paul Brink SVP,, Business Development p Directors Pierre Lassonde Director, Chairman David Harquail Director, President & C
Slide 6: Business Model Benefits
Business Model Benefits Gold ETF FNV Operators Dividend Yield -0.4% >1% 0-2% Leverage to Gold Price 1 >1 >1 Exploration & Expansion upside 0% 100% 100% Reduced Exposure to: Capital costs costs* 0% 0% 100% Operating costs* 0% 0% 100% Environmental costs* 0% 0% 100% FNV provides yield and more upside
Slide 7: Outperforming other Gold Investments
Outperforming other Gold Investments 320% FNV* 280% 240% 200% GOLD 160% 120% 80% S&P/TSX Global FNV IPO: Gold Index Dec 2007 40% 0% *27% compounded annual rate of return FNV and S&P/TSX Global Gold Index converted to USD. Chart to March 27, 2012 FNV 7
Slide 8: Key Producing Assets
Key Producing Assets GOLD ASSETS PGM’s U.S International Stillwater Goldstrike Tasiast Sudbury (3) Gold Quarry Palmarejo Pandora Marigold MWS Mesquite Ezulwini Other Hollister Cerro San Pedro Weyburn – oil Canada Edikan Midale – oil Sudbury (3) Australia Edson – gas Golden Highway (3) Duketon Mt. Ke
Slide 9: 2011 Revenue Sources
2011 Revenue Sources By Country By Asset Australia Other 4% 1% Other 9% Africa US PGMs 16% % 27% (3 Assets) 16% Gold Mexico (33 Assets) 26% Canada 75% 26% 79% of Revenue from North America 91% Precious Metals FNV 9
Slide 10: Revenue by Commodity
Revenue by Commodity 120 100 80 92% ons) precious (US$ Millio 60 metals in Q4 2011 40 Other PGM 20 Gold 0 Diversified Portfolio with Growing Precious Metals FNV 10
Slide 11: Our Growth Pipeline
Our Growth Pipeline Key Producing Advanced Exploration Assets* Assets* Assets* 43 25 139 G ld - Gold US ● Both B h organici andd ● Exploration E l i - Canada acquisition near optionality at no - Australia term growth cost to FNV - International PGMs Other Minerals Oil & Gas Over 200 mineral royaltie
Slide 12: Key Near-Term Growth Assets
Key Near‐Term Growth Assets Detour Lake - Ontario Detour (2% NSR royalty) Ramping up production in 2013 to 649 koz/yr* Tasiast (2% NSR royalty) Major expansion currently under feasibility S bik (2% NSR royalty) Subika lt ) Tasiast - Mauritania Royalty expected to start in 2013 Duketon (2% NSR royalt
Slide 13: Recent Acquisitions
Recent Acquisitions 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% Phoenix Gold Pr
Slide 14: Growing Revenues ($1,700/oz Au)
Growing Revenues ($1,700/oz Au) 500 2012 includes: • Full year of MWS and Sudbury Basin 400 • End of Goldstrike waste stripping • Smaller asset startups, expansions and NPIs ons) 81% 300 US$ (Millio 2013 will add: • Detour • Subika 200 • Organic growth risk 46% adjusted Future excludes: 100 • Permit
Slide 15: Capital for Future Acquisitions
Capital for Future Acquisitions Capital Resources (US$ Millions) Working Capital $851 Marketable Securities $44 Total Capital (Dec 31, 2011) $895 Updated 2012 Activity 2012 investment YTD ($110) C$32.00 warrant exercise $175 Total Capital $960 More investment opportunities due to: Higher prices crea
Slide 16: Franco-Nevada is outperforming gold by:
Franco‐Nevada is outperforming gold by: Growth (>80% revenue growth in 2011) Profits and Yield (60% dividend increase in 2011) 320% Business model that minimizes inflationary cost risks FNV Participation in world class discoveries (Detour, Tasiast) 280% Strong balance sheet with ~$1B for further gro
Slide 17: Appendix
Appendix Goldstrike ‐ Barrick Palmarejo ‐ Coeur Detour Detour Lake – Detour Gold MWS – First Uranium Tasiast ‐ Kinross Mesquite – New Gold Phoenix ‐ Rubicon East Boulder ‐ Stillwater Sudbury – Quadra FNX Weyburn ‐ Cenovus FNV 17
Slide 18: 2011 Financial Results
2011 Financial Results (US $ millions Q4 2011 Q4 2010 % Chg FY 2011 FY 2010 % Chg except per share and %) IFRS MEASURES Revenue $118.5 $74.9 58% $411.2 $227.2 81% Net Income (Loss) (105.4) 17.2 (713%) (6.8) 62.7 (111%) Net Earnings (Loss) Per Share ($0.80) $0.15 (633%) ($0.05) $0.55 (109%) KEY NON I
Slide 19: Increasingly diverse portfolio
Increasingly diverse portfolio 45 40 2012 • Timmins West 35 H2 • Hemlo NPI • Garden Well 30 25 2013 • Detour 20 • Subika 15 10 5 0 2008 2009 2010 2011 # of Royalties/Streams generating Revenue* * Excludes Oil and Gas FNV 19
Slide 20: Growth in the Near-Term
Growth in the Near‐Term Category Asset Operator Royalty Startup1 Avg Prod1 New • Edikan • Perseus Mining • 1.5% NSR • Aug 2011 • 265,000 oz mines: • Garden Well • Regis Resources • 2% NSR • Sept 2012 • 180,000 oz • Canadian Malartic • Osisko Mining • 1.5% NSR* • Apr 2011 • 574,000 oz* • Red October
Slide 21: Precious Metals Growth per Share
Precious Metals Growth per Share 250% Inf 2,3) M&I 200% ecious Metals Growth (1,2 P&P Per share growth 150% 100% Pre 50% 0% 2007 2008 2009 2010 2011 20% CAGR in resources over 4 years Growth in resources per share Growth is ~50% organic and ~50% from acquisitions (1) Based on publicly reported reser
Slide 22: Appendix – Non IFRS Measures
Appendix – Non IFRS Measures Three Months Ended Year Ended Adjusted EBITDA (US $ millions except per share) Dec 31, 2011 Dec 31, 2010 Dec 31, 2011 Dec 31, 2010 Net income $(105.4) $17.2 $(6.8) $62.7 Income tax expense 4.5 8.1 45.9 39.5 Finance costs 0.2 0.6 2.3 2.3 Finance income ((1.4)) ((1.0)) ((4
Slide 23: Appendix – Non IFRS Measures
Appendix – Non IFRS Measures Three Months Ended Year Ended Adjusted Net Income (US $ millions except per share) Dec 31, 2011 Dec 31, 2010 Dec 31, 2011 Dec 31, 2010 N t IIncome Net $(105 4) $(105.4) $17 2 $17.2 $(6 8) $(6.8) $62 7 $62.7 Foreign exchange loss, net of income tax (0.3) 3.1 2.9 7.4 Gain
Slide 24: Franco-Nevada Corporation
Franco‐Nevada Corporation Capital Structure (as of March 21, 2012) Analyst Coverage Shares Outstanding (FNV on TSX & NYSE) 143.9m BMO Capital Markets David Haughton 2013 Warrants(1) (C$64.27 exercise price) 4.1m / BOA/Merrill Lynch y Mike Jalonen 2014 Warrants(1) (C$32.14 exercise price) 2.1m CIBC C