Franco-nevada Corporation · TSX:FNV
Franco-nevada — Investor Presentation (January 2023)
36 slides from Franco-nevada's investor presentation, January 2023
Slide 1: Corporate Presentation
Corporate Presentation JANUARY 2023 FNV: TSX | NYSE
Slide 2: Cautionary Statement
CAUTIONARY STATEMENT 2 Forward Looking Statements This presentation contains “forward looking information” and “forward looking statements” within the meaning of applicable Canadian securities laws and the United States Private Securities Litigation Reform Act of 1995, respectively, which may includ
Slide 3: The Gold Investment That Works
THE GOLD INVESTMENT THAT WORKS 3 Franco-Nevada is the leading gold-focused royalty and streaming company with the largest and most diversified portfolio of cash flow producing assets. Leading Low-risk Diversified Growth track record business model portfolio and optionality
Slide 4: Shareholder Returns: Leading Track Record
SHAREHOLDER RETURNS 4 Leading Track Record (CAGR Since FNV Inception 1, 2, 3) A lower-risk gold investment to Franco-Nevada (FNV) - US$ basis hedge against market volatility NASDAQ NYSE and TSX listed S&P 500 Large holders include: Gold Bullion ETF BlackRock Barclays US Aggregate Bond Fidelity
Slide 5: Partnership Success: Industry-Leading Operators
PARTNERSHIP SUCCESS 5 Royalty and stream financing that provides Industry-Leading Operators long-term alignment and financial flexibility. Lundin Mining: Candelaria Acquisition Detour Lake: A Partnership Success Story
Slide 6: ESG Leadership
ESG LEADERSHIP 6 Our ESG Focus Top ESG Rankings Responsible Capital Allocation Community Contributions Good Governance & Shareholder Alignment Fostering Diversity and Inclusion Transparent ESG Disclosure For additional details, please see pages 36-37 of this presentation and our most recent ESG Repo
Slide 7: Business Model
Franco &)Nevada
Slide 8: Business Model Advantages
BUSINESS MODEL ADVANTAGES 8 Optionality Potential for exploration success on approximately 65,700 km2 Focus on Growth Management not occupied with operational decisions Free Cash-Flow Business Not exposed to capital calls Limited Cost Inflation Streams/NSRs not exposed to cost inflation High Margins
Slide 9: Financing Successful Mines: Partnership Approach
FINANCING SUCCESSFUL MINES 9 Partnership Approach Alignment with partners for M&A Financing Debt Reduction a win-win solution Support leading operators through long-term Project Financing Emerging Projects partnership Technical team with strong track record identifying successful projects
Slide 10: Why We Are Different
WHY WE ARE DIFFERENT 10 Shareholder Financial Cyclical Asset Alignment Flexibility Investing Selection Committed to high share Avoiding long-term debt Board and management Strong technical skills ownership and low and paying progressive have a patient approach and a focus on G&A – treating and susta
Slide 11: Asset Portfolio
Asset Portfolio
Slide 12: Assets
12 416 Assets Covering Approximately 65,700 km2 Our Portfolio 416 TOTAL 113 Precious Metals Diversified PRODUCING 44 Precious Metals Diversified ADVANCED 259 EXPLORATION Not all assets shown on map including exploration assets Asset count as of January 1, 2023
Slide 13: Core Precious Metal Streams Outperforming
13 CORE PRECIOUS METAL STREAMS OUTPERFORMING Antamina Cobre Panama $610M investment $1.36B investment 2021 revenue: $94M 2021 revenue: $235M Mine life potential1: 30+ years Mine life potential1: 35+ years Payback2: 71% Payback2: 36% Silver production has exceeded Expanding to 100 Mtpa in 20234 expec
Slide 14: Long-Life Assets
LONG-LIFE ASSETS 14 Franco-Nevada Growing reserves and reserve lives Sr. Gold Producers Long-duration portfolio increases optionality Int. Gold Producers Years 0 2 4 6 8 10 12 14 16 18 2016 2021 Source: Bank of America/Merrill Lynch (May 2022) Seniors: Agnico Eagle, Barrick, Kinross and Newmont Inte
Slide 15: Revenue Diversification
REVENUE DIVERSIFICATION 15 Diversified with Low Risk (YTD 2022 Revenue) Rest of First Gas World Cobre Panama Quantum 11% 9% 17% 17% Other Oil Mexico & 28% NGL Canada & 12% Central Antapaccay Glencore 2% USA America 7% 7% 40% Others 23% Iron Ore Commodity Gold Geography Assets Candelaria 48% Operator
Slide 16: Royalty Optionality
ROYALTY OPTIONALITY 16 2007 2008 - 2021 2021 120 100 >42 Moz gold Mineral Reserves (Moz) >$1.8B3 produced Proven & Probable 80 revenue to FNV 60 from portfolio >3x Gold increase1 40 Reserves2 of same assets Gold as reported 20 Reserves2 Dec. 2021 at time of IPO - IPO Reserves $1.2B paid for increase
Slide 17: Increasing Profitability
INCREASING PROFITABILITY 17 2021 2020 Adjusted EBITDA Margin1 2019 of 84.8% and Adjusted Net Income Margin1 of 53.5% 2018 YTD 2022 2017 2016 - 200 400 600 800 1,000 1,200 1,400 US $ (Millions) G&A Cost of Sales Depletion Taxes/Other Profit 1. Please see notes on appendix slides – GEOs and Non-GAAP M
Slide 18: Track Record
Franco &)Nevada
Slide 19: Track Record
TRACK RECORD 19 GEOs1 Revenue Market Capitalization2 (000’s) (US$ Millions) (US$ Billions) 800 1,400 30 700 1,200 25 600 1,000 20 500 800 400 15 600 300 10 200 400 200 5 100 - - - '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 '19 '20 '21 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 '19 '20 '21 '08 '09
Slide 20: Progressive & Sustainable Dividends
PROGRESSIVE & SUSTAINABLE DIVIDENDS 20 15 Consecutive Increases $260 $1,950 US$0.32/share3 >$1.85B paid since IPO1 $240 $1,800 Dividends Paid US $ (Millions) per annum $220 $1,650 $200 $1,500 2022 dividends of $245M $180 $1,350 Gold Price US $ $160 $1,200 $140 $1,050 IPO investors now realizing $120
Slide 21: Outperforming Bull & Bear Markets
OUTPERFORMING BULL & BEAR MARKETS 21 40% 32% 20% 20% 14% 12% 7% 1% – (6%) (14%) (20%) (33%) (40%) Bull Market Bear Market Bull Market (2008 - 2012) (2013 - 2015) (2016 - Present) Franco-Nevada (US$) Gold GDX1 1. GDX is a Gold Equity index comprised mostly of gold operating companies 2. Source: TD Se
Slide 22: Growth Outlook
Franco &)Nevada
Slide 23: Guidance
GUIDANCE 23 2021 Actual 2022 Guidance1 2026 Outlook2 728,237 680,000-740,000 765,000-825,000 GEOs Total + Record GEOs in 2021 – Assumes $1,650/oz Au, $19/oz Ag, $900/oz Pt, $2,200/oz Pd + Growth from Precious Metal assets + Energy revenue guidance exceeded – Assumes $100/t Fe 62% CFR China + Vale ro
Slide 24: Strong Growth Outlook
STRONG GROWTH OUTLOOK 24 GEO Growth Profile (Including Energy) 800 700 600 500 Cobre Panama ramp-up GEOs (000's) 400 driving growth1 300 200 100 0 2020 2021 2022 2026 Actual Actual Guidance Outlook Cobre Panama Antapaccay Antamina Candelaria Other GEOs for the years 2020 and 2021 represent actuals.
Slide 25: Cobre Panama Growth Outlook
COBRE PANAMA GROWTH OUTLOOK 25 GEO Growth Profile 450 180,000 400 160,000 On track to achieve 350 140,000 100Mtpa by the end of 300 120,000 20231 250 100,000 200 80,000 FNV 2022 guidance of 150 60,000 120,000-140,000 GEOs 100 40,000 50 20,000 - - 1. Negotiations between First Quantum Minerals Ltd. a
Slide 26: Organic Growth Pipeline
ORGANIC GROWTH PIPELINE 26 2023 2024 2025 2026 Expansions1 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Cobre Panama2 Panama Subika Ghana Detour Lake Ontario Tasiast Mauritania Vale Brazil Macassa Ontario Island Gold Ontario Stillwater Montana New Mines Est. Start3 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q
Slide 27: Producing Asset News
PRODUCING ASSET NEWS 27 Streams Negotiations between First Quantum Minerals Ltd. and the Government of Panama regarding a new concession contract remain ongoing as of January 6, 2023. There is the Cobre Panama Panama potential for the mine to be placed on care and maintenance if an agreement is not
Slide 28: Advanced and Exploration News
ADVANCED AND EXPLORATION NEWS 28 Construction Updates Salares Norte Chile Construction nearing completion. First production expected H1 2023. Magino Ontario Construction 70% complete. First production expected Q2 2023. Séguéla Côte d’Ivoire Construction 85% complete. First production expected mid-20
Slide 29: Long Term Optionality
LONG TERM OPTIONALITY 29 Long-Tem Assets 2.9Moz of total 18.6Moz Other M&I Royalty Ounces1 are Cascabel (Cu, Au, Ag) Holt from long-term assets. (Au) • Not included in 5-year Ring of Fire (Cr, Ni) 2.9 Moz outlook Pandora Taca Taca (PGM) (Cu, Au) Exposure to large copper and nickel deposits Crawford
Slide 30: Available Capital
AVAILABLE CAPITAL 30 1. As at September 30, 2022 2. $1B Corporate Revolver 3. Funding commitments subsequent to September 30, 2022 will be funded with cash flow from operations
Slide 31: Board and Management
BOARD AND MANAGEMENT 31 Board Management David Harquail Tom Albanese Derek Evans Dr. Catharine Farrow Louis Gignac Paul Brink Sandip Rana Lloyd Hong Chair Former CEO CEO Former CEO Chair President & CEO CFO CLO Rio Tinto MEG Energy TMAC Resources G Mining Ventures Board Director Maureen Jensen Jenni
Slide 32: Thank You for Your Interest
THANK YOU FOR YOUR INTEREST IN www.FRANCO-NEVADA.com TSX: FNV | NYSE: FNV
Slide 33: Appendix – GEOs and Non-GAAP Measures
APPENDIX – GEOS AND NON-GAAP MEASURES 33 For the three months ended For the nine months ended 1. Starting in Q4 2021, revenue from Franco-Nevada’s Energy assets is included in the calculation of GEOs. GEOs for comparative periods have Adjusted Net Income September 30, September 30, been recalculated
Slide 34: ESG Leadership
ESG LEADERSHIP 34 Our ESG Focus Responsible Community Contributions Capital Allocation Responsible Capital Allocation Commitment to responsible mining and energy Contributing to our communities and engaging with our extraction through investments in operations with operators to partner in community
Slide 35: ESG Leadership
ESG LEADERSHIP 35 Good Governance & Fostering Diversity Transparent Shareholder Alignment and Inclusion ESG Disclosure Established board and management team aligned with Committed to furthering diversity and inclusion Our annual ESG Report is available on our website and is shareholders with substan
Slide 36: CRA Audit (2012-2017)
CRA AUDIT (2012-2017) 36 Taxation Years Potential Income Potential Interest Reassessed Tax Payable1 & Penalties1,4,5 Canadian Domestic Tax Matters 2014-2017 $14.5M (C$19.9M)2 $4.4M (C$6.0M) Transfer Pricing 2013-2016 $21.8M (C$29.9M)3 $19.9M (C$27.1M) (Mexican Subsidiary) Transfer Pricing 2014-2017