Franco-nevada Corporation · TSX:FNV
Franco-nevada — Investor Presentation (September 2012)
27 slides from Franco-nevada's investor presentation, September 2012
Slide 1: September 2012 Update
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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
Dow vs. Gold 32 16 mic Scale) Gold (Logarithm 8 DOW/G 4 2 1 Gold price has more upside potential FNV 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 approximately i t l $7 billion. billi Goldsttrike Growth > 80% revenue growth in 2011 ~$1B $1B cashh andd no debt d b World class discoveries Yield 1.2% %
Slide 5: 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 6: Outperforming other Gold Investments
Outperforming other Gold Investments ~30% compounded annual rate of return including dividends FNV and S&P/TSX Global Gold Index converted to USD. Chart to Aug 31, 2012 FNV 6
Slide 7: FNV close correlation to Gold price
FNV close correlation to Gold price $2,000 $1,800 $1,600 R² = 0.92 $1,400 $1,200 Price (USD) $1,000 Gold P $800 $600 $ $400 $200 $0 $0 $10 $20 $30 $40 $50 $60 Franco‐Nevada Share Price (USD) Chart to Aug 31, 2012 FNV 7
Slide 8: Our Mineral Royalty and Stream Portfolio
Our Mineral Royalty and Stream Portfolio Key Producing Advanced Exploration Assets Assets Assets 43 26 139 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 20
Slide 9: Key Producing Assets
Key Producing Assets GOLD ASSETS PGMs U.S. Australia Stillwater Goldstrike Duketon Sudbury (3 mines) Gold Quarry Henty Pandora Marigold South Kalgoorlie Mesquite Bronzewing Other Hollister International Weyburn – oil Canada Tasiast Midale – oil Sudbury (3 mines) Palmarejo Edson – gas / ngl’s Golden
Slide 10: Recent Financial Results
Recent Financial Results Six Six US $ millions Months Months (except per share and % ) Q2 2012 Q2 2011 2012 2011 IFRS MEASURES Revenue $102.7 $106.3 $207.7 $179.4 Net Income $36.9 $33.3 $83.7 $54.5 Net Earnings Per Share $ $0.26 $ $0.27 $ $0.59 $ $0.45 KEY NON IFRS MEASURES Gold Revenue $81.4 $72.0
Slide 11: Q2 2012 Revenue Sources
Q2 2012 Revenue Sources By Commodity By Geography Australia Other 3% 1% Other Africa 10% 12% PGMs 11% US 31% Mexico 28% Gold 79% Canada 25% 90% Precious Metals 84% of Revenue from North America FNV 11
Slide 12: Continued Annual Revenue Growth
Continued Annual Revenue Growth 450 $411 M 400 OTHER 350 Q4 300 US$ Millions)) Revenue 250 $227 M Q3 $208 M 200 $ $151 M $156 M (U 150 Q2 GOLD Q2 100 50 Q1 Q1 - 2008 2009 2010 2011 2012 FNV 12
Slide 13: Organic Growth
Organic Growth Detour Lake - Ontario Detour (2% NSR royalty) Average life of mine production of ~657 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 second half of 2012 Duketon (2% NSR r
Slide 14: Acquisition Growth
Acquisition Growth Gold Wheaton • Sudbury (KGHM), MWS (AngloGold) & Ezulwini (Gold One) Canadian Malartic (Osisko Mining) Edikan (Perseus Mining) Sudbury – Ontario Phoenix Gold Project (Rubicon Minerals) Lumina Royalty Corp. • 4 royalties including Relincho (Teck) & Taca Taca (Lumina Copper) Canadia
Slide 15: Cobre Panama
Cobre Panama Transaction Overview • $1 billion commitment • Precious metals stream linked to copper production Attributes to Franco-Nevada • Partnering with an experienced mine builder and operator • Greater than 30 year mine life based on existing reserves* • Opportunities for production expansion
Slide 16: Cobre Panama – Anticipated Stream Profile
Cobre Panama – Anticipated Stream Profile* • 2.2 million gold-equivalent ounces anticipated to be delivered under the stream based on current mine plan reserves with further potential for resource addition Stream Profile 120,000 120,000 100,000 100,000 80,000 80,000 nces nces 60 000 60,000 60 000 60
Slide 17: Cobre Panama - Upside
Cobre Panama ‐ Upside • Reserve based on 3 out of 5 known deposits – Balboa and Brazo currently not included • Mine life incorporates only 29% of total estimated resource tonnes • Expansion to 240ktpd could occur earlier than the currently planned year 10 • Higher grade gold Balboa deposit remains o
Slide 18: Growing Revenues ($1,700/oz Au)
Growing Revenues ($1,700/oz Au) 500 2012 includes: • Full year of MWS and Sudbury 400 • End of Goldstrike waste stripping • Smaller asset startups, expansions and NPIs ons) 81% 300 US$ (Millio 2013 will add: • Detour • Subika 200 • Organic growth 46% Future excludes: 100 • Permitting projects: • New
Slide 19: Capital for Future Acquisitions
Capital for Future Acquisitions Existing capital available as Cobre Panama investment substantially funded from future cash flow Capital Resources (June 30, 2012) (US$ Millions) Working Capital $1,024 Marketable Securities $74 Credit Facility $175 Total Capital $1,273 More investment opportunities d
Slide 20: Franco-Nevada provides:
Franco‐Nevada provides: Growth - Participation in world class discoveries - Strong balance sheet for future acquisitions Yield - Dividend increases in each of past 5 years Low Risk - Diversified and secure portfolio y cost risks - Minimizes inflationary Why Own a Gold ETF? FNV and S&P/TSX Global Gol
Slide 21: Q & A
Q&A FNV 21
Slide 22: Appendix – Gold Growth in the Near-Term
Appendix – Gold Growth in the Near‐Term Category Asset Operator Royalty Startup1 Avg Prod1 New • Edikan • Perseus Mining • 1.5% NSR • Aug 2011 • 265,000 oz mines: • Garden Well • Regis Resources • 2% NSR • Sep 2012 • 180,000 oz • Canadian Malartic • Osisko Mining • 1.5% NSR* • Apr 2011 • 574,000 oz*
Slide 23: Appendix – Growing Reserves and Resources
Appendix – Growing Reserves and Resources Total Resource Growth* Resource Growth per Share* 300 0% 220% Inf 250 M&I e (%) 0% 180% oz) s & Resources (mo growth per share P&P 200 0% 140% 150 0% 100% Resource g Reserves 100 0% 60% 50 0 0% 20% 2007 2008 2009 2010 2011 2007 2008 2009 2010 2011 P&P M&I (i
Slide 24: Appendix – Non IFRS Measures
Appendix – Non IFRS Measures Three m onths ended Six m onths ended (Ex pressed in m illions ex cept per share am ounts) Jun 3 0 , 2 0 1 2 Jun 3 0 , 2 0 1 1 Jun 3 0 , 2 0 1 2 Jun 3 0 , 2 0 1 1 N et Incom e 36.9 33.3 83.7 54.5 Income tax expense 14.3 12.8 26.9 21.9 Finance costs 0.2 1.3 0.6 1.9 Financ
Slide 25: Appendix – Scalable Business Model
Appendix – Scalable Business Model 120 100 80 Revenue (USS$ Millionss) 60 40 20 G&A ‐ Proceeds taxes + Oil&Gas costs ‐20 Stream costs ‐40 Q2/08 Q2/09 Q2/ 0 Q2/10 Q2/ Q2/11 Q2/ 2 Q2/12 FNV 25
Slide 26: 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 27: Franco-Nevada Corporation
Franco‐Nevada Corporation Capital Structure (Q2 2012) Analyst Coverage Shares Outstanding (FNV on TSX & NYSE) 146.0m 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) 0.1m CIBC Capital Market
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