Franco-nevada Corporation · TSX:FNV
Franco-nevada — Investor Presentation (February 2016)
16 slides from Franco-nevada's investor presentation, February 2016
Slide 1: Corporate Update
February 2016 Corporate Update 1
Slide 2: Cautionary Statement
Cautionary Statement Forward Looking Statements This presentation contains “forward looking information” and “forward looking statements” within the meaning of applicable Canadian securities laws and the U.S. Private Securities Litigation Reform Act of 1995, respectively, which may include, but are
Slide 3: A Gold Focused Royalty/Stream Company
A Gold Focused Royalty/Stream Company Market Cap1 Available Capital2 Board of Directors ~ US$8.6 Billion ~ US$1.2 Billion Pierre Lassonde, Chair David Harquail, CEO FNV on TSX & NYSE Free Cash Flow Tom Albanese S&P/TSX 60 Margin3 > 75% Derek Evans GDX Overhead/mkt cap <0.3% Graham Farquharson Top Sh
Slide 4: The Gold Investment that Works
The Gold Investment that Works 300% 250% FNV 200% 150% 100% 50% Gold 0% S&P/TSX -50% Global FNV IPO: Gold Dec 2007 -100% Index 2008 2009 2010 2011 2012 2013 2014 2015 2016 FNV and S&P/TSX Global Gold Index converted to USD. Chart to February 16, 2016. 4
Slide 5: Our Business Principles
Our Business Principles Maximize Minimize Exploration upside Cost exposures Security of tenure Potential for encroachments Focus on new investments Involvement in operations Long term optionality 5
Slide 6: Business Model Benefits
Business Model Benefits Risk of: Gold ETF FNV Operators Capital Costs 0% 0%1 100% Operating & Other Costs 0% 0%1 100% Benefit of: Leverage to Gold Price 1 >1 >1 Exploration & Expansion 0% 100% 100% Dividend Yield (0.4%)2 ~1.6% 0 - 2% FNV provides yield and more upside than a gold ETF with less risk
Slide 7: Franco-Nevada since IPO
Franco-Nevada since IPO Revenue1 Adjusted Net Income1,2 Producing Mineral Market Capitalization4 500 (US$ millions) 1.40 (US$ per share) 50 Assets4 10 (US$ billions) 450 45 9 1.20 400 40 8 350 1.00 35 7 300 30 6 US$ per share US$ Millions # of Royalties US$ billions 0.80 250 25 5 0.60 200 20 4 150 0
Slide 8: 2015 Q3 Revenue Sources
2015 Q3 Revenue Sources By Commodity By Geography Other 3% O&G 7% Rest of US PGMs World 19% 7% 21% Canada 23% Gold 83% Latin America 37% 90% Precious Metals 79% from Americas 8
Slide 9: Diversified Portfolio
Diversified Portfolio Precious Metal Assets (selected) Goldstrike Stillwater Gold Quarry Marigold Fire Creek U.S. Bald Mountain Mesquite South Arturo Hollister Midas Sudbury Detour Holt Musselwhite Hemlo Canada Kirkland Lake Timmins W. Cdn. Malartic Brucejack Hardrock Antapaccay1 Antamina Candelaria
Slide 10: Recent Cornerstone Investments
Recent Cornerstone Investments Antamina – Peru Cobre Panama – Panama $610 M – Teck Corporation $338 M → $1 B – First Quantum Candelaria – Chile Antapaccay1 – Peru $648 M – Lundin Mining $500 M – Glencore Long term assets with large land positions 1. Transaction announced February 10, 2016; expected
Slide 11: Other Positive Portfolio News
Other Positive Portfolio News Adding New Ounces Timmins West • Tahoe Resources bid & 144 GAP discovery Detour Macassa • 23 year mine plan with West Detour 262 Mineral • Kirkland Lake’s production growth & exploration success Fire Creek/Midas • Klondex’s exploration success & permits Assets1 Marigold
Slide 12: New Investment Opportunities
New Investment Opportunities Cerro Moro – Yamana Gold Since Existing 3rd party 1985 Brucejack – Pretium Resources royalties Hardrock – Premier Gold Mines Since Palmarejo – Coeur Mining By-product funding 2008 Cobre Panama – First Quantum Kirkland Lake – Kirkland Lake Gold Since Primary product Stibn
Slide 13: Over $1.2 B of Available Capital
Over $1.2 B of Available Capital 1. As at September 30, 2015 2. See definition on Slide 15 13
Slide 14: Franco-Nevada Provides: Why own a gold ETF?
Franco-Nevada Provides: Gold exposure at a discount Growth – organic and acquisitions FNV Dividends vs. ETF fees Gold FNV IPO: Dec 2007 S&P/TSX Global Gold Index 2008 2009 2010 2011 2012 2013 2014 2015 2016 Why own a gold ETF? At February 16, 2016; FNV and S&P/TSX Global Gold Index converted to USD
Slide 15: Appendix – Non IFRS Measures
Appendix – Non IFRS Measures 1. Adjusted Net Income and Adjusted Net Income per share are non-IFRS financial measures, which excludes the following from net income and net income per share: foreign exchange gains/losses and other income/expenses; gains/losses on the sale of investments; impairment c
Slide 16: Appendix – Cobre Panama
Appendix – Cobre Panama Cobre Panama port Plant Area Precious metals stream on one of the world’s largest copper developments First Quantum has committed >$3B of a projected $6B project: • expects ramp-up in 2018 FNV total contribution of $1B is funded pro-rata with other project funds: • $338m adva
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