Franco-nevada Corporation · TSX:FNV
Franco-nevada — Investor Presentation (January 2012)
24 slides from Franco-nevada's investor presentation, January 2012
Slide 1: January 2012 Presentation
Ge) Franco) Nevada The GOLD Investment that WORKS JANUARY 2012 PRESENTATION
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: 45 32 40 Logarithmic Scale 35 16 30 25 DOW/Gold 8 20 4 15 10 2 5 Arithmetic Scale 1 0 Gold has upside potential 3
Slide 4: Franco-Nevada (FNV)
Franco-Nevada (FNV) A gold focused royalty & stream company. marejo Listed on the TSX & NYSE with a market capitalization of over $5 billion Palm > 70% expected revenue growth* Growth Goldstrrike >$700M $700M available cash and no debt World class discoveries 1.2% yield Yield 60% di divide
Slide 5: Business Model Benefits
Business Model Benefits Increased Exposure to: Gold ETF FNV Operators Dividend Yield <0% >1% 0 2% 0-2% Leverage to Gold Price 1 >1 >1 Exploration & Expansion upside 0% 100% 100% Reduced Exposure to: Capital costs* 0% 0% 100% Operating costs* 0% 0% 100% Environmental costs* 0% 0% 100% FNV provides yi
Slide 6: Outperforming other Gold Investments
Outperforming other Gold Investments 320% FNV 280% 240% 200% 160% GOLD 120% S&P/TSX Global 80% FNV IPO: Gold Index Dec 2007 40% 0% The Gold Investment that Works *FNV and S&P/TSX Global Gold Index converted to USD 6
Slide 7: Current and Future Assets
Current and Future Assets Over 200 mineral royalties and streams* *Does not include Franco-Nevada’s 135 oil & gas assets and 157 undeveloped oil & gas interests 7
Slide 8: Key Producing Assets
Key Producing Assets: Goldstrike ‐ Barrick Goldstrike NSR & NPI covering most of the Goldstrike complex Gold Quarry 7.29% NSR on portion of pit; protected by minimums P l Palmarejo j Palmarejo – Coeur d’Alene Gold stream for 50% of gold; protected by minimums Sudbury Basin assets Gold stream interes
Slide 9: Secure and Diverse Revenue
Secure and Diverse Revenue* By Country By Asset Other Australia 3% Base Metals & 3% Other 1% O & G, 8% Sudbury Palmarejo (PGM) 23% US South Africa 27% 9% 17%% Stillwater (PGM) 5% Goldstrike - NPI 8% Canada Gold Other Goldstrike - Mexico M i 25% 19% NSR 25% 5% Gold MWS Quarry 10% 5% Ezulwini 7% 77% o
Slide 10: Growing Precious Metals Revenue
Growing Precious Metals Revenue 120 100 80 (US$ Millions) 60 91% precious Reflects metals in OTHER year end Q3 2011 Q 40 minimum PGM payments 20 GOLD 0 Diversified portfolio with growing Precious Metals 10
Slide 11: Key near term Growth Assets
Key near term Growth Assets Tasiast ‐ Mauritania Tasiast (2% royalty) Ramping up production to a rate of 1.5 moz/yr by 2015* Detour (2% royalty) Ramping up production in 2013 to 649 koz/yr* S bik (2% royalty) Subika lt ) Detour Lake ‐ Ontario Royalty expected to start in 2013 Duketon (2% royalty) Mu
Slide 12: Acquisitions in 2011
Acquisitions in 2011 Gold Wheaton (Quadra FNX; First Uranium) Sudbury Basin, MWS and Ezulwini streams Canadian Malartic (Osisko Mining) 1.5% gross royalty on portion Sudbury Basin – Ontario Edikan/Central Ashanti (Perseus Mining) 1.5% gross royalty Phoenix Gold Project (Rubicon Minerals) 1 5% gross
Slide 13: Growing Revenues ($1,600/oz Au)
Growing Revenues ($1,600/oz Au) 500 ** 2012-13E includes: • Full year GLW assets • Tasiast , Detour & Subika 400 • End of Goldstrike waste stripping • New Acquisitions: Cdn Malartic, US$ (Milllions) Edikan • NPIs reaching payout: 76% Musselwhite Macassa, Musselwhite, Macassa Hemlo 300 • Organic grow
Slide 14: Capital for Future Acquisitions
Capital for Future Acquisitions Total cash & short-term investments (US$ Millions) Cash & short-term investments (Sept 30th, 2011) $372 Nov 2011 “bought g deal” financing g ((net)) $375 $ Total cash and short-term investments $747 A buyer’s market due to: Gold price volatility Tight equity and credi
Slide 15: Franco-Nevada is outperforming gold by
Franco-Nevada is outperforming gold by: Growth (>70% revenue growth expected in 2011) Profits and Yield (60% dividend increase in 2011) 320% B i Business model d l th thatt minimizes i i i iinflationary fl ti costt risks i k FNV 280% Participation in world class discoveries (Tasiast, Detour) Strong
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 $113 3 $55.0 $55 0 $58.3 $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
Slide 18: Non-IFRS Financial Reconciliation
Non-IFRS Financial Reconciliation Three months ended Sept 30, Nine months ended 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 02 0.6 06 2.1 21 1.6 16 Finance income (1.3) (0.7) (
Slide 19: Growth of Portfolio
Growth of Portfolio # of Royalties/Streams generating revenue 45 40 H2 H2: Expected 35 • Tasiast • Edikan/Central 30 H1 Ashanti • Canadian Malartic 25 • Ity 20 • Musselwhite • Macassa 15 10 5 0 2008 2009 2010 2011 Increasingly diverse portfolio * Excludes Oil and Gas 19
Slide 20: Growth in the Near Term
Growth in the Near Term Category Asset Operator Royalty Startup1 Avg Prod1 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 oz* • Edikan • Pe
Slide 21: Precious Metals Growth
Precious Metals Growth 180% Inferred Resource 160% M&I Resource s Growth (1,2,3) 140% +27% Further growth in 2011 P&P Reserve expected from: 120% +16% • Tasiast +4% 100% • Detour ecious Metals • Sudbury S db Basin B i 80% • MWS • Ezulwini 60% • Garden Well 40% • Edikan/Central Ashanti Pre • Canadian
Slide 22: Growth in Gold Revenue
Growth in Gold Revenue 700% 600% $86.9 million 500% 400% 300% 200% $12.2 million 100% $1,620/oz 0% $934/oz -100% Q1'08 Q3'08 Q1'09 Q3'09 Q1'10 Q3'10 Q1'11 Q3'11 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 David Harquail Director, President & CEO Derek Evans(1) Director – CEO, Pengrowth Energy Corporation Graham Farquharson(2) Director – President , Strathcona Mineral Services L i Gi Louis Gignac(1) Di t – Former Director F CEO, CEO C
Slide 24: Franco-Nevada Corporation
Franco-Nevada Corporation Capital Structure (as of Jan 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 CIBC Capital Markets Cosmos Chiu 2013 Warrants(1) (C$64.27 exercis