Franco-nevada Corporation · TSX:FNV
Franco-nevada — Mines & Money Sydney 2012
21 slides from Franco-nevada's conference presentation, Oct 17, 2012
Slide 1: Mines & Money Sydney, Australia
Mines & Money SSydney, d Australia A t li October 17 2012
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: Franco-Nevada (FNV)
Franco‐Nevada (FNV) Goldstrike A gold focused royalty & stream company Listed on the TSX & NYSE with company. a market capitalization of > $8 billion.* our Deto Growth > 80% revenue growth in 2011 World class discoveries Tasiast Yield >1.0% yield Growing dividends Low Risk i k Royalty R lt
Slide 4: 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 0% 0%* 0% 100% Operating Costs 0% 0%* 100% Environmental Costs 0% 0%* 100% FNV provides yield and more upside tha
Slide 5: FNV's Close Correlation to Gold
FNV’s Close Correlation to Gold $2,000 $1,500 R² = 0.92 old Price (USD) $1,000 Go $500 Chart to Oct 5, 2012 $0 $0 $10 $20 $30 $40 $50 $60 Franco‐Nevada Share Price (USD) Business model protects against rising operating and capital costs FNV 5
Slide 6: Outperforming other Gold Investments
Outperforming other Gold Investments 400% 360% FNV 320% 280% 240% GOLD 200% 160% 120% S&P/TSX Global 80% FNV IPO: Gold Index Dec 2007 40% FNV and S&P/TSX Global Gold Index converted to USD. Chart to Oct 5, 2012 0% 2007 2008 2008 2008 2009 2009 2009 2010 2010 2010 2011 2011 2011 2012 2012 >30% compou
Slide 7: FNV Assets
FNV Assets Revenue Royalties Net Smelter Royalties (NSR) Gross Overriding Royalties (GOR) Streams Contract to purchase physical metal with ongoing fixed cost (~$400/oz) Profit Royalties Net Profit Royalties (NPI) All agreements share common components: • No cash calls beyond fixed stream payments •
Slide 8: Over 340 Assets
Over 340 Assets* Producing Advanced Exploration Oil & Gas Assets Assets Assets Assets1 44 26 139 135 Gold -US ● Both organic and ● Exploration p ● Does not -Canada acquisition near- optionality at no include 158 -Australia term growth cost to FNV undeveloped oil -International & gas interests PGMs O
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: 2% NSR on Duketon – Regis Resources
2% NSR on Duketon – Regis Resources Moolart Well Pit Garden Well Processing Plant ~270,000 hectares An Australian success story FNV 10
Slide 11: Our Key Transaction Principles
Our Key Transaction Principles Long-term secure tenure Minimize Mi i i potential t ti l ffor encroachments h t Our first dollar is our last Operators manage, not FNV Exploration p o at o ups upside de Free our focus for future investments Maximizes long term optionality and scale FNV 11
Slide 12: Big Wins
Big Wins Goldstrike • Initial purchase price < $3 million • Expected E t d royalties lti > $1 billi billion** Goldstrike Detour e ou • Initial purchase price ~ $2 million loan • Expected royalties > $1 billion* Detour Tasiast • Book value at IPO ~ $2.7 million • Expected royalties > $600 million* Ta
Slide 13: Transaction Categories
Transaction Categories Purchase of Existing Exploration or Mine Financing Royalties Land Financing Existing Typically g 1-3% 1 3% NSR Exploration Equity pplacement Mineproduction % of gold Financingg Royalties withFinancing royalty option (“stream”) Recent Examples Recent Examples Recent Examples Cd
Slide 14: Royalty vs. Gold Stream
Royalty vs. Gold Stream Royalty Gold Stream Smaller % of production Larger % of gold (as by-product) Potential tax gain on sale Potential tax efficiency Registered on title Mortgage on property No inter-creditor issues Greater lending value for bankers Palmarejjo Tasiast FNV 14
Slide 15: Royalty/Stream Alternative
Royalty/Stream Alternative Financing Cash Burden Dilution of Instrument Shareholder’s interest None (other than Dilution in all current LOW Equity dividends) and future assets plus discounts, discounts fees fees, warrants eturn Risk Burden proportional Asset specific Royalty / R to production and Re
Slide 16: Over $4B of Stream Transactions
Over $4B of Stream Transactions 1,200 1,000 Franco‐Nevada* 800 Other US$ Millions 600 400 200 0 * Including Gold Wheaton transactions acquired by Franco-Nevada FNV 16
Slide 17: Why Operators use Royalty/Stream Financing
Why Operators use Royalty/Stream Financing Versus Equity Versus Debt Alternative when equity markets One stop financing vs. large bank weak syndication Less dilutive as asset specific Avoid commitment, advisor, standby, syndication y fees and cash sweep accounts No commissions, discounts, or No rest
Slide 18: Available Capital
Available Capital Franco--Nevada has >$1 B capital to invest Franco Kevin McElligott Managing Director – Australia Phone: +61 8 6263 4425 Mobile: +61 417 964 926 mcelligott@franco--nevada.com mcelligott@franco FNV 18
Slide 19: The New Gold Equity Space
The New Gold Equity Space Royalty Co's $30 Billion GOLD ETF's $150 Billion GOLD Equities $400 Billion One in three investors have chosen new gold investment options FNV 19
Slide 20: Dow vs. Gold
Dow vs. Gold 64 Equity market Gold bull Equity market Gold bull Equity market Gold bull Equity market market market market 32 DOW//Gold (Logaritthmic Scale) Homestake Yamana Gold Fields Placer Devvelopment 16 Agnico‐Eagle Kinross Yanaco Campb Placer‐Dome Anglo American Haarmony Ke bell Red Lake ocha
Slide 21: Thank You for Your Interest
Thank You for Your Interest FNV 21