Franco-nevada Corporation · TSX:FNV
Franco-nevada — Merger or Acquisition (December 2010)
14 slides from Franco-nevada's merger presentation, Dec 13, 2010
Slide 1: Franco-Nevada & Gold Wheaton Announce Plan of Arrangement
FRANCO-NEVADA & GOLD WHEATON ANNOUNCE PLAN OF ARRANGEMENT December 13, 2010 David Harquail – CEO David Cohen – Chairman & CEO 1
Slide 2: Cautionary Statement
Cautionary Statement Forward-Looking Statements Certain information contained in this presentation, including any information as to future financial or operating performance and other statements that express management's expectations or estimates of future performance, constitute "forward-looking st
Slide 3: Franco-Nevada + Gold Wheaton: Compelling Combination
Franco-Nevada + Gold Wheaton: Compelling Combination Accelerates cash flow generation Accretive on all per share metrics to Franco-Nevada shareholders Premium offer provides immediate value-creation and risk diversification for Gold Wheaton shareholders Logical combination that solidifies Franco-Nev
Slide 4: Transaction Summary
Transaction Summary Consideration: C$5.20 per Gold Wheaton common share 23% premium based on the 20-day volume-weighted average price Transaction value of C$830 million Structure: Plan of Arrangement supported by both Boards of Directors and management Consideration payable 60% in stock and 40% in c
Slide 5: Gold Wheaton: Value, Diversification and Growth
Gold Wheaton: Value, Diversification and Growth Value creation: Premium of 23% to the 20-day VWAP Continued participation in upside of the combined company and retained exposure to precious metals royalties through share ownership in Franco-Nevada Ownership in the largest gold-focused royalty compan
Slide 6: Franco-Nevada: Increased Leverage to Precious Metals
Franco-Nevada: Increased Leverage to Precious Metals Enhanced position as the leading gold-focused royalty company Accelerated cash flow growth – continued industry leading free cash flow margin Increases near-term annual Net Royalty Revenue (1) by approximately $100 million* Pro forma contribution
Slide 7: Contribution Analysis
Contribution Analysis Achieve an approximate 50% increase in 2011 operating cash flow for only a 25% increase in Enterprise Value * Based on broker estimates 7
Slide 8: Potential Precious Metal Royalty Growth
Potential Precious Metal Royalty Growth $30‐$40m O&G & other revenues Up to ~$250m Incremental precious metal revenue* Gold Wheaton adds ~$100 million in precious metal Net Royalty Revenue in 2011E * Note: 2010E represents management estimate of additional gold revenue in 2010 at current gold prices
Slide 9: Increased Diversification
Increased Diversification Pro‐forma NPV Breakdown Pro‐forma NPV Breakdown Contributes two of the top five assets Increases precious metal contribution from 81% to 86% No asset greater than 15% by value Increases precious metal value Source: Broker consensus estimates 9
Slide 10: Gold Wheaton Assets - Sudbury
Gold Wheaton Assets - Sudbury Attributable Production (k Au Eq. oz) Operator: Quadra FNX Location: Sudbury, Canada Royalty: 50% of Au, Pt, Pd contained in mined ore above $400/oz Au Eq Purchased by GLW: C$400 million in June, 2008 Net Revenue (9 Months to Sep 2010): $31 million Description: Source:
Slide 11: Gold Wheaton Assets – Mine Waste Solutions (MWS)
Gold Wheaton Assets – Mine Waste Solutions (MWS) Attributable Production (k Au oz) Operator: First Uranium Location: South Africa Royalty: 25% of Au produced above $400/oz Purchased by GLW: US$125 million in November, 2008 Net Revenue (9 Months to Sep 2010): $12 million Mine Life: 15 years Source: F
Slide 12: Gold Wheaton Assets - Ezulwini
Gold Wheaton Assets - Ezulwini Attributable Production (k Au oz) Operator: First Uranium Location: South Africa Royalty: 7% of Au produced above $400/oz Au Eq Purchased by GLW: US$50 million in November, 2009 Net Revenue (9 Months to Sep 2010): $10 million Mine life: 20 years Source: First Uranium D
Slide 13: Strong Platform for Further Growth
Strong Platform for Further Growth Pre-Transaction Post-Transaction (September 30, 2010) (est. at closing) Cash US$610 million US$170 million (1) Debt None None (2) Revolver Available US$175 million US$175 million Total Available US$785 million US$345 million Capital Franco‐Nevada maintains ~$345 mi
Slide 14: Appendix - Franco-Nevada Corporation
Appendix - Franco-Nevada Corporation Capital Structure(2) Analyst Coverage Shares Outstanding 114.48m BMO Capital Markets David Haughton BOA/Merrill Lynch Mike Jalonen Warrants @ C$32/sh March 2012 5.75m CIBC Capital Markets Cosmos Chiu Warrants @ C$75/sh June 2017 5.75m Credit Suisse Anita Soni Opt
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