Franco-nevada Corporation · TSX:FNV
Franco-nevada — Investor Presentation (July 2012)
20 slides from Franco-nevada's investor presentation, July 2012
Slide 1: July 2012 Update
STATESN {ERICA 9995 PLATINUM | July 2012 Update
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) A gold focused royalty & stream company. Palmarejo Listed on the TSX & NYSE with a market capitalization it li ti off over $6 billion billi Goldsttrike Growth > 80% revenue growth in 2011 ~$1B $1B cashh andd no debt d b World class discoveries Yield 1.3% 3% yield yed 25
Slide 4: 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 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 320% FNV 280% 240% 200% GOLD 160% 120% 80% S&P/TSX Global FNV IPO: Dec 2007 Gold Index 40% 0% ~30% compounded annual rate of return including dividends FNV and S&P/TSX Global Gold Index converted to USD. Chart to May 4, 2012 FNV 6
Slide 7: FNV's Strong Correlation to Gold
FNV’s Strong Correlation to Gold $2,000 $1,800 $1,600 R² = 0.94 $1,400 Current $ $1,200 Gold Price (USD) $1,000 $800 $600 $400 $200 $0 $0 $10 $20 $30 $40 $50 Franco‐Nevada Share Price (USD) FNV 7
Slide 8: Our Portfolio
Our Portfolio Key Producing Advanced Exploration Assets* Assets* Assets* 43 25 139 G ld - Gold US ● Both B h organici andd ● Exploration E l i - Canada acquisition near optionality at no - Australia term growth cost to FNV - International PGMs Other Minerals Oil & Gas Over 200 mineral royalties and
Slide 9: Key Producing Assets
Key Producing Assets GOLD ASSETS PGMs U.S. Australia Stillwater Goldstrike Duketon Sudbury (3 mines) Gold Quarry Henty Pandora Marigold South Kalgoorlie Mesquite Bronzewing Other Hollister International Weyburn – oil Canada Tasiast Midale – oil Sudbury (3 mines) Palmarejo Edson – gas / ngl’s Golden
Slide 10: Revenue by Commodity
Revenue by Commodity 120 100 80 89% (US$ Millions) precious i 60 metals in Q1 2012 40 Other PGM 20 Gold 0 Diversified Portfolio with Growing Precious Metals FNV 10
Slide 11: Q1 2012 Revenue Sources
Q1 2012 Revenue Sources By Country By Commodity Australia Other 4% 1% Other Africa US 11% 14% 23% PGMs 17% Mexico Gold 26% 72% Canada 32% 81% of Revenue from North America 89% Precious Metals FNV 11
Slide 12: Scalable Business Model
Scalable Business Model 120 100 80 Revenue 60 Millions $) 40 (M 20 G&A ‐ Proceed taxes ‐20 Stream costs ‐40 Q1/08 Q1/09 Q1/10 Q1/11 Q1/12 FNV 12
Slide 13: Growing Reserves and Resources
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 (incl. P&P) T
Slide 14: Key Near-Term Growth Assets
Key Near‐Term Growth Assets Detour Lake - Ontario Detour (2% NSR royalty) Ramping up production in 2013 to 649 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 2013 Duketon (2% NSR royalt
Slide 15: Recent Acquisitions
Recent Acquisitions Gold Wheaton (KGHM) • Sudbury Basin, MWS and Ezulwini streams Canadian C di Malartic M l ti (Osisko (O i k Mining) Mi i ) • 1.5% gross royalty on portion Sudbury – Ontario Edikan (Perseus Mining) • 1 5% gross royalty 1.5% Phoenix Gold Project (Rubicon Minerals) • 1.5% gross royal
Slide 16: 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: • N
Slide 17: Capital for Future Acquisitions
Capital for Future Acquisitions Capital Resources (Mar 31, 2012) (US$ Millions) Working Capital $986 Marketable Securities $54 Total Capital $1,040 More investment opportunities due to: Tight equity and credit markets C Commodity dit price i volatility l tilit Investing in precious and non-precious
Slide 18: Franco-Nevada is outperforming gold by:
Franco‐Nevada is outperforming gold by: Growth (>80% revenue growth in 2011) Profits and Yield (25% dividend increase in 2012) 320% Business model that minimizes inflationary cost risks FNV Participation in world class discoveries (Detour, Tasiast) 280% Strong balance sheet with ~$1B for further gro
Slide 19: Appendix: Growth in the Near-Term
Appendix: 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 • Sept 2012 • 180,000 oz • Canadian Malartic • Osisko Mining • 1.5% NSR* • Apr 2011 • 574,000 oz* • Re
Slide 20: Appendix: Franco-Nevada Corporation
Appendix: Franco‐Nevada Corporation Capital Structure (Q1 2012) Analyst Coverage Shares Outstanding (FNV on TSX & NYSE) 144.0m 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) 2.1m CIBC Capi