Franco-nevada Corporation · TSX:FNV

Franco-nevada — Investor Presentation (December 2011)

24 slides from Franco-nevada's investor presentation, December 2011

  1. Slide 1: December 2011 Presentation

    DECEMBER 2011 PRESENTATION 1

  2. 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

  3. Slide 3: Dow vs Gold: Gold has upside potential

    Dow vs Gold: 45 32 40 Logarithmic g Scale 35 16 30 25 DOW/Gold 8 20 4 15 10 2 5 Arithmetic Scale 1 0 Gold has upside potential 3

  4. 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 ƒ > 70% expected revenue growth* Growth Goldstrrike ƒ >$700M $700M available cash and no debt ƒ World class discoveries ƒ 1.2% yield Yield ƒ 60% di divide

  5. 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

  6. 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

  7. 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

  8. Slide 8: Quality Operators

    Quality Operators: Core Operators: Up and Comers: Goldstrike Palmarejo j Bald B ld Mountain M t i Hemlo Mesquite Cerro San Pedro Gold Quarry S bik Subika Holloway Hollo a Hislop Holt Marigold Musselwhite Stillwater D t Detour L Lake k East Boulder Duketon Tasiast Garden Well Goldstrike ‐ Barrick Mar

  9. 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

  10. 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

  11. Slide 11: Growth from World Class Discoveries

    Growth from World Class Discoveries Tasiast (2% royalty) >20m oz resource* resource 1.5 moz/yr by 2015** First revenue received in Q3 2011 Tasiast ‐ Mauritania Detour (2% royalty) >25m oz resource* 649k oz/yr starting 2013** Likely further expansion Potential royalties of >$1.5 billion*** Detour Lak

  12. Slide 12: Growth from Acquisitions in 2011

    Growth from Acquisitions in 2011 Gold Wheaton (Quadra FNX; First Uranium) ¾ Sudbury Basin, MWS and Ezulwini streams Canadian Malartic (Osisko Mining) ¾ 1.5% gross royalty on portion Sudbury Basin – Ontario Edikan/Central Ashanti (Perseus Mining) ¾ 1.5% gross royalty Phoenix Gold Project (Rubicon Min

  13. Slide 13: 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

  14. Slide 14: Growing Revenues ($1,600/oz Au)

    Growing Revenues ($1,600/oz Au) 500 ** 2012-13E includes: • Full year GLW assets • Tasiast , Detour & Subika 400 • End of Goldstrike waste stripping • New Acquisitions: Cdn Malartic, Edikan • NPIs reaching payout: 300 70% Musselwhite Macassa, Musselwhite, Macassa Hemlo US$ (Millions) • Organic growt

  15. Slide 15: Capital for Future Acquisitions

    Capital for Future Acquisitions Total cash & short-term investments (US$ Millions) Cash C h & short-term h tt investments i t t (Sept (S t 30th, 2011) $372 Nov 2011 “bought deal” financing (net) $375 T t l cash Total h and d short-term h tt iinvestments t t $747 A favourable environment for acquisit

  16. Slide 16: 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

  17. Slide 17: 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 17

  18. Slide 18: 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

  19. Slide 19: 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) (

  20. Slide 20: Growth of Portfolio

    Growth of Portfolio # of Royalties/Streams generating revenue 45 40 H2 H2: Expected 35 • Tasiast • Edikan/Central 30 H1 Ashanti 25 • Canadian Malartic • Ity 20 • Musselwhite • Macassa 15 10 5 0 2008 2009 2010 2011 Increasingly diverse portfolio * Excludes Oil and Gas 20

  21. 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

  22. 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

  23. 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

  24. Slide 24: Franco-Nevada Corporation: Capital Structure

    Franco-Nevada Corporation Capital Structure (as of Dec 5, 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

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