Download - Kevin McElligott, Managing Director Australia, FRANCO NEVADA: Update on the State of Royalty Finance
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Forward-Looking StatementsThis presentation contains certain “forward looking information” and “for ward l ooking statements” withi n the meani ng of applicabl e Canadian securities l aws and the United States PrivateSecurities Litigation Reform Act 1995, r especti vel y, which may incl ude, but are not limited to, s tatements with respec t to future events or future performance, management’s expectationsregarding Franco-Nevada’s growth, r esults of operati ons, esti mated futur e revenues, requirements for additional capital, miner al reser ve and mineral resource esti mates, produc tion esti mates,production cos ts and revenue, future demand for and prices of commodities , expected mini ng sequences , business prospects and opportunities . In addition, statements (includi ng data intabl es) relating to reserves and resources together with rel ated royalty equivalent unit calculations are forwar d looking statements, as they invol ve i mplied assessment, based on certainestimates and assumptions, and no assurance can be given that the estimates will be realized. Such for ward looki ng statements reflect management’s current beliefs and are based oninformation currentl y available to management. Often, but not al ways , for ward l ooking statements can be i dentified by the use of words such as “plans”, “expects”, “is expected”, “budget”,“scheduled”, “estimates”, “for ecasts”, “predicts”, “projects”, “intends”, “targets”, “ aims”, “anticipates” or “believes” or variati ons (includi ng negati ve variations) of such words and phr ases or maybe identified by statements to the effect that certain ac tions “may”, “could”, “should”, “would”, “might” or “ will” be taken, occur or be achieved. Forward looking statements invol ve known andunknown risks , uncertai nties and other factors, which may cause the actual results, perfor mance or achievements of Franco-Nevada to be materiall y different from any futur e results,perfor mance or achievements expressed or implied by the for ward looking statements. A number of factors could cause actual events or results to differ materially from any forward lookingstatement, incl uding, without limitation, fluctuations in the prices of the primar ycommodities that dri ve royalty and s tream revenue (gold, plati num group metals, copper, nickel, uranium, sil ver,iron-ore and oil & gas), fluctuati ons i n the value of the Canadian and Australian dollar, Mexican peso, and anyother currency in which revenue is generated, relative to the US dollar, changesin national and l ocal government l egislation, including permitti ng and licensing regimes and taxation policies, regul ations and political or economic developments i n any of the countries whereproperties in which Franco-Nevada holds a royalty, stream or other interest are located or thr ough which they are held, risks related to the operators of the properties i n which Franco-Nevadaholds a royalty, s tream or other interest, including changes in the ownershi p and control of such operators, infl uence of macroeconomic developments , business opportunities that becomeavailable to, or are pursued by Franco-Nevada, reduced access to debt and equity capital, litigation, title, permit or license disputes related to interests on any of the properties i n whichFranco-Nevada holds a royalty, stream or other interest, whether or not the Company is determined to have PFIC s tatus, excessi ve cost escal ation as well as devel opment, permitti ng,infrastructure, operati ng or technical difficulti es on any of the properties in which Franco-Nevada holds a royalty, stream or other interes t, rate and timing of producti on differences fromresource estimates, risks and hazar ds associated with the business of development and mining on any of the properties in which Franco-Nevada holds a royalty, stream or other interest,including, but not limited to unusual or unexpected geological and metallurgical conditi ons, slope failures or cave-ins, flooding and other natural disasters or civil unr est, and the i ntegration ofacquired assets. T he for ward looki ng statements contained in this presentation are based upon assumptions management believes to be reasonabl e, incl uding, without limitati on, the ongoingoperation of the properties in which Franco-Nevada holds a royalty, str eam or other interest by the owners or operators of such properties i n a manner consistent with past practice, theaccuracy of public statements and disclosures made by the owners or operators of such underlying properties, no material adverse change i n the market price of the commoditi es that underliethe asset portfolio, the Company’s ongoing income and assets rel ating to deter mination of its PF IC status, no adverse devel opment in respec t of any significant property in which Franco-Nevada holds a royalty, stream or other interes t, accuracy of publicl y disclosed expec tati ons for the development of underlying properties that are not yet in pr oduction, integration of acquiredassets and the absence of any other factors that could cause ac tions , events or results to dif fer from those anticipated, esti mated or intended. H owever, there can be no assur ance thatforward looking statements will prove to be accurate, as actual results and future events coul d dif fer materially from those anticipated in such statements and readers are cautioned thatforward looking statements are not guarantees of future performance. Franco-Nevada cannot assure investors that ac tual results will be consistent with these forward looking statements.Accordingl y, readers should not place undue r eliance on forwar d looking s tatements due to the inherent uncertai nty therein. For additional information with respect to risks, uncertai nties andassumpti ons, please refer to the “Risk F actors” section of our AIF, as well as Franco-Nevada’s most recent Management’s Discussi on and Anal ysis filed with the Canadian securitiesregulator y authorities on www.sedar.com and contai ned i n Franco-Nevada’s For m 40-F filed with the SEC on www.sec.gov. The forward looki ng statements herein ar e made as of the datesset out in this presentati on onl y and Franco-Nevada does not assume any obligation to update or revise them to reflect new information, estimates or opinions, futur e events or results orotherwise, except as required by applicable law.
Non-IFRS MeasuresAdjusted N et Income, Adj usted EBITDA and Margin are i ntended to pr ovide additional information only and do not have any s tandardized meaning under Inter nati onal Financi al ReportingStandards (“IFRS”) and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS. T hese measures are not necessarilyindicati ve of oper ating profit or cash flow from operations as deter mined under IFRS. Other companies may calculate these measur es differentl y. F or a reconciliation of these measures tovarious IFRS measures , please see the end of this presentation or the Company’s MD&A disclosure found on the C ompany’s website and filed with Canadi an securities regulator y authoritieson SEDAR at www.sedar.com and with the Securities and Exchange Commission on EDGAR at www.sec.gov.
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A gold focused royalty & stream company
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GOLD ASSETS
Other
See our Annual Information Form filed on www.sedar.com on March 19, 2013 and 2013 Asset Handbook for further detail1 As at June 30, 2013
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Oil & Gas
Assets
1. As at October 22, 2013
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US21%
Canada33%Mexico
22%
Australia5%
Rest of World19%
Gold
67%
PGMs
10%
Other
23%
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One in three investors have chosen new gold investment options
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0%
40%
80%
120%
160%
200%
240%
280%
320%
360%
400%
2007 2008 2009 2010 2011 2012
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GOLD
FNV IPO: Dec 2007
S&P/TSX Global Gold Index
FNV and S&P/TSX Global Gold Index converted to USD. C hart to October 17, 2013
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Gold ETF FNV Operators
0% 0%* 100%
0% 0%* 100%
1 >1 >1
0% 100% 100%
-0.4% >1.5% 0-4%
*Revenue royalties & streams
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Revenue Royalties
Streams
Profit Royalties
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Capital Resources (June 30, 2013) ($)
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18FNV* Including Gold Wheaton transactions acquired by Franco-Nevada
0
500
1,000
1,500
2,000U
S$
Mil
lio
ns
Franco-Nevada*
Other
19
FN
V
0
50
0
1,0
00
1,5
00
2,0
00
2,5
00
Sudbury: FNV
MWS: FNV
Campo Morado: SLW
Mineral Park: SLW
Keno Hill: SLW
Pascua-Lama: SLW
Palmarejo: FNV
Ezulwini: FNV
Aurizona: SSL
Mt. Milligan: RGLD
New Prosperity: FNV
Black Fox: SSL
Rosemont: SLW
Mt. Milligan: RGLD
Tulsequah Chief: RGLD
Cobre Panama: FNV
Mt. Milligan: RGLD
777 + Constancia: SLW
Colossus: SSL
Mutiny Gold: SSL
Salobo + Sudbury: SLW
US$ Millions
Go
ld
Silv
er
Mixe
d (G
old
, SIlv
er, P
GM
)
20
08
20
09
20
10
20
11
20
12
20
13
* G
old Wheaton transactions acquired by F
ranco-Nevada
* *
*
20FNV*Revenue royalties such as NSR’s. Profit royalties are a small part of FNV’s portfolio
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Royalty Gold Stream
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Existing Royalties
Mine FinancingExploration Financing
Purchase of Existing Royalties
Exploration or Land Financing
Mine Financing
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Financing Instrument
Cash Burden Dilution of Shareholder’s
interest
Retu
rn
Ris
k
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Versus Equity Versus Debt
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28FNV1 Adjustment after certain production thresholds are met – see our press release dated Aug 20, 2012 for additional detail
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Why Own a Gold ETF?
1 At October 22, 2013; FNV and S&P/TSX Global Gold Index converted to USD
0%
40%
80%
120%
160%
200%
240%
280%
320%
360%
400%
2007 2008 2009 2010 2011 2012
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GOLD
FNV IPO: Dec 2007
S&P/TSX Global Gold Index
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