Overview Our Business Model As a gold-focused royalty and streaming company, we do not operate mines, develop projects or conduct exploration. We have a unique business that is exposed to both the tremendous resource upside potential, or “optionality” of royalties on gold mines, development projects and exploration properties and the low risk, long life cash flows of precious metals streams on large copper mines. Both royalties and streams provide exposure to commodity prices, increases in production and future discoveries on the property. Neither interest is subject to cash calls to fund exploration, development, capital, environmental or closure costs and so they are lower risk than an operating interest. Royalties Streams Royalties are often 1-2% of the value of future production from a resource Streams have become a mainstream source of capital to mining P r property and are typically created as exploration properties change companies most often to fund the construction of new projects. In ecious M hands. Often royalties are a percentage of the net value a mine operator particular, streaming precious metals by-product from large copper receives for its product when it is processed at a smelter, hence the term projects provides a very attractive cost of capital to project developers. “net smelter return” or “NSR” royalty. Other forms of royalties include Streams are metal purchase agreements where the streamer purchases all etals profit-related royalties or “NPI” royalties but these are not a major part of or a portion of the gold, silver or other products from a mine in exchange Franco-Nevada’s portfolio. Royalty rights are often registered on the title for an upfront payment and an additional payment on each delivery. of the property or mineral rights. Registered royalties have strong tenure While streams have similar exploration and price optionality to royalties, and, in jurisdictions where recognized, will generally survive an operating they differ from royalties in many respects including the ongoing cash company reorganization. payment required to purchase the physical metal. Business Model Advantages D iv ersified A Optionality 2 ssets Potential for exploration success on ~66,000 km Focus on Growth Management not occupied with operational decisions M Free Cash Flow Business iner Not exposed to capital calls al R esour c Limited Cost Inflation es and M Streams/NSRs not exposed to cost inflation iner al R High Margin and Low Overhead eser Strong cash generation throughout the commodity cycle v es Diversified Portfolio Non-operating business is more scalable A dditional I nf orma tion TSX / NYSE: FNV Franco-Nevada Corporation 3