Franco-Nevada Adds to its U.S. Energy Interests, Initiates ATM Equity Program & Provides Details for Release of Q2 Results Marcellus Royalty Acquisition Franco-Nevada has entered into an agreement to acquire from Range Resources Corporation an overriding royalty interest
NEWS RELEASE
Toronto, July 19, 2019
(in U.S. dollars unless otherwise noted)
Franco-Nevada Adds to its U.S. Energy Interests, Initiates ATM
Equity Program & Provides Details for Release of Q2 Results
Marcellus Royalty Acquisition
Franco-Nevada has entered into an agreement to acquire from Range Resources Corporation an overriding royalty interest
on acreage in the Marcellus Shale for a gross purchase price of $300 million. The acquisition has an effective date of
March 1, 2019 and is expected to close shortly. The royalty is calculated as 1% of gross production less allowed deductions
from approximately 350,000 net acres of Range’s working in terest position in Washin gton, Western Allegheny and
Southern Beaver Counties in Pennsylvania. The royalty applie s to existing production and future development from the
Marcellus formation as well as future potential development from the Utica and Upper Devonian formations. The royalty
is registered on title and is a direct interest in real property.
The Marcellus is one of the most prolific and active gas and liquids plays in North America. Range’s acreage is in a liquids
rich portion of the Marcellus gi ving it one of the most cost competitive en ergy positions in North America. Range has a
track record of growing reserves and production from its a sset base. Since the effective date, the royalty has generated
approximately $9 million in revenue, with roughly half of the revenue generated from natural gas liquids and condensate.
At current commodity prices, revenue for 2020 is expected to be approximately $25 million growing to approximately $30
million per annum in five years. The royalty provides exposure to a significant inventory of undeveloped drilling locations
capable of supporting cash flow for several decades.
Franco-Nevada’s revenue is still projected to exceed 80% from gold equivalent ounces through 2023. This is supported
by the start of production at Cobre Panama from which Fran co-Nevada began receiving its first gold and silver stream
ounces in early July.
The purchase will be financed with a combination of cash on hand and funds drawn from the Corporation’s revolving credit
facility. Net debt following this investment will be approx imately $335 million. The Corporation is expected to have
approximately $1 billion in available capital after closing. Th is acquisition is immediately accretive, adds to Franco-
Nevada’s long-term cash flow profile and brings further diversification to its royalty and stream portfolio.
At the Market Equity Program
Franco-Nevada has established an at-the-market equity program (the “ATM Program”) that allows the Corporation to issue
up to $200 million worth of common shares from treasury (“ Common Shares”) to the public from time to time at the
prevailing market price through the Toronto Stock Exchange, the New York Stock Exchange or any other marketplace on
which the Common Shares are listed, quoted or otherwise trad e. The volume and timing of distributions under the ATM
Program, if any, will be determined at the Corporation’s sole discretion, subject to applicable regulatory limitations.
The ATM Program will be effective until July 18, 2020 unless te rminated prior to such date by the Corporation. Franco-
Nevada intends to use the net proceeds from the ATM Program, if any, for funding royalty and stream acquisitions and/or
other general corporate purposes including the repayment of indebtedness. Sales of Comm on Shares through the ATM
Program will be made pursuant to the terms of an equity distribution agreement dated July 19, 2019 with BMO Nesbitt
Burns Inc. and CIBC World Markets Inc., as Canadian agen ts, and BMO Capital Markets Corp. and CIBC World Markets
Corp., as U.S. agents.
The Corporation has filed a registration statement (including a prospectus) and a prospectus supplement with the U.S.
Securities and Exchange Commission (the “SEC”) for the ATM Program. Before you invest, you should read the prospectus
in that registration statement, the prospectus supplement and other documents the issuer has filed with the SEC for more
complete information about the issuer and the ATM Program. The Corporation has also filed prospectus supplement dated
July 19, 2019 to the Corporation’s Canadian base shelf pros pectus dated June 15, 2018 with the securities regulatory
authorities in Canada. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov or on
SEDAR at www.sedar.com. Alternatively, any agent participating in the ATM Program will arrange to send you the
prospectus if you request it by contacting, (i) in Canada: BMO Nesbitt Burns Inc., attn: Brampton Distribution Centre C/O
The DATA Group of Companies, 9195 Torbram Road , Brampton, Ontario, L6S 6H2, by email at
[email protected] or by phone at 905-791-31 51 Ext. 4312 or CIBC World Markets Inc., attn: Michelene
Dougherty or by email at michelene.doug [email protected]; and (ii) in the U.S., BM O Capital Markets Corp., attn: Equity
Syndicate Department, 3 Times Square, 25th Floor, New York , NY, 10036, by email at [email protected] or by
phone at 1-800-414-3627 or CIBC World Markets Corp., 4 25 Lexington Ave, 5th Floor, New York, NY, by email at
[email protected] or by phone at (800) 282-0822.
This news release does not constitute an offer to sell or the solicitation of an offer to buy the Common Shares, nor shall
there be any sale of these securities in any jurisdiction in which such an offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of any such jurisdiction.
Details for Upcoming Release of Q2/2019 Results
Franco-Nevada will release its Q2/2019 results on August 7, 2019 and management will host a conference call the
following day, August 8, 2019 at 10:00 a.m. Eastern Time to review the results. Interest ed investors are invited to
participate as follows:
Via Conference Call: Toll-Free: (888) 390-0546; International: (416) 764-8688
Conference Call Replay until Aug 15: Toll-Free (888) 390-0541; International (416) 764-8677; Code 868627#
Webcast: A live audio webcast will be accessible at www.franco-nevada.com
Corporate Summary
Franco-Nevada Corporation is the leading gold-focused royalty and stream company with the largest and most diversified
portfolio of cash-flow producing assets. Its business model prov ides investors with gold pric e and exploration optionality
while limiting exposure to many of the risks of operating companies. Franco-Nevada has a strong balance sheet and uses
its free cash flow to expand its portfolio and pay dividends. It trades under the symbol FNV on both the Toronto and New
York stock exchanges. Franco-Nevada is the gold investment that works.
For more information, please contact:
Jason O’Connell Sandip Rana
Vice President, Energy Chief Financial Officer
(416) 306-6310 (416) 306-6303
Forward Looking Statements
This press release contains “forward looking information” and “forward looking statements” within the meaning of applicable Can adian
securities laws and the United States Private Securities Litigation Reform Act of 1995, respectively, which may include, but are not limited to,
statements with respect to future events or future performance, management’s expectations regarding Franco-Nevada’s growth, res ults of
operations, estimated future revenues, carrying value of assets, future dividends and requirements for additional capital, mineral reserve and
mineral resource estimates, production estimates, production costs and revenue, future demand for and prices of commodities, ex pected
mining sequences, business prospects and opportunities, audits being conducted by the Canada Revenue Agency and available remedies, the
remedies relating to and consequences of the ruling of the Supreme Court of Panama in relation to the Cobre Panama project, the aggregate
value of Common Shares which may be issued pursuant to the ATM Program, the Corporation’s expected use of the net proceeds of the ATM
Program, if any, and the acquisition of the Range Resources roya lty interest and its expected impact on future performance and results of
operations. In addition, statements (including data in tables) relating to reserves and resources and gold equivalent ounces (“ GEOs”) are
forward looking statements, as they involve implied assessment, based on certain estimates and assumptions, and no assurance can be given
that the estimates and assumptions are accura te and that such reserves and resources and GEOs will be realized. Such forward lo oking
statements reflect management’s current beliefs and are based on information currently available to management. Often, but not always,
forward looking statements can be identified by the use of words such as “plans”, “expects”, “is expected”, “budgets”, “scheduled”, “estimates”,
“forecasts”, “predicts”, “projects”, “intends”, “targets”, “aims”, “anticipates” or “believes” or variations (including negative variations) of such
words and phrases or may be identified by statements to the effe ct that certain actions “may”, “could”, “should”, “would”, “might” or “will” be
taken, occur or be achieved. Forward looking statements involve known and unknown risks, uncertainties and other factors, which may cause
the actual results, performance or achievem e n t s o f F r a n c o - N e v a d a t o b e m a t e r i a l l y d i f f e r e n t f r o m a n y f u t u r e r e s u l t s , p e r f o r m a n ce or
achievements expressed or implied by the forward looking statemen ts. A number of factors could cause actual events or results t o differ
materially from any forward looking statement, including, without limitation: fluctuations in the prices of the primary commodi ties that drive
royalty and stream revenue (gold, platinum group metals, copper, nickel, uranium, silver, iron-ore and oil and gas); fluctuations in the value of
the Canadian and Australian dollar, Mexican peso, and any other currency in which re venue is generated, relative to the U.S. do llar; changes
in national and local government legislation, including permitting and licensing regimes and taxation policies and the enforcem ent thereof;
regulatory, political or economic developments in any of the countries where properties in which Franco-Nevada holds a royalty, stream or other
interest are located or through which they are held; risks related to the operators of the properties in which Franco-Nevada ho lds a royalty,
stream or other interest, including changes in the ownership and control of such operators; influence of macroeconomic developm ents;
business opportunities that become available 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 in which Franco-Nevada holds a royalty, stream or other interest; whether
or not the Corporation is determined to ha ve “passive foreign investment company” (“PFIC”) status as defined in Section 1297 of the United
States Internal Revenue Code of 1986, as ame nded; potential changes in Ca nadian tax treatment of offs hore streams; excessive co st
escalation as well as development, permitting, infrastructure, operating or technical difficulties on any of the properties in which Franco-Nevada
holds a royalty, stream or other interest; access to sufficient pipeline capacity; actual mineral content may differ from the r eserves and
resources contained in technical reports; rate and timing of production differences from resource estimates, other technical reports and mine
plans; risks and hazards associated with the business of developm ent 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 conditions, slope failures or
cave-ins, flooding and other natural disaster s, terrorism, civil unrest or an outbreak of contagious diseases; and the integrat ion of acquired
assets. The forward looking statements contained in this press release are based upon assumptions management believes to be reasonable,
including, without limitation: the ongoing operation of the properties in which Franco-Nevada holds a royalty, stream or other interest by the
owners or operators of such properties in a manner consistent with past practice; the accuracy of public statements and disclosures made by
the owners or operators of such underlying properties; no material adverse change in the market price of the commodities that u nderlie the
asset portfolio; the Corporation’s ongoing income and assets relating to determination of its PFIC status; no material changes to existing tax
treatment; no adverse development in respect of any significant property in which Franco-Nevada holds a royalty, stream or other interest; the
accuracy of publicly disclosed expectations for the development of underlying properties that are not yet in production; integration of acquired
assets; risks related to the completion of the acquisition of the Range Resources royalty interest; the expected application of tax laws and
regulations by taxation authorities; the expected assessment and outcome of any audit by any taxation authority; and the absence of any other
factors that could cause actions, events or results to differ from those anticipated, estimated or intended. However, there can be no assurance
that forward looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in
such statements. Investors are cautioned that forward looking stat ements are not guarantees of future performance. Franco-Nevad a cannot
assure investors that actual results will be consistent with these forward looking statements and investors should not place undue reliance on
forward looking statements due to the inherent uncertainty therein. For additional information with respect to risks, uncertain ties and
assumptions, please refer to the “Risk Factors” section of Franco-Nevada’s most recent Annual Information Form filed with the C anadian
securities regulatory authorities on www.sedar.com and Franco-Nevada’s most recent Annual Report filed on Form 40-F filed with the SEC on
www.sec.gov. The forward looking statements herein are made as of the date of this press release only and Franco-Nevada does no t assume
any obligation to update or revise them to reflect new information, estimates or opinions, future events or results or otherwis e, except as
required by applicable law.