Franco-Nevada Reports Strong Q3 Results 2021 Energy Guidance Increased “Franco-Nevada delivered a strong third quarter, setting the stage for a record year in 2021. Our diversified portfolio continues to serve us well with strong contributions during the quarter from precious metals, energy and iron
NEWS RELEASE
Toronto, November 3, 2021
(in U.S. dollars unless otherwise noted)
Franco-Nevada Reports Strong Q3 Results
2021 Energy Guidance Increased
“Franco-Nevada delivered a strong third quarter, setting the stage for a record year in 2021. Our diversified portfolio
continues to serve us well with strong contributions during the quarter from precious metals, energy and iron ore,” stated Paul
Brink, President & CEO. “Higher energy prices have led us to increase our 2021 Energy guidance for the second time this
year. Margins have moved higher this year due to the inflation-protected nature of our business model. Franco-Nevada is
debt-free and is growing its cash balances.”
YTD/2021 Q3/2021
Record YTD results vs Strong Q3 results vs
YTD/2020 Q3/2020
GEOs1 sold 462,926 +24% 146,495 +9%
Revenue $972.3 million +36% $316.3 million +13%
Net income $512.8 million ($2.68/share) +243% $166 million ($0.87/share) +8%
Adjusted Net Income2 $509.1 million ($2.67/share) +44% $165.6 million ($0.87/share) +9%
Adjusted EBITDA3 $822.5 million +40% $269.8 million +15%
Margin4 84.6% +3% 85.3% +2%
Strong Financial Position
No debt and $1.6 billion in available capital as at September 30, 2021
Generated $206.9 million in operating cash flow for the quarter
Quarterly dividend of $0.30/share
Sector-Leading ESG
Ranked #1 gold company by Sustainalytics, AA by MSCI and Prime by ISS ESG
Committed to the World Gold Council’s “Responsible Gold Mining Principles”
Partnering with our operators on community and ESG initiatives
Goal of 40% diverse representation at the Board and top leadership levels
Diverse, Long-Life Portfolio
Most diverse royalty and streaming portfolio by asset, operator and country
Core assets outperforming since time of acquisition
Growth in long-life reserves
Growth and Optionality
Acquisitions, mine expansions and new mines driving growth
10.1 million ounce increase in Measured and Indicated Mineral Resources at Detour Lake
Long-term options in gold, copper and nickel
Noront consolidation likely to accelerate development of Ring of Fire properties
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Quarterly revenue and GEOs sold by commodity
Q3/2021 Q3/2020
GEOs Sold Revenue GEOs Sold Revenue
# (in millions) # (in millions)
Gold 94,829 $ 169.2 108,709 $ 206.1
Silver 23,405 41.4 13,691 26.1
PGMs 9,458 16.9 10,630 21.3
Other Mining Assets 18,803 33.7 1,787 3.5
Mining 146,495 $ 261.2 134,817 $ 257.0
Oil — 27.9 — 16.1
Gas — 21.3 — 3.9
NGL — 5.9 — 2.8
146,495 $ 316.3 134,817 $ 279.8
Year-to-date revenue and GEOs sold by commodity
YTD/2021 YTD/2020
GEOs Sold Revenue GEOs Sold Revenue
# (in millions) # (in millions)
Gold 310,898 $ 554.1 294,218 $ 509.7
Silver 75,755 134.1 39,203 68.4
PGMs 32,945 58.4 35,876 65.3
Other Mining Assets 43,328 78.2 4,791 8.4
Mining 462,926 $ 824.8 374,088 $ 651.8
Oil — 78.9 — 40.0
Gas — 53.8 — 15.1
NGL — 14.8 — 8.8
462,926 $ 972.3 374,088 $ 715.7
For Q3/2021, revenue was sourced 82.6% from Mining assets (53.5% gold, 13.1% silver, 5.3% PGM and 10.7% other Mining
assets). Energy assets contributed 17.4% (8.8% oil, 6.7% gas and 1.9% NGL). Our current acquisition focus is to grow the
precious metal side of our business, but we will also add opportunistically in other mining commodities if good assets are
available. A strength of our diversified portfolio is that we benefit from the relative outperformance of different commodities
over time. Geographically, revenue was sourced 91.2% from the Americas (33.1% South America, 23.6% Central America &
Mexico, 19.8% U.S. and 14.7% Canada).
Increased 2021 Energy Guidance
Based on the increase in oil and gas prices and the performance of its Energy portfolio, Franco-Nevada is pleased to raise its
Energy revenue guidance. Energy revenue is now expected to range from $195 to $205 million, an increase from the prior
range of $155 to $170 million. Franco-Nevada is on track to meet the previously announced GEO guidance of 590,000 to
615,000 GEOs for 2021. Commodity prices used for the remainder of 2021 in our revised guidance are the following:
$1,750/oz Au, $22.00/oz Ag, $950/oz Pt, $2,000/oz Pd, $110/t Fe 65% CFR China, $70/bbl WTI and $4.00/mcf Henry
Hub.
Please see our annual MD&A and Q3/2021 MD&A for more details on our guidance and see “Forward-Looking Statements”
below.
Environmental, Social and Governance (ESG) Updates
Franco-Nevada continues to receive top rankings from ESG agencies and during the quarter had its Prime rating reaffirmed by
ISS ESG. The Company recently added to its community programs, committing to fund water supply infrastructure to
communities around Antapaccay. The Company is also partnering with Continental Resources to fund a pilot project for solar-
powered water recycling. An added diversity initiative was the award of the first Franco-Nevada diversity scholarship to a
student entering mining engineering at the University of Toronto.
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Q3/2021 Portfolio Updates
Gold Equivalent Ounces Sold: GEOs sold for the quarter were 146,495, an increase of 8.7% from the 134,817 sold in
Q3/2020. Higher contributions from Cobre Panama and Antamina, as well as the additions of the Vale Royalty Debentures
and Condestable stream, were partly offset by lower deliveries from Hemlo. There was limited impact from COVID-19 on our
assets this quarter, in comparison to Q3/2020, where a number of our assets were impacted by suspensions of production.
South America:
Antamina (22.5% silver stream) – GEOs delivered and sold were significantly higher in Q3/2021 than in Q3/2020,
which was impacted by a temporary suspension of production. In addition, changes in gold and silver prices in the
current period have resulted in a more favourable GEO conversion ratio than in the prior period.
Antapaccay (gold and silver stream) – GEOs delivered and sold were lower in Q3/2021 than in Q3/2020 due to
lower grades as anticipated in the life of mine plan.
Candelaria (gold and silver stream) – GEOs delivered and sold decreased in Q3/2021 relative to Q3/2020.
Production at Candeleria was lower this quarter than in the prior year quarter due to changes in mine sequencing
which have reduced 2021 copper and gold production guidance and are also expected to impact the operation’s
life of mine plan. Lundin is also aiming to improve mill throughput and address grade reconciliation.
Condestable (gold and silver stream) – Franco-Nevada received its second quarter of deliveries from the recently
acquired stream, with the asset contributing 3,127 GEOs in Q3/2021. Deliveries from Condestable are a fixed
amount of ounces through the end of 2025.
Vale Royalty Debentures (iron ore royalty) – Franco-Nevada accrued an estimated $21.7 million, or 12,101 GEOs,
in Q3/2021, of which $5.6 million, or 3,109, GEOs, relates to H1/2021. The royalty payment received for
H1/2021 exceeded our accrual due to higher average realized iron ore prices. In Q3/2021, iron ore prices
decreased after achieving record highs in mid-2021 while deductible transportation costs increased. Year-to-date,
we have recorded 27,594 GEOs.
Central America & Mexico:
Cobre Panama (gold and silver stream) – GEOs increased in Q3/2021 relative to one year earlier, which was
impacted by a suspension of operations due to COVID-19. Cobre Panama’s production in Q3/2021 was a record of
87.2 kt of copper, and achieved further quarterly milestones, including records in tonnes milled. Along with its
Q3/2021 results, First Quantum provided additional details on its construction and commissioning plans to expand
Cobre Panama to achieve a throughput rate of 100 million tonnes per annum by the end of 2023. First Quantum
reported that Law 9 discussions with the Government of Panama continue to be transparent and constructive
towards a mutually beneficial agreement and that the environmental and labour aspects of the discussions have
been concluded.
Guadalupe-Palmarejo (50% gold stream) – GEOs sold from Guadalupe-Palmarejo were higher than in the same
quarter in 2020 due to higher mill throughput and recoveries, reflecting ongoing blending optimization and
business improvement initiatives. In September 2021, Coeur reported positive results from its infill and expansion
drilling campaign at the Independencia and Guadalupe deposits that demonstrated near-mine growth potential.
Cascabel (1% royalty) – SolGold announced a maiden mineral resource at its Tandayama-America deposit, part of
the Cascabel project, approximately 3 km north of the Alpala deposit, and covered by the Franco-Nevada royalty.
The maiden resource comprises 233.0 million tonnes at 0.33% copper equivalent containing 0.53 million tonnes
of copper and 1.20 million ounces of gold in the Indicated category, plus 197.0 million tonnes at 0.39% copper
equivalent containing 0.52 million tonnes of copper and 1.24 million ounces of gold in the Inferred category.
U.S.:
Stillwater (5% royalty) – GEOs from Stillwater increased from prior year, reflecting higher platinum and palladium
prices.
Goldstrike (2-6% royalties) – Production was impacted by planned maintenance shutdowns as well as a
mechanical failure at the Goldstrike roaster. Repairs have been completed in Q3/2021 and production is
anticipated to normalize in Q4/2021.
South Arturo (4-9% royalty) – In October 2021, Nevada Gold Mines acquired from i-80 Gold the 40% interest in the
South Arturo JV that it did not already own. The transaction provides Nevada Gold Mines 100% of the longer term
upside at the South Arturo pit and the El Nino underground, as well as flexibility to pursue other potential
operational synergies at Goldstrike.
Mesquite (0.5-2% royalty) – In September 2021, Equinox Gold announced an updated mineral reserve and
resource estimate for Mesquite. Measured and Indicated Mineral Resources, exclusive of Mineral Reserves,
increased by 65% to 1,384,000 ounces of contained gold.
Rosemont (1.5% royalty) – Hudbay Minerals has had continued success at its Copper World Project, expects an
initial resource estimate before the end of the year, and is planning a preliminary economic assessment in the first
half of 2022.
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Canada:
Sudbury (50% gold and PGM stream) – Production at McCreedy West was lower than in Q3/2020, as expected in
the updated life of mine plan. In February 2021, KGHM approved an updated life of mine plan which extends
mining operations at the McCreedy West mine for another 5 years but at a lower production rate than in 2020.
Detour Lake (2% royalty) – Kirkland Lake Gold announced a new mineral resource estimate, reporting an increase
of 216% in Measured and Indicated Mineral Resources to 14.7 million ounces of gold, exclusive of Mineral
Reserves. Mineral Reserves were 15.8 million ounces of gold as at December 31, 2020. Kirkland Lake Gold and
Agnico Eagle have entered into an agreement to combine in a merger of equals.
Hemlo (3% royalty & 50% NPI) – Revenue from Hemlo was significantly lower than in Q3/2020 reflecting a
decrease in production from grounds where Franco-Nevada has royalty interests and higher operating costs which
affected royalties under the NPI.
Kirkland Lake (1.5-5.5% royalty & 20% NPI) – Kirkland Lake Gold reported that the Macassa #4 Shaft is on track
for completion in late 2022. Once completed, production at Macassa is targeted to grow to over 400,000 ounces
of gold per year, compared to targeted production of 220,000-255,000 ounces of gold for 2021.
LIORC – LIORC declared a cash dividend of C$2.10 per common share, compared to C$0.45 per common share in
Q3/2020, as higher iron ore prices have offset lower production at the Carol Lake mine.
Canadian Malartic (1.5% royalty) – Agnico Eagle and Yamana reported record quarterly production due to higher
grade and recoveries from the ore found deeper in the Malartic pit. The mine will continue its transition from the
Malartic pit to the Barnat pit through 2021. The Odyssey underground project, which is expected to extend the life
of the complex to at least 2039, is progressing as planned. Infill and step-out drilling at the East Gouldie zone,
where Franco-Nevada’s royalty claims cover a portion of the deposit, support continuity and scale.
Greenstone (Hardrock) (3% royalty) – On October 27, 2021, 60/40 joint venture partners Equinox Gold and Orion
Mine Finance held a ground-breaking ceremony to start construction of the Greenstone mine in Ontario, formerly
known as the Hardrock project.
Eskay Creek (1% royalty) – In July 2021, Skeena Resources announced a positive pre-feasibility study, outlining
average annual production of 249,000 ounces of gold and 7.2 million ounces of silver over a 10-year mine life,
and anticipates further increases to the annual production profile as part of a feasibility study expected in
Q1/2022.
Ring of Fire (1-3% royalties) – In October 2021, both Wyloo and BHP increased their offers to acquire Noront, with
Noront supporting BHP’s latest bid as of October 20, 2021.
Valentine Lake (2% royalty) – In October 2021, Marathon Gold reported continued positive exploration results from
ongoing in-fill drilling of the Berry deposit. Marathon also announced a delay in its environmental permitting
process for the project. Construction of the project, which was previously anticipated to commence in early 2022,
is expected to be delayed by several months.
Rest of World:
Tasiast (2% royalty) – In June 2021, Kinross announced a temporary suspension of mill operations due to a fire at
its Tasiast mine. Kinross expects to re-start the mill in Q4/2021. The Tasiast 24k project remains on schedule to
be completed in mid-2023.
Energy: Revenue from the Energy assets increased to $55.1 million in Q3/2021 compared to $22.8 million in Q3/2020.
Revenues were positively impacted by higher realized prices across the portfolio relative to the prior period. Revenue in
Q3/2021 also reflects the addition of royalty interests in the Haynesville shale play acquired at the end of 2020.
U.S.:
Haynesville (various royalty rates) – The newly acquired portfolio of royalties contributed $11.1 million in Q3/2021,
of which $1.3 million was attributable to prior periods. The asset is benefiting from current high natural gas prices,
as well as strong initial production levels due to high royalty interest wells.
SCOOP/STACK (various royalty rates) – Royalties from the SCOOP/STACK generated $8.4 million in Q3/2021
compared to $3.6 million in the prior year period, due to higher prices and a significant increase in production from
our royalties held through the Royalty Acquisition Venture with Continental.
Permian Basin (various royalty rates) – Royalties from the Permian contributed $9.0 million in Q3/2021 compared
to $4.1 million in Q3/2020. Volumes in Q3/2021 increased significantly compared to Q3/2020 reflecting higher
commodity prices and production at a number of new wells.
Marcellus (1% royalty) – Revenue from the Marcellus asset, operated by Range Resources, was $10.0 million in
Q3/2021 versus $4.8 million in Q3/2020. Production was relatively consistent compared to the prior year period,
but revenues benefited from significantly higher NGL and natural gas prices.
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Canada:
Weyburn (NRI, ORR, WI) – Revenue from the Weyburn Unit was $11.8 million in Q3/2021 compared to $7.2 million
in Q3/2020, reflecting slightly lower production offset by the increase in commodity prices and the operating
leverage of our NRI.
Dividend declaration
Franco-Nevada is pleased to announce that its Board of Directors has declared a quarterly dividend of $0.30 per share. The
dividend will be paid on December 23, 2021 to shareholders of record on December 9, 2021 (the “Record Date”). The
Canadian dollar equivalent is to be determined based on the daily average rate posted by the Bank of Canada on the Record
Date. Under Canadian tax legislation, Canadian resident individuals who receive “eligible dividends” are entitled to an
enhanced gross-up and dividend tax credit on such dividends.
The Company has a Dividend Reinvestment Plan (the “DRIP”). Participation in the DRIP is optional. The Company will issue
additional common shares through treasury at a 3% discount to the Average Market Price, as defined in the DRIP. However,
the Company may, from time to time, in its discretion, change or eliminate the discount applicable to treasury acquisitions or
direct that such common shares be purchased in market acquisitions at the prevailing market price, any of which would be
publicly announced. The DRIP and enrollment forms are available on the Company’s website at www.franco-nevada.com.
Canadian and U.S. registered shareholders may also enroll in the DRIP online through the plan agent’s self-service web portal
at www.investorcentre.com/franco-nevada. Canadian and U.S. beneficial shareholders should contact their financial
intermediary to arrange enrollment. Non-Canadian and non-U.S. shareholders may potentially participate in the DRIP, subject
to the satisfaction of certain conditions. Non-Canadian and non-U.S. shareholders should contact the Company to determine
whether they satisfy the necessary conditions to participate in the DRIP.
This press release is not an offer to sell or a solicitation of an offer of securities. A registration statement relating to the DRIP
has been filed with the U.S. Securities and Exchange Commission and may be obtained under the Company’s profile on the
U.S. Securities and Exchange Commission’s website at www.sec.gov.
Shareholder Information
The complete unaudited Condensed Consolidated Financial Statements and Management’s Discussion and Analysis can be
found today on Franco-Nevada’s website at www.franco-nevada.com, on SEDAR at www.sedar.com and on EDGAR at
www.sec.gov.
Management will host a conference call tomorrow, Thursday, November 4, 2021 at 10:00 a.m. Eastern Time to review
Franco-Nevada’s Q3/2021 results.
Interested investors are invited to participate as follows:
Via Conference Call: Toll-Free: (888) 390-0546; International: (416) 764-8688
Conference Call Replay until November 11, 2021: Toll-Free (888) 390-0541; International (416) 764-8677;
Code 596680 #
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 streaming company with the largest and most diversified
portfolio of cash-flow producing assets. Its business model provides investors with gold price and exploration optionality while
limiting exposure to cost inflation. Franco-Nevada is debt-free 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 go to our website at www.franco-nevada.com or contact:
Sandip Rana
Chief Financial Officer
(416) 306-6303
Forward-Looking Statements
This press release contains “forward-looking information” and “forward-looking statements” within the meaning of applicable Canadian 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, results of operations, estimated
future revenues, performance guidance, 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, expected mining
sequences, business prospects and opportunities, the performance and plans of third party operators, audits being conducted by the Canada
Revenue Agency, the expected exposure for current and future assessments 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 Company’s at-the-market equity program (the “ATM Program”), and the Company’s expected use of the net proceeds of the ATM
Program, if any. In addition, statements (including data in tables) relating to reserves and resources including reserves and resources covered by a
royalty, stream or other interest, GEOs or mine lives are forward-looking statements, as they involve implied assessment, based on certain
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estimates and assumptions, and no assurance can be given that the estimates and assumptions are accurate and that such reserves and
resources, mine lives and GEOs will be realized. Such forward-looking 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”, “potential for”, “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 effect
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 achievements of Franco-Nevada to be
materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. A number of
factors could cause actual events or results to differ materially from any forward-looking statement, including, without limitation: the price at which
Common Shares are sold in the ATM Program and the aggregate net proceeds received by the Company as a result of the ATM Program;
fluctuations in the prices of the primary commodities 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
revenue is generated, relative to the U.S. dollar; changes in national and local government legislation, including permitting and licensing regimes
and taxation policies and the enforcement thereof; the adoption of a global minimum tax on corporations; 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 holds a royalty, stream or other interest, including
changes in the ownership and control of such operators; relinquishment or sale of mineral properties; influence of macroeconomic developments;
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 Company is determined to have “passive foreign investment company” (“PFIC”) status as defined in Section 1297 of the United States
Internal Revenue Code of 1986, as amended; potential changes in Canadian tax treatment of offshore streams; excessive cost 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 reserves 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 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 conditions, slope failures or cave-ins, flooding and other natural
disasters, terrorism, civil unrest or an outbreak of contagious disease; the impact of the COVID-19 (coronavirus) pandemic; and the integration 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 underlie the
asset portfolio; the Company’s ongoing income and assets relating to determination of its PFIC status; no material changes to existing tax
treatment; the expected application of tax laws and regulations by taxation authorities; the expected assessment and outcome of any audit by any
taxation authority; 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; 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 statements are not guarantees of future
performance. In addition, there can be no assurance as to the outcome of the ongoing audit by the CRA or the Company’s exposure as a result
thereof. Franco-Nevada cannot assure investors that actual results will be consistent with these forward-looking statements. Accordingly, investors
should not place undue reliance on forward-looking statements due to the inherent uncertainty therein.
For additional information with respect to risks, uncertainties and assumptions, please refer to Franco-Nevada’s most recent Annual Information
Form filed with the Canadian 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 not assume any obligation to update or revise them to reflect new information, estimates or opinions, future events or results or
otherwise, except as required by applicable law.
NON-IFRS MEASURES: Cash Costs, Adjusted EBITDA, Adjusted Net Income and Margin are intended to provide additional
information only and do not have any standardized meaning prescribed under IFRS and should not be considered in isolation
or as a substitute for measures of performance prepared in accordance with IFRS. These measures are not necessarily
indicative of operating profit or cash flow from operations as determined under IFRS. Other companies may calculate these
measures differently. For a reconciliation of these measures to various IFRS measures, please see below or the Company’s
current MD&A disclosure found on the Company’s website, on SEDAR and on EDGAR. Comparative information has been
recalculated to conform to current presentation.
1 GEOs include Franco-Nevada’s attributable share of production from our Mining assets, after applicable recovery and
payability factors, and do not include Energy assets. GEOs are estimated on a gross basis for NSR royalties and, in the
case of stream ounces, before the payment of the per ounce contractual price paid by the Company. For NPI royalties,
GEOs are calculated taking into account the NPI economics. Silver, platinum, palladium and other mining commodities
are converted to GEOs by dividing associated revenue, which includes settlement adjustments, by the relevant gold
price. The price used in the computation of GEOs earned from a particular asset varies depending on the royalty or
stream agreement, which may make reference to the market price realized by the operator, or the average price for the
month, quarter, or year in which the mining commodity was produced or sold. For Q3/2021, the average commodity
prices were as follows: $1,789/oz gold (Q3/2020 - $1,911), $24.36/oz silver (Q3/2020 - $24.39), $1,024/oz platinum
(Q3/2020 - $903) and $2,459/oz palladium (Q3/2020 - $2,170), $191/t Fe 65% CFR China (Q3/2020 - $129). For
YTD/2021 prices, the average commodity prices were as follows: $1,801/oz gold (YTD/2020 - $1,735), $25.78/oz
silver (YTD/2020 - $19.22), $1,122/oz platinum (YTD/2020 - $865) and $2,551/oz palladium (YTD/2020 - $2,142),
and $205/t Fe 65% CFR China (YTD/2020 - $114).
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2 Adjusted Net Income and Adjusted Net Income per share are non-IFRS financial measures, which exclude the following
from net income and earnings per share (“EPS”): impairment charges related to royalty, stream and working interests
and investments; gains/losses on the sale of royalty, stream and working interests and investments; foreign exchange
gains/losses and other income/expenses; unusual non-recurring items; and the impact of income taxes on these items.
3 Adjusted EBITDA and Adjusted EBITDA per share are non-IFRS financial measures, which exclude the following from net
income and EPS: income tax expense/recovery; finance expenses and finance income; depletion and depreciation; non-
cash costs of sales; impairment charges related to royalty, stream and working interests and investments; gains/losses
on the sale of royalty, stream and working interests and investments; foreign exchange gains/losses and other
income/expenses; and unusual non-recurring items.
4 Margin is a non-IFRS financial measure which is defined by the Company as Adjusted EBITDA divided by revenue.
Reconciliation to IFRS measures:
For the three months ended For the nine months ended
September 30, September 30,
(expressed in millions, except per share amounts) 2021 2020 2021 2020
Net income $ 166.0 $ 153.9 $ 512.8 $ 149.5
Impairment charges — — 7.5 271.7
Foreign exchange loss (gain) and other (income) expenses 0.4 (0.5) 1.7 (0.3)
Tax effect of adjustments (0.4) (1.1) (1.9) (67.6)
Other tax related adjustments:
Recognition of previously unrecognized deferred tax assets (0.4) — (11.0) —
Adjusted Net Income $ 165.6 $ 152.3 $ 509.1 $ 353.3
Basic weighted average shares outstanding 191.1 190.3 191.0 189.9
Adjusted Net Income per share $ 0.87 $ 0.80 $ 2.67 $ 1.86
For the three months ended For the nine months ended
September 30, September 30,
(expressed in millions, except per share amounts) 2021 2020 2021 2020
Net income $ 166.0 $ 153.9 $ 512.8 $ 149.5
Income tax expense (recovery) 30.2 25.2 79.4 (8.2)
Finance expenses 0.8 0.8 2.7 2.7
Finance income (0.6) (1.1) (3.0) (3.0)
Depletion and depreciation 73.0 56.8 221.4 173.5
Impairment charges — — 7.5 271.7
Foreign exchange loss (gain) and other (income) expenses 0.4 (0.5) 1.7 (0.3)
Adjusted EBITDA $ 269.8 $ 235.1 $ 822.5 $ 585.9
Basic weighted average shares outstanding 191.1 190.3 191.0 189.9
Adjusted EBITDA per share $ 1.41 $ 1.23 $ 4.31 $ 3.09
For the three months ended For the nine months ended
September 30, September 30,
(expressed in millions, except Margin) 2021 2020 2021 2020
Net income $ 166.0 $ 153.9 $ 512.8 $ 149.5
Income tax expense (recovery) 30.2 25.2 79.4 (8.2)
Finance expenses 0.8 0.8 2.7 2.7
Finance income (0.6) (1.1) (3.0) (3.0)
Depletion and depreciation 73.0 56.8 221.4 173.5
Impairment charges — — 7.5 271.7
Foreign exchange loss (gain) and other (income) expenses 0.4 (0.5) 1.7 (0.3)
Adjusted EBITDA $ 269.8 $ 235.1 $ 822.5 $ 585.9
Revenue 316.3 279.8 972.3 715.7
Margin 85.3 % 84.0 % 84.6 % 81.9 %
8
FRANCO-NEVADA CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
(unaudited, in millions of U.S. dollars)
At September 30, At December 31,
2021 2020
ASSETS
Cash and cash equivalents (note 4) $ 346.7 $ 534.2
Receivables 147.8 93.4
Loan receivable (note 5) 39.0 —
Prepaid expenses and other (note 6) 51.4 36.1
Current assets $ 584.9 $ 663.7
Royalty, stream and working interests, net (note 7) $ 5,124.6 $ 4,632.1
Investments and loan receivable (note 5) 205.2 238.4
Deferred income tax assets 51.2 45.1
Other assets (note 8) 18.8 13.6
Total assets $ 5,984.7 $ 5,592.9
LIABILITIES
Accounts payable and accrued liabilities $ 29.5 $ 40.8
Current income tax liabilities 13.6 12.4
Current liabilities $ 43.1 $ 53.2
Deferred income tax liabilities 108.4 91.5
Other liabilities 4.0 4.4
Total liabilities $ 155.5 $ 149.1
SHAREHOLDERS’ EQUITY
Share capital (note 16) $ 5,611.1 $ 5,580.1
Contributed surplus 18.7 14.0
Retained earnings (deficit) 321.3 (34.4)
Accumulated other comprehensive loss (121.9) (115.9)
Total shareholders’ equity $ 5,829.2 $ 5,443.8
Total liabilities and shareholders’ equity $ 5,984.7 $ 5,592.9
Commitments and contingencies (notes 20 and 21)
The accompanying notes are an integral part of these condensed consolidated financial statements and can be found in Q3/2021
Quarterly Report available on our website