Mr. Stefan Axell reports

FRANCO-NEVADA AGREES TO ACQUIRE WEYBURN NET ROYALTY INTEREST FOR C$400 MILLION

Franco-Nevada Corp. has entered into a purchase and sale agreement with Penn West Petroleum Ltd. to acquire an approximate 11.7-per-cent net royalty interest in the Weyburn oil unit for $400-million in cash, prior to normal closing adjustments.

The unit is a conventional unitized oil field encompassing approximately 53,360 acres located in southeast Saskatchewan. The unit has been in production for approximately 50 years with production to date of approximately 460 million barrels out of an initial oil-in-place estimate of 1.4 billion barrels. Current production levels are approximately 26,000 barrels of oil per day of medium-grade slightly sour crude. The reserve life index based on proven plus probable reserves is more than 20 years. Significant opportunity remains within the unit for further increases in oil recovery through enhanced oil recovery technology. The unit is operated by Cenovus Energy Inc.

The NRI is paid, net of operating and capital costs, similar to a mineral net profits interest royalty. This adds to Franco-Nevada's existing interests in the Weyburn unit, which include both a 0.44-per-cent overriding royalty and a 2.26-per-cent working interest. The NRI adds approximately 24 million barrels (20.4 million barrels net after Crown royalties) to Franco-Nevada's proven plus probable oil equivalent reserves, based on an independent engineering report effective as of Dec. 31, 2011. Based on the purchase price, the cost of the acquired proven plus probable reserves is $16.53 per barrel.

Closing is expected to occur on or about Nov. 30, 2012, and will be financed through Franco-Nevada's existing working capital. Once closed, this acquisition is expected to be immediately accretive to Franco-Nevada's revenue, cash flow and earnings. It furthers the diversification of Franco-Nevada's royalty and stream portfolio with the addition of a known and proven cash-flowing asset in a safe jurisdiction. After this acquisition, Franco-Nevada expects that at least 80 per cent of its future revenues will continue to be earned from precious metals assets. On this transaction, Scotia Waterous acted as an adviser on behalf of Franco-Nevada, and CIBC World Markets acted as an adviser on behalf of Penn West.

Conference call details

Management of Franco-Nevada will host a conference call in conjunction with the third quarter 2012 conference call on Nov. 7, 2012, at 10 a.m. Eastern Time to review this transaction. Analysts and interested investors are invited to participate as follows:

Conference call:

Local:  647-427-7450

Toll-free:  1-888-231-8191

Title:  Franco-Nevada third quarter 2012 financial results

Conference call replay:  A recording will be available until Nov. 14, 2012

Local:  416-849-0833

Toll-free:  1-855-859-2056

Passcode:  58833221

Webcast:  A live audio webcast will be accessible at the company's website under coming events

Slides:  A presentation to accompany the conference call will be available on the company's website prior to the call

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