Mr. David Harquail reports

FRANCO-NEVADA ACQUIRES AN ADDITIONAL PRECIOUS METALS STREAM ON COBRE PANAMA FROM KORES FOR US$178 MILLION

Franco-Nevada Corp.'s wholly owned subsidiary, Franco-Nevada (Barbados) Corp. (FNB), has agreed to acquire a precious metals stream on Korea Resources Corp.'s (KORES) 10-per-cent indirect interest in the Cobre Panama project for $178-million (U.S.). The terms are the same as the $178-million (U.S.) precious metals stream announced in September in connection with First Quantum Minerals Ltd.'s acquisition of a separate 10-per-cent interest from LS-Nikko Copper Inc. FNB, First Quantum and KORES have entered into a definitive purchase and sale agreement and closing is expected at the end of January. The closing is subject to customary closing conditions. Upon closing, FNB will have precious metal stream interests covering 100 per cent of the ownership of Cobre Panama.

In addition, FNB now expects to finance the combined $356-million (U.S.) without a syndication partner. Previously, CEF Holdings Ltd. was named as a possible one-third syndication partner. CEF was unable to put a suitable structure in place to participate in this transaction. Franco-Nevada and CEF look forward to working together on future transactions.

FNB's existing precious metals stream has been in place since 2015 and covers First Quantum's 80-per-cent interest in Cobre Panama. This is a $1-billion (U.S.) commitment with FNB financing prorated to First Quantum's project expenditures. To the end of 2017, FNB has financed $727-million (U.S.) under the original stream and has a balance of $273-million (U.S.) remaining.

"We are pleased to have KORES as a new partner. KORES has supported the construction of Cobre Panama since the start of the project," said David Harquail, chief executive officer of Franco-Nevada. "First Quantum has now substantially derisked the project and expects to begin phased commissioning in late 2018 with continued ramp-up over 2019. Cobre Panama is expected to add materially to Franco-Nevada's growth profile beginning in 2019."

Precious metals stream terms

FNB's existing precious metals stream covering 80 per cent of production is being financed pro rata with First Quantum's project expenditures. In addition, the continuing payment for deliveries under this stream uses fixed gold and silver prices with a 1.5-per-cent annual inflation factor.

The incremental 20-per-cent stream differs in that FNB is financing the full amount upfront rather than pro rata. In addition, the continuing payment for deliveries is based on a percentage of the spot price. The attached table sets out the attributable deliveries and thresholds to FNB under the 20-per-cent incremental Cobre Panama stream. All precious metals deliveries are referenced off total project metal-in-concentrate shipped.

  
                                                                                                 Delivery period (3) 
                       Delivery period (1)   Delivery period (2) (from about 2029)              (from about 2044)

Au oz delivered              0 to 202,000                      202,001 to 429,047                       >429,048
Delivery terms    30 oz Au per 1 mm lb Cu              20.25 oz Au per 1 mm lb Cu     15.8% of Au in concentrate
                                                                                                          
Ag oz delivered            0 to 2,460,500                  2,460,501 to 7,432,750                     >7,432,751
Delivery terms   344 oz Ag per 1 mm lb Cu                444 oz Ag per 1 mm lb Cu     15.5% of Ag in concentrate

(1) The continuing payment for deliveries will be 20 per cent of the spot price of gold and silver until 604,000 
    ounces of gold and 9,618,000 oz of silver have been delivered under the new stream. Thereafter, the 
    continuing payment will increase to 50 per cent of the spot price of gold and silver.

(2) Each of the streams includes an adjustment provision that tops up the stream deliveries should the mill 
    capacity be less than 240,000 tonnes per day by year 10.

Corporate summary

Franco-Nevada is the leading gold-focused royalty and stream 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 many of the risks of operating companies. Franco-Nevada is debt free and uses its free cash flow to expand its portfolio and pay dividends.

We seek Safe Harbor.