Mr. Paul Brink reports

FRANCO-NEVADA ANNOUNCES RECORD ANNUAL RESULTS AND DIVIDEND INCREASE

Franco-Nevada Corp. has filed its results for the quarter and year ended Dec. 31, 2020 (in U.S. dollars unless otherwise noted).

"In 2020, the challenges of the COVID-19 pandemic highlighted the diversity of our portfolio, the commitment of our staff, and the resolve of the employees and communities at our assets," stated Paul Brink, chief executive officer. "With record precious-metals prices through the year and the recovery of energy prices in the second half of the year, Franco-Nevada generated record financial results. We are pleased to announce a new precious-metals stream on the Condestable copper mine in Peru and the acquisition of a portfolio of natural gas royalties in the Haynesville play in Texas. We expect strong growth in 2021 and over the next five years, driven by the ongoing Cobre Panama ramp-up, the two newly acquired assets and from broad organic growth across the portfolio. On the strength of this outlook, we are increasing the quarterly dividend to 30 cents per share starting with our second-quarter dividend payment in June, which will be declared in May. We are proud that this 15.4-per-cent increase will mark our 14th annual dividend increase. We have also strengthened our commitment to increase diversity at Franco-Nevada by adopting a goal of at least 40-per-cent diverse representation at the board and senior management levels."

Strong financial position:

• Debt free and $1.9-billion in available capital;
• Generated greater than $800-million in annual operating cash flow;
• Quarterly dividend increased 15.4 per cent to 30 cents per share;

Sector-leading ESG:

• Ranked No. 1 by Sustainalytics, AA by MSCI and prime by ISS ESG;
• Contributed to help communities through the COVID-19 crisis;
• Committed to the World Gold Council's responsible gold mining principles;
• Signatory of the UN Global Compact and BlackNorth Initiative pledge;

Portfolio growth:

• Guiding to GEOs (gold equivalent ounces) sales growth and energy revenue growth in both 2021 and over five years;
• Underpinned by long-life core assets (Cobre Panama, Candelaria, Antapaccay and Antamina);
• Expansions (Cobre Panama, Detour, Stillwater, Tasiast);
• New mines (Salares Norte, Hardrock, Stibnite Gold, Valentine Lake);
• Condestable precious-metal stream and Haynesville natural gas royalties add immediate cash flow;

Future optionality:

• Exploration success (Detour, Duketon, Guadalupe, Canadian Malartic, Macassa, South Arturo);
• New gold mine potential (Valentine Lake, Monument Bay, Eskay Creek, Fenelon);
• Long-term growth options in copper (Rosemont, Alpala, Taca Taca, NuevaUnion) and the Ring of Fire.

For Q4 2020, revenue was sourced 90.9 per cent from gold and gold equivalents (68.4 per cent gold, 12.5 per cent silver, 6.9 per cent platinum group metals and 3.1 per cent other mining assets). Geographically, revenue was sourced 88.4 per cent from the Americas (55.0 per cent Latin America, 14.5 per cent United States and 18.9 per cent Canada).

Portfolio additions

• Condestable stream: On March 8, 2021, Franco-Nevada closed a $165-million precious-metals stream with reference to the gold and silver production from the Condestable mine, an operating underground copper-gold-silver mine near Lima, Peru. The Condestable mine is owned and operated by a majority-owned subsidiary of Southern Peaks Mining LP (SPM), a private company. Effective Jan. 1, 2021, Franco-Nevada will receive deliveries of 8,760 ounces of gold and 291,000 ounces of silver annually until Dec. 31, 2025, followed thereafter by variable deliveries based on a percentage of gold and silver in concentrate. Franco-Nevada will pay 20 per cent of the spot price for gold and silver for each ounce delivered under the stream.
• Haynesville royalty portfolio: On Dec. 29, 2020, Franco-Nevada acquired a royalty portfolio in the Haynesville natural gas play, in Texas, from Mesa Minerals Partners LLC, a Quantum Energy Partners portfolio company, for $135-million. The Haynesville represents one of the most active gas plays in North America owing to its strong underlying economics and proximity to the U.S. Gulf Coast, which reduces transport costs. The royalty portfolio was assembled in partnership with upstream operator, Rockcliff Energy II LLC, and with the benefit of prioritization under the Rockcliff's near-term drilling schedule. The royalties generated royalties of $4.2-million in Q4 2020, providing immediate cash flow and increasing the weighting of natural gas within the energy portfolio. Based on Rockcliff's current drilling activity, royalty production is expected to be sustained at current levels in 2021.

2021 guidance

In 2021, the company expects attributable royalty and stream sales to total 555,000 to 585,000 GEOs from its mining assets and additional revenue of $115-million to $135-million from its energy assets. Of the royalty and stream sales from mining assets, the company expects 375,000 to 405,000 GEOs from its various stream agreements. For 2021 guidance, silver, platinum and palladium prices have been converted to GEOs using commodity prices of $1,750 Au, $25.00 Ag, $1,100 Pt and $2,200 Pd. The WTI oil price and Henry Hub natural gas price are assumed to average $55 per barrel and $2.50 per thousand cubic feet. The company estimates depletion expense to be $250-million to $280-million. The 2021 guidance and five-year outlook are based on public forecasts, and other disclosure by the third party owners and operators of its assets, or its assessment thereof.

Five-year outlook

Franco-Nevada expects its existing portfolio to produce between 600,000 and 630,000 GEOs by 2025, and additional revenue of $150-million and $170-million from its energy assets. This outlook assumes that the Cobre Panama project will have expanded its mill throughput capacity to 100 million tonnes per year during 2023. It also assumes continued deliveries from Sudbury into 2025, the commencement of production at Salares Norte, Hardrock, Stibnite Gold and Valentine Lake, and that the stream at MWS will have reached its cap. It is expected the remaining committed capital of $114.0-million for the royalty acquisition venture with Continental will be financed. The commodity price assumptions are the same as those used for the 2021 guidance and assume no other acquisitions other than the Condestable stream.

Corporate updates

Franco-Nevada is pleased to announce that its board of directors has decided to raise its quarterly dividend to 30 cents per share, effective for the second quarter of 2021. The dividend will be a 15.4-per-cent increase from the previous 26-cent-per-share quarterly dividend and will mark the 14th consecutive annual dividend increase for Franco-Nevada shareholders. Canadian investors in Franco-Nevada's IPO in December, 2007, will be receiving an effective 10.0-per-cent yield on their cost base. The board of directors plans on formally declaring the second-quarter dividend of 30 cents per share in May, 2021, with payment by the end of June, 2021.

Franco-Nevada is also pleased to announce that its board of directors has adopted a goal of 40-per-cent diverse representation at the board and senior management level by 2025. The new goal affirms Franco-Nevada's commitment to improve the representation of women, black people, indigenous peoples, racial minorities, people with disabilities and members of the LGBTQ plus community at the leadership level. The company recognizes that diversity and inclusion are critical to its success, and is striving to build on the progress it has already made.

Q4 2020 portfolio updates

Gold equivalent ounces sold

GEOs sold for the quarter were 147,476, a decrease of 3.9 per cent from the 153,396 sold in Q4 2019. Higher contributions from Hemlo, Cobre Panama, Antapaccay and Antamina were partly offset by lower contributions from Candelaria and Gold Quarry.

Latin America:

• Cobre Panama (gold and silver stream) -- GEOs delivered and sold were higher in Q4 2020 than one year earlier, as the mine continues its ramp-up. Earlier in the year, First Quantum suspended operations at Cobre Panama from April to July, 2020, due to the COVID-19 pandemic and restarted full production levels in August ahead of schedule. For 2021, First Quantum expects Cobre Panama to produce between 300,000 and 330,000 tonnes of copper as it continues to ramp up. Franco-Nevada expects sales in 2021 to be between 105,000 and 125,000 GEOs, up from 76,348 GEOs in 2020.
• Candelaria (gold and silver stream) -- GEOs delivered and sold decreased in Q4 2020 relative to the same quarter in 2019. The operation was suspended in October, 2020, due to labour strikes but returned to full production in December after reaching new collective agreements. With the Candelaria mill optimization project now complete, Franco-Nevada expects sales in 2021 to be between 65,000 and 75,000 GEOs, up from 59,655 GEOs in 2020.
• Antapaccay (gold and silver stream) -- GEOs delivered and sold were higher in Q4 2020 than one year earlier. In 2021, Franco-Nevada expects sales to be between 55,000 and 65,000 GEOs, down from 65,901 GEOs in 2020 due to planned lower grades based on the life-of-mine plan. Infill drilling in 2020 at Coroccohuayco has increased confidence in the mineral resources available, and the project has been rescoped as an open pit with mine planning reset to the conceptual level.
• Antamina (22.5-per-cent silver stream) -- GEOs delivered and sold were higher in Q4 2020, reflecting an increase in ounces sold and higher silver prices than one year earlier. The operation resumed full production levels in the second half of 2020 following a temporary shutdown due to COVID-19. Franco-Nevada expects production in 2021 to be 3.0 million to 3.2 million ounces of silver, up from 2.8 million ounces sold in 2020.
• Guadalupe-Palmarejo (50-per-cent gold stream) -- Sales from Guadalupe-Palmarejo were higher than in the same quarter in 2019, reflecting higher grades and recoveries. Coeur reported positive results from its infill drilling at the Guadalupe deposit.
• Cerro Moro (2-per-cent royalty) -- Production at Cerro Moro was impacted by changes in COVID-19 restrictions imposed in Argentina near the end of the year. Yamana reported that it expects operational challenges to continue in the first half of 2021, but to normalize as the vaccination program ramps up in Argentina.
• Salares Norte (2-per-cent royalty) -- Gold Fields reported that construction of the Salares Norte mine commenced in 2020, and prestripping of the pit and construction of the processing plant started in January, 2021. Gold Fields reported that the project is on schedule for first production in the first quarter of 2023.
• Taca Taca (1-per-cent royalty) -- In November, 2020, First Quantum filed an updated National Instrument 43-101 technical report and declared a maiden mineral reserve of over 7.7 million tonnes of contained copper. First Quantum is continuing with the project predevelopment and feasibility activities.

United States:

• Stillwater (5-per-cent royalty) -- Stillwater benefited from strong palladium prices during the quarter. Sibanye-Stillwater reported that production at its U.S. PGM operations improved in the second half of 2020 but were impacted by COVID-19 in Q4 2020. A meaningful increase in PGM production is forecasted for 2021.
• South Arturo (4-per-cent to 9-per-cent royalty) -- In December, 2020, Premier Gold announced that the South Arturo property will be spun out to a newly created company called i-80 Gold Corp. In January, 2021, Premier reported increased mineral reserves and resources, and released a positive prefeasibility study which includes the underground El Nino mine and the proposed phase 1 open pit.
• Castle Mountain (2.65-per-cent royalty) -- Commercial production at Castle Mountain was reached in November, 2020. The phase 1 operation is expected to produce on average 40,000 ounces of gold annually. A feasibility study for the phase 2 expansion, where annual average production is expected to increase to 200,000 ounces, is targeted for completion in first half 2021.
• Gold Quarry (7.29-per-cent royalty) -- Franco-Nevada recorded an adjustment in Q4 2020 due to its royalty payments no longer being based on the minimum payment obligations tied to mineral reserves and stockpiles. The adjustment resulted in a credit of 2,442 GEOs, compared with 4,184 GEOs being earned in Q4 2019. Going forward, Franco-Nevada expects its royalty from Gold Quarry to decrease to approximately 5,500 GEOs in 2021 and to 1,350 per annum thereafter.
• Mesquite (0.5-per-cent to 2-per-cent royalty) -- Equinox Gold plans to invest in a stripping program to access a higher-grade deposit, a leach pad expansion and a new truck fleet to support a longer life of mine. In October, 2020, Equinox announced that it had increased mineral reserves by 28 per cent, and measured and indicated mineral resources by 94 per cent.
• Stibnite (1.7-per-cent royalty) -- Perpetua Resources, formerly Midas Gold, released a positive feasibility study in December, 2020. A record of decision from the U.S. Forest Service with respect to the final environmental impact statement is expected in late 2021.

Canada:

• Detour Lake (2-per-cent royalty) -- In December, 2020, Kirkland Lake Gold announced plans to grow production to approximately 800,000 ounces in 2025 within the current mine plan. In addition, the operator plans to present a new mine plan in 2022 which it believes could significantly improve the longer-term outlook for Detour Lake, with the establishment of a superpit concept based on the potential existence of a much larger, continuous deposit around the existing pit locations.
• Hemlo (3-per-cent royalty and 50-per-cent net profits interest) -- Revenue from Hemlo increased significantly relative to the same quarter in 2019 as the 50-per-cent NPI on Interlake benefited from higher gold prices and increased production from grounds where Franco-Nevada has royalty interests. In addition, the company recorded royalties of $8-million related to prior periods during the quarter. In 2021, Franco-Nevada expects royalties from the Hemlo NPI to range from 20,000 to 30,000 GEOs, down from a record 40,155 GEOs in 2020.
• Kirkland Lake (1.5-per-cent to 5.5-per-cent royalty and 20-per-cent NPI) -- Macassa achieved its best quarter of production in 2020 in Q4 2020, after production having been affected by reduced operations due to COVID-19 and by unscheduled downtime in the mill. Production at Macassa is expected to ramp up over the next three years, reaching 400,000 ounces in 2023 following completion of the No. 4 shaft.
• Musselwhite (2-per-cent royalty and 5-per-cent NPI) -- Franco-Nevada anticipates payments from its NPI royalties from Musselwhite to resume in 2021, after Newmont announced in December, 2020, that the mine has been ramping up to full operations after the commissioning of its conveyor and material handling systems. Operations had been reduced since March, 2019, due to a fire at the mine and COVID-19 restrictions.
• Canadian Malartic (1.5-per-cent royalty) -- In February, 2021, Agnico Eagle and Yamana announced a positive construction decision for the Odyssey underground project. Ramp development started in December, 2020. Production at Odyssey South and East Gouldie, where Franco-Nevada has royalty claims, is expected to begin in late 2023 and 2027, respectively.
• Island Gold (0.62-per-cent royalty) -- Alamos announced that it began construction of the phase III expansion in December, 2020. The expansion is expected to increase average annual production by 72 per cent to 236,000 ounces starting in 2025.
• Hardrock (3-per-cent royalty) -- In December, 2020, Orion Mine Finance agreed to acquire Centerra's 50-per-cent interest in the project, and Equinox agreed to acquire Premier Gold. Subsequently, in March, 2021, Equinox announced it had entered into an agreement with Orion to acquire an additional 10-per-cent interest in the project, increasing its stake to 60 per cent. Orion will hold the remaining 40-per-cent interest in the project.
• Red Lake (Bateman) (2-per-cent royalty) -- In February, 2021, Battle North Gold announced that it is proceeding with the construction of the Bateman gold project. Based on the current construction schedule, processing of ore is targeted at the end of 2021 and commercial production at the end of 2022.
• Ring of Fire (various royalties) -- In December, 2020, Wyloo Metals, a private company, acquired Resource Capital Funds' investment interests in Noront Resources, including a 22-per-cent ownership stake and a $15-million convertible loan. Andrew Forrest, founder of Fortescue Metals Group, is the principal investor in Wyloo Metals.

Rest of world:

• Sabodala (gold stream) -- In February, 2021, Endeavour Mining completed the acquisition of Teranga Gold. Endeavour is targeting a definitive feasibility study for the Sabodala-Massawa plant expansion in late 2021.
• Tasiast (2-per-cent royalty) -- Kinross expects production at Tasiast to increase in 2021 as mining accesses higher-grade ore zones and the Tasiast 24k project to increase throughput capacity continues.
• Subika (Ahafo) (2-per-cent royalty) -- Production from Ahafo is expected to increase in 2021 due to the Subika underground delivering higher tonnes. Newmont has reported Subika as having significant underground potential for near-mine exploration opportunities. Franco-Nevada expects more production from the Subika royalty as mining at Ahafo returns to royalty grounds.
• Duketon (2-per-cent royalty) -- In December, 2020, Regis Resources announced its approval of the Garden Well South underground mine. Development is expected to commence in March, 2021. Processing of first underground development ore is scheduled by December, 2021, and stope production by June, 2022. Exploration below Garden Well, Rosemont and Gloster continues to define new mineralization extensions.

Energy

Revenue from the energy assets decreased to $27.8-million in Q4 2020 compared with $30.0-million in Q4 2019. Revenues were negatively impacted by lower realized commodity prices and lower volumes associated with a reduction in drilling by operators. These factors were partly offset by the incremental royalties the company recognized on its newly acquired interests in the Haynesville shale play of $4.2-million.

United States:

• Marcellus (1-per-cent royalty) -- The royalty contributed $4.9-million to revenue in Q4 2020, flat relative to Q4 2019, reflecting consistent production volume. In 2021, the company expects drilling activity levels to remain consistent with those in 2020.
• Scoop/Stack (various royalty rates) -- Royalties from Scoop/Stack decreased compared with Q4 2019 due to lower realized commodity prices, and lower volumes due to reduced drilling by the operators within the play and on royalty lands. In 2021, additional royalties acquired under the royalty acquisition venture with Continental are expected to provide additional volume contribution.
• Permian basin (various royalty rates) -- Revenue from Franco-Nevada's interests in the Permian basin decreased compared with the same quarter in the prior year due to lower realized prices. In 2021, the company expects a rebound in drilling activity as commodity prices recover.

Canada:

• Weyburn (net revenue interest, overriding royalty interest, working interest) -- Revenue from Weyburn contributed $5.2-million in Q4 2020 compared with $8.1-million in Q4 2019 due mostly to lower contribution from the NRI as a result of lower realized oil prices. In 2021, the company anticipates an increase in revenue, reflecting the NRI royalty's leverage to oil prices.
• Orion (4-per-cent gross overriding royalty) -- Revenue from Orion decreased compared with Q4 2019 due to lower realized prices. Production levels at the asset are now consistently around 20,000 barrels per day.

Shareholder information

The complete audited consolidated financial statements, and management's discussion and analysis can be found today on Franco-Nevada's website, on SEDAR and on EDGAR.

Management will host a conference call tomorrow, Thursday, March 11, 2021, at 10 a.m. ET to review Franco-Nevada's 2020 results, as well as discuss its 2021 and five-year outlook.

Interested investors are invited to participate as follows:

Via conference call:

Toll-free:  888-390-0546

International:  416-764-8688

Conference call replay until March 18, 2021:

Toll-free:  888-390-0541

International:  416-764-8677

Code:  525504 followed by the number sign

A live audio webcast will be accessible on the company's website.

        CONSOLIDATED STATEMENTS OF (LOSS) INCOME AND COMPREHENSIVE INCOME
        (in millions of U.S. dollars and shares, except per-share amounts)
  
  
                                                                   For the year ended
                                                                              Dec. 31,      
                                                                       2020      2019
    
Revenue                                                           $ 1,020.2   $ 844.1 
Costs of sales                                                                        
Costs of sales                                                        158.8     144.8 
Depletion and depreciation                                            241.0     263.2 
Total costs of sales                                                  399.8     408.0 
Gross profit                                                          620.4     436.1 
Other operating expenses (income)                                                     
Impairment charges and reversals                                      262.1         -     
General and administrative expenses                                    28.8      28.8  
Gain on sale of gold bullion                                           (7.0)     (2.9) 
Total other operating expenses                                        283.9      25.9  
Operating income                                                      336.5     410.2 
Foreign exchange gain (loss) and other income (expenses)                2.8       2.8   
Income before finance items and income taxes                          339.3     413.0 
Finance items                                                                 
Finance income                                                          3.7       3.5   
Finance expenses                                                       (3.5)    (10.6)
Net income before income taxes                                        339.5     405.9 
Income tax expense                                                     13.3      61.8  
Net income                                                            326.2     344.1 
Other comprehensive income                                                            
Items that may be reclassified subsequently to profit and loss                      
Currency translation adjustment                                        19.6      32.3  
Items that will not be reclassified subsequently to profit and loss                  
Gain on changes in the fair value of equity investments at fair                       
value through other comprehensive income (FVTOCI),                                  
net of income tax                                                      43.8       9.9   
Other comprehensive income                                             63.4      42.2  
Comprehensive income                                                  389.6     386.3 
Earnings per share                                                            
Basic                                                                  1.71      1.83  
Diluted                                                                1.71      1.83  

(1) The accompanying notes are an integral part of these consolidated financial
    statements and can be found in the company's 2020 annual report available on
    its website.

Franco-Nevada 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 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. It trades under the symbol FNV on both the Toronto and New York stock exchanges. Franco-Nevada is the gold investment that works.

We seek Safe Harbor.