Merrill Lynch Toronto Mining Conference September 4, 2008

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1 Merrill Lynch Toronto Mining Conference September 4, 2008 David Harquail CEO

2 Cautionary Statement Certain information contained in this Presentation, including any information as to our strategy, plans or future financial or operating performance and other statements that express management's expectations or estimates of future performance, constitute "forward-looking statements". In addition, statements relating to reserves or resources are forward-looking statements, as they involve implied assessment, based on certain estimates and assumptions, that the resources and reserves described can be profitably produced in the future. Original oil in place ( OOIP ) is also a forward-looking statement, and there are numerous uncertainties inherent in estimating OOIP and no assurance can be given that the level of OOIP or its recovery will be realized. All statements, other than statements of historical fact, are forward-looking statements. The words "believe", "expect", "will", potential, "anticipate", "contemplate", "target", "plan", "continue', "budget", "may", "intend", "estimate", likely and similar expressions identify forward-looking statements. Forward-looking statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable by management, are inherently subject to significant business, economic and competitive uncertainties and contingencies. The Company cautions the reader that such forwardlooking statements involve known and unknown risks, uncertainties and other factors that may cause the actual financial results, performance or achievements of Franco-Nevada to be materially different from the Company's estimated future results, performance or achievements expressed or implied by those forward-looking statements and the forward-looking statements are not guarantees of future performance. These risks, uncertainties and other factors include, but are not limited to: adverse fluctuations in the prices of the primary commodities that drive the Company s royalty revenue (gold, platinum group metals, copper, nickel, oil and gas); adverse fluctuations in the value of the Canadian and Australian dollar, and any other currency in which the Company generates revenue, relative to the U.S. dollar; changes in national and local government legislation, including taxation policies; regulations and political or economic developments in any of the countries where the company holds interests in mineral and oil and gas properties; influence of macroeconomic developments; business opportunities that become available to, or are pursued by us; reduced access to debt and equity capital; litigation; title disputes related to our interests or any of the properties underlying the Royalty Portfolio; operating or technical difficulties on any of the properties underlying the Royalty Portfolio; risks and hazards associated with the business of development and production on any of the properties underlying the Royalty Portfolio, including, but not limited to unusual or unexpected geological formations, cave-ins, flooding and other natural disasters or civil unrest. The forward-looking statements contained in this Presentation are based upon assumptions management believes to be reasonable, including, without limitation, the ongoing operation of the properties underlying the Royalty Portfolio 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 Royalty Portfolio, and any other factors that 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. Franco-Nevada cannot assure investors that actual results will be consistent with these forward-looking statements and readers are cautioned that forward-looking statements are not guarantees of future performance. Accordingly, readers 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 also refer to the Risk Factors sections of our most recent Annual Information Form filed with the Canadian securities regulatory authorities on as well as our Annual MD&A and our recent Quarterly MD&As. The forward-looking statements herein are made as of the date of this Presentation 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. 2

3 Franco-Nevada Franco-Nevada is the leading resource royalty and investment company in terms of number of royalties, market capitalization, revenue and financial strength Listed December 20, 2007 Issued Capital Share price range Market Capitalization at August 27, 2008 Working capital & marketable investments at June 30, 2008 Debt or hedges Indicated annual dividend Ownership by management & board Toronto Stock Exchange FNV million shares C$24.96-C$13.63 US $2.092 billion US$358 million Nil C$0.24/share 6% 3

4 Benefits of a Royalty Structure Exposure to: Operators Explorers ETF Bullion Metal price appreciation Production cash flow X X X Discovery potential X X Expansion potential X X X Reduced exposure to: Capital costs X X Operating costs X X Environmental X X A high margin, cash flowing business with upside 4

5 Investment Environment Commodity Price Inflation Demand and cost driven Opex and Capex inflation Result is modest margin growth for operators Gold Price Operating Margins * Credit Crunch Restricted bank credit Exit of hedge funds Higher risk aversion by investors Result is liquidity now at a premium * Operating Margin = Gold price less total cost per ounce divided by average annual gold price per ounce. Includes ABX, NEM, IAG, KGC, GC, AUY, AEM Source: Canaccord Adams Gold Price Average Value US$/oz in situ 5

6 First Half Comparisons EBITDA (1)(2) Revenue (1) (1) For six months ended June 30. Figures for 2006 and 2007 are performances of the portfolio of royalty assets under previous ownership as a non-public entity prior to acquisition by Franco-Nevada. (2) Non-GAAP measure. See our definition and calculation in our MD&A for the 2008 numbers and our Prospectus for the 2006 and 2007 numbers. (Millions US$) $43.9 $43.7 $38.9 $48.6 $57.6 $ % +48% Avg. Commodity Prices US$ yr Gold per oz. (London PM fix) $590 $658 $910 Platinum per oz (London PM fix) $1,111 $1,238 $1,945 Paladium per oz (London PM fix) $318 $355 $443 Oil (C$/bbl) (Edmonton Light) $74 $70 $112 Nat. Gas (C$) (AECO-C) $6.43 $6.88 $ % 6 Commodity price upside reflected in EBITDA (1)

7 H1 EBITDA* Margins 84% 44% 40% Franco-Nevada Senior Oil & Gas Producers (1) Senior Gold Producers (2) Royalties are a high margin business 7 * Non GAAP measure, see our MD&A. Calculated as EBITDA divided by total revenue for the six months to June 30, 2008 (1) Oil & gas average includes Canada Natural Resources, Encana, Husky Energy, Nexen, Petro Canada (2) Gold average includes Barrick Gold, Newmont, Goldcorp, Kinross

8 H1 Revenues - $68.5m By Commodity By Region By Royalty Type Other 1% Oil 26% Gas 15% PGMs 15% Gold 42% Profit Based 18% Working Interest 10% Revenue Based 71% Other (incl, divs) <1% Base Metals 2% Precious metals focus with a secure asset base 8

9 H1 Revenue By Royalty $68.5m 9 Expectations for H2: Stronger Goldstrike revenues Added revenues from Robinson Au & Cu Continued no Falcondo nickel contribution

10 Secure & Long Reserve Life Goldstrike -14.9Moz - U.S. patented lands Stillwater Moz PGM - U.S. patented lands Oil & Gas - 8,627Mboe - Canadian Freehold & Crown Oil & Gas P+P Reserves (Mboe) 6,123 5,808 8,312 8,627 Franco-Nevada benefits from exploration and capital spending by operators which is extending the life of our royalty assets Production Additions Note - all reserves are as of December 31, 2007, see our Annual Information Form for supporting detail.

11 Pipeline of Future Royalties UPSIDE Exploration & Arctic Gas ~145 mineral exploration interests ~100,000 acres of undeveloped lands ~1.1 TCF Arctic Gas resource GROWING FUTURE Hemlo, Hollister, Detour, Rosemont, Pinson, Pandora, Perama Hill, Duketon Cerro San Pedro, Mesquite, Tasiast ~15 potential operating projects within 5 years ~3 new operating projects BASE Goldstrike, Stillwater, Oil & Gas, Bald Mountain, Marigold, Robinson ~18 established operating mineral properties & 5 major O&G units Producing, Development and Exploration Assets 11

12 Future Royalties Hemlo (Interlake) - 3% NSR + 50% NPI - Development and initial mining has started Hollister - 3-5% NSR - New discovery on the property Detour Gold - 2% NSR - Operator reported 10.8m ounces in M&I resources in July Rosemont - 1.5% NSR - Potential $165m investment by Silver Wheaton Pandora - 5% NPI - Operator expects some royalty payments in 2008 Perama Hill - 2% NSR - Takeover by Eldorado Mining Duketon - 2% NSR - Operator is reporting a 3.5 million ounce resource and a new P.P. Pinson - 1-2% NSR - Barrick completes $30m earn-in Dorato - 1-2% NSR Option - New Peruvian exploration option 12

13 Arctic Gas & Royalty Creation FNV has an effective 9% ownership in certain gas reserves in the Canadian Arctic 1.1 TCF resource net to FNV Petro-Canada has the largest interest in these gas fields FNV owns P&NG mineral rights on 100,000 acres in Western Canada that can be farmed out for royalties 13

14 Financially Strong Cost of Operations $4.1m 6% G&A $5.0m 7% Publicly quoted marketable securities $47m Free Cash Flow* $58.7m 86% Business Development $0.7m 1% Cash & Cash Equivalents & Short-term investments $293m Credit Facility $150m Free Cash Flow* of $58.7m or EBITDA* of $57.6m generated in six months ended June 30, 2008 Liquidity and Capital Resources of $490m at June 30, *Non-GAAP financial measure. See our definition in our MD&A available at

15 Strategic Growth Options Acquire Existing Royalties Create New Royalties Precious Metals Streams Non-Operating JV Interests Owning and Converting Properties / Resources 15

16 FNV is Uniquely Well Positioned + Generating strong cash flow: World class assets and operators Unique mix of Gold, PGM s and O&G with secure titles 97% of revenue from North American and Australian assets 84% EBITDA* to revenue margin Long term pipeline of development and exploration assets. Royalty model is ideal in this inflationary environment $490m funded to invest when other sources of capital are restricted + Numbers reflect period for six months ended June 30, * Non-GAAP financial measure. See our definition in our MD&A available at

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