Good morning. My name is Chris and I will be your conference operator today. At this time, I would like to welcome everyone to the Franco-Nevada Corporation Fourth Quarter Results Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. [Operator Instructions] Thank you. Stefan Axell, you may begin your conference.

Thank you, Operator. Good morning, everyone. Thank you for joining us this morning either in person or over the phone to discuss Franco-Nevada's 2015 results. Today’s call will be a little bit longer than usual as we have other items to discuss. Accompanying our call today is a presentation which is available on our website at Franco-Nevada.com, where you’ll also find our full financial results, as well as an updated edition of our asset handbook. We'd like to remind participants that some of today's commentary may contain forward looking information, and refer you to a detailed note on Slide 2 of our presentation. We have our entire executive management team here participating during the call, as well as Jason O'Connell, who will highlight our oil and gas interest, as well as Phil Wilson, who will discuss on the changes to our portfolio year-over-year. I'll now turn the call over to Sandip Rana to discuss our 2015 result.

Thank you, Stefan. Good morning everyone. Before I get into the numbers, I just want to look back at 2015 as a whole for the mining and energy sector. And if you'd look at the mining and energy sector for 2015, you'd have seen continued volatility in commodity prices, liquidity issues with some companies, the pressure prices and just an overall negative sentiment for the sector as a whole. But I think what 2015 showcased for Franco-Nevada was the strength of our business model, the quality, the diversity of our asset base, the strength of our balance sheet. I think that is reflected in the number of GEOs that the company earned during the fourth quarter as well as for the full year 2015. If you turn to Slide 6, you will see our performance compared to our guidance that was given a year ago. We had guided the street to 335,000 to 355,000 GEOs for the full year. This used pricing of $1,200 gold, $1,200 platinum, and $750 palladium per ounce. As you know, prices did a bit lower than this. And if you exclude the Antamina acquisition, we did come in at the top half of the range, 347,000 GEOs to our account for the full year. When Antamina is included, we surpass 360,000 GEOs for the full year. So performance was very, very good. On the oil and gas side, we had guided $20 million to $30 million in revenue for the full year. Again, we came in at the higher end of the range, $28 million to our account in revenue for the full year for oil and gas. As you turn to Slide 7, we highlight the GEOs that we’ve received over the last 5 years. And as you compare it to 2011, we had…

Thanks Sandip. Good morning, everybody. We have been on a journey in Franco-Nevada and none of us could have imagined how it was going to unfold and certainly not how much it was going to grow. As you well know in the old Franco, the principal business was buying third-party royalties and we keep doing that business. Cerro Moro, Brucejack, Hardrock are some examples of assets we've invested in that are advancing towards production. We then got into the business of doing strange and financing new minds into production. That started off with byproduct financing, Cobre Panama is good example. But then we added on to that being able to finance new gold mines and commerce that has being advanced by True Gold is one of those. Then we got involved in M&A. We helped in particular Lundin acquire Candelaria, and then most recently have helped Teck and also Glencore in recapitalizing the companies and have been able to get streams on assets like Antamina and Antapaccay. In the last few years, we have been able to invest in what we believe will be four of the world's top 20 copper mines. First of these was Cobre Panama. It's a development project. Once it's in production its' an asset that will generate streams for us over 30 to 40 years. More recently though we have been able to invest in not only in top tier assets but in operating assets. It's an opportunity we never imagined that we would have. These are assets that have got proven operating parameters low-costs and importantly in doing the transactions we are able to get cash flow immediately from them. To add on top of that when you look at these assets, long life of these assets gives us tremendous option on the gold…

Thank you, Paul. Before we proceed with Oil & Gas presentation, I just want to take a moment here, just to let everybody know that after 24 years starting with the old Franco through the new mine years, in the last eight wonderful years here, in the current version of Franco, I have decided to move on and retire and I will be stepping down at the end of April. At that time, Jason O'Connell will commend and take over responsibilities for the management of Franco's Oil & Gas asset. Jason has been with us since 2008. He joined our Business Development team then in August -- October 2014. His focus became 100% on Oil & Gas. And when I step down at the end of April, he will assume the title of Vice President Oil & Gas for Franco. So at this time, I'd like to bring up Jason and have him proceed with our Oil & Gas presentation. Thank you.

Thank you, Geoff. Interesting time to starting out in the Oil & Gas business with commodity prices where they are. So we carried out an exercise this past year to reevaluate and re-categorize how we count our Oil & Gas asset, really just to bring it in line with how we look at our mineral assets. So formerly, we simply counted the number of royalty contracts that we had in Oil & Gas. It was a straight count in those contracts. However as we started to look at those contract, many of them had multiple royalties covering the same-land area. For example, you may have 5% royalty on Oil, 10% royalty on Gas and maybe a working interest, but they would all pertain to same-land area. And in addition to that, you sometimes had different royalties covering different geologic horizons at depth. So you might have seven or eight different contracts, all with respect to the same-land area. So what we did was we grouped all of those together into really geographic areas. We thought it made more sense to look at that way. The result of that exercise resulted in a change in reduction in how we count our assets. So we now have 59 producing assets, six of those are considered significant revenue generating assets. Those would be Weyburn, Midale. Edson. Then we have 53 other producing assets, which are smaller assets generating smaller amounts of revenue for the portfolio. They are located across the Western Canadian sedimentary basin. And then we have 19 exploration assets, 17 of those are in Western Canada and then we have some leases up in the Canadian Arctic as well as in Quebec with some exposure to the Utica Shale. So the map on Slide 24 shows the location of all those…

All right. Thank you, Jason, and good morning everyone. In the next few slides what we are going to look at is reserves and resources associated with some of our key assets and the royalty equivalent units. But before that, just want to take a brief moment to roll out our new 2016 asset handbook. It is published this morning. I believe this is the fifth year that we have published this book. It really is the go-to-guide for our business and it includes updates on our key mining assets, Oil & Gas, royalty equivalent units and hosts of other corporate information. We do encourage you to take a look at this. It's available and hardcopy through our offices or you can download it from our website. Slide number 30. This shows the total reserve ounces on key properties in which we have an interest. But for the first time we are actually showing silver expressed a gold equivalent in order to capture primarily Antamina, but also contributions from Cobre Panama, Candelaria and Antapaccay, Midas and the bunch of smaller mines as well. Now, the advantage is showing a simple count of this nature is that information is based entirely on public data. And it gives you an indication of the level of activity in our portfolio. The disadvantage, however, is that it doesn't tell you Franco's attributable share of these reserve ounces. But from the chart, there is one takeaway. It has to be that despite the difficult price environment over the last few years, the total reserves to which we are exposed has remained stable. We turn now to Slide number 31. Looking at some of the most significant changes in the underlying reserve base from the earlier slide, and notable gains have been through acquisitions, principally Antamina…

Now, I think they're all excellent presentations, and Geoff has been a great partner for decades we work together. I think thanks to him, Oil & Gas is always been the least of my concerns. He has been really managed our division; it really has had no major involvement of my part. It's been totally problem free division for us. We are not going to loose Geoff. We have tied him up with the contract for the next couple of years just in case Jason screws up. So we'll have some overlap and so we are good. So Jason can't be too comfortable yet. I think you've heard from the team that we are very satisfied with how our royalty portfolio is performing. And I think you've heard from Paul that we are also very pleased in terms of where we're positioned in the marketplace right now for transactions going forward. So I'm here to talk about what the next year and the next five years look like. And on Slide 36, it's specifically a summary of the main factors that are impacting Franco-Nevada's outlook in 2016. It's usually is a case in a broad portfolio. There is positive and there is negative, but for us it always will be the positive outway to negative. In 2016, we expect to benefit from started contribution of Antapaccay, a full year Antamina, and the starter payment from Karma. Our NPIs are also benefiting from some of the tailwinds in the industry. Offsetting that, you'll see that -- you'll recall that we amended our deal with Couer Mining on the Palmarejo transaction assets so they could transition the mine from the Palmarejo to Guadalupe. That means that we've been up till now getting a minimum of 12,500 ounces per quarter. That's going to…

On gold strike, if someone could speak to what your expectations are for gold strike in 2016 and 2017 particularly with the stockpiles that are going to be processed here over the next 24 months and the implications of when the NPI royalties in particular are going to be kicking in.

Sure, Steve. So you would have seen in 2015 we had a strong NPI in Q4 so we do expect that to continue. As the TCM process ramps up for 2016 I would expect the NPI to be stronger in the second half of the year than the first half of the year, then continue on to 2017. Obviously our guidance was done at $1,200 gold with it being approximately $1,270 now, that will also impact the NPI. But it won't be equal per quarter during the year I would expect the second half to be stronger than the first half.

Thanks, David and team and congrats, Jeff. Well deserved. Cosmos from CIBC here. Maybe first off, in the past six months, David, you made two pretty substantial acquisitions, royalty acquisitions Antamina and Antapaccay. How would you compare and contrast those two? Clearly, one is silver, the other is silver and gold. One has a higher upfront IRR, but it also seems like the other might have a bit more upside to it, longer term. Again, how would you compare and contrast those two?

I appreciate that, Cosmos. It's interesting because I think the market reaction to Antapaccay was so strong because everyone’s focus is very much on IRR today. I should try to remind people, especially in the resource business, if I want a high IRR back in November-December, I could have just bought tax debt, and get an 18% yield. I have absolute every confidence when it matures next year, it’s going to get paid off. But the trouble is the reinvestment risk. So I much better having something that’s going to give me return, that’s going to be over a long period of time. Hopefully, multiple and you get the optionality of that investment through multiple resource cycles. The advantage of Antamina is that we have a much longer term investment there. If you notice that there's a very small stepdown on our royalty at Antamina. There's tremendous larger pit potential at Antamina and expansion potential. There's underground mining potential and there's other development potential. We believe that asset will go for 50 years. It is a great asset, lots of potential as well but the structure of that deal is we have a much larger stepdown, two-thirds stepdown, about 15 years out in the future when they deliver us a certain number of ounces. I hate to have that happen. Giving up my optionality, two-thirds of my optionality on that exploration property. I'm going to have a stream that I'm going to have to worry about 15 years from now to build up again. I'm going to miss some of those other cycles beyond year 15. So I look at it, that was part of the tradeoff. We're getting the quicker payback but I have a bigger reinvestment risk at Antapaccay, than I do with Antamina. I think you build…

Great. And my other question is, I don’t know if you want to make a comment on First Quantum, but certainly they monetize - is there a positive read through here to Franco-Nevada’s Cobre Panama royalty?

I think there is number of positives. I think the site visits that went recently, you can see basically half of the projects have been committed to already. It’s going along well. First Quantum management is proud of it. They’ve also made it clear that that’s their number one priority, is to get that project built by 2018. They see that as the best way to get themselves back on to the right financial convents is make that into a cash generator for a company. They also see it as a way to derisking themselves from the Zambian risk that they have in that company. So all the public indications, and even the private indications to us is absolutely committed to going forward. We could appreciate the market’s concern about the financial capacity. Right now, the way we structured our GEOs, we only put in our money for every $3 they put in the project. So we are not going to be fully committed until close to $6 billion has been invested in that project. That’s a protection for us. We are also very well protected in that project. We have, in our safe right here, the securities for their 80% interest in the project. We’ve now allowed them to do some project borrowing on that project. I think they’ve started that process now. So hopefully, by later this year or early next year, they can borrow some money subject to an inter-credit over Franco-Nevada’s. So we believe we will be protected in all circumstances. And if this project gets further delayed, part of our new agreement with First Quantum because they have every confidence they have this for using at a set rate by 2018. If there is any delay, well, we’ll get a discounted price on our gold beyond that, that will give us extra 5% return on this project for any delay. Because one of our worries was okay, could First Quantum be taken over and if there was a BHP or Rio Tinto they would likely want us that project in - such a major copper project, they don’t more copper supply. And so this is why we feel we needed to have that protection just in case if there is a change there and someone else might have a different perspective on what was to come in the copper market. I am actually very proud of our business development team, I think we have covered all the bases on this project, we are absolutely committed to making our ongoing contribution project because this is the 50 year project, 8 billion tones of reserves and Panama has been a great country to work in, totally business like mentality in relative to South American countries or something that you might work in and so we think its cornerstone effort for us we want to be there.

Maybe one more question David, maybe more question for Jason and Jeff here. What’s your sort of breakeven price for oil and gas, your oil and gas royalties. If we talked about a year ago, would have been I think $35 a barrel, I think you mentioned that at 35, it would have been minimal royalty back to us – certainly the cost structure has now changed.

Yes, again the bulk of our royalties are just top line revenue royalties, there is no issue of breakeven cost there, the issue is on particular. The breakeven cost there - it’s really very difficult to pinpoint to be honest with you. Last year would have been higher. What happens is when your price starts to fall. Operator is probably true for many operators, they start to dial back the capital spending after putting into the asset. And it really start to tightening the cost structure. So cost have come down in the last year. Capital spending has come down significantly in the last year and so as I said, the breakeven cost is difficult to pinpoint but it was cash flow positive earlier this year when oil was under $30 barrels. At that point, you’re getting down to very minimal cash flow from the assets. So its in or about that neighborhood.

Josh Wolfson with Dundee. Following up with the oil and gas comments, you pointed out number of transaction that happen space recently. You guys have been pretty active on deals but not on that side. What you guys seeing that’s a difference and what is your expectations when you’re pricing deals for long term assumption for oil price.

We were active in most of the deals last year at least being involved in, thank God we didn’t buy them. I think our experience and I have to remind myself, whenever you have a big drop of commodity price usually have lot of potential buyers and are expecting type recovery in our commodity price. So once we participated and we didn’t win, we did three processes last year. The only one that we won was that [indiscernible] another transaction. In terms of what we are seeing right now, I think none of them is that exciting, now what we really interesting is large free whole packages which goes back to our philosophy of owning the land and then you don’t worry about how the operators might change over time. Some of the other ones that are in the market right now they tend to be going on core assets, a lot of jointed lands, there is not the larger packages but if buying cheap enough, for sure we can tag on them, some of them actually tie in to our properties maybe we can create something more material over time. So I'd say, we are always at to it looking at something bigger or small in the oil and gas sector last year we were telegraphing, we were really looking at some bigger things. Now we are telegraphing that most – as Jason said, mostly just tuck-in transactions at this stage. Our focus right now is the large gold deals in the marketplace. So if we look like we’re going to do certainly material in the oil and gas space we’ll let you know right now we don’t see any pipeline. On the price deck, we can’t tell you that specifically. Obviously ours is more conservative and the ones that bought last year. And I think – oil and gas is more tricky than mining. Once they build a mill, you know what that throughout is going to be forever, and once that production profile. The trouble with oil and gas is that you’re making essentially the price deck, but if your price deck is wrong, you also get a different amount of capital based on the properties which means there are fewer wells, let’s say enhanced oil recovery on projects then you start getting that production decline recurring very well. So that’s why I think we have to be conservative on oil and gas deck because we have a double whammy there if we get wrong.

And then just one other question on now the financial side. There is big working capital consumption this quarter and that's been the case for the last five quarters. Are we expecting a reversal and really what's that attributed to?

Sandy will speak to that.

You are referring to the cash flow?

Yes.

It's just accounting because we do hold gold from our royalties and then we sell them. So when we sell them there is a re-class that comes out of working capital that goes down to invested. So you'll see proceeds on the sale of gold and so it's coming out of working capital and going down below. So it's a re-class on the cash flow and so as we continue to receive physical gold from harvest and we sell it ourselves you'll see that re-class occurring.

Is there any other working capital uses for the business on a general basis or is it, it's pretty consistent or there should be nothing else. Okay. Thank you.

David, you've done Antamina and are the easy ones done now? Other field more difficult jurisdictions, Paul you're the one who dissolve the work on these so.

There are good amount of transactions out there Greg. So as I say there are transactions that I think people would consider as equivalent to those transactions, but that are potentially doable. They are streams in the market which are definitely further upheld and given that we've got the option of investing in safer jurisdictions, that's where we would like to spend the money at this stage. I should -- I will also just clarify one thing David had mentioned on the -- I also think there is on about 60% roughly gold and then once we have the reduction over time it reduces down to about 30 of the gold. So it's about one third of the goal, but the reduction is about a 50% reduction.

I think with that maybe we should turn it operator to anyone on the line that might have a question. And operator could pull that?

[Operator Instructions] And the first question is from John Bridges of JPMorgan. Your line is open.

Hi David everybody. Congratulations on the results. I think a while ago, my question on Cobre Panama. So I'm out and I'll pass the next guy. But well done on the results.

Thanks John.

The next question is from Chris Terry with Deutsche Bank. Your line is open.

Hi guys. I got a question just on the overall strategy I guess and trying to say how you're positioning the business. You've obviously talked about it in a number of the questions already. But if you look at Slide 17 might be the best starting point, how do you see your ability to pick the cycles as they go forward. And I guess when you look at the rig capitalization cycle today, you could argue that the base metals oil and gas is still very much in that equation. But the mix cycle probably for gold will be back to the 2011 primary product funding arguably. So how do you get the balance right going forward of investing in gold as opposed to the rig capitalizations?

It's a good question and I think that's one of the things that we always have to address with our investors. They always expect us to be buying things all the time. And this is the feaster family business and you got to make hey when the sun is shining and it stop when it's raining. And so we expect there is actually a very limited window hereby. The next year, either these major companies are going bankrupt or they've solved with their financial equation. So they will be doing -- be done in terms of their financial situation. And all the portfolio cleaning that's being done by the gold companies, I think that's roughly going to run its course over the next year. So we kind of see this as the feast period time as if we're going to help on transactions help on the recapitalization. We can't let any of our business development team going holiday. So we want to do that because we then expect when the industry’s back and bull market and the equity market we won't be able to buy anything. How do we judge this? It's really when the opportunities come over to us and people are saying and willing to start negotiating with us on very interesting properties and have good geological potential and a long duration and upside. We're always in the market for those And as just the opportunity come back when they really need us. They generally don't need us. Their other financing options are open and we're very relaxed about that. When those bull markets come back again, we have a great pipeline of development properties and exploration properties that we then get organic growth from those properties as other people are spending on those properties. In terms of the commodity mix as well, it's driven a bit by what's seems to be so underweighted by our portfolio. Oil is sending a signal right now. We should be buying more oil but right now our big strategic opportunity is in the gold space. We can never have too much gold and we'll be 95% precious metals this year, that's not a problem. If you remember two years ago, there was a problem we were over 20% oil and we were actually looking to see how can we reiterate size of the portfolio to keep to our precious metals commitment to stay always at least 80% precious metals in the company. But I would say this is actually a very easy business. You buy when people are selling and you don't buy when there is a bull market. Simple as that, I think our luxury is we have a very long term timeframe and that we have permanent cap in our business. It gives us a big strategic advantage over about just everybody else.

Okay. Thanks. Thanks David. So is it fair to say that rate recapitalization deal, you're still going to be aiming at more chunky tough deals whereas the setting the business up for the future in the next cycle, those might be bought size or tuck-in tied deals?

I think that's fair enough. I think to be material enough for the companies that are in recapitalization it used to substantial. So those will be the chunky deals. We're still doing where we just don't talk about a little royalty deals. Some of my directors call me retentive, but I buy royalties for as little as $50,000 up at Red Lake and if they're going to make some future deals look good, and so we'll always add in and you can see from our numbers we're up to 262 different royalties and streams. We first started this business in 2008. It was $176. We just don't put press releases or anything that's less tens of millions of dollars now, but we'll always be adding on the exploration front and just the materiality is not there.

Thanks very much David.

And currently showing no further questions by phone.

Any other questions in the room here? Okay. I can see everyone is anxious. For the visitors that we have today, we have some refreshments outside. All the Management you recognize them by the tags are -- would love to spend time and address any questions you have. We even tidied up our desk if you want to have a tour of our office and see our setup. We're happy to show you how we're doing. Just as an aside we're running our company, we are increasing the number of employees. We're up to 29 employees, so it's getting up there. But I think about 18 or 19 of them are in this officer here. So you're seeing the bulk of the entire Franco-Nevada operations and you can maybe get an appreciation on why we're running as efficiently as we are. The other thing I refer to people on line is don't forget if you send us an email info at franco-nevada.com, we'll send you a hard copy because I think the best investors are the ones that are registered and have poor eyesight and they need these sort of bigger print copies to be able to see what's going on and the tabs. So I think it's hard to do when you're looking on a website and our Annual Meeting is going to be on May 4. We'll come up with our first quarter results on that day. We'll give you an update on our dividend decision for 2016 and you're welcome to attend our Annual General Meeting. It's at the Broadcast Center at Toronto Stock Exchange at 4:30 on May 4. And so please join us. Thank you very much for your interest.

Ladies and gentlemen this concludes today's conference call. You may now disconnect. Thank you.