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>>> Franco-Nevada Adds to Royalties Portfolio and Initiates New ATM Equity Program


PR Newswire

May 11, 2020


https://finance.yahoo.com/news/franco-nevada-adds-royalties-portfolio-123100728.html


TORONTO, May 11, 2020 /PRNewswire/ -

Alpala Royalty Acquisition

The Corporation today entered into an agreement with SolGold PLC ("SolGold") to acquire a 1% net smelter royalty ("NSR") with reference to all minerals produced from the Alpala copper-gold project in northern Ecuador for $100 million. The Alpala project is owned by Exploraciones Novomining SA, which is held 85% by SolGold and 15% by Cornerstone Capital Resources Inc. The NSR will cover the 4,979 hectare Cascabel concession and closing of the acquisition is subject to on-site confirmatory due diligence which will be completed once COVID-19 travel restrictions are lifted. In the interim, the Corporation has agreed to provide SolGold with a bridge loan of $15 million for a period of up to 8 months.

SolGold has the option to increase the size of the transaction to $150 million for a 1.5% NSR until January 11, 2021 and also has the option to buy-back 50% of the NSR for a period of time. Franco-Nevada is entitled to receive certain minimum royalty payments from 2028 and also has the option to convert the NSR to a gold NSR for a period of time after Alpala is producing.

As part of the royalty arrangements, the Corporation has agreed to contribute $150,000 per year for three years after closing to one or more of SolGold's local Ecuadorian environmental and social initiatives. SolGold has agreed to match or surpass such annual funding.

At-the-Market Equity Program

Franco-Nevada has established an at-the-market equity program (the "ATM Program") that allows the Corporation to issue up to $300 million worth of common shares from treasury ("Common Shares") to the public from time to time at the prevailing market price through the Toronto Stock Exchange, the New York Stock Exchange or any other marketplace on which the Common Shares are listed, quoted or otherwise traded. The volume and timing of distributions under the ATM Program, if any, will be determined at the Corporation's sole discretion, subject to applicable regulatory limitations. The Corporation's previous at-the-market equity program established July 19, 2019 that allowed the Corporation to issue up to $200 million worth of Common Shares was terminated on April 28, 2020.

The ATM Program will be effective until May 28, 2022 unless terminated prior to such date by the Corporation. Franco-Nevada intends to use the net proceeds from the ATM Program, if any, for funding royalty and stream acquisitions and/or other general corporate purposes including the repayment of indebtedness. Sales of Common Shares through the ATM Program will be made pursuant to the terms of an equity distribution agreement dated May 11, 2020 with CIBC Capital Markets, BMO Nesbitt Burns Inc., RBC Dominion Securities Inc., Scotia Capital Inc., TD Securities Inc., Canaccord Genuity Corp., Credit Suisse Securities (Canada), Inc., National Bank Financial Inc., Raymond James Ltd., and Industrial Alliance Securities Inc., as Canadian agents, and CIBC Capital Markets, BMO Capital Markets Corp., RBC Capital Markets, LLC, Scotia Capital (USA) Inc., TD Securities (USA) LLC, BofA Securities, Inc., Canaccord Genuity LLC, Credit Suisse Securities (USA) LLC, National Bank of Canada Financial Inc., Raymond James (USA) Ltd., Barclays Capital Inc., Deutsche Bank Securities Inc. and Stifel, Nicolaus & Company, Incorporated, as U.S. agents.

The Corporation has filed a registration statement (including a prospectus) and a prospectus supplement with the U.S. Securities and Exchange Commission (the "SEC") for the ATM Program. Before you invest, you should read the prospectus in that registration statement, the prospectus supplement and other documents the issuer has filed with the SEC for more complete information about the issuer and the ATM Program. The Corporation has also filed prospectus supplement dated May 11, 2020 to the Corporation's Canadian base shelf prospectus dated April 28, 2020 with the securities regulatory authorities in Canada. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov or on SEDAR at www.sedar.com. Alternatively, any agent participating in the ATM Program will arrange to send you the prospectus if you request it by contacting, (i) in Canada: CIBC World Markets Inc., attn: Michelene Dougherty, by email at [e-mail] or by phone at 416-956-3636 or BMO Nesbitt Burns Inc., attn: Brampton Distribution Centre C/O The DATA Group of Companies, 9195 Torbram Road, Brampton, Ontario, L6S 6H2, by email at [e-mail] or by phone at 905-791-3151 Ext. 4312; and (ii) in the U.S.: CIBC World Markets Corp., 425 Lexington Ave, 5th Floor, New York, NY, by email at [e-mail] or by phone at [phone] or BMO Capital Markets Corp., attn: Equity Syndicate Department, 3 Times Square, 25th Floor, New York, NY, 10036, by email at [e-mail] or by phone at 1-800-414-3627.