Franco-Nevada Announces 2013 Year-End Results, Increases Dividend and Provides Outlook

March 19, 2014

TORONTO, March 19, 2014 /PRNewswire/ – Franco-Nevada Corporation (TSX: FNV);
(NYSE: FNV) today reported 2013 year end results realizing 241,402 Gold
Equivalent Ounces((3)) and $67.0 million in revenue for its oil & gas assets. Net income was
$11.7 million, or $0.08 per share, which included after-tax impairment
charges of $114.0 million. Adjusted Net Income((1)) was $138.3 million, or $0.94 per share, and Adjusted EBITDA((2)) was $322.5 million, or $2.20 per share. For the fourth quarter of 2013,
Franco-Nevada realized a net loss of $80.6 million, or $0.55 per share,
which included after-tax impairment charges of $108.1 million. Adjusted
Net Income((1)) for the quarter was $30.5 million, or $0.21 per share, and Adjusted
EBITDA((2)) was $77.3 million, or $0.53 per share.

An impairment charge of $107.9 million was recorded on our McCreedy
precious metal stream located in Sudbury as KGHM International Ltd.
announced that it would cease production of contact nickel ores as its
off-take contract has been cancelled. In addition, an impairment of
$24.2 million was recorded on our interest in Falcondo, a ferronickel
operation located in the Dominican Republic, as Glencore Xstrata has
put the operation on care and maintenance. Neither of these impairments
impacted guidance, revenue or Adjusted EBITDA.

“In 2013, Franco-Nevada’s portfolio performed very well despite lower
gold prices,” said David Harquail, President and CEO of
Franco-Nevada. “We exceeded guidance for both our projected GEOs and
oil & gas revenues. We expect our existing portfolio will continue to
generate a growing number of ounces over the next five years.
Franco-Nevada remains financially strong and debt-free and we expect to
continue to grow with further investments.”

“This is our sixth year of financial results since Franco-Nevada was
reborn as a public company in late 2007. Over those six years, our
business model has created real shareholder value with our share price
outperforming both gold and gold equity benchmarks. In 2013,
Franco-Nevada paid over $100 million in dividends to shareholders.
We’re pleased to continue the tradition of increasing dividends with an
11% increase to our dividend starting in the second quarter of 2014. We
are proud to continue to differentiate Franco-Nevada as the gold
investment that works.”

Financial Results

For the fourth quarter of 2013, Gold Equivalent Ounces(3) (“GEOs”) were
69,741 representing a 17.5% increase over the same period of 2012.
Despite a 26.0% lower average gold price and a 12.9% lower average
platinum price for the quarter, the Company saw growth in its GEOs from
higher production levels from International and Canadian gold assets
and PGM assets, partially offset by lower production from U.S. gold
assets. In addition, our oil & gas assets generated $12.6 million in
revenues during the quarter. Revenue was earned 83% from precious
metals (69% gold and 14% PGMs) and 83% from North America and Australia
(39% Canada, 14% U.S., 24% Mexico and 6% Australia).

The breakdown of revenue and GEOs((3)) is as follows:

                       For the three months ended     For the year ended
                           December 31, 2013          December 31, 2013

                           Revenue        GEOs(3)       Revenue  GEOs(3)

                     (in millions)              # (in millions)         #

    Gold - United    $        11.5          8,833   $      59.1   41,040

    Gold - Canada             15.3         12,116          43.6   31,966

    Gold - Australia           1.8          1,457           9.7    6,809

    Gold - Rest of            40.6         32,047         157.5  112,482

    Gold - Total     $        69.2         54,453   $     269.9  192,297

    PGMs                      13.8         11,776          51.6   40,007

    Other minerals             4.4          3,512          12.4    9,098

    Oil & gas                 12.6              -          67.0        -

                     $       100.0         69,741         400.9  241,402

Corporate Updates

        --  Cerro Moro:In January 2014, Franco-Nevada entered into an
            agreement with AngloGold Ashanti Limited to acquire an existing
            2.0% net smelter return ("NSR") royalty on Yamana's Gold Inc.'s
            Cerro Moro project located in Argentina for the Argentine peso
            equivalent of $23.5 million (at the official Argentine peso
            exchange rate) in cash.  The transaction is expected to close
            during H1 2014.

        --  Klondex Gold:On February 11, 2014, Franco-Nevada entered into
            gold purchase and royalty agreements with Klondex Mines Ltd.
            ("Klondex") which provided for the pre-paid purchase of 38,250
            ounces of gold and a 2.5% NSR on Klondex's Fire Creek and Midas
            properties, both of which are located in Nevada, U.S., for
            total consideration of $35.0 million in cash. Under the terms
            of the gold purchase agreement, the prepaid gold deliveries
            will be made at the end of each month with the first delivery
            due on June 30, 2014 and the last delivery due on December 31,
            2018.  The annualized delivery schedule is: 6,750 ounces in
            2014, 7,500 ounces in 2015 and 8,000 ounces in each of 2016,
            2017 and 2018.  The NSR royalties will become payable following
            completion of the pre-paid deliveries.

        --  Sabodala:On December 12, 2013, Franco-Nevada acquired a 6% gold
            stream on Teranga Gold Corporation's Sabodala gold project
            located in Senegal, Africa. Under the terms of the gold stream
            agreement, the Company funded a $135.0 million deposit in
            exchange for 22,500 ounces of gold per year, payable monthly,
            for the first six years of the agreement, after which the
            Company will purchase 6% of the gold produced from Sabodala.
            The Company will pay 20% of the market price of gold for each
            ounce delivered under the agreement.

        --  On March 19, 2014, the Company extended its credit facility for
            an additional two years with the amended expiry being March 19,
            2019.  As at December 31, 2013, Franco-Nevada had working
            capital(4) of $861.2 million, no debt with an undrawn $500.0
            million unsecured five-year revolving credit facility.

2014 Guidance

For 2014, the Company expects attributable royalty and stream production
to total 245,000 to 265,000 GEOs((3)) from its mineral assets and revenue of $60 million to $70 million from
its oil & gas assets. For the 2014 guidance, platinum and palladium
metals have been converted to GEOs using assumed commodity prices of
$1,300/oz Au, $1,400/oz Pt and $725/oz Pd. The WTI oil price is assumed
to average $95 per barrel with higher discounts for Canadian oil than
experienced in 2013.

Five Year Outlook (2018)

Our five year outlook is based upon the respective operators’ public
projections for each asset. Using the same commodity price assumptions
as for 2014 and assuming no other acquisitions, the Company expects its
existing portfolio to generate by 2018 between 300,000 to 325,000 gold
equivalent ounces and $65 to $75 million in oil & gas revenues. This
outlook is also based on the following assumptions:

        --  Cobre Panama:The outlook assumes a successful commissioning of
            the Cobre Panama project with operations performing at 50%
            capacity in 2018 of the annualized production levels projected
            by First Quantum.
        --  Detour Gold:  The outlook assumes the successful ramp-up to
            full production of the Detour Lake mine to produce on average
            657,000 ounces per year over the life of mine. No further
            expansion has been assumed within the next five years.

        --  Tasiast: The outlook assumes no material expansion within the
            five year period. Production levels in 2018 are assumed to be
            comparable to current production levels.

        --  New mines: The outlook assumes new mines will be contributing
            to the portfolio at levels close to the current operator's
            projections at Rosemont(owned by Augusta Resource), Phoenix
            (owned by Rubicon Minerals), Agi Dagi(owned by Alamos Gold),
            Duketon(comprising Rosemont and Erlistoun and owned by Regis
            Resources) and Peculiar Knob(owned by Arrium Limited).Increased
            production is expected by 2018 at Subika (operated by Newmont
            Mining) and Holt(operated by St Andrews).  Lower production is
            expected by 2018 at Palmarejoand Goldstrike. 

        --  Oil & gas: The outlook assumes the ongoing enhanced oil
            recovery capital program at Weyburn and Canadian oil price
            differentials returning to historic norms.

Portfolio Update

        --  Gold - U.S.:Capital spending associated with Barrick Gold
            Corporation's ("Barrick") ongoing thiosulphate project at
            Goldstrike and a lower average gold price continued to impact
            the Company's net profit interest ("NPI") royalty which
            resulted in lower GEOs and revenue for the quarter. In
            addition, Barrick reported a reduction in the ore tons
            processed through the autoclave due to the construction
            activities. The thiosulfate project is expected to bring
            forward production which is expected to benefit Franco-Nevada
            in future periods. For 2014, the Company expects to earn
            slightly higher GEOs than 2013 levels. At Gold Quarry, where
            the royalty has minimum provisions, the Company expects to
            receive 11,250 ounces. GEOs from Marigold, Bald Mountain and
            Mesquite are expected to be lower in 2014 but will be more than
            offset by GEOs from the newly acquired Fire Creek asset.
            Overall GEOs from U.S gold assets are expected to be higher in
            2014 than 2013.

        --  Gold - Canada:GEOs from Canadian gold assets are expected to
            benefit from higher production from Detour Gold Corporation's
            Detour Lake mine and the Kirkland Lake royalty which was
            acquired in October 2013. In addition, Lake Shore Gold Corp.
            announced the completion of its mill expansion during the third
            quarter of 2013 which will benefit Franco-Nevada's royalty on
            the Timmins West property. Pretium Resources Inc. announced
            results from its bulk sampling program and filed a technical
            report which included a Mineral Resource estimate for its
            Brucejack project. The Government of Canada has announced that
            it will not issue the federal authorizations necessary for the
            development of the New Prosperity project, as a result the New
            Prosperity project continues to be excluded from
            Franco-Nevada's long term projections.  GEOs earned from
            Canadian gold assets in 2014 are expected to be in-line with
            2013 levels.

        --  Gold - Australia:Regis Resources Ltd. ("Regis") announced the
            completion of construction and the commencement of
            commissioning of its Rosemont Gold project, which comprises
            part of the Duketon project. In February 2014, Regis also
            announced a 4-6 week suspension of open pit mining at Garden
            Well and Rosemont due to flooding. Alacer Gold Corp. sold its
            South Kalgoorlie operations on which Franco-Nevada has a
            royalty, to a subsidiary of Metals X Limited, an Australian
            publicly-listed company. GEOs from Australian gold assets are
            expected to be slightly higher in 2014 than 2013.

        --  Gold - Rest of World:First Quantum Minerals Ltd. ("First
            Quantum") announced the results of its review of the Cobre
            Panama project which included a larger project with installed
            capacity approximately 17% higher than the original plan and a
            revised development timeframe with first concentrate production
            expected in the fourth quarter of 2017. Franco-Nevada expects
            to fund approximately $200.0 million in 2014 under its precious
            metals stream agreement on the Cobre Panama project. Coeur
            Mining, Inc. reported annual production of 116,536 ounces of
            gold from Palmarejo and provided 2014 guidance of 87,000-95,000
            ounces of gold. The Company holds a 50% gold stream over
            Palmarejo which includes an annual minimum of 50,000 ounces,
            payable monthly.  Overall Rest of World gold assets are
            expected to generate higher GEOs in 2014.

        --  PGM Assets:Stillwater Mining Company has announced its 2014
            guidance of between 520,000-535,000 ounces of palladium and
            platinum which is in-line with 2013 production levels.
            Production from KGHM International Ltd.'s ("KGHM") Morrison
            mine is expected to be in-line with 2013 levels. KGHM announced
            plans to reduce mining at its McCreedy mine due to the
            cancellation of a nickel processing contract. While mining of
            the contact nickel ore at McCreedy was not attributable to the
            Franco-Nevada's stream, the reduction in the labor force
            resulted in Franco-Nevada recording an impairment charge on
            this asset.
        --  Oil & gas: Q4 revenues were lower than Q3 due to lower oil
            prices, higher differentials and pipeline apportionments. For
            2014, revenues are expected to be comparable to 2013 with
            slightly lower volumes and price discounts offset by reduced
            capital spending.

Dividend Information

Franco-Nevada is pleased to announce that its Board of Directors has
decided to raise its dividend and move to quarterly dividend payments,
both effective for the second quarter of 2014. The dividend will
increase to $0.20 per share per quarter, an increase of two cents per
share per quarter, resulting in an effective annual dividend of $0.80
per share compared to $0.72 per share paid in 2013. The Board of
Directors plans on formally declaring the second quarter dividend of
$0.20 per share in May 2014 with payment by the end of June 2014.
Moving to a quarterly dividend should reduce the foreign exchange
exposure shareholders have been assuming with our monthly declarations.

Shareholder Information and 2014 Asset Handbook

The complete Consolidated Annual Financial Statements and Management’s
Discussion and Analysis can be found today on Franco-Nevada’s website
at www.franco-nevada.com, on SEDAR at www.sedar.com and on EDGAR at www.sec.gov.

Management will host a conference call tomorrow, Thursday, March 20,
2014 at 10:00 a.m. Eastern Time to review the results as well as
discuss Franco-Nevada’s 2014 and five-year outlook. In addition,
Franco-Nevada will be releasing its 2014 Asset Handbook with updated
disclosures on our assets and the number of gold ounces and royalty
equivalent units associated with each asset.

Interested investors are invited to participate as follows:

        --  Via Conference Call:  Toll-Free: (888) 231-8191; International:
            (647) 427-7450; Title: Franco-Nevada 2013 Results and 2014

        --  Conference Call Replay: A recording will be available until
            March 27, 2014 at the following numbers: Toll-Free (855)
            859-2056; International (416) 849-0833; Pass code 51386489.

        --  Webcast: A live audio webcast will be accessible

Corporate Summary

Franco-Nevada is a gold-focused royalty and stream company. The Company
has a diversified portfolio of cash-flow producing assets and interests
in some of the largest development projects in the world. Its business
model provides investors with exploration optionality while limiting
exposure to operating and capital cost risks. Franco-Nevada has
substantial cash with no debt and is generating cash flow from its
portfolio that is being used to expand its portfolio and pay
dividends. Franco-Nevada’s common shares trade under the symbol FNV on
both the Toronto and New York stock exchanges.

Prepared in accordance with IFRS and presented in U.S. dollars (unless
otherwise noted).

Forward Looking Statements

This press release contains “forward looking information” and “forward
looking statements” within the meaning of applicable Canadian
securities laws and the U.S. Private Securities Litigation Reform Act
of 1995, respectively, which may include, but are not limited to,
statements with respect to future events or future performance,
management’s expectations regarding Franco-Nevada’s growth, results of
operations, estimated future revenues, requirements for additional
capital, mineral reserve and mineral resource estimates, production
estimates, production costs and revenue, future demand for and prices
of commodities, expected mining sequences, business prospects and
opportunities. In addition, statements (including data in tables)
relating to reserves and resources and gold equivalent ounces are
forward looking statements, as they involve implied assessment, based
on certain estimates and assumptions, and no assurance can be given
that the estimates will be realized. Such forward looking statements
reflect management’s current beliefs and are based on information
currently available to management. Often, but not always, forward
looking statements can be identified by the use of words such as
“plans”, “expects”, “is expected”, “budgets”, “scheduled”, “estimates”,
“forecasts”, “predicts”, “projects”, “intends”, “targets”, “aims”,
“anticipates” or “believes” or variations (including negative
variations) of such words and phrases or may be identified by
statements to the effect that certain actions “may”, “could”, “should”,
“would”, “might” or “will” be taken, occur or be achieved. Forward
looking statements involve known and unknown risks, uncertainties and
other factors, which may cause the actual results, performance or
achievements of Franco-Nevada to be materially different from any
future results, performance or achievements expressed or implied by the
forward looking statements. A number of factors could cause actual
events or results to differ materially from any forward looking
statement, including, without limitation: fluctuations in the prices of
the primary commodities that drive royalty and stream revenue (gold,
platinum group metals, copper, nickel, uranium, silver, iron-ore and
oil and gas); fluctuations in the value of the Canadian and Australian
dollar, Mexican peso and any other currency in which revenue is
generated, relative to the U.S. dollar; changes in national and local
government legislation, including permitting and licensing regimes and
taxation policies; regulations and political or economic developments
in any of the countries where properties in which Franco-Nevada holds a
royalty, stream or other interest are located or through which they are
held; risks related to the operators of the properties in which
Franco-Nevada holds a royalty, stream or other interest, including
changes in the ownership and control of such operators; influence of
macroeconomic developments; business opportunities that become
available to, or are pursued by Franco-Nevada; reduced access to debt
and equity capital; litigation; title, permit or license disputes
related to interests on any of the properties in which Franco-Nevada
holds a royalty, stream or other interest; whether or not the
Corporation is determined to have PFIC status; excessive cost
escalation as well as development, permitting, infrastructure,
operating or technical difficulties on any of the properties in which
Franco-Nevada holds a royalty, stream or other interest; rate and
timing of production differences from resource estimates; risks and
hazards associated with the business of development and mining on any
of the properties in which Franco-Nevada holds a royalty, stream or
other interest, including, but not limited to unusual or unexpected
geological and metallurgical conditions, slope failures or cave-ins,
flooding and other natural disasters or civil unrest; and the
integration of acquired assets. The forward looking statements
contained in this press release are based upon assumptions management
believes to be reasonable, including, without limitation: the ongoing
operation of the properties in which Franco-Nevada holds a royalty,
stream or other interest 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 asset portfolio; the Corporation’s
ongoing income and assets relating to determination of its PFIC status;
no adverse development in respect of any significant property in which
Franco-Nevada holds a royalty, stream or other interest; the accuracy
of publicly disclosed expectations for the development of underlying
properties that are not yet in production; integration of acquired
assets; and the absence of any other factors that could 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 and investors are cautioned that forward looking statements
are not guarantees of future performance. Franco-Nevada cannot assure
investors that actual results will be consistent with these forward
looking statements. Accordingly, investors 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 refer to the “Risk Factors”
section of Franco-Nevada’s most recent Annual Information Form as well
as Franco-Nevada’s most recent Management’s Discussion and Analysis
filed with the Canadian securities regulatory authorities on www.sedar.com and contained in Franco-Nevada’s Form 40-F filed with the SEC on www.sec.gov. The forward looking statements herein are made as of the date of this
press release 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.

NON-IFRS MEASURES: Adjusted Net Income, Adjusted EBITDA and Working Capital are intended to
provide additional information only and do not have any standardized
meaning prescribed under IFRS and should not be considered in isolation
or as a substitute for measures of performance prepared in accordance
with IFRS. These measures are not necessarily indicative of operating
profit or cash flow from operations as determined under IFRS. Other
companies may calculate these measures differently. For a
reconciliation of these measures to various IFRS measures, please see
below or the Company’s current MD&A disclosure found on the Company’s
website, on SEDAR and on EDGAR.

    (1)  Adjusted Net Income is defined by the Company as net income (loss)
         excluding foreign exchange gains/losses, gains/losses on the sale
         of investments, impairment charges related to royalties, streams,
         working interests and investments, unusual non-recurring items,
         and the impact of taxes on all these items.

    (2)  Adjusted EBITDA is defined by the Company as net income (loss)
         excluding income tax expense/recovery, finance income and costs,
         foreign exchange gains/losses, gains/losses on the sale of
         investments, income/losses from equity investments, depletion and
         depreciation and impairment charges related to royalties, streams,
         working interests and investments.

    (3)  GEOs include our gold, platinum, palladium and other mineral
         assets. GEOs are estimated on a gross basis for NSR royalties and,
         in the case of stream ounces, before the payment of the per ounce
         contractual price paid by the Company. For NPI royalties, GEOs are
         calculated taking into account the NPI economics. Platinum,
         palladium and other minerals were converted to GEOs by dividing
         associated revenue by the average gold price for the period. For
         Q4 2013, the average commodity prices were as follows: $1,272/oz
         gold (2012 - $1,719/oz); $1,397/oz platinum (2012 - $1,603/oz) and
         $726/oz palladium (2012 - $654/oz). For 2013, the average
         commodity prices were as follows: $1,411/oz gold (2012 -
         $1,669/oz); $1,487/oz platinum (2012 - $1,552/oz) and $725/oz
         palladium (2012 - $645/oz).

    (4)   Working capital is defined by the Company as current assets less
         current liabilities.

Reconciliation to IFRS measures:

                                         Three months ended      Year ended
                                               December 31,    December 31,

    (expressed in millions, except per     2013        2012    2013    2012
    share amounts)

    Net Income (Loss)                  $ (80.6) $    (33.1) $  11.7 $ 102.6

      Foreign exchange loss and other       0.5       (0.5)     2.3   (0.1)
      expenses, net of income tax

      Mark-to-market changes on             1.7         1.4     9.9   (7.2)
      derivatives, net of income tax

      Impairment of investments, net       25.6         7.6    30.8     7.6
      of income tax

      Impairment of royalty, stream        83.3        74.1    83.3    74.1
      and working interests, net of
      income tax

      Credit facility costs written                       -     0.3       -
      off, net of income tax

      Foreign withholding taxes               -           -       -   (3.5)

      Withholding tax reversal                -       (2.5)       -   (2.5)

    Adjusted Net Income                $   30.5 $      47.0 $ 138.3 $ 171.0

    Basic Weighted Average Shares         147.1       145.3   146.8   143.1

    Adjusted Net Income per share      $   0.21 $      0.32 $  0.94 $  1.19

    Net Income (Loss)                  $ (80.6) $    (33.1) $  11.7 $ 102.6

      Income tax (recovery) expense      (17.1)        10.9    22.3    52.3

      Finance costs                         0.6         0.2     1.9     1.1

      Finance income                      (1.0)       (1.4)   (3.5)   (9.6)

      Depletion and depreciation           34.4        32.8   129.3   126.7

      Impairment of investments            24.8         8.6    30.7     8.6

      Impairment of royalty, stream       112.9        74.1   112.9    74.1
      and working interests

      Foreign exchange (gains)/losses       3.3         1.6    17.2   (8.0)
      and other (income)/expenses

    Adjusted EBITDA                    $   77.3 $      93.7 $ 322.5 $ 347.8

    Adjusted EBITDA per share          $   0.53 $      0.65 $  2.20 $  2.43



    (in millions of U.S.

                                  December 31, 2013      December 31, 2012


    Cash and cash               $             770.0    $             631.7
    equivalents (Note 5)

    Short-term investments                     18.0                  148.2
    (Note 6)

    Receivables                                78.0                   83.4

    Prepaid expenses and                       46.3                   15.9

       Current assets                         912.3                  879.2

    Royalty, stream and
    working interests, net                  2,050.2                2,223.6
    (Note 7)

    Investments (Note 6)                       38.2                  108.4

    Deferred income tax                        15.8                    8.7
    assets (Note 15)

    Other                                      28.4                   24.0

       Total assets             $           3,044.9    $           3,243.9


    Accounts payable and
    accrued liabilities (Note                  46.1    $              44.0

    Current income tax                          5.0                   12.8

       Current liabilities                     51.1                   56.8

    Deferred income tax                        30.0                   38.0
    liabilities (Note 15)

       Total liabilities                       81.1                   94.8

    (Note 16)

    Common shares                           3,133.0                3,116.7

    Contributed surplus                        45.8                   47.2

    Deficit                                 (212.5)                (120.6)

    Accumulated other
    comprehensive income                      (2.5)                  105.8

       Total shareholders'                  2,963.8                3,149.1

       Total liabilities
       and shareholders'     $              3,044.9    $           3,243.9

    Commitments (Note 18)                                                 

    Subsequent events (Note 20)

    The notes are an integral part of these unaudited consolidated
               financial statements and can be found in
           our 2013 Annual Report available on our website.

    FRANCO-NEVADA CORPORATION                                             


    (in millions of U.S. dollars, except
    per share amounts)

                                          For the years ended December 31,

                                             2013                 2012

    Revenue (Note 12)                      $  400.9    $             427.0

    Costs and expenses                                                    

      Costs of sales (Note 13)                 60.2                   59.2

      Depletion and depreciation              129.3                  126.7

      Impairment of investments (Note 6)       30.7                    8.6

      Impairment of royalty, stream and       112.9                   74.1
      working interests (Note 7(c))

      Corporate administration (Note 14        15.2                   17.4
      and 16)

      Business development                      3.0                    2.6

                                              351.3                  288.6

      Operating income                         49.6                  138.4

      Foreign exchange gain (loss) and       (17.2)                    8.0
      other income (expenses)

     Income before finance items and           32.4                  146.4
    income taxes 

    Finance items                                                         

      Finance income                            3.5                    9.6

      Finance expenses (Note 11)              (1.9)                  (1.1)

    Net income before income taxes         $   34.0    $             154.9

    Income tax expense (Note 15)               22.3                   52.3

    Net income                             $   11.7    $             102.6

    Other comprehensive income (loss):                                    

    Items that may be classified                                         -
    subsequently to profit and loss:

      Unrealized change in market value
      of available-for-sale investments,
      net of an income tax recovery of       (26.0)                    7.5
      $3.0 (2012 - income tax expense of
      $2.6) (Note 6)

      Realized change in market value of
      available-for-sale investments            6.5                    8.6
      (Note 6)

      Currency translation adjustment        (88.8)                   23.1

    Other comprehensive income (loss) for   (108.3)                   39.2
    the year

    Total comprehensive income (loss) for  $ (96.6)    $             141.8
    the year

    Basic earnings per share (Note 17)     $   0.08    $              0.72

    Diluted earnings per share (Note 17)   $   0.08    $              0.71

    The notes are an integral part of these unaudited consolidated
               financial statements and can be found in
           our 2013 Annual Report available on our website.

    FRANCO-NEVADA CORPORATION                                              

    CONSOLIDATED STATEMENTS OF CASH FLOWS                                  

    (in millions of U.S. dollars)                                          

                                           For the years ended December 31,

                                               2013                    2012

    Cash flows from operating activities                                   

    Net income                              $  11.7  $                102.6

    Adjustments to reconcile net income to
    net cash provided

      by (used in) operating activities:                                   

      Depletion and depreciation              129.3                   126.7

      Impairment of royalty, stream and       112.9                    74.1
      working interests (Note 7(c))

      Impairment of investments (Note 6)       30.7                     8.6

      Mark-to-market on warrants               11.5                   (8.2)

      Other non-cash items                      1.6                     0.2

      Deferred income tax expense (Note      (12.6)                    14.0

      Share-based payments (Note 16(c) and      4.6                     2.9

      Unrealized foreign exchange loss          3.1                     0.1

      Changes in non-cash assets and

        (Increase) decrease in receivables      5.4                   (4.3)

        (Increase) in prepaid expenses and   (43.0)                  (14.0)

        Increase (decrease) in accounts       (5.8)                     3.6
        payable and accrued liabilities

      Net cash provided by operating          249.4                   306.3

    Cash flows from investing activities                                   

      Proceeds on sale of short-term          253.4                   318.4

      Acquisition of investments            (124.6)                 (468.6)

      Acquisition of interests in mineral   (134.8)                 (493.2)
      and oil & gas properties

      Acquisition of oil & gas well           (6.1)                  (15.9)

      Acquisition of property and             (1.3)                       -

      Proceeds from sale of gold bullion       12.0                       -

    Net cash used in investing activities     (1.4)                 (659.3)

    Cash flows from financing activities                                   

      Credit facility amendment costs         (1.5)                       -

      Payment of dividends                  (101.8)                  (77.9)

      Proceeds from exercise of warrants        2.3                   241.3

      Proceeds from exercise of stock           7.0                    16.6

    Net cash (used in) provided by           (94.0)                   180.0
    financing activities

    Effect of exchange rate changes on       (15.7)                    10.6
    cash and cash equivalents

    Net increase (decrease) in cash and       138.3                 (162.4)
    cash equivalents

    Cash and cash equivalents at beginning    631.7                   794.1
    of year

    Cash and cash equivalents at end of     $ 770.0  $                631.7

    Supplemental cash flow information:                                    

    Cash paid for interest expense and      $   1.2  $                  0.6
    loan standby fees during the year

    Income taxes paid during the year       $  47.0  $                 46.4

    The notes are an integral part of these unaudited consolidated
               financial statements and can be found in
           our 2013 Annual Report available on our website.



    (in millions of
    U.S. dollars)

                        Share                   other
                       capital  Contributed comprehensive            Total
                      (Note 16)   Surplus   income (loss)   Deficit Equity

    Balance at          3,116.7        47.2         105.8   (120.6) 3,149.1
    January 1, 2013

      Net income              -           -             -      11.7    11.7

      comprehensive           -           -       (108.3)         - (108.3)

      comprehensive           -           -             -         -  (96.6)

      Exercise of           9.0       (2.0)             -         -     7.0
      stock options

      Exercise of           3.3       (1.0)             -         -     2.3

      Share-based             -         4.6             -         -     4.6

      Vesting of
      restricted            1.4       (1.4)             -         -       -
      share units

      Expiry of               -       (1.6)             -         -   (1.6)

      investment            2.6           -             -         -     2.6

      Dividends               -           -             -   (103.6) (103.6)

    Balance at
    December 31,        3,133.0        45.8         (2.5)   (212.5) 2,963.8

    Balance at          2,803.6        99.5          66.6   (135.5) 2,834.2
    January 1, 2012

      Net income              -           -             -     102.6   102.6

      comprehensive           -           -          39.2         -    39.2

      comprehensive           -           -             -         -   141.8

      Exercise of          21.8       (5.1)             -         -    16.7
      stock options

      Share-based             -         2.9             -         -     2.9

      Exercise of         289.6      (48.3)             -         -   241.3

      Vesting of
      restricted            1.8       (1.8)             -         -       -
      share units

      Adjustment to       (0.1)           -             -         -   (0.1)
      finance costs

      Dividends               -           -             -    (87.7)  (87.7)

    Balance at
    December 31,        3,116.7        47.2         105.8   (120.6) 3,149.1

    The notes are an integral part of these unaudited consolidated
               financial statements and can be found in
           our 2013 Annual Report available on our website.

SOURCE Franco-Nevada Corporation

Source: PR Newswire

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