6-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 6-K

Report of Foreign Issuer

Pursuant to Rule 13a-16 or 15d-16 of the Securities Exchange Act of 1934

For the month of March 2021

Commission File Number 001-35286

FRANCO-NEVADA CORPORATION

(Translation of registrant’s name into English)

199 Bay Street, Suite 2000, P.O. Box 285, Commerce Court Postal Station, Toronto, Ontario, Canada M5L 1G9

(Address of principal executive offices)

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F

Form 20-F   ◻ Form 40-F   ⌧

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):  ◻

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):  ◻

The information contained in Exhibits 99.2, 99.3, and 99.4 of this Form 6-K are hereby incorporated by reference into the registrant’s following registration statements on Form F-3 (file no. 333-225687), on Form S-8 (file no. 333-176856) and on Form F-10 (file no. 333-237671).

INDEX TO EXHIBITS

99.1	Press Release dated March 10, 2021 – Franco-Nevada Announces Record Annual Results and Dividend Increase
99.2	Management’s Discussion and Analysis for the fiscal year ended December 31, 2020
99.3	Audited Consolidated Financial Statements of the Registrant, as at and for the fiscal years ended December 31, 2020 and 2019, including the notes thereto, together with the Report of Independent Registered Public Accounting Firm thereon and the management’s report on internal control over financial reporting
99.4	Consent of PricewaterhouseCoopers LLP
101.INS	XBRL Instance Document
101.SCH	XBRL Taxonomy Extension Schema Document
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document
101.LAB	XBRL Taxonomy Extension Labels Linkbase Document
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document

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SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	FRANCO-NEVADA CORPORATION
	/s/ Lloyd Hong
Date: March 10, 2021	Lloyd Hong
	Chief Legal Officer & Corporate Secretary

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EX-99.1

Exhibit 99.1

NEWS RELEASE

Toronto, March 10, 2021

(in U.S. dollars unless otherwise noted)

Franco-Nevada Announces Record Annual Results and Dividend Increase

Two new acquisitions increase growth outlook

“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, CEO. “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 5 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 $0.30/share starting with our second quarter dividend payment in June which will be declared in May. We are proud that this 15.4% increase will mark our 14^th annual dividend increase. We have also strengthened our commitment to increase diversity at Franco-Nevada by adopting a goal of at least 40% diverse representation at the Board and senior management levels.”

		2020		Q4/2020
	Record annual results	vs	Strong Q4 results	vs
		2019		Q4/2019
GEOs1 sold	521,564	+1%	147,476	-4%
Revenue	$1,020.2 million	+21%	$304.5 million	+18%
Net income	$326.2 million ($1.71/share)	-5%	$176.7 million ($0.93/share)	+56%
Adjusted Net Income2	$516.3 million ($2.71/share)	+51%	$163.0 million ($0.85/share)	+47%
Adjusted EBITDA3	$839.6 million	+25%	$253.7 million	+26%

Strong Financial Position

● Debt free and $1.9 billion in available capital

● Generated >$800 million in annual operating cash flow

● Quarterly dividend increased 15.4% to $0.30/share

Sector Leading ESG

● Ranked #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 sales growth and Energy revenue growth in both 2021 and over 5 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, NuevaUnión) and the Ring of Fire

Annual revenue and GEOs Sold by commodity
	2020			2019
	GEOs Sold	Revenue		GEOs Sold	Revenue
	#	(in millions)		#	(in millions)
Gold	405,033	$	718.1	387,663	$	545.8
Silver	59,606		106.4	58,906		83.2
PGMs	47,038		86.2	52,813		75.6
Other Mining Assets	9,887		17.8	17,056		23.6
Mining	521,564	$	928.5	516,438	$	728.2
Oil	—		55.7	—		87.5
Gas	—		24.4	—		18.0
NGL	—		11.6	—		10.4
	521,564	$	1,020.2	516,438	$	844.1

Quarterly revenue and GEOs Sold by commodity
	Q4/2020			Q4/2019
	GEOs Sold	Revenue		GEOs Sold	Revenue
	#	(in millions)		#	(in millions)
Gold	110,815	$	208.4	117,698	$	174.8
Silver	20,403		38.0	15,427		22.8
PGMs	11,162		20.9	16,271		24.6
Other Mining Assets	5,096		9.4	4,000		5.9
Mining	147,476	$	276.7	153,396	$	228.1
Oil	—		15.7	—		23.6
Gas	—		9.3	—		3.7
NGL	—		2.8	—		2.7
	147,476	$	304.5	153,396	$	258.1

For Q4/2020, revenue was sourced 90.9% from gold and gold equivalents (68.4% gold, 12.5% silver, 6.9% PGM and 3.1% other mining assets). Geographically, revenue was sourced 88.4% from the Americas (55.0% Latin America, 14.5% U.S. and 18.9% 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 January 1, 2021, Franco-Nevada will receive deliveries of 8,760 ounces of gold and 291,000 ounces of silver annually until December 31, 2025, followed thereafter by variable deliveries based on a percentage of gold and silver in concentrate. Franco-Nevada will pay 20% of the spot price for gold and silver for each ounce delivered under the stream.

● Haynesville Royalty Portfolio: On December 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, we expect attributable royalty and stream sales to total 555,000 to 585,000 GEOs from our Mining assets and additional revenue of $115 to $135 million from our Energy assets. Of the royalty and stream sales from mining assets, we expect 375,000 to 405,000 GEOs from our 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 mcf. We estimate depletion expense to be $250 to $280 million. The 2021 guidance and 5-year outlook below are based on public forecasts and other disclosure by the third-party owners and operators of our assets or our assessment thereof.

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5-Year Outlook

Franco-Nevada expects its existing portfolio to produce between 600,000 and 630,000 GEOs by 2025, and additional revenue of $150 and $170 million from our 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 funded. The commodity price assumptions are the same as those used for our 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 $0.30 per share, effective for the second quarter of 2021. The dividend will be a 15.4% increase from the previous $0.26 per share quarterly dividend and will mark the 14^th 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% yield on their cost base. The Board of Directors plans on formally declaring the second quarter dividend of $0.30 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% 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+ 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% 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% 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% 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% 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% royalty) – Gold Fields reported that construction of the Salares Norte mine commenced in 2020, and pre-stripping 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% royalty) – In November 2020, First Quantum filed an updated NI 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 pre-development and feasibility activities.

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U.S.:

● Stillwater (5% 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 (4-9% 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 pre-feasibility study which includes the underground El Niño mine and the proposed Phase 1 open pit.

● Castle Mountain (2.65% 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 H1/2021.

● Gold Quarry (7.29% 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 to 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 (0.5-2% 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% and measured and indicated mineral resources by 94%.

● Stibnite (1.7% 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% 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 “super pit” concept based on the potential existence of a much larger, continuous deposit around the existing pit locations.

● Hemlo (3% royalty & 50% NPI) – Revenue from Hemlo increased significantly relative to the same quarter in 2019 as the 50% 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 (1.5-5.5% royalty & 20% 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 #4 Shaft.

● Musselwhite (2% royalty and 5% 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% 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% 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% to 236,000 ounces starting in 2025.

● Hardrock (3% royalty) – In December 2020, Orion Mine Finance agreed to acquire Centerra’s 50% 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% interest in the project, increasing its stake to 60%. Orion will hold the remaining 40% interest in the project.

● Red Lake (Bateman)(2% 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.

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● 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% 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% 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% 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% 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 mineralisation extensions.

Energy: Revenue from the Energy assets decreased to $27.8 million in Q4/2020 compared to $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 we recognized on our newly acquired interests in the Haynesville shale play of $4.2 million.

U.S.:

● Marcellus (1% royalty) – The royalty contributed $4.9 million to revenue in Q4/2020, flat relative to Q4/2019, reflecting consistent production volume. In 2021, we expect drilling activity levels to remain consistent with those in 2020.

● SCOOP/STACK (various royalty rates) –Royalties from SCOOP/STACK decreased compared to 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 to the same quarter in the prior year due to lower realized prices. In 2021, we expect a rebound in drilling activity as commodity prices recover.

Canada:

● Weyburn (NRI, ORR, WI) – Revenue from Weyburn contributed $5.2 million in Q4/2020 compared to $8.1 million in Q4/2019 due mostly to lower contribution from the NRI as a result of lower realized oil prices. In 2021, we anticipate an increase in revenue, reflecting the NRI royalty’s leverage to oil prices.

● Orion (4% GORR) – Revenue from Orion decreased compared to Q4/2019 due to lower realized prices. Production levels at the asset are now consistently ~20,000 bbl/day.

Shareholder Information

The complete Audited Consolidated 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 11, 2021 at 10:00 a.m. Eastern Time 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 #

● Webcast: A live audio webcast will be accessible at www.franco-nevada.com

Corporate Summary

Franco-Nevada Corporation 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.

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For more information, please go to our website at www.franco-nevada.com or contact:

Sandip Rana

Chief Financial Officer

(416) 306-6303

info@franco-nevada.com

Forward-Looking Statements

This press release contains “forward-looking information” and “forward-looking statements” within the meaning of applicable Canadian securities laws and the United States 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, carrying value of assets, future dividends and 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, audits being conducted by the Canada Revenue Agency, the expected exposure for current and future assessments and available remedies, the remedies relating to and consequences of the ruling of the Supreme Court of Panama in relation to the Cobre Panama project, the aggregate value of Common Shares which may be issued pursuant to the Company’s at-the-market equity program (the “ATM Program”), and the Company’s expected use of the net proceeds of the ATM Program, if any. In addition, statements (including data in tables) relating to reserves and resources and gold equivalent ounces (“GEOs”) are forward-looking statements, as they involve implied assessment, based on certain estimates and assumptions, and no assurance can be given that the estimates and assumptions are accurate and that such reserves and resources and GEOs 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: the price at which Common Shares are sold in the ATM Program and the aggregate net proceeds received by the Company as a result of the ATM Program; 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 and the enforcement thereof; regulatory, 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 Company is determined to have “passive foreign investment company” (“PFIC”) status as defined in Section 1297 of the United States Internal Revenue Code of 1986, as amended; potential changes in Canadian tax treatment of offshore streams; 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; access to sufficient pipeline capacity; actual mineral content may differ from the reserves and resources contained in technical reports; rate and timing of production differences from resource estimates, other technical reports and mine plans; 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, terrorism, civil unrest or an outbreak of contagious disease; the impact of the COVID-19 (coronavirus) pandemic; 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 Company’s ongoing income and assets relating to determination of its PFIC status; no material changes to existing tax treatment; the expected application of tax laws and regulations by taxation authorities; the expected assessment and outcome of any audit by any taxation authority; 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. Investors are cautioned that forward-looking statements are not guarantees of future performance. In addition, there can be no assurance as to the outcome of the ongoing audit by the CRA or the Company’s exposure as a result thereof. 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 Franco-Nevada’s most recent Annual Information Form filed with the Canadian securities regulatory authorities on www.sedar.com and Franco-Nevada’s most recent Annual Report filed on 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.

6

NON-IFRS MEASURES: Cash Costs, Adjusted EBITDA, and Adjusted Net Income 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. Comparative information has been recalculated to conform to current presentation.

1 GEOs include Franco-Nevada’s attributable share of production from our Mining assets, after applicable recovery and payability factors, and do not include Energy 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. Silver, platinum, palladium and other mining commodities are converted to GEOs by dividing associated revenue, which includes settlement adjustments, by the relevant gold price. The price used in the computation of GEOs earned from a particular asset varies depending on the royalty or stream agreement, which may make reference to the market price realized by the operator, or the average price for the month, quarter, or year in which the mining commodity was produced or sold. For Q4/2020, the average commodity prices were as follows: $1,873 gold (Q4/2019 - $1,480), $24.39 silver (Q4/2019 - $17.31), $939 platinum (Q4/2019 - $907) and $2,348 palladium (Q4/2019 - $1,800). For 2020, the average commodity prices were as follows: $1,770 gold (2019 - $1,392), $20.55 silver (2019 - $16.20), $884 platinum (2019 - $863) and $2,194 palladium (2019 - $1,539).

2 Adjusted Net Income and Adjusted Net Income per share are non-IFRS financial measures, which exclude the following from net income and earnings per share (“EPS”): impairment charges related to royalty, stream and working interests and investments; gains/losses on the sale of royalty, stream and working interests and investments; foreign exchange gains/losses and other income/expenses; unusual non-recurring items; and the impact of income taxes on these items.

3 Adjusted EBITDA and Adjusted EBITDA per share are non-IFRS financial measures, which exclude the following from net income and EPS: income tax expense/recovery; finance expenses and finance income; depletion and depreciation; non-cash costs of sales; impairment charges related to royalty, stream and working interests and investments; gains/losses on the sale of royalty, stream and working interests and investments; foreign exchange gains/losses and other income/expenses; and unusual non-recurring items.

7

Reconciliation to IFRS measures:

	For the three months ended				For the year ended
	December 31,				December 31,
(expressed in millions, except per GEO amounts)	2020		2019		2020		2019
Total costs of sales	$	114.2	$	119.0	$	399.8	$	408.0
Depletion and depreciation		(67.5)		(72.7)		(241.0)		(263.2)
Energy operating costs		(1.9)		(2.2)		(6.4)		(7.3)
Cash Costs attributable to GEOs sold	$	44.8	$	44.1	$	152.4	$	137.5
GEOs		147,476		153,396		521,564		516,438
Cash Costs per GEO sold	$	304	$	287	$	292	$	266

	For the three months ended				For the year ended
	December 31,				December 31,
(expressed in millions, except per share amounts)	2020		2019		2020		2019
Net Income	$	176.7	$	113.3	$	326.2	$	344.1
Income tax expense		21.5		17.2		13.3		61.8
Finance expenses		0.8		2.1		3.5		10.6
Finance income		(0.7)		(0.8)		(3.7)		(3.5)
Depletion and depreciation		67.5		72.7		241.0		263.2
Impairment charges (reversals)		(9.6)		—		262.1		—
Foreign exchange (gains)/losses and other (income)/expenses		(2.5)		(2.8)		(2.8)		(2.8)
Adjusted EBITDA	$	253.7	$	201.7	$	839.6	$	673.4
Basic weighted average shares outstanding		190.9		188.8		190.3		187.7
Adjusted EBITDA per share	$	1.33	$	1.07	$	4.41	$	3.59

	For the three months ended				For the year ended
	December 31,				December 31,
(expressed in millions, except per share amounts)	2020		2019		2020		2019
Net Income	$	176.7	$	113.3	$	326.2	$	344.1
Impairment charges (reversals)		(9.6)		—		262.1		—
Foreign exchange (gains)/losses and other (income)/expenses		(2.5)		(2.8)		(2.8)		(2.8)
Tax effect of adjustments		(1.6)		0.3		(69.2)		0.2
Adjusted Net Income	$	163.0	$	110.8	$	516.3	$	341.5
Basic weighted average shares outstanding		190.9		188.8		190.3		187.7
Adjusted Net Income per share	$	0.85	$	0.59	$	2.71	$	1.82

8

FRANCO-NEVADA CORPORATION

CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

(in millions of U.S. dollars)

	At December 31,		At December 31,
	2020		2019
ASSETS
Cash and cash equivalents (note 5)	$	534.2	$	132.1
Receivables		93.4		97.8
Prepaid expenses and other (note 7)		36.1		48.8
Current assets	$	663.7	$	278.7
Royalty, stream and working interests, net (note 8)	$	4,632.1	$	4,797.8
Investments and loan receivable (note 6)		238.4		183.2
Deferred income tax assets (note 16)		45.1		6.8
Other assets (note 9)		13.6		14.1
Total assets	$	5,592.9	$	5,280.6
LIABILITIES
Accounts payable and accrued liabilities (note 10)	$	40.8	$	41.8
Current income tax liabilities		12.4		11.6
Current liabilities	$	53.2	$	53.4
Debt (note 11)	$	—	$	80.0
Deferred income tax liabilities (note 16)		91.5		82.4
Other liabilities		4.4		2.6
Total liabilities	$	149.1	$	218.4
SHAREHOLDERS’ EQUITY (note 17)
Share capital	$	5,580.1	$	5,390.7
Contributed surplus		14.0		14.2
Deficit		(34.4)		(164.4)
Accumulated other comprehensive loss		(115.9)		(178.3)
Total shareholders’ equity	$	5,443.8	$	5,062.2
Total liabilities and shareholders’ equity	$	5,592.9	$	5,280.6
Commitments and contingencies (notes 22 and 23)
Subsequent event (note 24)

The accompanying notes are an integral part of these consolidated financial statements and can be found in 2020 Annual Report available on our website

9

FRANCO-NEVADA CORPORATION

CONSOLIDATED STATEMENTS OF (LOSS) INCOME AND COMPREHENSIVE INCOME

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

	For the year ended
	December 31,
	2020		2019
Revenue (note 12)	$	1,020.2	$	844.1
Costs of sales
Costs of sales (note 13)	$	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 (note 8)	$	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 (note 15)
Finance income	$	3.7	$	3.5
Finance expenses		(3.5)		(10.6)
Net income before income taxes	$	339.5	$	405.9
Income tax expense (note 16)		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 (note 6)		43.8		9.9
Other comprehensive income	$	63.4	$	42.2
Comprehensive income	$	389.6	$	386.3
Earnings per share (note 18)
Basic	$	1.71	$	1.83
Diluted	$	1.71	$	1.83
Weighted average number of shares outstanding (note 18)
Basic		190.3		187.7
Diluted		190.7		188.0

The accompanying notes are an integral part of these consolidated financial statements and can be found in our 2020 Annual Report available on our website

10

FRANCO-NEVADA CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in millions of U.S. dollars)

	For the year ended
	December 31,
	2020		2019
Cash flows from operating activities
Net income	$	326.2	$	344.1
Adjustments to reconcile net income to net cash provided by operating activities:
Depletion and depreciation		241.0		263.2
Share-based payments		5.6		4.9
Impairment charges and reversals		262.1		—
Unrealized foreign exchange loss		0.4		—
Deferred income tax (recovery) expense		(35.2)		22.7
Other non-cash items		(12.0)		(7.8)
Acquisition of gold bullion		(37.9)		(31.8)
Proceeds from sale of gold bullion		52.7		36.2
Operating cash flows before changes in non-cash working capital	$	802.9	$	631.5
Changes in non-cash working capital:
Decrease (increase) in receivables	$	4.4	$	(22.3)
Decrease (increase) in prepaid expenses and other		1.4		(14.3)
(Decrease) increase in current liabilities		(4.8)		22.8
Net cash provided by operating activities	$	803.9	$	617.7
Cash flows from investing activities
Acquisition of royalty, stream and working interests	$	(311.1)	$	(443.9)
Acquisition of energy well equipment		(1.5)		(1.3)
Proceeds from sale of investments		3.6		13.0
Acquisition of investments		—		(3.9)
Net cash used in investing activities	$	(309.0)	$	(436.1)
Cash flows from financing activities
Proceeds from at-the-market equity offerings	$	135.7	$	136.0
Repayment of term loan		(80.0)		(80.0)
Proceeds from draw of term loan		—		160.0
Repayment of revolving credit facilities		—		(485.0)
Proceeds from draw of credit facilities		—		275.0
Credit facility amendment costs		—		(0.8)
Payment of dividends		(154.9)		(138.2)
Proceeds from exercise of stock options		7.4		13.2
Net cash used in financing activities	$	(91.8)	$	(119.8)
Effect of exchange rate changes on cash and cash equivalents	$	(1.0)	$	0.6
Net change in cash and cash equivalents	$	402.1	$	62.4
Cash and cash equivalents at beginning of year	$	132.1	$	69.7
Cash and cash equivalents at end of year	$	534.2	$	132.1
Supplemental cash flow information:
Cash paid for interest expense and loan standby fees	$	2.4	$	9.5
Income taxes paid	$	51.2	$	38.6

The accompanying notes are an integral part of these consolidated financial statements and can be found in our 2020 Annual Report available on our website

11

EX-99.2

Exhibit 99.2

Management’s Discussion and Analysis

This Management’s Discussion and Analysis (“MD&A”) of financial position and results of operations of Franco-Nevada Corporation (“Franco-Nevada”, the “Company”, “we” or “our”) has been prepared based upon information available to Franco-Nevada as at March 10, 2021 and should be read in conjunction with Franco-Nevada’s audited consolidated financial statements and related notes as at and for the year ended December 31, 2020 and 2019 (the “financial statements”). The audited consolidated financial statements and this MD&A are presented in U.S. dollars and have been prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”).

Readers are cautioned that the MD&A contains forward-looking statements and that actual events may vary from management’s expectations. Readers are encouraged to read the “Cautionary Statement on Forward-Looking Information” at the end of this MD&A and to consult Franco-Nevada’s audited consolidated financial statements for the year ended December 31, 2020 and 2019 and the corresponding notes to the financial statements which are available on our website at www.franco-nevada.com, on SEDAR at www.sedar.com and on Form 40-F filed with the United States Securities and Exchange Commission on EDGAR at www.sec.gov.

Additional information related to Franco-Nevada, including our Annual Information Form and Form 40-F, are available on SEDAR at www.sedar.com, and on EDGAR at www.sec.gov, respectively. These documents contain descriptions of certain of Franco-Nevada’s producing and advanced royalty and stream assets, as well as a description of risk factors affecting the Company. For additional information, please see our website at www.franco-nevada.com.

Table of Contents

3	Overview
4	Strategy
5	Highlights
8	Guidance
9	Market overview
10	Selected financial information
11	Revenue by asset
12	Review of quarterly financial performance
16	Review of annual financial performance
20	Impairment charges and reversals
21	General and administrative expenses
21	Other income and expenses
22	Summary of quarterly information
23	Balance sheet review
24	Liquidity and capital resources
29	Critical accounting estimates
31	Outstanding share data
31	Internal control over financial reporting and disclosure controls and procedures
32	Non-IFRS financial measures
35	Cautionary statement on forward-looking information

Abbreviations used in this report

The following abbreviations may be used throughout this MD&A:

Abbreviated Definitions
Periods under review		Interest types		Measurement
"Q4/2020"	The three-month period ended December 31, 2020	"NSR"	Net smelter return royalty	"GEO"	Gold equivalent ounces
"Q3/2020"	The three-month period ended September 30, 2020	"GR"	Gross royalty	"PGM"	Platinum group metals
"Q2/2020"	The three-month period ended June 30, 2020	"ORR"	Overriding royalty	"oz"	Ounce
"Q1/2020"	The three-month period ended March 31, 2020	"GORR"	Gross overriding royalty	"oz Au"	Ounce of gold
"Q4/2019"	The three-month period ended December 31, 2019	"FH"	Freehold or lessor royalty	"oz Ag"	Ounce of silver
"Q3/2019"	The three-month period ended September 30, 2019	"NPI"	Net profits interest	"oz Pt"	Ounce of platinum
"Q2/2019"	The three-month period ended June 30, 2019	"NRI"	Net royalty interest	"oz Pd"	Ounce of palladium
"Q1/2019"	The three-month period ended March 31, 2019	"WI"	Working interest	"LBMA"	London Bullion Market Association
				"bbl"	Barrel
Places and currencies				"boe"	Barrels of oil equivalent
"U.S."	United States			"WTI"	West Texas Intermediate
"$" or "USD"	United States dollars			"mcf"	Thousand cubic feet
"C$" or "CAD"	Canadian dollars
"A$" or "AUD"	Australian dollars

For definitions of the various types of agreements, please refer to our most recent Annual Information Form filed on SEDAR at www.sedar.com or our Form 40-F filed on EDGAR at www.sec.gov.

2020 Management’s Discussion and Analysis 2

Overview

Franco-Nevada is the leading gold-focused royalty and streaming company with the largest and most diversified portfolio of royalties and streams by commodity, geography, revenue type and stage of project. 

Franco-Nevada asset count at March 10, 2021
	Mining	Energy	TOTAL
Producing	54	55	109
Advanced	41	—	41
Exploration	223	27	250
TOTAL	318	82	400

Franco-Nevada’s shares are listed on the Toronto and New York stock exchanges under the symbol FNV.  An investment in Franco-Nevada’s shares is expected to provide investors with yield and exposure to commodity price and exploration optionality while limiting exposure to cost inflation and other operating risks. Since its initial public offering over 13 years ago, Franco-Nevada has increased its dividend annually and its share price has outperformed the gold price and all relevant gold equity benchmarks.

Our aspiration is to make Franco-Nevada the “go to” gold stock for the generalist investor. We believe that our emphasis on minimizing risk, paying dividends and maintaining a strong balance sheet along with high environmental, social and governance standards is attractive to generalist investors. In a world confronted by political volatility and financial market instability, we believe making Franco-Nevada a lower risk gold investment that pays dividends and has leverage to gold is the right strategy.

2020 Management’s Discussion and Analysis 3

Strategy

Franco-Nevada is committed to being the gold investment that works; for its shareholders, its operating partners and its communities:

● The Company believes combining a lower-risk gold investment with a strong balance sheet, progressive dividends and exposure to exploration optionality is the right mix to appeal to investors seeking to hedge market instability.

● Franco-Nevada seeks to build long-term alignment with its operating partners. This alignment and the natural flexibility of royalties and streams is an effective financing tool for the cyclical resource sector.

● Franco-Nevada works to be a positive force in its community, ensuring high governance standards, providing a safe and diverse workplace, promoting responsible mining and energy production and sponsoring community programs at the operations in which it invests.

Franco-Nevada’s revenue is generated from various forms of agreements, ranging from net smelter return royalties, streams, net profits interests, net royalty interests, working interests and other types of arrangements.

The Company does not operate mines, develop projects or conduct exploration.  Franco-Nevada has a free cash flow generating business with limited future capital commitments and management is focused on managing and growing its portfolio of royalties and streams. The advantages of this business model are:

● Exposure to commodity price optionality;

● A perpetual discovery option over large areas of geologically prospective lands;

● No additional capital requirements other than the initial investment;

● Limited exposure to many of the risks associated with operating companies; 

● A free cash-flow business with limited cash calls;

● A high-margin business that can generate cash through the entire commodity cycle;

● A scalable and diversified business in which a large number of assets can be managed with a small stable overhead; and

● Management that focuses on forward looking growth opportunities rather than operational or development issues.

Franco-Nevada’s financial results in the short term are primarily tied to the price of commodities and the amount of production from its portfolio of assets. Financial results have also typically been supplemented by acquisitions of new assets.  Over the longer term, results are impacted by the availability of exploration and development capital applied by other companies to expand or extend Franco-Nevada’s producing assets or to advance Franco-Nevada’s advanced and exploration assets into production.

Franco-Nevada has a long-term investment outlook and recognizes the cyclical nature of the industry. Franco-Nevada has operated by maintaining a strong balance sheet so that it can make investments during commodity cycle downturns.

Our focus is growing investor exposure to gold and other precious metals, although we also make limited countercyclical investments in energy and other metals. This strategy adds to our growth options and increases our exposure to resource sector optionality. In 2020, 91.0% of revenue was earned from gold and gold equivalents.

One of the strengths of the Franco-Nevada business model is that our margins are not generally impacted when producer costs increase. The majority of our interests are royalty and stream payments/deliveries that are based on production levels with no adjustments for the operator’s operating cost. In 2020, these accounted for 92.3% of our revenue. We also have a small number of NPI and NRI royalties which are based on the profit of the underlying operations.

2020 Management’s Discussion and Analysis 4

Highlights

Financial Update – Q4/2020 vs Q4/2019

● 147,476GEOs⁽¹⁾ sold in Q4/2020, a decrease of 3.9%;

● $304.5 million in revenue, an increase of 18.0%;

● $44.8 million, or $304 per GEO sold, in Cash Costs⁽²⁾ attributable to GEO production, compared to $44.1 million, or $287 per GEO sold;

● $253.7 million, or $1.33 per share, of Adjusted EBITDA⁽²⁾, an increase of 25.8% and 24.3%, respectively;

● 83.3% in Margin⁽²⁾, compared to 78.1%;

● $176.7 million, or $0.93 per share, in net income, an increase of 56.0% and 55.0%, respectively;

● $163.0 million, or $0.85 per share in Adjusted Net Income⁽²⁾, an increase of 47.1% and 44.1%, respectively;

● $246.3 million in net cash provided by operating activities, an increase of 33.4%;

● $534.2 million in cash and cash equivalents as at December 31, 2020 with no debt;

● $1.9 billion in available capitalas at December 31, 2020.

Financial Update – 2020 vs 2019

● 521,564 GEOssold, an increase of 1.0%;

● $1,020.2 million in revenue, an increase of 20.9%;

● $152.4 million, or $292 per GEO sold, in Cash Costs attributable to GEO production, compared to $137.5 million, or $266 per GEO sold;

● $839.6 million, or $4.41 per share, in Adjusted EBITDA, an increase of 24.7% and 22.8%, respectively;

● 82.3% in Margin, compared to 79.8% in 2019;

● $326.2 million, or $1.71 per share, in net income, a decrease of 5.2% and 6.6%, respectively;

● $516.3 million, or $2.71 per share, in Adjusted Net Income, an increase of 51.2% and 48.9%, respectively;

● $803.9 million in net cash provided by operating activities, an increase of 30.1%.

Impact of the COVID-19 Pandemic

Although a challenging year, we believe 2020 highlighted the resilience of Franco-Nevada’s business model during uncertain times. Our workforce seamlessly transitioned to working remotely and we developed work-arounds for certain of our due diligence processes, leading to the addition of several assets to our portfolio. We also expanded our social commitments, with new programs to support mental health at the communities around Candelaria and water infrastructure for communities around Palmarejo-Guadalupe, and made new community contribution commitments as part of our acquisition of the Alpala royalty and Condestable stream.

Earlier in the year, a number of our assets were impacted by a temporary suspension of operations. These included Cobre Panama, Antamina, Guadalupe-Palmarejo, Stillwater, Mine Waste Solutions (“MWS”), Detour Lake, Kirkland Lake (Macassa), Golden Highway, Cerro Moro, Canadian Malartic, Musselwhite, Timmins West, and Island Gold. As a result of these suspensions, as well as the concurrent crash in oil and gas prices, on April 7, 2020, we withdrew our original guidance for 2020 of 550,000 to 580,000 GEOs and $80 to $95 million in Energy revenue. Since then, all of our temporarily suspended mining assets were authorized to resume, with the exception of Golden Highway which remains on temporary suspension while the operator, Kirkland Lake Gold Ltd., continues to assess options for the future of the assets. On August 5, 2020, we issued revised guidance of 475,000 to 505,000 GEOs and $60 to $75 million in Energy revenue, both of which have been exceeded.

The pandemic, along with a number of geopolitical and market factors, created significant volatility in commodity prices during the year, resulting in record gold prices but historic lows for oil and gas. The significant decrease in the price of oil and gas in the first half of 2020 resulted in reduced production and capital spend by a number of the operators of our Energy assets. As a result, we undertook a review of the carrying value of our Energy assets and recorded after-tax impairments of $207.4 million ($271.7 million pre-tax) related to our interests in the SCOOP/STACK and Weyburn. As a result of increased gold prices, we reviewed our previously impaired gold assets, and recorded a full reversal of our impairment of the MWS stream of $9.6 million, net of depletion charges. Commodity prices have been more volatile than usual during the pandemic and there is heightened potential for further impairments or reversals thereof.

Franco-Nevada ended 2020 financially strong, debt-free, and well-positioned to make further investments to grow its diversified portfolio of assets. At December 31, 2020, the Company had working capital of $610.5 million, including cash and cash equivalents of $534.2 million, marketable securities of $191.8 million, and credit facilities of $1.1 billion.

__________________________

1 GEOs include Franco-Nevada’s attributable share of production from our Mining assets, after applicable recovery and payability factors, and do not include Energy 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. Silver, platinum, palladium and other mining commodities are converted to GEOs by dividing associated revenue, which includes settlement adjustments, by the relevant gold price. The price used in the computation of GEOs earned from a particular asset varies depending on the royalty or stream agreement, which may make reference to the market price realized by the operator, or the average price for the month, quarter, or year in which the mining commodity was produced or sold. For illustrative purposes, please refer to the average commodity price table on pages 12 and 16 of this MD&A for indicative prices which may be used in the calculation of GEOs for the quarters and years ended December 31, 2020 and 2019, respectively.

2 Cash Costs, Adjusted Net Income, Adjusted EBITDA, and Margin are non-IFRS financial measures with no standardized meaning under IFRS. For further information and a detailed reconciliation, please see the “Non-IFRS Financial Measures” section of this MD&A.

2020 Management’s Discussion and Analysis 5

Significant Portfolio Updates

Additional updates related to our portfolio of assets are available in our News Release issued on March 10, 2021, available on SEDAR at www.sedar.com and EDGAR at www.sec.gov.

● Cobre Panama: On January 26, 2021, First Quantum Minerals Ltd. (“First Quantum”) reported that it produced 206,000 tonnes of copper and 85,000 ounces of gold in 2020, exceeding its revised copper production guidance and ending at the high end of its revised gold production guidance. The operation, which suspended operations from April to July 2020 due to the COVID-19 pandemic, restarted full production levels in August, ahead of schedule. Franco-Nevada sold 76,348 GEOs from the asset in 2020.

● Candelaria: On January 20, 2021, Lundin Mining Corporation (“Lundin Mining”) reported that Candelaria copper and gold production both exceeded revised annual guidance. The operation, which had been suspended in October 2020 due to labour strikes, returned to full production in December after reaching new collective agreements. Candelaria completed its Mill Optimization Project in December with the upgrade installation of the fourth and final ball mill motor. Franco-Nevada sold 59,655 GEOs from the asset in 2020.

Corporate Developments

Acquisition of Condestable Gold and Silver Stream – Peru

Subsequent to year-end, on March 8, 2021, the Company, through a wholly-owned subsidiary, closed a precious metals stream agreement with reference to the gold and silver production from the Condestable mine in Peru, for an up-front deposit of $165.0 million. The Condestable mine is located approximately 90 kilometers south of Lima, Peru, and is owned and operated by a subsidiary of Southern Peaks Mining LP (“SPM”), a private company. Commencing on January 1, 2021 and ending December 31, 2025, Franco-Nevada will receive 8,760 ounces of gold and 291,000 ounces of silver annually until a total of 43,800 ounces of gold and 1,455,000 ounces of silver have been delivered (the “Fixed Deliveries”). Thereafter, Franco-Nevada will receive 63% of the contained gold and contained silver produced until a cumulative total of 87,600 ounces of gold and 2,910,000 ounces of silver have been delivered (the “Variable Phase 1 Deliveries”). The stream then reduces to 25% over the remaining life of mine (the “Variable Phase 2 Deliveries”). Franco-Nevada will pay 20% of the spot price for gold and silver for each ounce delivered under the stream (the “Ongoing Payment”). The stream has an effective date of January 1, 2021, with the first quarterly delivery due on or before March 15, 2021.

For a period of four years from closing, subject to certain restrictions, a subsidiary of SPM may, at its option, make a one-time special delivery comprising the number of ounces of refined gold equal to $118.8 million at the then current spot price subject to the Ongoing Payment, to achieve the early payment of the Fixed Deliveries and Variable Phase 1 Deliveries. The Variable Phase 2 Deliveries would commence immediately thereafter.

Acquisition of U.S. Oil & Gas Royalty Rights – Haynesville, Texas, U.S.A.

On December 29, 2020, the Company, through a wholly-owned subsidiary, 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. The royalties are located in Harrison and Panola counties, which represent a core area of the East Texas part of the basin, where Rockcliff Energy II LLC is the primary operator. The royalties are derived principally from mineral title which provides a perpetual interest in royalty lands.

The acquisition has an effective date of October 1, 2020. Between the effective date and the closing date, the asset has generated approximately $4.2 million in royalties associated with the sale of natural gas.

Amendment of Sabodala Gold Stream Agreement - Senegal

On September 25, 2020, the Company, through a wholly-owned subsidiary, amended its existing Sabodala gold purchase and sale agreement with Teranga Gold Corporation (“Teranga”) to compensate the Company for displacement that will be caused by the processing of Massawa ore through the Sabodala processing facilities and to provide for certain protocols for the commingling of Sabodala and Massawa ores. Teranga acquired a 90% interest in the Massawa project from Barrick Gold Corporation on March 4, 2020.

The amended agreement provides that effective September 1, 2020, Teranga will make fixed deliveries of 783.33 ounces of refined gold per month until 105,750 ounces of gold have been delivered to the Company (the “Fixed Delivery Period”) and 6% of production from the stream area thereafter. Following the Fixed Delivery Period, a reconciliation will be conducted to determine if the Company would have received more or less than 105,750 ounces of gold under the 6% variable stream during such period.  Teranga will be entitled to a credit for an over-delivery which will be applied against the 6% variable stream until depleted and the Company will be entitled to a one-time additional delivery in the case of an under-delivery.

Acquisition of Rio Baker (Salares Norte) Royalty – Chile

On September 23, 2020, the Company, through a wholly-owned subsidiary, acquired an existing 2% NSR on all mineral production from Gold Fields’ Rio Baker concessions in Chile for $5.0 million cash with contingent payments of up to $8.0 million. With this acquisition, the Company now has exposure to 100% of the Salares Norte deposit. The royalty agreement is subject to a 0.5% buy-back at any time for $4.0 million.

2020 Management’s Discussion and Analysis 6

Acquisition of Alpala Royalty – Northern Ecuador

On September 11, 2020, the Company completed a royalty transaction with SolGold plc (“SolGold”) to acquire a 1% NSR with reference to all minerals produced from the Alpala copper-gold-silver project in northern Ecuador for $100.0 million. The Alpala project is owned by Exploraciones Novomining SA, which is held 85% by SolGold and 15% by Cornerstone Capital Resources Inc. SolGold has the option to increase the size of the transaction to $150 million for a 1.5% NSR until May 11, 2021 and also has the option to buy-back 50% of the royalty 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-only NSR for a period of time once Alpala is producing. The NSR covers the Cascabel concession.

Acquisition of Freeport Royalty Portfolio Interests

On September 1, 2020, the Company acquired a portfolio of 24 royalties from Freeport-McMoRan Inc. for $30.6 million in cash. The portfolio includes prospective royalties over Wallbridge Mining Co. Ltd.’s Fenelon, Martiniere and Northway-Noyon projects. It also includes producing royalties on Industrias Peñoles, S.A.B.de C.V.’s Milpillas copper mine in Sonora, Mexico, and on Ormat Technologies Inc.’s Neal Hot Spring geothermal operation in Oregon.

Acquisition of U.S. Oil & Gas Royalty Rights with Continental Resources, Inc.

The Company, through a wholly-owned subsidiary, has a strategic relationship with Continental Resources. Inc. (“Continental”) to acquire, through a jointly-owned entity (the “Royalty Acquisition Venture”), royalty rights within Continental’s areas of operation. In 2020, Franco-Nevada recorded contributions to the Royalty Acquisition Venture of $29.8 million (2019 - $114.4 million). In the first half of the year, following weak commodity prices, Franco-Nevada and Continental agreed to reduce the pace of their capital funding commitments to the Royalty Acquisition Venture. The venture will target lower prices for acquiring acreage to provide a stronger platform for a potential future rebound in commodity prices and a resumption of development activity by Continental. As at December 31, 2020, the cumulative investment in the Royalty Acquisition Venture by the Company totaled $406.0 million and Franco-Nevada has remaining commitments of up to $114.0 million, approximately half of which is expected to be deployed in 2021.

Acquisition of Island Gold Royalty Interest – Ontario, Canada

On March 20, 2020, Franco-Nevada acquired an existing 0.62% NSR on Alamos Gold Inc.’s Island Gold project in Finan Township in the Province of Ontario for $13.4 million (C$19.0 million).

Financing

Credit Facilities

As at December 31, 2020, the Company had no amounts drawn against its $1.0 billion unsecured revolving term credit facility (the “Corporate Revolver”). However, the Company has posted security in the form of standby letters of credit in the amount of $18.1 million (C$23.1 million) in connection with the audit by the Canada Revenue Agency (“CRA”). The standby letters of credit reduce the available balance under the Corporate Revolver.

On March 10, 2020, Franco-Nevada (Barbados) Corporation amended its $100.0 million unsecured revolving credit facility (the “FNBC Revolver”) to extend the term to March 20, 2021. The amendment also provided a reduction in the applicable margins and standby fees. The term of the FNBC Revolver is expected to be further extended by an additional year. As at December 31, 2020, the Company had no amounts outstanding against the FNBC Revolver.

On February 14, 2020, the Company made full repayment of the $80.0 million it had outstanding at December 31, 2019 under its non-revolving credit facility (the “Corporate Term Loan”). The Corporate Term Loan is a non-revolving facility, and is therefore no longer available to draw.

At-the-Market Equity Program

On May 11, 2020, the Company established a new at-the-market equity program (the “ATM Program”) permitting the Company to issue up to an aggregate of $300 million worth of common shares from treasury at prevailing market prices to the public through the Toronto Stock Exchange, the New York Stock Exchange or any other marketplace on which the common shares are listed, quoted or otherwise trade. The previous at-the-market program, which permitted the Company to issue up to an aggregate of $200 million worth of common shares, was terminated on April 28, 2020 when the Company renewed its base shelf prospectus.

For 2020, the Company issued 1,054,800 common shares under the ATM Program and its previous at-the-market equity program at an average price per common share of $128.96. The gross proceeds from these issuances were $136.0 million, and the net proceeds were $133.7 million after deducting agent commission costs of $1.4 million and other share issuance costs of $0.9 million.

Dividend Increase

Franco-Nevada is pleased to announce that its Board of Directors has decided to raise its quarterly dividend to $0.30 per share, effective for the second quarter of 2021. The dividend will be a 15.4% increase from the previous $0.26 per share quarterly dividend and will mark the 14^th consecutive annual dividend increase for Franco-Nevada shareholders.

In 2020, dividends declared totaled $1.03 per share. The total dividend declared was $197.2 million, of which $154.9 million was paid in cash and $42.3 million was paid in common shares under the Company’s Dividend Reinvestment Plan (“DRIP”).

2020 Management’s Discussion and Analysis 7

Guidance

The following contains forward-looking statements. Reference should be made to the “Cautionary Statement on Forward-Looking

Information” section at the end of this MD&A. For a description of material factors that could cause our actual results to differ

materially from the forward-looking statements below, please see the “Cautionary Statement” and the “Risk Factors” section of

our most recent Annual Information Form filed with the Canadian securities regulatory authorities on www.sedar.com and our

most recent Form 40-F filed with the United States Securities and Exchange Commission on www.sec.gov. The 2021 guidance is based on assumptions including the forecasted state of operations from our assets based on the public statements and other disclosures by the third-party owners and operators of the underlying properties (subject to our assessment thereof). Further challenges due to the COVID-19 pandemic may result in additional risk to the accuracy of our 2021 guidance.

For 2021, the Company is pleased to provide the following guidance for its mining and energy segments, respectively.

	2021 guidance	2020 actual	2019 actual
Gold & Gold Equivalent sales(1),(2)	555,000 - 585,000 GEOs	521,564 GEOs sold	516,438 GEOs sold
Energy revenue(3)	$115.0 - $135.0 million	$91.7 million	$115.9 million

1 Of the 555,000 to 585,000 GEOs, Franco-Nevada expects to receive 375,000 to 405,000 GEOs under its various streams. For the year ended December 31, 2020, the Company earned 351,580 GEOs from its streams.

2 In forecasting GEOs for 2021, gold, silver, platinum and palladium metals have been converted to GEOs using commodity prices of $1,750 Au, $25.00 Ag, $1,100 Pt and $2,200 Pd.

3 In forecasting revenue from Energy assets for 2021, the Company assumed a WTI oil price of $55 per barrel and a Henry Hub natural gas price of $2.50/mcf.

Gold equivalent sales: GEO sales in 2020 exceeded our revised guidance of 475,000 to 505,000 GEOs, with higher than expected production from our Cobre Panama, Candelaria, and Guadalupe-Palmarejo streams, as well as higher than anticipated royalties from our Hemlo NPI. For 2021, we continue to expect solid growth in our GEO sales based on the following:

● Latin America: We anticipate sales from Cobre Panama to increase significantly over 2020, ranging between 105,000 and 125,000 GEOs, as the mine continues to ramp-up. Sales in 2021 from Candelaria are also expected to increase to between 65,000 and 75,000 GEOs, as the mine has completed its mill optimization project. We anticipate sales of silver ounces from Antamina to increase compared to 2020 to the high-end of our long-term expected annual range of 2.8 million to 3.2 million silver ounces. We have also factored in incremental GEOs from our newly acquired Condestable stream, referenced above. Increases from these assets are expected to be partly offset by a decrease in GEOs from Antapaccay ranging between 55,000 and 65,000 GEOs due to lower planned grades based on the life of mine plan.

● U.S.: We anticipate higher royalties from Stillwater due to an expected increase in PGM production. Gold Quarry is expected to decrease to approximately 5,500 GEOs in 2021 and to 1,350 GEOs thereafter, as our royalty payments will no longer be based on the minimum payment obligations tied to mineral reserves and stockpiles. We also anticipate lower royalties from South Arturo, based on the latest life of mine plan.

● Canada: We anticipate payments from our NPI royalties from Musselwhite to resume in 2021, as the mine ramps up to full operations after commissioning its new conveyor and materials handling systems in late 2020. We also anticipate higher royalties from the Detour Lake mine where strong production growth is expected in 2021 and from Dublin Gulch (Eagle) which reached commercial production in mid-2020. These increases are expected to be offset by lower royalties from Hemlo, ranging from 20,000 to 30,000 GEOs in 2021, down from a record of 40,155 GEOs in 2020. We also anticipate our deliveries from Sudbury to decrease to approximately 10,000 GEOs.

● Rest of World: We anticipate more production from our Subika (Ahafo) royalty, as mining at Ahafo returns to our royalty grounds. Deliveries from Karma are expected to decrease due to the fixed delivery commitments being fulfilled in 2020. Deliveries from Sabodala are also expected to be lower based on the fixed delivery commitments set in the amended stream agreement, referenced above.

Energy revenue: Revenue from our Energy assets exceeded our revised 2020 guidance as oil and gas prices improved in the second half of 2020 resulting in better than expected royalties from our Permian assets and our Weyburn NRI. In addition, we received the initial contribution from the newly acquired Haynesville royalties. In 2021, we expect an increase in Energy revenue both due to higher forecasted oil and gas prices and the following:

● U.S.: Our recently acquired royalty portfolio in the Haynesville shale play will contribute its first full year of revenue. With respect to our interests in the SCOOP/STACK, additional royalties acquired under the Royalty Acquisition Venture with Continental are expected to provide additional volume contribution. We also anticipate a rebound in drilling activity in the Permian Basin as commodity prices recover but flat drilling activity at Marcellus relative to 2020. We also have not included lease bonus revenue in our 2021 guidance. Lease bonuses were minimal in 2020.

● Canada: We expect an increase in revenue from Weyburn, reflecting the NRI royalty’s leverage to oil prices. For Orion, we anticipate consistent production levels but increased revenue from better oil prices.

Depletion: The Company has estimated depletion and depreciation expense to be between $250.0 million to $280.0 million for 2021.

2020 Management’s Discussion and Analysis 8

Capital commitments: As at December 31, 2020, Franco-Nevada is committed to contribute, subject to satisfaction of agreed upon development thresholds, up to $114.0 million to the Royalty Acquisition Venture held with Continental. Approximately half is expected to be deployed in 2021. The Company is also committed to funding the potential upsizing of the Alpala royalty, referenced in the Corporate Developments section above.

Market Overview

The price of gold and other precious metals are the largest factors in determining profitability and cash-flow from operations for Franco-Nevada. Historically, the price of gold has been subject to volatile price movements and is affected by numerous macroeconomic and industry factors that are beyond the Company’s control. Major influences on the gold price include interest rates, fiscal and monetary stimulus, inflation expectations, currency exchange rate fluctuations including the relative strength of the U.S. dollar, and the supply of and demand for gold.

Commodity price volatility also impacts the number of GEOs when converting non-gold commodities to GEOs. Silver, platinum, palladium and other mining commodities are converted to GEOs by dividing associated revenue, which includes settlement adjustments, by the relevant gold price. The price used in the computation of GEOs earned from a particular asset varies depending on the royalty or stream agreement, which may make reference to the market price realized by the operator, or the average price for the month, quarter, or year in which the mining commodity was produced or sold.

In 2020, gold prices reflected improved sentiment toward gold as a safe haven in uncertain times as well as an alternative investment class in a low interest rate environment. Gold prices increased 27.1%, averaging $1,770/oz in 2020, compared to $1,392/oz in 2019, and ended the year at $1,888/oz.

Silver prices averaged $20.55/oz in 2020, an increase of 26.9% compared to $16.20/oz in 2019. Platinum and palladium prices averaged $884/oz and $2,194/oz, respectively, in 2020, compared to $863/oz and $1,539/oz, respectively, in 2019, an increase of 2.4% and an increase of 42.5%, respectively.

During the year, a number of geopolitical and market factors outside of the Company’s control (including those related to the COVID-19 pandemic) have contributed to volatility and a significant decrease in the price of oil and gas. WTI prices averaged $39.36/bbl in 2020, a 30.9% decrease from 2019, Edmonton Light prices averaged C$45.72/bbl in 2020, down 33.7% compared to 2019. Henry Hub natural gas prices averaged $2.13/mcf in 2020 compared to $2.53/mcf in 2019, down 15.8%.

2020 Management’s Discussion and Analysis 9

Selected Financial Information

	For the three months ended						For the year ended
(in millions, except Average Gold Price, GEOs sold,	December 31,						December 31,
Margin, per ounce amounts and per share amounts)	2020			2019			2020			2019
Statistical Measures
Average Gold Price	$	1,873		$	1,480		$	1,770		$	1,392
GEOs sold(1)		147,476			153,396			521,564			516,438
Statement of Comprehensive Income
Revenue	$	304.5		$	258.1		$	1,020.2		$	844.1
Depletion and depreciation		67.5			72.7			241.0			263.2
Costs of sales		46.7			46.3			158.8			144.8
Operating income		195.8			129.0			336.5			410.2
Net income		176.7			113.3			326.2			344.1
Basic earnings per share	$	0.93		$	0.60		$	1.71		$	1.83
Diluted earnings per share	$	0.92		$	0.60		$	1.71		$	1.83
Dividends declared per share	$	0.26		$	0.25		$	1.03		$	0.99
Dividends declared (including DRIP)	$	50.7		$	47.6		$	197.2		$	187.0
Weighted average shares outstanding		190.9			188.8			190.3			187.7
Non-IFRS Measures
Cash Costs(2) attributable to GEOs sold	$	44.8		$	44.1		$	152.4		$	137.5
Cash Costs(2) per GEO sold	$	304		$	287		$	292		$	266
Adjusted EBITDA(2)	$	253.7		$	201.7		$	839.6		$	673.4
Adjusted EBITDA(2) per share	$	1.33		$	1.07		$	4.41		$	3.59
Margin(2)		83.3	%		78.1	%		82.3	%		79.8	%
Adjusted Net Income(2)	$	163.0		$	110.8		$	516.3		$	341.5
Adjusted Net Income(2) per share	$	0.85		$	0.59		$	2.71		$	1.82
Statement of Cash Flows
Net cash provided by operating activities	$	246.3		$	184.6		$	803.9		$	617.7
Net cash used in investing activities	$	(137.9)		$	(1.8)		$	(309.0)		$	(436.1)
Net cash used in financing activities	$	(39.7)		$	(142.6)		$	(91.8)		$	(119.8)

	As at		As at
	December 31,		December 31,
(expressed in millions)	2020		2019
Statement of Financial Position
Cash and cash equivalents	$	534.2	$	132.1
Total assets		5,592.9		5,280.6
Debt		—		80.0
Deferred income tax liabilities		91.5		82.4
Total shareholders’ equity		5,443.8		5,062.2
Working capital(3)		610.5		225.3

1 Refer to Note 1 at the bottom of page 5 of this MD&A for the methodology for calculating GEOs and, for illustrative purposes, to the average commodity price table on pages 12 and 16 of this MD&A for indicative prices which may be used in the calculations of GEOs for the year ended December 31, 2020 and 2019, respectively.

2 Cash costs, Adjusted EBITDA, Margin and Adjusted Net Income are non-IFRS financial measures with no standardized meaning under IFRS. For further information and a detailed reconciliation, please see the “Non-IFRS Financial Measures” section of this MD&A.

3 The Company defines Working Capital as current assets less current liabilities.

2020 Management’s Discussion and Analysis 10

Revenue by Asset

Our portfolio is well-diversified with GEOs and revenue being earned from 54 Mining assets and 55 Energy assets in various jurisdictions.

The following table details revenue earned from our various royalty, stream and working interests for the years ended December 31, 2020 and 2019:

		For the three months ended				For the year ended
(expressed in millions)		December 31,				December 31,
Property	Interest and %	2020		2019		2020		2019
GOLD & GOLD EQUIVALENTS
Latin America
Cobre Panama	Stream (indexed) Gold & Silver	$	46.1	$	32.8	$	135.4	$	64.7
Candelaria	Stream 68% Gold & Silver		22.5		30.9		106.8		103.1
Antapaccay	Stream (indexed) Gold & Silver		47.5		29.1		118.5		100.4
Antamina	Stream 22.5% Silver		20.5		10.2		57.0		44.9
Guadalupe-Palmarejo	Stream 50% Gold		29.1		17.3		79.0		49.7
Other			1.7		1.3		5.4		6.4
United States
Stillwater	NSR 5% PGM	$	15.2	$	13.1	$	50.9	$	39.8
Goldstrike	NSR 2-4%, NPI 2.4-6%		5.4		4.1		20.7		21.2
Gold Quarry	NSR 7.29%		(4.0)		5.9		10.7		15.6
Marigold	NSR 1.75-5%, GR 0.5-4%		2.6		1.7		7.1		8.7
Bald Mountain	NSR/GR 0.875-5%		2.5		3.8		11.2		8.9
South Arturo	GR 4-9%		1.3		1.1		6.2		1.8
Other			1.9		3.0		7.0		6.4
Canada
Sudbury	Stream 50% PGM & Gold	$	6.5	$	13.1	$	40.1	$	41.2
Detour Lake	NSR 2%		5.7		4.7		20.4		16.8
Hemlo	NSR 3%, NPI 50%		21.6		5.6		69.9		18.2
Brucejack	NSR 1.2%		2.0		1.6		7.2		5.6
Kirkland Lake	NSR 1.5-5.5%, NPI 20%		1.5		1.4		5.4		5.2
Other			11.9		8.5		27.0		27.5
Rest of World
MWS	Stream 25%	$	11.0	$	12.1	$	41.8	$	37.1
Sabodala	6% Stream, Fixed to 105,750 oz (1)		5.1		6.3		21.6		29.5
Tasiast	NSR 2%		4.1		3.1		14.3		10.9
Subika (Ahafo)	NSR 2%		2.8		5.3		10.4		17.4
Karma	Stream 4.875%, Fixed to 80,625 oz		7.0		5.6		28.9		20.2
Duketon	NSR 2%		1.4		1.5		9.6		7.7
Edikan	NSR 1.5%		1.2		0.9		4.4		3.6
Other			2.6		4.1		11.6		15.7
		$	276.7	$	228.1	$	928.5	$	728.2
ENERGY
United States
SCOOP/STACK	Various Royalty Rates	$	4.6	$	7.0	$	21.6	$	26.2
Permian Basin	Various Royalty Rates		5.5		5.3		18.5		20.0
Marcellus	GORR 1%		4.9		4.9		20.4		18.0
Haynesville	Various Royalty Rates		4.2		—		4.2		—
Other			0.1		—		0.1		—
Canada
Weyburn	NRI 11.71%, ORR 0.44%, WI 2.56%	$	5.2	$	8.1	$	16.0	$	33.8
Orion	GORR 4%		2.0		2.6		5.9		10.2
Other			1.3		2.1		5.0		7.7
		$	27.8	$	30.0	$	91.7	$	115.9
Revenue		$	304.5	$	258.1	$	1,020.2	$	844.1

1 Sabodala agreement was amended with an effective date of September 1, 2020.

2020 Management’s Discussion and Analysis 11

Review of Quarterly Financial Performance

The prices of precious metals and oil and gas and production from Mining and Energy assets are the largest factors in determining profitability and cash flow from operations for Franco-Nevada. The following table summarizes average commodity prices and average exchange rates during the periods presented.

Quarterly average prices and rates		Q4/2020		Q4/2019		Variance
Gold(1)	($/oz)	$	1,873	$	1,480	26.6	%
Silver(1)	($/oz)		24.39		17.31	40.9	%
Platinum(1)	($/oz)		939		907	3.5	%
Palladium(1)	($/oz)		2,348		1,800	30.4	%
Edmonton Light	(C$/bbl)		49.45		66.87	(26.1)	%
West Texas Intermediate	($/bbl)		42.68		56.94	(25.0)	%
Henry Hub	($/mcf)		2.77		2.42	14.5	%
CAD/USD exchange rate(2)			0.7675		0.7576	1.3	%

1 Based on LBMA PM Fix for gold, platinum and palladium. Based on LBMA Fix for silver.

2 Based on Bank of Canada daily rates.

Revenue

Revenue and GEO sales by commodity, geographical location and type of interest for the three months ended December 31, 2020 and 2019 is as follows:

	Gold Equivalent Ounces(1)			Revenue (in millions)
For the three months ended December 31,	2020	2019	Variance	2020		2019		Variance
Commodity
Gold	110,815	117,698	(6,883)	$	208.4	$	174.8	$	33.6
Silver	20,403	15,427	4,976		38.0		22.8		15.2
PGM	11,162	16,271	(5,109)		20.9		24.6		(3.7)
Other Mining assets	5,096	4,000	1,096		9.4		5.9		3.5
Mining	147,476	153,396	(5,920)	$	276.7	$	228.1	$	48.6
Energy	—	—	—		27.8		30.0		(2.2)
	147,476	153,396	(5,920)	$	304.5	$	258.1	$	46.4
Geography
Latin America	89,456	81,697	7,759	$	167.4	$	121.6	$	45.8
United States	13,028	22,235	(9,207)		44.2		49.9		(5.7)
Canada	26,164	23,247	2,917		57.7		47.7		10.0
Rest of World	18,828	26,217	(7,389)		35.2		38.9		(3.7)
	147,476	153,396	(5,920)	$	304.5	$	258.1	$	46.4
Type
Revenue-based royalties	24,832	38,765	(13,933)	$	69.6	$	78.0	$	(8.4)
Streams	104,337	105,434	(1,097)		195.4		157.4		38.0
Profit-based royalties	12,783	5,008	7,775		27.0		12.5		14.5
Other	5,524	4,189	1,335		12.5		10.2		2.3
	147,476	153,396	(5,920)	$	304.5	$	258.1	$	46.4

1 Refer to Note 1 at the bottom of page 5 of this MD&A for the methodology for calculating GEOs and, for illustrative purposes, to the average commodity price table above for indicative prices which may be used in the calculations of GEOs.

Revenue for Q4/2020 was $304.5 million, up 18.0% from Q4/2019, and comprised $276.7 million from Mining assets and $27.8 million from Energy assets. Mining revenue in Q4/2020 increased 21.3%, benefiting from strong precious metal prices. Conversely, Energy revenue decreased 7.3% compared to the same period in 2019 due to a decrease in oil and gas prices in 2020 which negatively impacted all Energy assets. Included in Energy revenue is $4.2 million from the newly acquired Haynesville portfolio.

Mining assets contributed 90.9% of the Company’s total revenue in Q4/2020, compared to 88.4% in Q4/2019. Geographically, the Company remains heavily invested in the Americas, representing 88.4% of revenue in Q4/2020, compared to 84.9% in Q4/2019.

2020 Management’s Discussion and Analysis 12

GEO Sales

GEOs sold in Q4/2020 totaled 147,476 ounces, compared to 153,396 GEOs in Q4/2019.

2020 Management’s Discussion and Analysis 13

The quarter-over-quarter decrease in GEOs sold was primarily due to the following factors:

● Candelaria – 11,958 GEOs were sold in Q4/2020 compared to 20,728 GEOs in Q4/2019 due to the operation shutting down as a result of labour action in Q4/2020. The operation returned to full production capacity in December 2020 after reaching new collective agreements.

● Gold Quarry – An adjustment was recorded in Q4/2020 due to 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 to 4,184 GEOs being earned in Q4/2019.

● Sudbury – 3,489 GEOs were sold in Q4/2020 compared to 8,420 GEOs in Q4/2019 as anticipated based on McCreedy West’s life of mine plan.

The above decreases were partly offset by the following factors:

● Hemlo – 11,450 GEOs were earned in Q4/2020 compared to 3,729 GEOs in Q4/2019 as the 50% NPI on Interlake benefited from higher gold prices and increased production. In addition, the Company recorded 4,168 GEOs for NPI royalties related to prior periods during Q4/2020.

● Antapaccay – 25,430 GEOs were sold in Q4/2020 compared to 19,530 GEOs in Q4/2019 due timing of deliveries.

● Antamina – 11,079 GEOs were sold in Q4/2020 compared to 6,892 GEOs in Q4/2019 reflecting the resumption of full production levels in the second half of 2020 following a shutdown due to the COVID-19 pandemic earlier in the year. Higher silver prices also resulted in a more favourable GEO conversion ratio.

● Guadalupe-Palmarejo – 15,669 GEOs were sold in Q4/2020 compared to 11,644 GEOs in Q4/2019 due to higher grades and recoveries.

● Cobre Panama – Franco-Nevada sold 24,347 GEOs in Q4/2020 compared to 22,028 GEOs in Q4/2019 as the operation has fully ramped up production following the temporary suspension due to the COVID-19 pandemic.

Energy Revenue

Energy assets earned revenue of $27.8 million (56.4% oil, 33.5% gas and 10.1% NGLs) for the quarter, a decrease of 7.3% compared to $30.0 million (78.0% oil, 12.6% gas and 9.4% NGLs) in Q4/2019. U.S. assets generated 69.3% of Franco-Nevada’s Energy revenue. The decrease in Energy revenue was primarily due to a significant decline in oil prices and the following factors:

● SCOOP/STACK – Royalties from the SCOOP/STACK contributed $4.6 million in Q4/2020 compared to $7.0 million in Q4/2019 due to lower realized commodity prices and lower volumes due to reduced drilling by some of the operators within the plan and on royalty lands. These factors offset contributions from additional royalties acquired under the Royalty Acquisition Venture with Continental, where the pace of acquisition slowed in 2020.

● Weyburn – Revenue from the Weyburn Unit was $5.2 million in Q4/2020 compared to $8.1 million in Q4/2019 due mostly to lower contribution from the NRI as a result of lower realized oil prices. The realized oil price was C$46.27/boe compared to C$63.35/boe for Q4/2019.

The above decreases were partly offset by the following:

● Haynesville – The newly acquired portfolio of royalties, effective October 1, 2020, contributed $4.2 million in Q4/2020.

Costs of Sales

2020 Management’s Discussion and Analysis 14

The following table provides a breakdown of costs of sales incurred in the periods presented:

	For the three months ended December 31,
(expressed in millions)	2020		2019		Variance
Costs of stream sales	$	44.0	$	43.5	$	0.5
Mineral production taxes		0.8		0.6		0.2
Mining costs of sales	$	44.8	$	44.1	$	0.7
Energy costs of sales		1.9		2.2		(0.3)
	$	46.7	$	46.3	$	0.4

Ounces from stream assets decreased in Q4/2020 compared to Q4/2019. Costs of stream sales increased slightly as a result of higher metal prices as certain streams carry a cost per ounce which varies based on spot prices.

Depletion and Depreciation

Depletion and depreciation expense totaled $67.5 million in Q4/2020, compared to $72.7 million in Q4/2019, in part due to the quarter-over-quarter decrease in GEOs sold. In Q4/2020, the Company also earned a higher portion of its GEOs from its Hemlo asset which has been fully depleted. Depletion on a per ounce basis also varies from year to year based on the asset’s updated reserve estimates.

Income Taxes

Income tax expense was $21.5 million in Q4/2020 (Q4/2019 – $17.2 million), comprised of a current income tax expense of $17.1 million (Q4/2019 – $13.9 million) and a deferred income tax expense of $4.4 million (Q4/2019 – $3.3 million). The Company is undergoing an audit by the CRA of its 2012-2017 taxation years. Refer to the “Liquidity and Capital Resources – Contingencies” section of this MD&A for further details.

Net Income

Net income for Q4/2020 was $176.7 million, or $0.93 per share, compared to $113.3 million, or $0.60 per share, for the same period in 2019. Adjusted Net Income, which adjusts for impairment charges and reversals, foreign exchange gains and losses and other income and expenses, among other items, was $163.0 million, or $0.85 per share, compared to $110.8 million, or $0.59 per share, earned in Q4/2019.

2020 Management’s Discussion and Analysis 15

Review of Annual Financial Performance

The prices of precious metals and oil and gas and the actual production from Mining and Energy assets are the largest factors in determining profitability and cash flow from operations for Franco-Nevada. The following table summarizes average commodity prices and average exchange rates during the periods presented.

Average prices and rates		2020		2019		Variance
Gold(1)	($/oz)	$	1,770	$	1,392	27.1	%
Silver(1)	($/oz)		20.55		16.20	26.9	%
Platinum(1)	($/oz)		884		863	2.4	%
Palladium(1)	($/oz)		2,194		1,539	42.5	%
Edmonton Light	(C$/bbl)		45.72		68.99	(33.7)	%
West Texas Intermediate	($/bbl)		39.36		57.00	(30.9)	%
Henry Hub	($/mcf)		2.13		2.53	(15.8)	%
CAD/USD exchange rate(2)			0.7455		0.7536	(1.1)	%

1 Based on LBMA PM Fix for gold, platinum and palladium. Based on LBMA Fix for silver.

2 Based on Bank of Canada daily rates.

Revenue

Revenue and GEO sales by commodity, geographical location and type of interest for the year ended December 31, 2020 and 2019 is as follows:

	Gold Equivalent Ounces(1)			Revenue (in millions)
For the year ended December 31,	2020	2019	Variance	2020		2019		Variance
Commodity
Gold	405,033	387,663	17,370	$	718.1	$	545.8	$	172.3
Silver	59,606	58,906	700		106.4		83.2		23.2
PGM	47,038	52,813	(5,775)		86.2		75.6		10.6
Other Mining assets	9,887	17,056	(7,169)		17.8		23.6		(5.8)
Mining	521,564	516,438	5,126	$	928.5	$	728.2	$	200.3
Energy	—	—	—		91.7		115.9		(24.2)
	521,564	516,438	5,126	$	1,020.2	$	844.1	$	176.1
Geography
Latin America	281,684	260,389	21,295	$	502.1	$	369.2	$	132.9
United States	64,466	73,820	(9,354)		178.6		166.6		12.0
Canada	95,038	80,570	14,468		196.9		166.2		30.7
Rest of World	80,376	101,659	(21,283)		142.6		142.1		0.5
	521,564	516,438	5,126	$	1,020.2	$	844.1	$	176.1
Type
Revenue-based royalties	113,247	134,611	(21,364)	$	274.9	$	266.7	$	8.2
Streams	351,580	345,466	6,114		629.2		490.8		138.4
Profit-based royalties	46,257	20,466	25,791		88.7		49.7		39.0
Other	10,480	15,895	(5,415)		27.4		36.9		(9.5)
	521,564	516,438	5,126	$	1,020.2	$	844.1	$	176.1

1 Refer to Note 1 at the bottom of page 5 of this MD&A for the methodology for calculating GEOs and, for illustrative purposes, to the average commodity price table above for indicative prices which may be used in the calculations of GEOs.

2020 Management’s Discussion and Analysis 16

Revenue in 2020 was $1,020.2 million, up 20.9% from 2019 due to higher metal prices and an increase in GEOs sold. Mining revenue comprised 91.0% of total revenue in 2020, compared to 86.3% in 2019. We continue to earn the majority of our revenue from the Americas, at 86.0% in 2020, compared to 83.2% in 2019.

GEO Sales

GEOs sold in 2020 totaled 521,564 ounces, compared to 516,438 GEOs in 2019.

2020 Management’s Discussion and Analysis 17

The year-over-year increase in GEOs sold was primarily due to the following factors:

● Cobre Panama – Franco-Nevada sold 76,348 GEOs in 2020 compared to 43,554 GEOs in 2019 as the Company benefited from a full year of deliveries in 2020 vs. first deliveries in 2019 beginning in July.

● Hemlo – 40,155 GEOs were earned in 2020 compared to 13,313 GEOs in 2019 due to an increase in production on the Interlake lands along with higher gold prices. In addition, the Company recorded 5,243 GEOs for NPI royalties related to prior periods.

● Guadalupe-Palmarejo – 44,696 GEOs were sold in 2020 compared to 35,031 GEOs in 2019 due to higher grades and recoveries being achieved.

The above increases were partly offset by the following factors:

● Candelaria – 59,655 GEOs were sold in 2020 compared to 73,638 GEOs in 2019 due to ore hardness in the first half of 2020 and work stoppages in the fourth quarter of 2020.

● Sabodala – 12,164 GEOs were sold in 2020 compared to 21,140 GEOs in 2019 due to the fixed delivery commitments under the recently amended stream agreement being lower than those which were in effect in 2019.

● Sudbury – 21,046 GEOs were sold in 2020 compared to 27,956 GEOs in 2019 as anticipated based on McCreedy West’s life of mine plan.

Energy Revenue

The Company’s Energy assets contributed revenue of $91.7 million (60.7% oil, 26.6% gas and 12.7% NGLs) in 2020, a decrease of 20.9% compared to $115.9 million (75.3% oil, 15.6% gas and 9.0% NGLs) in 2019. The Company’s U.S. Energy assets generated 70.6% of the Company’s Energy revenue in 2020. The year-over-year decrease in Energy revenue was primarily due to lower realized oil prices across the portfolio in addition to the following factors:

● Weyburn – Revenue from the Weyburn Unit in 2020 was $16.0 million compared to $33.8 million in 2019. The substantial revenue reduction in 2020 included negative revenue from the Weyburn NRI in Q2/2020 as operating and capital costs associated with the royalty exceeded revenue resulting from unusually low realized oil prices. The actual realized oil price was C$41.55/boe in 2020 compared to C$65.18/boe in 2019.

The above decrease was partly offset by the following:

● Haynesville – The newly acquired portfolio of royalties, effective October 1, 2020, contributed $4.2 million in 2020.

● Marcellus – The Marcellus royalty, which was effective March 1, 2019, contributed a full year of revenue in 2020 of $20.4 million, compared to $18.0 million in 2019.

Costs of Sales

2020 Management’s Discussion and Analysis 18

The following table provides a breakdown of costs of sales incurred in the periods presented:

	For the year ended December 31,
(expressed in millions)	2020		2019		Variance
Costs of stream sales	$	149.5	$	135.1	$	14.4
Mineral production taxes		2.9		2.4		0.5
Mining costs of sales	$	152.4	$	137.5	$	14.9
Energy costs of sales		6.4		7.3		(0.9)
	$	158.8	$	144.8	$	14.0

Costs of stream sales in 2020 increased 10.7% relative to 2019, reflecting an increase in stream GEOs sold as well as higher metal prices as certain streams carry a cost per ounce which varies based on spot prices.

Depletion and Depreciation

Depletion and depreciation expense totaled $241.0 million in 2020, compared to $263.2 million in 2019. While GEOs sold increased year-over-year, depletion expense decreased as the incremental GEOs were earned from assets carrying lower depletion rates. In particular, for 2020, the Company earned a significant portion of its GEOs from its Hemlo asset, which has been fully depleted. Depletion on a per ounce basis also varies from year to year based on the asset’s updated reserve estimates.

Impairment Charges and Reversals

In 2020, the Company recorded pre-tax impairments of $271.7 million, or $207.4 million after-tax, related to its interests in the SCOOP/STACK and Weyburn, and an impairment reversal of $9.6 million, net of depletion, related to its MWS stream. Refer to the “Impairments of Royalties, Stream and Working Interests” section of this MD&A for details.

Income Taxes

Income tax expense in 2020 totaled $13.3 million (2019 – $61.8 million), comprised of a current income tax expense of $48.5 million (2019 – $39.1 million) and a deferred income tax recovery of $35.2 million (2019 – $22.7 million deferred income tax expense). The deferred income tax recovery in 2020 was mostly related to the impairment charges recorded on the Company’s Energy assets. The Company is undergoing an audit by the CRA of its 2012-2017 taxation years. Refer to the “Liquidity and Capital Resources – Contingencies” section of this MD&A for further details.

Net Income

Net income in 2020 was $326.2 million, or $1.71 per share, compared to $344.1 million, or $1.83 per share, for the same period in 2019. The decrease in net income reflects the impairment charges recorded on the Company’s Energy assets, largely offset by higher mining revenue. Adjusted Net Income was $516.3 million, or $2.71 per share, compared to $341.5 million, or $1.82 per share, earned in 2019.

2020 Management’s Discussion and Analysis 19

Impairment Charges and Reversals

Royalties, stream and working interests are reviewed for impairment if there is an indication that the carrying amount may not be recoverable. The Company also reassesses previously impaired assets for indications that an impairment loss may no longer exist or has decreased. In 2020, the Company recorded pre-tax impairment charges (reversals) as summarized in the following table:

		Impairment
		(reversal)		Recoverable
(expressed in millions)		amount		amount
Royalty, stream and working interests, net
SCOOP/STACK	$	207.2	$	309.2
Weyburn		60.5		162.8
Mine Waste Solutions		(9.6)		114.8
Other assets
Oil well equipment	$	4.0	$	4.7
	$	262.1	$	591.5

Refer to note 8 to the financial statements for further details on impairment charges and reversals.

SCOOP/STACK and Weyburn

In Q1/2020, as a result of reduced production and capital spend by the operators of the Company’s Energy assets due to lower market expectations for oil and gas prices, the Company noted the presence of impairment indicators at March 31, 2020 and carried out an asset impairment analysis of its Energy assets. The Company recorded pre-tax impairment charges of $207.2 million at its SCOOP/STACK assets, $60.5 million at Weyburn, and $4.0 million related to its oil well equipment. The key assumptions and estimates used in determining the recoverable amounts of the Company’s Energy assets are related to oil prices and discount rates.

Forecasted WTI prices as at March 31, 2020 used to determine future cash flows were as follows:

											Average
											Annual
	Remainder of										Increase
	2020		2021		2022		2023		2024		Thereafter
WTI oil price (US$/barrel)	$	30.00	$	41.18	$	49.88	$	55.87	$	57.98	2	%

While oil and gas prices have rebounded from April 2020, there remains a greater than normal variability in oil and gas prices. At December 31, 2020, the Company determined that there was no indication of impairment reversals.

Future cash-flows were discounted using an after-tax discount rate which reflects specific market risk factors associated with individual characteristics of the cash-generating unit (“CGU”). For the SCOOP/STACK CGUs, the discount rate ranged between 5% for proved producing reserves to 12% for undeveloped contingent resources. For the Weyburn CGU, the discount rate assumed was 9.5%.

Mine Waste Solutions

In 2014, the Company recorded an impairment of $26.6 million on its stream interest in the MWS tailings recovery operation in South Africa. Due to the capped nature of the stream and its limited optionality, the Company assessed that the reduction in consensus gold price estimates at the time was an indication of impairment.

In 2020, the Company assessed that the increase in consensus gold price estimates during the year represented an indication of impairment reversal and carried out an asset impairment reversal analysis. As the recoverable amount determined for the asset exceeded its carrying value, a full reversal of the 2014 impairment loss of $9.6 million, net of depletion, was recognized.

The key assumptions and estimates used in determining the recoverable amount of the MWS stream asset related to gold prices and discount rates.

Forecasted gold prices as at December 31, 2020 used to determine future cash flows were as follows:

	2021			2022		2023	2024
Gold price (US$/ounce)	$	1,910	$	1,886	$	1,831	$	1,681

The future cash-flows were discounted using a discount rate of 5% which reflects specific market risk factors associated with MWS.

2020 Management’s Discussion and Analysis 20

General and Administrative Expenses

The following table provides a breakdown of general and administrative expenses incurred for the periods presented:

	For the three months ended December 31,						For the year ended December 31,
(expressed in millions)	2020		2019		Variance		2020		2019		Variance
Salaries and benefits	$	2.8	$	4.3	$	(1.5)	$	9.6	$	10.1	$	(0.5)
Professional fees		1.2		1.2		—		3.7		2.5		1.2
Office costs		—		0.1		(0.1)		0.3		0.4		(0.1)
Share-based compensation		1.8		1.3		0.5		5.6		5.5		0.1
Board of Directors' costs		0.2		0.6		(0.4)		2.3		2.3		—
(Gain)/loss on mark-to-market of DSU liability		(1.8)		1.3		(3.1)		2.0		2.8		(0.8)
Other		0.4		1.9		(1.5)		5.3		5.2		0.1
	$	4.6	$	10.7	$	(6.1)	$	28.8	$	28.8	$	—

General and administrative expenses represented 2.8% of revenue in 2020 (2019 – 3.4%). General and administrative expenses, which include business development costs, vary depending upon the level of business development related activity and the timing of completing transactions.

Included in general and administrative expenses is the gain or loss on the mark-to-market of the value of the deferred share units (“DSUs”) previously granted to the directors of the Company. Although the Company’s share price increased both in 2020 and 2019, the year-over-year increase in 2020 was less pronounced than in the prior year. As such, the marked-to-market value of the DSU liability increased by $2.0 million in 2020, a lesser extent than in 2019 where the increase in the liability was $2.8 million. In Q4/2020, the share price decreased during the quarter, resulting in a decrease in the liability of $1.8 million compared to an increase in the liability of $1.3 million in Q4/2019.

Other Income and Expenses

Foreign Exchange and Other Income/Expenses

The following table provides a list of foreign exchange and other income/expenses incurred for the periods presented:

	For the three months ended December 31,						For the year ended December 31,
(expressed in millions)	2020		2019		Variance		2020		2019		Variance
Foreign exchange loss	$	0.3	$	0.2	$	0.1	$	(0.1)	$	(0.1)	$	—
Mark-to-market gain on warrants		2.1		2.0		0.1		2.6		2.0		0.6
Other income		0.1		0.6		(0.5)		0.3		0.9		(0.6)
	$	2.5	$	2.8	$	(0.3)	$	2.8	$	2.8	$	—

Under IFRS, all foreign exchange gains or losses related to monetary assets and liabilities held in a currency other than the functional currency are recorded in net income as opposed to other comprehensive income. The parent company’s functional currency is the Canadian dollar, while the functional currency of certain of the Company’s subsidiaries is the U.S. dollar.

Finance Income and Finance Expenses

The following table provides a breakdown of finance income and expenses incurred for the periods presented:

	For the three months ended December 31,						For the year ended December 31,
(expressed in millions)	2020		2019		Variance		2020		2019		Variance
Finance income
Interest	$	0.7	$	0.8	$	(0.1)	$	3.7	$	3.5	$	0.2
	$	0.7	$	0.8	$	(0.1)	$	3.7	$	3.5	$	0.2
Finance expenses
Standby charges	$	0.6	$	0.5	$	0.1	$	2.1	$	2.1	$	—
Amortization of debt issue costs		0.2		0.3		(0.1)		1.0		0.9		0.1
Interest		—		1.2		(1.2)		0.3		7.4		(7.1)
Accretion of lease liabilities		—		0.1		(0.1)		0.1		0.2		(0.1)
	$	0.8	$	2.1	$	(1.3)	$	3.5	$	10.6	$	(7.1)

Finance income is earned on our cash and cash equivalents. Finance income also includes interest income of $2.4 million on the Noront Loan. Interest income also includes $0.6 million on a loan provided to SolGold in advance of the closing of the acquisition of the Alpala royalty, referenced in the Corporate Developments section above.

In 2020 and 2019, finance expenses consisted of interest expense incurred on our Corporate Revolver and Corporate Term Loan, both of which have been repaid. The Company also incurs standby charges, which represent the costs of maintaining our credit facilities based on the undrawn amounts, and recognizes the amortization of costs incurred with respect to the initial set-up or subsequent amendments of our credit facilities. Finance expenses also includes the accretion expense on lease liabilities.

2020 Management’s Discussion and Analysis 21

Summary of Quarterly Information

Selected quarterly financial and statistical information for the most recent eight quarters⁽¹⁾ is set out below:

(in millions, except Average Gold Price, Margin, GEOs, per GEO amounts and	Q4			Q3			Q2			Q1				Q4			Q3			Q2			Q1
per share amounts)	2020			2020			2020			2020				2019			2019			2019			2019
Revenue	$	304.5		$	279.8		$	195.4		$	240.5		$	258.1		$	235.7		$	170.5		$	179.8
Costs and expenses(2)		108.7			101.5			89.6			383.9			129.1			113.5			91.5			99.8
Operating income (loss)		195.8			178.3			105.8			(143.4)			129.0			122.2			79.0			80.0
Other (expenses) income		2.4			0.8			0.1			(0.3)			1.5			(2.7)			(1.3)			(1.8)
Income tax expense (recovery)		21.5			25.2			11.5			(44.9)			17.2			17.9			13.7			13.0
Net income (loss)		176.7			153.9			94.4			(98.8)			113.3			101.6			64.0			65.2
Basic earnings (loss) per share	$	0.93		$	0.81		$	0.50		$	(0.52)		$	0.60		$	0.54		$	0.34		$	0.35
Diluted earnings (loss) per share	$	0.92		$	0.81		$	0.50		$	(0.52)		$	0.60		$	0.54		$	0.34		$	0.35
Net cash provided by operating activities	$	246.3		$	212.2		$	150.2		$	195.2		$	184.6		$	170.4		$	119.1		$	143.6
Net cash used in investing activities		(137.9)			(117.6)			(19.0)			(34.5)			(1.8)			(344.5)			(33.5)			(56.3)
Net cash (used in) provided by financing activities		(39.7)			(9.4)			34.8			(77.5)			(142.6)			(133.9)			241.4			(84.7)
Average Gold Price(3)	$	1,873		$	1,911		$	1,711		$	1,583		$	1,480		$	1,474		$	1,310		$	1,304
GEOs sold(4)		147,476			134,817			104,330			134,941			153,396			133,219			107,774			122,049
Cash Costs(5) attributable to GEOs sold	$	44.8		$	39.1		$	27.0		$	41.5		$	44.1		$	36.8		$	25.6		$	31.0
Cash Costs(5) per GEO sold	$	304		$	290		$	259		$	308		$	287		$	276		$	238		$	254
Adjusted EBITDA(5)	$	253.7		$	235.1		$	158.1		$	192.7		$	201.7		$	192.9		$	137.9		$	140.9
Adjusted EBITDA(5) per share	$	1.33		$	1.23		$	0.83		$	1.02		$	1.07		$	1.03		$	0.74		$	0.75
Margin(5)		83.3	%		84.0	%		80.9	%		80.1	%		78.1	%		81.8	%		80.9	%		78.4	%
Adjusted Net Income(5)	$	163.0		$	152.3		$	91.8		$	109.2		$	110.8		$	101.6		$	64.0		$	65.2
Adjusted Net Income(5) per share	$	0.85		$	0.80		$	0.48		$	0.58		$	0.59		$	0.54		$	0.34		$	0.35

1 Sum of the quarters may not add up to yearly total due to rounding.

2 Includes impairment charges (reversals) on royalty, stream and working interests of $(9.6) million (Q4/2020) and $271.7 million (Q1/2020).

3 Based on LBMA Gold Price PM Fix.

4 GEOs include production from our Mining assets and do not include Energy 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. Silver, platinum, palladium and other mining commodities are converted to GEOs by dividing associated revenue, which includes settlement adjustments, by the relevant gold price. The price used in the computation of GEOs earned from a particular asset varies depending on the royalty or stream agreement, which may make reference to the market price realized by the operator, or the average price for the month, quarter, or year in which the mining commodity was produced or sold. For illustrative purposes, please refer to the average commodity price table on pages 12 and 16of this MD&A for indicative prices which may be used in the calculation of GEOs for the year ended December 31, 2020 and 2019, respectively.

5 Cash Costs, Adjusted EBITDA, Margin and Adjusted Net Income are non-IFRS measures with no standardized meaning under IFRS. For further information and a detailed reconciliation, please refer to the “Non-IFRS Financial Measures” section of this MD&A.

2020 Management’s Discussion and Analysis 22

Balance Sheet Review

Summary Balance Sheet and Key Financial Metrics

	At December 31,			At December 31,
(expressed in millions, except debt to equity ratio)	2020		2019
Cash and cash equivalents	$	534.2	$	132.1
Current assets		663.7		278.7
Non-current assets		4,929.2		5,001.9
Total assets	$	5,592.9	$	5,280.6
Current liabilities		53.2		53.4
Non-current liabilities		95.9		165.0
Total liabilities	$	149.1	$	218.4
Total shareholders’ equity	$	5,443.8	$	5,062.2
Debt	$	—	$	80.0
Total common shares outstanding		191.0		189.4
Key Financial Metrics
Working Capital	$	610.5	$	225.3
Debt to equity		—		0.02:1

Assets

Total assets were $5,592.9 million at December 31, 2020 compared to $5,280.6 million at December 31, 2019. Our asset base is primarily comprised of non-current assets such as our royalty, stream and working interests, equity investments and loan receivable, while our current assets primarily comprise cash and cash equivalents, and accounts receivable. The decrease in non-current assets compared to December 31, 2019 reflects a decrease in the carrying amount of the Company’s royalty, stream and working interests as a result of impairment charges recognized on our Energy assets, as well as depletion and depreciation expense. These decreases were partly offset by the acquisitions of the Haynesville, Alpala and other royalty interests and increase in the fair value of equity instruments.

Liabilities

Total liabilities as at December 31, 2020 primarily comprise $40.8 million of accounts payable and accrued liabilities and $91.5 million deferred income tax liabilities. The decrease in non-current liabilities compared to December 31, 2019, reflects the repayment of $80.0 million of debt the Company had outstanding at December 31, 2019 which was repaid during the first quarter of 2020.

Shareholders’ Equity

Shareholders’ equity increased by $381.6 million as at December 31, 2020 compared to December 31, 2019 reflecting net income of $326.2 million and net proceeds of $133.7 million from issuances under the ATM Program and the previous at-the-market equity program, after agent commission costs $1.4 million and other share issuance costs of $0.9 million. Declared dividends reduced shareholders’ equity by $197.2 million but were partly settled through the issuance of $42.3 million in common shares pursuant to the DRIP. Shareholders’ equity also includes a gain on the fair value of investments of $43.8 million and a gain of $19.6 million in currency translation adjustment in 2020.

2020 Management’s Discussion and Analysis 23

Liquidity and Capital Resources

Cash flow for the year ended December 31, 2020 and 2019 was as follows:

	For the three months ended				For the year ended
	December 31,				December 31,
(expressed in millions)	2020		2019		2020		2019
Net cash provided by operating activities	$	246.3	$	184.6	$	803.9	$	617.7
Net cash used in investing activities		(137.9)		(1.8)		(309.0)		(436.1)
Net cash used in financing activities		(39.7)		(142.6)		(91.8)		(119.8)
Effect of exchange rate changes on cash and cash equivalents		(1.3)		0.2		(1.0)		0.6
Net change in cash and cash equivalents	$	67.4	$	40.4	$	402.1	$	62.4

Operating Cash Flow

Net cash provided by operating activities was $803.9 million in 2020 (2019 - $617.7 million). Operating cash flow increased due to higher revenue primarily as a result of higher commodity prices compared to the corresponding 2019 periods. Also reflected in operating cash flow are proceeds from the sale of gold bullion the Company receives as settlement for certain of its royalties.

Investing Activities

Net cash used in investing activities was $309.0 million in 2020 (2019 – $436.1 million), which primarily consisted of the acquisition of the Haynesville royalty for a gross purchase price of $135.0 million, the Alpala royalty for $100.0 million, the Freeport portfolio of royalties for $30.6 million, the Rio Baker royalty for $5.0 million, and the Island Gold royalty for $13.4 million (C$19.0 million). The Company also funded its share of royalty acquisitions in the Royalty Acquisition Venture with Continental of $25.2 million.

Comparatively, investing activities in 2019 primarily consisted of the acquisition of the Marcellus royalty for a gross purchase price of $300.0 million, the funding of Franco-Nevada’s share in the Royalty Acquisition Venture with Continental of $108.8 million, and the purchase of the Salares Norte, Valentine Lake, Eagle’s Nest and Premier royalties.

Financing Activities

Net cash used by financing activities was $91.8 million in 2020 (2019 – $119.8 million) and included the full repayment of amounts borrowed against the Corporate Term Loan of $80.0 million and the payment of dividends in cash of $154.9 million. These were partially offset by net proceeds of $135.7 million from the ATM Program and the previous at-the-market equity program and $7.4 million net proceeds from exercise of stock options.

Comparatively, financing activities in 2019 included the full repayment of $485 million for amounts borrowed against the Corporate Revolver, partly funded with proceeds from the Corporate Term Loan. Financing activities in 2019 also included net proceeds of $136.0 million from the previous at-the-market equity program, and dividends paid in cash of $138.2 million.

Capital Resources

Our cash and cash equivalents totaled $534.2 million as at December 31, 2020 (December 31, 2019 – $132.1 million). In addition, we held investments and loan receivables of $238.4 million as at December 31, 2020 (December 31, 2019 – $183.2 million), of which $191.8 million was held in publicly-traded equity instruments (December 31, 2019 – $141.7 million).

As at March 10, 2021, the Company also has a total of approximately $1.1 billion available under its two revolving credit facilities.

The Corporate Revolver is a $1.0 billion unsecured, revolving credit facility with a five-year term maturing March 22, 2024. Advances under the Corporate Revolver bear interest depending upon the currency of the advance and the Company’s leverage ratio. Funds are generally drawn using LIBOR 30-day rates plus 100 basis points. As at December 31, 2020, the Company has two standby letters of credit in the amount of $18.1 million (C$23.1 million) against the Corporate Revolver in relation to the audit by the CRA, as referenced in the “Contingencies” section of this MD&A. The standby letters of credit reduce the available balance under the Corporate Revolver.

The FNBC Revolver is a $0.1 billion unsecured, revolving credit facility. As at December 31, 2020, the available balance under the FNBC Revolver was $0.1 billion. The FNBC Revolver was amended on March 10, 2020 to extend the term to March 20, 2021. The term is expected to be further extended by an additional year. Under the amendment, funds are generally drawn using LIBOR 30-day rates plus 125 basis points.

2020 Management’s Discussion and Analysis 24

The Company also had a Corporate Term Loan, which was a $160.0 million unsecured, non-revolving credit facility. On February 14, 2020, funds borrowed under the Corporate Term Loan were repaid in full. As the Corporate Term Loan is a non-revolving facility, it is therefore no longer available to draw.

Management’s objectives when managing capital are to:

(a) when capital is not being used for long-term investments, ensure its preservation and availability by investing in low risk investments with high liquidity; and

(b) ensure that adequate levels of capital are maintained to meet the Company’s operating requirements and other current liabilities.

As at December 31, 2020, the majority of funds were held in cash deposits with several financial institutions. Franco-Nevada invests its excess funds in term deposits. Certain investments with maturities upon acquisition of 3 months, or 92 days or less, were classified as term deposits within cash and cash equivalents on the statement of financial position.

Our performance is impacted by foreign currency fluctuations of the Canadian dollar and Australian dollar relative to the U.S. dollar. The largest exposure is with respect to the Canadian/U.S. dollar exchange rates as we hold a significant amount of our assets in Canada and report our results in U.S. dollars. The effect of volatility in these currencies against the U.S. dollar impacts our general and administrative expenses and depletion of Mining and Energy interests incurred in our Canadian and Australian entities due to their respective functional currencies. During 2020, the Canadian dollar traded in a range of $0.6898 to $0.7863, ending at $0.7854, and the Australian dollar traded between $0.5727 and $0.7709, ending at $0.7709.

Our near-term cash requirements include the potential funding of the upsize option with respect to the Alpala royalty, our funding commitments towards the Royalty Acquisition Venture with Continental, corporate administration costs, certain costs of operations, payment of dividends and income taxes directly related to the recognition of royalty, stream and working interest revenues. As a royalty and stream company, there are limited requirements for capital expenditures other than for the acquisition of additional royalties or streams and capital commitments for our working interests. Such acquisitions are entirely discretionary and will be consummated through the use of cash, as available, or through the issuance of common shares or other equity or debt securities, or the use of our credit facilities. We believe that our current cash resources, available credit facilities and future cash flows will be sufficient to cover the costs of our commitments, operating and administrative expenses, and dividend payments for the foreseeable future.

2020 Management’s Discussion and Analysis 25

Purchase Commitments

The following table summarizes Franco-Nevada’s commitments to pay for gold, silver and PGM pursuant to the associated precious metals agreements as at December 31, 2020:

	Attributable payable
	production to be purchased						Per ounce cash payment (1),(2)								Term of		Date of
Interest	Gold		Silver		PGM		Gold			Silver			PGM		agreement(3)		contract
Antamina	0	%	22.5	% (4)	0	%		n/a			5	% (5)		n/a	40 years		7-Oct-15
Antapaccay	—	% (6)	—	% (7)	0	%		20	% (8)		20	% (9)		n/a	40 years		10-Feb-16
Candelaria	68	% (10)	68	% (10)	0	%	$	400		$	4.00			n/a	40 years		6-Oct-14
Cobre Panama Fixed Payment Stream	—	% (11)	—	% (12)	0	%	$	418	(13)	$	6.27	(14)		n/a	40 years		19-Jan-18
Cobre Panama Floating Payment Stream	—	% (15)	—	% (16)	0	%		20	% (17)		20	% (18)		n/a	40 years		19-Jan-18
Karma	4.875	% (19)	0	%	0	%		20	% (20)		n/a			n/a	40 years		11-Aug-14
Guadalupe-Palmarejo	50	%	0	%	0	%	$	800			n/a			n/a	40 years		2-Oct-14
Sabodala	—	% (21)	0	%	0	%		20	% (22)		n/a			n/a	40 years		25-Sep-20
MWS	25	%	0	%	0	%	$	400			n/a			n/a	40 years	(23)	2-Mar-12
Cooke 4	7	%	0	%	0	%	$	400			n/a			n/a	40 years		5-Nov-09
Sudbury(24)	50	%	0	%	50	%	$	400			n/a		$	400	40 years		15-Jul-08

1 Subject to an annual inflationary adjustment except for Antamina, Antapaccay, Karma, Guadalupe-Palmarejo, and Sabodala.

2 Should the prevailing market price for gold be lower than this amount, the per ounce cash payment will be reduced to the prevailing market price.

3 Subject to successive extensions.

4 Subject to a fixed payability of 90%. Percentage decreases to 15% after 86 million ounces of silver has been delivered under the agreement.

5 Purchase price is 5% of the average silver price at the time of delivery.

6 Gold deliveries are referenced to copper in concentrate shipped with 300 ounces of gold delivered for each 1,000 tonnes of copper in concentrate shipped, until 630,000 ounces of gold has been delivered. Thereafter, percentage is 30% of gold shipped.

7 Silver deliveries are referenced to copper in concentrate shipped with 4,700 ounces of silver delivered for each 1,000 tonnes of copper in concentrate shipped, until 10.0 million ounces of silver has been delivered. Thereafter, percentage is 30% of silver shipped.

8 Purchase price is 20% of the spot price of gold until 750,000 ounces of gold have been delivered, thereafter the purchase price is 30% of the spot price of gold.

9 Purchase price is 20% of the spot price of silver until 12.8 million ounces of silver have been delivered, thereafter the purchase price is 30% of the spot price of silver.

10 Percentage decreases to 40% after 720,000 ounces of gold and 12.0 million ounces of silver have been delivered under the agreement.

11 Gold deliveries are indexed to copper in concentrate produced from the project. 120 ounces of gold per every 1 million pounds of copper produced until 808,000 ounces of gold delivered. Thereafter, 81 ounces of gold per 1 million pounds of copper produced until 1,716,188 ounces of gold delivered. Thereafter, 63.4% of the gold in concentrate.

12 Silver deliveries are indexed to copper in concentrate produced from the project. 1,376 ounces of silver per every 1 million pounds of copper produced until 9,842,000 ounces of silver delivered. Thereafter 1,776 ounces of silver per 1 million pounds of copper produced until 29,731,000 ounces of silver delivered. Thereafter, 62.1% of the silver in concentrate.

13 After 1,341,000 ounces of gold delivered, purchase price is the greater of 50% of spot and $418.27 per ounce. As the mill throughput for 30 consecutive days commensurate with annual capacity of 58 million tonnes per annum was not reached by January 1, 2019, Franco-Nevada will receive a 5% annual rate of return until such mill throughput was achieved, through a reduction of the applicable fixed gold price of $100 per ounce or a delivery of additional ounces for no consideration.

14 After 21,510,000 ounces of silver delivered, purchase price is the greater of 50% of spot and $6.27 per ounce.

15 Gold deliveries are indexed to copper in concentrate produced from the project. 30 ounces of gold per every 1 million pounds of copper produced until 202,000 ounces of gold delivered. Thereafter 20.25 ounces of gold per 1 million pounds of copper produced until 429,047 ounces of gold delivered. Thereafter, 15.85% of the gold in concentrate.

16 Silver deliveries are indexed to copper in concentrate produced from the project. 344 ounces of silver per every 1 million pounds of copper produced until 2,460,500 ounces of silver delivered. Thereafter, 444 ounces of silver per 1 million pounds of copper produced until 7,432,750 ounces of silver delivered. Thereafter 15.53% of the silver in concentrate.

17 After 604,000 ounces of gold delivered, purchase price is 50% of the spot price of gold. As the mill throughput for 30 consecutive days commensurate with annual capacity of 58 million tonnes per annum was not reached by January 1, 2019, Franco-Nevada will receive a 5% annual rate of return until such mill throughput was achieved, through a reduction of the applicable fixed gold price of $100 per ounce or a delivery of additional ounces for no consideration.

18 After 9,618,000 ounces of silver delivered, purchase price is 50% of the spot price of silver.

19 Gold deliveries are fixed at 15,000 ounces per annum from March 31, 2016 until February 28, 2021 (exclusive of an aggregate 5,625 gold ounces, or 703 gold ounces per quarter, to be delivered as a result of the exercise by the operator of its option to increase the upfront deposit). Thereafter, percentage is 4.875%.

20 Purchase price is 20% of the average gold price at the time of delivery.

21 Based on amended agreement with an effective date of September 1, 2020, gold deliveries are fixed at 783.33 ounces per month until 105,750 ounces of gold are delivered. Thereafter, percentage is 6% of gold production (subject to reconciliation after fixed delivery period to determine if Franco-Nevada would have received more or less than 105,750 ounces of gold under the original 6% variable stream for such period, entitling the operator to a credit for an over-delivery applied against future stream deliveries or a one-time additional delivery to Franco-Nevada for an under-delivery).

22 Purchase price is 20% of prevailing market price at the time of delivery.

23 Agreement is capped at 312,500 ounces of gold.

24 The Company is committed to purchase 50% of the precious metals contained in ore from the properties. Payment is based on gold equivalent ounces. For McCreedy West, the fixed price per gold equivalent ounce was increased to $800 per ounce (with no annual inflationary adjustment), effective July 1, 2018 until December 31, 2021.

Capital commitments

As described in the Corporate Developments section above, the Company has a strategic relationship with a subsidiary of Continental to jointly acquire royalty rights through the Royalty Acquisition Venture. As at December 31, 2020, Franco-Nevada has remaining commitments of up to $114.0 million, approximately half of which is expected to be deployed in 2021. Franco-Nevada is also committed to funding the potential upsizing of the Alpala royalty, referenced in the Corporate Developments section above.

2020 Management’s Discussion and Analysis 26

Contingencies

Canada Revenue Agency Audit

The CRA is conducting an audit of Franco-Nevada for the 2012-2017 taxation years. The following table provides a summary of the various CRA audit and reassessment matters further detailed below:

	CRA Position	Taxation Years Reassessed	Potential Liability for Tax, Interest and Penalties (in millions)
Canadian Domestic Tax Matters	Upfront payment made in connection with precious metal stream agreements should be deducted for income tax purposes in a similar manner to how such amount is expensed for financial statement purposes.	2014, 2015	For 2014-2015: Tax: $1.1 (C$1.4) Interest and other penalties: $0.2 (C$0.2) If CRA were to reassess the 2016-2020 taxation years on the same basis: Tax: $33.6 (C$42.8) Interest and other penalties: $4.1 (C$5.3)
Transfer Pricing (Mexico)	Transfer pricing provisions in the Act (as defined below) apply such that a majority of the income earned by the Company’s Mexican subsidiary should be included in the income of the Company and subject to tax in Canada.	2013, 2014, 2015	For 2013-2015: Tax: $19.9 (C$25.3) Transfer pricing penalties: $8.1 (C$10.3) Interest and other penalties: $7.1 (C$9.2) If CRA were to reassess the 2016-2020 taxation years on the same basis: Tax: $3.6 (C$4.6) Transfer pricing penalties: $1.4 (C$1.7) Interest and other penalties: $0.9 (C$1.1)
Transfer Pricing (Barbados)	Transfer pricing provisions in the Act (as defined below) apply such that a majority of the income relating to certain precious metal streams earned by the Company’s Barbadian subsidiary should be included in the income of the Company and subject to tax in Canada.	2014, 2015	For 2014-2015: Tax: $5.3 (C$6.7) Transfer pricing penalties: $2.0 (C$2.5) Interest and other penalties: $1.7 (C$2.2) If CRA were to reassess the 2016-2020 taxation years on the same basis: Tax: $136.8 (C$174.2) Transfer pricing penalties: $51.5 (C$65.6) Interest and other penalties: $11.0 (C$14.0)
FAPI (Barbados)	The FAPI provisions in the Act (as defined below) apply such that a majority of the income relating to precious metal streams earned by the Company’s Barbadian subsidiary, in 2012 and 2013, should be included in the income of the Company and subject to tax in Canada.	2012, 2013	For 2012-2013: Tax: $6.0 (C$7.7) Interest and other penalties: $2.4 (C$3.1)

a) Canadian Domestic Tax Matters (2014-2015):

In October 2019, certain wholly-owned Canadian subsidiaries of the Company received Notices of Reassessment for the 2014 and 2015 taxation years (the “Domestic Reassessments”) in which the CRA increases income by adjusting the timing of the deduction of the upfront payments which were made in connection with precious metal stream agreements. The CRA’s position is that the upfront payment should be deducted for income tax purposes in a similar manner to how such upfront payment is expensed for financial statement purposes. Consequently, the CRA’s position results in a slower deduction of the upfront payment and an acceleration of the payment of Canadian taxes. This results in the Company being subject to an incremental payment of Federal and provincial income taxes for these years of $1.1 million (C$1.4 million) (after applying available non-capital losses and other deductions) plus estimated interest (calculated to December 31, 2020) and other penalties of $0.2 million (C$0.2 million). The Company has filed formal Notices of Objection with the CRA against the Domestic Reassessments.

If the CRA were to reassess the particular Canadian subsidiaries for taxation years 2016 through 2020 on the same basis, the Company estimates that it would be subject to an incremental payment of Canadian tax for these years of approximately $33.6 million (C$42.8 million) (after applying available non-capital losses and other deductions) plus interest (calculated to December 31, 2020) and other penalties of approximately $4.1 million (C$5.3 million).

2020 Management’s Discussion and Analysis 27

b) Mexico (2013-2015):

In December 2018, the Company received a Notice of Reassessment from the CRA for the 2013 taxation year (the “2013 Reassessment”) in relation to its Mexican subsidiary. The reassessment was made on the basis of the transfer pricing provisions in the Income Tax Act (Canada) (the “Act”) and asserts that a majority of the income earned by the Mexican subsidiary should have been included in the income of the Company and subject to tax in Canada. The 2013 Reassessment results in additional Federal and provincial income taxes of $8.5 million (C$10.8 million) plus estimated interest (calculated to December 31, 2020) and other penalties of $3.2 million (C$4.2 million) but before any relief under the Canada-Mexico tax treaty.

In December 2019, the Company received Notices of Reassessment for the 2014 and 2015 taxation years (the “2014 and 2015 Reassessments”) on the same basis as the 2013 Reassessment, resulting in additional Federal and provincial income taxes of $11.4 million (C$14.5 million) plus estimated interest (calculated to December 31, 2020) and other penalties of $3.9 million (C$5.0 million) but before any relief under the Canada-Mexico tax treaty.

The Company has filed formal Notices of Objection with the CRA against the 2013 Reassessment and the 2014 and 2015 Reassessments and has posted security in the form of a standby letter of credit for 50% of the reassessed amounts of tax, interest and penalties, as referenced in Note 11 (a) to the financial statements. Further, the Company has commenced an appeal in the Tax Court of Canada with respect to these reassessments.

For taxation years 2013 through 2015, the Company’s Mexican subsidiary paid a total of $30.3 million (419.4 million Pesos) in cash taxes, at a 30% tax rate, to the Mexican tax authorities on income earned in Mexico. If required, the Company intends to seek relief from double taxation under the Canada-Mexico tax treaty.

In December 2020, the CRA issued revised 2013 Reassessment and 2014 and 2015 Reassessments to include transfer pricing penalties of $8.1 million (C$10.3 million). The Company disagrees and intends to file Notices of Objection, and if required appeal to the Tax Court of Canada, against these revised reassessments.

If the CRA were to reassess the Company for taxation years 2016 through 2020 on the same basis and continue to apply transfer pricing penalties, the Company estimates that it would be subject to additional Canadian tax for these years of approximately $3.6 million (C$4.6 million), transfer pricing penalties of approximately $1.4 million (C$1.7 million) plus interest (calculated to December 31, 2020) and other penalties of approximately $0.9 million (C$1.1 million) but before any relief under the Canada-Mexico tax treaty. The Company’s Mexican subsidiary paid $3.8 million (71.0 million Pesos) in cash taxes, at a 30% tax rate, to the Mexican tax authorities on income earned in Mexico for the 2016 year and ceased operations after 2016.

c) Barbados (2014-2015):

The 2014 and 2015 Reassessments also reassess the Company in relation to its Barbadian subsidiary. The reassessments were made on the basis of the transfer pricing provisions in the Act and assert that a majority of the income relating to certain precious metal streams earned by the Barbadian subsidiary should have been included in the income of the Company and subject to tax in Canada, resulting in additional Federal and provincial income taxes of $5.3 million (C$6.7 million) plus estimated interest (calculated to December 31, 2020) and other penalties of $1.7 million (C$2.2 million). As noted previously, the Company has filed formal Notices of Objection with the CRA against the 2014 and 2015 Reassessments and has posted security in the form of a standby letter of credit for 50% of the reassessed amounts of tax, interest and penalties, as referenced in Note 11 (a) to the financial statements. Further, the Company has commenced an appeal in the Tax Court of Canada with respect to the 2014 and 2015 Reassessments.

As noted above, in December 2020, the CRA issued revised 2014 and 2015 Reassessments to include transfer pricing penalties of $2.0 million (C$2.5 million). The Company disagrees and intends to file Notices of Objection, and if required appeal to the Tax Court of Canada, against the revised reassessments.

If the CRA were to reassess the Company for taxation years 2016 through 2020 on the same basis and continue to apply transfer pricing penalties, the Company estimates that it would be subject to additional Canadian tax for these years of approximately $136.8 million (C$174.2 million), transfer pricing penalties of approximately $51.5 million (C$65.6 million) plus interest (calculated to December 31, 2020) and other penalties of approximately $11.0 million (C$14.0 million).

d) Barbados (2012-2013):

In August 2020, the Company received Notices of Reassessment for the 2012 and 2013 taxation years (the “FAPI Reassessments”, and collectively with the Domestic Reassessments, the 2013 Reassessment and the 2014 and 2015 Reassessments, the “Reassessments”) in relation to its Barbadian subsidiary. The reassessments assert that a majority of the income relating to precious metal streams earned by the Barbadian subsidiary, in those years, should have been included in the income of its Canadian parent company and subject to tax in Canada as Foreign Accrual Property Income (“FAPI”). The CRA has noted that its position may not extend beyond the 2013 taxation year. The FAPI Reassessments result in additional Federal and provincial income taxes of $6.0 million (C$7.7 million) plus estimated interest (calculated to December 31, 2020) and other penalties of $2.4 million (C$3.1 million). The Company has filed formal Notices of Objection with the CRA against the FAPI Reassessments and has posted security in cash for 50% of the reassessed amounts of tax, interest and penalties.

The CRA recently expanded its audit to include the 2016 and 2017 taxation years and the Company has not received any proposal or notices of reassessment for these taxation years.

2020 Management’s Discussion and Analysis 28

Management believes that the Company and its subsidiaries have filed all tax returns and paid all applicable taxes in compliance with Canadian and applicable foreign tax laws and, as a result, no amounts have been recorded in the financial statements of the Company for the Reassessments, or for any potential tax liability that may arise in respect of these matters. The Company does not believe that the Reassessments are supported by Canadian tax law and jurisprudence and intends to vigorously defend its tax filing positions.

The CRA audit is ongoing and there can be no assurance that the CRA will not further challenge the manner in which the Company or any of its subsidiaries has filed its tax returns and reported its income. In the event that the CRA successfully challenges the manner in which the Company or a subsidiary has filed its tax returns and reported its income, this could potentially result in additional income taxes, penalties and interest, which could have a material adverse effect on the Company.

CriticalAccountingEstimates

The preparation of consolidated financial statements in accordance with IFRS requires the Company to make judgments, estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Estimates and assumptions are continuously evaluated and are based on management’s best knowledge of the relevant facts and circumstances, having regard to previous experience. However, actual outcomes may differ from the amounts included in the consolidated financial statements.

In particular, the areas which require management to make significant judgements, estimates and assumptions in determining carrying values are:

Impact of the COVID-19 Pandemic

The COVID-19 global health pandemic has had a significant impact on the global economy and commodity and financial markets. The full extent and impact of the COVID-19 pandemic is unknown. The adverse effects of the pandemic may continue for an extended and unknown period of time, particularly as variant strains of the virus are identified. The impact of the pandemic to date has included extreme volatility in financial markets, a slowdown in economic activity, extreme volatility in commodity prices (including gold, silver, palladium and oil and gas) and has raised the prospect of an extended global recession. As well, as efforts have been undertaken to slow the spread of the COVID-19 pandemic, the operation and development of mining projects has been impacted. Many mining projects, including a number of the properties in which Franco-Nevada holds a royalty, stream or other interest have been impacted by the pandemic resulting in the temporary suspension of operations, and other mitigation measures that impacted production. If the operation or development of one or more of the properties in which Franco-Nevada holds a royalty, stream or other interest and from which it receives or expects to receive significant revenue is suspended as a result of the continuing COVID-19 pandemic or future pandemics or other public health emergencies, it may have a material adverse impact on Franco-Nevada’s profitability, results of operations, financial condition and the trading price of Franco-Nevada’s securities. The broader impact of the COVID-19 pandemic or future pandemics or similar public health emergencies on investors, businesses, the global economy or financial and commodity markets may also have a material adverse impact on Franco-Nevada’s profitability, results of operations, financial condition and the trading price of Franco-Nevada’s securities.

Impact of Recent Global and Market Developments on Oil and Gas Prices

A number of geopolitical and market factors impacting global energy markets (including those related to the COVID-19 pandemic) have contributed to extreme volatility and a significant decrease in the price of oil and gas (WTI, WCS and NYMEX). As a result of reduced production and capital spend by a number of the operators of the Company’s Energy interests due to lower market expectations for oil and gas prices, the Company recorded impairments of $271.7 million at March 31, 2020, as detailed in note 8 (b) to the financial statements.

While oil and gas prices have rebounded from the historical lows of April 2020, assumptions about future commodity prices, interest rates and levels of supply and demand of commodities are subject to greater variability than normal and there remains heightened potential for further impairments or reversals thereof. The continuation of volatile oil and gas prices for a prolonged period may significantly affect the valuation of the Company’s financial and non-financial assets and have a material adverse impact on Franco-Nevada’s profitability, results of operations, financial condition and the trading price of Franco-Nevada’s securities.

Reserves and Resources

Royalty, stream and working interests comprise a large component of the Company’s assets and, as such, the reserves and resources of the properties to which the interests relate have a significant effect on the Company’s financial statements. These estimates are applied in determining the depletion of and assessing the recoverability of the carrying value of royalty, stream and working interests. For mineral royalty and stream interests, the public disclosures of reserves and resources that are released by the operators of the interests involve assessments of geological and geophysical studies and economic data and the reliance on a number of assumptions, including commodity prices and production costs. For energy interests, the estimated reserves in reserve reports prepared by independent petroleum consultants or other qualified parties engaged by the Company reflect similar assessments of geological and geophysical studies and economic data and reliance on assumptions. These assumptions are, by their very nature, subject to interpretation and uncertainty.

The estimates of reserves and resources may change based on additional knowledge gained subsequent to the initial assessment. Changes in the estimates of reserves and resources may materially affect the recorded amounts of depletion and the assessed recoverability of the carrying value of royalty, stream and working interests.

2020 Management’s Discussion and Analysis 29

Impairment of Royalty, Stream and Working Interests

Assessment of impairment of royalty, stream, working interests and energy well equipment at the end of each reporting period requires the use of judgments, assumptions and estimates when assessing whether there are any indicators that give rise to the requirement to conduct an impairment test on the Company’s royalty, stream and working interests, and/or energy equipment. Indicators which could trigger an impairment test include, but are not limited to, a significant change in operator reserve and resource estimates, industry or economic trends, current or forecast commodity prices, and other relevant operator information. The assessment of fair values requires the use of estimates and assumptions for recoverable production, long-term commodity prices, discount rates, reserve/resource conversion, foreign exchange rates, future capital expansion plans and the associated production implications. In addition, the Company may use other approaches in determining fair value which may include judgment and estimates related to (i) dollar value per ounce or pound of reserve/resource; (ii) cash-flow multiples; and (iii) market capitalization of comparable assets. Changes in any of the assumptions and estimates used in determining the fair value of the royalty, stream or working interests, or energy well equipment could impact the impairment analysis.

Asset Acquisitions and Business Combinations

The assessment of whether an acquisition meets the definition of a business, or whether assets are acquired is an area of key judgment. If deemed to be a business combination, applying the acquisition method to business combinations requires each identifiable asset and liability to be measured at its acquisition-date fair value. The excess, if any, of the fair value of consideration over the fair value of the net identifiable assets acquired is recognized as goodwill. The determination of the acquisition-date fair values often requires management to make assumptions and estimates about future events. The assumptions and estimates with respect to determining the fair value of royalty, stream or working interests generally requires a high degree of judgment, and include estimates of mineral reserves and resources acquired, future metal prices, discount rates and reserve/resource conversion. Changes in any of the assumptions or estimates used in determining the fair value of acquired assets and liabilities could impact the amounts assigned to assets and liabilities.

Joint Arrangements

Judgment is required to determine whether the Company has joint control of a contractual arrangement, which requires continuous assessment of the relevant activities and whether the decisions in relation to those activities require unanimous consent. Judgment is also continually required to classify a joint arrangement as either a joint operation or a joint venture when the arrangement has been structured through a separate vehicle. Classifying the arrangement requires the Company to assess its rights and obligations arising from the arrangement. Specifically, the Company considers the legal form of the separate vehicle, the terms of the contractual arrangement and other relevant facts and circumstances. This assessment often requires significant judgment, and a different conclusion on joint control, or whether the arrangement is a joint operation or a joint venture, may have a material impact on the accounting treatment.

The Company evaluated its joint arrangement with Continental, whereby the Company acquired a 49.9% economic interest in TMRC II, in accordance with IFRS 11 Joint Arrangements. The Company concluded that the arrangement qualified as a joint operation based on the terms of the contractual agreement which specify how revenues and expenses are shared. Under the agreement, revenues generated by the royalty assets of TMRC II are to be distributed based on the performance of the assets against agreed upon development thresholds and the tranche in which the assets were acquired, resulting in the Company receiving distributions ranging between 50-75% of revenue. As a result, the Company has concluded that its rights are tied to the assets of TMRC II, rather than the net results of the entity.

Income Taxes

The interpretation and application of existing tax laws, regulations or rules in Canada, Barbados, the United States, Australia or any of the countries in which the mining operations are located or to which shipments of gold, silver or platinum group metals are made requires the use of judgment. The likelihood that tax positions taken will be sustained upon examination by applicable tax authorities is assessed based on facts and circumstances of the relevant tax position considering all available evidence. Differing interpretation of these laws, regulations or rules could result in an increase in the Company’s taxes, or other governmental charges, duties or impositions.

In assessing the probability of realizing deferred income tax assets, the Company makes estimates related to expectations of future taxable income and expected timing of reversals of existing temporary differences. Such estimates are based on forecasted cash flows from operations which require the use of estimates and assumptions such as long-term commodity prices and recoverable ounces of gold, silver and platinum group metals. Therefore, the amount of deferred income tax assets recognized on the balance sheet could be reduced if the actual results differ significantly from forecast. The Company reassesses its deferred income tax assets at the end of each reporting period.

Functional Currency

The functional currency for each of the Company’s subsidiaries is the currency of the primary economic environment in which the entity operates. Determination of functional currency may involve certain judgments to determine the primary economic environment and the Company reconsiders the functional currency of its entities if there is a change in events and conditions which determined the primary economic environment.

2020 Management’s Discussion and Analysis 30

New and Amended Standards Adopted by the Company

The following standard was effective and implemented for the annual period as of January 1, 2020.

Amendments to IFRS 3 Business Combinations

In October 2018, the IASB issued amendments to the definition of a business in IFRS 3 Business Combinations (“IFRS 3”). The amendments are intended to assist entities to determine whether a transaction should be accounted for as a business combination or as an asset acquisition. The amendments clarify the minimum requirements for a business, remove the assessment of whether market participants are capable of replacing any missing elements, add guidance to help entities assess whether an acquired process is substantive, narrow the definitions of a business and of outputs, and introduce an optional fair value concentration test. While it is generally expected that the application of the amendments will result in more acquisitions being accounted for as asset acquisitions, the Company will evaluate the impact of the amendments based on the nature and terms of acquisitions the Company may complete in future.

New Accounting Standards Issued But Not Yet Effective

Certain new accounting standards and interpretations have been published that are not mandatory for the current period and have not been early adopted. These standards are not expected to have a material impact on the Company’s current or future reporting periods.

Outstanding Share Data

Franco-Nevada is authorized to issue an unlimited number of common and preferred shares. A detailed description of the rights, privileges, restrictions and conditions attached to each class of authorized shares is included in our most recent Annual Information Form, a copy of which can be found on SEDAR at www.sedar.com and in our Form 40-F, a copy of which can be found on EDGAR at www.sec.gov.

As of March 10, 2021, the number of common shares outstanding or issuable pursuant to other outstanding securities is as follows:

Common Shares	Number
Outstanding	190,956,476
Issuable upon exercise of Franco-Nevada options(1)	745,962
Issuable upon vesting of Franco-Nevada RSUs	102,708
Diluted common shares	191,805,146

1 There were 745,962 stock options under our share compensation plan outstanding to directors, officers, employees and others with exercise prices ranging from C$40.87 to C$171.33 per share.

Franco-Nevada has not issued any preferred shares.

Internal Control Over Financial Reporting and Disclosure Controls and Procedures

Our management is responsible for establishing and maintaining Franco-Nevada’s internal control over financial reporting and other financial disclosure and our disclosure controls and procedures.

Internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with IFRS. Franco-Nevada’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of Franco-Nevada; (ii) are designed to provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with IFRS, and that receipts and expenditures of Franco-Nevada are being made only in accordance with authorizations of management and directors of Franco-Nevada; and (iii) are designed to provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of Franco-Nevada’s assets that could have a material effect on Franco-Nevada’s financial statements. Internal control over other financial disclosure is a process designed to ensure that other financial information included in this MD&A, fairly represents in all material respects the financial condition, results of operations and cash flows of Franco-Nevada for the periods presented in this MD&A.

Franco-Nevada’s disclosure controls and procedures are designed to provide reasonable assurance that material information relating to Franco-Nevada, including its consolidated subsidiaries, is made known to management by others within those entities, particularly during the period in which this report is prepared and that information required to be disclosed by Franco-Nevada in its annual filings, interim filings or other reports filed or submitted by it under securities legislation is recorded, processed, summarized and reported within the time periods specified in securities legislation.

Due to its inherent limitations, internal control over financial reporting and other financial disclosure may not prevent or detect all misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may change.

2020 Management’s Discussion and Analysis 31

An evaluation was carried out by our management, with the participation of our President & Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of Franco-Nevada’s internal control over financial reporting as of the end of the period covered by this report based on the framework and criteria established in Internal Control – Integrated Framework (2013) as issued by the Committee of Sponsoring Organizations (COSO) of the Treadway Commission. Based on that evaluation, the CEO and CFO have concluded that Franco-Nevada’s internal control over financial reporting was effective as of December 31, 2020.

An evaluation was also carried out under the supervision of the CEO and CFO and with the participation of management, of the effectiveness of the design and operation of Franco-Nevada’s disclosure controls and procedures (as defined under applicable Canadian securities laws and in Rule 13a – 15(e) and Rule 15d – 15(e) under the U.S. Securities Exchange Act of 1934), and based on that evaluation the CEO and the CFO have concluded that, as of December 31, 2020, Franco-Nevada’s disclosure controls and procedures were effective.

For the year ended December 31, 2020, there has been no change in Franco-Nevada’s internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, Franco-Nevada’s internal control over financial reporting.

Franco-Nevada’s report of management’s assessment regarding internal control over financial reporting (as defined in Rule 13a-15(f) or 15d-15(f) under the U.S. Securities Exchange Act of 1934) is included in the Management’s Report on Internal Control over Financial Reporting that accompanies Franco-Nevada’s Annual Consolidated Financial Statements for the fiscal year ended December 31, 2020.

Non-IFRS Financial Measures

Cash Costs attributable to GEOs sold and Cash Costs per GEO

Cash Costs attributable to GEOs sold and Cash Costs per GEO sold are non-IFRS financial measures. Cash Costs are calculated by starting with total costs of sales and removing depletion and depreciation, and costs not attributable to GEOs sold such as our Energy operating costs. Cash Costs per GEO sold are calculated by dividing Cash Costs by the number of GEOs sold in the period, excluding prepaid GEOs.

Management uses Cash Costs and Cash Costs per GEO sold to evaluate the Company’s ability to generate positive cash flow from its mining royalty, stream and working interests. Management and certain investors also use this information to evaluate the Company’s performance relative to peers in the mining industry who present this measure on a similar basis. Cash Costs and Cash Costs per GEO are only intended to provide additional information to investors and analysts and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS. They do not have any standardized meaning under IFRS, and may not be comparable to similar measures presented by other issuers.

Reconciliation of Cash Costs and Cash Costs per GEO sold:

	For the three months ended				For the year ended
	December 31,				December 31,
(expressed in millions, except per GEO amounts)	2020		2019		2020		2019
Total costs of sales	$	114.2	$	119.0	$	399.8	$	408.0
Depletion and depreciation		(67.5)		(72.7)		(241.0)		(263.2)
Energy operating costs		(1.9)		(2.2)		(6.4)		(7.3)
Cash Costs attributable to GEOs sold	$	44.8	$	44.1	$	152.4	$	137.5
GEOs		147,476		153,396		521,564		516,438
Cash Costs per GEO sold	$	304	$	287	$	292	$	266

Adjusted EBITDA and Adjusted EBITDA per share

Adjusted EBITDA and Adjusted EBITDA per share are non-IFRS financial measures, which exclude the following from net income and earnings per share (“EPS”):

● Income tax expense/recovery;

● Finance expenses;

● Finance income;

● Depletion and depreciation;

● Non-cash costs of sales;

● Impairment charges and reversals related to royalty, stream and working interests;

● Impairment of investments;

● Gains/losses on sale of royalty, stream and working interests;

● Gains/losses on investments;

● Foreign exchange gains/losses and other income/expenses; and

● Unusual non-recurring items.

Management uses Adjusted EBITDA and Adjusted EBITDA per share to evaluate the underlying operating performance of the Company as a whole for the reporting periods presented, to assist with the planning and forecasting of future operating results, and to supplement information in its financial statements. Management believes that in addition to measures prepared in

2020 Management’s Discussion and Analysis 32

accordance with IFRS such as Net Income and EPS, our investors and analysts use Adjusted EBITDA and Adjusted EBITDA per share to evaluate the results of the underlying business of the Company, particularly since the excluded items are typically not included in our guidance, with the exception of depletion and depreciation expense. While the adjustments to net income and EPS in these measures include items that are both recurring and non-recurring, management believes that Adjusted EBITDA and Adjusted EBITDA per share are useful measures of the Company’s performance because they adjust for items which may not relate to or have a disproportionate effect on the period in which they are recognized, impact the comparability of our core operating results from period to period, are not always reflective of the underlying operating performance of our business and/or are not necessarily indicative of future operating results. Adjusted EBITDA and Adjusted EBITDA per share are only intended to provide additional information to investors and analysts, and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS. They do not have any standardized meaning under IFRS, and may not be comparable to similar measures presented by other issuers.

Reconciliation of Net Income to Adjusted EBITDA:

	For the three months ended				For the year ended
	December 31,				December 31,
(expressed in millions, except per share amounts)	2020		2019		2020		2019
Net Income	$	176.7	$	113.3	$	326.2	$	344.1
Income tax expense		21.5		17.2		13.3		61.8
Finance expenses		0.8		2.1		3.5		10.6
Finance income		(0.7)		(0.8)		(3.7)		(3.5)
Depletion and depreciation		67.5		72.7		241.0		263.2
Impairment charges (reversals)		(9.6)		—		262.1		—
Foreign exchange (gains)/losses and other (income)/expenses		(2.5)		(2.8)		(2.8)		(2.8)
Adjusted EBITDA	$	253.7	$	201.7	$	839.6	$	673.4
Basic weighted average shares outstanding		190.9		188.8		190.3		187.7
Basic earnings per share	$	0.93	$	0.60	$	1.71	$	1.83
Income tax expense		0.11		0.09		0.07		0.33
Finance expenses		—		—		0.01		0.06
Finance income		—		—		(0.02)		(0.02)
Depletion and depreciation		0.35		0.39		1.27		1.40
Impairment charges (reversals)		(0.1)		—		1.4		—
Foreign exchange (gains)/losses and other (income)/expenses		(0.01)		(0.01)		(0.01)		(0.01)
Adjusted EBITDA per share	$	1.33	$	1.07	$	4.41	$	3.59

Margin

Margin is a non-IFRS financial measure which is defined by the Company as Adjusted EBITDA divided by revenue. The Company uses Margin in its annual incentive compensation process to evaluate management’s performance in increasing revenue and containing costs. Margin is intended to provide additional information, does not have any standardized definition under IFRS and should not be considered in isolation or as a substitute for a measure of performance in accordance with IFRS.

Reconciliation of Net Income to Margin:

	For the three months ended						For the year ended
	December 31,						December 31,
(expressed in millions, except Margin)	2020			2019			2020			2019
Net Income	$	176.7		$	113.3		$	326.2		$	344.1
Income tax expense		21.5			17.2			13.3			61.8
Finance expenses		0.8			2.1			3.5			10.6
Finance income		(0.7)			(0.8)			(3.7)			(3.5)
Depletion and depreciation		67.5			72.7			241.0			263.2
Impairment charges (reversals)		(9.6)			—			262.1			—
Foreign exchange (gains)/losses and other (income)/expenses		(2.5)			(2.8)			(2.8)			(2.8)
Adjusted EBITDA	$	253.7		$	201.7		$	839.6		$	673.4
Revenue		304.5			258.1			1,020.2			844.1
Margin		83.3	%		78.1	%		82.3	%		79.8	%

2020 Management’s Discussion and Analysis 33

Adjusted Net Income and Adjusted Net Income per share

Adjusted Net Income and Adjusted Net Income per share are non-IFRS financial measures, which exclude the following from net income and EPS:

● Foreign exchange gains/losses and other income/expenses;

● Impairment charges and reversals related to royalty, stream and working interests;

● Impairment of investments;

● Gains/losses on sale of royalty, stream and working interests;

● Gains/losses on investments;

● Unusual non-recurring items; and

● Impact of income taxes on these items.

Management uses Adjusted Net Income and Adjusted Net Income per share to evaluate the underlying operating performance of the Company as a whole for the reporting periods presented, to assist with the planning and forecasting of future operating results, and to supplement information in its financial statements. Management believes that in addition to measures prepared in accordance with IFRS such as Net Income and EPS, our investors and analysts use Adjusted Net Income and Adjusted Net Income per share to evaluate the results of the underlying business of the Company, particularly since the excluded items are typically not included in our guidance. While the adjustments to net income and EPS in these measures include items that are both recurring and non-recurring, management believes that Adjusted Net Income and Adjusted Net Income per share are useful measures of the Company’s performance because they adjust for items which may not relate to or have a disproportionate effect on the period in which they are recognized, impact the comparability of our core operating results from period to period, are not always reflective of the underlying operating performance of our business and/or are not necessarily indicative of future operating results. Adjusted Net Income and Adjusted Net Income per share are intended to provide additional information to investors and analysts and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS. They do not have any standardized meaning under IFRS, and may not be comparable to similar measures presented by other issuers.

Reconciliation of Net Income to Adjusted Net Income:

	For the three months ended				For the year ended
	December 31,				December 31,
(expressed in millions, except per share amounts)	2020		2019		2020		2019
Net Income	$	176.7	$	113.3	$	326.2	$	344.1
Impairment charges (reversals)		(9.6)		—		262.1		—
Foreign exchange (gains)/losses and other (income)/expenses		(2.5)		(2.8)		(2.8)		(2.8)
Tax effect of adjustments		(1.6)		0.3		(69.2)		0.2
Adjusted Net Income	$	163.0	$	110.8	$	516.3	$	341.5
Basic weighted average shares outstanding		190.9		188.8		190.3		187.7
Basic earnings per share	$	0.93	$	0.60	$	1.71	$	1.83
Impairment charges (reversals)		(0.05)		—		1.38		—
Foreign exchange (gains)/losses and other (income)/expenses		(0.01)		(0.01)		(0.01)		(0.01)
Tax effect of adjustments		(0.02)		—		(0.37)		—
Adjusted Net Income per share	$	0.85	$	0.59	$	2.71	$	1.82

2020 Management’s Discussion and Analysis 34

Cautionary Statement on Forward-Looking Information

This MD&A contains “forward-looking information” and “forward-looking statements” within the meaning of applicable Canadian securities laws and the United States 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, carrying value of assets, future dividends and 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, audits being conducted by the CRA, the expected exposure for current and future assessments and available remedies, the remedies relating to and consequences of the ruling of the Supreme Court of Panama in relation to the Cobre Panama project, the aggregate value of Common Shares which may be issued pursuant to the ATM Program, and the Company’s expected use of the net proceeds of the ATM Program, if any. 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 and assumptions are accurate and that such reserves and resources and GEOs 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: the price at which Common Shares are sold in the ATM Program and the aggregate net proceeds received by the Company as a result of the ATM Program; 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 Energy); 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 and the enforcement thereof; regulatory, 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 Company is determined to have “passive foreign investment company” (“PFIC”) status as defined in Section 1297 of the United States Internal Revenue Code of 1986, as amended; potential changes in Canadian tax treatment of offshore streams; 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; access to sufficient pipeline capacity; actual mineral content may differ from the reserves and resources contained in technical reports; rate and timing of production differences from resource estimates, other technical reports and mine plans; 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, terrorism, civil unrest or an outbreak of contagious disease; the impact of the COVID-19 (coronavirus) pandemic; and the integration of acquired assets. The forward-looking statements contained in this MD&A 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 Company’s ongoing income and assets relating to determination of its PFIC status; no material changes to existing tax treatment; the expected application of tax laws and regulations by taxation authorities; the expected assessment and outcome of any audit by any taxation authority; 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. Investors are cautioned that forward-looking statements are not guarantees of future performance. In addition, there can be no assurance as to the outcome of the ongoing audit by the CRA or the Company’s exposure as a result thereof. 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 Franco-Nevada’s most recent Annual Information Form filed with the Canadian securities regulatory authorities on www.sedar.com and Franco-Nevada’s most recent Annual Report filed on Form 40-F filed with the SEC on www.sec.gov. The forward-looking statements herein are made as of the date of this MD&A 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.

2020 Management’s Discussion and Analysis 35

EX-99.3

Exhibit 99.3

Management’s Report On Internal Control Over Financial Reporting

Franco-Nevada Corporation’s (“Franco-Nevada”) management is responsible for establishing and maintaining adequate internal control over financial reporting, as defined in rules 13a-15(f) and 15d-15(f) under the United States Securities Exchange Act of 1934, as amended.

Franco-Nevada’s management, with the participation of its President & Chief Executive Officer and its Chief Financial Officer, assessed the effectiveness of the Company’s internal control over financial reporting as at December 31, 2020. Franco-Nevada’s management conducted an evaluation of the Company’s internal control over financial reporting based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Based on Franco-Nevada’s management’s assessment, Franco-Nevada’s internal control over financial reporting is effective as at December 31, 2020.

The effectiveness of the Company’s internal control over financial reporting as at December 31, 2020 has been audited by PricewaterhouseCoopers LLP, Independent Registered Public Accounting Firm, as stated in their report appearing herein.

/s/Paul Brink	/s/Sandip Rana
Paul Brink	Sandip Rana
President & Chief Executive Officer	Chief Financial Officer

March 10, 2021

2020 Financial Statements 2

Report of Independent Registered Public Accounting Firm

To the Shareholders and Board of Directors of Franco-Nevada Corporation

Opinions on the Financial Statements and Internal Control over Financial Reporting

We have audited the accompanying consolidated statements of financial position of Franco-Nevada Corporation and its subsidiaries (together, the Company) as of December 31, 2020 and 2019, and the related consolidated statements of income and comprehensive income, cash flows and changes in shareholders’ equity for the years then ended, including the related notes (collectively referred to as the consolidated financial statements). We also have audited the Company's internal control over financial reporting as of December 31, 2020, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2020 and 2019, and its financial performance and its cash flows for the years then ended in conformity with International Financial Reporting Standards as issued by the International Accounting Standards Board. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2020, based on criteria established in Internal Control – Integrated Framework (2013) issued by the COSO.

Basis for Opinions

The Company's management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management's Report on Internal Control over Financial Reporting. Our responsibility is to express opinions on the Company’s consolidated financial statements and on the Company's internal control over financial reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects.

Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.

Definition and Limitations of Internal Control over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

2020 Financial Statements 3

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Critical Audit Matters

The critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit and risk committee and that (i) relate to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

Assessment of indicators of impairment of royalty, stream and working interests

As described in Notes 2, 3 and 8 to the consolidated financial statements, the Company’s royalty, stream and working interests carrying value was $4,632.1 million as of December 31, 2020. Management assesses at the end of each reporting period whether there are any indicators that the carrying value may not be recoverable or that an impairment loss previously recognized may no longer exist (together, indicators of impairment) that give rise to the requirement to conduct an impairment analysis. Impairment is assessed at the cash generating unit (CGU) level, which is usually at the individual royalty, stream or working interest level for each property from which independent cash inflows are generated. Management uses significant judgment when assessing whether there are indicators of impairment, including significant change in operator reserve and resource estimates, industry or economic trends, current or forecast commodity prices and other relevant operator information. For certain energy interests, management uses reserve reports prepared by independent reserve engineers or other qualified parties engaged by the Company (management’s specialists).

The principal considerations for our determination that performing procedures relating to the assessment of indicators of impairment of royalty, stream and working interests is a critical audit matter are (i) the significant judgment by management when assessing whether there were indicators of impairment that would require an impairment analysis to be performed; and (ii) a high degree of auditor judgment, subjectivity and effort in performing procedures to evaluate audit evidence related to management’s assessment of indicators of impairment, including significant changes in operator reserve and resource estimates, industry or economic trends, current or forecast commodity prices and other relevant operator information.

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included testing the effectiveness of controls relating to management’s assessment of indicators of impairment of royalty, stream and working interests. These procedures also included, among others, evaluating the reasonableness of management’s assessment of indicators of impairment for a sample of royalty, stream and working interests related to significant changes in operator reserve and resource estimates, industry or economic trends, current or forecast commodity prices and other relevant operator information by considering (i) current and past performance of royalty, stream and working interests; (ii) consistency with external market and industry data; (iii) publicly disclosed or other relevant information by operators of royalty, stream and working interests; and (iv) whether management’s assessment of indicators of impairment was consistent with evidence obtained in other areas of the audit. For certain energy interests, the work of management’s specialists was used in performing the procedures to evaluate the reasonableness of management’s assessment of indicators of impairment related to significant changes in reserve estimates. As a basis for using this work, management’s specialists’ qualifications were understood and the Company’s relationship with management’s specialists was assessed. The procedures performed also included evaluation of the methods and assumptions used by management’s specialists, tests of the data used by management’s specialists and an evaluation of management’s specialists’ findings.

Impairment of royalty, stream and working interests – energy interests

As described in Notes 2, 3 and 8 to the consolidated financial statements, the Company’s energy royalty and working interests carrying value was $1,214.6 million as of December 31, 2020. As a result of reduced production and capital spend by the operators of the Company’s energy interests due to lower market expectations for oil and gas prices, management noted the presence of indicators of impairment as of March 31, 2020 and carried out an asset impairment analysis of its energy interests. An impairment loss is recognized for the amount by which the CGU’s carrying value exceeds its recoverable amount. The Company recorded impairment charges to its SCOOP/STACK and Weyburn energy interests of $207.2 million and $60.5 million, respectively. Management estimated the recoverable amounts as fair value less costs of disposal using discounted cash flow models. Management’s cash flow projections for the energy interests included significant judgment and assumptions relating to future oil and gas prices, future drilling activity to reflect the reduced capital spending by operators in the current environment for certain energy interests, expected future production and discount rates. For the expected future production assumptions, management used cash flows prepared by an independent reserve engineer or a third party advisor for certain energy interests (management’s specialists) and publicly released technical information.

2020 Financial Statements 4

The principal considerations for our determination that performing procedures relating to the impairment of royalty, stream and working interests - energy interests is a critical audit matter are (i) the significant judgment by management, including the use of management’s specialists, when developing the recoverable amount estimates of the energy interests; (ii) a high degree of auditor judgment, subjectivity and effort in performing procedures and evaluating management’s significant assumptions related to future oil and gas prices, future drilling activity for certain energy interests, expected future production and discount rates; and (iii) the audit effort involved the use of professionals with specialized skill and knowledge.

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included testing the effectiveness of controls relating to management’s recoverable amount estimates of the Company’s energy interests, including controls over the significant assumptions used in the recoverable amount estimates. These procedures also included, among others, (i) testing management’s process for developing the recoverable amount estimates of the energy interests; (ii) evaluating the appropriateness of the discounted cash flow models; (iii) testing the completeness and accuracy of underlying data used in the models; and (iv) evaluating the reasonableness of significant assumptions used by management. Evaluating the reasonableness of the significant assumptions used by management relating to future oil and gas prices involved comparing those prices to external industry data. Evaluating the reasonableness of the significant assumptions used by management relating to future drilling activity for certain energy interests involved considering consistency with the publicly disclosed capital spend forecast information from the operators of the energy interests and future realized oil and gas prices. Evaluating the reasonableness of the significant assumptions used by management relating to expected future production based on publicly released technical information for certain energy interests involved considering current and past performance of the energy interests and consistency with publicly disclosed information by the operator of the energy interests. For certain energy interests, the work of management’s specialists was used in performing the procedures to evaluate the reasonableness of the significant assumptions used by management related to expected future production. As a basis for using this work, management’s specialists’ qualifications were understood and the Company’s relationship with management’s specialists was assessed. The procedures performed also included evaluation of the methods and assumptions used by management’s specialists, tests of the data used by management’s specialists and an evaluation of management’s specialists’ findings. Professionals with specialized skill and knowledge were used to assist in evaluating the reasonableness of the discount rates assumptions.

/s/PricewaterhouseCoopers LLP

Chartered Professional Accountants, Licensed Public Accountants

Toronto, Canada

March 10, 2021

We have served as the Company’s auditor since 2007.

2020 Financial Statements 5

Franco-Nevada Corporation

Consolidated Statements of Financial Position

(in millions of U.S. dollars)

	At December 31,		At December 31,
	2020		2019
ASSETS
Cash and cash equivalents (note 5)	$	534.2	$	132.1
Receivables		93.4		97.8
Prepaid expenses and other (note 7)		36.1		48.8
Current assets	$	663.7	$	278.7
Royalty, stream and working interests, net (note 8)	$	4,632.1	$	4,797.8
Investments and loan receivable (note 6)		238.4		183.2
Deferred income tax assets (note 16)		45.1		6.8
Other assets (note 9)		13.6		14.1
Total assets	$	5,592.9	$	5,280.6
LIABILITIES
Accounts payable and accrued liabilities (note 10)	$	40.8	$	41.8
Current income tax liabilities		12.4		11.6
Current liabilities	$	53.2	$	53.4
Debt (note 11)	$	—	$	80.0
Deferred income tax liabilities (note 16)		91.5		82.4
Other liabilities		4.4		2.6
Total liabilities	$	149.1	$	218.4
SHAREHOLDERS’ EQUITY (note 17)
Share capital	$	5,580.1	$	5,390.7
Contributed surplus		14.0		14.2
Deficit		(34.4)		(164.4)
Accumulated other comprehensive loss		(115.9)		(178.3)
Total shareholders’ equity	$	5,443.8	$	5,062.2
Total liabilities and shareholders’ equity	$	5,592.9	$	5,280.6
Commitments and contingencies (notes 22 and 23)
Subsequent event (note 24)

The accompanying notes are an integral part of these consolidated financial statements.

Approved by the Board of Directors and authorized for issue on March 10, 2021.

/s/David Harquail	/s/Randall Oliphant
David Harquail	Randall Oliphant
Director	Director

2020 Financial Statements 6

Franco-Nevada Corporation

Consolidated Statements of Income and Comprehensive Income

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

	For the year ended
	December 31,
	2020		2019
Revenue (note 12)	$	1,020.2	$	844.1
Costs of sales
Costs of sales (note 13)	$	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 (note 8)	$	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 (note 15)
Finance income	$	3.7	$	3.5
Finance expenses		(3.5)		(10.6)
Net income before income taxes	$	339.5	$	405.9
Income tax expense (note 16)		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 (note 6)		43.8		9.9
Other comprehensive income	$	63.4	$	42.2
Comprehensive income	$	389.6	$	386.3
Earnings per share (note 18)
Basic	$	1.71	$	1.83
Diluted	$	1.71	$	1.83
Weighted average number of shares outstanding (note 18)
Basic		190.3		187.7
Diluted		190.7		188.0

The accompanying notes are an integral part of these consolidated financial statements.

2020 Financial Statements 7

Franco-Nevada Corporation

Consolidated Statements of Cash Flows

(in millions of U.S. dollars)

	For the year ended
	December 31,
	2020		2019
Cash flows from operating activities
Net income	$	326.2	$	344.1
Adjustments to reconcile net income to net cash provided by operating activities:
Depletion and depreciation		241.0		263.2
Share-based payments		5.6		4.9
Impairment charges and reversals		262.1		—
Unrealized foreign exchange loss		0.4		—
Deferred income tax (recovery) expense		(35.2)		22.7
Other non-cash items		(12.0)		(7.8)
Acquisition of gold bullion		(37.9)		(31.8)
Proceeds from sale of gold bullion		52.7		36.2
Operating cash flows before changes in non-cash working capital	$	802.9	$	631.5
Changes in non-cash working capital:
Decrease (increase) in receivables	$	4.4	$	(22.3)
Decrease (increase) in prepaid expenses and other		1.4		(14.3)
(Decrease) increase in current liabilities		(4.8)		22.8
Net cash provided by operating activities	$	803.9	$	617.7
Cash flows from investing activities
Acquisition of royalty, stream and working interests	$	(311.1)	$	(443.9)
Acquisition of energy well equipment		(1.5)		(1.3)
Proceeds from sale of investments		3.6		13.0
Acquisition of investments		—		(3.9)
Net cash used in investing activities	$	(309.0)	$	(436.1)
Cash flows from financing activities
Proceeds from at-the-market equity offerings	$	135.7	$	136.0
Repayment of term loan		(80.0)		(80.0)
Proceeds from draw of term loan		—		160.0
Repayment of revolving credit facilities		—		(485.0)
Proceeds from draw of credit facilities		—		275.0
Credit facility amendment costs		—		(0.8)
Payment of dividends		(154.9)		(138.2)
Proceeds from exercise of stock options		7.4		13.2
Net cash used in financing activities	$	(91.8)	$	(119.8)
Effect of exchange rate changes on cash and cash equivalents	$	(1.0)	$	0.6
Net change in cash and cash equivalents	$	402.1	$	62.4
Cash and cash equivalents at beginning of year	$	132.1	$	69.7
Cash and cash equivalents at end of year	$	534.2	$	132.1
Supplemental cash flow information:
Cash paid for interest expense and loan standby fees	$	2.4	$	9.5
Income taxes paid	$	51.2	$	38.6

The accompanying notes are an integral part of these consolidated financial statements.

2020 Financial Statements 8

Franco-Nevada Corporation

Consolidated Statements of Changes in Shareholders’ Equity

(in millions of U.S. dollars)

					Accumulated
					other
	Share capital		Contributed		comprehensive
	(note 17)		surplus		income (loss)		Deficit		Total equity
Balance at January 1, 2020	$	5,390.7	$	14.2	$	(178.3)	$	(164.4)	$	5,062.2
Net income		—		—		—		326.2		326.2
Other comprehensive income		—		—		63.4		—		63.4
Total comprehensive income									$	389.6
At-the-market equity offerings	$	133.7	$	—	$	—	$	—		133.7
Exercise of stock options		9.7		(2.3)		—		—	$	7.4
Share-based payments		—		5.8		—		—		5.8
Vesting of restricted share units		3.7		(3.7)		—		—		—
Transfer of gain on disposal of equity investments at FVTOCI		—		—		(1.0)		1.0		—
Dividend reinvestment plan		42.3		—		—		—		42.3
Dividends declared		—		—		—		(197.2)		(197.2)
Balance at December 31, 2020	$	5,580.1	$	14.0	$	(115.9)	$	(34.4)	$	5,443.8
Balance at January 1, 2019	$	5,158.3	$	15.6	$	(220.3)	$	(321.7)	$	4,631.9
Net income		—		—		—		344.1		344.1
Other comprehensive income		—		—		42.2		—		42.2
Total comprehensive income									$	386.3
At-the-market equity offering	$	136.0	$	—	$	—	$	—	$	136.0
Acquisition of Salares Norte		27.0		—		—		—		27.0
Exercise of stock options		17.3		(4.1)		—		—		13.2
Share-based payments		—		6.0		—		—		6.0
Vesting of restricted share units		3.3		(3.3)		—		—		—
Transfer of gain on disposal of equity investments at FVTOCI		—		—		(0.2)		0.2		—
Dividend reinvestment plan		48.8		—		—		—		48.8
Dividends declared		—		—		—		(187.0)		(187.0)
Balance at December 31, 2019	$	5,390.7	$	14.2	$	(178.3)	$	(164.4)	$	5,062.2

The accompanying notes are an integral part of these consolidated financial statements.

2020 Financial Statements 9

Franco-Nevada Corporation

Notes to the Consolidated Financial Statements

For the years ended December 31, 2020 and 2019

(expressed in millions of U.S. dollars, except per share amounts, unless otherwise noted)

Note 1 – Corporate Information

Franco-Nevada Corporation (“Franco-Nevada” or the “Company”) is incorporated under the Canada Business Corporations Act. The Company is a royalty and stream company focused on precious metals (gold, silver, and platinum group metals) and has a diversity of revenue sources with a target of no more than 20% of revenue from energy (oil, gas and natural gas liquids). The Company owns a portfolio of royalty, stream and working interests, covering properties at various stages, from production to early exploration located in Latin America, United States, Canada, Australia, Europe and Africa.

The Company’s shares are listed on the Toronto Stock Exchange and the New York Stock Exchange and the Company is domiciled in Canada. The Company’s head and registered office is located at 199 Bay Street, Suite 2000, Toronto, Ontario, Canada.

Note 2 – Significant accounting policies

(a) Statement of compliance

These consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”) under the historical cost convention, except for equity investments, warrants and receivables from provisionally priced concentrate sales which are measured at fair value. These consolidated financial statements were authorized for issuance by the Board of Directors on March 10, 2021.

(b) Principles of consolidation

The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries (its “subsidiaries”) (together the “Company”).

(i) Subsidiaries

These consolidated financial statements include the accounts of Franco-Nevada and its subsidiaries. All intercompany accounts, transactions, income and expenses, and profits or losses have been eliminated on consolidation. The Company consolidates subsidiaries where it has the ability to exercise control. Control of an investee is defined to exist when the Company is exposed to variable returns from its involvement in the investee and has the ability to affect those returns through its power over the investee. Specifically, the Company controls an investee if, and only if, it has all of the following: power over the investee (i.e. existing rights that give the Company the current ability to direct the relevant activities of the investee); exposure, or rights, to variable returns from its involvement with the investee; and the ability to use its power over the investee to affect its returns. Control is presumed to exist where the Company owns more than one half of the voting rights unless it can be demonstrated that ownership does not constitute control. The existence and effect of potential voting rights that are currently exercisable or convertible are considered when assessing whether the Company controls another entity. Subsidiaries are fully consolidated from the date on which control is transferred to the Company. They are de-consolidated from the date that control ceases.

The financial statements of the subsidiaries are prepared for the same reporting period as the parent company, using consistent accounting policies. The consolidated financial statements include all assets, liabilities, revenues, expenses and cash flows of the Company and its subsidiaries after eliminating intercompany transactions.

Material subsidiaries of the Company and their geographic locations at December 31, 2020 were as follows:

Entity	Jurisdiction	Economic Interest
Franco-Nevada U.S. Corporation	Delaware	100%
Franco-Nevada GLW Holdings Corp.	British Columbia	100%
Franco-Nevada Canada Holdings Corp.	Canada	100%
Franco-Nevada (Barbados) Corporation	Barbados	100%
Franco-Nevada Australia Pty Ltd.	Australia	100%
Franco-Nevada Delaware LLC	Delaware	100%
Franco-Nevada Texas LP	Texas	100%
Minera Global Copper Chile S.A.	Chile	100%
FN Subco Inc.	British Columbia	100%
FN Holdings ULC	Alberta	100%

2020 Financial Statements 10

Franco-Nevada Corporation

Notes to the Consolidated Financial Statements

For the years ended December 31, 2020 and 2019

(expressed in millions of U.S. dollars, except per share amounts, unless otherwise noted)

All the above entities are classified as subsidiaries of the Company. There are no significant restrictions on the Company’s ability to access or use assets or settle liabilities of its subsidiaries.

(ii) Joint arrangements

A joint arrangement is defined as an arrangement over which two or more parties have joint control, which is the contractually agreed sharing of control over an arrangement. This exists only when the decisions about relevant activities (being those that significantly affect the returns of the arrangement) require unanimous consent of the parties sharing control. There are two types of joint arrangement, joint operations (“JO”) and joint ventures (“JV”).

A JO is a joint arrangement whereby the parties that have joint control of the arrangement have rights to the assets and obligations for the liabilities, relating to the arrangement. In relation to the Company’s interest in any JO, the Company would recognize its share of any assets, liabilities, revenues and expenses of the JO.

The Company participates in a strategic relationship with Continental Resources, Inc. (“Continental”), to jointly acquire mineral rights in within Continental’s areas of operation. The mineral interests are acquired through a royalty acquisition entity, The Mineral Resource Company II, LLC (“TMRC II”), in which the Company holds an economic interest of 49.9%. The Company funds 80% of the contributions to TMRC II, with the remainder funded by Continental. The Company determined that it has joint control over TMRC II given that decisions about relevant activities require unanimous consent of the parties to the joint arrangement. The Company further determined that the joint arrangement is a JO, based on the terms of the contractual agreement which specify how revenues and expenses are shared between the parties.

The Company also participates in joint operations with respect to energy working interests but does not have joint control. A working interest is an ownership position in the energy property and related operating assets, whereby the Company is liable for its proportionate share of gross costs of capital and operations based on information received from the operator. The Company’s share of the assets, liabilities, revenues and expenses of each joint operation are recognized in the statements of financial position and statements of income and comprehensive income.

(c) Business combinations

On the acquisition of a business, the acquisition method of accounting is used whereby the purchase consideration is allocated to the identifiable assets, liabilities and contingent liabilities (identifiable net assets) of the business on the basis of the fair value at the date of acquisition. Provisional fair values allocated at a reporting date are finalized as soon as the relevant information is available, which period shall not exceed twelve months from the acquisition date and are adjusted to reflect the transaction as of the acquisition date.

The results of businesses acquired during the period are consolidated into the consolidated financial statements from the date on which control commences at the date of acquisition and taken out of the consolidated financial statements from the date on which control ceases.

When all or part of the purchase consideration is contingent on future events, the cost of the acquisition initially recorded includes an estimate of the fair value of the contingent liability amounts expected to be payable in the future. The cost of acquisition is adjusted when revised estimates are made, with corresponding adjustments made to the consolidated statement of income and comprehensive income.

When a business is acquired in a number of stages, the cost of each stage is compared with the fair value of the identifiable net assets at the date of that purchase. When the cost of the acquisition exceeds the fair values of the identifiable net assets acquired, the difference is recorded as goodwill. If the fair value attributable to the Company’s share of the identifiable net assets exceeds the cost of acquisition, the difference is recognized as a gain in the consolidated statement of income and comprehensive income. Acquisition costs are expensed.

(d) Currency translation

(i) Functional and presentation currency

The functional currency for each entity within the Franco-Nevada group is the currency of the primary economic environment in which it operates.

These consolidated financial statements are expressed in United States dollars, which is the functional currency of the majority of the subsidiaries. The parent Company’s functional currency is the Canadian dollar. The U.S. dollar is used as the presentation currency of the Company to ensure comparability with the Company’s peers. References herein to C$ are to Canadian dollars.

2020 Financial Statements 11

Franco-Nevada Corporation

Notes to the Consolidated Financial Statements

For the years ended December 31, 2020 and 2019

(expressed in millions of U.S. dollars, except per share amounts, unless otherwise noted)

(ii) Foreign currency transactions and balances

Foreign currency transactions are translated into the functional currency of the respective subsidiary, using the exchange rate prevailing at the dates of the transaction (spot exchange rates). Foreign exchange gains and losses resulting from the settlement of such transactions and the re-measurement of monetary items and available-for-sale securities at the date of the consolidated statements of financial position are recognized in net income. Non-monetary items measured at historical cost are translated into the functional currency using the exchange rate at the date of the transaction.

The results and financial position of the subsidiaries that have a functional currency different from the presentation currency are translated into U.S. dollars, the group’s presentation currency, as follows:

● assets and liabilities for each subsidiary are translated at the closing exchange rate at the date of the balance sheet;

● income and expenses for each subsidiary are translated at the average exchange rates during the period; and

● all resulting exchange differences are charged/credited to the currency translation adjustment in other comprehensive income.

(e) Royalty, stream and working interests

Royalty, stream and working interests consist of acquired royalty interests, stream metal purchase agreements, and working interests in producing, advanced/development and exploration stage properties. Royalty, stream and working interests are recorded at cost and capitalized as tangible assets with finite lives. They are subsequently measured at cost less accumulated depletion and accumulated impairment losses and reversals. The cost of royalty, stream and working interests is determined by reference to the cost model under IAS 16. The major categories of the Company’s interests are producing, advanced and exploration. Producing assets are those that have generated revenue from steady-state operations for the Company or are expected to in the next year. Advanced assets are interests on projects which are not yet producing, but where in management’s view, the technical feasibility and commercial viability of extracting a mineral resource are demonstrable. Exploration assets represent interests on projects where technical feasibility and commercial viability of extracting a mineral resource are not demonstrable. Royalty, stream and working interests for producing and advanced assets are recorded at cost and capitalized in accordance with IAS 16, while exploration assets are recorded and capitalized in accordance with IFRS 6 Exploration for and Evaluation of Mineral Resources (“IFRS 6”).

Management uses the following criteria in its assessment of technical feasibility and commercial viability:

(i) Geology: there is a known mineral deposit which contains mineral reserves or resources; or the project is adjacent to a mineral deposit that is already being mined or developed and there is sufficient geologic certainty of converting the deposit into mineral reserves or resources.

(ii) Accessibility and authorization: there are no significant unresolved issues impacting the accessibility and authorization to develop or mine the mineral deposit, and social, environmental and governmental permits and approvals to develop or mine the mineral deposit appear obtainable.

Producing mineral royalty and stream interests are depleted using the units-of-production method over the life of the property to which the interest relates. The life of the property is estimated using life of mine models specifically associated with the mineral royalty or stream properties which include proven and probable reserves and may include a portion of resources expected to be converted into reserves. Where life of mine models are not available, the Company uses publicly available statements of reserves and resources for the mineral royalty or stream properties to estimate the life of the property and portion of resources that the Company expects to be converted into reserves. Where life of mine models and publicly available reserve and resource statements are not available, depletion is based on the Company’s best estimate of the volumes to be produced and delivered under the contract. The Company relies on information available to it under contracts with operators and/or public disclosures for information on reserves and resources from the operators of the producing mineral and stream interests.

Producing energy interests are depleted using the units-of-production method over the life of the property to which the interest relates, which is estimated using available estimated proved and probable reserves specifically associated with the energy properties. For energy interests, management uses reserve reports prepared by independent reserve engineers or other qualified parties engaged by the Company.

On acquisition of a producing royalty, stream or working interest, an allocation of its fair value is attributed to the exploration potential of the interest. The estimated fair value of this acquired exploration potential is recorded as an asset (non-depletable interest) on the acquisition date. Updated reserve and resource information obtained from the operators of the royalty, stream or working interest properties is used to determine the amount to be converted from non-depletable interest to depletable interest. If the cost of a royalty, stream or working interest includes contingent consideration, the contingent consideration is measured at fair value on the date of acquisition and included in the cost of the interest. Any

2020 Financial Statements 12

Franco-Nevada Corporation

Notes to the Consolidated Financial Statements

For the years ended December 31, 2020 and 2019

(expressed in millions of U.S. dollars, except per share amounts, unless otherwise noted)

changes in the fair value of the contingent consideration subsequent to the acquisition date are recorded against the cost of the interest acquired.

Acquisition costs of advanced and exploration stage royalty, stream and working interests are capitalized and are not depleted until such time as revenue-generating activities begin. The Company may receive advance minimum payments prior to the commencement of production on some of its interests. In these circumstances, the Company would record depletion expense as described above, up to a maximum of the total of the advance minimum payment received.

(f) Working interests in energy properties

Acquired energy working interests are accounted for at cost and capitalized as tangible assets of developing or operating properties, or in accordance with IFRS 6 for exploration properties. For each energy property on which the Company has a working interest, the Company bears its proportionate share of the gross costs of capital and operations based on information received from the operator. Such capital costs are capitalized to energy well equipment which is a component of other assets on the statement of financial position.

Capitalized costs, other than those related to energy well equipment, are depreciated when the asset is available for its intended use on a units-of-production basis, whereby the denominator is the proved and probable reserves associated with the energy properties. For energy well equipment, capitalized costs are depreciated by application of a 25% declining balance method.

(g) Impairment of non-financial assets

Producing and advanced mineral, stream and working interests are reviewed for impairment if there is any indication that the carrying amount may not be recoverable. Impairment is assessed at the level of cash-generating units (“CGUs”) which, in accordance with IAS 36 Impairment of Assets (“IAS 36”), are identified as the smallest identifiable group of assets from which independent cash flows are generated. This is usually at the individual royalty, stream, or working interest level for each property from which independent cash inflows are generated.

An impairment loss is recognized for the amount by which the asset’s carrying value exceeds its recoverable amount, which is the higher of fair value less costs of disposal (“FVLCD”) and value-in-use (“VIU”). The future cash flow expected is derived using estimates of proven and probable reserves, a portion of resources that is expected to be converted into reserves and information regarding the mineral, stream and energy properties, respectively, that could affect the future recoverability of the Company’s interests. Discount factors are determined individually for each asset and reflect their respective risk profiles. In certain circumstances, the Company may use a market approach in determining the recoverable amount which may include an estimate of (i) net present value of estimated future cash flows; (ii) dollar value per ounce or pound of reserve/resource; (iii) cash-flow multiples; and/or (iv) market capitalization of comparable assets. Impairment losses are charged to the royalty, stream or working interest and any associated energy well equipment in the case of working interests. Assets are subsequently reassessed for indications that an impairment loss previously recognized may no longer exist. An impairment charge is reversed if the conditions that gave rise to the recognition of an impairment loss are subsequently reversed and the asset’s recoverable amount exceeds its carrying amount. Impairment losses can be reversed only to the extent that the recoverable amount does not exceed the carrying value that would have been determined had no impairment been recognized previously.

Gold bullion and prepaid expenses are similarly assessed for impairment whenever indicators of impairment exist in accordance with IAS 36. An impairment loss is recognized for the amount by which the asset’s carrying value exceeds its recoverable amount, which is the higher of FVLCD and VIU.

Interests classified as exploration are assessed for impairment whenever indicators of impairment exist in accordance with IFRS 6. An impairment loss is recognized for the amount by which the asset’s carrying value exceeds its recoverable amount, which is the higher of FVLCD and VIU. An interest that has previously been classified as exploration is also assessed for impairment before reclassification to either advanced or producing, and the impairment loss, if any, is recognized in net income.

(h) Financial instruments

Financial assets and financial liabilities are recognized on the Company’s statement of financial position when the Company has become a party to the contractual provisions of the instrument. Financial assets are derecognized when the rights to receive cash flows from the assets have expired or have been transferred and the Company has transferred substantially all risks and rewards of ownership. The Company’s financial instruments consist of cash and cash equivalents, receivables, accounts payable, accrued liabilities, debt, and investments, including equity investments, loans receivable, and warrants. Financial instruments are recognized initially at fair value.

2020 Financial Statements 13

Franco-Nevada Corporation

Notes to the Consolidated Financial Statements

For the years ended December 31, 2020 and 2019

(expressed in millions of U.S. dollars, except per share amounts, unless otherwise noted)

Under the IFRS 9 model for classification the Company has classified its financial assets as described below.

(i) Cash and cash equivalents

Cash and cash equivalents comprise cash on hand, deposits held with banks and other short-term highly liquid investments with original maturities of three months or less. Cash and cash equivalents are recorded at amortized cost using the effective interest method.

(ii) Receivables

Receivables, other than those related to stream agreements with provisional pricing mechanisms, are classified as financial assets at amortized cost and measured using the effective interest method less any impairment loss allowance. The loss allowance for receivables is measured based on lifetime expected credit losses.

(iii) Investments

Investments comprise equity interests in publicly-traded and privately-held entities, warrants, marketable securities with original maturities at the date of the purchase of more than three months and a loan receivable.

The Company’s equity investments are held for strategic purposes and not for trading. The Company made an irrevocable election to designate these investments in common shares at FVTOCI. FVTOCI investments are recognized initially at fair value plus transaction costs. Subsequent to initial recognition, FVTOCI investments are measured at fair value and changes in the fair value are recognized directly in other comprehensive income (loss). When an equity investment at FVTOCI is sold, the accumulated gains or losses are reclassified from accumulated other comprehensive income (loss) directly to deficit.

Translation differences on equity securities classified as FVTOCI are included in other comprehensive income (loss).

Derivative instruments, such as warrants and receivables related to stream agreements with provisional pricing mechanisms, are classified as fair value through profit and loss (“FVTPL”) and are recognized initially at fair value. Subsequent to initial recognition, derivatives are measured at fair value. In the case of receivables related to stream agreements with provisional pricing, once the final settlement price is determined the financial instrument is no longer a derivative and is classified as a financial asset at amortized cost. Changes in the fair value of receivables related to stream agreements with provisional pricing mechanisms are recognized in revenue in the statement of income and other comprehensive income. Changes in fair value of warrants are recognized as other income (expenses) in the statement of income and comprehensive income.

Loans receivable are classified as financial assets at amortized cost because these instruments are held for collection of contractual cash flows and those cash flows represent solely payments of principal and interest. Loans are measured at amortized cost using the effective interest method, less any impairment loss allowance. The impairment loss allowance for the loan receivable is measured based on expected credit losses under the general approach. Interest income is recognized by applying the effective interest rate method and presented as finance income in the statement of income and comprehensive income.

(iv) Financial liabilities

Financial liabilities, including accounts payable, accrued liabilities and debt, are classified as financial liabilities to be subsequently measured at amortized cost using the effective interest method.

(i) Revenue recognition

The Company generates revenue from contracts with customers under each of its royalty, stream and working interests. The Company has determined that each unit of a commodity that is delivered to a customer under a royalty, stream, or working interest arrangement is a performance obligation for the delivery of a good that is separate from each other unit of the commodity to be delivered under the same arrangement.

(i) Stream arrangements

Under its stream arrangements, the Company acquires commodities from operators of mining properties on which the Company has stream interests. The Company sells the commodities received under these arrangements to its customers under separate sales contracts.

For those stream arrangements where the Company acquires refined metal from the operator, the Company sells the refined metal to third party financial institutions or brokers. The Company transfers control over the commodity on the date the commodity is delivered to the customer’s metal account, which is the date that title to the commodity and the risks and rewards of ownership transfer to the customer and the customer is able to direct the use of and obtain substantially all of the benefits from the commodity. The transaction price for these

2020 Financial Statements 14

Franco-Nevada Corporation

Notes to the Consolidated Financial Statements

For the years ended December 31, 2020 and 2019

(expressed in millions of U.S. dollars, except per share amounts, unless otherwise noted)

sales is fixed at the delivery date based on the spot price for the commodity and payment of the transaction price is generally due immediately when control has been transferred.

For those stream arrangements where the Company acquires the commodities in concentrate form from the operator, the Company sells the concentrate under sales contracts with independent smelting companies. The Company transfers control over the concentrate at the time of shipment, which is when the risks and rewards of ownership and title pass to the independent smelting company. The final prices for metals contained in the concentrate are determined based on the market price for the metals on a specified future date after shipment. Upon transfer of control at shipment, the Company records revenue and a corresponding receivable from these sales based on forward commodity prices at the time of shipment.

Variations between the price recorded at the transfer of control and the actual final price set under the contracts with the smelting companies are caused by changes in market commodity prices, and result in an embedded derivative in the receivable. The embedded derivative is recorded at fair value each period until final settlement occurs, with changes in fair value classified as provisional price adjustments and included as a component of stream revenue. These provisional price adjustments associated with concentrate sales are not considered to be revenue from contracts with customers as they arise from changes in market commodity prices.

(ii) Royalty arrangements

For royalty interests, the Company sells commodities to customers under contracts that are established by the operator of each mining or energy property on which the royalty interest is held. The Company recognizes revenue from these sales when control over the commodity transfers to the customer. This transfer of control generally occurs when the operator of the mining or energy property on which the royalty interest is held physically delivers the commodity to the customer. At this point in time, the risks and rewards of ownership have transferred to the customer and the Company has an unconditional right to payment.

Revenue from royalty arrangements is measured at the transaction price agreed in the royalty arrangement with the operator of each mining or energy property. The transaction price will reflect the gross value of the commodity sold less deductions that vary based on the terms of the royalty arrangement.

(iii) Working interest arrangements

The Company sells its proportionate share of the crude oil, natural gas and natural gas liquids to third-party customers using the services of a third-party marketing agent. The Company transfers control over the oil and gas at the time it enters the pipeline system, which is when title and the risks and rewards of ownership are transferred to customers and the Company has an unconditional right to payment. Revenue is measured at the transaction price set by reference to monthly market commodity prices plus certain price adjustments. Price adjustments include product quality and transportation adjustments and market differentials.

(j) Costs of sales

Costs of sales includes various production taxes that are recognized with the related revenues and the Company’s share of the gross operating costs for the working interests in the energy properties.

For stream agreements, the Company purchases gold, silver or platinum group metals for a cash payment of the lesser of a set contractual price, subject to annual inflationary adjustments, and the prevailing market price per ounce of gold and/or silver when purchased. Under certain stream agreements, the Company purchases gold and/or silver for a cash payment that is a fixed percentage of the prevailing market price per ounce of gold and/or silver when purchased.

In certain instances, the Company purchases a fixed amount of gold by providing an initial deposit. The initial deposit is recorded as a prepaid gold asset and classified within current prepaid expenses and other assets or non-current other assets dependent on whether delivery will occur within 12 months of the reporting date. When gold is delivered to the Company it is recorded as inventory until such time as it is sold and the cost of the gold is recorded as a cost of sale.

(k) Income taxes

The income tax expense or recovery represents the sum of current and deferred income taxes.

Current income tax payable is based on taxable profit for the year. Taxable profit differs from net income as reported in the consolidated statement of income and other comprehensive income because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The Company’s liability for current tax is calculated by using tax rates and laws that have been enacted or substantively enacted at the statement of financial position date.

Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amount of assets and liabilities in the consolidated financial statements and the corresponding tax bases used in the computation of taxable profit, and is accounted for using the statement of financial position liability method. Deferred tax liabilities are recognized

2020 Financial Statements 15

Franco-Nevada Corporation

Notes to the Consolidated Financial Statements

For the years ended December 31, 2020 and 2019

(expressed in millions of U.S. dollars, except per share amounts, unless otherwise noted)

for all taxable temporary differences and deferred tax assets are recognized to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilized. Such assets and liabilities are not recognized if the temporary differences arise from initial recognition of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit.

Deferred tax liabilities are recognized for taxable temporary differences arising on investments in subsidiaries, except where the Company is able to control the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future.

Deferred tax is calculated at the tax rates that are enacted or substantively enacted at the statement of financial position date and are expected to apply to the period when the deferred tax asset is realized or the liability is settled. Deferred tax is charged or credited in the consolidated statement of income and other comprehensive income, except when it relates to items credited or charged directly to equity, in which case the deferred tax is also accounted for within equity.

The Company evaluates its exposure to uncertain tax positions and where it is probable that such exposure will materialize, recognizes a provision.

(l) Stock options

The Company may issue equity-settled share-based payments to directors, officers, employees and consultants under the terms of its share compensation plan. Equity-settled share-based payments are measured at fair value at the date of grant. The fair value determined at the date of grant of equity-settled share-based payments is expensed over the expected service period with a corresponding change to contributed surplus and is based on the Company’s estimate of shares that will ultimately vest.

Fair value is measured by use of the Black-Scholes option pricing valuation model. The expected life used in the model is adjusted, based on management’s best estimate, for the effect of non-transferability, exercise restrictions and behavioural considerations. Expected volatility is estimated by considering historic average share price volatility. Any consideration paid or received upon the exercise of the stock options or purchase of shares is credited to share capital.

(m) Restricted share units

The Company may grant performance-based or time-based restricted share units (“RSUs”) to officers and employees under the terms of its share compensation plan. When each RSU vests, the Company plans to settle every RSU with one common share of the parent company. The Company recognizes the fair value of the RSUs as share-based compensation expense which is determined with reference to the weighted average trading price of the Company’s common shares over the five trading days immediately preceding the date of issuance. The amount recognized reflects the number of awards for which the related service and non-market performance conditions associated with these awards are expected to be met. The Company expenses the fair value of the RSUs over the applicable service period, with a corresponding change in contributed surplus. Time-based RSUs vest over a three year period on the anniversary of the date of grant. For performance vesting conditions, the grant date fair value of the RSU is measured to reflect such conditions and this estimate is not updated between expected and actual outcomes. Performance-based RSUs vest at the end of a three year period following the achievement of certain performance criteria and target settlement will range from 0% to 200% of the value.

(n) Deferred share units

Non-executive directors may choose to convert their directors’ fees into deferred share units (“DSUs”) under the terms of the Company’s deferred share unit plan (the “DSU Plan”). Directors must elect to convert their fees prior to January 1 of each year. The Company may also award DSUs to non-executive directors under the DSU Plan as compensation. When dividends are declared by the Company, directors are also credited with dividend equivalents in the form of additional DSUs based on the number of vested DSUs each director holds on the record date for the payment of a dividend. Retainer, conversion and dividend equivalent DSUs vest immediately. The fair value of DSUs at the time of conversion or award, as applicable, is determined with reference to the weighted average trading price of the Company’s common shares over the five trading days immediately preceding the date of conversion or award, as applicable. The fair value of the DSUs, which are settled in cash, is recognized as a share-based compensation expense with a corresponding increase in liabilities, over the service period. The fair value of the DSUs is marked to the quoted market price of the Company’s common shares at each reporting date with a corresponding change in the consolidated statement of income and comprehensive income. Participants are not allowed to redeem their DSUs until retirement or termination of directorship. The cash value of the DSUs at the time of redemption is equivalent to the market value of the Company’s common shares when redemption takes place.

2020 Financial Statements 16

Franco-Nevada Corporation

Notes to the Consolidated Financial Statements

For the years ended December 31, 2020 and 2019

(expressed in millions of U.S. dollars, except per share amounts, unless otherwise noted)

(o) Segment reporting

The Company is engaged in the management and acquisition of royalties, streams and working interests in the mining and energy sectors. Operating segments are reported in a manner consistent with the internal reporting provided to the Chief Executive Officer (“CEO”) who fulfills the role of the chief operating decision-maker. The CEO is responsible for allocating resources and assessing performance of the Company’s operating segments.

(p) Earnings per share

Basic earnings per share is computed by dividing the net income or loss by the weighted average number of common shares outstanding during each period. Diluted earnings per share reflects the effect of all potentially dilutive common share equivalents, which includes dilutive share options and restricted share units granted to employees and warrants computed using the treasury stock method.

New and Amended Standards Adopted by the Company

The following standard was effective and implemented for the annual period as of January 1, 2020.

Amendments to IFRS 3 Business Combinations

In October 2018, the IASB issued amendments to the definition of a business in IFRS 3 Business Combinations (“IFRS 3”). The amendments are intended to assist entities to determine whether a transaction should be accounted for as a business combination or as an asset acquisition. The amendments clarify the minimum requirements for a business, remove the assessment of whether market participants are capable of replacing any missing elements, add guidance to help entities assess whether an acquired process is substantive, narrow the definitions of a business and of outputs, and introduce an optional fair value concentration test. The application of the amendments to IFRS 3 did not have a significant impact on the Company’s consolidated financial statements.

New Accounting Standards Issued But Not Yet Effective

Certain new accounting standards and interpretations have been published that are not mandatory for the current period and have not been early adopted. These standards are not expected to have a material impact on the Company’s current or future reporting periods.

Note 3 – Significant judgments, estimates and assumptions

The preparation of consolidated financial statements in accordance with IFRS requires the Company to make judgments, estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Estimates and assumptions are continuously evaluated and are based on management’s best knowledge of the relevant facts and circumstances, having regard to previous experience. However, actual outcomes may differ from the amounts included in the consolidated financial statements.

In particular, the areas which require management to make significant judgements, estimates and assumptions in determining carrying values are:

Impact of the COVID-19 pandemic

The COVID-19 global health pandemic has had a significant impact on the global economy and commodity and financial markets. The full extent and impact of the COVID-19 pandemic is unknown. The adverse effects of the pandemic may continue for an extended and unknown period of time, particularly as variant strains of the virus are identified. The impact of the pandemic to date has included extreme volatility in financial markets, a slowdown in economic activity, extreme volatility in commodity prices (including gold, silver, palladium and oil and gas) and has raised the prospect of an extended global recession. As well, as efforts have been undertaken to slow the spread of the COVID-19 pandemic, the operation and development of mining projects has been impacted. Many mining projects, including a number of the properties in which Franco-Nevada holds a royalty, stream or other interest have been impacted by the pandemic resulting in the temporary suspension of operations, and other mitigation measures that impacted production. If the operation or development of one or more of the properties in which Franco-Nevada holds a royalty, stream or other interest and from which it receives or expects to receive significant revenue is suspended as a result of the continuing COVID-19 pandemic or future pandemics or other public health emergencies, it may have a material adverse impact on Franco-Nevada’s profitability, results of operations, financial condition and the trading price of Franco-Nevada’s securities. The broader impact of the COVID-19 pandemic or future pandemics or similar public health emergencies on investors, businesses, the global economy or financial and commodity markets may also have a material adverse impact on Franco-Nevada’s profitability, results of operations, financial condition and the trading price of Franco-Nevada’s securities.

2020 Financial Statements 17

Franco-Nevada Corporation

Notes to the Consolidated Financial Statements

For the years ended December 31, 2020 and 2019

(expressed in millions of U.S. dollars, except per share amounts, unless otherwise noted)

Impact of global and market developments on oil and gas prices

A number of geopolitical and market factors impacting global energy markets (including those related to the COVID-19 pandemic) have contributed to extreme volatility and a significant decrease in the price of oil and gas (WTI, WCS and NYMEX). As a result of reduced production and capital spend by a number of the operators of the Company’s Energy interests due to lower market expectations for oil and gas prices, the Company recorded impairments of $271.7 million at March 31, 2020, as detailed in note 8 (b).

While oil and gas prices have rebounded from the historical lows of April 2020, assumptions about future commodity prices, interest rates and levels of supply and demand of commodities are subject to greater variability than normal and there remains heightened potential for further impairments or reversals thereof. The continuation of volatile oil and gas prices for a prolonged period may significantly affect the valuation of the Company’s financial and non-financial assets and have a material adverse impact on Franco-Nevada’s profitability, results of operations, financial condition and the trading price of Franco-Nevada’s securities.

Reserves and Resources

Royalty, stream and working interests comprise a large component of the Company’s assets and, as such, the reserves and resources of the properties to which the interests relate have a significant effect on the Company’s financial statements. These estimates are applied in determining the depletion of and assessing the recoverability of the carrying value of royalty, stream and working interests. For mineral royalty and stream interests, the public disclosures of reserves and resources that are released by the operators of the interests involve assessments of geological and geophysical studies and economic data and the reliance on a number of assumptions, including commodity prices and production costs. For energy interests, the estimated reserves in reserve reports prepared by independent reserve engineers or other qualified parties engaged by the Company reflect similar assessments of geological and geophysical studies and economic data and reliance on assumptions. These assumptions are, by their very nature, subject to interpretation and uncertainty.

The estimates of reserves and resources may change based on additional knowledge gained subsequent to the initial assessment. Changes in the estimates of reserves and resources may materially affect the recorded amounts of depletion and the assessed recoverability of the carrying value of royalty, stream and working interests.

Impairment of Royalty, Stream and Working Interests

Assessment of impairment of royalty, stream, working interests and energy well equipment at the end of each reporting period requires the use of judgments, assumptions and estimates when assessing whether there are any indicators that give rise to the requirement to conduct an impairment analysis on the Company’s royalty, stream and working interests, and/or energy equipment. Indicators which could trigger an impairment analysis include, but are not limited to, a significant change in operator reserve and resource estimates, industry or economic trends, current or forecast commodity prices, and other relevant operator information. The assessment of fair values requires the use of estimates and assumptions for recoverable production, long-term commodity prices, discount rates, reserve/resource conversion, foreign exchange rates, future capital expansion plans and the associated production implications. In addition, the Company may use other approaches in determining fair value which may include judgment and estimates related to (i) dollar value per ounce or pound of reserve/resource; (ii) cash-flow multiples; and (iii) market capitalization of comparable assets. Changes in any of the assumptions and estimates used in determining the fair value of the royalty, stream or working interests, or energy well equipment could impact the impairment analysis.

Asset Acquisitions and Business Combinations

The assessment of whether an acquisition meets the definition of a business, or whether assets are acquired is an area of key judgment. If deemed to be a business combination, applying the acquisition method to business combinations requires each identifiable asset and liability to be measured at its acquisition-date fair value. The excess, if any, of the fair value of consideration over the fair value of the net identifiable assets acquired is recognized as goodwill. The determination of the acquisition-date fair values often requires management to make assumptions and estimates about future events. The assumptions and estimates with respect to determining the fair value of royalty, stream or working interests generally requires a high degree of judgment, and include estimates of mineral reserves and resources acquired, future metal prices, discount rates and reserve/resource conversion. Changes in any of the assumptions or estimates used in determining the fair value of acquired assets and liabilities could impact the amounts assigned to assets and liabilities.

Joint Arrangements

Judgment is required to determine whether the Company has joint control of a contractual arrangement, which requires continuous assessment of the relevant activities and whether the decisions in relation to those activities require unanimous consent. Judgment is also continually required to classify a joint arrangement as either a joint operation or a joint venture when the arrangement has been structured through a separate vehicle. Classifying the arrangement requires the Company to assess its rights and obligations arising from the arrangement. Specifically, the Company considers the legal form of the separate vehicle, the terms of the contractual arrangement and other relevant facts and circumstances.

2020 Financial Statements 18

Franco-Nevada Corporation

Notes to the Consolidated Financial Statements

For the years ended December 31, 2020 and 2019

(expressed in millions of U.S. dollars, except per share amounts, unless otherwise noted)

This assessment often requires significant judgment, and a different conclusion on joint control, or whether the arrangement is a joint operation or a joint venture, may have a material impact on the accounting treatment.

The Company evaluated its joint arrangement with Continental, whereby the Company acquired a 49.9% economic interest in TMRC II, in accordance with IFRS 11. The Company concluded that the arrangement qualified as a joint operation based on the terms of the contractual agreement which specify how revenues and expenses are shared. Under the agreement, revenues generated by the royalty assets of TMRC II are to be distributed based on the performance of the assets against agreed upon development thresholds and the tranche in which the assets were acquired, resulting in the Company receiving distributions ranging between 50-75% of revenue. As a result, the Company has concluded that its rights are tied to the assets of TMRC II, rather than the net results of the entity.

Income Taxes

The interpretation and application of existing tax laws, regulations or rules in Canada, Barbados, the United States, Australia or any of the countries in which the mining operations are located or to which shipments of gold, silver or platinum group metals are made requires the use of judgment. The likelihood that tax positions taken will be sustained upon examination by applicable tax authorities is assessed based on facts and circumstances of the relevant tax position considering all available evidence. Differing interpretation of these laws, regulations or rules could result in an increase in the Company’s taxes, or other governmental charges, duties or impositions.

In assessing the probability of realizing deferred income tax assets, the Company makes estimates related to expectations of future taxable income and expected timing of reversals of existing temporary differences. Such estimates are based on forecasted cash flows from operations which require the use of estimates and assumptions such as long-term commodity prices and recoverable ounces of gold, silver and platinum group metals. Therefore, the amount of deferred income tax assets recognized on the balance sheet could be reduced if the actual results differ significantly from forecast. The Company reassesses its deferred income tax assets at the end of each reporting period.

Functional Currency

The functional currency for each of the Company’s subsidiaries is the currency of the primary economic environment in which the entity operates. Determination of functional currency may involve certain judgments to determine the primary economic environment and the Company reconsiders the functional currency of its entities if there is a change in events and conditions which determined the primary economic environment.

Note 4 – Acquisitions and other transactions

(a) Acquisition of U.S. Oil & Gas Royalty Interest – Haynesville, Texas, USA

On December 29, 2020, the Company, through a wholly-owned subsidiary, acquired a royalty portfolio in the Haynesville gas play in Texas, for $135.0 million. The royalties are derived principally from mineral title which provides a perpetual interest in royalty lands.

The acquisition has an effective date of October 1, 2020. Between the effective date and the closing date, the asset has generated approximately $4.2 million in royalties.

The acquisition of the Haynesville royalties has been accounted for as an asset acquisition.

(b) Amendment of Sabodala Gold Stream Agreement – Senegal

On September 25, 2020, the Company, through a wholly-owned subsidiary, amended its existing Sabodala gold purchase and sale agreement with Teranga Gold Corporation (“Teranga”) to compensate the Company for displacement that will be caused by the processing of Massawa ore through the Sabodala processing facilities and to provide for certain protocols for the commingling of Sabodala and Massawa ores. Teranga acquired a 90% interest in the Massawa project from Barrick Gold Corporation on March 4, 2020.

The amended agreement provides that effective September 1, 2020, Teranga will make fixed deliveries of 783.33 ounces of refined gold per month until 105,750 ounces of gold have been delivered to the Company (the “Fixed Delivery Period”) and 6% of production from the stream area thereafter. Following the Fixed Delivery Period, a reconciliation will be conducted to determine if the Company would have received more or less than 105,750 ounces of gold under the 6% variable stream during such period. Teranga will be entitled to a credit for an over-delivery which will be applied against the 6% variable stream until depleted and the Company will be entitled to a one-time additional delivery in the case of an under-delivery.

2020 Financial Statements 19

Franco-Nevada Corporation

Notes to the Consolidated Financial Statements

For the years ended December 31, 2020 and 2019

(expressed in millions of U.S. dollars, except per share amounts, unless otherwise noted)

(c) Acquisition of Rio Baker (Salares Nortes) Royalty – Chile

On September 23, 2020, the Company, through a wholly-owned subsidiary, acquired an existing 2% NSR on all mineral production from Gold Fields’ Rio Baker concessions in Chile for $5.0 million cash with contingent payments of up to $8.0 million. With this acquisition, the Company now has exposure to 100% of the Salares Norte deposit. The royalty agreement is subject to a 0.5% buy-back at any time for $4.0 million.

The acquisition of the Rio Baker royalty has been accounted for as an asset acquisition.

(d) Acquisition of Alpala Royalty – Northern Ecuador

On September 11, 2020, the Company completed a royalty transaction with SolGold plc (“SolGold”) to acquire a 1% NSR with reference to all minerals produced from the Alpala copper-gold-silver project in northern Ecuador for $100.0 million. The Alpala project is owned by Exploraciones Novomining SA, which is held 85% by SolGold and 15% by Cornerstone Capital Resources Inc. SolGold has the option to increase the size of the transaction to $150 million for a 1.5% NSR until May 11, 2021 and also has the option to buy-back 50% of the royalty 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-only NSR for a period of time once Alpala is producing. The NSR covers the Cascabel concession. The principal and interest of the $15.0 million bridge loan that the Company provided to SolGold in May 2020 were applied toward the Company’s payment of the purchase price.

The acquisition of the Alpala royalty has been accounted for as an asset acquisition.

(e) Acquisition of Freeport Royalty Portfolio Interests

On September 1, 2020, the Company completed the acquisition of a portfolio of 24 royalties from Freeport-McMoRan Inc. for $30.6 million in cash. Producing royalties have been added to the Company’s portfolio from Industrias Peñoles, S.A.B.de C.V.’s Milpillas copper mine in the northwestern Mexican state of Sonora, Mexico and from Ormat Technologies Inc.’s Neal Hot Spring geothermal operation in Oregon. The remaining royalties are classified as exploration, including prospective royalties over Wallbridge Mining Co. Ltd.’s Fenelon, Martiniere and Northway-Noyon projects and certain of Glencore Canada Corporation’s projects in the Matagami region of Quebec, among others.

The acquisition of the Freeport royalty portfolio interests has been accounted for as an asset acquisition.

(f) Acquisition of U.S. Oil & Gas Mineral Rights with Continental Resources, Inc.

The Company, through a wholly-owned subsidiary, has a strategic relationship with Continental to acquire, through a jointly-owned entity (the “Royalty Acquisition Venture”), royalty rights within Continental’s areas of operation.

Franco-Nevada recorded contributions to the Royalty Acquisition Venture of $29.8 million in 2020 (2019 – $114.4 million). In the first half of the year, following weak commodity prices, Franco-Nevada and Continental agreed to reduce the pace of their capital funding commitments to the Royalty Acquisition Venture. As at December 31, 2020, the total cumulative investment in the Royalty Acquisition Venture totaled $406.0 million. Franco-Nevada has remaining commitments of up to $114.0 million, of which approximately half is expected to be deployed in 2021. Accounts payable at December 31, 2020 include $10.2 million (2019 - $5.6 million) of contributions disbursed after year-end.

The Royalty Acquisition Venture is accounted for as a joint operation in accordance with IFRS 11 Joint Arrangements.

(g) Acquisition of Island Gold Royalty Interest – Ontario, Canada

On March 20, 2020, Franco-Nevada acquired an existing 0.62% NSR on Alamos Gold Inc.’s Island Gold project in Finan Township in the Province of Ontario for $13.4 million (C$19.0 million).

The acquisition of the Island Gold royalty has been accounted for as an asset acquisition.

(h) Acquisition of Eagle’s Nest Royalty Interest – Ontario, Canada

On December 23, 2019, Franco-Nevada acquired a 1% gross revenue royalty on Noront Resources Ltd.’s (“Noront”) Eagle’s Nest nickel, copper and platinum group metals deposit in the Ring of Fire mining district of Ontario, Canada, for C$5.0 million ($3.8 million).

The acquisition of the Eagle’s Nest royalty has been accounted for as an asset acquisition.

(i) Acquisition of Project 81 Royalty Interest and Noble Common Shares – Ontario, Canada

On November 22, 2019, Franco-Nevada acquired a 2% NSR on Noble Mineral Exploration’s (“Noble”) 55,000 hectare patented land package known as Project 81 in the Timmins-Cochrane area of Ontario, Canada, in exchange for Franco-Nevada agreeing to waive its pre-emptive and buy-back rights in respect of a historical third party royalty, which was

2020 Financial Statements 20

Franco-Nevada Corporation

Notes to the Consolidated Financial Statements

For the years ended December 31, 2020 and 2019

(expressed in millions of U.S. dollars, except per share amounts, unless otherwise noted)

subsequently terminated. Franco-Nevada’s 2% NSR covers the Crawford Nickel-Sulphide Project, which was recently spun out by Noble to Canada Nickel Company Inc. As part of the arrangement, Noble issued C$500,000 of Noble common shares to Franco-Nevada.

The acquisition of the Project 81 royalty has been accounted for as an asset acquisition.

(j) Acquisition of Premier Gold Royalty Interests

On September 25, 2019, Franco-Nevada acquired two royalties from Premier Gold Mines Limited (“Premier”) for $6.0 million, including a 2% net smelter royalty (“NSR”) on property owned by Newmont Corporation adjoining its Musselwhite Mine in Northwestern Ontario and a 1.5% NSR on Nevada Gold Mines LLC’s Rain/Emigrant and Saddle properties located at the south end of the Carlin Trend in Nevada.

The acquisitions of the Premier royalties have been accounted for as asset acquisitions.

(k) Acquisition of U.S. Oil & Gas Royalty Interest – Marcellus, Pennsylvania, USA

On July 22, 2019, Franco-Nevada acquired from Range Resources Corporation (“Range”) an overriding royalty interest on acreage in the Marcellus for a gross purchase price of $300.0 million. The royalty is calculated as 1% of gross production, less allowed deductions from approximately 350,000 net acres of Range’s working interest position in Washington, Western Allegheny and Southern Beaver Counties in Pennsylvania. The royalty applies to existing production and future development from the Marcellus formation as well as future potential development from the Utica and Upper Devonian formations.

The acquisition has an effective date of March 1, 2019. Between the effective date and the closing date, the asset has generated approximately $9.4 million in royalties.

The acquisition of the Marcellus royalty has been accounted for as an asset acquisition.

(l) Acquisition of Valentine Lake Royalty Interest – Newfoundland, Canada

On February 21, 2019, Franco-Nevada acquired a 2% NSR on Marathon Gold Corporation’s (“Marathon”) Valentine Lake Gold Camp in central Newfoundland for C$18.0 million ($13.7 million). Marathon has an option to buy back 0.5% of the NSR for $7.0 million until December 31, 2022.

The acquisition of the Valentine Lake royalty has been accounted for as an asset acquisition.

(m) Acquisition of Salares Norte Royalty Interest – Chile

On January 31, 2019, Franco-Nevada, through a wholly-owned subsidiary, acquired an existing 2% NSR on Gold Fields’ Salares Norte project in the Atacama region of northern Chile for $32.0 million, comprised of $27.0 million of Franco-Nevada common shares (366,499 common shares) and $5.0 million in cash. Gold Fields has an option to buy back 1% of the NSR for $6.0 million within 24 months of the commencement of commercial production.

The acquisition of the Salares Norte royalty has been accounted for as an asset acquisition.

Note 5 – Cash and cash equivalents

As at December 31, 2020 and 2019, cash and cash equivalents were primarily held in interest-bearing deposits.

Cash and cash equivalents comprised the following:

	At December 31,		At December 31,
	2020		2019
Cash deposits	$	523.7	$	118.7
Term deposits		10.5		13.4
	$	534.2	$	132.1

Note 6 – Investments and loan receivable

Investments comprise the following: (i) equity interests in various public and non-public entities which the Company acquired through the open market or through transactions; (ii) warrants in various publicly-listed companies; and (iii) a loan receivable extended to Noront Resources Ltd. as part of the Company’s acquisition of royalty rights in the Ring of Fire

2020 Financial Statements 21

Franco-Nevada Corporation

Notes to the Consolidated Financial Statements

For the years ended December 31, 2020 and 2019

(expressed in millions of U.S. dollars, except per share amounts, unless otherwise noted)

mining district of Ontario, Canada, in April 2015. The loan bears a 7% interest, is secured by certain mining claims held by Noront in the Ring of Fire district, and has a maturity date of September 30, 2022.

Investments and loan receivable comprised the following:

	At December 31,		At December 31,
	2020		2019
Equity investments	$	195.6	$	145.6
Loan receivable		37.1		34.6
Warrants		5.7		3.0
	$	238.4	$	183.2

The change in the fair value of equity investments recognized in other comprehensive income (loss) for the periods ended December 31, 2020 and 2019 were as follows:

	2020		2019
Gain on change in the fair value of equity investments at FVTOCI	$	50.5	$	11.4
Tax expense in other comprehensive income		(6.7)		(1.5)
Gain on change in the fair value of equity investments at FVTOCI, net of tax	$	43.8	$	9.9

Note 7 – Prepaid expenses and other current assets

Prepaid expenses and other current assets comprised the following:

	At December 31,		At December 31,
	2020		2019
Gold bullion	$	18.6	$	26.2
Prepaid expenses		16.4		17.5
Stream ounces inventory		0.5		4.4
Debt issue costs		0.6		0.7
	$	36.1	$	48.8

Note 8 – Royalty, stream and working interests

(a) Royalties, streams and working interests

Royalty, stream and working interests, net of accumulated depletion and impairment charges and reversals, comprised the following:

					Impairment
			Accumulated		(charges)
As at December 31, 2020	Cost		depletion(1)		reversals		Carrying value
Mining royalties	$	1,049.2	$	(642.3)	$	—	$	406.9
Streams		4,346.6		(1,702.6)		9.6		2,653.6
Energy		1,944.7		(462.4)		(267.7)		1,214.6
Advanced		343.0		(49.0)		—		294.0
Exploration		76.1		(13.1)		—		63.0
	$	7,759.6	$	(2,869.4)	$	(258.1)	$	4,632.1

1. Accumulated depletion includes previously recognized impairment charges.

					Impairments
			Accumulated		(charges)
As at December 31, 2019	Cost		depletion(1)		reversals		Carrying value
Mining royalties	$	1,035.7	$	(620.1)	$	—	$	415.6
Streams		4,346.3		(1,542.3)		—		2,804.0
Energy		1,756.4		(402.8)		—		1,353.6
Advanced		203.2		(32.3)		—		170.9
Exploration		66.2		(12.5)		—		53.7
	$	7,407.8	$	(2,610.0)	$	—	$	4,797.8

1. Accumulated depletion includes previously recognized impairment charges.

2020 Financial Statements 22

Franco-Nevada Corporation

Notes to the Consolidated Financial Statements

For the years ended December 31, 2020 and 2019

(expressed in millions of U.S. dollars, except per share amounts, unless otherwise noted)

Changes in royalty, stream and working interests for the periods ended December 31, 2020 and December 31, 2019 were as follows:

	Mining
	royalties		Streams		Energy		Advanced		Exploration		Total
Balance at January 1, 2019	$	450.1	$	2,967.6	$	966.6	$	129.8	$	41.5	$	4,555.6
Additions (note 4)		—		—		419.0		46.0		11.9		476.9
Transfers		5.9		—		—		(5.9)		—		—
Depletion		(46.0)		(163.6)		(49.0)		(0.9)		(0.2)		(259.7)
Impact of foreign exchange		5.6		—		17.0		1.9		0.5		25.0
Balance at December 31, 2019	$	415.6	$	2,804.0	$	1,353.6	$	170.9	$	53.7	$	4,797.8
Additions (note 4)		18.8		—		170.2		118.6		8.2		315.8
Transfers		(1.2)		—		—		1.2		—		—
Impairment (charges) and reversals		—		9.6		(267.7)		—		—		(258.1)
Depletion		(31.5)		(160.0)		(44.9)		(2.1)		(0.2)		(238.7)
Impact of foreign exchange		5.2		—		3.4		5.4		1.3		15.3
Balance at December 31, 2020	$	406.9	$	2,653.6	$	1,214.6	$	294.0	$	63.0	$	4,632.1

Of the total net book value as at December 31, 2020, $3,327.3 million (December 31, 2019 - $3,743.8 million) is depletable and $1,304.8 million (December 31, 2019 - $1,054.0 million) is non-depletable.

(b) Impairment of Energy interests

Royalties, stream and working interests are reviewed for impairment if there is an indication that the carrying amount may not be recoverable. As a result of reduced production and capital spend by the operators of the Company’s Energy interests due to lower market expectations for oil and gas prices, the Company noted the presence of impairment indicators as at March 31, 2020 and carried out an asset impairment analysis of its Energy interests. Impairments in the carrying value of each CGU were measured and recorded to the extent that the carrying value of each CGU exceeds its estimated recoverable amount, which was the higher of FVLCD and VIU, which is generally calculated using an estimate of future discounted cash-flows.

The Company recorded impairment charges at March 31, 2020 with respect to the following CGUs based on the recoverable amount using a FVLCD model:

SCOOP/STACK

The Company’s interest in the SCOOP/STACK comprises acquisitions of royalty rights through the Royalty Acquisition Venture, a jointly-owned entity with Continental, as well as two packages of royalty rights acquired between December 2016 and November 2017.

Weyburn

The Company holds a 11.71% NRI, a 0.44% ORR and a 2.56% WI in the Weyburn Unit, which is located 129km southeast of Regina, Saskatchewan. The 11.71% NRI was acquired on November 13, 2012.

The following table summarizes the impairment losses recorded at March 31, 2020 and estimated recoverable amount by CGU on a pre-tax basis:

		Impairment		Recoverable
		amount		amount
Royalty, stream and working interests, net
SCOOP/STACK	$	207.2	$	309.2
Weyburn		60.5		162.8
Other assets
Oil well equipment	$	4.0	$	4.7
	$	271.7	$	476.7

2020 Financial Statements 23

Franco-Nevada Corporation

Notes to the Consolidated Financial Statements

For the years ended December 31, 2020 and 2019

(expressed in millions of U.S. dollars, except per share amounts, unless otherwise noted)

Key assumptions and sensitivity analysis

Key assumptions and estimates used in determining the recoverable amounts of the Company’s Energy interests are related to oil prices and discount rates. The future cash flows expected from each CGU were derived from a model developed by management using cash-flows prepared by an independent reserve engineer or a third-party advisor, and expected performance based on publicly-released technical information to predict expected future production. For the SCOOP/STACK CGUs, the Company’s management made assumptions of future drilling activity to reflect the reduced capital spending by operators in the current environment.

The Company’s management made assumptions of future West Texas Intermediate (“WTI”) prices to estimate future revenues, based on long-term consensus price estimates obtained from a sample of independent reserve evaluators. For the Weyburn CGU, the differential to Edmonton Light prices assumption was $8.55/barrel, and the U.S. dollar to Canadian dollar foreign exchange rate assumption was $0.72. Forecasted WTI prices as at March 31, 2020 used to determine future cash flows were as follows:

											Average
											Annual
	Remainder of										Increase
	2020		2021		2022		2023		2024		Thereafter
WTI oil price (US$/barrel)	$	30.00	$	41.18	$	49.88	$	55.87	$	57.98	2	%

The future cash-flows were discounted using an after-tax discount rate which reflects specific market risk factors associated with individual characteristics of the CGU. For the SCOOP/STACK CGUs, the discount rate ranged between 5% for proved producing reserves to 12% for undeveloped contingent resources. For the Weyburn CGU, the discount rate assumed was 9.5%.

While oil and gas prices have partially rebounded from April 2020, there remains a level of uncertainty surrounding oil and gas prices. The Company determined that this did not warrant a consideration of an indicator of reversal in the previously recorded impairments.

A sensitivity analysis showing the impact of a change, in isolation, in the WTI oil price and discount rate assumptions is shown below:

	Increase (Decrease) to Impairment Charges
	1% Increase		1% Decrease		10% Decrease		10% Increase
	in the		in the		in WTI Oil		in WTI Oil
	Discount Rate		Discount Rate		Price		Price
SCOOP/STACK	$	34.1	$	(39.9)	$	37.8	$	(37.3)
Weyburn, including oil well equipment		16.9		(19.1)		39.8		(39.0)
	$	51.0	$	(59.0)	$	77.6	$	(76.3)

(c) Impairment reversal of Mine Waste Solutions stream

At every reporting period, the Company assesses whether there is an indication that an impairment loss previously recognized for an asset may no longer exist or may have decreased.

In 2014, the Company carried out an impairment analysis on its stream interest in the Mine Waste Solutions (“MWS”) tailings recovery operation in South Africa. Due to the capped nature of the stream and its limited optionality, the Company assessed that the reduction in consensus gold price estimates at the time was an indication of impairment, and, as a result, recorded an impairment of $26.6 million.

In 2020, the Company assessed that the increase in consensus gold price estimates represented an indication that the previously recorded impairment loss may no longer exist or may have decreased and carried out an asset impairment reversal analysis. The recoverable amount was based on the FVLCD. The recoverable amount determined for the MWS interest exceeded its carrying value. As such, a full reversal of the 2014 impairment loss, net of depletion had an impairment loss not previously been recorded, of $9.6 million was recognized, increasing the carrying value of the interest to $77.2 million. The following table summarizes the impairment reversal and estimated recoverable amount for the MWS stream interest on a pre-tax basis:

		Impairment
		reversal		Recoverable
		amount		amount
Royalty, stream and working interests, net
Mine Waste Solutions	$	(9.6)	$	114.8
	$	(9.6)	$	114.8

2020 Financial Statements 24

Franco-Nevada Corporation

Notes to the Consolidated Financial Statements

For the years ended December 31, 2020 and 2019

(expressed in millions of U.S. dollars, except per share amounts, unless otherwise noted)

Key assumptions and sensitivity analysis

Key assumptions and estimates used in determining the recoverable amount of the Company’s MWS stream are related to gold prices and timing of unlevered cash flows.

The FVLCD for the MWS stream was determined by calculating the net present value (“NPV”) of the estimated future cash-flows expected to be generated by the mining of the MWS tailings. The estimates of future cash-flows were derived from a life-of-mine model developed by the Company’s management using MWS’s historical performance to predict future performance. Based on observable market or publicly available data, the Company’s management made assumptions of future gold prices to estimate future revenues. These price assumptions were supported by longer-term consensus price estimates obtained from a sample of analysts. Forecasted gold prices as at December 31, 2020 used to determine future cash flows were as follows:

	2021			2022		2023	2024
Gold price (US$/ounce)	$	1,910	$	1,886	$	1,831	$	1,681

The future cash-flows were discounted using a discount rate of 5% which reflects specific market risk factors associated with MWS.

A sensitivity analysis showing the impact of a change, in isolation, in the forecasted gold prices (+/- 10%) and discount rate (+/- 1%) was performed on the cash flow model for the MWS stream. Reviewing changes in the key assumptions did not have any impact on the result of the Company’s impairment reversal assessment.

Note 9 – Other assets

Other assets comprised the following:

	At December 31,		At December 31,
	2020		2019
Energy well equipment, net	$	5.0	$	9.3
Right-of-use assets, net		2.0		2.5
Furniture and fixtures, net		0.4		0.4
Debt issue costs		1.3		1.9
Other		4.9		—
	$	13.6	$	14.1

Note 10 – Accounts payable and accrued liabilities

Accounts payable and accrued liabilities comprise the following:

	At December 31,		At December 31,
	2019		2019
Accounts payable	$	3.5	$	6.8
Accrued liabilities		37.3		35.0
	$	40.8	$	41.8

Note 11 – Debt

Changes in obligations related to the Company’s credit facilities were as follows:

		Corporate		Corporate		FNBC
	revolver			term loan		revolver		Total
Size of facility	$	1,000.0	$	160.0	$	100.0	$	1,260.0
Balance at January 1, 2019	$	210.0	$	—	$	—	$	210.0
Drawdowns		275.0		160.0		—		435.0
Repayment		(485.0)		(80.0)		—		(565.0)
Balance at December 31, 2019	$	—	$	80.0	$	—	$	80.0
Repayment		—		(80.0)		—		(80.0)
Balance at December 31, 2020	$	—	$	—	$	—	$	—

2020 Financial Statements 25

Franco-Nevada Corporation

Notes to the Consolidated Financial Statements

For the years ended December 31, 2020 and 2019

(expressed in millions of U.S. dollars, except per share amounts, unless otherwise noted)

(a) Corporate Revolver

The Company has a $1.0 billion unsecured revolving term credit facility (the “Corporate Revolver”). The Corporate Revolver has a maturity date of March 22, 2024.

The Company has two standby letters of credit in the amount of $18.1 million (C$23.1 million) against the Corporate Revolver in relation to the audit by the Canada Revenue Agency (“CRA”) of its 2013–2015 taxation years, as referenced in note 23.

Advances under the Corporate Revolver can be drawn as follows:

U.S. dollars

· Base rate advances with interest payable monthly at the Canadian Imperial Bank of Commerce (“CIBC”) base rate, plus between 0.00% and 1.05% per annum depending upon the Company’s leverage ratio; or

· LIBOR loans for periods of 1, 2, 3 or 6 months with interest payable at a rate of LIBOR, plus between 1.00% and 2.05% per annum, depending on the Company’s leverage ratio.

Canadian dollars

· Prime rate advances with interest payable monthly at the CIBC prime rate, plus between 0.00% and 1.05% per annum, depending on the Company’s leverage ratio; or

· Bankers’ acceptances for a period of 30 to 180 days with a stamping fee calculated on the face amount between 1.00% and 2.05%, depending on the Company’s leverage ratio.

All loans are readily convertible into loans of other types, described above, on customary terms and upon provision of appropriate notice. Borrowings under the Corporate Revolver are guaranteed by certain of the Company’s subsidiaries and are unsecured.

The Corporate Revolver is subject to a standby fee of 0.20% to 0.41% per annum, depending on the Company’s leverage ratio, even if no amounts are outstanding under the Corporate Revolver.

(b) Corporate Term Loan

On April 17, 2019, the Company entered into an unsecured credit facility (the “Corporate Term Loan”) in the amount of $160.0 million to pay down amounts previously borrowed under the Corporate Revolver. The Corporate Term Loan had a maturity date of April 17, 2021. Advances were drawn as a one-month LIBOR loan with interest payable at a rate of LIBOR plus 0.85%. In 2020, the Company fully repaid the amount borrowed against the Corporate Term Loan. As the Corporate Term Loan is a non-revolving facility, it is no longer available to draw.

(c) FNBC Revolver

The Company’s subsidiary, Franco-Nevada (Barbados) Corporation (“FNBC”), has an unsecured revolving term credit facility (the “FNBC Revolver”). The FNBC Revolver provides for the availability over a one-year period of up to $100.0 million in borrowings.

On March 10, 2020, the FNBC Revolver was amended to provide an extension of the maturity date to March 20, 2021. Advances, under the amended terms of the FNBC Revolver, can be drawn in U.S. dollars as follows:

● Base rate advances with interest payable monthly at the CIBC base rate, plus 0.25% per annum; or

● LIBOR loans for periods of 1, 2, 3 or 6 months with interest payable at a rate of LIBOR plus 1.25% per annum.

All loans are readily convertible into loans of other types on customary terms and upon provision of appropriate notice.

The FNBC Revolver is subject to a standby fee of 0.25% per annum, even if no amounts are outstanding.

2020 Financial Statements 26

Franco-Nevada Corporation

Notes to the Consolidated Financial Statements

For the years ended December 31, 2020 and 2019

(expressed in millions of U.S. dollars, except per share amounts, unless otherwise noted)

Note 12 – Revenue

Revenue classified by commodity, geography and type comprised the following:

	2020		2019
Commodity
Gold(1)	$	718.1	$	545.8
Silver		106.4		83.2
Platinum-group metals(1)		86.2		75.6
Other mining commodities		17.8		23.6
Mining	$	928.5	$	728.2
Energy		91.7		115.9
	$	1,020.2	$	844.1
Geography
Latin America	$	502.1	$	369.2
United States		178.6		166.6
Canada(1)		196.9		166.2
Rest of World		142.6		142.1
	$	1,020.2	$	844.1
Type
Revenue-based royalties	$	274.9	$	266.7
Streams(1)		629.2		490.8
Profit-based royalties		88.7		49.7
Other		27.4		36.9
	$	1,020.2	$	844.1

1. Includes a loss of $0.1 million and gain of $5.9 million of provisional pricing adjustments for gold and platinum-group metals, respectively

(2019 – gain of $0.3 million and $7.8 million, respectively).

Note 13 – Costs of sales

Costs of sales comprised the following:

	2020		2019
Costs of stream sales	$	149.5	$	135.1
Mineral production taxes		2.9		2.4
Mining costs of sales	$	152.4	$	137.5
Energy costs of sales		6.4		7.3
	$	158.8	$	144.8

Note 14 – Related party disclosures

Key management personnel are those persons having authority and responsibility for planning, directing and controlling the activities of the Company. Key management personnel include the Board of Directors and the executive management team.

Compensation for key management personnel of the Company was as follows:

	2020		2019
Short-term benefits(1)	$	3.5	$	4.6
Share-based payments(2)		7.9		5.9
	$	11.4	$	10.5

1. Includes salary, benefits and short-term accrued incentives/other bonuses earned in the period.

2. Represents the expense of stock options and restricted share units and mark-to-market charges on deferred share units during the year.

2020 Financial Statements 27

Franco-Nevada Corporation

Notes to the Consolidated Financial Statements

For the years ended December 31, 2020 and 2019

(expressed in millions of U.S. dollars, except per share amounts, unless otherwise noted)

Note 15 – Finance income and expenses

Finance income and expenses for the periods ended December 31, 2020 and 2019 were as follows:

	2020		2019
Finance income
Interest	$	3.7	$	3.5
	$	3.7	$	3.5
Finance expenses
Standby charges	$	2.1	$	2.1
Amortization of debt issue costs		1.0		0.9
Interest		0.3		7.4
Accretion of lease liabilities		0.1		0.2
	$	3.5	$	10.6

Note 16 - Income taxes

Income tax expense for the years ended December 31, 2020 and 2019 was as follows:

	2020		2019
Current income tax expense
Expense for the year	$	50.9	$	42.3
Adjustment in respect of prior years		(2.4)		(3.2)
Current income tax expense	$	48.5	$	39.1
Deferred income tax expense (recovery)
Origination and reversal of temporary differences	$	(30.2)		20.2
Impact of changes in tax rates		(0.8)		(1.0)
Change in unrecognized deductible temporary differences		(6.4)		(0.1)
Adjustments in respect of prior years		2.2		3.4
Other		—		0.2
Deferred income tax (recovery) expense	$	(35.2)	$	22.7
Income tax expense	$	13.3	$	61.8

A reconciliation of the product of net income before taxes multiplied by the combined Canadian federal and provincial statutory rate to the provision for income taxes as shown in the consolidated statement of income and comprehensive income for the years ended December 31, 2020 and 2019, is as follows:

	2020		2019
Net income before income taxes	$	339.5	$	405.9
Statutory tax rate		26.5%		26.6%
Tax expense at statutory rate	$	90.0	$	108.0
Reconciling items:
Change in unrecognized deductible temporary differences	$	(6.4)	$	(0.1)
Income/expenses not taxed		(4.2)		(4.3)
Differences in foreign statutory tax rates		(66.0)		(42.8)
Differences due to changing future tax rates		(0.8)		(1.0)
Foreign withholding tax		—		0.3
Temporary differences subject to initial recognition exemption		0.6		1.5
Other		0.1		0.2
Income tax expense	$	13.3	$	61.8

2020 Financial Statements 28

Franco-Nevada Corporation

Notes to the Consolidated Financial Statements

For the years ended December 31, 2020 and 2019

(expressed in millions of U.S. dollars, except per share amounts, unless otherwise noted)

Income tax expense recognized in other comprehensive income is as follows:

		2020						2019
						After						After
		Before		Tax		Tax		Before		Tax		Tax
		Tax Gain		Expense		Gain		Tax Gain		Expense		Gain
Gain (loss) on change in the fair value of equity investments at FVTOCI	$	50.5	$	(6.7)	$	43.8	$	11.4	$	(1.5)	$	9.9
Currency translation adjustment		19.6		—		19.6		32.3		—		32.3
Other comprehensive income	$	70.1	$	(6.7)	$	63.4	$	43.7	$	(1.5)	$	42.2
Deferred tax			$	(6.7)					$	(1.5)
Tax expense in other comprehensive income			$	(6.7)						(1.5)

The significant components of deferred income tax assets and liabilities as at December 31, 2020 and 2019 are as follows:

	2020		2019
Deferred income tax assets:
Deductible temporary differences relating to:
Royalty, stream and working interests	$	44.1	$	6.5
Non-capital loss carry-forwards		0.6		0.3
Other		0.4		—
	$	45.1	$	6.8
Deferred income tax liabilities:
Taxable temporary differences relating to:
Share issue and debt issue costs	$	0.3	$	(1.7)
Royalty, stream and working interests		89.6		89.0
Non-capital loss carry-forwards		(3.9)		(4.3)
Investments		11.6		4.3
Other		(6.1)		(4.9)
	$	91.5	$	82.4
Deferred income tax liabilities, net	$	46.4	$	75.6

The movement in net deferred tax liabilities during the years ended December 31, 2020 and 2019 is as follows:

		2020		2019
Balance, beginning of year	$	75.6	$	50.0
Recognized in net income		(35.2)		22.5
Recognized in other comprehensive income		6.7		1.5
Recognized in equity		0.3		0.4
Other		(1.0)		1.2
Balance, end of year	$	46.4	$	75.6

The Company has recognized deferred tax assets in respect of the following non-capital losses as at December 31, 2020 that can be applied against future taxable profit:

Country	Type	Amount		Expiry date
Canada	Non-Capital Losses	$	14.7	2030-2038
Chile	Non-Capital Losses		2.3	No expiry
		$	17.0

Unrecognized deferred tax assets and liabilities

The aggregate amount of taxable temporary differences associated with investments in subsidiaries, for which deferred tax liabilities have not been recognized as at December 31, 2020 is $298.1 million (2019 – $393.7 million). No deferred tax liabilities are recognized on the temporary differences associated with investment in subsidiaries because the company controls the timing of reversal and it is not probable that they will reverse in the foreseeable future.

The aggregate amount of deductible temporary differences associated with other items, for which deferred tax assets have not been recognized as at December 31, 2020 is $48.7 million (2019 - $72.7 million). No deferred tax asset is recognized in respect of these items because it is not probable that future taxable profits will be available against which the company can utilize the benefit.

2020 Financial Statements 29

Franco-Nevada Corporation

Notes to the Consolidated Financial Statements

For the years ended December 31, 2020 and 2019

(expressed in millions of U.S. dollars, except per share amounts, unless otherwise noted)

Deductible temporary differences, losses and unused tax credits for which no deferred tax assets have been recognized are attributable to the following:

	2020			2019
Royalty, stream and working interests	$	25.1	$	48.0
Tax losses (expiry dates - 2029-2033)		23.6		24.7
	$	48.7	$	72.7

The Company is undergoing an audit by the Canada Revenue Agency of its 2012-2017 taxation years, as referenced in note 23.

Note 17 – Shareholders’ equity

(a) Share capital

The Company’s authorized capital stock includes an unlimited number of common shares (190,956,476 common shares issued and outstanding as at December 31, 2020) having no par value and preferred shares issuable in series (issued - nil).

Changes in share capital in the year ended December 31, 2020 and 2019 were as follows:

	Number
	of shares		Amount
Balance at January 1, 2019	186,692,481	$	5,158.3
At-the-market equity offering	1,433,400		136.0
Acquisition of Salares Norte	366,499		27.0
Exercise of stock options	283,863		17.3
Vesting of restricted share units	46,375		3.3
Dividend reinvestment plan	558,770		48.8
Balance at December 31, 2019	189,381,388	$	5,390.7
At-the-market equity offering	1,054,800	$	133.7
Exercise of stock options	150,482		9.7
Vesting of restricted share units	42,328		3.7
Dividend reinvestment plan	327,478		42.3
Balance at December 31, 2020	190,956,476	$	5,580.1

(b) At-the-Market Equity Program

On May 11, 2020, the Company established a new at-the-market equity program (the “ATM Program”) permitting the Company to issue up to an aggregate of $300 million worth of common shares from treasury at prevailing market prices to the public through the Toronto Stock Exchange, the New York Stock Exchange or any other marketplace on which the common shares are listed, quoted or otherwise trade. The previous at-the-market program, which permitted the Company to issue up to an aggregate of $200 million worth of common shares, was terminated on April 28, 2020 when the Company renewed its base shelf prospectus. The volume and timing of distributions under the ATM Program is determined at the Company’s sole discretion, subject to applicable regulatory limitations and blackout periods. The ATM Program will be effective until May 28, 2022 unless terminated prior to such date by the Company.

During the year ended December 31, 2020, the Company issued 1,054,800 common shares under the ATM Program and the Company’s previous at-the-market equity program at an average price per common share of $128.96. The gross proceeds to the Company from these issuances were $136.0 million, and the net proceeds were $133.7 million after deducting agent commission costs of $1.4 million and other share issuance costs of $0.9 million.

(c) Dividends

In 2020, the Company declared dividends of $1.03 per common share (2019 - $0.99 per common share).

Dividends paid in cash and through the Company’s Dividend Reinvestment Plan (“DRIP”) were as follows:

	2020		2019
Cash dividends	$	154.9	$	138.2
DRIP dividends		42.3		48.8
	$	197.2	$	187.0

2020 Financial Statements 30

Franco-Nevada Corporation

Notes to the Consolidated Financial Statements

For the years ended December 31, 2020 and 2019

(expressed in millions of U.S. dollars, except per share amounts, unless otherwise noted)

(d) Stock-based payments

On March 7, 2018, the Company’s Board of Directors adopted an amended and restated share compensation plan covering both stock options and RSUs effective May 9, 2018 (the “Plan”). Pursuant to the Plan, the Company may grant incentive stock options to directors, officers, employees and consultants at the discretion of the Board of Directors. The exercise price and vesting period of any option is fixed by the Board of Directors on the date of grant. The term of options is at the sole discretion of the Board of Directors but may not exceed ten years from the date of grant. Options expire on the earlier of the expiry date or the date of termination and are non-transferable. The options granted will be adjusted in the event of an amalgamation, rights offering, share consolidation or subdivision or other similar adjustments of the share capital of the Company. The aggregate number of common shares that may be issued under the Plan is limited to 9,700,876 common shares. Within any one-year period, the number of common shares issued to any single insider participant under the Plan shall not exceed 5% of the common shares then issued and outstanding.

Options to purchase common shares of the Company that have been granted in accordance with the Plan and pursuant to other agreements are as follows:

	2020			2019
		Weighted			Weighted
		average exercise			average exercise
	Number	price		Number	price
Stock options outstanding, beginning of year	836,427	C$	80.01	1,015,409	C$	69.13
Granted	61,594	C$	171.33	104,881	C$	129.32
Exercised	(150,482)	C$	67.13	(283,863)	C$	59.31
Forfeited	(1,577)	C$	112.84	—	C$	—
Stock options outstanding, end of the year	745,962	C$	90.08	836,427	C$	80.01
Exercisable stock options, end of the year	563,975	C$	76.14	596,402	C$	68.05

Options granted during the years ended December 31, 2020 and 2019 have a ten-year term and vest over three years in equal portions on the anniversary of the grant date. The fair value of stock options was calculated using the Black-Scholes option pricing model based on the following weighted average assumptions, resulting in a fair value of $1.7 million, or a weighted average fair value of C$36.67 per stock option (2019 — $2.2 million, or C$28.11 per stock option).

	2020		2019
Risk-free interest rate	0.39	%	1.62	%
Expected dividend yield	0.78	%	1.02	%
Expected price volatility of the Company’s common shares	28.8	%	27.5	%
Expected life of the option	4 years		4 years
Forfeiture rate	0	%	0	%

During the year ended December 31, 2020, an expense of $2.2 million (2019 - $2.3 million) related to stock options has been included in the consolidated statement of income and other comprehensive income, and $0.1 million (2019 - $0.5 million), was capitalized to royalty, stream and working interest, net, respectively. As at December 31, 2020, there was $2.9 million (2019 – $3.5 million) of total unrecognized non-cash stock-based compensation relating to stock options granted under the Plan, which is expected to be recognized over a weighted average period of 1.7 years (2019 – 1.7 years).

2020 Financial Statements 31

Franco-Nevada Corporation

Notes to the Consolidated Financial Statements

For the years ended December 31, 2020 and 2019

(expressed in millions of U.S. dollars, except per share amounts, unless otherwise noted)

Options to purchase common shares outstanding at December 31, 2020, exercise prices and weighted average lives to maturity as follows:

			Weighted
Exercise	Options	Options	average life
price	outstanding	exercisable	(years)
C$40.87	32,451	32,451	2.94
C$42.43	750	750	1.25
C$46.17	75,000	75,000	2.63
C$55.58	17,397	17,397	1.95
C$58.67	20,000	20,000	4.64
C$59.52	33,876	33,876	3.95
C$65.76	55,853	55,853	4.94
C$75.45	120,074	120,074	5.94
C$88.76	45,082	29,171	7.64
C$94.57	95,273	60,184	7.95
C$100.10	84,523	84,523	6.94
C$129.32	104,089	34,696	8.94
C$171.33	61,594	—	9.94
	745,962	563,975	6.40

(e) Restricted share units

During the year ended December 31, 2020, 22,519 performance-based RSUs (2019 –20,153) and 14,546 time-based RSUs (2019 –19,863) were awarded to management of the Company. The fair value of the RSUs, which is determined with reference to the weighted average trading price of the Company’s common shares over the five trading days immediately preceding the date of issuance, was determined to be $5.0 million in 2020 (2019 - $3.9 million). Included in the Company’s stock-based compensation expense is an amount of $3.4 million (2019 – $2.6 million) relating to RSUs. In addition, $0.1 million related to the RSUs was capitalized to royalty, stream and working interest, net (2019 – $0.6 million). As at December 31, 2020, there is $7.7 million (2019 – $6.4 million) of total unrecognized non-cash stock-based compensation expense relating to non-vested restricted share units granted under the Plan, which is expected to be recognized over a weighted average period of 2.1 years (2019 – 2.1 years).

(f) Deferred Share Unit Plan

During the year ended December 31, 2020, 14,285 DSUs and dividend equivalent DSUs were granted to directors under the DSU Plan (2019 – 18,448). No DSUs and dividend equivalent DSUs were redeemed during the year. The mark-to-market adjustment recorded for the year ended December 31, 2020 in respect of the DSU Plan resulted in an increase in the DSU liability of $2.0 million (2019 – $2.8 million).The value of the DSU liability as at December 31, 2020 was $14.9 million (2019 - $10.8 million).

(g) Outstanding Stock Options and Restricted Share Units

The following table sets out the maximum shares that would be outstanding if all of the stock options and RSUs at December 31, 2020 and 2019 were exercised:

	2020	2019
Common shares outstanding	190,956,476	189,381,388
Stock options	745,962	836,427
Restricted Share Units	102,708	108,978
	191,805,146	190,326,793

Note 18 – Earnings per share (“EPS”)

	2020						2019
				Shares	Per Share				Shares	Per Share
		Net income		(in millions)	Amount		Net income		(in millions)	Amount
Basic earnings per share		$	326.2	190.3	$	1.71	$	344.1	187.7	$	1.83
Effect of dilutive securities			—	0.4		—		—	0.3		—
Diluted earnings per share		$	326.2	190.7	$	1.71	$	344.1	188.0	$	1.83

2020 Financial Statements 32

Franco-Nevada Corporation

Notes to the Consolidated Financial Statements

For the years ended December 31, 2020 and 2019

(expressed in millions of U.S. dollars, except per share amounts, unless otherwise noted)

For the year ended December 31, 2020, a weighted average of 3,534 stock options (2019 –1,143 stock options) was excluded in the computation of diluted EPS due to being anti-dilutive. Further, for the year ended December 31, 2019, a weighted average of 6,034 stock options was excluded due to the strike price exceeding the average share price during the year. RSUs totaling 66,996 (2019 - 65,972 RSUs) were excluded from the computation of diluted EPS due to the performance criteria for the vesting of the RSUs not being measurable as at December 31, 2020.

Note 19 – Segment reporting

The chief operating decision-maker organizes and manages the business under two operating segments, consisting of royalty, stream and working interests in each of the mining and energy sectors.

The Company’s reportable segments for purposes of assessing performance are presented as follows:

	2020						2019
	Mining		Energy		Total		Mining		Energy		Total
Revenue	$	928.5	$	91.7	$	1,020.2	$	728.2	$	115.9	$	844.1
Income/(expenses)
Costs of sales	$	152.4	$	6.4	$	158.8	$	137.5	$	7.3	$	144.8
Depletion and depreciation		193.8		44.9		238.7		210.7		49.0		259.7
Segment gross profit	$	582.3	$	40.4	$	622.7	$	380.0	$	59.6	$	439.6

A reconciliation of total segment gross profit to consolidated net income before income taxes is presented below:

		2020		2019
Total segment gross profit	$	622.7	$	439.6
Other operating (income)/expenses
Impairment charges and reversals	$	262.1	$	—
General and administrative expenses		28.8		28.8
Gain on sale of bullion		(7.0)		(2.9)
Depreciation		2.3		3.5
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

Revenues earned during the years ended December 31, 2020 and 2019 are presented by geographic area based on the location of the mining operations giving rise to the royalty, stream or working interest:

	2020		2019
Latin America:
Peru	$	175.5		$	145.3
Chile		106.8			103.1
Panama		135.4			64.7
Other		84.4			56.1
United States		178.6			166.6
Canada		196.9			166.2
Rest of World		142.6			142.1
	$	1,020.2		$	844.1

For the year ended December 31, 2020, three interests generated revenue totaling $360.7 million (2019 – two interests generated revenue totaling $203.5 million), each comprising 13%, 12% and 10%, respectively (2019 – 12% and 12%, respectively) of revenue.

2020 Financial Statements 33

Franco-Nevada Corporation

Notes to the Consolidated Financial Statements

For the years ended December 31, 2020 and 2019

(expressed in millions of U.S. dollars, except per share amounts, unless otherwise noted)

Royalty, stream and working interests as at December 31, 2020 and 2019 are presented by geographic area based on the location of the mining operations giving rise to the royalty, stream or working interest.

		2020		2019
Latin America:
Panama	$	1,318.5	$	1,348.4
Peru		766.3		825.5
Chile		485.0		504.2
Other		154.4		48.1
United States		1,216.8		1,300.2
Canada		458.2		504.9
Rest of World		232.9		266.5
	$	4,632.1	$	4,797.8

Investments of $238.4 million (2019 - $183.2 million) are held in Canada. Energy well equipment, included in other non-current assets, of $5.0 million (2019 - $9.3 million) is located in Canada.

Note 20 - Fair value measurements

Fair value is a market-based measurement, not an entity-specific measurement. For some assets and liabilities, observable market transactions or market information might be available. For other assets and liabilities, observable market transactions and market information might not be available. However, the objective of a fair value measurement in both cases is the same - to estimate the price at which an orderly transaction to sell the asset or to transfer the liability would take place between market participants at the measurement date under current market conditions (i.e. an exit price at the measurement date from the perspective of a market participant that holds the asset or owes the liability).

The fair value hierarchy establishes three levels to classify the inputs to valuation techniques used to measure fair value.

● Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities.

● Level 2 inputs are quoted prices in markets that are not active, quoted prices for similar assets or liabilities in active markets, inputs other than quoted prices observable for the asset or liability (for example, interest rate and yield curves observable at commonly quoted intervals, forward pricing curves used to value currency and commodity contracts and volatility measurements used to value option contracts), or inputs that are derived principally from or corroborated by observable market data or other means.

● Level 3 inputs are unobservable (supported by little or no market activity).

The fair value hierarchy gives the highest priority to Level 1 inputs and the lowest priority to Level 3 inputs.

There were no transfers between the levels of the fair value hierarchy during the year ended December 31, 2020.

Assets and Liabilities Measured at Fair Value on a Recurring Basis:

	Quoted prices in		Significant other		Significant
	active markets for		observable		unobservable
	identical assets		inputs		inputs		Aggregate
As at December 31, 2020	(Level 1)		(Level 2)		(Level 3)		fair value
Receivables from provisional concentrate sales	$	—	$	10.1	$	—	$	10.1
Equity investments		191.8		—		3.8		195.6
Warrants		—		5.7		—		5.7
	$	191.8	$	15.8	$	3.8	$	211.4

	Quoted prices in		Significant other		Significant
	active markets for		observable		unobservable
	identical assets		inputs		inputs		Aggregate
As at December 31, 2019	(Level 1)		(Level 2)		(Level 3)		fair value
Receivables from provisional concentrate sales	$	—	$	16.4	$	—	$	16.4
Equity investments		141.7		—		3.9		145.6
Warrants		—		3.0		—		3.0
	$	141.7	$	19.4	$	3.9	$	165.0

2020 Financial Statements 34

Franco-Nevada Corporation

Notes to the Consolidated Financial Statements

For the years ended December 31, 2020 and 2019

(expressed in millions of U.S. dollars, except per share amounts, unless otherwise noted)

The fair values of the Company’s remaining financial assets and liabilities, which include cash and cash equivalents, receivables, loan receivables, accounts payable and accrued liabilities, and debt approximate their carrying values due to their short-term nature, historically negligible credit losses, fair value of collateral, or floating interest rate.

The Company has not offset financial assets with financial liabilities.

Assets Measured at Fair Value on a Non-Recurring Basis:

	Quoted prices in		Significant other		Significant
	active markets for		observable		unobservable
	identical assets		inputs		inputs		Aggregate
As at December 31, 2020	(Level 1)		(Level 2)		(Level 3)		fair value
SCOOP/STACK	$	—	$	—	$	309.2	$	309.2
Weyburn		—		—		162.8		162.8
Mine Waste Solutions		—		—		114.8		114.8
Oil well equipment		—		—		4.7		4.7
	$	—	$	—	$	591.5	$	591.5

The valuation techniques that are used to measure fair value are as follows:

(a) Receivables

The fair values of receivables arising from gold and platinum group metal concentrate sales contracts that contain provisional pricing mechanisms are determined using the appropriate quoted forward prices from the exchange that is the principal active market for the particular metal. As such, these receivables are classified within Level 2 of the fair value hierarchy.

(b) Investments

The fair values of publicly-traded investments are determined based on a market approach reflecting the closing prices of each particular security at the statement of financial position date. The closing prices are quoted market prices obtained from the exchange that is the principal active market for the particular security, and therefore are classified within Level 1 of the fair value hierarchy.

The Company holds one equity investment that does not have a quoted market price in an active market. The Company has assessed the fair value of the instrument based on a valuation technique using unobservable discounted future cash flows. As a result, the fair value is classified within Level 3 of the fair value hierarchy.

The fair values of warrants are estimated using the Black-Scholes pricing model which requires the use of inputs that are observable in the market. As such, these investments are classified within Level 2 of the fair value hierarchy.

(c) Royalty, stream, and working interests

The fair values of royalty, stream, and working interests are determined primarily using an income approach using unobservable discounted future cash-flows. As a result, the fair values are classified within Level 3 of the fair value hierarchy.

2020 Financial Statements 35

Franco-Nevada Corporation

Notes to the Consolidated Financial Statements

For the years ended December 31, 2020 and 2019

(expressed in millions of U.S. dollars, except per share amounts, unless otherwise noted)

Note 21 – Financial risk management

The Company’s financial instruments are comprised of financial assets and liabilities. The Company’s principal financial liabilities comprise accounts payable, accrued liabilities and debt. The Company’s principal financial assets are cash and cash equivalents, receivables, loan receivables, and investments. The main purpose of these financial instruments is to manage short-term cash flow and working capital requirements and fund future acquisitions.

The Company is engaged in the business of acquiring, managing and creating resource royalties and streams. Royalties and streams are interests that provide the right to revenue or production from the various properties, after deducting specified costs, if any. These activities expose the Company to a variety of financial risks, which include direct exposure to market risks (which includes commodity price risk, foreign exchange risk and interest rate risk), credit risk, liquidity risk and capital risk management.

Management designs strategies for managing some of these risks, which are summarized below. The Company’s executive management oversees the management of financial risks. The Company’s executive management ensures that financial risk-taking activities are governed by appropriate policies and procedures and that financial risks are identified, measured and managed in accordance with the Company’s policies and risk appetite.

The Company’s overall objective from a risk management perspective is to safeguard its assets and mitigate risk exposure by focusing on security rather than yield.

(a)Market risks

Market risks are the risks that change in market factors, such as commodity prices, foreign exchange rates or interest rates, will affect the value of the Company’s financial instruments. The Company manages market risks by either accepting it or mitigating it through the use of economic strategies.

Commodity price risk

The Company’s royalties, working interests and streams are subject to fluctuations from changes in market prices of the underlying commodities. The market prices of gold, silver, platinum, palladium, oil and gas are the primary drivers of the Company’s profitability and ability to generate free cash flow. All of the Company’s future revenue is not hedged in order to provide shareholders with full exposure to changes in the market prices of these commodities.

Foreign exchange risk

The functional currencies of the Company’s entities include the Canadian, U.S. and Australian dollars with the reporting currency of the Company being the U.S. dollar. The Company is primarily exposed to currency fluctuations relative to the U.S. dollar on balances and transactions that are denominated and settled in Canadian dollars and Australian dollars. The Company has exposure to the Canadian dollar through its Canadian energy activities and corporate administration costs. Consequently, fluctuations in the U.S. dollar exchange rate against these currencies increase the volatility of depletion, corporate administration costs and overall net earnings, when translated into U.S. dollars.

The Company records currency translation adjustment gains or losses primarily due to the fluctuation of the U.S. dollar in relation to its Canadian assets and liabilities. During the year ended December 31, 2020, the U.S. dollar weakened in relation to the Canadian dollar. As a result, the Company recorded a currency translation adjustment gain of $19.6 million (2019 –$32.3 million).

Interest Rate Risk

Interest rate risk refers to the risk that the value of a financial instrument or cash flows associated with the instrument will fluctuate due to changes in market interest rates. As at December 31, 2020, the Company’s interest rate exposure arises mainly from the interest receipts on cash and cash equivalents. As at December 31, 2019, the Company was also exposed to interest rate risk due to its outstanding variable-rate debt of $80.0 million.

The following table shows the approximate interest rate sensitivities of our financial assets and liabilities as at December 31,  2020 and 2019:

	Effect on net income				Effect on equity
	2020		2019		2020		2019
0.5% increase	$	1.8	$	0.3	$	1.8	$	0.3
0.5% decrease		(0.5)		(0.3)		(0.5)		(0.3)

2020 Financial Statements 36

Franco-Nevada Corporation

Notes to the Consolidated Financial Statements

For the years ended December 31, 2020 and 2019

(expressed in millions of U.S. dollars, except per share amounts, unless otherwise noted)

(b)Credit risk

Credit risk is the risk that a third party might fail to fulfill its performance obligations under the terms of a financial instrument. Credit risk arises from cash and cash equivalents, receivables and loan receivables. The Company closely monitors its financial assets and maintains its cash deposits in several high-quality financial institutions and as such does not have any significant concentration of credit risk.

As at December 31, 2020, the Company is unaware of any information which would cause it to believe that these financial assets are not fully recoverable.

(c)Liquidity Risk

Liquidity risk is the risk of loss from not having access to sufficient funds to meet both expected and unexpected cash demands. The Company manages its exposure to liquidity risk through prudent management of its statement of financial position, including maintaining sufficient cash balances and access to credit facilities. The Company has in place a planning and budgeting process to help determine the funds required to support the Company’s normal operating requirements on an ongoing basis. Management continuously monitors and reviews both actual and forecasted cash flows, including acquisition activities.

As at December 31, 2020, the Company held $534.2 million in either cash, cash equivalents or highly-liquid investments (2019 – $132.1 million). All of the Company’s financial liabilities are due within one year. The Company’s near-term cash requirements include corporate administration costs, certain costs of sales, including the ore purchase commitments described in note 22, dividends and income taxes directly related to the recognition of royalty, stream and working interest revenues. In addition, the Company is committed to fund the acquisition of mineral rights through the Royalty Acquisition Venture pursuant to its agreement with Continental as described in note 4 (f).

(d)Capital Risk Management

The Company’s primary objective when managing capital is to provide a sustainable return to shareholders through managing and growing the Company’s resource asset portfolio while ensuring capital protection. The Company defines capital as its cash, cash equivalents, short-term investments and long-term investments which is managed by the Company’s management subject to approved policies and limits by the Board of Directors.

There were no changes in the Company’s approach to capital management during the year ended December 31, 2020 compared to the prior year. The Company is not subject to material externally imposed capital requirements or significant financial covenants or capital requirements with our lenders. The Company is in compliance with all its covenants under its credit facility as at December 31, 2020.

As at December 31, 2020, the Company has cash and cash equivalents totaling $534.2 million (2019 – $132.1 million), investments and a loan receivable totaling $238.4 million (2019 – $183.2 million), of which $191.8 million (2019 – $141.7 million) are held in liquid securities. The Company also has approximately $1.1 billion (2019 – $1.1 billion) available under its unsecured revolving term credit facilities. All of these sources of capital are available to the Company to meet its near-term cash requirements and grow its portfolio of assets.

2020 Financial Statements 37

Franco-Nevada Corporation

Notes to the Consolidated Financial Statements

For the years ended December 31, 2020 and 2019

(expressed in millions of U.S. dollars, except per share amounts, unless otherwise noted)

Note 22 – Commitments

(a)Commodity purchase commitments

The following table summarizes the Company’s commitments pursuant to the associated precious metals agreements:

	Attributable payable
	production to be purchased						Per ounce cash payment (1),(2)								Term of		Date of
Interest	Gold		Silver		PGM		Gold			Silver			PGM		agreement(3)		contract
Antamina	0	%	22.5	% (4)	0	%		n/a			5	% (5)		n/a	40 years		7-Oct-15
Antapaccay	—	% (6)	—	% (7)	0	%		20	% (8)		20	% (9)		n/a	40 years		10-Feb-16
Candelaria	68	% (10)	68	% (10)	0	%	$	400		$	4.00			n/a	40 years		6-Oct-14
Cobre Panama Fixed Payment Stream	—	% (11)	—	% (12)	0	%	$	418	(13)	$	6.27	(14)		n/a	40 years		19-Jan-18
Cobre Panama Floating Payment Stream	—	% (15)	—	% (16)	0	%		20	% (17)		20	% (18)		n/a	40 years		19-Jan-18
Karma	4.875	% (19)	0	%	0	%		20	% (20)		n/a			n/a	40 years		11-Aug-14
Guadalupe-Palmarejo	50	%	0	%	0	%	$	800			n/a			n/a	40 years		2-Oct-14
Sabodala	—	% (21)	0	%	0	%		20	% (22)		n/a			n/a	40 years		25-Sep-20
MWS	25	%	0	%	0	%	$	400			n/a			n/a	40 years	(23)	2-Mar-12
Cooke 4	7	%	0	%	0	%	$	400			n/a			n/a	40 years		5-Nov-09
Sudbury(24)	50	%	0	%	50	%	$	400			n/a		$	400	40 years		15-Jul-08

1 Subject to an annual inflationary adjustment except for Antamina, Antapaccay, Karma, Guadalupe-Palmarejo, and Sabodala.

2 Should the prevailing market price for gold be lower than this amount, the per ounce cash payment will be reduced to the prevailing market price.

3 Subject to successive extensions.

4 Subject to a fixed payability of 90%. Percentage decreases to 15% after 86 million ounces of silver has been delivered under the agreement.

5 Purchase price is 5% of the average silver price at the time of delivery.

6 Gold deliveries are referenced to copper in concentrate shipped with 300 ounces of gold delivered for each 1,000 tonnes of copper in concentrate shipped, until 630,000 ounces of gold has been delivered. Thereafter, percentage is 30% of gold shipped.

7 Silver deliveries are referenced to copper in concentrate shipped with 4,700 ounces of silver delivered for each 1,000 tonnes of copper in concentrate shipped, until 10.0 million ounces of silver has been delivered. Thereafter, percentage is 30% of silver shipped.

8 Purchase price is 20% of the spot price of gold until 750,000 ounces of gold have been delivered, thereafter the purchase price is 30% of the spot price of gold.

9 Purchase price is 20% of the spot price of silver until 12.8 million ounces of silver have been delivered, thereafter the purchase price is 30% of the spot price of silver.

10 Percentage decreases to 40% after 720,000 ounces of gold and 12.0 million ounces of silver have been delivered under the agreement.

11 Gold deliveries are indexed to copper in concentrate produced from the project. 120 ounces of gold per every 1 million pounds of copper produced until 808,000 ounces of gold delivered. Thereafter, 81 ounces of gold per 1 million pounds of copper produced until 1,716,188 ounces of gold delivered. Thereafter, 63.4% of the gold in concentrate.

12 Silver deliveries are indexed to copper in concentrate produced from the project. 1,376 ounces of silver per every 1 million pounds of copper produced until 9,842,000 ounces of silver delivered. Thereafter 1,776 ounces of silver per 1 million pounds of copper produced until 29,731,000 ounces of silver delivered. Thereafter, 62.1% of the silver in concentrate.

13 After 1,341,000 ounces of gold delivered, purchase price is the greater of 50% of spot and $418.27 per ounce. As the mill throughput for 30 consecutive days commensurate with annual capacity of 58 million tonnes per annum was not reached by January 1, 2019, Franco-Nevada will receive a 5% annual rate of return until such mill throughput was achieved, through a reduction of the applicable fixed gold price of $100 per ounce or a delivery of additional ounces for no consideration.

14 After 21,510,000 ounces of silver delivered, purchase price is the greater of 50% of spot and $6.27 per ounce.

15 Gold deliveries are indexed to copper in concentrate produced from the project. 30 ounces of gold per every 1 million pounds of copper produced until 202,000 ounces of gold delivered. Thereafter 20.25 ounces of gold per 1 million pounds of copper produced until 429,047 ounces of gold delivered. Thereafter, 15.85% of the gold in concentrate.

16 Silver deliveries are indexed to copper in concentrate produced from the project. 344 ounces of silver per every 1 million pounds of copper produced until 2,460,500 ounces of silver delivered. Thereafter, 444 ounces of silver per 1 million pounds of copper produced until 7,432,750 ounces of silver delivered. Thereafter 15.53% of the silver in concentrate.

17 After 604,000 ounces of gold delivered, purchase price is 50% of the spot price of gold. As the mill throughput for 30 consecutive days commensurate with annual capacity of 58 million tonnes per annum was not reached by January 1, 2019, Franco-Nevada will receive a 5% annual rate of return until such mill throughput was achieved, through a reduction of the applicable fixed gold price of $100 per ounce or a delivery of additional ounces for no consideration.

18 After 9,618,000 ounces of silver delivered, purchase price is 50% of the spot price of silver.

19 Gold deliveries are fixed at 15,000 ounces per annum from March 31, 2016 until February 28, 2021 (exclusive of an aggregate 5,625 gold ounces, or 703 gold ounces per quarter, to be delivered as a result of the exercise by the operator of its option to increase the upfront deposit). Thereafter, percentage is 4.875%.

20 Purchase price is 20% of the average gold price at the time of delivery.

21 Based on amended agreement with an effective date of September 1, 2020, gold deliveries are fixed at 783.33 ounces per month until 105,750 ounces of gold is delivered. Thereafter, percentage is 6% of gold production (subject to reconciliation after fixed delivery period to determine if Franco-Nevada would have received more or less than 105,750 ounces of gold under the original 6% variable stream for such period, entitling the operator to a credit for an over-delivery applied against future stream deliveries or a one-time additional delivery to Franco-Nevada for an under-delivery).

22 Purchase price is 20% of prevailing market price at the time of delivery.

23 Agreement is capped at 312,500 ounces of gold.

24 The Company is committed to purchase 50% of the precious metals contained in ore from the properties. Payment is based on gold equivalent ounces. For McCreedy West, the fixed price per gold equivalent ounce was increased to $800 per ounce (with no annual inflationary adjustment), effective July 1, 2018 until December 31, 2021.

2020 Financial Statements 38

Franco-Nevada Corporation

Notes to the Consolidated Financial Statements

For the years ended December 31, 2020 and 2019

(expressed in millions of U.S. dollars, except per share amounts, unless otherwise noted)

(b)Capital commitments

The Company is committed to funding its share of the acquisition of mineral rights acquired through the Royalty Acquisition Venture with Continental, and the potential upsizing of the Alpala Royalty, as described in notes 4 (f) and 4 (b), respectively.

Note 23 – Contingencies

Canada Revenue Agency Audit:

The CRA is conducting an audit of Franco-Nevada for the 2012-2017 taxation years. The following table provides a summary of the various CRA audit and reassessment matters further detailed below:

	CRA Position	Taxation Years Reassessed	Potential Liability for Tax, Interest and Penalties (in millions)
Canadian Domestic Tax Matters	Upfront payment made in connection with precious metal stream agreements should be deducted for income tax purposes in a similar manner to how such amount is expensed for financial statement purposes.	2014, 2015	For 2014-2015: Tax: $1.1 (C$1.4) Interest and other penalties: $0.2 (C$0.2) If CRA were to reassess the 2016-2020 taxation years on the same basis: Tax: $33.6 (C$42.8) Interest and other penalties: $4.1 (C$5.3)
Transfer Pricing (Mexico)	Transfer pricing provisions in the Act (as defined below) apply such that a majority of the income earned by the Company’s Mexican subsidiary should be included in the income of the Company and subject to tax in Canada.	2013, 2014, 2015	For 2013-2015: Tax: $19.9 (C$25.3) Transfer pricing penalties: $8.1 (C$10.3) Interest and other penalties: $7.1 (C$9.2) If CRA were to reassess the 2016-2020 taxation years on the same basis: Tax: $3.6 (C$4.6) Transfer pricing penalties: $1.4 (C$1.7) Interest and other penalties: $0.9 (C$1.1)
Transfer Pricing (Barbados)	Transfer pricing provisions in the Act (as defined below) apply such that a majority of the income relating to certain precious metal streams earned by the Company’s Barbadian subsidiary should be included in the income of the Company and subject to tax in Canada.	2014, 2015	For 2014-2015: Tax: $5.3 (C$6.7) Transfer pricing penalties: $2.0 (C$2.5) Interest and other penalties: $1.7 (C$2.2) If CRA were to reassess the 2016-2020 taxation years on the same basis: Tax: $136.8 (C$174.2) Transfer pricing penalties: $51.5 (C$65.6) Interest and other penalties: $11.0 (C$14.0)
FAPI (Barbados)	The FAPI provisions in the Act (as defined below) apply such that a majority of the income relating to precious metal streams earned by the Company’s Barbadian subsidiary, in 2012 and 2013, should be included in the income of the Company and subject to tax in Canada.	2012, 2013	For 2012-2013: Tax: $6.0 (C$7.7) Interest and other penalties: $2.4 (C$3.1)

(a) Canadian Domestic Tax Matters (2014-2015):

In October 2019, certain wholly-owned Canadian subsidiaries of the Company received Notices of Reassessment for the 2014 and 2015 taxation years (the “Domestic Reassessments”) in which the CRA increases income by adjusting the timing of the deduction of the upfront payments which were made in connection with precious metal stream agreements. The CRA’s position is that the upfront payment should be deducted for income tax purposes in a similar manner to how such upfront payment is expensed for financial statement purposes. Consequently, the CRA’s position results in a slower deduction of the upfront payment and an acceleration of the payment of Canadian taxes. This results in the Company being subject to an incremental payment of Federal and provincial income taxes for these years of $1.1 million (C$1.4 million) (after applying available non-capital losses and other deductions) plus estimated

2020 Financial Statements 39

Franco-Nevada Corporation

Notes to the Consolidated Financial Statements

For the years ended December 31, 2020 and 2019

(expressed in millions of U.S. dollars, except per share amounts, unless otherwise noted)

interest (calculated to December 31, 2020) and other penalties of $0.2 million (C$0.2 million). The Company has filed formal Notices of Objection with the CRA against the Domestic Reassessments.

If the CRA were to reassess the particular Canadian subsidiaries for taxation years 2016 through 2020 on the same basis, the Company estimates that it would be subject to an incremental payment of Canadian tax for these years of approximately $33.6 million (C$42.8 million) (after applying available non-capital losses and other deductions) plus interest (calculated to December 31, 2020) and other penalties of approximately $4.1 million (C$5.3 million).

(b) Mexico (2013-2015):

In December 2018, the Company received a Notice of Reassessment from the CRA for the 2013 taxation year (the “2013 Reassessment”) in relation to its Mexican subsidiary. The reassessment was made on the basis of the transfer pricing provisions in the Income Tax Act (Canada) (the “Act”) and asserts that a majority of the income earned by the Mexican subsidiary should have been included in the income of the Company and subject to tax in Canada. The 2013 Reassessment results in additional Federal and provincial income taxes of $8.5 million (C$10.8 million) plus estimated interest (calculated to December 31, 2020) and other penalties of $3.2 million (C$4.2 million) but before any relief under the Canada-Mexico tax treaty.

In December 2019, the Company received Notices of Reassessment for the 2014 and 2015 taxation years (the “2014 and 2015 Reassessments”) on the same basis as the 2013 Reassessment, resulting in additional Federal and provincial income taxes of $11.4 million (C$14.5 million) plus estimated interest (calculated to December 31, 2020) and other penalties of $3.9 million (C$5.0 million) but before any relief under the Canada-Mexico tax treaty.

The Company has filed formal Notices of Objection with the CRA against the 2013 Reassessment and the 2014 and 2015 Reassessments and has posted security in the form of a standby letter of credit for 50% of the reassessed amounts of tax, interest and penalties, as referenced in Note 11 (a). Further, the Company has commenced an appeal in the Tax Court of Canada with respect to these reassessments.

For taxation years 2013 through 2015, the Company’s Mexican subsidiary paid a total of $30.3 million (419.4 million Pesos) in cash taxes, at a 30% tax rate, to the Mexican tax authorities on income earned in Mexico. If required, the Company intends to seek relief from double taxation under the Canada-Mexico tax treaty.

In December 2020, the CRA issued revised 2013 Reassessment and 2014 and 2015 Reassessments to include transfer pricing penalties of $8.1 million (C$10.3 million). The Company disagrees and intends to file Notices of Objection, and if required appeal to the Tax Court of Canada, against these revised reassessments.

If the CRA were to reassess the Company for taxation years 2016 through 2020 on the same basis and continue to apply transfer pricing penalties, the Company estimates that it would be subject to additional Canadian tax for these years of approximately $3.6 million (C$4.6 million), transfer pricing penalties of approximately $1.4 million (C$1.7 million) plus interest (calculated to December 31, 2020) and other penalties of approximately $0.9 million (C$1.1 million) but before any relief under the Canada-Mexico tax treaty. The Company’s Mexican subsidiary paid $3.8 million (71.0 million Pesos) in cash taxes, at a 30% tax rate, to the Mexican tax authorities on income earned in Mexico for the 2016 year and ceased operations after 2016.

(c) Barbados (2014-2015):

The 2014 and 2015 Reassessments also reassess the Company in relation to its Barbadian subsidiary. The reassessments were made on the basis of the transfer pricing provisions in the Act and assert that a majority of the income relating to certain precious metal streams earned by the Barbadian subsidiary should have been included in the income of the Company and subject to tax in Canada, resulting in additional Federal and provincial income taxes of $5.3 million (C$6.7 million) plus estimated interest (calculated to December 31, 2020) and other penalties of $1.7 million (C$2.2 million). As noted previously, the Company has filed formal Notices of Objection with the CRA against the 2014 and 2015 Reassessments and has posted security in the form of a standby letter of credit for 50% of the reassessed amounts of tax, interest and penalties, as referenced in Note 11 (a). Further, the Company has commenced an appeal in the Tax Court of Canada with respect to the 2014 and 2015 Reassessments.

As noted above, in December 2020, the CRA issued revised 2014 and 2015 Reassessments to include transfer pricing penalties of $2.0 million (C$2.5 million). The Company disagrees and intends to file Notices of Objection, and if required appeal to the Tax Court of Canada, against the revised reassessments.

If the CRA were to reassess the Company for taxation years 2016 through 2020 on the same basis and continue to apply transfer pricing penalties, the Company estimates that it would be subject to additional Canadian tax for these years of approximately $136.8 million (C$174.2 million), transfer pricing penalties of approximately $51.5 million (C$65.6 million) plus interest (calculated to December 31, 2020) and other penalties of approximately $11.0 million (C$14.0 million).

2020 Financial Statements 40

Franco-Nevada Corporation

Notes to the Consolidated Financial Statements

For the years ended December 31, 2020 and 2019

(expressed in millions of U.S. dollars, except per share amounts, unless otherwise noted)

(d) Barbados (2012-2013):

In August 2020, the Company received Notices of Reassessment for the 2012 and 2013 taxation years (the “FAPI Reassessments”, and collectively with the Domestic Reassessments, the 2013 Reassessment and the 2014 and 2015 Reassessments, the “Reassessments”) in relation to its Barbadian subsidiary. The reassessments assert that a majority of the income relating to precious metal streams earned by the Barbadian subsidiary, in those years, should have been included in the income of its Canadian parent company and subject to tax in Canada as Foreign Accrual Property Income (“FAPI”). The CRA has noted that its position may not extend beyond the 2013 taxation year. The FAPI Reassessments result in additional Federal and provincial income taxes of $6.0 million (C$7.7 million) plus estimated interest (calculated to December 31, 2020) and other penalties of $2.4 million (C$3.1 million). The Company has filed formal Notices of Objection with the CRA against the FAPI Reassessments and has posted security in cash for 50% of the reassessed amounts of tax, interest and penalties.

The CRA recently expanded its audit to include the 2016 and 2017 taxation years and the Company has not received any proposal or notices of reassessment for these taxation years.

Management believes that the Company and its subsidiaries have filed all tax returns and paid all applicable taxes in compliance with Canadian and applicable foreign tax laws and, as a result, no amounts have been recorded in the financial statements of the Company for the Reassessments, or for any potential tax liability that may arise in respect of these matters. The Company does not believe that the Reassessments are supported by Canadian tax law and jurisprudence and intends to vigorously defend its tax filing positions.

The CRA audit is ongoing and there can be no assurance that the CRA will not further challenge the manner in which the Company or any of its subsidiaries has filed its tax returns and reported its income. In the event that the CRA successfully challenges the manner in which the Company or a subsidiary has filed its tax returns and reported its income, this could potentially result in additional income taxes, penalties and interest, which could have a material adverse effect on the Company.

Note 24 – Subsequent events

Acquisition of Condestable Gold and Silver Stream – Peru

Subsequent to year-end, on March 8, 2021, the Company, through a wholly-owned subsidiary, closed a precious metals stream agreement with reference to the gold and silver production from the Condestable mine in Peru, for an up-front deposit of $165.0 million. The Condestable mine is located approximately 90 kilometers south of Lima, Peru, and is owned and operated by a subsidiary of Southern Peaks Mining LP (“SPM”), a private company. Commencing on January 1, 2021 and ending December 31, 2025, Franco-Nevada will receive 8,760 ounces of gold and 291,000 ounces of silver annually until a total of 43,800 ounces of gold and 1,455,000 ounces of silver have been delivered (the “Fixed Deliveries”). Thereafter, Franco-Nevada will receive 63% of the contained gold and contained silver produced until a cumulative total of 87,600 ounces of gold and 2,910,000 ounces of silver have been delivered (the “Variable Phase 1 Deliveries”). The stream then reduces to 25% over the remaining life of mine (the “Variable Phase 2 Deliveries”). Franco-Nevada will pay 20% of the spot price for gold and silver for each ounce delivered under the stream (the “Ongoing Payment”). The stream has an effective date of January 1, 2021, with the first quarterly delivery due on or before March 15, 2021.

For a period of four years from closing, subject to certain restrictions, a subsidiary of SPM may, at its option, make a one-time special delivery comprising the number of ounces of refined gold equal to $118.8 million at the then current spot price subject to the Ongoing Payment, to achieve the early payment of the Fixed Deliveries and Variable Phase 1 Deliveries. The Variable Phase 2 Deliveries would commence immediately thereafter.

2020 Financial Statements 41

***

EX-99.4

Exhibit 99.4

March 10, 2021

Consent of Independent Registered Public Accounting Firm

We hereby consent to the incorporation by reference in the Registration Statements on Form S-8 (No. 333-176856), Form F-3 (No. 333-225687) and Form F-10 (No. 333-237671) of Franco-Nevada Corporation (the company) of our report dated March 10, 2021 relating to the consolidated financial statements and the effectiveness of internal control over financial reporting, which appears in Exhibit 99.3 to the company’s current report on Form 6-K furnished to the U.S. Securities and Exchange Commission on March 10, 2021.

/s/PricewaterhouseCoopers LLP

Chartered Professional Accountants, Licensed Public Accountants

Toronto, Canada

PricewaterhouseCoopers LLP

PwC Tower, 18 York Street, Suite 2600, Toronto, Ontario, Canada M5J 0B2

T: +1416 863 1133,, F: +1 +1 416 365 8215, www.pwc.com/ca

“PwC” refers to PricewaterhouseCoopers LLP, an Ontario limited liability partnership.

XML

Document and Entity Information	12 Months Ended
	Dec. 31, 2020
Document and Entity Information
Entity Registrant Name	FRANCO NEVADA Corp
Entity Central Index Key	0001456346
Document Type	6-K
Document Period End Date	Dec. 31, 2020
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2020
Document Fiscal Period Focus	FY

XML

Consolidated Statements of Financial Position - USD ($) $ in Millions	Dec. 31, 2020	Dec. 31, 2019
ASSETS
Cash and cash equivalents (note 5)	$ 534.2	$ 132.1
Receivables	93.4	97.8
Prepaid expenses and other (note 7)	36.1	48.8
Current assets	663.7	278.7
Royalty, stream and working interests, net (note 8)	4,632.1	4,797.8
Investments and loan receivable (note 6)	238.4	183.2
Deferred income tax assets (note 16)	45.1	6.8
Other assets (note 9)	13.6	14.1
Total assets	5,592.9	5,280.6
LIABILITIES
Accounts payable and accrued liabilities (note 10)	40.8	41.8
Current income tax liabilities	12.4	11.6
Current liabilities	53.2	53.4
Debt (note 11)		80.0
Deferred income tax liabilities (note 16)	91.5	82.4
Other liabilities	4.4	2.6
Total liabilities	149.1	218.4
SHAREHOLDERS' EQUITY (note 17)
Share capital	5,580.1	5,390.7
Contributed surplus	14.0	14.2
Deficit	(34.4)	(164.4)
Accumulated other comprehensive loss	(115.9)	(178.3)
Total shareholders' equity	5,443.8	5,062.2
Total liabilities and shareholders' equity	$ 5,592.9	$ 5,280.6

XML

Consolidated Statements of Income and Comprehensive Income - USD ($) shares in Millions, $ in Millions	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
Consolidated Statements of Income and Comprehensive Income
Revenue (note 12)	$ 1,020.2	$ 844.1
Costs of sales
Costs of sales (note 13)	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 (note 8)	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 (note 15)
Finance income	3.7	3.5
Finance expenses	(3.5)	(10.6)
Net income before income taxes	339.5	405.9
Income tax expense (note 16)	13.3	61.8
Net income	326.2	344.1
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 (note 6)	43.8	9.9
Other comprehensive income	63.4	42.2
Comprehensive income	$ 389.6	$ 386.3
Basic earnings per share (in dollars per share)	$ 1.71	$ 1.83
Diluted earnings per share (in dollars per share)	$ 1.71	$ 1.83
Weighted average basic number of shares outstanding	190.3	187.7
Weighted average diluted number of shares outstanding	190.7	188.0

XML

Consolidated Statements of Cash Flows - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
Cash flows from operating activities
Net income	$ 326.2	$ 344.1
Adjustments to reconcile net income to net cash provided by operating activities:
Depletion and depreciation	241.0	263.2
Share-based payments	5.6	4.9
Impairment charges and reversals	262.1
Unrealized foreign exchange loss	0.4
Deferred income tax (recovery) expense	(35.2)	22.7
Other non-cash items	(12.0)	(7.8)
Acquisition of gold bullion	(37.9)	(31.8)
Proceeds from sale of gold bullion	52.7	36.2
Operating cash flows before changes in non-cash working capital	802.9	631.5
Changes in non-cash working capital:
Decrease (increase) in receivables	4.4	(22.3)
Decrease (increase) in prepaid expenses and other	1.4	(14.3)
(Decrease) increase in current liabilities	(4.8)	22.8
Net cash provided by operating activities	803.9	617.7
Cash flows from investing activities
Acquisition of royalty, stream and working interests	(311.1)	(443.9)
Acquisition of energy well equipment	(1.5)	(1.3)
Proceeds from sale of investments	3.6	13.0
Acquisition of investments		(3.9)
Net cash used in investing activities	(309.0)	(436.1)
Cash flows from financing activities
Proceeds from at-the-market equity offerings	135.7	136.0
Repayment of term loan	(80.0)	(80.0)
Proceeds from draw of term loan		160.0
Repayment of revolving credit facilities		(485.0)
Proceeds from draw of credit facilities		275.0
Credit facility amendment costs		(0.8)
Payment of dividends	(154.9)	(138.2)
Proceeds from exercise of stock options	7.4	13.2
Net cash used in financing activities	(91.8)	(119.8)
Effect of exchange rate changes on cash and cash equivalents	(1.0)	0.6
Net change in cash and cash equivalents	402.1	62.4
Cash and cash equivalents at beginning of year	132.1	69.7
Cash and cash equivalents at end of year	534.2	132.1
Supplemental cash flow information:
Cash paid for interest expense and loan standby fees	2.4	9.5
Income taxes paid	$ 51.2	$ 38.6

XML

Consolidated Statements of Changes in Shareholders' Equity - USD ($) $ in Millions	Share Capital (Note 17)	Contributed Surplus	Accumulated Other Comprehensive Income (Loss)	Deficit	Total
Balance at beginning of period at Dec. 31, 2018	$ 5,158.3	$ 15.6	$ (220.3)	$ (321.7)	$ 4,631.9
Net income				344.1	344.1
Other comprehensive (loss) income			42.2		42.2
Total comprehensive income					386.3
At-the-market equity offering	136.0				136.0
Acquisition of Salares Norte	27.0				27.0
Exercise of stock options	17.3	(4.1)			13.2
Share-based payments		6.0			6.0
Vesting of restricted share units	3.3	(3.3)
Transfer of gain on disposal of equity investments at FVTOCI			(0.2)	0.2
Dividend reinvestment plan	48.8				48.8
Dividends declared				(187.0)	(187.0)
Balance at end of period at Dec. 31, 2019	5,390.7	14.2	(178.3)	(164.4)	5,062.2
Net income				326.2	326.2
Other comprehensive (loss) income			63.4		63.4
Total comprehensive income					389.6
At-the-market equity offering	133.7				133.7
Exercise of stock options	9.7	(2.3)			7.4
Share-based payments		5.8			5.8
Vesting of restricted share units	3.7	(3.7)
Transfer of gain on disposal of equity investments at FVTOCI			(1.0)	1.0
Dividend reinvestment plan	42.3				42.3
Dividends declared				(197.2)	(197.2)
Balance at end of period at Dec. 31, 2020	$ 5,580.1	$ 14.0	$ (115.9)	$ (34.4)	$ 5,443.8

XML

Corporate Information

12 Months Ended

Dec. 31, 2020

Corporate Information

Corporate Information

Note 1 – Corporate Information

Franco-Nevada Corporation (“Franco-Nevada” or the “Company”) is incorporated under the Canada Business Corporations Act. The Company is a royalty and stream company focused on precious metals (gold, silver, and platinum group metals) and has a diversity of revenue sources with a target of no more than 20% of revenue from energy (oil, gas and natural gas liquids). The Company owns a portfolio of royalty, stream and working interests, covering properties at various stages, from production to early exploration located in Latin America, United States, Canada, Australia, Europe and Africa.

The Company’s shares are listed on the Toronto Stock Exchange and the New York Stock Exchange and the Company is domiciled in Canada. The Company’s head and registered office is located at 199 Bay Street, Suite 2000, Toronto, Ontario, Canada.

XML

Significant accounting policies

12 Months Ended

Dec. 31, 2020

Significant accounting policies

Significant accounting policies

Note 2 – Significant accounting policies

(a)Statement of compliance

These consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”) under the historical cost convention, except for equity investments, warrants and receivables from provisionally priced concentrate sales which are measured at fair value. These consolidated financial statements were authorized for issuance by the Board of Directors on March 10, 2021.

(b)Principles of consolidation

The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries (its “subsidiaries”) (together the “Company”).

(i) Subsidiaries

These consolidated financial statements include the accounts of Franco-Nevada and its subsidiaries. All intercompany accounts, transactions, income and expenses, and profits or losses have been eliminated on consolidation. The Company consolidates subsidiaries where it has the ability to exercise control. Control of an investee is defined to exist when the Company is exposed to variable returns from its involvement in the investee and has the ability to affect those returns through its power over the investee. Specifically, the Company controls an investee if, and only if, it has all of the following: power over the investee (i.e. existing rights that give the Company the current ability to direct the relevant activities of the investee); exposure, or rights, to variable returns from its involvement with the investee; and the ability to use its power over the investee to affect its returns. Control is presumed to exist where the Company owns more than one half of the voting rights unless it can be demonstrated that ownership does not constitute control. The existence and effect of potential voting rights that are currently exercisable or convertible are considered when assessing whether the Company controls another entity. Subsidiaries are fully consolidated from the date on which control is transferred to the Company. They are de-consolidated from the date that control ceases.

The financial statements of the subsidiaries are prepared for the same reporting period as the parent company, using consistent accounting policies. The consolidated financial statements include all assets, liabilities, revenues, expenses and cash flows of the Company and its subsidiaries after eliminating intercompany transactions.

Material subsidiaries of the Company and their geographic locations at December 31, 2020 were as follows:

Entity	Jurisdiction	Economic Interest
Franco-Nevada U.S. Corporation	Delaware	100%
Franco-Nevada GLW Holdings Corp.	British Columbia	100%
Franco-Nevada Canada Holdings Corp.	Canada	100%
Franco-Nevada (Barbados) Corporation	Barbados	100%
Franco-Nevada Australia Pty Ltd.	Australia	100%
Franco-Nevada Delaware LLC	Delaware	100%
Franco-Nevada Texas LP	Texas	100%
Minera Global Copper Chile S.A.	Chile	100%
FN Subco Inc.	British Columbia	100%
FN Holdings ULC	Alberta	100%

All the above entities are classified as subsidiaries of the Company. There are no significant restrictions on the Company’s ability to access or use assets or settle liabilities of its subsidiaries.

(ii) Joint arrangements

A joint arrangement is defined as an arrangement over which two or more parties have joint control, which is the contractually agreed sharing of control over an arrangement. This exists only when the decisions about relevant activities (being those that significantly affect the returns of the arrangement) require unanimous consent of the parties sharing control. There are two types of joint arrangement, joint operations (“JO”) and joint ventures (“JV”).

A JO is a joint arrangement whereby the parties that have joint control of the arrangement have rights to the assets and obligations for the liabilities, relating to the arrangement. In relation to the Company’s interest in any JO, the Company would recognize its share of any assets, liabilities, revenues and expenses of the JO.

The Company participates in a strategic relationship with Continental Resources, Inc. (“Continental”), to jointly acquire mineral rights in within Continental’s areas of operation. The mineral interests are acquired through a royalty acquisition entity, The Mineral Resource Company II, LLC (“TMRC II”), in which the Company holds an economic interest of 49.9%. The Company funds 80% of the contributions to TMRC II, with the remainder funded by Continental. The Company determined that it has joint control over TMRC II given that decisions about relevant activities require unanimous consent of the parties to the joint arrangement. The Company further determined that the joint arrangement is a JO, based on the terms of the contractual agreement which specify how revenues and expenses are shared between the parties.

The Company also participates in joint operations with respect to energy working interests but does not have joint control. A working interest is an ownership position in the energy property and related operating assets, whereby the Company is liable for its proportionate share of gross costs of capital and operations based on information received from the operator. The Company’s share of the assets, liabilities, revenues and expenses of each joint operation are recognized in the statements of financial position and statements of income and comprehensive income.

(c)Business combinations

On the acquisition of a business, the acquisition method of accounting is used whereby the purchase consideration is allocated to the identifiable assets, liabilities and contingent liabilities (identifiable net assets) of the business on the basis of the fair value at the date of acquisition. Provisional fair values allocated at a reporting date are finalized as soon as the relevant information is available, which period shall not exceed twelve months from the acquisition date and are adjusted to reflect the transaction as of the acquisition date.

The results of businesses acquired during the period are consolidated into the consolidated financial statements from the date on which control commences at the date of acquisition and taken out of the consolidated financial statements from the date on which control ceases.

When all or part of the purchase consideration is contingent on future events, the cost of the acquisition initially recorded includes an estimate of the fair value of the contingent liability amounts expected to be payable in the future. The cost of acquisition is adjusted when revised estimates are made, with corresponding adjustments made to the consolidated statement of income and comprehensive income.

When a business is acquired in a number of stages, the cost of each stage is compared with the fair value of the identifiable net assets at the date of that purchase. When the cost of the acquisition exceeds the fair values of the identifiable net assets acquired, the difference is recorded as goodwill. If the fair value attributable to the Company’s share of the identifiable net assets exceeds the cost of acquisition, the difference is recognized as a gain in the consolidated statement of income and comprehensive income.  Acquisition costs are expensed.

(d)Currency translation

(i) Functional and presentation currency

The functional currency for each entity within the Franco-Nevada group is the currency of the primary economic environment in which it operates.

These consolidated financial statements are expressed in United States dollars, which is the functional currency of the majority of the subsidiaries. The parent Company’s functional currency is the Canadian dollar. The U.S. dollar is used as the presentation currency of the Company to ensure comparability with the Company’s peers. References herein to C$ are to Canadian dollars.

(ii) Foreign currency transactions and balances

Foreign currency transactions are translated into the functional currency of the respective subsidiary, using the exchange rate prevailing at the dates of the transaction (spot exchange rates). Foreign exchange gains and losses resulting from the settlement of such transactions and the re-measurement of monetary items and available-for-sale securities at the date of the consolidated statements of financial position are recognized in net income. Non-monetary items measured at historical cost are translated into the functional currency using the exchange rate at the date of the transaction.

The results and financial position of the subsidiaries that have a functional currency different from the presentation currency are translated into U.S. dollars, the group’s presentation currency, as follows:

· assets and liabilities for each subsidiary are translated at the closing exchange rate at the date of the balance sheet;

· income and expenses for each subsidiary are translated at the average exchange rates during the period; and

· all resulting exchange differences are charged/credited to the currency translation adjustment in other comprehensive income.

(e)Royalty, stream and working interests

Royalty, stream and working interests consist of acquired royalty interests, stream metal purchase agreements, and working interests in producing, advanced/development and exploration stage properties. Royalty, stream and working interests are recorded at cost and capitalized as tangible assets with finite lives. They are subsequently measured at cost less accumulated depletion and accumulated impairment losses and reversals. The cost of royalty, stream and working interests is determined by reference to the cost model under IAS 16. The major categories of the Company’s interests are producing, advanced and exploration. Producing assets are those that have generated revenue from steady-state operations for the Company or are expected to in the next year. Advanced assets are interests on projects which are not yet producing, but where in management’s view, the technical feasibility and commercial viability of extracting a mineral resource are demonstrable.  Exploration assets represent interests on projects where technical feasibility and commercial viability of extracting a mineral resource are not demonstrable.  Royalty, stream and working interests for producing and advanced assets are recorded at cost and capitalized in accordance with IAS 16, while exploration assets are recorded and capitalized in accordance with IFRS 6 Exploration for and Evaluation of Mineral Resources (“IFRS 6”).

Management uses the following criteria in its assessment of technical feasibility and commercial viability:

(i) Geology: there is a known mineral deposit which contains mineral reserves or resources; or the project is adjacent to a mineral deposit that is already being mined or developed and there is sufficient geologic certainty of converting the deposit into mineral reserves or resources.

(ii) Accessibility and authorization: there are no significant unresolved issues impacting the accessibility and authorization to develop or mine the mineral deposit, and social, environmental and governmental permits and approvals to develop or mine the mineral deposit appear obtainable.

Producing mineral royalty and stream interests are depleted using the units-of-production method over the life of the property to which the interest relates. The life of the property is estimated using life of mine models specifically associated with the mineral royalty or stream properties which include proven and probable reserves and may include a portion of resources expected to be converted into reserves. Where life of mine models are not available, the Company uses publicly available statements of reserves and resources for the mineral royalty or stream properties to estimate the life of the property and portion of resources that the Company expects to be converted into reserves. Where life of mine models and publicly available reserve and resource statements are not available, depletion is based on the Company’s best estimate of the volumes to be produced and delivered under the contract. The Company relies on information available to it under contracts with operators and/or public disclosures for information on reserves and resources from the operators of the producing mineral and stream interests.

Producing energy interests are depleted using the units-of-production method over the life of the property to which the interest relates, which is estimated using available estimated proved and probable reserves specifically associated with the energy properties. For energy interests, management uses reserve reports prepared by independent reserve engineers or other qualified parties engaged by the Company.

On acquisition of a producing royalty, stream or working interest, an allocation of its fair value is attributed to the exploration potential of the interest. The estimated fair value of this acquired exploration potential is recorded as an asset (non-depletable interest) on the acquisition date. Updated reserve and resource information obtained from the operators of the royalty, stream or working interest properties is used to determine the amount to be converted from non-depletable interest to depletable interest. If the cost of a royalty, stream or working interest includes contingent consideration, the contingent consideration is measured at fair value on the date of acquisition and included in the cost of the interest. Any changes in the fair value of the contingent consideration subsequent to the acquisition date are recorded against the cost of the interest acquired.

Acquisition costs of advanced and exploration stage royalty, stream and working interests are capitalized and are not depleted until such time as revenue-generating activities begin. The Company may receive advance minimum payments prior to the commencement of production on some of its interests. In these circumstances, the Company would record depletion expense as described above, up to a maximum of the total of the advance minimum payment received.

(f) Working interests in energy properties

Acquired energy working interests are accounted for at cost and capitalized as tangible assets of developing or operating properties, or in accordance with IFRS 6 for exploration properties. For each energy property on which the Company has a working interest, the Company bears its proportionate share of the gross costs of capital and operations based on information received from the operator. Such capital costs are capitalized to energy well equipment which is a component of other assets on the statement of financial position.

Capitalized costs, other than those related to energy well equipment, are depreciated when the asset is available for its intended use on a units-of-production basis, whereby the denominator is the proved and probable reserves associated with the energy properties. For energy well equipment, capitalized costs are depreciated by application of a 25% declining balance method.

(g) Impairment of non-financial assets

Producing and advanced mineral, stream and working interests are reviewed for impairment if there is any indication that the carrying amount may not be recoverable. Impairment is assessed at the level of cash-generating units (“CGUs”) which, in accordance with IAS 36 Impairment of Assets (“IAS 36”), are identified as the smallest identifiable group of assets from which independent cash flows are generated. This is usually at the individual royalty, stream, or working interest level for each property from which independent cash inflows are generated.

An impairment loss is recognized for the amount by which the asset’s carrying value exceeds its recoverable amount, which is the higher of fair value less costs of disposal (“FVLCD”) and value-in-use (“VIU”). The future cash flow expected is derived using estimates of proven and probable reserves, a portion of resources that is expected to be converted into reserves and information regarding the mineral, stream and energy properties, respectively, that could affect the future recoverability of the Company’s interests. Discount factors are determined individually for each asset and reflect their respective risk profiles. In certain circumstances, the Company may use a market approach in determining the recoverable amount which may include an estimate of (i) net present value of estimated future cash flows; (ii) dollar value per ounce or pound of reserve/resource; (iii) cash-flow multiples; and/or (iv) market capitalization of comparable assets.  Impairment losses are charged to the royalty, stream or working interest and any associated energy well equipment in the case of working interests. Assets are subsequently reassessed for indications that an impairment loss previously recognized may no longer exist. An impairment charge is reversed if the conditions that gave rise to the recognition of an impairment loss are subsequently reversed and the asset’s recoverable amount exceeds its carrying amount. Impairment losses can be reversed only to the extent that the recoverable amount does not exceed the carrying value that would have been determined had no impairment been recognized previously.

Gold bullion and prepaid expenses are similarly assessed for impairment whenever indicators of impairment exist in accordance with IAS 36. An impairment loss is recognized for the amount by which the asset’s carrying value exceeds its recoverable amount, which is the higher of FVLCD and VIU.

Interests classified as exploration are assessed for impairment whenever indicators of impairment exist in accordance with IFRS 6. An impairment loss is recognized for the amount by which the asset’s carrying value exceeds its recoverable amount, which is the higher of FVLCD and VIU. An interest that has previously been classified as exploration is also assessed for impairment before reclassification to either advanced or producing, and the impairment loss, if any, is recognized in net income.

(h) Financial instruments

Financial assets and financial liabilities are recognized on the Company’s statement of financial position when the Company has become a party to the contractual provisions of the instrument. Financial assets are derecognized when the rights to receive cash flows from the assets have expired or have been transferred and the Company has transferred substantially all risks and rewards of ownership. The Company’s financial instruments consist of cash and cash equivalents, receivables, accounts payable, accrued liabilities, debt, and investments, including equity investments, loans receivable, and warrants. Financial instruments are recognized initially at fair value.

Under the IFRS 9 model for classification the Company has classified its financial assets as described below.

(i) Cash and cash equivalents

Cash and cash equivalents comprise cash on hand, deposits held with banks and other short-term highly liquid investments with original maturities of three months or less. Cash and cash equivalents are recorded at amortized cost using the effective interest method.

(ii) Receivables

Receivables, other than those related to stream agreements with provisional pricing mechanisms, are classified as financial assets at amortized cost and measured using the effective interest method less any impairment loss allowance. The loss allowance for receivables is measured based on lifetime expected credit losses.

(iii) Investments

Investments comprise equity interests in publicly-traded and privately-held entities, warrants, marketable securities with original maturities at the date of the purchase of more than three months and a loan receivable.

The Company’s equity investments are held for strategic purposes and not for trading. The Company made an irrevocable election to designate these investments in common shares at FVTOCI. FVTOCI investments are recognized initially at fair value plus transaction costs. Subsequent to initial recognition, FVTOCI investments are measured at fair value and changes in the fair value are recognized directly in other comprehensive income (loss). When an equity investment at FVTOCI is sold, the accumulated gains or losses are reclassified from accumulated other comprehensive income (loss) directly to deficit.

Translation differences on equity securities classified as FVTOCI are included in other comprehensive income (loss).

Derivative instruments, such as warrants and receivables related to stream agreements with provisional pricing mechanisms, are classified as fair value through profit and loss (“FVTPL”) and are recognized initially at fair value. Subsequent to initial recognition, derivatives are measured at fair value. In the case of receivables related to stream agreements with provisional pricing, once the final settlement price is determined the financial instrument is no longer a derivative and is classified as a financial asset at amortized cost. Changes in the fair value of receivables related to stream agreements with provisional pricing mechanisms are recognized in revenue in the statement of income and other comprehensive income.  Changes in fair value of warrants are recognized as other income (expenses) in the statement of income and comprehensive income.

Loans receivable are classified as financial assets at amortized cost because these instruments are held for collection of contractual cash flows and those cash flows represent solely payments of principal and interest. Loans are measured at amortized cost using the effective interest method, less any impairment loss allowance. The impairment loss allowance for the loan receivable is measured based on expected credit losses under the general approach. Interest income is recognized by applying the effective interest rate method and presented as finance income in the statement of income and comprehensive income.

(iv) Financial liabilities

Financial liabilities, including accounts payable, accrued liabilities and debt, are classified as financial liabilities to be subsequently measured at amortized cost using the effective interest method.

(i) Revenue recognition

The Company generates revenue from contracts with customers under each of its royalty, stream and working interests. The Company has determined that each unit of a commodity that is delivered to a customer under a royalty, stream, or working interest arrangement is a performance obligation for the delivery of a good that is separate from each other unit of the commodity to be delivered under the same arrangement. 

(i) Stream arrangements

Under its stream arrangements, the Company acquires commodities from operators of mining properties on which the Company has stream interests. The Company sells the commodities received under these arrangements to its customers under separate sales contracts.

For those stream arrangements where the Company acquires refined metal from the operator, the Company sells the refined metal to third party financial institutions or brokers. The Company transfers control over the commodity on the date the commodity is delivered to the customer’s metal account, which is the date that title to the commodity and the risks and rewards of ownership transfer to the customer and the customer is able to direct the use of and obtain substantially all of the benefits from the commodity. The transaction price for these sales is fixed at the delivery date based on the spot price for the commodity and payment of the transaction price is generally due immediately when control has been transferred.

For those stream arrangements where the Company acquires the commodities in concentrate form from the operator, the Company sells the concentrate under sales contracts with independent smelting companies. The Company transfers control over the concentrate at the time of shipment, which is when the risks and rewards of ownership and title pass to the independent smelting company. The final prices for metals contained in the concentrate are determined based on the market price for the metals on a specified future date after shipment. Upon transfer of control at shipment, the Company records revenue and a corresponding receivable from these sales based on forward commodity prices at the time of shipment.

Variations between the price recorded at the transfer of control and the actual final price set under the contracts with the smelting companies are caused by changes in market commodity prices, and result in an embedded derivative in the receivable. The embedded derivative is recorded at fair value each period until final settlement occurs, with changes in fair value classified as provisional price adjustments and included as a component of stream revenue. These provisional price adjustments associated with concentrate sales are not considered to be revenue from contracts with customers as they arise from changes in market commodity prices.

(ii) Royalty arrangements

For royalty interests, the Company sells commodities to customers under contracts that are established by the operator of each mining or energy property on which the royalty interest is held. The Company recognizes revenue from these sales when control over the commodity transfers to the customer. This transfer of control generally occurs when the operator of the mining or energy property on which the royalty interest is held physically delivers the commodity to the customer. At this point in time, the risks and rewards of ownership have transferred to the customer and the Company has an unconditional right to payment.

Revenue from royalty arrangements is measured at the transaction price agreed in the royalty arrangement with the operator of each mining or energy property. The transaction price will reflect the gross value of the commodity sold less deductions that vary based on the terms of the royalty arrangement.

(iii) Working interest arrangements

The Company sells its proportionate share of the crude oil, natural gas and natural gas liquids to third-party customers using the services of a third-party marketing agent. The Company transfers control over the oil and gas at the time it enters the pipeline system, which is when title and the risks and rewards of ownership are transferred to customers and the Company has an unconditional right to payment. Revenue is measured at the transaction price set by reference to monthly market commodity prices plus certain price adjustments. Price adjustments include product quality and transportation adjustments and market differentials.

(j) Costs of sales

Costs of sales includes various production taxes that are recognized with the related revenues and the Company’s share of the gross operating costs for the working interests in the energy properties.

For stream agreements, the Company purchases gold, silver or platinum group metals for a cash payment of the lesser of a set contractual price, subject to annual inflationary adjustments, and the prevailing market price per ounce of gold and/or silver when purchased. Under certain stream agreements, the Company purchases gold and/or silver for a cash payment that is a fixed percentage of the prevailing market price per ounce of gold and/or silver when purchased.

In certain instances, the Company purchases a fixed amount of gold by providing an initial deposit. The initial deposit is recorded as a prepaid gold asset and classified within current prepaid expenses and other assets or non-current other assets dependent on whether delivery will occur within 12 months of the reporting date. When gold is delivered to the Company it is recorded as inventory until such time as it is sold and the cost of the gold is recorded as a cost of sale.

(k) Income taxes

The income tax expense or recovery represents the sum of current and deferred income taxes.

Current income tax payable is based on taxable profit for the year. Taxable profit differs from net income as reported in the consolidated statement of income and other comprehensive income because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The Company’s liability for current tax is calculated by using tax rates and laws that have been enacted or substantively enacted at the statement of financial position date.

Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amount of assets and liabilities in the consolidated financial statements and the corresponding tax bases used in the computation of taxable profit, and is accounted for using the statement of financial position liability method. Deferred tax liabilities are recognized for all taxable temporary differences and deferred tax assets are recognized to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilized. Such assets and liabilities are not recognized if the temporary differences arise from initial recognition of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit.

Deferred tax liabilities are recognized for taxable temporary differences arising on investments in subsidiaries, except where the Company is able to control the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future.

Deferred tax is calculated at the tax rates that are enacted or substantively enacted at the statement of financial position date and are expected to apply to the period when the deferred tax asset is realized or the liability is settled. Deferred tax is charged or credited in the consolidated statement of income and other comprehensive income, except when it relates to items credited or charged directly to equity, in which case the deferred tax is also accounted for within equity.

The Company evaluates its exposure to uncertain tax positions and where it is probable that such exposure will materialize, recognizes a provision.

(l) Stock options

The Company may issue equity-settled share-based payments to directors, officers, employees and consultants under the terms of its share compensation plan. Equity-settled share-based payments are measured at fair value at the date of grant. The fair value determined at the date of grant of equity-settled share-based payments is expensed over the expected service period with a corresponding change to contributed surplus and is based on the Company’s estimate of shares that will ultimately vest.

Fair value is measured by use of the Black-Scholes option pricing valuation model. The expected life used in the model is adjusted, based on management’s best estimate, for the effect of non-transferability, exercise restrictions and behavioural considerations. Expected volatility is estimated by considering historic average share price volatility. Any consideration paid or received upon the exercise of the stock options or purchase of shares is credited to share capital.

(m) Restricted share units

The Company may grant performance-based or time-based restricted share units (“RSUs”) to officers and employees under the terms of its share compensation plan. When each RSU vests, the Company plans to settle every RSU with one common share of the parent company. The Company recognizes the fair value of the RSUs as share-based compensation expense which is determined with reference to the weighted average trading price of the Company’s common shares over the five trading days immediately preceding the date of issuance. The amount recognized reflects the number of awards for which the related service and non-market performance conditions associated with these awards are expected to be met. The Company expenses the fair value of the RSUs over the applicable service period, with a corresponding change in contributed surplus. Time-based RSUs vest over a three year period on the anniversary of the date of grant. For performance vesting conditions, the grant date fair value of the RSU is measured to reflect such conditions and this estimate is not updated between expected and actual outcomes. Performance-based RSUs vest at the end of a three year period following the achievement of certain performance criteria and target settlement will range from 0% to 200% of the value.

(n) Deferred share units

Non-executive directors may choose to convert their directors’ fees into deferred share units (“DSUs”) under the terms of the Company’s deferred share unit plan (the “DSU Plan”). Directors must elect to convert their fees prior to January 1 of each year. The Company may also award DSUs to non-executive directors under the DSU Plan as compensation. When dividends are declared by the Company, directors are also credited with dividend equivalents in the form of additional DSUs based on the number of vested DSUs each director holds on the record date for the payment of a dividend. Retainer, conversion and dividend equivalent DSUs vest immediately. The fair value of DSUs at the time of conversion or award, as applicable, is determined with reference to the weighted average trading price of the Company’s common shares over the five trading days immediately preceding the date of conversion or award, as applicable. The fair value of the DSUs, which are settled in cash, is recognized as a share-based compensation expense with a corresponding increase in liabilities, over the service period. The fair value of the DSUs is marked to the quoted market price of the Company’s common shares at each reporting date with a corresponding change in the consolidated statement of income and comprehensive income. Participants are not allowed to redeem their DSUs until retirement or termination of directorship. The cash value of the DSUs at the time of redemption is equivalent to the market value of the Company’s common shares when redemption takes place.

(o) Segment reporting

The Company is engaged in the management and acquisition of royalties, streams and working interests in the mining and energy sectors. Operating segments are reported in a manner consistent with the internal reporting provided to the Chief Executive Officer (“CEO”) who fulfills the role of the chief operating decision-maker. The CEO is responsible for allocating resources and assessing performance of the Company’s operating segments.

(p) Earnings per share

Basic earnings per share is computed by dividing the net income or loss by the weighted average number of common shares outstanding during each period. Diluted earnings per share reflects the effect of all potentially dilutive common share equivalents, which includes dilutive share options and restricted share units granted to employees and warrants computed using the treasury stock method.

New and Amended Standards Adopted by the Company

The following standard was effective and implemented for the annual period as of January 1, 2020.

Amendments to IFRS 3 Business Combinations

In October 2018, the IASB issued amendments to the definition of a business in IFRS 3 Business Combinations (“IFRS 3”). The amendments are intended to assist entities to determine whether a transaction should be accounted for as a business combination or as an asset acquisition. The amendments clarify the minimum requirements for a business, remove the assessment of whether market participants are capable of replacing any missing elements, add guidance to help entities assess whether an acquired process is substantive, narrow the definitions of a business and of outputs, and introduce an optional fair value concentration test. The application of the amendments to IFRS 3 did not have a significant impact on the Company’s consolidated financial statements. 

New Accounting Standards Issued But Not Yet Effective

Certain new accounting standards and interpretations have been published that are not mandatory for the current period and have not been early adopted. These standards are not expected to have a material impact on the Company’s current or future reporting periods. 

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Significant judgments, estimates and assumptions

12 Months Ended

Dec. 31, 2020

Significant judgments, estimates and assumptions

Significant judgments, estimates and assumptions

Note 3 – Significant judgments, estimates and assumptions

The preparation of consolidated financial statements in accordance with IFRS requires the Company to make judgments, estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Estimates and assumptions are continuously evaluated and are based on management’s best knowledge of the relevant facts and circumstances, having regard to previous experience. However, actual outcomes may differ from the amounts included in the consolidated financial statements.

In particular, the areas which require management to make significant judgements, estimates and assumptions in determining carrying values are:

Impact of the COVID-19 pandemic 

The COVID-19 global health pandemic has had a significant impact on the global economy and commodity and financial markets. The full extent and impact of the COVID-19 pandemic is unknown. The adverse effects of the pandemic may continue for an extended and unknown period of time, particularly as variant strains of the virus are identified. The impact of the pandemic to date has included extreme volatility in financial markets, a slowdown in economic activity, extreme volatility in commodity prices (including gold, silver, palladium and oil and gas) and has raised the prospect of an extended global recession. As well, as efforts have been undertaken to slow the spread of the COVID-19 pandemic, the operation and development of mining projects has been impacted. Many mining projects, including a number of the properties in which Franco-Nevada holds a royalty, stream or other interest have been impacted by the pandemic resulting in the temporary suspension of operations, and other mitigation measures that impacted production. If the operation or development of one or more of the properties in which Franco-Nevada holds a royalty, stream or other interest and from which it receives or expects to receive significant revenue is suspended as a result of the continuing COVID-19 pandemic or future pandemics or other public health emergencies, it may have a material adverse impact on Franco-Nevada’s profitability, results of operations, financial condition and the trading price of Franco-Nevada’s securities. The broader impact of the COVID-19 pandemic or future pandemics or similar public health emergencies on investors, businesses, the global economy or financial and commodity markets may also have a material adverse impact on Franco-Nevada’s profitability, results of operations, financial condition and the trading price of Franco-Nevada’s securities.

Impact of global and market developments on oil and gas prices 

A number of geopolitical and market factors impacting global energy markets (including those related to the COVID-19 pandemic) have contributed to extreme volatility and a significant decrease in the price of oil and gas (WTI, WCS and NYMEX). As a result of reduced production and capital spend by a number of the operators of the Company’s Energy interests due to lower market expectations for oil and gas prices, the Company recorded impairments of $271.7 million at March 31, 2020, as detailed in note 8 (b).

While oil and gas prices have rebounded from the historical lows of April 2020, assumptions about future commodity prices, interest rates and levels of supply and demand of commodities are subject to greater variability than normal and there remains heightened potential for further impairments or reversals thereof. The continuation of volatile oil and gas prices for a prolonged period may significantly affect the valuation of the Company’s financial and non-financial assets and have a material adverse impact on Franco-Nevada’s profitability, results of operations, financial condition and the trading price of Franco-Nevada’s securities.

Reserves and Resources

Royalty, stream and working interests comprise a large component of the Company’s assets and, as such, the reserves and resources of the properties to which the interests relate have a significant effect on the Company’s financial statements. These estimates are applied in determining the depletion of and assessing the recoverability of the carrying value of royalty, stream and working interests. For mineral royalty and stream interests, the public disclosures of reserves and resources that are released by the operators of the interests involve assessments of geological and geophysical studies and economic data and the reliance on a number of assumptions, including commodity prices and production costs. For energy interests, the estimated reserves in reserve reports prepared by independent reserve engineers or other qualified parties engaged by the Company reflect similar assessments of geological and geophysical studies and economic data and reliance on assumptions. These assumptions are, by their very nature, subject to interpretation and uncertainty.

The estimates of reserves and resources may change based on additional knowledge gained subsequent to the initial assessment. Changes in the estimates of reserves and resources may materially affect the recorded amounts of depletion and the assessed recoverability of the carrying value of royalty, stream and working interests.

Impairment of Royalty, Stream and Working Interests

Assessment of impairment of royalty, stream, working interests and energy well equipment at the end of each reporting period requires the use of judgments, assumptions and estimates when assessing whether there are any indicators that give rise to the requirement to conduct an  impairment analysis on the Company’s royalty, stream and working interests, and/or energy equipment. Indicators which could trigger an impairment analysis include, but are not limited to, a significant change in operator reserve and resource estimates, industry or economic trends, current or forecast commodity prices, and other relevant operator information. The assessment of fair values requires the use of estimates and assumptions for recoverable production, long-term commodity prices, discount rates, reserve/resource conversion, foreign exchange rates, future capital expansion plans and the associated production implications.  In addition, the Company may use other approaches in determining fair value which may include judgment and estimates related to (i) dollar value per ounce or pound of reserve/resource; (ii) cash-flow multiples; and (iii) market capitalization of comparable assets. Changes in any of the assumptions and estimates used in determining the fair value of the royalty, stream or working interests, or energy well equipment could impact the impairment analysis.

Asset Acquisitions and Business Combinations

The assessment of whether an acquisition meets the definition of a business, or whether assets are acquired is an area of key judgment. If deemed to be a business combination, applying the acquisition method to business combinations requires each identifiable asset and liability to be measured at its acquisition-date fair value. The excess, if any, of the fair value of consideration over the fair value of the net identifiable assets acquired is recognized as goodwill. The determination of the acquisition-date fair values often requires management to make assumptions and estimates about future events. The assumptions and estimates with respect to determining the fair value of royalty, stream or working interests generally requires a high degree of judgment, and include estimates of mineral reserves and resources acquired, future metal prices, discount rates and reserve/resource conversion. Changes in any of the assumptions or estimates used in determining the fair value of acquired assets and liabilities could impact the amounts assigned to assets and liabilities.

Joint Arrangements

Judgment is required to determine whether the Company has joint control of a contractual arrangement, which requires continuous assessment of the relevant activities and whether the decisions in relation to those activities require unanimous consent. Judgment is also continually required to classify a joint arrangement as either a joint operation or a joint venture when the arrangement has been structured through a separate vehicle. Classifying the arrangement requires the Company to assess its rights and obligations arising from the arrangement. Specifically, the Company considers the legal form of the separate vehicle, the terms of the contractual arrangement and other relevant facts and circumstances. This assessment often requires significant judgment, and a different conclusion on joint control, or whether the arrangement is a joint operation or a joint venture, may have a material impact on the accounting treatment.

The Company evaluated its joint arrangement with Continental, whereby the Company acquired a 49.9% economic interest in TMRC II, in accordance with IFRS 11. The Company concluded that the arrangement qualified as a joint operation based on the terms of the contractual agreement which specify how revenues and expenses are shared. Under the agreement, revenues generated by the royalty assets of TMRC II are to be distributed based on the performance of the assets against agreed upon development thresholds and the tranche in which the assets were acquired, resulting in the Company receiving distributions ranging between 50-75% of revenue. As a result, the Company has concluded that its rights are tied to the assets of TMRC II, rather than the net results of the entity.

Income Taxes

The interpretation and application of existing tax laws, regulations or rules in Canada, Barbados, the United States, Australia or any of the countries in which the mining operations are located or to which shipments of gold, silver or platinum group metals are made requires the use of judgment. The likelihood that tax positions taken will be sustained upon examination by applicable tax authorities is assessed based on facts and circumstances of the relevant tax position considering all available evidence. Differing interpretation of these laws, regulations or rules could result in an increase in the Company’s taxes, or other governmental charges, duties or impositions.

In assessing the probability of realizing deferred income tax assets, the Company makes estimates related to expectations of future taxable income and expected timing of reversals of existing temporary differences. Such estimates are based on forecasted cash flows from operations which require the use of estimates and assumptions such as long-term commodity prices and recoverable ounces of gold, silver and platinum group metals. Therefore, the amount of deferred income tax assets recognized on the balance sheet could be reduced if the actual results differ significantly from forecast. The Company reassesses its deferred income tax assets at the end of each reporting period.

Functional Currency

The functional currency for each of the Company’s subsidiaries is the currency of the primary economic environment in which the entity operates. Determination of functional currency may involve certain judgments to determine the primary economic environment and the Company reconsiders the functional currency of its entities if there is a change in events and conditions which determined the primary economic environment.

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Acquisitions and other transactions

12 Months Ended

Dec. 31, 2020

Acquisitions and other transactions

Acquisitions and other transactions

Note 4 – Acquisitions and other transactions

(a) Acquisition of U.S. Oil & Gas Royalty Interest – Haynesville, Texas, USA

On December 29, 2020, the Company, through a wholly-owned subsidiary, acquired a royalty portfolio in the Haynesville gas play in Texas, for $135.0 million. The royalties are derived principally from mineral title which provides a perpetual interest in royalty lands.

The acquisition has an effective date of October 1, 2020. Between the effective date and the closing date, the asset has generated approximately $4.2 million in royalties.

The acquisition of the Haynesville royalties has been accounted for as an asset acquisition.

(b) Amendment of Sabodala Gold Stream Agreement – Senegal

On September 25, 2020, the Company, through a wholly-owned subsidiary, amended its existing Sabodala gold purchase and sale agreement with Teranga Gold Corporation (“Teranga”) to compensate the Company for displacement that will be caused by the processing of Massawa ore through the Sabodala processing facilities and to provide for certain protocols for the commingling of Sabodala and Massawa ores. Teranga acquired a 90% interest in the Massawa project from Barrick Gold Corporation on March 4, 2020.

The amended agreement provides that effective September 1, 2020, Teranga will make fixed deliveries of 783.33 ounces of refined gold per month until 105,750 ounces of gold have been delivered to the Company (the “Fixed Delivery Period”) and 6% of production from the stream area thereafter. Following the Fixed Delivery Period, a reconciliation will be conducted to determine if the Company would have received more or less than 105,750 ounces of gold under the 6% variable stream during such period.  Teranga will be entitled to a credit for an over-delivery which will be applied against the 6% variable stream until depleted and the Company will be entitled to a one-time additional delivery in the case of an under-delivery.

(c) Acquisition of Rio Baker (Salares Nortes) Royalty – Chile

On September 23, 2020, the Company, through a wholly-owned subsidiary, acquired an existing 2% NSR on all mineral production from Gold Fields’ Rio Baker concessions in Chile for $5.0 million cash with contingent payments of up to $8.0 million. With this acquisition, the Company now has exposure to 100% of the Salares Norte deposit. The royalty agreement is subject to a 0.5% buy-back at any time for $4.0 million.

The acquisition of the Rio Baker royalty has been accounted for as an asset acquisition.

(d) Acquisition of Alpala Royalty – Northern Ecuador

On September 11, 2020, the Company completed a royalty transaction with SolGold plc (“SolGold”) to acquire a 1% NSR with reference to all minerals produced from the Alpala copper-gold-silver project in northern Ecuador for $100.0 million. The Alpala project is owned by Exploraciones Novomining SA, which is held 85% by SolGold and 15% by Cornerstone Capital Resources Inc. SolGold has the option to increase the size of the transaction to $150 million for a 1.5% NSR until May 11, 2021 and also has the option to buy-back 50% of the royalty 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-only NSR for a period of time once Alpala is producing. The NSR covers the Cascabel concession. The principal and interest of the $15.0 million bridge loan that the Company provided to SolGold in May 2020 were applied toward the Company’s payment of the purchase price.

The acquisition of the Alpala royalty has been accounted for as an asset acquisition.

(e) Acquisition of Freeport Royalty Portfolio Interests

On September 1, 2020, the Company completed the acquisition of a portfolio of 24 royalties from Freeport-McMoRan Inc. for $30.6 million in cash. Producing royalties have been added to the Company’s portfolio from Industrias Peñoles, S.A.B.de C.V.’s Milpillas copper mine in the northwestern Mexican state of Sonora, Mexico and from Ormat Technologies Inc.’s Neal Hot Spring geothermal operation in Oregon. The remaining royalties are classified as exploration, including prospective royalties over Wallbridge Mining Co. Ltd.’s Fenelon, Martiniere and Northway-Noyon projects and certain of Glencore Canada Corporation’s projects in the Matagami region of Quebec, among others.

The acquisition of the Freeport royalty portfolio interests has been accounted for as an asset acquisition.

(f) Acquisition of U.S. Oil & Gas Mineral Rights with Continental Resources, Inc.

The Company, through a wholly-owned subsidiary, has a strategic relationship with Continental to acquire, through a jointly-owned entity (the “Royalty Acquisition Venture”), royalty rights within Continental’s areas of operation.  

Franco-Nevada recorded contributions to the Royalty Acquisition Venture of $29.8 million in 2020 (2019 – $114.4 million). In the first half of the year, following weak commodity prices, Franco-Nevada and Continental agreed to reduce the pace of their capital funding commitments to the Royalty Acquisition Venture. As at December 31, 2020, the total cumulative investment in the Royalty Acquisition Venture totaled $406.0 million. Franco-Nevada has remaining commitments of up to $114.0 million, of which approximately half is expected to be deployed in 2021. Accounts payable at December 31, 2020 include $10.2 million (2019 - $5.6 million) of contributions disbursed after year-end.

The Royalty Acquisition Venture is accounted for as a joint operation in accordance with IFRS 11 Joint Arrangements.

(g) Acquisition of Island Gold Royalty Interest – Ontario, Canada

On March 20, 2020, Franco-Nevada acquired an existing 0.62% NSR on Alamos Gold Inc.’s Island Gold project in Finan Township in the Province of Ontario for $13.4 million (C$19.0 million).

The acquisition of the Island Gold royalty has been accounted for as an asset acquisition.

(h) Acquisition of Eagle’s Nest Royalty Interest – Ontario, Canada

On December 23, 2019, Franco-Nevada acquired a 1% gross revenue royalty on Noront Resources Ltd.’s (“Noront”) Eagle’s Nest nickel, copper and platinum group metals deposit in the Ring of Fire mining district of Ontario, Canada, for C$5.0 million ($3.8 million).

The acquisition of the Eagle’s Nest royalty has been accounted for as an asset acquisition.

(i) Acquisition of Project 81 Royalty Interest and Noble Common Shares – Ontario, Canada

On November 22, 2019, Franco-Nevada acquired a 2% NSR on Noble Mineral Exploration’s (“Noble”) 55,000 hectare patented land package known as Project 81 in the Timmins-Cochrane area of Ontario, Canada, in exchange for Franco-Nevada agreeing to waive its pre-emptive and buy-back rights in respect of a historical third party royalty, which was subsequently terminated. Franco-Nevada’s 2% NSR covers the Crawford Nickel-Sulphide Project, which was recently spun out by Noble to Canada Nickel Company Inc. As part of the arrangement, Noble issued C$500,000 of Noble common shares to Franco-Nevada.

The acquisition of the Project 81 royalty has been accounted for as an asset acquisition.

(j) Acquisition of Premier Gold Royalty Interests

On September 25, 2019, Franco-Nevada acquired two royalties from Premier Gold Mines Limited (“Premier”) for $6.0 million, including a 2% net smelter royalty (“NSR”) on property owned by Newmont Corporation adjoining its Musselwhite Mine in Northwestern Ontario and a 1.5% NSR on Nevada Gold Mines LLC’s Rain/Emigrant and Saddle properties located at the south end of the Carlin Trend in Nevada.

The acquisitions of the Premier royalties have been accounted for as asset acquisitions.

(k) Acquisition of U.S. Oil & Gas Royalty Interest – Marcellus, Pennsylvania, USA

On July 22, 2019, Franco-Nevada acquired from Range Resources Corporation (“Range”) an overriding royalty interest on acreage in the Marcellus for a gross purchase price of $300.0 million. The royalty is calculated as 1% of gross production, less allowed deductions from approximately 350,000 net acres of Range’s working interest position in Washington, Western Allegheny and Southern Beaver Counties in Pennsylvania. The royalty applies to existing production and future development from the Marcellus formation as well as future potential development from the Utica and Upper Devonian formations.

The acquisition has an effective date of March 1, 2019. Between the effective date and the closing date, the asset has generated approximately $9.4 million in royalties.

The acquisition of the Marcellus royalty has been accounted for as an asset acquisition.

(l) Acquisition of Valentine Lake Royalty Interest – Newfoundland, Canada

On February 21, 2019, Franco-Nevada acquired a 2% NSR on Marathon Gold Corporation’s (“Marathon”) Valentine Lake Gold Camp in central Newfoundland for C$18.0 million ($13.7 million). Marathon has an option to buy back 0.5% of the NSR for $7.0 million until December 31, 2022.

The acquisition of the Valentine Lake royalty has been accounted for as an asset acquisition.

(m) Acquisition of Salares Norte Royalty Interest – Chile

On January 31, 2019, Franco-Nevada, through a wholly-owned subsidiary, acquired an existing 2% NSR on Gold Fields’ Salares Norte project in the Atacama region of northern Chile for $32.0 million, comprised of $27.0 million of Franco-Nevada common shares (366,499 common shares) and $5.0 million in cash. Gold Fields has an option to buy back 1% of the NSR for $6.0 million within 24 months of the commencement of commercial production.

The acquisition of the Salares Norte royalty has been accounted for as an asset acquisition.

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Cash and cash equivalents

12 Months Ended

Dec. 31, 2020

Cash and cash equivalents

Cash and cash equivalents

Note 5 – Cash and cash equivalents

As at December 31, 2020 and 2019, cash and cash equivalents were primarily held in interest-bearing deposits.

Cash and cash equivalents comprised the following:

	At December 31,		At December 31,
	2020		2019
Cash deposits	$	523.7	$	118.7
Term deposits		10.5		13.4
	$	534.2	$	132.1

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Investments and loan receivable

12 Months Ended

Dec. 31, 2020

Investments and loan receivable

Investments and loan receivable

Note 6 – Investments and loan receivable

Investments comprise the following: (i) equity interests in various public and non-public entities which the Company acquired through the open market or through transactions; (ii) warrants in various publicly-listed companies; and (iii) a loan receivable extended to Noront Resources Ltd. as part of the Company’s acquisition of royalty rights in the Ring of Fire mining district of Ontario, Canada, in April 2015. The loan bears a 7% interest, is secured by certain mining claims held by Noront in the Ring of Fire district, and has a maturity date of September 30, 2022.

Investments and loan receivable comprised the following:

	At December 31,		At December 31,
	2020		2019
Equity investments	$	195.6	$	145.6
Loan receivable		37.1		34.6
Warrants		5.7		3.0
	$	238.4	$	183.2

The change in the fair value of equity investments recognized in other comprehensive income (loss) for the periods ended December 31, 2020 and 2019 were as follows:

	2020		2019
Gain on change in the fair value of equity investments at FVTOCI	$	50.5	$	11.4
Tax expense in other comprehensive income		(6.7)		(1.5)
Gain on change in the fair value of equity investments at FVTOCI, net of tax	$	43.8	$	9.9

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Prepaid expenses and other current assets

12 Months Ended

Dec. 31, 2020

Prepaid expenses and other current assets.

Prepaid expenses and other current assets

Note 7 – Prepaid expenses and other current assets

Prepaid expenses and other current assets comprised the following:

	At December 31,		At December 31,
	2020		2019
Gold bullion	$	18.6	$	26.2
Prepaid expenses		16.4		17.5
Stream ounces inventory		0.5		4.4
Debt issue costs		0.6		0.7
	$	36.1	$	48.8

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Royalty, stream and working interests

12 Months Ended

Dec. 31, 2020

Royalty, stream and working interests

Royalty, stream and working interests

Note 8 – Royalty, stream and working interests

(a)Royalties, streams and working interests

Royalty, stream and working interests, net of accumulated depletion and impairment charges and reversals, comprised the following:

					Impairment
			Accumulated		(charges)
As at December 31, 2020	Cost		depletion(1)		reversals		Carrying value
Mining royalties	$	1,049.2	$	(642.3)	$	—	$	406.9
Streams		4,346.6		(1,702.6)		9.6		2,653.6
Energy		1,944.7		(462.4)		(267.7)		1,214.6
Advanced		343.0		(49.0)		—		294.0
Exploration		76.1		(13.1)		—		63.0
	$	7,759.6	$	(2,869.4)	$	(258.1)	$	4,632.1

1. Accumulated depletion includes previously recognized impairment charges.

					Impairments
			Accumulated		(charges)
As at December 31, 2019	Cost		depletion(1)		reversals		Carrying value
Mining royalties	$	1,035.7	$	(620.1)	$	—	$	415.6
Streams		4,346.3		(1,542.3)		—		2,804.0
Energy		1,756.4		(402.8)		—		1,353.6
Advanced		203.2		(32.3)		—		170.9
Exploration		66.2		(12.5)		—		53.7
	$	7,407.8	$	(2,610.0)	$	—	$	4,797.8

1. Accumulated depletion includes previously recognized impairment charges.

Changes in royalty, stream and working interests for the periods ended December 31, 2020 and December 31, 2019 were as follows:

	Mining
	royalties		Streams		Energy		Advanced		Exploration		Total
Balance at January 1, 2019	$	450.1	$	2,967.6	$	966.6	$	129.8	$	41.5	$	4,555.6
Additions (note 4)		—		—		419.0		46.0		11.9		476.9
Transfers		5.9		—		—		(5.9)		—		—
Depletion		(46.0)		(163.6)		(49.0)		(0.9)		(0.2)		(259.7)
Impact of foreign exchange		5.6		—		17.0		1.9		0.5		25.0
Balance at December 31, 2019	$	415.6	$	2,804.0	$	1,353.6	$	170.9	$	53.7	$	4,797.8
Additions (note 4)		18.8		—		170.2		118.6		8.2		315.8
Transfers		(1.2)		—		—		1.2		—		—
Impairment (charges) and reversals		—		9.6		(267.7)		—		—		(258.1)
Depletion		(31.5)		(160.0)		(44.9)		(2.1)		(0.2)		(238.7)
Impact of foreign exchange		5.2		—		3.4		5.4		1.3		15.3
Balance at December 31, 2020	$	406.9	$	2,653.6	$	1,214.6	$	294.0	$	63.0	$	4,632.1

Of the total net book value as at December 31, 2020,  $3,327.3 million (December 31, 2019 - $3,743.8 million) is depletable and $1,304.8 million (December 31, 2019 - $1,054.0 million) is non-depletable.

(b)Impairment of Energy interests

Royalties, stream and working interests are reviewed for impairment if there is an indication that the carrying amount may not be recoverable. As a result of reduced production and capital spend by the operators of the Company’s Energy interests due to lower market expectations for oil and gas prices, the Company noted the presence of impairment indicators as at March 31, 2020 and carried out an asset impairment analysis of its Energy interests. Impairments in the carrying value of each CGU were measured and recorded to the extent that the carrying value of each CGU exceeds its estimated recoverable amount, which was the higher of FVLCD and VIU, which is generally calculated using an estimate of future discounted cash-flows.

The Company recorded impairment charges at March 31, 2020 with respect to the following CGUs based on the recoverable amount using a FVLCD model:

SCOOP/STACK

The Company’s interest in the SCOOP/STACK comprises acquisitions of royalty rights through the Royalty Acquisition Venture, a jointly-owned entity with Continental, as well as two packages of royalty rights acquired between December 2016 and November 2017.

Weyburn

The Company holds a 11.71% NRI, a 0.44% ORR and a 2.56% WI in the Weyburn Unit, which is located 129km southeast of Regina, Saskatchewan. The 11.71% NRI was acquired on November 13, 2012.

The following table summarizes the impairment losses recorded at March 31, 2020 and estimated recoverable amount by CGU on a pre-tax basis:  

		Impairment		Recoverable
		amount		amount
Royalty, stream and working interests, net
SCOOP/STACK	$	207.2	$	309.2
Weyburn		60.5		162.8
Other assets
Oil well equipment	$	4.0	$	4.7
	$	271.7	$	476.7

Key assumptions and sensitivity analysis

Key assumptions and estimates used in determining the recoverable amounts of the Company’s Energy interests are related to oil prices and discount rates. The future cash flows expected from each CGU were derived from a model developed by management using cash-flows prepared by an independent reserve engineer or a third-party advisor, and expected performance based on publicly-released technical information to predict expected future production. For the SCOOP/STACK CGUs, the Company’s management made assumptions of future drilling activity to reflect the reduced capital spending by operators in the current environment.

The Company’s management made assumptions of future West Texas Intermediate (“WTI”) prices to estimate future revenues, based on long-term consensus price estimates obtained from a sample of independent reserve evaluators. For the Weyburn CGU, the differential to Edmonton Light prices assumption was $8.55/barrel, and the U.S. dollar to Canadian dollar foreign exchange rate assumption was $0.72. Forecasted WTI prices as at March 31, 2020 used to determine future cash flows were as follows:

											Average
											Annual
	Remainder of										Increase
	2020		2021		2022		2023		2024		Thereafter
WTI oil price (US$/barrel)	$	30.00	$	41.18	$	49.88	$	55.87	$	57.98	2	%

The future cash-flows were discounted using an after-tax discount rate which reflects specific market risk factors associated with individual characteristics of the CGU. For the SCOOP/STACK CGUs, the discount rate ranged between 5% for proved producing reserves to 12% for undeveloped contingent resources. For the Weyburn CGU, the discount rate assumed was 9.5%.  

While oil and gas prices have partially rebounded from April 2020, there remains a level of uncertainty surrounding oil and gas prices. The Company determined that this did not warrant a consideration of an indicator of reversal in the previously recorded impairments.

A sensitivity analysis showing the impact of a change, in isolation, in the WTI oil price and discount rate assumptions is shown below:

	Increase (Decrease) to Impairment Charges
	1% Increase		1% Decrease		10% Decrease		10% Increase
	in the		in the		in WTI Oil		in WTI Oil
	Discount Rate		Discount Rate		Price		Price
SCOOP/STACK	$	34.1	$	(39.9)	$	37.8	$	(37.3)
Weyburn, including oil well equipment		16.9		(19.1)		39.8		(39.0)
	$	51.0	$	(59.0)	$	77.6	$	(76.3)

(c)Impairment reversal of Mine Waste Solutions stream

At every reporting period, the Company assesses whether there is an indication that an impairment loss previously recognized for an asset may no longer exist or may have decreased.

In 2014, the Company carried out an impairment analysis on its stream interest in the Mine Waste Solutions (“MWS”) tailings recovery operation in South Africa. Due to the capped nature of the stream and its limited optionality, the Company assessed that the reduction in consensus gold price estimates at the time was an indication of impairment, and, as a result, recorded an impairment of $26.6 million.

In 2020, the Company assessed that the increase in consensus gold price estimates represented an indication that the previously recorded impairment loss may no longer exist or may have decreased and carried out an asset impairment reversal analysis. The recoverable amount was based on the FVLCD. The recoverable amount determined for the MWS interest exceeded its carrying value. As such, a full reversal of the 2014 impairment loss, net of depletion had an impairment loss not previously been recorded, of $9.6 million was recognized, increasing the carrying value of the interest to $77.2 million. The following table summarizes the impairment reversal and estimated recoverable amount for the MWS stream interest on a pre-tax basis:

		Impairment
		reversal		Recoverable
		amount		amount
Royalty, stream and working interests, net
Mine Waste Solutions	$	(9.6)	$	114.8
	$	(9.6)	$	114.8

Key assumptions and sensitivity analysis

Key assumptions and estimates used in determining the recoverable amount of the Company’s MWS stream are related to gold prices and timing of unlevered cash flows.

The FVLCD for the MWS stream was determined by calculating the net present value (“NPV”) of the estimated future cash-flows expected to be generated by the mining of the MWS tailings. The estimates of future cash-flows were derived from a life-of-mine model developed by the Company’s management using MWS’s historical performance to predict future performance. Based on observable market or publicly available data, the Company’s management made assumptions of future gold prices to estimate future revenues. These price assumptions were supported by longer-term consensus price estimates obtained from a sample of analysts. Forecasted gold prices as at December 31, 2020 used to determine future cash flows were as follows:

	2021			2022		2023	2024
Gold price (US$/ounce)	$	1,910	$	1,886	$	1,831	$	1,681

The future cash-flows were discounted using a discount rate of 5% which reflects specific market risk factors associated with MWS.

A sensitivity analysis showing the impact of a change, in isolation, in the forecasted gold prices (+/- 10%) and discount rate (+/- 1%) was performed on the cash flow model for the MWS stream. Reviewing changes in the key assumptions did not have any impact on the result of the Company’s impairment reversal assessment.

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Other assets

12 Months Ended

Dec. 31, 2020

Other assets

Other assets

Note 9 – Other assets

Other assets comprised the following:

	At December 31,		At December 31,
	2020		2019
Energy well equipment, net	$	5.0	$	9.3
Right-of-use assets, net		2.0		2.5
Furniture and fixtures, net		0.4		0.4
Debt issue costs		1.3		1.9
Other		4.9		—
	$	13.6	$	14.1

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Accounts payable and accrued liabilities

12 Months Ended

Dec. 31, 2020

Accounts payable and accrued liabilities

Accounts payable and accrued liabilities

Note 10 – Accounts payable and accrued liabilities

Accounts payable and accrued liabilities comprise the following:

	At December 31,		At December 31,
	2019		2019
Accounts payable	$	3.5	$	6.8
Accrued liabilities		37.3		35.0
	$	40.8	$	41.8

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Debt

12 Months Ended

Dec. 31, 2020

Debt

Debt

Note 11 – Debt

Changes in obligations related to the Company’s credit facilities were as follows:

		Corporate		Corporate		FNBC
	revolver			term loan		revolver		Total
Size of facility	$	1,000.0	$	160.0	$	100.0	$	1,260.0
Balance at January 1, 2019	$	210.0	$	—	$	—	$	210.0
Drawdowns		275.0		160.0		—		435.0
Repayment		(485.0)		(80.0)		—		(565.0)
Balance at December 31, 2019	$	—	$	80.0	$	—	$	80.0
Repayment		—		(80.0)		—		(80.0)
Balance at December 31, 2020	$	—	$	—	$	—	$	—

(a)Corporate Revolver

The Company has a $1.0 billion unsecured revolving term credit facility (the “Corporate Revolver”). The Corporate Revolver has a maturity date of March 22, 2024.

The Company has two standby letters of credit in the amount of $18.1 million (C$23.1 million) against the Corporate Revolver in relation to the audit by the Canada Revenue Agency (“CRA”) of its 2013–2015 taxation years, as referenced in note 23.

Advances under the Corporate Revolver can be drawn as follows:

U.S. dollars

·Base rate advances with interest payable monthly at the Canadian Imperial Bank of Commerce (“CIBC”) base rate, plus between 0.00% and 1.05% per annum depending upon the Company’s leverage ratio; or

·LIBOR loans for periods of 1, 2, 3 or 6 months with interest payable at a rate of LIBOR, plus between 1.00% and 2.05% per annum, depending on the Company’s leverage ratio.

Canadian dollars

·Prime rate advances with interest payable monthly at the CIBC prime rate, plus between 0.00% and 1.05% per annum, depending on the Company’s leverage ratio; or

·Bankers’ acceptances for a period of 30 to 180 days with a stamping fee calculated on the face amount between 1.00% and 2.05%, depending on the Company’s leverage ratio.

All loans are readily convertible into loans of other types, described above, on customary terms and upon provision of appropriate notice. Borrowings under the Corporate Revolver are guaranteed by certain of the Company’s subsidiaries and are unsecured.

The Corporate Revolver is subject to a standby fee of 0.20% to 0.41% per annum, depending on the Company’s leverage ratio, even if no amounts are outstanding under the Corporate Revolver.

(b)Corporate Term Loan

On April 17, 2019, the Company entered into an unsecured credit facility (the “Corporate Term Loan”) in the amount of $160.0 million to pay down amounts previously borrowed under the Corporate Revolver. The Corporate Term Loan had a maturity date of April 17, 2021. Advances were drawn as a one-month LIBOR loan with interest payable at a rate of LIBOR plus 0.85%. In 2020, the Company fully repaid the amount borrowed against the Corporate Term Loan. As the Corporate Term Loan is a non-revolving facility, it is no longer available to draw.

(c) FNBC Revolver

The Company’s subsidiary, Franco-Nevada (Barbados) Corporation (“FNBC”), has an unsecured revolving term credit facility (the “FNBC Revolver”). The FNBC Revolver provides for the availability over a one-year period of up to $100.0 million in borrowings.

On March 10, 2020, the FNBC Revolver was amended to provide an extension of the maturity date to March 20, 2021.  Advances, under the amended terms of the FNBC Revolver, can be drawn in U.S. dollars as follows:

· Base rate advances with interest payable monthly at the CIBC base rate, plus 0.25% per annum; or

· LIBOR loans for periods of 1, 2, 3 or 6 months with interest payable at a rate of LIBOR plus 1.25% per annum.

All loans are readily convertible into loans of other types on customary terms and upon provision of appropriate notice.

The FNBC Revolver is subject to a standby fee of 0.25% per annum, even if no amounts are outstanding.

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Revenue

12 Months Ended

Dec. 31, 2020

Revenue.

Revenue

Note 12 – Revenue

Revenue classified by commodity, geography and type comprised the following:

	2020		2019
Commodity
Gold(1)	$	718.1	$	545.8
Silver		106.4		83.2
Platinum-group metals(1)		86.2		75.6
Other mining commodities		17.8		23.6
Mining	$	928.5	$	728.2
Energy		91.7		115.9
	$	1,020.2	$	844.1
Geography
Latin America	$	502.1	$	369.2
United States		178.6		166.6
Canada(1)		196.9		166.2
Rest of World		142.6		142.1
	$	1,020.2	$	844.1
Type
Revenue-based royalties	$	274.9	$	266.7
Streams(1)		629.2		490.8
Profit-based royalties		88.7		49.7
Other		27.4		36.9
	$	1,020.2	$	844.1

1. Includes a loss of $0.1 million and gain of $5.9 million of provisional pricing adjustments for gold and platinum-group metals, respectively

(2019 – gain of $0.3 million and $7.8 million, respectively).

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Costs of sales

12 Months Ended

Dec. 31, 2020

Costs of sales

Costs of sales

Note 13 – Costs of sales

Costs of sales comprised the following:

	2020		2019
Costs of stream sales	$	149.5	$	135.1
Mineral production taxes		2.9		2.4
Mining costs of sales	$	152.4	$	137.5
Energy costs of sales		6.4		7.3
	$	158.8	$	144.8

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Related party disclosures

12 Months Ended

Dec. 31, 2020

Related party disclosures

Related party disclosures

Note 14 – Related party disclosures

Key management personnel are those persons having authority and responsibility for planning, directing and controlling the activities of the Company. Key management personnel include the Board of Directors and the executive management team.

Compensation for key management personnel of the Company was as follows:

	2020		2019
Short-term benefits(1)	$	3.5	$	4.6
Share-based payments(2)		7.9		5.9
	$	11.4	$	10.5

1. Includes salary, benefits and short-term accrued incentives/other bonuses earned in the period.

2. Represents the expense of stock options and restricted share units and mark-to-market charges on deferred share units during the year.

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Finance income and expenses

12 Months Ended

Dec. 31, 2020

Finance income and expenses

Finance income and expenses

Note 15 – Finance income and expenses

Finance income and expenses for the periods ended December 31, 2020 and 2019 were as follows:

	2020		2019
Finance income
Interest	$	3.7	$	3.5
	$	3.7	$	3.5
Finance expenses
Standby charges	$	2.1	$	2.1
Amortization of debt issue costs		1.0		0.9
Interest		0.3		7.4
Accretion of lease liabilities		0.1		0.2
	$	3.5	$	10.6

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Income taxes

12 Months Ended

Dec. 31, 2020

Income taxes

Income taxes

Note 16 - Income taxes

Income tax expense for the years ended December 31, 2020 and 2019 was as follows:

	2020		2019
Current income tax expense
Expense for the year	$	50.9	$	42.3
Adjustment in respect of prior years		(2.4)		(3.2)
Current income tax expense	$	48.5	$	39.1
Deferred income tax expense (recovery)
Origination and reversal of temporary differences	$	(30.2)		20.2
Impact of changes in tax rates		(0.8)		(1.0)
Change in unrecognized deductible temporary differences		(6.4)		(0.1)
Adjustments in respect of prior years		2.2		3.4
Other		—		0.2
Deferred income tax (recovery) expense	$	(35.2)	$	22.7
Income tax expense	$	13.3	$	61.8

A reconciliation of the product of net income before taxes multiplied by the combined Canadian federal and provincial statutory rate to the provision for income taxes as shown in the consolidated statement of income and comprehensive income for the years ended December 31, 2020 and 2019, is as follows:

	2020		2019
Net income before income taxes	$	339.5	$	405.9
Statutory tax rate		26.5%		26.6%
Tax expense at statutory rate	$	90.0	$	108.0
Reconciling items:
Change in unrecognized deductible temporary differences	$	(6.4)	$	(0.1)
Income/expenses not taxed		(4.2)		(4.3)
Differences in foreign statutory tax rates		(66.0)		(42.8)
Differences due to changing future tax rates		(0.8)		(1.0)
Foreign withholding tax		—		0.3
Temporary differences subject to initial recognition exemption		0.6		1.5
Other		0.1		0.2
Income tax expense	$	13.3	$	61.8

Income tax expense recognized in other comprehensive income is as follows:

		2020						2019
						After						After
		Before		Tax		Tax		Before		Tax		Tax
		Tax Gain		Expense		Gain		Tax Gain		Expense		Gain
Gain (loss) on change in the fair value of equity investments at FVTOCI	$	50.5	$	(6.7)	$	43.8	$	11.4	$	(1.5)	$	9.9
Currency translation adjustment		19.6		—		19.6		32.3		—		32.3
Other comprehensive income	$	70.1	$	(6.7)	$	63.4	$	43.7	$	(1.5)	$	42.2
Deferred tax			$	(6.7)					$	(1.5)
Tax expense in other comprehensive income			$	(6.7)						(1.5)

The significant components of deferred income tax assets and liabilities as at December 31, 2020 and 2019 are as follows:

	2020		2019
Deferred income tax assets:
Deductible temporary differences relating to:
Royalty, stream and working interests	$	44.1	$	6.5
Non-capital loss carry-forwards		0.6		0.3
Other		0.4		—
	$	45.1	$	6.8
Deferred income tax liabilities:
Taxable temporary differences relating to:
Share issue and debt issue costs	$	0.3	$	(1.7)
Royalty, stream and working interests		89.6		89.0
Non-capital loss carry-forwards		(3.9)		(4.3)
Investments		11.6		4.3
Other		(6.1)		(4.9)
	$	91.5	$	82.4
Deferred income tax liabilities, net	$	46.4	$	75.6

The movement in net deferred tax liabilities during the years ended December 31, 2020 and 2019 is as follows:

		2020		2019
Balance, beginning of year	$	75.6	$	50.0
Recognized in net income		(35.2)		22.5
Recognized in other comprehensive income		6.7		1.5
Recognized in equity		0.3		0.4
Other		(1.0)		1.2
Balance, end of year	$	46.4	$	75.6

The Company has recognized deferred tax assets in respect of the following non-capital losses as at December 31, 2020 that can be applied against future taxable profit:

Country	Type	Amount		Expiry date
Canada	Non-Capital Losses	$	14.7	2030-2038
Chile	Non-Capital Losses		2.3	No expiry
		$	17.0

Unrecognized deferred tax assets and liabilities

The aggregate amount of taxable temporary differences associated with investments in subsidiaries, for which deferred tax liabilities have not been recognized as at December 31, 2020 is $298.1 million (2019 – $393.7 million).  No deferred tax liabilities are recognized on the temporary differences associated with investment in subsidiaries because the company controls the timing of reversal and it is not probable that they will reverse in the foreseeable future.

The aggregate amount of deductible temporary differences associated with other items, for which deferred tax assets have not been recognized as at December 31, 2020 is $48.7 million (2019 - $72.7 million).  No deferred tax asset is recognized in respect of these items because it is not probable that future taxable profits will be available against which the company can utilize the benefit.

Deductible temporary differences, losses and unused tax credits for which no deferred tax assets have been recognized are attributable to the following:

	2020			2019
Royalty, stream and working interests	$	25.1	$	48.0
Tax losses (expiry dates - 2029-2033)		23.6		24.7
	$	48.7	$	72.7

The Company is undergoing an audit by the Canada Revenue Agency of its 2012-2017 taxation years, as referenced in note 23.

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Shareholders' equity

12 Months Ended

Dec. 31, 2020

Shareholders' equity

Shareholders' equity

Note 17 – Shareholders’ equity

(a) Share capital

The Company’s authorized capital stock includes an unlimited number of common shares (190,956,476 common shares issued and outstanding as at December 31,  2020) having no par value and preferred shares issuable in series (issued - nil).

Changes in share capital in the year ended December 31, 2020 and 2019 were as follows:

	Number
	of shares		Amount
Balance at January 1, 2019	186,692,481	$	5,158.3
At-the-market equity offering	1,433,400		136.0
Acquisition of Salares Norte	366,499		27.0
Exercise of stock options	283,863		17.3
Vesting of restricted share units	46,375		3.3
Dividend reinvestment plan	558,770		48.8
Balance at December 31, 2019	189,381,388	$	5,390.7
At-the-market equity offering	1,054,800	$	133.7
Exercise of stock options	150,482		9.7
Vesting of restricted share units	42,328		3.7
Dividend reinvestment plan	327,478		42.3
Balance at December 31, 2020	190,956,476	$	5,580.1

(b) At-the-Market Equity Program

On May 11, 2020, the Company established a new at-the-market equity program (the “ATM Program”) permitting the Company to issue up to an aggregate of $300 million worth of common shares from treasury at prevailing market prices to the public through the Toronto Stock Exchange, the New York Stock Exchange or any other marketplace on which the common shares are listed, quoted or otherwise trade. The previous at-the-market program, which permitted the Company to issue up to an aggregate of $200 million worth of common shares, was terminated on April 28, 2020 when the Company renewed its base shelf prospectus. The volume and timing of distributions under the ATM Program is determined at the Company’s sole discretion, subject to applicable regulatory limitations and blackout periods. The ATM Program will be effective until May 28, 2022 unless terminated prior to such date by the Company.

During the year ended December 31, 2020, the Company issued 1,054,800 common shares under the ATM Program and the Company’s previous at-the-market equity program at an average price per common share of $128.96. The gross proceeds to the Company from these issuances were $136.0 million, and the net proceeds were $133.7 million after deducting agent commission costs of $1.4 million and other share issuance costs of $0.9 million.

(c) Dividends

In 2020, the Company declared dividends of $1.03 per common share (2019 - $0.99 per common share).

Dividends paid in cash and through the Company’s Dividend Reinvestment Plan (“DRIP”) were as follows:

	2020		2019
Cash dividends	$	154.9	$	138.2
DRIP dividends		42.3		48.8
	$	197.2	$	187.0

(d) Stock-based payments

On March 7, 2018, the Company’s Board of Directors adopted an amended and restated share compensation plan covering both stock options and RSUs effective May 9, 2018 (the “Plan”). Pursuant to the Plan, the Company may grant incentive stock options to directors, officers, employees and consultants at the discretion of the Board of Directors.  The exercise price and vesting period of any option is fixed by the Board of Directors on the date of grant.  The term of options is at the sole discretion of the Board of Directors but may not exceed ten years from the date of grant.  Options expire on the earlier of the expiry date or the date of termination and are non-transferable.  The options granted will be adjusted in the event of an amalgamation, rights offering, share consolidation or subdivision or other similar adjustments of the share capital of the Company. The aggregate number of common shares that may be issued under the Plan is limited to 9,700,876 common shares. Within any one-year period, the number of common shares issued to any single insider participant under the Plan shall not exceed 5% of the common shares then issued and outstanding.

Options to purchase common shares of the Company that have been granted in accordance with the Plan and pursuant to other agreements are as follows:

	2020			2019
		Weighted			Weighted
		average exercise			average exercise
	Number	price		Number	price
Stock options outstanding, beginning of year	836,427	C$	80.01	1,015,409	C$	69.13
Granted	61,594	C$	171.33	104,881	C$	129.32
Exercised	(150,482)	C$	67.13	(283,863)	C$	59.31
Forfeited	(1,577)	C$	112.84	—	C$	—
Stock options outstanding, end of the year	745,962	C$	90.08	836,427	C$	80.01
Exercisable stock options, end of the year	563,975	C$	76.14	596,402	C$	68.05

Options granted during the years ended December 31, 2020 and 2019 have a ten-year term and vest over three years in equal portions on the anniversary of the grant date.  The fair value of stock options was calculated using the Black-Scholes option pricing model based on the following weighted average assumptions, resulting in a fair value of $1.7 million, or a weighted average fair value of C$36.67 per stock option (2019 — $2.2 million, or C$28.11 per stock option).

	2020		2019
Risk-free interest rate	0.39	%	1.62	%
Expected dividend yield	0.78	%	1.02	%
Expected price volatility of the Company’s common shares	28.8	%	27.5	%
Expected life of the option	4 years		4 years
Forfeiture rate	0	%	0	%

During the year ended December 31, 2020, an expense of $2.2 million (2019 - $2.3 million) related to stock options has been included in the consolidated statement of income and other comprehensive income, and $0.1 million (2019 - $0.5 million), was capitalized to royalty, stream and working interest, net, respectively. As at December 31, 2020, there was $2.9 million (2019 – $3.5 million) of total unrecognized non-cash stock-based compensation relating to stock options granted under the Plan, which is expected to be recognized over a weighted average period of 1.7 years (2019 – 1.7 years).

Options to purchase common shares outstanding at December 31, 2020, exercise prices and weighted average lives to maturity as follows:

			Weighted
Exercise	Options	Options	average life
price	outstanding	exercisable	(years)
C$40.87	32,451	32,451	2.94
C$42.43	750	750	1.25
C$46.17	75,000	75,000	2.63
C$55.58	17,397	17,397	1.95
C$58.67	20,000	20,000	4.64
C$59.52	33,876	33,876	3.95
C$65.76	55,853	55,853	4.94
C$75.45	120,074	120,074	5.94
C$88.76	45,082	29,171	7.64
C$94.57	95,273	60,184	7.95
C$100.10	84,523	84,523	6.94
C$129.32	104,089	34,696	8.94
C$171.33	61,594	—	9.94
	745,962	563,975	6.40

(e) Restricted share units

During the year ended December 31, 2020,  22,519 performance-based RSUs (2019  –20,153) and 14,546 time-based RSUs (2019  –19,863) were awarded to management of the Company. The fair value of the RSUs, which is determined with reference to the weighted average trading price of the Company’s common shares over the five trading days immediately preceding the date of issuance, was determined to be $5.0 million in 2020  (2019 - $3.9 million). Included in the Company’s stock-based compensation expense is an amount of $3.4 million (2019 – $2.6 million) relating to RSUs. In addition, $0.1 million related to the RSUs was capitalized to royalty, stream and working interest, net (2019 – $0.6 million). As at December 31, 2020, there is $7.7 million (2019 – $6.4 million) of total unrecognized non-cash stock-based compensation expense relating to non-vested restricted share units granted under the Plan, which is expected to be recognized over a weighted average period of 2.1 years (2019 – 2.1 years).

(f) Deferred Share Unit Plan

During the year ended December 31, 2020,  14,285 DSUs and dividend equivalent DSUs were granted to directors under the DSU Plan (2019 – 18,448). No DSUs and dividend equivalent DSUs were redeemed during the year. The mark-to-market adjustment recorded for the year ended December 31, 2020 in respect of the DSU Plan resulted in an increase in the DSU liability of $2.0 million (2019 – $2.8 million).The value of the DSU liability as at December 31, 2020 was $14.9 million (2019 - $10.8 million).

(g) Outstanding Stock Options and Restricted Share Units

The following table sets out the maximum shares that would be outstanding if all of the stock options and RSUs at December 31, 2020 and 2019 were exercised:

	2020	2019
Common shares outstanding	190,956,476	189,381,388
Stock options	745,962	836,427
Restricted Share Units	102,708	108,978
	191,805,146	190,326,793

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Earnings per share ("EPS")

12 Months Ended

Dec. 31, 2020

Earnings per share ("EPS")

Earnings per share ("EPS")

Note 18 – Earnings per share (“EPS”)

	2020						2019
				Shares	Per Share				Shares	Per Share
		Net income		(in millions)	Amount		Net income		(in millions)	Amount
Basic earnings per share		$	326.2	190.3	$	1.71	$	344.1	187.7	$	1.83
Effect of dilutive securities			—	0.4		—		—	0.3		—
Diluted earnings per share		$	326.2	190.7	$	1.71	$	344.1	188.0	$	1.83

For the year ended December 31, 2020, a weighted average of 3,534 stock options (2019  –1,143 stock options) was excluded in the computation of diluted EPS due to being anti-dilutive. Further, for the year ended December 31, 2019, a weighted average of 6,034 stock options was excluded due to the strike price exceeding the average share price during the year.  RSUs totaling 66,996  (2019 - 65,972 RSUs) were excluded from the computation of diluted EPS due to the performance criteria for the vesting of the RSUs not being measurable as at December 31, 2020. 

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Segment reporting

12 Months Ended

Dec. 31, 2020

Segment reporting

Segment reporting

Note 19 – Segment reporting

The chief operating decision-maker organizes and manages the business under two operating segments, consisting of royalty, stream and working interests in each of the mining and energy sectors.

The Company’s reportable segments for purposes of assessing performance are presented as follows:

	2020						2019
	Mining		Energy		Total		Mining		Energy		Total
Revenue	$	928.5	$	91.7	$	1,020.2	$	728.2	$	115.9	$	844.1
Income/(expenses)
Costs of sales	$	152.4	$	6.4	$	158.8	$	137.5	$	7.3	$	144.8
Depletion and depreciation		193.8		44.9		238.7		210.7		49.0		259.7
Segment gross profit	$	582.3	$	40.4	$	622.7	$	380.0	$	59.6	$	439.6

A reconciliation of total segment gross profit to consolidated net income before income taxes is presented below:

		2020		2019
Total segment gross profit	$	622.7	$	439.6
Other operating (income)/expenses
Impairment charges and reversals	$	262.1	$	—
General and administrative expenses		28.8		28.8
Gain on sale of bullion		(7.0)		(2.9)
Depreciation		2.3		3.5
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

Revenues earned during the years ended December 31, 2020 and 2019 are presented by geographic area based on the location of the mining operations giving rise to the royalty, stream or working interest:

	2020		2019
Latin America:
Peru	$	175.5		$	145.3
Chile		106.8			103.1
Panama		135.4			64.7
Other		84.4			56.1
United States		178.6			166.6
Canada		196.9			166.2
Rest of World		142.6			142.1
	$	1,020.2		$	844.1

For the year ended December 31, 2020,  three interests generated revenue totaling $360.7 million (2019 – two interests generated revenue totaling $203.5 million), each comprising 13%,  12% and 10%, respectively (2019 – 12% and 12%, respectively) of revenue.

Royalty, stream and working interests as at December 31, 2020 and 2019 are presented by geographic area based on the location of the mining operations giving rise to the royalty, stream or working interest.

		2020		2019
Latin America:
Panama	$	1,318.5	$	1,348.4
Peru		766.3		825.5
Chile		485.0		504.2
Other		154.4		48.1
United States		1,216.8		1,300.2
Canada		458.2		504.9
Rest of World		232.9		266.5
	$	4,632.1	$	4,797.8

Investments of $238.4 million (2019 - $183.2 million) are held in Canada. Energy well equipment, included in other non-current assets, of $5.0 million (2019 - $9.3 million) is located in Canada.

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Fair value measurements

12 Months Ended

Dec. 31, 2020

Fair value measurements

Fair value measurements

Note 20 - Fair value measurements

Fair value is a market-based measurement, not an entity-specific measurement. For some assets and liabilities, observable market transactions or market information might be available. For other assets and liabilities, observable market transactions and market information might not be available. However, the objective of a fair value measurement in both cases is the same - to estimate the price at which an orderly transaction to sell the asset or to transfer the liability would take place between market participants at the measurement date under current market conditions (i.e. an exit price at the measurement date from the perspective of a market participant that holds the asset or owes the liability).

The fair value hierarchy establishes three levels to classify the inputs to valuation techniques used to measure fair value.

· Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities.

· Level 2 inputs are quoted prices in markets that are not active, quoted prices for similar assets or liabilities in active markets, inputs other than quoted prices observable for the asset or liability (for example, interest rate and yield curves observable at commonly quoted intervals, forward pricing curves used to value currency and commodity contracts and volatility measurements used to value option contracts), or inputs that are derived principally from or corroborated by observable market data or other means.

· Level 3 inputs are unobservable (supported by little or no market activity).

The fair value hierarchy gives the highest priority to Level 1 inputs and the lowest priority to Level 3 inputs.

There were no transfers between the levels of the fair value hierarchy during the year ended December 31, 2020. 

Assets and Liabilities Measured at Fair Value on a Recurring Basis:

	Quoted prices in		Significant other		Significant
	active markets for		observable		unobservable
	identical assets		inputs		inputs		Aggregate
As at December 31, 2020	(Level 1)		(Level 2)		(Level 3)		fair value
Receivables from provisional concentrate sales	$	—	$	10.1	$	—	$	10.1
Equity investments		191.8		—		3.8		195.6
Warrants		—		5.7		—		5.7
	$	191.8	$	15.8	$	3.8	$	211.4

	Quoted prices in		Significant other		Significant
	active markets for		observable		unobservable
	identical assets		inputs		inputs		Aggregate
As at December 31, 2019	(Level 1)		(Level 2)		(Level 3)		fair value
Receivables from provisional concentrate sales	$	—	$	16.4	$	—	$	16.4
Equity investments		141.7		—		3.9		145.6
Warrants		—		3.0		—		3.0
	$	141.7	$	19.4	$	3.9	$	165.0

The fair values of the Company’s remaining financial assets and liabilities, which include cash and cash equivalents, receivables, loan receivables, accounts payable and accrued liabilities, and debt approximate their carrying values due to their short-term nature, historically negligible credit losses, fair value of collateral, or floating interest rate. 

The Company has not offset financial assets with financial liabilities.

Assets Measured at Fair Value on a Non-Recurring Basis:

	Quoted prices in		Significant other		Significant
	active markets for		observable		unobservable
	identical assets		inputs		inputs		Aggregate
As at December 31, 2020	(Level 1)		(Level 2)		(Level 3)		fair value
SCOOP/STACK	$	—	$	—	$	309.2	$	309.2
Weyburn		—		—		162.8		162.8
Mine Waste Solutions		—		—		114.8		114.8
Oil well equipment		—		—		4.7		4.7
	$	—	$	—	$	591.5	$	591.5

The valuation techniques that are used to measure fair value are as follows:

(a) Receivables

The fair values of receivables arising from gold and platinum group metal concentrate sales contracts that contain provisional pricing mechanisms are determined using the appropriate quoted forward prices from the exchange that is the principal active market for the particular metal. As such, these receivables are classified within Level 2 of the fair value hierarchy.

(b) Investments

The fair values of publicly-traded investments are determined based on a market approach reflecting the closing prices of each particular security at the statement of financial position date. The closing prices are quoted market prices obtained from the exchange that is the principal active market for the particular security, and therefore are classified within Level 1 of the fair value hierarchy.

The Company holds one equity investment that does not have a quoted market price in an active market. The Company has assessed the fair value of the instrument based on a valuation technique using unobservable discounted future cash flows. As a result, the fair value is classified within Level 3 of the fair value hierarchy.

The fair values of warrants are estimated using the Black-Scholes pricing model which requires the use of inputs that are observable in the market. As such, these investments are classified within Level 2 of the fair value hierarchy.

(c) Royalty, stream, and working interests

The fair values of royalty, stream, and working interests are determined primarily using an income approach using unobservable discounted future cash-flows. As a result, the fair values are classified within Level 3 of the fair value hierarchy.

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Financial risk management

12 Months Ended

Dec. 31, 2020

Financial risk management

Financial risk management

Note 21 – Financial risk management

The Company’s financial instruments are comprised of financial assets and liabilities. The Company’s principal financial liabilities comprise accounts payable, accrued liabilities and debt. The Company’s principal financial assets are cash and cash equivalents, receivables, loan receivables, and investments. The main purpose of these financial instruments is to manage short-term cash flow and working capital requirements and fund future acquisitions.

The Company is engaged in the business of acquiring, managing and creating resource royalties and streams.  Royalties and streams are interests that provide the right to revenue or production from the various properties, after deducting specified costs, if any.  These activities expose the Company to a variety of financial risks, which include direct exposure to market risks (which includes commodity price risk, foreign exchange risk and interest rate risk), credit risk, liquidity risk and capital risk management.

Management designs strategies for managing some of these risks, which are summarized below. The Company’s executive management oversees the management of financial risks. The Company’s executive management ensures that financial risk-taking activities are governed by appropriate policies and procedures and that financial risks are identified, measured and managed in accordance with the Company’s policies and risk appetite.

The Company’s overall objective from a risk management perspective is to safeguard its assets and mitigate risk exposure by focusing on security rather than yield.

(a)Market risks

Market risks are the risks that change in market factors, such as commodity prices, foreign exchange rates or interest rates, will affect the value of the Company’s financial instruments. The Company manages market risks by either accepting it or mitigating it through the use of economic strategies.

Commodity price risk

The Company’s royalties, working interests and streams are subject to fluctuations from changes in market prices of the underlying commodities. The market prices of gold, silver, platinum, palladium, oil and gas are the primary drivers of the Company’s profitability and ability to generate free cash flow. All of the Company’s future revenue is not hedged in order to provide shareholders with full exposure to changes in the market prices of these commodities.

Foreign exchange risk

The functional currencies of the Company’s entities include the Canadian, U.S. and Australian dollars with the reporting currency of the Company being the U.S. dollar. The Company is primarily exposed to currency fluctuations relative to the U.S. dollar on balances and transactions that are denominated and settled in Canadian dollars and Australian dollars.  The Company has exposure to the Canadian dollar through its Canadian energy activities and corporate administration costs.  Consequently, fluctuations in the U.S. dollar exchange rate against these currencies increase the volatility of depletion, corporate administration costs and overall net earnings, when translated into U.S. dollars.

The Company records currency translation adjustment gains or losses primarily due to the fluctuation of the U.S. dollar in relation to its Canadian assets and liabilities. During the year ended December 31, 2020, the U.S. dollar weakened in relation to the Canadian dollar. As a result, the Company recorded a currency translation adjustment gain of $19.6 million (2019  –$32.3 million).

Interest Rate Risk

Interest rate risk refers to the risk that the value of a financial instrument or cash flows associated with the instrument will fluctuate due to changes in market interest rates. As at December 31, 2020, the Company’s interest rate exposure arises mainly from the interest receipts on cash and cash equivalents. As at December 31, 2019, the Company was also exposed to interest rate risk due to its outstanding variable-rate debt of $80.0 million.

The following table shows the approximate interest rate sensitivities of our financial assets and liabilities as at December 31,  2020 and 2019:  

	Effect on net income				Effect on equity
	2020		2019		2020		2019
0.5% increase	$	1.8	$	0.3	$	1.8	$	0.3
0.5% decrease		(0.5)		(0.3)		(0.5)		(0.3)

(b)Credit risk

Credit risk is the risk that a third party might fail to fulfill its performance obligations under the terms of a financial instrument.  Credit risk arises from cash and cash equivalents, receivables and loan receivables. The Company closely monitors its financial assets and maintains its cash deposits in several high-quality financial institutions and as such does not have any significant concentration of credit risk.

As at December 31, 2020, the Company is unaware of any information which would cause it to believe that these financial assets are not fully recoverable.

(c)Liquidity Risk

Liquidity risk is the risk of loss from not having access to sufficient funds to meet both expected and unexpected cash demands. The Company manages its exposure to liquidity risk through prudent management of its statement of financial position, including maintaining sufficient cash balances and access to credit facilities. The Company has in place a planning and budgeting process to help determine the funds required to support the Company’s normal operating requirements on an ongoing basis. Management continuously monitors and reviews both actual and forecasted cash flows, including acquisition activities.

As at December 31, 2020, the Company held $534.2 million in either cash, cash equivalents or highly-liquid investments (2019 – $132.1 million).  All of the Company’s financial liabilities are due within one year. The Company’s near-term cash requirements include corporate administration costs, certain costs of sales, including the ore purchase commitments described in note 22, dividends and income taxes directly related to the recognition of royalty, stream and working interest revenues.  In addition, the Company is committed to fund the acquisition of mineral rights through the Royalty Acquisition Venture pursuant to its agreement with Continental as described in note 4 (f).

(d)Capital Risk Management

The Company’s primary objective when managing capital is to provide a sustainable return to shareholders through managing and growing the Company’s resource asset portfolio while ensuring capital protection. The Company defines capital as its cash, cash equivalents, short-term investments and long-term investments which is managed by the Company’s management subject to approved policies and limits by the Board of Directors.

There were no changes in the Company’s approach to capital management during the year ended December 31, 2020 compared to the prior year.  The Company is not subject to material externally imposed capital requirements or significant financial covenants or capital requirements with our lenders. The Company is in compliance with all its covenants under its credit facility as at December 31, 2020.

As at December 31, 2020, the Company has cash and cash equivalents totaling $534.2 million (2019 – $132.1 million), investments and a loan receivable totaling $238.4 million (2019 – $183.2 million), of which $191.8 million (2019 – $141.7 million) are held in liquid securities. The Company also has approximately $1.1 billion (2019 – $1.1 billion) available under its unsecured revolving term credit facilities. All of these sources of capital are available to the Company to meet its near-term cash requirements and grow its portfolio of assets.

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Commitments

12 Months Ended

Dec. 31, 2020

Commitments

Commitments

Note 22 – Commitments

(a)Commodity purchase commitments

The following table summarizes the Company’s commitments pursuant to the associated precious metals agreements:

	Attributable payable
	production to be purchased						Per ounce cash payment (1),(2)								Term of		Date of
Interest	Gold		Silver		PGM		Gold			Silver			PGM		agreement(3)		contract
Antamina	0	%	22.5	% (4)	0	%		n/a			5	% (5)		n/a	40 years		7-Oct-15
Antapaccay	—	% (6)	—	% (7)	0	%		20	% (8)		20	% (9)		n/a	40 years		10-Feb-16
Candelaria	68	% (10)	68	% (10)	0	%	$	400		$	4.00			n/a	40 years		6-Oct-14
Cobre Panama Fixed Payment Stream	—	% (11)	—	% (12)	0	%	$	418	(13)	$	6.27	(14)		n/a	40 years		19-Jan-18
Cobre Panama Floating Payment Stream	—	% (15)	—	% (16)	0	%		20	% (17)		20	% (18)		n/a	40 years		19-Jan-18
Karma	4.875	% (19)	0	%	0	%		20	% (20)		n/a			n/a	40 years		11-Aug-14
Guadalupe-Palmarejo	50	%	0	%	0	%	$	800			n/a			n/a	40 years		2-Oct-14
Sabodala	—	% (21)	0	%	0	%		20	% (22)		n/a			n/a	40 years		25-Sep-20
MWS	25	%	0	%	0	%	$	400			n/a			n/a	40 years	(23)	2-Mar-12
Cooke 4	7	%	0	%	0	%	$	400			n/a			n/a	40 years		5-Nov-09
Sudbury(24)	50	%	0	%	50	%	$	400			n/a		$	400	40 years		15-Jul-08

1 Subject to an annual inflationary adjustment except for Antamina, Antapaccay, Karma, Guadalupe-Palmarejo, and Sabodala.

2 Should the prevailing market price for gold be lower than this amount, the per ounce cash payment will be reduced to the prevailing market price.

3 Subject to successive extensions.

4 Subject to a fixed payability of 90%. Percentage decreases to 15% after 86 million ounces of silver has been delivered under the agreement.

5 Purchase price is 5% of the average silver price at the time of delivery.

6 Gold deliveries are referenced to copper in concentrate shipped with 300 ounces of gold delivered for each 1,000 tonnes of copper in concentrate shipped, until 630,000 ounces of gold has been delivered. Thereafter, percentage is 30% of gold shipped.

7 Silver deliveries are referenced to copper in concentrate shipped with 4,700 ounces of silver delivered for each 1,000 tonnes of copper in concentrate shipped, until 10.0 million ounces of silver has been delivered. Thereafter, percentage is 30% of silver shipped.

8 Purchase price is 20% of the spot price of gold until 750,000 ounces of gold have been delivered, thereafter the purchase price is 30% of the spot price of gold.

9 Purchase price is 20% of the spot price of silver until 12.8 million ounces of silver have been delivered, thereafter the purchase price is 30% of the spot price of silver.

10 Percentage decreases to 40% after 720,000 ounces of gold and 12.0 million ounces of silver have been delivered under the agreement.

11 Gold deliveries are indexed to copper in concentrate produced from the project. 120 ounces of gold per every 1 million pounds of copper produced until 808,000 ounces of gold delivered. Thereafter, 81 ounces of gold per 1 million pounds of copper produced until 1,716,188 ounces of gold delivered. Thereafter, 63.4% of the gold in concentrate.

12 Silver deliveries are indexed to copper in concentrate produced from the project. 1,376 ounces of silver per every 1 million pounds of copper produced until 9,842,000 ounces of silver delivered. Thereafter 1,776 ounces of silver per 1 million pounds of copper produced until 29,731,000 ounces of silver delivered. Thereafter, 62.1% of the silver in concentrate.

13 After 1,341,000 ounces of gold delivered, purchase price is the greater of 50% of spot and $418.27 per ounce. As the mill throughput for 30 consecutive days commensurate with annual capacity of 58 million tonnes per annum was not reached by January 1, 2019, Franco‑Nevada will receive a 5% annual rate of return until such mill throughput was achieved, through a reduction of the applicable fixed gold price of $100 per ounce or a delivery of additional ounces for no consideration.

14 After 21,510,000 ounces of silver delivered, purchase price is the greater of 50% of spot and $6.27 per ounce.

15 Gold deliveries are indexed to copper in concentrate produced from the project. 30 ounces of gold per every 1 million pounds of copper produced until 202,000 ounces of gold delivered. Thereafter 20.25 ounces of gold per 1 million pounds of copper produced until 429,047 ounces of gold delivered. Thereafter, 15.85% of the gold in concentrate.

16 Silver deliveries are indexed to copper in concentrate produced from the project. 344 ounces of silver per every 1 million pounds of copper produced until 2,460,500 ounces of silver delivered. Thereafter, 444 ounces of silver per 1 million pounds of copper produced until 7,432,750 ounces of silver delivered. Thereafter 15.53% of the silver in concentrate.

17 After 604,000 ounces of gold delivered, purchase price is 50% of the spot price of gold. As the mill throughput for 30 consecutive days commensurate with annual capacity of 58 million tonnes per annum was not reached by January 1, 2019, Franco-Nevada will receive a 5% annual rate of return until such mill throughput was achieved, through a reduction of the applicable fixed gold price of $100 per ounce or a delivery of additional ounces for no consideration.

18 After 9,618,000 ounces of silver delivered, purchase price is 50% of the spot price of silver.

19 Gold deliveries are fixed at 15,000 ounces per annum from March 31, 2016 until February 28, 2021 (exclusive of an aggregate 5,625 gold ounces, or 703 gold ounces per quarter, to be delivered as a result of the exercise by the operator of its option to increase the upfront deposit). Thereafter, percentage is 4.875%.

20 Purchase price is 20% of the average gold price at the time of delivery.

21 Based on amended agreement with an effective date of September 1, 2020, gold deliveries are fixed at 783.33 ounces per month until 105,750 ounces of gold is delivered. Thereafter, percentage is 6% of gold production (subject to reconciliation after fixed delivery period to determine if Franco-Nevada would have received more or less than 105,750 ounces of gold under the original 6% variable stream for such period, entitling the operator to a credit for an over-delivery applied against future stream deliveries or a one-time additional delivery to Franco-Nevada for an under-delivery).

22 Purchase price is 20% of prevailing market price at the time of delivery.

23 Agreement is capped at 312,500 ounces of gold.

24 The Company is committed to purchase 50% of the precious metals contained in ore from the properties. Payment is based on gold equivalent ounces. For McCreedy West, the fixed price per gold equivalent ounce was increased to $800 per ounce (with no annual inflationary adjustment), effective July 1, 2018 until December 31, 2021.

(b)Capital commitments

The Company is committed to funding its share of the acquisition of mineral rights acquired through the Royalty Acquisition Venture with Continental, and the potential upsizing of the Alpala Royalty, as described in notes 4 (f) and 4 (b), respectively.

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Contingencies

12 Months Ended

Dec. 31, 2020

Contingencies

Contingencies

Note 23 – Contingencies

Canada Revenue Agency Audit:

The CRA is conducting an audit of Franco-Nevada for the 2012-2017 taxation years. The following table provides a summary of the various CRA audit and reassessment matters further detailed below:

	CRA Position	Taxation Years Reassessed	Potential Liability for Tax, Interest and Penalties (in millions)
Canadian Domestic Tax Matters	Upfront payment made in connection with precious metal stream agreements should be deducted for income tax purposes in a similar manner to how such amount is expensed for financial statement purposes.	2014, 2015	For 2014-2015: Tax:  $1.1  (C$1.4) Interest and other penalties: $0.2  (C$0.2) If CRA were to reassess the 2016-2020 taxation years on the same basis: Tax: $33.6  (C$42.8) Interest and other penalties: $4.1  (C$5.3)
Transfer Pricing (Mexico)	Transfer pricing provisions in the Act (as defined below) apply such that a majority of the income earned by the Company’s Mexican subsidiary should be included in the income of the Company and subject to tax in Canada.	2013, 2014, 2015	For 2013-2015: Tax: $19.9  (C$25.3) Transfer pricing penalties: $8.1  (C$10.3) Interest and other penalties: $7.1  (C$9.2) If CRA were to reassess the 2016-2020 taxation years on the same basis: Tax: $3.6 (C$4.6) Transfer pricing penalties: $1.4  (C$1.7) Interest and other penalties: $0.9  (C$1.1)
Transfer Pricing (Barbados)	Transfer pricing provisions in the Act (as defined below) apply such that a majority of the income relating to certain precious metal streams earned by the Company’s Barbadian subsidiary should be included in the income of the Company and subject to tax in Canada.	2014, 2015	For 2014-2015: Tax: $5.3  (C$6.7) Transfer pricing penalties: $2.0  (C$2.5) Interest and other penalties: $1.7  (C$2.2) If CRA were to reassess the 2016-2020 taxation years on the same basis: Tax: $136.8 (C$174.2) Transfer pricing penalties: $51.5  (C$65.6) Interest and other penalties: $11.0  (C$14.0)
FAPI (Barbados)	The FAPI provisions in the Act (as defined below) apply such that a majority of the income relating to precious metal streams earned by the Company’s Barbadian subsidiary, in 2012 and 2013, should be included in the income of the Company and subject to tax in Canada.	2012, 2013	For 2012-2013: Tax: $6.0  (C$7.7) Interest and other penalties: $2.4  (C$3.1)

(a) Canadian Domestic Tax Matters (2014-2015):

In October 2019, certain wholly-owned Canadian subsidiaries of the Company received Notices of Reassessment for the 2014 and 2015 taxation years (the “Domestic Reassessments”) in which the CRA increases income by adjusting the timing of the deduction of the upfront payments which were made in connection with precious metal stream agreements. The CRA’s position is that the upfront payment should be deducted for income tax purposes in a similar manner to how such upfront payment is expensed for financial statement purposes. Consequently, the CRA’s position results in a slower deduction of the upfront payment and an acceleration of the payment of Canadian taxes. This results in the Company being subject to an incremental payment of Federal and provincial income taxes for these years of $1.1 million (C$1.4 million) (after applying available non-capital losses and other deductions) plus estimated interest (calculated to December 31, 2020) and other penalties of $0.2 million (C$0.2 million). The Company has filed formal Notices of Objection with the CRA against the Domestic Reassessments.

If the CRA were to reassess the particular Canadian subsidiaries for taxation years 2016 through 2020 on the same basis, the Company estimates that it would be subject to an incremental payment of Canadian tax for these years of approximately $33.6 million (C$42.8 million) (after applying available non-capital losses and other deductions) plus interest (calculated to December 31, 2020) and other penalties of approximately $4.1 million (C$5.3 million).

(b) Mexico (2013-2015):

In December 2018, the Company received a Notice of Reassessment from the CRA for the 2013 taxation year (the “2013 Reassessment”) in relation to its Mexican subsidiary. The reassessment was made on the basis of the transfer pricing provisions in the Income Tax Act (Canada) (the “Act”) and asserts that a majority of the income earned by the Mexican subsidiary should have been included in the income of the Company and subject to tax in Canada. The 2013 Reassessment results in additional Federal and provincial income taxes of $8.5 million (C$10.8 million) plus estimated interest (calculated to December 31, 2020) and other penalties of $3.2 million (C$4.2 million) but before any relief under the Canada-Mexico tax treaty.

In December 2019, the Company received Notices of Reassessment for the 2014 and 2015 taxation years (the “2014 and 2015 Reassessments”) on the same basis as the 2013 Reassessment, resulting in additional Federal and provincial income taxes of $11.4 million (C$14.5 million) plus estimated interest (calculated to December 31, 2020) and other penalties of $3.9 million (C$5.0 million) but before any relief under the Canada-Mexico tax treaty.

The Company has filed formal Notices of Objection with the CRA against the 2013 Reassessment and the 2014 and 2015 Reassessments and has posted security in the form of a standby letter of credit for 50% of the reassessed amounts of tax, interest and penalties, as referenced in Note 11 (a). Further, the Company has commenced an appeal in the Tax Court of Canada with respect to these reassessments.

For taxation years 2013 through 2015, the Company’s Mexican subsidiary paid a total of $30.3 million (419.4 million Pesos) in cash taxes, at a 30% tax rate, to the Mexican tax authorities on income earned in Mexico. If required, the Company intends to seek relief from double taxation under the Canada-Mexico tax treaty.

In December 2020, the CRA issued revised 2013 Reassessment and 2014 and 2015 Reassessments to include transfer pricing penalties of $8.1 million (C$10.3 million).  The Company disagrees and intends to file Notices of Objection, and if required appeal to the Tax Court of Canada, against these revised reassessments.

If the CRA were to reassess the Company for taxation years 2016 through 2020 on the same basis and continue to apply transfer pricing penalties, the Company estimates that it would be subject to additional Canadian tax for these years of approximately $3.6 million (C$4.6 million), transfer pricing penalties of approximately $1.4 million (C$1.7 million) plus interest (calculated to December 31, 2020) and other penalties of approximately $0.9 million (C$1.1 million) but before any relief under the Canada-Mexico tax treaty. The Company’s Mexican subsidiary paid $3.8 million (71.0 million Pesos) in cash taxes, at a 30% tax rate, to the Mexican tax authorities on income earned in Mexico for the 2016 year and ceased operations after 2016.

(c) Barbados (2014-2015):

The 2014 and 2015 Reassessments also reassess the Company in relation to its Barbadian subsidiary. The reassessments were made on the basis of the transfer pricing provisions in the Act and assert that a majority of the income relating to certain precious metal streams earned by the Barbadian subsidiary should have been included in the income of the Company and subject to tax in Canada, resulting in additional Federal and provincial income taxes of $5.3 million (C$6.7 million) plus estimated interest (calculated to December 31, 2020) and other penalties of $1.7 million (C$2.2 million). As noted previously, the Company has filed formal Notices of Objection with the CRA against the 2014 and 2015 Reassessments and has posted security in the form of a standby letter of credit for 50% of the reassessed amounts of tax, interest and penalties, as referenced in Note 11 (a). Further, the Company has commenced an appeal in the Tax Court of Canada with respect to the 2014 and 2015 Reassessments.

As noted above, in December 2020, the CRA issued revised 2014 and 2015 Reassessments to include transfer pricing penalties of $2.0 million (C$2.5 million).  The Company disagrees and intends to file Notices of Objection, and if required appeal to the Tax Court of Canada, against the revised reassessments.

If the CRA were to reassess the Company for taxation years 2016 through 2020 on the same basis and continue to apply transfer pricing penalties, the Company estimates that it would be subject to additional Canadian tax for these years of approximately $136.8 million (C$174.2 million), transfer pricing penalties of approximately $51.5 million (C$65.6 million) plus interest (calculated to December 31, 2020) and other penalties of approximately $11.0 million (C$14.0 million).

(d) Barbados (2012-2013):

In August 2020, the Company received Notices of Reassessment for the 2012 and 2013 taxation years (the “FAPI Reassessments”, and collectively with the Domestic Reassessments, the 2013 Reassessment and the 2014 and 2015 Reassessments, the “Reassessments”) in relation to its Barbadian subsidiary. The reassessments assert that a majority of the income relating to precious metal streams earned by the Barbadian subsidiary, in those years, should have been included in the income of its Canadian parent company and subject to tax in Canada as Foreign Accrual Property Income (“FAPI”). The CRA has noted that its position may not extend beyond the 2013 taxation year. The FAPI Reassessments result in additional Federal and provincial income taxes of $6.0 million (C$7.7 million) plus estimated interest (calculated to December 31, 2020) and other penalties of $2.4 million (C$3.1 million). The Company has filed formal Notices of Objection with the CRA against the FAPI Reassessments and has posted security in cash for 50% of the reassessed amounts of tax, interest and penalties.

The CRA recently expanded its audit to include the 2016 and 2017 taxation years and the Company has not received any proposal or notices of reassessment for these taxation years.

Management believes that the Company and its subsidiaries have filed all tax returns and paid all applicable taxes in compliance with Canadian and applicable foreign tax laws and, as a result, no amounts have been recorded in the financial statements of the Company for the Reassessments, or for any potential tax liability that may arise in respect of these matters. The Company does not believe that the Reassessments are supported by Canadian tax law and jurisprudence and intends to vigorously defend its tax filing positions.

The CRA audit is ongoing and there can be no assurance that the CRA will not further challenge the manner in which the Company or any of its subsidiaries has filed its tax returns and reported its income. In the event that the CRA successfully challenges the manner in which the Company or a subsidiary has filed its tax returns and reported its income, this could potentially result in additional income taxes, penalties and interest, which could have a material adverse effect on the Company.

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Subsequent events

12 Months Ended

Dec. 31, 2020

Subsequent events.

Subsequent events

Note 24 – Subsequent events

Acquisition of Condestable Gold and Silver Stream – Peru

Subsequent to year-end, on March 8, 2021, the Company, through a wholly-owned subsidiary, closed a precious metals stream agreement with reference to the gold and silver production from the Condestable mine in Peru, for an up-front deposit of $165.0 million. The Condestable mine is located approximately 90 kilometers south of Lima, Peru, and is owned and operated by a subsidiary of Southern Peaks Mining LP (“SPM”), a private company. Commencing on January 1, 2021 and ending December 31, 2025, Franco-Nevada will receive 8,760 ounces of gold and 291,000 ounces of silver annually until a total of 43,800 ounces of gold and 1,455,000 ounces of silver have been delivered (the “Fixed Deliveries”). Thereafter, Franco-Nevada will receive 63% of the contained gold and contained silver produced until a cumulative total of 87,600 ounces of gold and 2,910,000 ounces of silver have been delivered (the “Variable Phase 1 Deliveries”). The stream then reduces to 25% over the remaining life of mine (the “Variable Phase 2 Deliveries”). Franco-Nevada will pay 20% of the spot price for gold and silver for each ounce delivered under the stream (the “Ongoing Payment”). The stream has an effective date of January 1, 2021, with the first quarterly delivery due on or before March 15, 2021.

For a period of four years from closing, subject to certain restrictions, a subsidiary of SPM may, at its option, make a one-time special delivery comprising the number of ounces of refined gold equal to $118.8 million at the then current spot price subject to the Ongoing Payment, to achieve the early payment of the Fixed Deliveries and Variable Phase 1 Deliveries. The Variable Phase 2 Deliveries would commence immediately thereafter.

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Significant accounting policies (Policies)

12 Months Ended

Dec. 31, 2020

Significant accounting policies

Statement of compliance

(a)Statement of compliance

These consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”) under the historical cost convention, except for equity investments, warrants and receivables from provisionally priced concentrate sales which are measured at fair value. These consolidated financial statements were authorized for issuance by the Board of Directors on March 10, 2021.

Principles of consolidation

(b)Principles of consolidation

The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries (its “subsidiaries”) (together the “Company”).

(i) Subsidiaries

These consolidated financial statements include the accounts of Franco-Nevada and its subsidiaries. All intercompany accounts, transactions, income and expenses, and profits or losses have been eliminated on consolidation. The Company consolidates subsidiaries where it has the ability to exercise control. Control of an investee is defined to exist when the Company is exposed to variable returns from its involvement in the investee and has the ability to affect those returns through its power over the investee. Specifically, the Company controls an investee if, and only if, it has all of the following: power over the investee (i.e. existing rights that give the Company the current ability to direct the relevant activities of the investee); exposure, or rights, to variable returns from its involvement with the investee; and the ability to use its power over the investee to affect its returns. Control is presumed to exist where the Company owns more than one half of the voting rights unless it can be demonstrated that ownership does not constitute control. The existence and effect of potential voting rights that are currently exercisable or convertible are considered when assessing whether the Company controls another entity. Subsidiaries are fully consolidated from the date on which control is transferred to the Company. They are de-consolidated from the date that control ceases.

The financial statements of the subsidiaries are prepared for the same reporting period as the parent company, using consistent accounting policies. The consolidated financial statements include all assets, liabilities, revenues, expenses and cash flows of the Company and its subsidiaries after eliminating intercompany transactions.

Material subsidiaries of the Company and their geographic locations at December 31, 2020 were as follows:

Entity	Jurisdiction	Economic Interest
Franco-Nevada U.S. Corporation	Delaware	100%
Franco-Nevada GLW Holdings Corp.	British Columbia	100%
Franco-Nevada Canada Holdings Corp.	Canada	100%
Franco-Nevada (Barbados) Corporation	Barbados	100%
Franco-Nevada Australia Pty Ltd.	Australia	100%
Franco-Nevada Delaware LLC	Delaware	100%
Franco-Nevada Texas LP	Texas	100%
Minera Global Copper Chile S.A.	Chile	100%
FN Subco Inc.	British Columbia	100%
FN Holdings ULC	Alberta	100%

All the above entities are classified as subsidiaries of the Company. There are no significant restrictions on the Company’s ability to access or use assets or settle liabilities of its subsidiaries.

(ii) Joint arrangements

A joint arrangement is defined as an arrangement over which two or more parties have joint control, which is the contractually agreed sharing of control over an arrangement. This exists only when the decisions about relevant activities (being those that significantly affect the returns of the arrangement) require unanimous consent of the parties sharing control. There are two types of joint arrangement, joint operations (“JO”) and joint ventures (“JV”).

A JO is a joint arrangement whereby the parties that have joint control of the arrangement have rights to the assets and obligations for the liabilities, relating to the arrangement. In relation to the Company’s interest in any JO, the Company would recognize its share of any assets, liabilities, revenues and expenses of the JO.

The Company participates in a strategic relationship with Continental Resources, Inc. (“Continental”), to jointly acquire mineral rights in within Continental’s areas of operation. The mineral interests are acquired through a royalty acquisition entity, The Mineral Resource Company II, LLC (“TMRC II”), in which the Company holds an economic interest of 49.9%. The Company funds 80% of the contributions to TMRC II, with the remainder funded by Continental. The Company determined that it has joint control over TMRC II given that decisions about relevant activities require unanimous consent of the parties to the joint arrangement. The Company further determined that the joint arrangement is a JO, based on the terms of the contractual agreement which specify how revenues and expenses are shared between the parties.

The Company also participates in joint operations with respect to energy working interests but does not have joint control. A working interest is an ownership position in the energy property and related operating assets, whereby the Company is liable for its proportionate share of gross costs of capital and operations based on information received from the operator. The Company’s share of the assets, liabilities, revenues and expenses of each joint operation are recognized in the statements of financial position and statements of income and comprehensive income.

Business combinations

(c)Business combinations

On the acquisition of a business, the acquisition method of accounting is used whereby the purchase consideration is allocated to the identifiable assets, liabilities and contingent liabilities (identifiable net assets) of the business on the basis of the fair value at the date of acquisition. Provisional fair values allocated at a reporting date are finalized as soon as the relevant information is available, which period shall not exceed twelve months from the acquisition date and are adjusted to reflect the transaction as of the acquisition date.

The results of businesses acquired during the period are consolidated into the consolidated financial statements from the date on which control commences at the date of acquisition and taken out of the consolidated financial statements from the date on which control ceases.

When all or part of the purchase consideration is contingent on future events, the cost of the acquisition initially recorded includes an estimate of the fair value of the contingent liability amounts expected to be payable in the future. The cost of acquisition is adjusted when revised estimates are made, with corresponding adjustments made to the consolidated statement of income and comprehensive income.

When a business is acquired in a number of stages, the cost of each stage is compared with the fair value of the identifiable net assets at the date of that purchase. When the cost of the acquisition exceeds the fair values of the identifiable net assets acquired, the difference is recorded as goodwill. If the fair value attributable to the Company’s share of the identifiable net assets exceeds the cost of acquisition, the difference is recognized as a gain in the consolidated statement of income and comprehensive income.  Acquisition costs are expensed.

Currency translation

(d)Currency translation

(i) Functional and presentation currency

The functional currency for each entity within the Franco-Nevada group is the currency of the primary economic environment in which it operates.

These consolidated financial statements are expressed in United States dollars, which is the functional currency of the majority of the subsidiaries. The parent Company’s functional currency is the Canadian dollar. The U.S. dollar is used as the presentation currency of the Company to ensure comparability with the Company’s peers. References herein to C$ are to Canadian dollars.

(ii) Foreign currency transactions and balances

Foreign currency transactions are translated into the functional currency of the respective subsidiary, using the exchange rate prevailing at the dates of the transaction (spot exchange rates). Foreign exchange gains and losses resulting from the settlement of such transactions and the re-measurement of monetary items and available-for-sale securities at the date of the consolidated statements of financial position are recognized in net income. Non-monetary items measured at historical cost are translated into the functional currency using the exchange rate at the date of the transaction.

The results and financial position of the subsidiaries that have a functional currency different from the presentation currency are translated into U.S. dollars, the group’s presentation currency, as follows:

· assets and liabilities for each subsidiary are translated at the closing exchange rate at the date of the balance sheet;

· income and expenses for each subsidiary are translated at the average exchange rates during the period; and

· all resulting exchange differences are charged/credited to the currency translation adjustment in other comprehensive income.

Royalty, stream and working interests

(e)Royalty, stream and working interests

Royalty, stream and working interests consist of acquired royalty interests, stream metal purchase agreements, and working interests in producing, advanced/development and exploration stage properties. Royalty, stream and working interests are recorded at cost and capitalized as tangible assets with finite lives. They are subsequently measured at cost less accumulated depletion and accumulated impairment losses and reversals. The cost of royalty, stream and working interests is determined by reference to the cost model under IAS 16. The major categories of the Company’s interests are producing, advanced and exploration. Producing assets are those that have generated revenue from steady-state operations for the Company or are expected to in the next year. Advanced assets are interests on projects which are not yet producing, but where in management’s view, the technical feasibility and commercial viability of extracting a mineral resource are demonstrable.  Exploration assets represent interests on projects where technical feasibility and commercial viability of extracting a mineral resource are not demonstrable.  Royalty, stream and working interests for producing and advanced assets are recorded at cost and capitalized in accordance with IAS 16, while exploration assets are recorded and capitalized in accordance with IFRS 6 Exploration for and Evaluation of Mineral Resources (“IFRS 6”).

Management uses the following criteria in its assessment of technical feasibility and commercial viability:

(i) Geology: there is a known mineral deposit which contains mineral reserves or resources; or the project is adjacent to a mineral deposit that is already being mined or developed and there is sufficient geologic certainty of converting the deposit into mineral reserves or resources.

(ii) Accessibility and authorization: there are no significant unresolved issues impacting the accessibility and authorization to develop or mine the mineral deposit, and social, environmental and governmental permits and approvals to develop or mine the mineral deposit appear obtainable.

Producing mineral royalty and stream interests are depleted using the units-of-production method over the life of the property to which the interest relates. The life of the property is estimated using life of mine models specifically associated with the mineral royalty or stream properties which include proven and probable reserves and may include a portion of resources expected to be converted into reserves. Where life of mine models are not available, the Company uses publicly available statements of reserves and resources for the mineral royalty or stream properties to estimate the life of the property and portion of resources that the Company expects to be converted into reserves. Where life of mine models and publicly available reserve and resource statements are not available, depletion is based on the Company’s best estimate of the volumes to be produced and delivered under the contract. The Company relies on information available to it under contracts with operators and/or public disclosures for information on reserves and resources from the operators of the producing mineral and stream interests.

Producing energy interests are depleted using the units-of-production method over the life of the property to which the interest relates, which is estimated using available estimated proved and probable reserves specifically associated with the energy properties. For energy interests, management uses reserve reports prepared by independent reserve engineers or other qualified parties engaged by the Company.

On acquisition of a producing royalty, stream or working interest, an allocation of its fair value is attributed to the exploration potential of the interest. The estimated fair value of this acquired exploration potential is recorded as an asset (non-depletable interest) on the acquisition date. Updated reserve and resource information obtained from the operators of the royalty, stream or working interest properties is used to determine the amount to be converted from non-depletable interest to depletable interest. If the cost of a royalty, stream or working interest includes contingent consideration, the contingent consideration is measured at fair value on the date of acquisition and included in the cost of the interest. Any changes in the fair value of the contingent consideration subsequent to the acquisition date are recorded against the cost of the interest acquired.

Acquisition costs of advanced and exploration stage royalty, stream and working interests are capitalized and are not depleted until such time as revenue-generating activities begin. The Company may receive advance minimum payments prior to the commencement of production on some of its interests. In these circumstances, the Company would record depletion expense as described above, up to a maximum of the total of the advance minimum payment received.

Working interests in energy properties

(f) Working interests in energy properties

Acquired energy working interests are accounted for at cost and capitalized as tangible assets of developing or operating properties, or in accordance with IFRS 6 for exploration properties. For each energy property on which the Company has a working interest, the Company bears its proportionate share of the gross costs of capital and operations based on information received from the operator. Such capital costs are capitalized to energy well equipment which is a component of other assets on the statement of financial position.

Capitalized costs, other than those related to energy well equipment, are depreciated when the asset is available for its intended use on a units-of-production basis, whereby the denominator is the proved and probable reserves associated with the energy properties. For energy well equipment, capitalized costs are depreciated by application of a 25% declining balance method.

Impairment of non-financial assets

(f) Impairment of non-financial assets

Producing and advanced mineral, stream and working interests are reviewed for impairment if there is any indication that the carrying amount may not be recoverable. Impairment is assessed at the level of cash-generating units (“CGUs”) which, in accordance with IAS 36 Impairment of Assets (“IAS 36”), are identified as the smallest identifiable group of assets from which independent cash flows are generated. This is usually at the individual royalty, stream, or working interest level for each property from which independent cash inflows are generated.

An impairment loss is recognized for the amount by which the asset’s carrying value exceeds its recoverable amount, which is the higher of fair value less costs of disposal (“FVLCD”) and value-in-use (“VIU”). The future cash flow expected is derived using estimates of proven and probable reserves, a portion of resources that is expected to be converted into reserves and information regarding the mineral, stream and energy properties, respectively, that could affect the future recoverability of the Company’s interests. Discount factors are determined individually for each asset and reflect their respective risk profiles. In certain circumstances, the Company may use a market approach in determining the recoverable amount which may include an estimate of (i) net present value of estimated future cash flows; (ii) dollar value per ounce or pound of reserve/resource; (iii) cash-flow multiples; and/or (iv) market capitalization of comparable assets.  Impairment losses are charged to the royalty, stream or working interest and any associated energy well equipment in the case of working interests. Assets are subsequently reassessed for indications that an impairment loss previously recognized may no longer exist. An impairment charge is reversed if the conditions that gave rise to the recognition of an impairment loss are subsequently reversed and the asset’s recoverable amount exceeds its carrying amount. Impairment losses can be reversed only to the extent that the recoverable amount does not exceed the carrying value that would have been determined had no impairment been recognized previously.

Gold bullion and prepaid expenses are similarly assessed for impairment whenever indicators of impairment exist in accordance with IAS 36. An impairment loss is recognized for the amount by which the asset’s carrying value exceeds its recoverable amount, which is the higher of FVLCD and VIU.

Interests classified as exploration are assessed for impairment whenever indicators of impairment exist in accordance with IFRS 6. An impairment loss is recognized for the amount by which the asset’s carrying value exceeds its recoverable amount, which is the higher of FVLCD and VIU. An interest that has previously been classified as exploration is also assessed for impairment before reclassification to either advanced or producing, and the impairment loss, if any, is recognized in net income.

Financial instruments

(f) Financial instruments

Financial assets and financial liabilities are recognized on the Company’s statement of financial position when the Company has become a party to the contractual provisions of the instrument. Financial assets are derecognized when the rights to receive cash flows from the assets have expired or have been transferred and the Company has transferred substantially all risks and rewards of ownership. The Company’s financial instruments consist of cash and cash equivalents, receivables, accounts payable, accrued liabilities, debt, and investments, including equity investments, loans receivable, and warrants. Financial instruments are recognized initially at fair value.

Under the IFRS 9 model for classification the Company has classified its financial assets as described below.

(i) Cash and cash equivalents

Cash and cash equivalents comprise cash on hand, deposits held with banks and other short-term highly liquid investments with original maturities of three months or less. Cash and cash equivalents are recorded at amortized cost using the effective interest method.

(ii) Receivables

Receivables, other than those related to stream agreements with provisional pricing mechanisms, are classified as financial assets at amortized cost and measured using the effective interest method less any impairment loss allowance. The loss allowance for receivables is measured based on lifetime expected credit losses.

(iii) Investments

Investments comprise equity interests in publicly-traded and privately-held entities, warrants, marketable securities with original maturities at the date of the purchase of more than three months and a loan receivable.

The Company’s equity investments are held for strategic purposes and not for trading. The Company made an irrevocable election to designate these investments in common shares at FVTOCI. FVTOCI investments are recognized initially at fair value plus transaction costs. Subsequent to initial recognition, FVTOCI investments are measured at fair value and changes in the fair value are recognized directly in other comprehensive income (loss). When an equity investment at FVTOCI is sold, the accumulated gains or losses are reclassified from accumulated other comprehensive income (loss) directly to deficit.

Translation differences on equity securities classified as FVTOCI are included in other comprehensive income (loss).

Derivative instruments, such as warrants and receivables related to stream agreements with provisional pricing mechanisms, are classified as fair value through profit and loss (“FVTPL”) and are recognized initially at fair value. Subsequent to initial recognition, derivatives are measured at fair value. In the case of receivables related to stream agreements with provisional pricing, once the final settlement price is determined the financial instrument is no longer a derivative and is classified as a financial asset at amortized cost. Changes in the fair value of receivables related to stream agreements with provisional pricing mechanisms are recognized in revenue in the statement of income and other comprehensive income.  Changes in fair value of warrants are recognized as other income (expenses) in the statement of income and comprehensive income.

Loans receivable are classified as financial assets at amortized cost because these instruments are held for collection of contractual cash flows and those cash flows represent solely payments of principal and interest. Loans are measured at amortized cost using the effective interest method, less any impairment loss allowance. The impairment loss allowance for the loan receivable is measured based on expected credit losses under the general approach. Interest income is recognized by applying the effective interest rate method and presented as finance income in the statement of income and comprehensive income.

(iv) Financial liabilities

Financial liabilities, including accounts payable, accrued liabilities and debt, are classified as financial liabilities to be subsequently measured at amortized cost using the effective interest method.

Revenue recognition

(f) Revenue recognition

The Company generates revenue from contracts with customers under each of its royalty, stream and working interests. The Company has determined that each unit of a commodity that is delivered to a customer under a royalty, stream, or working interest arrangement is a performance obligation for the delivery of a good that is separate from each other unit of the commodity to be delivered under the same arrangement. 

(i) Stream arrangements

Under its stream arrangements, the Company acquires commodities from operators of mining properties on which the Company has stream interests. The Company sells the commodities received under these arrangements to its customers under separate sales contracts.

For those stream arrangements where the Company acquires refined metal from the operator, the Company sells the refined metal to third party financial institutions or brokers. The Company transfers control over the commodity on the date the commodity is delivered to the customer’s metal account, which is the date that title to the commodity and the risks and rewards of ownership transfer to the customer and the customer is able to direct the use of and obtain substantially all of the benefits from the commodity. The transaction price for these sales is fixed at the delivery date based on the spot price for the commodity and payment of the transaction price is generally due immediately when control has been transferred.

For those stream arrangements where the Company acquires the commodities in concentrate form from the operator, the Company sells the concentrate under sales contracts with independent smelting companies. The Company transfers control over the concentrate at the time of shipment, which is when the risks and rewards of ownership and title pass to the independent smelting company. The final prices for metals contained in the concentrate are determined based on the market price for the metals on a specified future date after shipment. Upon transfer of control at shipment, the Company records revenue and a corresponding receivable from these sales based on forward commodity prices at the time of shipment.

Variations between the price recorded at the transfer of control and the actual final price set under the contracts with the smelting companies are caused by changes in market commodity prices, and result in an embedded derivative in the receivable. The embedded derivative is recorded at fair value each period until final settlement occurs, with changes in fair value classified as provisional price adjustments and included as a component of stream revenue. These provisional price adjustments associated with concentrate sales are not considered to be revenue from contracts with customers as they arise from changes in market commodity prices.

(ii) Royalty arrangements

For royalty interests, the Company sells commodities to customers under contracts that are established by the operator of each mining or energy property on which the royalty interest is held. The Company recognizes revenue from these sales when control over the commodity transfers to the customer. This transfer of control generally occurs when the operator of the mining or energy property on which the royalty interest is held physically delivers the commodity to the customer. At this point in time, the risks and rewards of ownership have transferred to the customer and the Company has an unconditional right to payment.

Revenue from royalty arrangements is measured at the transaction price agreed in the royalty arrangement with the operator of each mining or energy property. The transaction price will reflect the gross value of the commodity sold less deductions that vary based on the terms of the royalty arrangement.

(iii) Working interest arrangements

The Company sells its proportionate share of the crude oil, natural gas and natural gas liquids to third-party customers using the services of a third-party marketing agent. The Company transfers control over the oil and gas at the time it enters the pipeline system, which is when title and the risks and rewards of ownership are transferred to customers and the Company has an unconditional right to payment. Revenue is measured at the transaction price set by reference to monthly market commodity prices plus certain price adjustments. Price adjustments include product quality and transportation adjustments and market differentials.

Cost of sales

(f) Costs of sales

Costs of sales includes various production taxes that are recognized with the related revenues and the Company’s share of the gross operating costs for the working interests in the energy properties.

For stream agreements, the Company purchases gold, silver or platinum group metals for a cash payment of the lesser of a set contractual price, subject to annual inflationary adjustments, and the prevailing market price per ounce of gold and/or silver when purchased. Under certain stream agreements, the Company purchases gold and/or silver for a cash payment that is a fixed percentage of the prevailing market price per ounce of gold and/or silver when purchased.

In certain instances, the Company purchases a fixed amount of gold by providing an initial deposit. The initial deposit is recorded as a prepaid gold asset and classified within current prepaid expenses and other assets or non-current other assets dependent on whether delivery will occur within 12 months of the reporting date. When gold is delivered to the Company it is recorded as inventory until such time as it is sold and the cost of the gold is recorded as a cost of sale.

Income taxes

(f) Income taxes

The income tax expense or recovery represents the sum of current and deferred income taxes.

Current income tax payable is based on taxable profit for the year. Taxable profit differs from net income as reported in the consolidated statement of income and other comprehensive income because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The Company’s liability for current tax is calculated by using tax rates and laws that have been enacted or substantively enacted at the statement of financial position date.

Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amount of assets and liabilities in the consolidated financial statements and the corresponding tax bases used in the computation of taxable profit, and is accounted for using the statement of financial position liability method. Deferred tax liabilities are recognized for all taxable temporary differences and deferred tax assets are recognized to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilized. Such assets and liabilities are not recognized if the temporary differences arise from initial recognition of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit.

Deferred tax liabilities are recognized for taxable temporary differences arising on investments in subsidiaries, except where the Company is able to control the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future.

Deferred tax is calculated at the tax rates that are enacted or substantively enacted at the statement of financial position date and are expected to apply to the period when the deferred tax asset is realized or the liability is settled. Deferred tax is charged or credited in the consolidated statement of income and other comprehensive income, except when it relates to items credited or charged directly to equity, in which case the deferred tax is also accounted for within equity.

The Company evaluates its exposure to uncertain tax positions and where it is probable that such exposure will materialize, recognizes a provision.

Stock options

(f) Stock options

The Company may issue equity-settled share-based payments to directors, officers, employees and consultants under the terms of its share compensation plan. Equity-settled share-based payments are measured at fair value at the date of grant. The fair value determined at the date of grant of equity-settled share-based payments is expensed over the expected service period with a corresponding change to contributed surplus and is based on the Company’s estimate of shares that will ultimately vest.

Fair value is measured by use of the Black-Scholes option pricing valuation model. The expected life used in the model is adjusted, based on management’s best estimate, for the effect of non-transferability, exercise restrictions and behavioural considerations. Expected volatility is estimated by considering historic average share price volatility. Any consideration paid or received upon the exercise of the stock options or purchase of shares is credited to share capital.

Restricted share units

(f) Restricted share units

The Company may grant performance-based or time-based restricted share units (“RSUs”) to officers and employees under the terms of its share compensation plan. When each RSU vests, the Company plans to settle every RSU with one common share of the parent company. The Company recognizes the fair value of the RSUs as share-based compensation expense which is determined with reference to the weighted average trading price of the Company’s common shares over the five trading days immediately preceding the date of issuance. The amount recognized reflects the number of awards for which the related service and non-market performance conditions associated with these awards are expected to be met. The Company expenses the fair value of the RSUs over the applicable service period, with a corresponding change in contributed surplus. Time-based RSUs vest over a three year period on the anniversary of the date of grant. For performance vesting conditions, the grant date fair value of the RSU is measured to reflect such conditions and this estimate is not updated between expected and actual outcomes. Performance-based RSUs vest at the end of a three year period following the achievement of certain performance criteria and target settlement will range from 0% to 200% of the value.

Deferred share units

(f) Deferred share units

Non-executive directors may choose to convert their directors’ fees into deferred share units (“DSUs”) under the terms of the Company’s deferred share unit plan (the “DSU Plan”). Directors must elect to convert their fees prior to January 1 of each year. The Company may also award DSUs to non-executive directors under the DSU Plan as compensation. When dividends are declared by the Company, directors are also credited with dividend equivalents in the form of additional DSUs based on the number of vested DSUs each director holds on the record date for the payment of a dividend. Retainer, conversion and dividend equivalent DSUs vest immediately. The fair value of DSUs at the time of conversion or award, as applicable, is determined with reference to the weighted average trading price of the Company’s common shares over the five trading days immediately preceding the date of conversion or award, as applicable. The fair value of the DSUs, which are settled in cash, is recognized as a share-based compensation expense with a corresponding increase in liabilities, over the service period. The fair value of the DSUs is marked to the quoted market price of the Company’s common shares at each reporting date with a corresponding change in the consolidated statement of income and comprehensive income. Participants are not allowed to redeem their DSUs until retirement or termination of directorship. The cash value of the DSUs at the time of redemption is equivalent to the market value of the Company’s common shares when redemption takes place.

Segment reporting

(f) Segment reporting

The Company is engaged in the management and acquisition of royalties, streams and working interests in the mining and energy sectors. Operating segments are reported in a manner consistent with the internal reporting provided to the Chief Executive Officer (“CEO”) who fulfills the role of the chief operating decision-maker. The CEO is responsible for allocating resources and assessing performance of the Company’s operating segments.

Earnings per share

(f) Earnings per share

Basic earnings per share is computed by dividing the net income or loss by the weighted average number of common shares outstanding during each period. Diluted earnings per share reflects the effect of all potentially dilutive common share equivalents, which includes dilutive share options and restricted share units granted to employees and warrants computed using the treasury stock method.

New and amended standards adopted by the company and not yet effective

New and Amended Standards Adopted by the Company

The following standard was effective and implemented for the annual period as of January 1, 2020.

Amendments to IFRS 3 Business Combinations

In October 2018, the IASB issued amendments to the definition of a business in IFRS 3 Business Combinations (“IFRS 3”). The amendments are intended to assist entities to determine whether a transaction should be accounted for as a business combination or as an asset acquisition. The amendments clarify the minimum requirements for a business, remove the assessment of whether market participants are capable of replacing any missing elements, add guidance to help entities assess whether an acquired process is substantive, narrow the definitions of a business and of outputs, and introduce an optional fair value concentration test. The application of the amendments to IFRS 3 did not have a significant impact on the Company’s consolidated financial statements.

New Accounting Standards Issued But Not Yet Effective

Certain new accounting standards and interpretations have been published that are not mandatory for the current period and have not been early adopted. These standards are not expected to have a material impact on the Company’s current or future reporting periods.

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Significant accounting policies (Tables)

12 Months Ended

Dec. 31, 2020

Significant accounting policies

Schedule of principal subsidiaries

Entity	Jurisdiction	Economic Interest
Franco-Nevada U.S. Corporation	Delaware	100%
Franco-Nevada GLW Holdings Corp.	British Columbia	100%
Franco-Nevada Canada Holdings Corp.	Canada	100%
Franco-Nevada (Barbados) Corporation	Barbados	100%
Franco-Nevada Australia Pty Ltd.	Australia	100%
Franco-Nevada Delaware LLC	Delaware	100%
Franco-Nevada Texas LP	Texas	100%
Minera Global Copper Chile S.A.	Chile	100%
FN Subco Inc.	British Columbia	100%
FN Holdings ULC	Alberta	100%

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Cash and cash equivalents (Tables)

12 Months Ended

Dec. 31, 2020

Cash and cash equivalents

Schedule of cash and cash equivalents

	At December 31,		At December 31,
	2020		2019
Cash deposits	$	523.7	$	118.7
Term deposits		10.5		13.4
	$	534.2	$	132.1

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Investments and loan receivable (Tables)

12 Months Ended

Dec. 31, 2020

Investments and loan receivable

Schedule of investments and loan receivable

	At December 31,		At December 31,
	2020		2019
Equity investments	$	195.6	$	145.6
Loan receivable		37.1		34.6
Warrants		5.7		3.0
	$	238.4	$	183.2

Schedule of unrealized gains (losses) on available-for-sale investments recognized in other comprehensive income

	2020		2019
Gain on change in the fair value of equity investments at FVTOCI	$	50.5	$	11.4
Tax expense in other comprehensive income		(6.7)		(1.5)
Gain on change in the fair value of equity investments at FVTOCI, net of tax	$	43.8	$	9.9

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Prepaid expenses and other current assets (Tables)

12 Months Ended

Dec. 31, 2020

Prepaid expenses and other current assets.

The schedule of prepaid expenses and other current assets

	At December 31,		At December 31,
	2020		2019
Gold bullion	$	18.6	$	26.2
Prepaid expenses		16.4		17.5
Stream ounces inventory		0.5		4.4
Debt issue costs		0.6		0.7
	$	36.1	$	48.8

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Royalty, stream and working interests (Tables)

12 Months Ended

Dec. 31, 2020

Royalty, stream and working interests

Disclosure of detailed information about royalty, stream and working interest, net

					Impairment
			Accumulated		(charges)
As at December 31, 2020	Cost		depletion(1)		reversals		Carrying value
Mining royalties	$	1,049.2	$	(642.3)	$	—	$	406.9
Streams		4,346.6		(1,702.6)		9.6		2,653.6
Energy		1,944.7		(462.4)		(267.7)		1,214.6
Advanced		343.0		(49.0)		—		294.0
Exploration		76.1		(13.1)		—		63.0
	$	7,759.6	$	(2,869.4)	$	(258.1)	$	4,632.1

1. Accumulated depletion includes previously recognized impairment charges.

					Impairments
			Accumulated		(charges)
As at December 31, 2019	Cost		depletion(1)		reversals		Carrying value
Mining royalties	$	1,035.7	$	(620.1)	$	—	$	415.6
Streams		4,346.3		(1,542.3)		—		2,804.0
Energy		1,756.4		(402.8)		—		1,353.6
Advanced		203.2		(32.3)		—		170.9
Exploration		66.2		(12.5)		—		53.7
	$	7,407.8	$	(2,610.0)	$	—	$	4,797.8

1. Accumulated depletion includes previously recognized impairment charges.

Disclosure of detailed information about royalty, stream and working interest, net rollforward

	Mining
	royalties		Streams		Energy		Advanced		Exploration		Total
Balance at January 1, 2019	$	450.1	$	2,967.6	$	966.6	$	129.8	$	41.5	$	4,555.6
Additions (note 4)		—		—		419.0		46.0		11.9		476.9
Transfers		5.9		—		—		(5.9)		—		—
Depletion		(46.0)		(163.6)		(49.0)		(0.9)		(0.2)		(259.7)
Impact of foreign exchange		5.6		—		17.0		1.9		0.5		25.0
Balance at December 31, 2019	$	415.6	$	2,804.0	$	1,353.6	$	170.9	$	53.7	$	4,797.8
Additions (note 4)		18.8		—		170.2		118.6		8.2		315.8
Transfers		(1.2)		—		—		1.2		—		—
Impairment (charges) and reversals		—		9.6		(267.7)		—		—		(258.1)
Depletion		(31.5)		(160.0)		(44.9)		(2.1)		(0.2)		(238.7)
Impact of foreign exchange		5.2		—		3.4		5.4		1.3		15.3
Balance at December 31, 2020	$	406.9	$	2,653.6	$	1,214.6	$	294.0	$	63.0	$	4,632.1

Schedule of maturity of cash flow determined on the basis of forecasted WTI oil prices

											Average
											Annual
	Remainder of										Increase
	2020		2021		2022		2023		2024		Thereafter
WTI oil price (US$/barrel)	$	30.00	$	41.18	$	49.88	$	55.87	$	57.98	2	%

Schedule of key assumptions and sensitivity analysis

	Increase (Decrease) to Impairment Charges
	1% Increase		1% Decrease		10% Decrease		10% Increase
	in the		in the		in WTI Oil		in WTI Oil
	Discount Rate		Discount Rate		Price		Price
SCOOP/STACK	$	34.1	$	(39.9)	$	37.8	$	(37.3)
Weyburn, including oil well equipment		16.9		(19.1)		39.8		(39.0)
	$	51.0	$	(59.0)	$	77.6	$	(76.3)

Scheduled cash flow maturity of forecasted gold prices

	2021			2022		2023	2024
Gold price (US$/ounce)	$	1,910	$	1,886	$	1,831	$	1,681

Streams

Royalty, stream and working interests

Schedule of impairments of Royalty, Stream and Working Interests, Net

		Impairment
		reversal		Recoverable
		amount		amount
Royalty, stream and working interests, net
Mine Waste Solutions	$	(9.6)	$	114.8
	$	(9.6)	$	114.8

Energy assets

Royalty, stream and working interests

Schedule of impairments of Royalty, Stream and Working Interests, Net

		Impairment		Recoverable
		amount		amount
Royalty, stream and working interests, net
SCOOP/STACK	$	207.2	$	309.2
Weyburn		60.5		162.8
Other assets
Oil well equipment	$	4.0	$	4.7
	$	271.7	$	476.7

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Other assets (Tables)

12 Months Ended

Dec. 31, 2020

Other assets

Schedule of Other assets

	At December 31,		At December 31,
	2020		2019
Energy well equipment, net	$	5.0	$	9.3
Right-of-use assets, net		2.0		2.5
Furniture and fixtures, net		0.4		0.4
Debt issue costs		1.3		1.9
Other		4.9		—
	$	13.6	$	14.1

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Accounts payable and accrued liabilities (Tables)

12 Months Ended

Dec. 31, 2020

Accounts payable and accrued liabilities

The summary of accounts payable and accrued liabilities

	At December 31,		At December 31,
	2019		2019
Accounts payable	$	3.5	$	6.8
Accrued liabilities		37.3		35.0
	$	40.8	$	41.8

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Debt (Tables)

12 Months Ended

Dec. 31, 2020

Debt

Schedule of changes in obligations related to the Credit Facility

		Corporate		Corporate		FNBC
	revolver			term loan		revolver		Total
Size of facility	$	1,000.0	$	160.0	$	100.0	$	1,260.0
Balance at January 1, 2019	$	210.0	$	—	$	—	$	210.0
Drawdowns		275.0		160.0		—		435.0
Repayment		(485.0)		(80.0)		—		(565.0)
Balance at December 31, 2019	$	—	$	80.0	$	—	$	80.0
Repayment		—		(80.0)		—		(80.0)
Balance at December 31, 2020	$	—	$	—	$	—	$	—

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Revenue (Tables)

12 Months Ended

Dec. 31, 2020

Revenue.

Schedule of Revenue

	2020		2019
Commodity
Gold(1)	$	718.1	$	545.8
Silver		106.4		83.2
Platinum-group metals(1)		86.2		75.6
Other mining commodities		17.8		23.6
Mining	$	928.5	$	728.2
Energy		91.7		115.9
	$	1,020.2	$	844.1
Geography
Latin America	$	502.1	$	369.2
United States		178.6		166.6
Canada(1)		196.9		166.2
Rest of World		142.6		142.1
	$	1,020.2	$	844.1
Type
Revenue-based royalties	$	274.9	$	266.7
Streams(1)		629.2		490.8
Profit-based royalties		88.7		49.7
Other		27.4		36.9
	$	1,020.2	$	844.1

1. Includes a loss of $0.1 million and gain of $5.9 million of provisional pricing adjustments for gold and platinum-group metals, respectively

(2019 – gain of $0.3 million and $7.8 million, respectively).

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Costs of sales (Tables)

12 Months Ended

Dec. 31, 2020

Costs of sales

Schedule of Costs of sales

	2020		2019
Costs of stream sales	$	149.5	$	135.1
Mineral production taxes		2.9		2.4
Mining costs of sales	$	152.4	$	137.5
Energy costs of sales		6.4		7.3
	$	158.8	$	144.8

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Related party disclosures (Tables)

12 Months Ended

Dec. 31, 2020

Related party disclosures

Schedule of compensation for key management personnel

	2020		2019
Short-term benefits(1)	$	3.5	$	4.6
Share-based payments(2)		7.9		5.9
	$	11.4	$	10.5

1. Includes salary, benefits and short-term accrued incentives/other bonuses earned in the period.

2. Represents the expense of stock options and restricted share units and mark-to-market charges on deferred share units during the year.

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Finance income and expenses (Tables)

12 Months Ended

Dec. 31, 2020

Finance income and expenses

Schedule of finance income and expenses

	2020		2019
Finance income
Interest	$	3.7	$	3.5
	$	3.7	$	3.5
Finance expenses
Standby charges	$	2.1	$	2.1
Amortization of debt issue costs		1.0		0.9
Interest		0.3		7.4
Accretion of lease liabilities		0.1		0.2
	$	3.5	$	10.6

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Income taxes (Tables)

12 Months Ended

Dec. 31, 2020

Income taxes

Schedule of income tax expense

	2020		2019
Current income tax expense
Expense for the year	$	50.9	$	42.3
Adjustment in respect of prior years		(2.4)		(3.2)
Current income tax expense	$	48.5	$	39.1
Deferred income tax expense (recovery)
Origination and reversal of temporary differences	$	(30.2)		20.2
Impact of changes in tax rates		(0.8)		(1.0)
Change in unrecognized deductible temporary differences		(6.4)		(0.1)
Adjustments in respect of prior years		2.2		3.4
Other		—		0.2
Deferred income tax (recovery) expense	$	(35.2)	$	22.7
Income tax expense	$	13.3	$	61.8

Reconciliation of the provision for income taxes

	2020		2019
Net income before income taxes	$	339.5	$	405.9
Statutory tax rate		26.5%		26.6%
Tax expense at statutory rate	$	90.0	$	108.0
Reconciling items:
Change in unrecognized deductible temporary differences	$	(6.4)	$	(0.1)
Income/expenses not taxed		(4.2)		(4.3)
Differences in foreign statutory tax rates		(66.0)		(42.8)
Differences due to changing future tax rates		(0.8)		(1.0)
Foreign withholding tax		—		0.3
Temporary differences subject to initial recognition exemption		0.6		1.5
Other		0.1		0.2
Income tax expense	$	13.3	$	61.8

Schedule of income tax (expense) recovery recognized in other comprehensive income (loss)

		2020						2019
						After						After
		Before		Tax		Tax		Before		Tax		Tax
		Tax Gain		Expense		Gain		Tax Gain		Expense		Gain
Gain (loss) on change in the fair value of equity investments at FVTOCI	$	50.5	$	(6.7)	$	43.8	$	11.4	$	(1.5)	$	9.9
Currency translation adjustment		19.6		—		19.6		32.3		—		32.3
Other comprehensive income	$	70.1	$	(6.7)	$	63.4	$	43.7	$	(1.5)	$	42.2
Deferred tax			$	(6.7)					$	(1.5)
Tax expense in other comprehensive income			$	(6.7)						(1.5)

Schedule of components of deferred income tax assets and liabilities

	2020		2019
Deferred income tax assets:
Deductible temporary differences relating to:
Royalty, stream and working interests	$	44.1	$	6.5
Non-capital loss carry-forwards		0.6		0.3
Other		0.4		—
	$	45.1	$	6.8
Deferred income tax liabilities:
Taxable temporary differences relating to:
Share issue and debt issue costs	$	0.3	$	(1.7)
Royalty, stream and working interests		89.6		89.0
Non-capital loss carry-forwards		(3.9)		(4.3)
Investments		11.6		4.3
Other		(6.1)		(4.9)
	$	91.5	$	82.4
Deferred income tax liabilities, net	$	46.4	$	75.6

Schedule of movement in net deferred tax liabilities

		2020		2019
Balance, beginning of year	$	75.6	$	50.0
Recognized in net income		(35.2)		22.5
Recognized in other comprehensive income		6.7		1.5
Recognized in equity		0.3		0.4
Other		(1.0)		1.2
Balance, end of year	$	46.4	$	75.6

Schedule of non-capital losses

Country	Type	Amount		Expiry date
Canada	Non-Capital Losses	$	14.7	2030-2038
Chile	Non-Capital Losses		2.3	No expiry
		$	17.0

Schedule of deductible temporary differences, losses and unused tax credits for which no deferred tax assets

	2020			2019
Royalty, stream and working interests	$	25.1	$	48.0
Tax losses (expiry dates - 2029-2033)		23.6		24.7
	$	48.7	$	72.7

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Shareholders' equity (Tables)

12 Months Ended

Dec. 31, 2020

Shareholders' equity

Schedule of changes in share capital

	Number
	of shares		Amount
Balance at January 1, 2019	186,692,481	$	5,158.3
At-the-market equity offering	1,433,400		136.0
Acquisition of Salares Norte	366,499		27.0
Exercise of stock options	283,863		17.3
Vesting of restricted share units	46,375		3.3
Dividend reinvestment plan	558,770		48.8
Balance at December 31, 2019	189,381,388	$	5,390.7
At-the-market equity offering	1,054,800	$	133.7
Exercise of stock options	150,482		9.7
Vesting of restricted share units	42,328		3.7
Dividend reinvestment plan	327,478		42.3
Balance at December 31, 2020	190,956,476	$	5,580.1

Schedule of dividends paid

	2020		2019
Cash dividends	$	154.9	$	138.2
DRIP dividends		42.3		48.8
	$	197.2	$	187.0

Schedule of options to purchase common shares that have been granted

	2020			2019
		Weighted			Weighted
		average exercise			average exercise
	Number	price		Number	price
Stock options outstanding, beginning of year	836,427	C$	80.01	1,015,409	C$	69.13
Granted	61,594	C$	171.33	104,881	C$	129.32
Exercised	(150,482)	C$	67.13	(283,863)	C$	59.31
Forfeited	(1,577)	C$	112.84	—	C$	—
Stock options outstanding, end of the year	745,962	C$	90.08	836,427	C$	80.01
Exercisable stock options, end of the year	563,975	C$	76.14	596,402	C$	68.05

Schedule of fair value of options calculated using Black-Scholes option pricing model and weighted average assumptions utilized

	2020		2019
Risk-free interest rate	0.39	%	1.62	%
Expected dividend yield	0.78	%	1.02	%
Expected price volatility of the Company’s common shares	28.8	%	27.5	%
Expected life of the option	4 years		4 years
Forfeiture rate	0	%	0	%

Schedule of options to purchase common shares outstanding, exercise prices and weighted average lives to maturity

			Weighted
Exercise	Options	Options	average life
price	outstanding	exercisable	(years)
C$40.87	32,451	32,451	2.94
C$42.43	750	750	1.25
C$46.17	75,000	75,000	2.63
C$55.58	17,397	17,397	1.95
C$58.67	20,000	20,000	4.64
C$59.52	33,876	33,876	3.95
C$65.76	55,853	55,853	4.94
C$75.45	120,074	120,074	5.94
C$88.76	45,082	29,171	7.64
C$94.57	95,273	60,184	7.95
C$100.10	84,523	84,523	6.94
C$129.32	104,089	34,696	8.94
C$171.33	61,594	—	9.94
	745,962	563,975	6.40

Schedule of share purchase warrants

	2020	2019
Common shares outstanding	190,956,476	189,381,388
Stock options	745,962	836,427
Restricted Share Units	102,708	108,978
	191,805,146	190,326,793

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Earnings per share ("EPS") (Tables)

12 Months Ended

Dec. 31, 2020

Earnings per share ("EPS")

Schedule of basic and diluted EPS

	2020						2019
				Shares	Per Share				Shares	Per Share
		Net income		(in millions)	Amount		Net income		(in millions)	Amount
Basic earnings per share		$	326.2	190.3	$	1.71	$	344.1	187.7	$	1.83
Effect of dilutive securities			—	0.4		—		—	0.3		—
Diluted earnings per share		$	326.2	190.7	$	1.71	$	344.1	188.0	$	1.83

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Segment reporting (Tables)

12 Months Ended

Dec. 31, 2020

Segment reporting

Schedule of reportable segments for purposes of assessing performance

	2020						2019
	Mining		Energy		Total		Mining		Energy		Total
Revenue	$	928.5	$	91.7	$	1,020.2	$	728.2	$	115.9	$	844.1
Income/(expenses)
Costs of sales	$	152.4	$	6.4	$	158.8	$	137.5	$	7.3	$	144.8
Depletion and depreciation		193.8		44.9		238.7		210.7		49.0		259.7
Segment gross profit	$	582.3	$	40.4	$	622.7	$	380.0	$	59.6	$	439.6

		2020		2019
Total segment gross profit	$	622.7	$	439.6
Other operating (income)/expenses
Impairment charges and reversals	$	262.1	$	—
General and administrative expenses		28.8		28.8
Gain on sale of bullion		(7.0)		(2.9)
Depreciation		2.3		3.5
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

Schedule of geographical revenue and royalty, stream and working interests information

	2020		2019
Latin America:
Peru	$	175.5		$	145.3
Chile		106.8			103.1
Panama		135.4			64.7
Other		84.4			56.1
United States		178.6			166.6
Canada		196.9			166.2
Rest of World		142.6			142.1
	$	1,020.2		$	844.1

		2020		2019
Latin America:
Panama	$	1,318.5	$	1,348.4
Peru		766.3		825.5
Chile		485.0		504.2
Other		154.4		48.1
United States		1,216.8		1,300.2
Canada		458.2		504.9
Rest of World		232.9		266.5
	$	4,632.1	$	4,797.8

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Fair value measurements (Tables)

12 Months Ended

Dec. 31, 2020

Recurring Basis

Fair value measurements

Schedule of Assets and Liabilities Measured at Fair Value

	Quoted prices in		Significant other		Significant
	active markets for		observable		unobservable
	identical assets		inputs		inputs		Aggregate
As at December 31, 2020	(Level 1)		(Level 2)		(Level 3)		fair value
Receivables from provisional concentrate sales	$	—	$	10.1	$	—	$	10.1
Equity investments		191.8		—		3.8		195.6
Warrants		—		5.7		—		5.7
	$	191.8	$	15.8	$	3.8	$	211.4

	Quoted prices in		Significant other		Significant
	active markets for		observable		unobservable
	identical assets		inputs		inputs		Aggregate
As at December 31, 2019	(Level 1)		(Level 2)		(Level 3)		fair value
Receivables from provisional concentrate sales	$	—	$	16.4	$	—	$	16.4
Equity investments		141.7		—		3.9		145.6
Warrants		—		3.0		—		3.0
	$	141.7	$	19.4	$	3.9	$	165.0

Non recurring Basis

Fair value measurements

Schedule of Assets Measured at Fair Value on a Non-Recurring Basis

	Quoted prices in		Significant other		Significant
	active markets for		observable		unobservable
	identical assets		inputs		inputs		Aggregate
As at December 31, 2020	(Level 1)		(Level 2)		(Level 3)		fair value
SCOOP/STACK	$	—	$	—	$	309.2	$	309.2
Weyburn		—		—		162.8		162.8
Mine Waste Solutions		—		—		114.8		114.8
Oil well equipment		—		—		4.7		4.7
	$	—	$	—	$	591.5	$	591.5

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Financial risk management (Tables)

12 Months Ended

Dec. 31, 2020

Financial risk management

Schedule of interest rate sensitivities of our financial assets and liabilities

	Effect on net income				Effect on equity
	2020		2019		2020		2019
0.5% increase	$	1.8	$	0.3	$	1.8	$	0.3
0.5% decrease		(0.5)		(0.3)		(0.5)		(0.3)

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Commitments (Tables)

12 Months Ended

Dec. 31, 2020

Commitments

Schedule of company's commitment to pay for metals pursuant to the agreement

	Attributable payable
	production to be purchased						Per ounce cash payment (1),(2)								Term of		Date of
Interest	Gold		Silver		PGM		Gold			Silver			PGM		agreement(3)		contract
Antamina	0	%	22.5	% (4)	0	%		n/a			5	% (5)		n/a	40 years		7-Oct-15
Antapaccay	—	% (6)	—	% (7)	0	%		20	% (8)		20	% (9)		n/a	40 years		10-Feb-16
Candelaria	68	% (10)	68	% (10)	0	%	$	400		$	4.00			n/a	40 years		6-Oct-14
Cobre Panama Fixed Payment Stream	—	% (11)	—	% (12)	0	%	$	418	(13)	$	6.27	(14)		n/a	40 years		19-Jan-18
Cobre Panama Floating Payment Stream	—	% (15)	—	% (16)	0	%		20	% (17)		20	% (18)		n/a	40 years		19-Jan-18
Karma	4.875	% (19)	0	%	0	%		20	% (20)		n/a			n/a	40 years		11-Aug-14
Guadalupe-Palmarejo	50	%	0	%	0	%	$	800			n/a			n/a	40 years		2-Oct-14
Sabodala	—	% (21)	0	%	0	%		20	% (22)		n/a			n/a	40 years		25-Sep-20
MWS	25	%	0	%	0	%	$	400			n/a			n/a	40 years	(23)	2-Mar-12
Cooke 4	7	%	0	%	0	%	$	400			n/a			n/a	40 years		5-Nov-09
Sudbury(24)	50	%	0	%	50	%	$	400			n/a		$	400	40 years		15-Jul-08

1 Subject to an annual inflationary adjustment except for Antamina, Antapaccay, Karma, Guadalupe-Palmarejo, and Sabodala.

2 Should the prevailing market price for gold be lower than this amount, the per ounce cash payment will be reduced to the prevailing market price.

3 Subject to successive extensions.

4 Subject to a fixed payability of 90%. Percentage decreases to 15% after 86 million ounces of silver has been delivered under the agreement.

5 Purchase price is 5% of the average silver price at the time of delivery.

6 Gold deliveries are referenced to copper in concentrate shipped with 300 ounces of gold delivered for each 1,000 tonnes of copper in concentrate shipped, until 630,000 ounces of gold has been delivered. Thereafter, percentage is 30% of gold shipped.

7 Silver deliveries are referenced to copper in concentrate shipped with 4,700 ounces of silver delivered for each 1,000 tonnes of copper in concentrate shipped, until 10.0 million ounces of silver has been delivered. Thereafter, percentage is 30% of silver shipped.

8 Purchase price is 20% of the spot price of gold until 750,000 ounces of gold have been delivered, thereafter the purchase price is 30% of the spot price of gold.

9 Purchase price is 20% of the spot price of silver until 12.8 million ounces of silver have been delivered, thereafter the purchase price is 30% of the spot price of silver.

10 Percentage decreases to 40% after 720,000 ounces of gold and 12.0 million ounces of silver have been delivered under the agreement.

11 Gold deliveries are indexed to copper in concentrate produced from the project. 120 ounces of gold per every 1 million pounds of copper produced until 808,000 ounces of gold delivered. Thereafter, 81 ounces of gold per 1 million pounds of copper produced until 1,716,188 ounces of gold delivered. Thereafter, 63.4% of the gold in concentrate.

12 Silver deliveries are indexed to copper in concentrate produced from the project. 1,376 ounces of silver per every 1 million pounds of copper produced until 9,842,000 ounces of silver delivered. Thereafter 1,776 ounces of silver per 1 million pounds of copper produced until 29,731,000 ounces of silver delivered. Thereafter, 62.1% of the silver in concentrate.

13 After 1,341,000 ounces of gold delivered, purchase price is the greater of 50% of spot and $418.27 per ounce. As the mill throughput for 30 consecutive days commensurate with annual capacity of 58 million tonnes per annum was not reached by January 1, 2019, Franco‑Nevada will receive a 5% annual rate of return until such mill throughput was achieved, through a reduction of the applicable fixed gold price of $100 per ounce or a delivery of additional ounces for no consideration.

14 After 21,510,000 ounces of silver delivered, purchase price is the greater of 50% of spot and $6.27 per ounce.

15 Gold deliveries are indexed to copper in concentrate produced from the project. 30 ounces of gold per every 1 million pounds of copper produced until 202,000 ounces of gold delivered. Thereafter 20.25 ounces of gold per 1 million pounds of copper produced until 429,047 ounces of gold delivered. Thereafter, 15.85% of the gold in concentrate.

16 Silver deliveries are indexed to copper in concentrate produced from the project. 344 ounces of silver per every 1 million pounds of copper produced until 2,460,500 ounces of silver delivered. Thereafter, 444 ounces of silver per 1 million pounds of copper produced until 7,432,750 ounces of silver delivered. Thereafter 15.53% of the silver in concentrate.

17 After 604,000 ounces of gold delivered, purchase price is 50% of the spot price of gold. As the mill throughput for 30 consecutive days commensurate with annual capacity of 58 million tonnes per annum was not reached by January 1, 2019, Franco-Nevada will receive a 5% annual rate of return until such mill throughput was achieved, through a reduction of the applicable fixed gold price of $100 per ounce or a delivery of additional ounces for no consideration.

18 After 9,618,000 ounces of silver delivered, purchase price is 50% of the spot price of silver.

19 Gold deliveries are fixed at 15,000 ounces per annum from March 31, 2016 until February 28, 2021 (exclusive of an aggregate 5,625 gold ounces, or 703 gold ounces per quarter, to be delivered as a result of the exercise by the operator of its option to increase the upfront deposit). Thereafter, percentage is 4.875%.

20 Purchase price is 20% of the average gold price at the time of delivery.

21 Based on amended agreement with an effective date of September 1, 2020, gold deliveries are fixed at 783.33 ounces per month until 105,750 ounces of gold is delivered. Thereafter, percentage is 6% of gold production (subject to reconciliation after fixed delivery period to determine if Franco-Nevada would have received more or less than 105,750 ounces of gold under the original 6% variable stream for such period, entitling the operator to a credit for an over-delivery applied against future stream deliveries or a one-time additional delivery to Franco-Nevada for an under-delivery).

22 Purchase price is 20% of prevailing market price at the time of delivery.

23 Agreement is capped at 312,500 ounces of gold.

24 The Company is committed to purchase 50% of the precious metals contained in ore from the properties. Payment is based on gold equivalent ounces. For McCreedy West, the fixed price per gold equivalent ounce was increased to $800 per ounce (with no annual inflationary adjustment), effective July 1, 2018 until December 31, 2021.

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Contingencies (Tables)

12 Months Ended

Dec. 31, 2020

Contingencies

Summary of the various CRA audit and reassessment matters

	CRA Position	Taxation Years Reassessed	Potential Liability for Tax, Interest and Penalties (in millions)
Canadian Domestic Tax Matters	Upfront payment made in connection with precious metal stream agreements should be deducted for income tax purposes in a similar manner to how such amount is expensed for financial statement purposes.	2014, 2015	For 2014-2015: Tax:  $1.1  (C$1.4) Interest and other penalties: $0.2  (C$0.2) If CRA were to reassess the 2016-2020 taxation years on the same basis: Tax: $33.6  (C$42.8) Interest and other penalties: $4.1  (C$5.3)
Transfer Pricing (Mexico)	Transfer pricing provisions in the Act (as defined below) apply such that a majority of the income earned by the Company’s Mexican subsidiary should be included in the income of the Company and subject to tax in Canada.	2013, 2014, 2015	For 2013-2015: Tax: $19.9  (C$25.3) Transfer pricing penalties: $8.1  (C$10.3) Interest and other penalties: $7.1  (C$9.2) If CRA were to reassess the 2016-2020 taxation years on the same basis: Tax: $3.6 (C$4.6) Transfer pricing penalties: $1.4  (C$1.7) Interest and other penalties: $0.9  (C$1.1)
Transfer Pricing (Barbados)	Transfer pricing provisions in the Act (as defined below) apply such that a majority of the income relating to certain precious metal streams earned by the Company’s Barbadian subsidiary should be included in the income of the Company and subject to tax in Canada.	2014, 2015	For 2014-2015: Tax: $5.3  (C$6.7) Transfer pricing penalties: $2.0  (C$2.5) Interest and other penalties: $1.7  (C$2.2) If CRA were to reassess the 2016-2020 taxation years on the same basis: Tax: $136.8 (C$174.2) Transfer pricing penalties: $51.5  (C$65.6) Interest and other penalties: $11.0  (C$14.0)
FAPI (Barbados)	The FAPI provisions in the Act (as defined below) apply such that a majority of the income relating to precious metal streams earned by the Company’s Barbadian subsidiary, in 2012 and 2013, should be included in the income of the Company and subject to tax in Canada.	2012, 2013	For 2012-2013: Tax: $6.0  (C$7.7) Interest and other penalties: $2.4  (C$3.1)

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Corporate Information (Details)	12 Months Ended
	Dec. 31, 2020
Corporate Information
Maximum energy streams target percentage (as a percent)	20.00%

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Significant accounting policies - Subsidiaries (Details)	12 Months Ended
	Dec. 31, 2020
Franco-Nevada U.S. Corporation
Subsidiaries
Economic Interests (as a percent)	100.00%
Franco-Nevada GLW Holdings Corp.
Subsidiaries
Economic Interests (as a percent)	100.00%
Franco-Nevada Canada Holdings Corp
Subsidiaries
Economic Interests (as a percent)	100.00%
Franco-Nevada (Barbados) Corporation
Subsidiaries
Economic Interests (as a percent)	100.00%
Franco-Nevada Australia Pty Ltd
Subsidiaries
Economic Interests (as a percent)	100.00%
Franco-Nevada Delaware LLC
Subsidiaries
Economic Interests (as a percent)	100.00%
Franco-Nevada Texas LP
Subsidiaries
Economic Interests (as a percent)	100.00%
Minera Global Copper Chile S.A.
Subsidiaries
Economic Interests (as a percent)	100.00%
FN Subco Inc.
Subsidiaries
Economic Interests (as a percent)	100.00%
FN Holdings ULC
Subsidiaries
Economic Interests (as a percent)	100.00%
The Mineral Resource Company II, LLC
Subsidiaries
Economic Interests (as a percent)	49.90%
Funding basis (as a percent)	80.00%

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Significant accounting policies - Working interest in oil & gas properties (Details)	Dec. 31, 2020
Significant accounting policies
Oil and gas well equipment declining depreciation rate	25.00%

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Significant accounting policies - Deferred share units and Restricted share units (Details)	12 Months Ended
	Dec. 31, 2020 shares
Deferred Share Units
Significant accounting policies
Number of trading days immediately preceding grant date for determining fair value	5 days
Restricted Share Units
Significant accounting policies
The number of trading days immediately preceding the date of the conversion award	5 days
The number of shares exchanged for each RSU	1
Time-based RSU
Significant accounting policies
Vesting period	3 years
Performance based RSU
Significant accounting policies
Vesting period	3 years
Bottom | Performance based RSU
Significant accounting policies
Target settlement range 0% to 200%	0.00%
Top | Performance based RSU
Significant accounting policies
Target settlement range 0% to 200%	200.00%

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Significant judgments, estimates and assumptions (Details) - USD ($) $ in Millions		1 Months Ended	12 Months Ended
	Mar. 31, 2020	Mar. 31, 2020	Dec. 31, 2020
Subsidiaries
Impairment loss recognised in profit or loss	$ 271.7	$ 271.7	$ 262.1
The Mineral Resource Company II, LLC
Subsidiaries
Proportion of ownership interest in subsidiary			49.90%
The Mineral Resource Company II, LLC | Bottom
Subsidiaries
Distributions received (as a percent)			50.00%
The Mineral Resource Company II, LLC | Top
Subsidiaries
Distributions received (as a percent)			75.00%

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Acquisitions and other transactions (Details) $ in Millions												12 Months Ended
	Oct. 01, 2020 USD ($)	Sep. 23, 2020 USD ($)	Sep. 11, 2020 USD ($)	Sep. 01, 2020 USD ($) item oz	Mar. 20, 2020 CAD ($)	Dec. 23, 2019 CAD ($)	Nov. 22, 2019 CAD ($) a	Sep. 25, 2019 USD ($) item	Jul. 22, 2019 USD ($) a	Feb. 21, 2019 USD ($)	Jan. 31, 2019 USD ($) EquityInstruments	Dec. 31, 2020 USD ($)	Dec. 31, 2019 USD ($)	Dec. 29, 2020 USD ($)	Mar. 20, 2020 USD ($)	Mar. 04, 2020	Dec. 23, 2019 USD ($)	Feb. 21, 2019 CAD ($)	Feb. 21, 2019 USD ($)
U.S. Oil & Gas Royalty Interest - Haynesville, Texas, USA
Acquisitions
Consideration transferred														$ 135.0
Value of royalties generated by the acquired assets	$ 4.2
Amendment of Sabodala Gold Stream Agreement [Member]
Acquisitions
Ownership percentage of the project by Teranga																90.00%
Amendment of Sabodala Gold Stream Agreement Fixed Stream [Member]
Acquisitions
Deliveries of ounces of refined gold per month untill threshold | oz				783.33
Deliveries of ounces of refined gold threshold | oz				105,750
Refined gold delivery as percentage of production from stream area				6.00%
Amendment of Sabodala Gold Stream Agreement Variable Stream [Member]
Acquisitions
Deliveries of ounces of refined gold threshold | oz				105,750
Refined gold delivery as percentage of production from stream area				6.00%
Rio Baker (Salares Nortes) Royalty , Chile [Member]
Acquisitions
Percentage of NSR		2.00%
Contingent consideration recognised as of acquisition date		$ 8.0
Cash transferred		$ 5.0
Exposure to deposits		100.00%
Option to buy back of NSR (as a percent)		0.50%
Value of option to buy back of NSR		$ 4.0
Salares Norte Royalty Interest
Acquisitions
Consideration transferred											$ 32.0
Percentage of NSR											2.00%
Cash transferred											$ 5.0
Option to buy back of NSR (as a percent)											1.00%
Value of option to buy back of NSR											$ 6.0
Period to buy back of NSR											24 months
Salares Norte Royalty Interest | Common shares
Acquisitions
Value of common shares issued in acquisition											$ 27.0
Number of instruments or interests issued or issuable | EquityInstruments											366,499
Valentine Lake Royalty Interest
Acquisitions
Consideration transferred																		$ 18,000,000	$ 13.7
Percentage of NSR										2.00%
Option to buy back of NSR (as a percent)																		0.50%	0.50%
Value of option to buy back of NSR										$ 7.0
Eagle's Nest Royalty Interest - Ontario, Canada
Acquisitions
Consideration transferred						$ 5,000,000											$ 3.8
Acquired gross royalty percent						1.00%
Project 81 Royalty Interest And Noble Common Shares [Member]
Acquisitions
Consideration transferred							$ 500,000
Percentage of NSR							2.00%
Number of royalties acquired | a							55,000
Premier Gold Royalty Interests
Acquisitions
Consideration transferred								$ 6.0
Number of royalties acquired | item								2
Premier Gold Royalty Interests | Newmont Goldcorp Corporation
Acquisitions
Percentage of NSR								2.00%
Premier Gold Royalty Interests | Nevada Gold Mines L L C
Acquisitions
Percentage of NSR								1.50%
US Oil Gas Royalties Interests Marcellus, Pennsylvania
Acquisitions
Consideration transferred									$ 300.0
Value of royalties generated by the acquired assets									$ 9.4
Percentage of gross production									1.00%
Number of acres allowed as deduction | a									350,000
Alpala Royalty Northern Ecuador
Acquisitions
Consideration transferred			$ 100.0
Percentage of NSR			1.00%
Option to buy back of NSR (as a percent)			50.00%
Ownership percentage of the project by SolGold PLC			85
Ownership percentage of the project by Cornerstone Capital Resource Inc.			15
Maximum amount of funding that can be increased			$ 150.0
Increased Percentage of NSR			1.5
Loan extended			$ 15.0
Island Gold Royalty Ontario, Canada
Acquisitions
Consideration transferred					$ 19,000,000										$ 13.4
Percentage of NSR					0.62%
South Central Oklahoma Oil Province And Sooner Trend Anadarko Basin Canadian And Kingfisher Countries
Acquisitions
Total contributions made												$ 29.8	$ 114.4
Cumulative investment in royalty acquisition venture												406.0
South Central Oklahoma Oil Province And Sooner Trend Anadarko Basin Canadian And Kingfisher Countries | Top
Acquisitions
Total cumulative investment												114.0
South Central Oklahoma Oil Province And Sooner Trend Anadarko Basin Canadian And Kingfisher Countries | Accounts payable
Acquisitions
Consideration transferred												$ 10.2	$ 5.6
Freeport Royalty Portfolio Interest
Acquisitions
Cash transferred				$ 30.6
Number of Royalty Portfolio Acquired | item				24

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Cash and cash equivalents (Details) - USD ($) $ in Millions	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Cash and cash equivalents
Cash deposits	$ 523.7	$ 118.7
Term deposits	10.5	13.4
Cash and cash equivalents	$ 534.2	$ 132.1	$ 69.7

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Investments and loan receivable (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
Investments and loan receivable
Investments and loan receivable (note 6)	$ 238.4	$ 183.2
Unrealized gains losses on available-for-sale investments
Gain on change in the fair value of equity investments at FVTOCI	50.5	11.4
Tax expense in other comprehensive income	(6.7)	(1.5)
Gain on change in the fair value of equity investments at FVTOCI, net of tax	43.8	9.9
Equity investments
Investments and loan receivable
Investments and loan receivable (note 6)	195.6	145.6
Loan receivable
Investments and loan receivable
Investments and loan receivable (note 6)	$ 37.1	34.6
Unrealized gains losses on available-for-sale investments
Loan bears interest	7.00%
Warrants
Investments and loan receivable
Investments and loan receivable (note 6)	$ 5.7	$ 3.0

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Prepaid expenses and other current assets (Details) - USD ($) $ in Millions	Dec. 31, 2020	Dec. 31, 2019
Prepaid expenses and other current assets.
Gold bullion	$ 18.6	$ 26.2
Prepaid expenses	16.4	17.5
Stream ounces inventory	0.5	4.4
Debt issue costs	0.6	0.7
Prepaid expenses and other current assets	$ 36.1	$ 48.8

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Royalty, stream and working interests - Royalties, Streams and Working Interests (Details) - USD ($) $ in Millions	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Royalty, stream and working interests
Royalty, stream and working interests, net	$ 4,632.1	$ 4,797.8	$ 4,555.6
Royalty, stream and working interest, net depletable	3,327.3	3,743.8
Royalty, stream and working interest, net non-depletable	1,304.8	1,054.0
Cost
Royalty, stream and working interests
Royalty, stream and working interests, net	7,759.6	7,407.8
Accumulated Depletion
Royalty, stream and working interests
Royalty, stream and working interests, net	(2,869.4)	(2,610.0)
Impairment (charges) reversals
Royalty, stream and working interests
Royalty, stream and working interests, net	(258.1)
Mineral Royalties
Royalty, stream and working interests
Royalty, stream and working interests, net	406.9	415.6	450.1
Mineral Royalties | Cost
Royalty, stream and working interests
Royalty, stream and working interests, net	1,049.2	1,035.7
Mineral Royalties | Accumulated Depletion
Royalty, stream and working interests
Royalty, stream and working interests, net	(642.3)	(620.1)
Streams
Royalty, stream and working interests
Royalty, stream and working interests, net	2,653.6	2,804.0	2,967.6
Streams | Cost
Royalty, stream and working interests
Royalty, stream and working interests, net	4,346.6	4,346.3
Streams | Accumulated Depletion
Royalty, stream and working interests
Royalty, stream and working interests, net	(1,702.6)	(1,542.3)
Streams | Impairment (charges) reversals
Royalty, stream and working interests
Royalty, stream and working interests, net	9.6
Energy
Royalty, stream and working interests
Royalty, stream and working interests, net	1,214.6	1,353.6	966.6
Energy | Cost
Royalty, stream and working interests
Royalty, stream and working interests, net	1,944.7	1,756.4
Energy | Accumulated Depletion
Royalty, stream and working interests
Royalty, stream and working interests, net	(462.4)	(402.8)
Energy | Impairment (charges) reversals
Royalty, stream and working interests
Royalty, stream and working interests, net	(267.7)
Advanced
Royalty, stream and working interests
Royalty, stream and working interests, net	294.0	170.9	129.8
Advanced | Cost
Royalty, stream and working interests
Royalty, stream and working interests, net	343.0	203.2
Advanced | Accumulated Depletion
Royalty, stream and working interests
Royalty, stream and working interests, net	(49.0)	(32.3)
Exploration
Royalty, stream and working interests
Royalty, stream and working interests, net	63.0	53.7	$ 41.5
Exploration | Cost
Royalty, stream and working interests
Royalty, stream and working interests, net	76.1	66.2
Exploration | Accumulated Depletion
Royalty, stream and working interests
Royalty, stream and working interests, net	$ (13.1)	$ (12.5)

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Royalty, stream and working interests - Rollforward (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
Royalty, stream and working interests
Balance at beginning of period	$ 4,797.8	$ 4,555.6
Additions (note 4)	315.8	476.9
Impairment (charges) and reversals	(258.1)
Depletion	(238.7)	(259.7)
Impact of foreign exchange	15.3	25.0
Balance at end of period	4,632.1	4,797.8
Mineral Royalties
Royalty, stream and working interests
Balance at beginning of period	415.6	450.1
Additions (note 4)	18.8
Transfers	(1.2)	5.9
Depletion	(31.5)	(46.0)
Impact of foreign exchange	5.2	5.6
Balance at end of period	406.9	415.6
Streams
Royalty, stream and working interests
Balance at beginning of period	2,804.0	2,967.6
Impairment (charges) and reversals	9.6
Depletion	(160.0)	(163.6)
Balance at end of period	2,653.6	2,804.0
Energy
Royalty, stream and working interests
Balance at beginning of period	1,353.6	966.6
Additions (note 4)	170.2	419.0
Impairment (charges) and reversals	(267.7)
Depletion	(44.9)	(49.0)
Impact of foreign exchange	3.4	17.0
Balance at end of period	1,214.6	1,353.6
Advanced
Royalty, stream and working interests
Balance at beginning of period	170.9	129.8
Additions (note 4)	118.6	46.0
Transfers	1.2	(5.9)
Depletion	(2.1)	(0.9)
Impact of foreign exchange	5.4	1.9
Balance at end of period	294.0	170.9
Exploration
Royalty, stream and working interests
Balance at beginning of period	53.7	41.5
Additions (note 4)	8.2	11.9
Depletion	(0.2)	(0.2)
Impact of foreign exchange	1.3	0.5
Balance at end of period	$ 63.0	$ 53.7

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Royalty, stream and working interests - Impairments of Royalties, Streams and Working Interests (Details)		1 Months Ended	12 Months Ended
	Mar. 31, 2020 USD ($)	Mar. 31, 2020 USD ($)	Dec. 31, 2020 USD ($) $ / bbl $ / $	Nov. 13, 2012
Royalty, stream and working interests
Impairment of royalty, streams and working interests	$ 271,700,000	$ 271,700,000	$ 262,100,000
Recoverable amount	476,700,000	476,700,000
Edmonton Light prices (in US $/ barrels) | $ / bbl			8.55
Exchange rate (US $ / Canadian dollar) | $ / $			0.72
WTI oil price increase (as percentage)			2.00%
Increase (Decrease) to impairment charges due to 1% increase in discount rate			$ 51,000,000
Increase (Decrease) to impairment charges due to 1% decrease in discount rate			(59,000,000)
Increase (Decrease) to impairment charges due to 10% increase in WTI oil prices			(76,300,000)
Increase (Decrease) to impairment charges due to 10% decrease in WTI oil prices			77,600,000
Remainder of 2020
Royalty, stream and working interests
WTI oil price (in US $/ barrels)			30.00
2021
Royalty, stream and working interests
WTI oil price (in US $/ barrels)			41.18
2022
Royalty, stream and working interests
WTI oil price (in US $/ barrels)			49.88
2023
Royalty, stream and working interests
WTI oil price (in US $/ barrels)			55.87
2024
Royalty, stream and working interests
WTI oil price (in US $/ barrels)			57.98
SCOOP/STACK
Royalty, stream and working interests
Impairment of royalty, streams and working interests		207,200,000
Recoverable amount	309,200,000	309,200,000
Increase (Decrease) to impairment charges due to 1% increase in discount rate			34,100,000
Increase (Decrease) to impairment charges due to 1% decrease in discount rate			(39,900,000)
Increase (Decrease) to impairment charges due to 10% increase in WTI oil prices			(37,300,000)
Increase (Decrease) to impairment charges due to 10% decrease in WTI oil prices			$ 37,800,000
Weyburn
Royalty, stream and working interests
Percentage of NRI				11.71%
Percentage of ORR			0.44%
Percentage of WI			2.56%
Impairment of royalty, streams and working interests		60,500,000
Recoverable amount	162,800,000	162,800,000
Change in discount rate assumption for impairment analysis (as a percent)			9.50%
Oil well equipment
Royalty, stream and working interests
Impairment of royalty, streams and working interests		4,000,000
Recoverable amount	$ 4,700,000	$ 4,700,000
Weyburn and oil well equipment
Royalty, stream and working interests
Increase (Decrease) to impairment charges due to 1% increase in discount rate			$ 16,900,000
Increase (Decrease) to impairment charges due to 1% decrease in discount rate			(19,100,000)
Increase (Decrease) to impairment charges due to 10% increase in WTI oil prices			(39,000,000)
Increase (Decrease) to impairment charges due to 10% decrease in WTI oil prices			$ 39,800,000
Bottom | SCOOP/STACK
Royalty, stream and working interests
Change in discount rate assumption for impairment analysis (as a percent)			5.00%
Top | SCOOP/STACK
Royalty, stream and working interests
Change in discount rate assumption for impairment analysis (as a percent)			12.00%

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Royalty, stream and working interests - Impairment reversal of Mine Waste Solutions stream (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2014	Dec. 31, 2019	Dec. 31, 2018
Royalty, stream and working interests
Carrying value	$ 4,632.1		$ 4,797.8	$ 4,555.6
Streams
Royalty, stream and working interests
Carrying value	2,653.6		$ 2,804.0	$ 2,967.6
Streams | Mine Waste Solutions
Royalty, stream and working interests
Impairments		$ 26.6
Reversal of impairment loss recognized	9.6
Carrying value	$ 77.2

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Royalty, stream and working interests - Mine Waste Solutions stream (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2020	Mar. 31, 2020
Royalty, stream and working interests
Recoverable amount		$ 476.7
Streams
Royalty, stream and working interests
Impairment reversal amount	$ (9.6)
Recoverable amount	114.8
Streams | Mine Waste Solutions
Royalty, stream and working interests
Impairment reversal amount	(9.6)
Recoverable amount	$ 114.8

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Royalty, stream and working interests - Key assumptions and sensitivity analysis (Details) - Streams - Mine Waste Solutions	Dec. 31, 2020 USD ($)
Royalty, stream and working interests
Change in discount rate assumption for impairment analysis (as a percent)	5.00%
Gold prices discount rate (as a percent)	10.00%
Discount Rate increase (Percentage)	1.00%
Discount Rate decrease (Percentage)	1.00%
2021
Royalty, stream and working interests
Gold price (US$/ounce)	$ 1,910
2022
Royalty, stream and working interests
Gold price (US$/ounce)	1,886
2023
Royalty, stream and working interests
Gold price (US$/ounce)	1,831
2024
Royalty, stream and working interests
Gold price (US$/ounce)	$ 1,681

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Other assets (Details) - USD ($) $ in Millions	Dec. 31, 2020	Dec. 31, 2019
Other assets
Energy well equipment, net	$ 5.0	$ 9.3
Right-of-use assets, net	2.0	2.5
Furniture and fixtures, net	0.4	0.4
Debt issue costs	1.3	1.9
Other	4.9
Other assets	$ 13.6	$ 14.1

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Accounts payable and accrued liabilities (Details) - USD ($) $ in Millions	Dec. 31, 2020	Dec. 31, 2019
Accounts payable and accrued liabilities
Accounts payable	$ 3.5	$ 6.8
Accrued liabilities	37.3	35.0
Accounts payable and accrued liabilities	$ 40.8	$ 41.8

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Debt (Details) $ in Millions, $ in Millions		12 Months Ended
	Mar. 20, 2017 USD ($)	Dec. 31, 2020 USD ($) LetterOfCredit	Dec. 31, 2019 USD ($)	Dec. 31, 2020 CAD ($)	Dec. 31, 2020 USD ($)	Apr. 17, 2019 USD ($)
Revolving term credit facility
Size of facility					$ 1,260.0
Balance, beginning of year		$ 80.0	$ 210.0
Drawdowns			435.0
Repayment		(80.0)	(565.0)
Balance, end of year			80.0
Amount outstanding		$ 80.0	80.0
Credit Facility
Revolving term credit facility
Size of facility					1,000.0
Balance, beginning of year			210.0
Drawdowns			275.0
Repayment			(485.0)
Maximum borrowing capacity					$ 1,000.0
Amount outstanding			210.0
Credit Facility | Bottom
Revolving term credit facility
Bankers acceptance period under credit facility		30 days
Stamping fee (as a percent)		1.00%
Standby fee (as a percent)		0.20%
Credit Facility | Top
Revolving term credit facility
Bankers acceptance period under credit facility		180 days
Stamping fee (as a percent)		2.05%
Standby fee (as a percent)		0.41%
Credit Facility | CIBC | Bottom
Revolving term credit facility
Spread on variable rate (as a percent)				0.00%	0.00%
Credit Facility | CIBC | Top
Revolving term credit facility
Spread on variable rate (as a percent)				1.05%	1.05%
Credit Facility | LIBOR | Bottom
Revolving term credit facility
Spread on variable rate (as a percent)				1.00%	1.00%
Credit Facility | LIBOR | Top
Revolving term credit facility
Spread on variable rate (as a percent)				2.05%	2.05%
Credit Facility | Prime rate | Bottom
Revolving term credit facility
Spread on variable rate (as a percent)				0.00%	0.00%
Credit Facility | Prime rate | Top
Revolving term credit facility
Spread on variable rate (as a percent)				1.05%	1.05%
Term Loan
Revolving term credit facility
Balance, beginning of year		$ 80.0
Drawdowns			160.0
Repayment		(80.0)	(80.0)
Balance, end of year			80.0
Amount outstanding		$ 80.0	$ 80.0
Borrowed amount					$ 160.0	$ 160.0
Term Loan | 30-day Libor
Revolving term credit facility
Spread on variable rate (as a percent)						0.85%
FNBC Credit Facility
Revolving term credit facility
Maturity period	1 year
Maximum borrowing capacity	$ 100.0				$ 100.0
Standby fee (as a percent)		0.25%
FNBC Credit Facility | CIBC
Revolving term credit facility
Spread on variable rate (as a percent)				0.25%	0.25%
FNBC Credit Facility | LIBOR
Revolving term credit facility
Spread on variable rate (as a percent)				1.25%	1.25%
Letter of credit
Revolving term credit facility
Maximum borrowing capacity				$ 23.1	$ 18.1
Number of letter of credit | LetterOfCredit		2

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Revenue (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
Revenue
Revenue	$ 1,020.2	$ 844.1
Revenue-based royalties
Revenue
Revenue	274.9	266.7
Streams
Revenue
Revenue	629.2	490.8
Profit-based royalties
Revenue
Revenue	88.7	49.7
Other
Revenue
Revenue	27.4	36.9
Latin America
Revenue
Revenue	502.1	369.2
United States
Revenue
Revenue	178.6	166.6
Canada
Revenue
Revenue	196.9	166.2
Rest of World
Revenue
Revenue	142.6	142.1
Mining
Revenue
Revenue	928.5	728.2
Gold
Revenue
Revenue	718.1	545.8
Provisional price adjustment	(0.1)	0.3
Silver
Revenue
Revenue	106.4	83.2
Platinum-group metals
Revenue
Revenue	86.2	75.6
Provisional price adjustment	5.9	7.8
Other mining commodities
Revenue
Revenue	17.8	23.6
Energy
Revenue
Revenue	$ 91.7	$ 115.9

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Costs of sales (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
Costs of sales
Cost of stream sales	$ 149.5	$ 135.1
Mineral production taxes	2.9	2.4
Mining costs of sales	152.4	137.5
Energy costs of sales	6.4	7.3
Total costs of sales	$ 158.8	$ 144.8

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Related party disclosures (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
Related party disclosures
Short-term benefits	$ 3.5	$ 4.6
Share-based payments	7.9	5.9
Total	$ 11.4	$ 10.5

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Finance income and expenses (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
Finance income
Interest	$ 3.7	$ 3.5
Finance income	3.7	3.5
Finance expenses
Standby charges	2.1	2.1
Amortization of debt issue costs	1.0	0.9
Interest	0.3	7.4
Accretion of lease liabilities	0.1	0.2
Finance expenses	$ 3.5	$ 10.6

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Income taxes - Other (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
Income taxes
Expense for the year	$ 50.9	$ 42.3
Adjustment in respect of prior years	(2.4)	(3.2)
Current income tax expense	48.5	39.1
Origination and reversal of temporary differences	(30.2)	20.2
Impact of changes in tax rates	(0.8)	(1.0)
Change in unrecognized deductible temporary differences	(6.4)	(0.1)
Adjustments in respect of prior years	2.2	3.4
Other		0.2
Deferred income tax expense	(35.2)	22.7
Income tax expense	$ 13.3	$ 61.8

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Income taxes - Reconciliation (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
Income taxes
Deferred income tax (recovery) expense	$ (35.2)	$ 22.7
Net income before income taxes	$ 339.5	$ 405.9
Statutory tax rate (as a percent)	26.50%	26.60%
Tax expense at statutory rate	$ 90.0	$ 108.0
Change in unrecognized deductible temporary differences	(6.4)	(0.1)
Income/expenses not taxed	(4.2)	(4.3)
Differences in foreign statutory tax rates	(66.0)	(42.8)
Differences due to changing future tax rates	(0.8)	(1.0)
Foreign withholding tax		0.3
Temporary differences subject to initial recognition exemption	0.6	1.5
Other	0.1	0.2
Income tax expense	$ 13.3	$ 61.8

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Income taxes - Recognized in OCI (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
Income taxes
Gain (loss) on change in the fair value of equity investments of FVTOCI	$ 50.5	$ 11.4
Currency translation adjustment	19.6	32.3
Other comprehensive income (loss)	70.1	43.7
Gain (loss) on change in the fair value of equity investments at FVTOCI	(6.7)	(1.5)
Other comprehensive income (loss)	(6.7)	(1.5)
Deferred tax	(6.7)	(1.5)
Tax expense in other comprehensive income	(6.7)	(1.5)
Gain (loss) on change in the fair value equity investments at FVTOCI	43.8	9.9
Currency translation adjustment	19.6	32.3
Other comprehensive income	$ 63.4	$ 42.2

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Income taxes - DTA and DTL (Details) - USD ($) $ in Millions	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Non-capital loss
Deferred income tax liabilities, net	$ 46.4	$ 75.6	$ 50.0
Share issue and debt issue costs deferred income tax liabilities
Non-capital loss
Net deferred tax liabilities	0.3	(1.7)
Royalty stream and working interests deferred income tax assets
Non-capital loss
Net deferred tax assets	44.1	6.5
Royalty stream and working interests deferred income tax liabilities
Non-capital loss
Net deferred tax liabilities	89.6	89.0
Non-capital loss carry-forwards deferred income tax assets
Non-capital loss
Net deferred tax assets	0.6	0.3
Non-capital loss carry-forwards deferred income tax liabilities
Non-capital loss
Net deferred tax liabilities	(3.9)	(4.3)
Investments deferred income tax liabilities
Non-capital loss
Net deferred tax liabilities	11.6	4.3
Other deferred income tax assets
Non-capital loss
Net deferred tax assets	0.4
Other deferred income tax liabilities
Non-capital loss
Net deferred tax liabilities	(6.1)	(4.9)
Deferred income tax assets
Non-capital loss
Net deferred tax assets	45.1	6.8
Deferred income tax liabilities
Non-capital loss
Net deferred tax liabilities	$ 91.5	$ 82.4

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Income taxes - Movement in net deferred tax liabilities (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
Income taxes
Balance, beginning of year	$ 75.6	$ 50.0
Recognized in net income	(35.2)	22.5
Recognized in other comprehensive income	6.7	1.5
Recognized in equity	0.3	0.4
Other	(1.0)	1.2
Balance, end of year	$ 46.4	$ 75.6

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Income taxes - Noncapital Losses (Details) $ in Millions	Dec. 31, 2020 USD ($)
Non-capital loss
Amount	$ 17.0
Canada
Non-capital loss
Amount	14.7
Chile
Non-capital loss
Amount	$ 2.3

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Income taxes - Unrecognized (Details) - USD ($) $ in Millions	Dec. 31, 2020	Dec. 31, 2019
Income taxes
Aggregate amount of taxable temporary differences associated with investments in subsidiaries for which deferred tax liabilities have not been recognized	$ 298.1	$ 393.7
Aggregate amount of deductible temporary differences associated with other items for which deferred tax assets have not been recognized	$ 48.7	$ 72.7

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Income taxes - Deductible Temporary Difference, losses and Unused Tax Credits (Details) - USD ($) $ in Millions	Dec. 31, 2020	Dec. 31, 2019
Disclosure of temporary difference and unused tax credits
Unused tax credits for which no deferred tax asset recognised	$ 48.7	$ 72.7
Royalty, stream and working interests
Disclosure of temporary difference and unused tax credits
Unused tax credits for which no deferred tax asset recognised	25.1	48.0
Tax losses (expiry dates - 2029-2033)
Disclosure of temporary difference and unused tax credits
Unused tax credits for which no deferred tax asset recognised	$ 23.6	$ 24.7

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Shareholders' equity - Common Shares (Details) $ / shares in Units, $ in Millions	12 Months Ended
	Dec. 31, 2020 USD ($) $ / shares shares	Dec. 31, 2019 USD ($) EquityInstruments shares	Jan. 31, 2019 EquityInstruments
Shareholders' equity
Number of shares outstanding at beginning of period | shares	189,381,388
Number of shares outstanding at end of period | shares	190,956,476	189,381,388
Balance at the beginning period	$ 5,390.7
At-the-market equity offering	133.7	$ 136.0
Amount of Acquisition of Salares Norte		27.0
Amount of Exercise of stock options	7.4	13.2
Dividend reinvestment plan	(42.3)	(48.8)
Balance at the ending period	$ 5,580.1	$ 5,390.7
Common shares
Shareholders' equity
Shares issued | shares	190,956,476
Shares, par value (dollars per share) | $ / shares	$ 0
Common shares | Salares Norte Royalty Interest
Shareholders' equity
Acquisition of Salares Norte | EquityInstruments			366,499
Preferred shares
Shareholders' equity
Shares issued | shares	0
Share Capital (Note 17)
Shareholders' equity
Number of shares outstanding at beginning of period | shares	189,381,388	186,692,481
At-the-market equity offering | shares	1,054,800	1,433,400
Acquisition of Salares Norte | EquityInstruments		366,499
Exercise of stock options | shares	150,482	283,863
Vesting of restricted share units | shares	42,328	46,375
Dividend reinvestment plan | shares	327,478	558,770
Number of shares outstanding at end of period | shares	190,956,476	189,381,388
Balance at the beginning period	$ 5,390.7	$ 5,158.3
At-the-market equity offering	133.7	136.0
Amount of Acquisition of Salares Norte		27.0
Amount of Exercise of stock options	9.7	17.3
Amount of Vesting of restricted share units	3.7	3.3
Dividend reinvestment plan	(42.3)	(48.8)
Balance at the ending period	$ 5,580.1	$ 5,390.7

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Shareholders' equity - At-the-market equity offering (Details) - USD ($) $ / shares in Units, $ in Millions			12 Months Ended
	May 11, 2020	Apr. 28, 2020	Dec. 31, 2020	Dec. 31, 2019
Shareholders' equity
Maximum value of shares that can be issued from treasury to public	$ 300.0	$ 200.0
Average price per common share			$ 128.96
Gross proceeds from share issues			$ 136.0
Net proceeds from share issues			133.7
Share issuance agent commission costs			1.4
Share issue costs and expense			$ 0.9
Share Capital (Note 17)
Shareholders' equity
Number of shares issued at At-the-market equity offering			1,054,800	1,433,400

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Shareholders' equity - Dividends (Details) - USD ($) $ / shares in Units, $ in Millions	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
Shareholders' equity
Dividend declared per share	$ 1.03	$ 0.99
Cash dividends	$ (154.9)	$ (138.2)
DRIP dividends	(42.3)	(48.8)
Dividends declared	$ (197.2)	$ (187.0)

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Shareholders' equity - Stock-based payments - Assumptions & Options (Details)	12 Months Ended
	Dec. 31, 2020 $ / shares	Dec. 31, 2020 USD ($) Y EquityInstruments	Dec. 31, 2019 $ / shares	Dec. 31, 2019 USD ($) Y EquityInstruments	Dec. 31, 2020 USD ($) EquityInstruments	Dec. 31, 2019 USD ($) EquityInstruments	Mar. 07, 2018 shares
Stock-based payments
Aggregate number of common shares | shares							9,700,876
Risk-free interest rate		0.39%		1.62%
Expected dividend yield		0.78%		1.02%
Expected price volatility of the Company's common shares		28.80%		27.50%
Expected life of the option | Y		4		4
Forfeiture rate		0.00%		0.00%
Weighted average life		6 years 4 months 24 days
Stock options outstanding, beginning of year (in shares) | EquityInstruments		836,427		1,015,409
Granted (in shares) | EquityInstruments		61,594		104,881
Exercised (in shares) | EquityInstruments		(150,482)		(283,863)
Forfeited (in shares) | EquityInstruments		(1,577)
Stock options outstanding, end of the year (in shares)		745,962		836,427
Exercisable stock options, end of the year (in shares)					563,975	596,402
Stock options outstanding, beginning of year (in dollars per share)	$ 80.01		$ 69.13
Granted (in dollars per share)	171.33		129.32
Exercised (in dollars per share)	67.13		59.31
Forfeited (in dollars per share)	112.84
Stock options outstanding, end of year (in dollars per share)	90.08		80.01
Exercisable stock options, end of the year (in dollars per share)	76.14		68.05
Stock options
Stock-based payments
Maximum percentage of common shares issued to single insider participant under compensation plan within one year					5.00%
Term of options		10 years		10 years
Vesting period		3 years		3 years
Weighted average fair value per stock option | $					$ 1,700,000	$ 2,200,000
Weighted average fair value per stock option (in dollars per share)	$ 36.67		$ 28.11
Expenses related to stock options | $		$ 2,200,000		$ 2,300,000
Capitalized to royalty, stream and working interest, net | $		$ 100,000		$ 500,000
Total unrecognized non-cash stock-based compensation expense | $					$ 2,900,000	$ 3,500,000
Weighted average life		1 year 8 months 12 days		1 year 8 months 12 days
Stock options | Maximum
Stock-based payments
Term of options		10 years

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Shareholders' equity - Stock-based payments - Exercise price (Details)	12 Months Ended
	Dec. 31, 2020 $ / shares	Dec. 31, 2020 EquityInstruments	Dec. 31, 2020 USD ($)	Dec. 31, 2019 EquityInstruments	Dec. 31, 2018 EquityInstruments
Shareholders' equity
Options outstanding		745,962	745,962	836,427	1,015,409
Options exercisable		563,975	563,975	596,402
Weighted average life	6 years 4 months 24 days
C$40.87
Shareholders' equity
Exercise price | $ / shares	$ 40.87
Options outstanding			32,451
Options exercisable			32,451
Weighted average life	2 years 11 months 9 days
C$42.43
Shareholders' equity
Exercise price | $ / shares	$ 42.43
Options outstanding			750
Options exercisable			750
Weighted average life	1 year 3 months
C$46.17
Shareholders' equity
Exercise price | $ / shares	$ 46.17
Options outstanding			75,000
Options exercisable			75,000
Weighted average life	2 years 7 months 17 days
C$55.58
Shareholders' equity
Exercise price | $ / shares	$ 55.58
Options outstanding			17,397
Options exercisable			17,397
Weighted average life	1 year 11 months 12 days
C$58.67
Shareholders' equity
Exercise price | $ / shares	$ 58.67
Options outstanding			20,000
Options exercisable			20,000
Weighted average life	4 years 7 months 21 days
C$59.52
Shareholders' equity
Exercise price | $ / shares	$ 59.52
Options outstanding			33,876
Options exercisable			33,876
Weighted average life	3 years 11 months 12 days
C$65.76
Shareholders' equity
Exercise price | $ / shares	$ 65.76
Options outstanding			55,853
Options exercisable			55,853
Weighted average life	4 years 11 months 9 days
C$75.45
Shareholders' equity
Exercise price | $ / shares	$ 75.45
Options outstanding			120,074
Options exercisable			120,074
Weighted average life	5 years 11 months 9 days
C$88.76
Shareholders' equity
Exercise price | $ / shares	$ 88.76
Options outstanding			45,082
Options exercisable			29,171
Weighted average life	7 years 7 months 21 days
C$94.57
Shareholders' equity
Exercise price | $ / shares	$ 94.57
Options outstanding			95,273
Options exercisable			60,184
Weighted average life	7 years 11 months 12 days
C$100.10
Shareholders' equity
Exercise price | $ / shares	$ 100.10
Options outstanding			84,523
Options exercisable			84,523
Weighted average life	6 years 11 months 9 days
C$129.32
Shareholders' equity
Exercise price | $ / shares	$ 129.32
Options outstanding			104,089
Options exercisable			34,696
Weighted average life	8 years 11 months 9 days
C$171.33
Shareholders' equity
Exercise price | $ / shares	$ 171.33
Options outstanding			61,594
Weighted average life	9 years 11 months 9 days

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Shareholders' equity - Restricted stock unit (Details) $ in Millions	12 Months Ended
	Dec. 31, 2020 USD ($) EquityInstruments	Dec. 31, 2019 USD ($) EquityInstruments
Restricted Share Units
Stock-based payments
Fair value of RSUs granted	$ 5.0	$ 3.9
Number of trading days immediately preceding the date of conversion or award grant for determining fair value	5 days
Stock-based compensation expenses	$ 3.4	2.6
Capitalised to royalty, stream and working interest	0.1	0.6
Total unrecognized non-cash stock-based compensation expense	$ 7.7	$ 6.4
Expected to be recognized over weighted average period	2 years 1 month 6 days	2 years 1 month 6 days
Performance based RSU
Stock-based payments
Granted | EquityInstruments	22,519	20,153
Time-based RSU
Stock-based payments
Granted | EquityInstruments	14,546	19,863

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Shareholders' equity - Share Purchase Warrants and Deferred share unit plan (Details) - DSU plan $ in Millions	12 Months Ended
	Dec. 31, 2020 USD ($) EquityInstruments shares	Dec. 31, 2019 USD ($) EquityInstruments
Stock-based payments
Redeemed | shares	0
Granted | EquityInstruments	14,285	18,448
DSU liability	$ 14.9	$ 10.8
Mark-to-market adjustments	$ 2.0	$ 2.8

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Shareholders' equity - Outstanding (Detail)	Dec. 31, 2020 EquityInstruments	Dec. 31, 2020 shares	Dec. 31, 2020 USD ($)	Dec. 31, 2019 EquityInstruments shares	Dec. 31, 2018 EquityInstruments
Shareholders' equity
Common share outstanding		190,956,476		189,381,388
Stock options	745,962		745,962	836,427	1,015,409
Restricted Share Units | EquityInstruments	102,708			108,978
Total		191,805,146		190,326,793

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Earnings per share ("EPS") (Details) - USD ($) $ / shares in Units, $ in Millions	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
Earnings per share
Basic EPS - Net income (loss)	$ 326.2	$ 344.1
Basic EPS - (in shares)	190,300,000	187,700,000
Basic EPS (in dollars per share)	$ 1.71	$ 1.83
Effect of dilutive securities - (in shares)	400,000	300,000
Diluted EPS - Net income (loss)	$ 326.2	$ 344.1
Diluted EPS - (in shares)	190,700,000	188,000,000
Diluted EPS (in dollars per share)	$ 1.71	$ 1.83
Securities excluded from computation of diluted EPS (in shares)		6,034
Stock options
Earnings per share
Securities excluded from computation of diluted EPS (in shares)	3,534	1,143
Restricted shares
Earnings per share
Securities excluded from computation of diluted EPS (in shares)	66,996	65,972

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Segment Reporting - Financials (Details) $ in Millions		1 Months Ended	12 Months Ended
	Mar. 31, 2020 USD ($)	Mar. 31, 2020 USD ($)	Dec. 31, 2020 USD ($) item	Dec. 31, 2019 USD ($)
Segment Reporting
Number of operating segments | item			2
Revenue			$ 1,020.2	$ 844.1
Income/(expenses)
Costs of sales			158.8	144.8
Depletion and depreciation			241.0	263.2
Gross profit			620.4	436.1
Other operating (income)/expenses
General and administrative expenses			28.8	28.8
Impairment of royalty, streams and working interests	$ 271.7	$ 271.7	262.1
Gain on sale of bullion			(7.0)	(2.9)
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
Operating Segments
Segment Reporting
Revenue			1,020.2	844.1
Income/(expenses)
Costs of sales			158.8	144.8
Depletion and depreciation			238.7	259.7
Gross profit			622.7	439.6
Other operating (income)/expenses
General and administrative expenses			28.8	28.8
Impairment of royalty, streams and working interests			262.1
Gain on sale of bullion			(7.0)	(2.9)
Depreciation			2.3	3.5
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
Operating Segments | Mining Segment
Segment Reporting
Revenue			928.5	728.2
Income/(expenses)
Costs of sales			152.4	137.5
Depletion and depreciation			193.8	210.7
Gross profit			582.3	380.0
Operating Segments | Energy Segment
Segment Reporting
Revenue			91.7	115.9
Income/(expenses)
Costs of sales			6.4	7.3
Depletion and depreciation			44.9	49.0
Gross profit			$ 40.4	$ 59.6

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Segment Reporting - Interests (Details) $ in Millions	12 Months Ended
	Dec. 31, 2020 USD ($) item	Dec. 31, 2019 USD ($) item
Interests
Number of major interests | item	3	2
Revenue	$ 1,020.2	$ 844.1
Major Interest One
Interests
Revenue	$ 360.7	$ 203.5
Percentage of revenue (as a percent)	13.00%	12.00%
Major Interest Two
Interests
Percentage of revenue (as a percent)	12.00%	12.00%
Major Interest Three
Interests
Percentage of revenue (as a percent)	10.00%

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Segment Reporting - Geographical (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
Geographical
Revenue	$ 1,020.2	$ 844.1
Royalty, stream and working interests	4,632.1	4,797.8
Deferred income tax assets (note 16)	238.4	183.2
Oil and gas well equipment	5.0	9.3
Peru
Geographical
Revenue	175.5	145.3
Royalty, stream and working interests	766.3	825.5
Chile
Geographical
Revenue	106.8	103.1
Royalty, stream and working interests	485.0	504.2
Panama
Geographical
Revenue	135.4	64.7
Royalty, stream and working interests	1,318.5	1,348.4
Other
Geographical
Revenue	84.4	56.1
Royalty, stream and working interests	154.4	48.1
United States
Geographical
Revenue	178.6	166.6
Royalty, stream and working interests	1,216.8	1,300.2
Canada
Geographical
Revenue	196.9	166.2
Royalty, stream and working interests	458.2	504.9
Rest of World
Geographical
Revenue	142.6	142.1
Royalty, stream and working interests	$ 232.9	$ 266.5

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Fair value measurements (Details)	12 Months Ended
	Dec. 31, 2020 USD ($) EquityInstruments	Dec. 31, 2019 USD ($)
Fair value measurements
Transfer from Level 1 to 2 of financial assets	$ 0
Transfer from Level 2 to 1 of financial assets	0
Transfer from Level 1 to 2 of financial liabilities	0
Transfer from Level 2 to 1 of financial liabilities	0
Transfers Into Level 3 of financial assets	0
Transfers Out of Level 3 of financial assets	0
Transfers Into Level 3 of financial liabilities	0
Transfers Out of Level 3 of financial liabilities	0
Assets	$ 5,592,900,000	$ 5,280,600,000
Number of investments with no quoted market price in an active market | EquityInstruments	1
Recurring Basis
Fair value measurements
Financial assets, at fair value	$ 211,400,000	165,000,000
Recurring Basis | Level 1
Fair value measurements
Financial assets, at fair value	191,800,000	141,700,000
Recurring Basis | Level 2
Fair value measurements
Financial assets, at fair value	15,800,000	19,400,000
Recurring Basis | Level 3
Fair value measurements
Financial assets, at fair value	3,800,000	3,900,000
Non recurring Basis
Fair value measurements
Financial assets, at fair value	591,500,000
Non recurring Basis | Level 3
Fair value measurements
Financial assets, at fair value	591,500,000
Receivables from provisional concentrate sales | Recurring Basis
Fair value measurements
Financial assets, at fair value	10,100,000	16,400,000
Receivables from provisional concentrate sales | Recurring Basis | Level 2
Fair value measurements
Financial assets, at fair value	10,100,000	16,400,000
Equity investments | Recurring Basis
Fair value measurements
Financial assets, at fair value	195,600,000	145,600,000
Equity investments | Recurring Basis | Level 1
Fair value measurements
Financial assets, at fair value	191,800,000	141,700,000
Equity investments | Recurring Basis | Level 3
Fair value measurements
Financial assets, at fair value	3,800,000	3,900,000
SCOOP/STACK | Non recurring Basis
Fair value measurements
Financial assets, at fair value	309,200,000
SCOOP/STACK | Non recurring Basis | Level 3
Fair value measurements
Financial assets, at fair value	309,200,000
Weyburn | Non recurring Basis
Fair value measurements
Financial assets, at fair value	162,800,000
Weyburn | Non recurring Basis | Level 3
Fair value measurements
Financial assets, at fair value	162,800,000
Mine Waste Solutions | Non recurring Basis
Fair value measurements
Financial assets, at fair value	114,800,000
Mine Waste Solutions | Non recurring Basis | Level 3
Fair value measurements
Financial assets, at fair value	114,800,000
Warrants | Recurring Basis
Fair value measurements
Financial assets, at fair value	5,700,000	3,000,000
Warrants | Recurring Basis | Level 2
Fair value measurements
Financial assets, at fair value	5,700,000	$ 3,000,000
Oil well equipment | Non recurring Basis
Fair value measurements
Financial assets, at fair value	4,700,000
Oil well equipment | Non recurring Basis | Level 3
Fair value measurements
Financial assets, at fair value	$ 4,700,000

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Financial risk management (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Financial Risk Management
Cumulative translation adjustment	$ 19.6	$ 32.3
Borrowings		80.0	$ 210.0
Investments and loan receivable (note 6)	238.4	183.2
Credit Facility
Financial Risk Management
Borrowings			$ 210.0
Foreign Exchange Risk
Financial Risk Management
Cumulative translation adjustment	$ 19.6	$ (32.3)
Interest Rate Risk
Financial Risk Management
Increase in interest rate used for sensitivity analysis (as a percent)	0.50%	0.50%
Decrease in interest rate used for sensitivity analysis (as a percent)	0.50%	0.50%
Interest rate sensitivities increase effect on net income	$ 1.8	$ 0.3
Interest rate sensitivities decrease effect on net income	(0.5)	(0.3)
Interest rate sensitivities increase effect on equity	1.8	0.3
Interest rate sensitivities decrease effect on equity	(0.5)	(0.3)
Borrowings	80.0
Liquidity Risk
Financial Risk Management
Cash and cash equivalents and available-for-sale securities	$ 534.2	132.1
Term of financial liabilities	1 year
Capital Risk Management
Financial Risk Management
Cash and cash equivalents and available-for-sale securities	$ 534.2	132.1
Investments and loan receivable (note 6)	238.4	183.2
Liquid securities	191.8	141.7
Capital Risk Management | Credit Facility
Financial Risk Management
Undrawn borrowing facilities	$ 1,100.0	$ 1,100.0

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Commitments (Details) t in Millions, lb in Millions	12 Months Ended
	Dec. 31, 2020 $ / oz t oz $ / shares	Dec. 31, 2020 $ / oz	Dec. 31, 2020 lb	Dec. 31, 2020 oz	Dec. 31, 2020	Dec. 31, 2020 USD ($)	Jul. 01, 2018 $ / oz
Antamina
Commitments
Attributable payable production of gold to be purchased (as a percent)					0.00%
Attributable payable production of silver to be purchased (as a percent)					22.50%
Attributable payable production of platinum group metals to be purchased (as a percent)					0.00%
Payment for each ounce of silver (as a percent)					5.00%
Term of agreement	40 years
Fixed silver payability (as a percent)	90.00%
Percentage of reduction in spot price after maximum ounces of silver have been delivered under the stream agreement	15.00%
Maximum ounces of silver on which on-going price of spot price is payable				86,000,000
Purchase price per ounce of silver as a percent of average or spot price upon initial delivery	5.00%
Antapaccay
Commitments
Attributable payable production of platinum group metals to be purchased (as a percent)					0.00%
Payment for each ounce of gold (as a percent)					20.00%
Payment for each ounce of silver (as a percent)					20.00%
Term of agreement	40 years
Percentage of reduction in spot price after maximum ounces of silver have been delivered under the stream agreement	30.00%
Maximum ounces of silver on which on-going price of spot price is payable				12,800,000
Purchase price per ounce of silver as a percent of average or spot price upon initial delivery	20.00%
Ounces of gold receivable for each 1,000 tonnes of copper				300
Copper for 300 ounces of gold				1,000
Quantity of delivered gold ounces before payable production to be purchased decreases to next threshold from initial threshold				630,000
Percentage of gold receivable after initial threshold is achieved	30.00%
Ounces of silver receivable for each 1,l000 tonnes of copper				4,700
Copper for 4,700 ounces of silver				1,000
Maximum ounces of silver receivable				10,000,000
Percentage of spot price of gold on which on-going price is paid	20.00%
Maximum ounces of gold on which on-going price of spot price is payable				750,000
Percentage of spot price of gold on which on-going price is paid after maximum ounces have been delivered	30.00%
Percentage of spot price of silver on which on-going price is paid after maximum ounces have been delivered	30.00%
Candelaria
Commitments
Attributable payable production of gold to be purchased (as a percent)					68.00%
Attributable payable production of silver to be purchased (as a percent)					68.00%
Attributable payable production of platinum group metals to be purchased (as a percent)					0.00%
Payment for each ounce of gold (in dollars per ounce) | $ / oz		400
Payment for each ounce of silver (in dollars per ounce) | $ / oz		4.00
Term of agreement	40 years
Percentage of reduction in spot price after maximum ounces of silver have been delivered under the stream agreement	40.00%
Maximum ounces of silver on which on-going price of spot price is payable				12,000,000
Maximum ounces of gold on which on-going price of spot price is payable				720,000
Cobre Panama Fixed Payment Stream
Commitments
Attributable payable production of platinum group metals to be purchased (as a percent)					0.00%
Payment for each ounce of gold (in dollars per ounce) | $ / oz		418
Payment for each ounce of silver (in dollars per ounce) | $ / oz		6.27
Term of agreement	40 years
Percentage of reduction in spot price after maximum ounces of silver have been delivered under the stream agreement	62.10%
Percentage of reduction in spot price after maximum ounces of gold have been delivered under the stream agreement	63.40%
Maximum ounces of silver on which on-going price of spot price is payable				21,510,000
Maximum ounces of silver on which on-going price of spot price is payable				9,842,000
Quantity of delivered gold ounces before payable production to be purchased decreases to next threshold from initial threshold				808,000
Purchase price per ounce of gold per ounce upon delivery initial post inflation adjustment | $						418.27
The mill through put number of consecutive days of commensurate	30 days
The annual capacity of tonnes per annum reached by period end. | t	58
Annual rate of return on upfront payments until the mill throughput is achieved	5.00%
The reduction of applicable fixed gold price per ounce (in dollar per ounce) | $ / oz	100
Quantity of delivered gold ounces before purchase decreases to next threshold from initial threshold	1,341,000
Purchase price per ounce of silver per ounce upon delivery initial post inflation adjustment | $ / shares	$ 6.27
Percentage of spot price of gold on which on-going price is paid after maximum ounces have been delivered	50.00%
Percentage of spot price of silver on which on-going price is paid after maximum ounces have been delivered	50.00%
Ounces of gold receivable per every 1 million pounds of copper produced			1	120
Copper for stated ounces of gold | lb			1
Copper pounds per gold ounces to purchase threshold 2				81
Maximum ounces of gold receivable for second threshold				1,716,188
Ounces of silver receivable per every 1 million pounds of copper produced | lb			1
Copper for stated ounces of silver | lb			1
Number of payable Silver ounces to be purchased per quantity of pounds of copper				1,776
Ounces of silver receivable per every 1 million pounds of copper produced				1,376
Ounces Of Silver Delivered Under Threshold 2 Before Committed Quantities Reduces				29,731,000
Cobre Panama Floating Payment Stream
Commitments
Attributable payable production of platinum group metals to be purchased (as a percent)					0.00%
Payment for each ounce of gold (as a percent)					20.00%
Payment for each ounce of silver (as a percent)					20.00%
Term of agreement	40 years
Percentage of reduction in spot price after maximum ounces of silver have been delivered under the stream agreement	15.53%
Percentage of reduction in spot price after maximum ounces of gold have been delivered under the stream agreement	15.85%
Maximum ounces of silver on which on-going price of spot price is payable				9,618,000
Maximum ounces of silver on which on-going price of spot price is payable				2,460,500
Quantity of delivered gold ounces before payable production to be purchased decreases to next threshold from initial threshold				202,000
The mill through put number of consecutive days of commensurate	30 days
The annual capacity of tonnes per annum reached by period end. | t	58
Annual rate of return on upfront payments until the mill throughput is achieved	5.00%
The reduction of applicable fixed gold price per ounce (in dollar per ounce) | $ / oz	100
Maximum ounces of gold on which on-going price of spot price is payable				604,000
Percentage of spot price of gold on which on-going price is paid after maximum ounces have been delivered	50.00%
Percentage of spot price of silver on which on-going price is paid after maximum ounces have been delivered	50.00%
Ounces of gold receivable per every 1 million pounds of copper produced				30
Copper for stated ounces of gold | lb			1
Copper pounds per gold ounces to purchase threshold 2				20.25
Ounces of gold receivable per every 1 million pounds of copper produced | lb			1
Maximum ounces of gold receivable for second threshold				429,047
Ounces of silver receivable per every 1 million pounds of copper produced				344
Copper for stated ounces of silver | lb			1
Number of payable Silver ounces to be purchased per quantity of pounds of copper				444
Ounces of silver receivable per every 1 million pounds of copper produced | lb			1
Ounces Of Silver Delivered Under Threshold 2 Before Committed Quantities Reduces				7,432,750
Karma
Commitments
Attributable payable production of gold to be purchased (as a percent)					4.875%
Attributable payable production of silver to be purchased (as a percent)					0.00%
Attributable payable production of platinum group metals to be purchased (as a percent)					0.00%
Payment for each ounce of gold (as a percent)					20.00%
Term of agreement	40 years
Percentage of gold receivable after initial threshold is achieved	4.875%
Percentage of spot price of gold on which on-going price is paid	20.00%
Maximum ounces of gold receivable (per annum)				15,000
Aggregate gold ounces delivered to increase the upfront deposit				5,625
Gold ounces delivered to increase the upfront deposit (per quarter)				703
Guadalupe-Palmarejo
Commitments
Attributable payable production of gold to be purchased (as a percent)					50.00%
Attributable payable production of silver to be purchased (as a percent)					0.00%
Attributable payable production of platinum group metals to be purchased (as a percent)					0.00%
Payment for each ounce of gold (in dollars per ounce) | $ / oz		800
Term of agreement	40 years
Sabodala
Commitments
Attributable payable production of silver to be purchased (as a percent)					0.00%
Attributable payable production of platinum group metals to be purchased (as a percent)					0.00%
Payment for each ounce of gold (as a percent)					20.00%
Term of agreement	40 years
Maximum ounces of gold threshold				105,750
Percentage of gold receivable after initial threshold is achieved	6.00%
Percentage of spot price of gold on which on-going price is paid	20.00%
Maximum ounces of gold receivable (per month)				783.33
MWS
Commitments
Attributable payable production of gold to be purchased (as a percent)					25.00%
Attributable payable production of silver to be purchased (as a percent)					0.00%
Attributable payable production of platinum group metals to be purchased (as a percent)					0.00%
Payment for each ounce of gold (in dollars per ounce) | $ / oz		400
Term of agreement	40 years
Ounces of gold capped under agreement				312,500
Cooke 4
Commitments
Attributable payable production of gold to be purchased (as a percent)					7.00%
Attributable payable production of silver to be purchased (as a percent)					0.00%
Attributable payable production of platinum group metals to be purchased (as a percent)					0.00%
Payment for each ounce of gold (in dollars per ounce) | $ / oz		400
Term of agreement	40 years
Sudbury
Commitments
Attributable payable production of gold to be purchased (as a percent)					50.00%
Attributable payable production of silver to be purchased (as a percent)					0.00%
Attributable payable production of platinum group metals to be purchased (as a percent)					50.00%
Payment for each ounce of gold (in dollars per ounce) | $ / oz		400					800
Payment for each ounce of PGM (in dollars per ounce) | $ / oz		400
Term of agreement	40 years
Percentage of purchase commitment					50.00%

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Contingencies (Details) $ in Millions, $ in Millions, $ in Millions			1 Months Ended				12 Months Ended
	Oct. 31, 2019 CAD ($)	Oct. 31, 2019 USD ($)	Aug. 31, 2020 CAD ($)	Aug. 31, 2020 USD ($)	Dec. 31, 2018 CAD ($)	Dec. 31, 2018 USD ($)	Dec. 31, 2020 MXN ($)	Dec. 31, 2020 CAD ($)	Dec. 31, 2020 USD ($)	Dec. 31, 2019 CAD ($)	Dec. 31, 2019 USD ($)	Dec. 31, 2020 USD ($)	Aug. 31, 2020 USD ($)	Dec. 31, 2019 MXN ($)	Dec. 31, 2019 CAD ($)	Dec. 31, 2019 USD ($)	Oct. 31, 2019 USD ($)	Dec. 31, 2018 USD ($)
Contingencies
Income taxes paid									$ 51.2		$ 38.6
Canada Revenue Agency Reassessment Action | Reassessment for the 2014 and 2015 taxation years | Canada
Contingencies
Provincial income taxes assessed	$ 1.4	$ 1.1
Canada Revenue Agency Reassessment Action | Reassessment for the 2014 and 2015 taxation years | Mexico
Contingencies
Provincial income taxes assessed										$ 14.5	$ 11.4
Canada Revenue Agency Reassessment Action | Reassessment for the 2014 and 2015 taxation years | Barbados
Contingencies
Provincial income taxes assessed								$ 6.7	5.3
Percentage of security deposit for notice of objection against reassessment								50.00%				50.00%
Canada Revenue Agency Reassessment Action | Reassessment for the 2013 and 2014 and 2015 taxation years | Mexico
Contingencies
Contingent liability recorded								$ 10.3				$ 8.1
Provincial income taxes assessed								25.3	19.9
Percentage of security deposit for notice of objection against reassessment														50.00%	50.00%	50.00%
Canada Revenue Agency Reassessment Action | Tax Year 2016 Through 2020 | Canada
Contingencies
Provincial income taxes assessed	42.8	$ 33.6
Canada Revenue Agency Reassessment Action | Tax Year 2016 Through 2020 | Mexico
Contingencies
Provincial income taxes assessed								$ 4.6	3.6
Income taxes paid							$ 71.0		$ 3.8
Tax rate (as a percent)							30.00%	30.00%	30.00%
Canada Revenue Agency Reassessment Action | Tax Year 2016 Through 2020 | Barbados
Contingencies
Provincial income taxes assessed								$ 174.2	$ 136.8
Canada Revenue Agency Reassessment Action | Tax Year 2013 Through 2015
Contingencies
Contingent liability recorded														$ 419.4		$ 30.3
Tax rate (as a percent)										30.00%	30.00%
Canada Revenue Agency Reassessment Action | 2013 taxation year | Mexico
Contingencies
Provincial income taxes assessed					$ 10.8	$ 8.5
Canada Revenue Agency Reassessment Action | Reassessment for the 2012 and 2013 | Barbados
Contingencies
Provincial income taxes assessed			$ 7.7	$ 6.0
Percentage of security deposit for notice of objection against reassessment			50.00%										50.00%
Canada Revenue Agency Transfer Pricing Contingent Penalty | Reassessment for the 2014 and 2015 taxation years | Barbados
Contingencies
Contingent liability recorded								2.5				2.0
Canada Revenue Agency Transfer Pricing Contingent Penalty | Reassessment for the 2013 and 2014 and 2015 taxation years | Mexico
Contingencies
Contingent liability recorded								10.3				8.1
Canada Revenue Agency Transfer Pricing Contingent Penalty | Tax Year 2016 Through 2020 | Mexico
Contingencies
Contingent liability recorded								1.7				1.4
Canada Revenue Agency Transfer Pricing Contingent Penalty | Tax Year 2016 Through 2020 | Barbados
Contingencies
Contingent liability recorded								65.6				51.5
Canada Revenue Agency interest and other penalties | Reassessment for the 2014 and 2015 taxation years | Canada
Contingencies
Contingent liability recorded	0.2																$ 0.2
Canada Revenue Agency interest and other penalties | Reassessment for the 2014 and 2015 taxation years | Mexico
Contingencies
Contingent liability recorded															$ 5.0	$ 3.9
Canada Revenue Agency interest and other penalties | Reassessment for the 2014 and 2015 taxation years | Barbados
Contingencies
Contingent liability recorded								2.2				1.7
Canada Revenue Agency interest and other penalties | Reassessment for the 2013 and 2014 and 2015 taxation years | Mexico
Contingencies
Contingent liability recorded								9.2				7.1
Canada Revenue Agency interest and other penalties | Tax Year 2016 Through 2020 | Canada
Contingencies
Contingent liability recorded	$ 5.3																$ 4.1
Canada Revenue Agency interest and other penalties | Tax Year 2016 Through 2020 | Mexico
Contingencies
Contingent liability recorded								1.1				0.9
Canada Revenue Agency interest and other penalties | Tax Year 2016 Through 2020 | Barbados
Contingencies
Contingent liability recorded								$ 14.0				$ 11.0
Canada Revenue Agency interest and other penalties | 2013 taxation year | Mexico
Contingencies
Contingent liability recorded					$ 4.2													$ 3.2
Canada Revenue Agency interest and other penalties | Reassessment for the 2012 and 2013 | Barbados
Contingencies
Contingent liability recorded			$ 3.1										$ 2.4

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Subsequent events (Details) - Asset acquisition subsequent to year-end $ in Millions	Mar. 08, 2021 USD ($) oz
Condestable Gold and Silver Stream Acquisition, Peru
Subsequent events
Consideration transferred | $	$ 165.0
Receive of refined gold quarterly as percentage of production from stream area	8,760
Receive of refined silver quarterly as percentage of production from stream area	291,000
Deliveries of ounces of refined gold threshold	43,800
Deliveries of refined silver threshold ounces	1,455,000
Gold Purchase Price Upon Delivery Initial	20.00%
Silver Purchase Price Upon Delivery Initial	20.00%
Deliveries of refined gold as special delivery from stream area | $	$ 118.8
Condestable Gold and Silver Stream Acquisition, Peru Variable Phase 1 Deliveries of Stream
Subsequent events
Deliveries of ounces of refined gold threshold	87,600
Deliveries of refined silver threshold ounces	2,910,000
Refined gold will receive as percentage of production from stream area	63.00%
Refined silver will receive as percentage of production from stream area	63.00%
Condestable Gold and Silver Stream Acquisition, Peru, Fixed Phase 2 Deliveries of Stream [Member]
Subsequent events
Refined gold delivery as percentage of production from stream area	25.00%
Refined silver delivery as percentage of production from stream area	25.00%