February 6, 2012 Technical Presentation

We've Always Preferred Lucky Geologists to Good Ones
Peter Maciulaitis

In 1982, Franco Nevada Mining Corporation Ltd. (FNMC) was created by Seymour Schulich to test the entrepreneurial skills of young metals analyst Pierre Lassonde. FNMC went public in 1983, raising $2M Cn selling shares at $0.35 Cn. FNMC listed on the Toronto Stock Exchange. Over the next 20 years, FNMC grew into the world's 5th largest gold mining company as measured by market capitalization. In 2003, FNMC merged with Newmont Mining, making Newmont the largest gold mining company in the world. Pierre Lassonde became Newmont's president. FNMC had operated with a very small staff of employees and consultants.

Initially, FNMC attempted to achieve cash flow by finding, then mining a gold deposit. Attempts to develop reserves at an inactive gold mine and later by drilling a low-grade gold resource both failed. In 1986, two consulting geologists alerted Lassonde that the underlying royalty on the Goldstrike property was for sale. Located along the Nevada's Carlin Trend, Goldstrike was producing only 42,000 ounces of gold per year. FNMC quickly acquired the royalty gaining instant cash flow without a discovery or mining. A few months later American Barrick Resources Corp. purchased the Goldstrike operations. Goldstrike was on the road to becoming the largest gold mine in US history.

In 1985, FNMC began grassroots exploration utilizing a consulting geologist, adding a second consultant in 1987. As royalty income quickly increased, FNMC feared being classed a passive foreign investment company (PFIC). To avoid becoming a PFIC, gain exploration exposure, and obtain mining intelligence, FNMC and a sister company, Euro-Nevada Mining Corporation Ltd., provided these geologists with a budget of $600K-$1M Cn/year. In 1993-1994, the unthinkable occurred. A high-grade vein gold deposit was discovered, helping double the value of the companies.