Franco-Nevada Announces Financing Package with Discovery Silver on the Porcupine Complex

Transaction Overview - Franco-Nevada Corporation has entered into a comprehensive financing transaction with Discovery Silver Corporation to support the acquisition of the Porcupine Complex from Newmont Corporation [1] - The transaction includes a $300M net smelter return royalty, a$100M senior secured term loan, and approximately $49M of equity participation in a concurrent C$225M Discovery equity raise [1] - The financing package will enable Discovery to acquire the Porcupine Complex and fund its capital program to achieve full potential [1] Strategic Importance - The Porcupine Complex is a well-established gold-producing asset in Ontario with over 100 years of production history and extensive infrastructure [3] - The complex includes the Hoyle Pond and Borden underground mines, the new Pamour open pit mine expected to commence production in 2025, and the Dome open pit project [3] - The Royalty expands Franco-Nevada's coverage of Ontario's significant gold mines and deposits, adding immediate gold revenues [3] Production and Resource Potential - The Porcupine Complex is expected to produce approximately 285 koz Au annually over the next 10 years and a total of 4.9 Moz Au over a 22-year mine life [3] - The complex hosts extensive mineral resources of 3.9 Moz Au M&I (69.7 Mt at 1.76 g/t Au) and 12.5 Moz Au inferred (254.5 Mt at 1.53 g/t Au) [8] - Discovery has identified opportunities to increase production, including expanding the Pamour open pit, increasing underground throughput, and developing the Dome open pit project [3] Management and Exploration - Discovery is led by Tony Makuch, who has extensive experience in the Timmins camp and a proven track record of optimizing operations [3] - Discovery plans an extensive exploration program across the 140k hectare property, targeting high-grade mineralization and new resource discoveries [8] Financing Details - The $300M Royalty consists of two tranches: 2.25$100M Senior Secured Loan has a 7-year maturity with amortization starting after year 5 and includes an upfront fee and standby fee [8] - Franco-Nevada will purchase approximately 9.9% of Discovery's common shares through a C$225M equity raise, with a two-year lock-up period [8] Corporate Positioning - Franco-Nevada remains debt-free and will finance the transactions from cash on hand, maintaining its ability to expand its portfolio [9] - The company is a leading gold-focused royalty and streaming company with a diversified portfolio of cash-flow producing assets [10] Environmental and Social Initiatives - Franco-Nevada will partner with Discovery on environmental and social initiatives in the project area [16] - The transaction is expected to close in H1 2025, subject to customary conditions and regulatory approvals [16]