2022 ASSET HANDBOOK 12 FNV TSX NYSE Franco-Nevada Corporation is the leading gold-focused royalty and streaming company. We do not operate mines, develop projects or conduct exploration. Instead, we own and continue to grow a large, diversified portfolio of royalties and streams. Royalties Many mining properties have government and/or private royalties associated with them often created when prospectors or exploration companies sell their property to a more senior company capable of developing and operating a mine on the property. The most common royalties are 1-2% of the value of future production from the property. Often these are a percentage of the net value the Company receives for its product when it is processed at a smelter, hence the term “net smelter return royalty” or “NSR royalty”. There are other forms of royalties such as profit-related royalties or fixed-rate royalties but these are not a major part of Franco-Nevada’s focus or portfolio. Royalty rights are often registered on the title of the property or mineral rights. Registered royalties have strong tenure and, in jurisdictions where recognized, will generally survive an operating company reorganization. The majority of Franco-Nevada’s royalties have been acquired from the past owners of mining properties but we also actively work with operators to create royalties in return for mine financing. Streams Streams are metal purchase agreements where the streamer purchases all or a portion of the gold, silver or other products from a mine in exchange for an upfront payment and an additional payment on each delivery. While streams have similar exploration and price optionality to royalties, they differ from royalties in many respects including the ongoing cash payment required to purchase the physical metal. In some cases that ongoing payment is a fixed dollar amount and in other cases it is an agreed percentage of the commodity price at the time of delivery. A stream with fixed dollar ongoing payments has more leverage to the commodity price than the alternative. Both royalties and streams are typically life-of-mine agreements that provide exposure to commodity prices, increases in production and future discoveries on the property. Neither interest is subject to cash calls to fund exploration, development, capital, environmental or closure costs and so they are lower risk than an operating interest in this respect. A large and diversified portfolio can be assembled without the need for significant corporate overheads. OVERVIEW OUR BUSINESS MODEL Our Business