Printer Friendly

Franco Nevada Corporation (TSE: FNV) - Franco-Nevada Adds to its U.S. Energy Interests, Initiates ATM Equity Program & Provides Details for Release of Q2 Results -- 19/7/2019.

Marcellus Royalty Acquisition

Franco-Nevada has entered into an agreement to acquire from Range Resources Corporation an overriding royalty interest on acreage in the Marcellus Shale for a gross purchase price of $300 million. The acquisition has an effective date of March 1, 2019 and is expected to close shortly. 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 royalty is registered on title and is a direct interest in real property.

The Marcellus is one of the most prolific and active gas and liquids plays in North America. Range's acreage is in a liquids rich portion of the Marcellus giving it one of the most cost competitive energy positions in North America. Range has a track record of growing reserves and production from its asset base. Since the effective date, the royalty has generated approximately $9 million in revenue, with roughly half of the revenue generated from natural gas liquids and condensate. At current commodity prices, revenue for 2020 is expected to be approximately $25 million growing to approximately $30 million per annum in five years. The royalty provides exposure to a significant inventory of undeveloped drilling locations capable of supporting cash flow for several decades.

Franco-Nevada's revenue is still projected to exceed 80% from gold equivalent ounces through 2023. This is supported by the start of production at Cobre Panama from which Franco-Nevada began receiving its first gold and silver stream ounces in early July.

The purchase will be financed with a combination of cash on hand and funds drawn from the Corporation's revolving credit facility. Net debt following this investment will be approximately $335 million. The Corporation is expected to have approximately $1 billion in available capital after closing. This acquisition is immediately accretive, adds to Franco-Nevada's long-term cash flow profile and brings further diversification to its royalty and stream portfolio.

At the Market Equity Program

Franco-Nevada has established an at-the-market equity program (the "ATM Program") that allows the Corporation to issue up to $200 million worth of common shares from treasury ("Common Shares") to the public from time to time at the prevailing market price 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 volume and timing of distributions under the ATM Program, if any, will be determined at the Corporation's sole discretion, subject to applicable regulatory limitations.

The ATM Program will be effective until July 18, 2020 unless terminated prior to such date by the Corporation. Franco-Nevada intends to use the net proceeds from the ATM Program, if any, for funding royalty and stream acquisitions and/or other general corporate purposes including the repayment of indebtedness. Sales of Common Shares through the ATM Program will be made pursuant to the terms of an equity distribution agreement dated July 19, 2019 with BMO Nesbitt Burns Inc. and CIBC World Markets Inc., as Canadian agents, and BMO Capital Markets Corp. and CIBC World Markets Corp., as U.S. agents.

The Corporation has filed a registration statement (including a prospectus) and a prospectus supplement with the U.S. Securities and Exchange Commission (the "SEC") for the ATM Program. Before you invest, you should read the prospectus in that registration statement, the prospectus supplement and other documents the issuer has filed with the SEC for more complete information about the issuer and the ATM Program. The Corporation has also filed prospectus supplement dated July 19, 2019 to the Corporation's Canadian base shelf prospectus dated June 15, 2018 with the securities regulatory authorities in Canada. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov or on SEDAR at www.sedar.com. Alternatively, any agent participating in the ATM Program will arrange to send you the prospectus if you request it by contacting, (i) in Canada: BMO Nesbitt Burns Inc., attn: Brampton Distribution Centre C/O The DATA Group of Companies, 9195 Torbram Road, Brampton, Ontario, L6S 6H2, by email at torbramwarehouse@datagroup.ca or by phone at 905-791-3151 Ext. 4312 or CIBC World Markets Inc., attn: Michelene Dougherty or by email at michelene.dougherty@cibc.ca; and (ii) in the U.S., BMO Capital Markets Corp., attn: Equity Syndicate Department, 3 Times Square, 25th Floor, New York, NY, 10036, by email at bmoprospectus@bmo.com or by phone at 1-800-414-3627 or CIBC World Markets Corp., 425 Lexington Ave, 5th Floor, New York, NY, by email at useprospectus@cibc.com or by phone at (800) 282-0822.

This news release does not constitute an offer to sell or the solicitation of an offer to buy the Common Shares, nor there be any sale of these securities in any jurisdiction in which such an offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction.

Details for Upcoming Release of Q2/2019 Results

Franco-Nevada will release its Q2/2019 results on August 7, 2019 and management will host a conference call the following day, August 8, 2019 at 10:00 a.m. Eastern Time to review the results. Interested investors are invited to participate as follows:

* Via Conference Call: Toll-Free: (888) 390-0546; International: (416) 764-8688

* Conference Call Replay until Aug 15: Toll-Free (888) 390-0541; International (416) 764-8677; Code 868627#

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

https://s21.q4cdn.com/700333554/files/doc_news/2019/07/Franco-Nevada-Adds-to-its-U.S.-Energy-lnterests-(1).pdf
COPYRIGHT 2019 Acquisdata Pty Ltd.
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 2019 Gale, Cengage Learning. All rights reserved.

Article Details
Printer friendly Cite/link Email Feedback
Title Annotation:Media Releases
Publication:Canada Mining
Article Type:Financial report
Geographic Code:1U8NV
Date:Jul 25, 2019
Words:958
Previous Article:Barrick Gold Corporation (TSE: ABX) - Barrick Looks To The Future In Cote D'lvoire -- 19/7/2019.
Next Article:The Industry.
Topics:

Terms of use | Privacy policy | Copyright © 2022 Farlex, Inc. | Feedback | For webmasters |