Falconbridge Dominicana, C. Por A. (Falcondo) - Dominican Republic

Franco-Nevada includes an approximate 4.1% equity interest in Falconbridge Dominicana, C. Por A. ("Falcondo"), through the ownership of common shares of Falcondo, which owns and operates an integrated complex of mines, smelter, crude oil supply system, oil refinery, and power plant producing ferronickel in the Dominican Republic. Revenue is received through dividend distributions on these common shares. These dividends are made at the discretion of Falcondo and, as such, there is no assurance that historical dividends are indicative of future dividend payments or that Franco-Nevada will receive dividends in any period. Xstrata Nickel, a division of Xstrata PLC, is the majority shareholder of Falcondo, following its acquisition of Falconbridge Limited in 2006.

A scoping study was initiated in 2007 to examine the potential to convert Falcondo's primary fuel source from oil to coal, substantially reducing operating costs by approximately $1.50 per pound. The project also includes the conversion of Falcondo's oil refinery to a commercial oil refinery, with the potential to generate significant additional returns.

The scoping study phase of the Luma Miranda Project, 25 kilometres from the Falcondo plant site, was completed in the final quarter of 2007. This area has 15.2 million tonnes of resources at 1.56% nickel. The additional mining area would increase Falcondo's production by improving grades and extending mine life.

In addition, an exploration programme at Loma Ortega 3 area, an extension of the operating Loma Ortega mine, identified 6.9 million tonnes of mineralization not included in resources at a grade of 1.5% Ni.