Franco Nevada

Royalty:	50% Gold Royalty Stream
2009 Revenue:	$18.823 M
Operator:	Coeur d'Alene Mines Corporation

Palmarejo is a combined open-pit and underground silver-gold mine located in the Sierra Madre Mountains in the western part of Chihuahua State, Mexico. Franco-Nevada has an interest in 50% of the gold produced paid on the difference between the spot gold price and $400 per ounce (with an inflation adjustment). The gold stream is for the life of the operation but is subject to a minimum production level which began on July 1, 2009 of 50,000 ounces per annum until payments have been made on 400,000 ounces. The gold stream applies to the majority of the property which totals approximately 29,000 acres and includes the Palmarejo, Guadalupe and La Patria deposits.

Coeur is the developer and operator of Palmarejo which started production in April 2009. In its start-up year, Coeur reported that it produced 3.0 million ounces of silver and 54,740 ounces of gold at an average operating cost of $9.90 per silver ounce. Coeur expects in 2010 to produce 7.9 million ounces of silver and 109,000 ounces of gold at an average cost of $2.50 per silver ounce (excluding royalty payments). Capital expenditures in 2009 were reported at $162.8 million with another $55 million expected to be spent in 2010. Coeur is also reporting reserves at the Guadalupe deposit to the south-east and is considering the feasibility of developing Guadalupe on which Franco-Nevada’s royalty would also apply.