© 2010 David Schumacher

Franco-Nevada’s Bald Mountain royalties cover a significant portion of the approximately 150,000 acre Bald Mountain mine located in White Pine County, 90 miles northwest of Ely, Nevada. Operations began as two separate mines with different owners, initially producing gold in 1981 at Alligator Ridge on the east side of the district and in 1986 at Bald Mountain on the west side of the district. The property was combined in 1993 by Placer Dome Inc. Historically, Bald Mountain has been operated from multiple small open pits, using multiple heap leach facilities. Barrick, the current operator, continues to actively explore the property and region.

Initially, Franco-Nevada held royalty interests on Bald Mountain unpatented mining claims that were primarily situated on the eastern portions of the property. They include approximately 18,160 acres that are subject to a 4% NSR on all gold and silver recovered, of which approximately 50% may be subject to a lower royalty rate until the payment cap is reached on royalties payable to other parties, and approximately 2,300 acres that are subject to a 2.418% NSR.

In 2010, Franco-Nevada expanded its interests at Bald Mountain by purchasing two additional royalties. Late in the year, Franco-Nevada purchased an undivided 25% interest in a 3.5% to 7.0% sliding scale NSR royalty, adjusted by a PPI-indexed gold price, which covers some 9,500 acres of unpatented claims. Production has occurred on these claims continuously since the first Bald Mountain mine began operations in 1986 and it is expected they will continue to be a significant source of ore for Bald Mountain in the future. In addition, the White Pine royalty was acquired and provides for a 1%-5% sliding scale overriding gross production royalty which covers some 5,400 acres of unpatented mining claims situated to the north of Bald Mountain Mine Complex. In the 1980s, modest heap leach production occurred at the White Pine Mine, which is located in the northern portion of these royalty claims. Barrick is currently exploring this royalty property and, given the increase in gold price, the Company believes the area remains prospective.

Bald Mountain mine continued a planned $320 million mine expansion project in 2010. As a result, production suffered in the short term as mine sequencing resulted in a focus on more mine development waste-stripping activities and less on the mining of leach material.