Franco-Nevada has a 1.95% GR royalty on precious metals recovered from the Cerro San Pedro project located in central Mexico near San Luis Potosi. The open pit mine with run-of-mine heap leaching is owned and operated by New Gold Inc. ("New Gold"). Operations have been periodically interrupted by various legal challenges.

New Gold reported 2010 sales of 114,713 ounces of gold and 2.1 million ounces of silver compared to 93,312 ounces of gold and 1.5 million ounces of silver in 2009. The increase in production was attributed to an increase in grade mined, offset by fewer tonnes due to the loss of an explosives permit earlier in the year. In 2011, New Gold expects Cerro San Pedro to produce between 135,000 and 145,000 ounces of gold and between 1.9 and 2.1 million ounces of silver at total cash costs between $240 and $260 per ounce net of by-product credits.

In 2010, New Gold increased Inferred Resources at Cerro San Pedro by 36% mostly due to the addition of underground sulfide resources. New Gold has planned more drilling on the manto sulfides in 2011 and is targeting a decision to explore from underground in early 2012.