Franco-Nevada has a 5% NPI royalty on the 17,193 acre Pandora property in the western Bushveld area of South Africa. Anglo American Platinum Corporation (“Angloplat”) and Lonmin Plc (“Lonmin”) formed a joint venture to develop the Pandora property in 2001. The property is owned by Angloplat (42.5%), Lonmin (42.5%), Bapo-Ba-Mogale Mining Company (7.5%) and Mvelaphanda Resources (7.5%). The royalty provides for AMR payments of ZAR 100,000 (approximately $14,000).

The mine forms part of the north western limb of the Bushveld Complex and is situated approximately 40 kilometres east of the town of Rustenburg in South Africa. Current mine infrastructure consists primarily of the E3 Decline Shaft, which mines UG2 ore exclusively. The mining method is conventional breast stoping with strike pillars. The operating depth for the current workings is between surface and 300m below surface. The down-dip extension to the Pandora Plan 4 area was included in the Mineral Reserve in 2010. The current LoM plan consists of a Mineral Resource (exclusive of Ore Reserves) of 19.1 4E million ounces and an Ore Reserve of 1.9 4E million ounces (4E represents platinum, palladium, rhodium and gold). The partners agreed to proceed with a phased implementation of the project in 2005. The approach was based on continued development and stoping in the E3 decline and the start of two opencast sections. Further deepening of the No 3 decline is ongoing, while the open pit mining operations have been completed.

Lonmin reported in its 2010 Annual Report that the extension of the current Pandora underground operation which will give access to two additional levels, extending the life of the shaft, has commenced and completion is planned for 2011. The feasibility study on the 180,000 tonnes per month project was concluded during 2010 and various components of the study continue to be reviewed in order to extract the optimal value for the joint venture. This includes an option to extend the current decline project resulting in access to four additional levels. The centre of gravity of future mining will shift towards ground covered by the Franco-Nevada royalty as the mine is deepened.

Platinum production attributable to Angloplat’s 42.5% share increased by 18% to 34.3 koz in 2010, from 28.2 koz in 2009. The 4E measured head grade increased by 8% to 4.38 g/t in 2010. Cash operating costs per platinum ounce in ore delivered to concentrators increased by 23% to R10,156. Capital expenditure for the year totalled R133 million. Angloplat reported in its 2010 Annual Report that the mine will continue to produce at the same level in 2011 and that production will be ramped up once the deepening of the No 3 decline is completed in mid 2012.