TORONTO, Nov. 6, 2012 /PRNewswire/ – Franco-Nevada Corporation (TSX: FNV, NYSE:
FNV) (“Franco-Nevada”) today announced that it has entered into a
purchase and sale agreement with Penn West Petroleum Ltd. and Penn West
Petroleum (collectively “Penn West”) to acquire an approximate 11.7%
net royalty interest (“NRI”) in the Weyburn Oil Unit (the “Unit”) for
C$400 million in cash, prior to normal closing adjustments.

The Unit is a conventional unitized oil field encompassing approximately
53,360 acres located in southeast Saskatchewan. The Unit has been in
production for approximately 50 years with production to date of
approximately 460 million barrels (“MMbbl”) out of an initial oil in
place estimate of 1.4 billion barrels. Current production levels are
approximately 26,000 barrels of oil per day of medium grade slightly
sour crude. The reserve life index based on proven plus probable
reserves is more than 20 years. Significant opportunity remains within
the Unit for further increases in oil recovery through enhanced oil
recovery technology. The Unit is operated by Cenovus Energy Inc.

The NRI is paid net of operating and capital costs similar to a mineral
net profits interest royalty. This adds to Franco-Nevada’s existing
interests in the Weyburn Unit which include both a 0.44% overriding
royalty and a 2.26% working interest. The NRI adds approximately 24
MMbbl (20.4 MMbbl net after crown royalties) to Franco-Nevada’s proven
plus probable oil equivalent reserves, based on an independent
engineering report effective as of December 31, 2011. Based on the
purchase price the cost of the acquired proven plus probable reserves
is C$16.53 per barrel.

Closing is expected to occur on or about November 30, 2012 and will be
funded through Franco-Nevada’s existing working capital. Once closed,
this acquisition is expected to be immediately accretive to
Franco-Nevada’s revenue, cash flow and earnings. It furthers the
diversification of Franco-Nevada’s royalty and stream portfolio with
the addition of a known and proven cash-flowing asset in a safe
jurisdiction. After this acquisition, Franco-Nevada expects that at
least 80% of its future revenues will continue to be earned from
precious metals assets. On this transaction, Scotia Waterous acted as
an advisor on behalf of Franco-Nevada and CIBC World Markets acted as
an advisor on behalf of Penn West.

Conference call details

Management of Franco-Nevada will host a conference call, in conjunction
with the third quarter 2012 conference call, on November 7, 2012 at
10:00 a.m. Eastern Time to review this transaction. Analysts and
interested investors are invited to participate as follows;

• Conference Call: Local: 647-427-7450; Toll-Free: 1-888-231-8191; Title:
  Franco-Nevada Corporation Third Quarter 2012 Financial Results.

• Conference Call Replay: A recording will be available until November 14,
  2012 at the following numbers:
  Local: 416-849-0833; Toll-Free: 1-855-859-2056; Pass code: 58833221.

• Webcast: A live audio webcast will be accessible at www.franco-nevada.com under upcoming events.

• Slides: A presentation to accompany the conference call will be
  available on the Company’s website prior to the call.

Corporate Summary

Franco-Nevada is a gold royalty and stream company. The Company has a
diversified portfolio of cash-flow producing assets and interests in
some of the largest new gold development and exploration projects in
the world. Its business model benefits from rising commodity prices
and new discoveries while limiting exposure to operating and capital
cost inflation. Franco-Nevada has substantial cash with no debt and is
generating cash flow from its portfolio that is being used to expand
its portfolio and pay monthly dividends. Franco-Nevada’s common shares
trade under the symbol FNV on both the Toronto and New York stock
exchanges.

ADVISORY REGARDING OIL AND GAS RESERVES

Reserves are the estimated remaining quantities of oil and natural gas
and related substances anticipated to be recoverable from known
accumulations, from a given date forward, based on: analysis of
drilling, geological, geophysical and engineering data, the use of
established technology, and specified economic conditions, which are
generally accepted as being reasonable. Proven reserves are those
reserves which can be estimated with a high degree of certainty to be
recoverable. It is likely that the actual remaining quantities
recovered will exceed the estimated proven reserves. Probable reserves
are those additional reserves that are less certain to be recovered
than proven reserves. It is equally likely that the actual remaining
quantities recovered will be greater or less than the sum of the
estimated proven plus probable reserves. Franco-Nevada retains
Independent Qualified Reserves Evaluators (IQREs) to conduct a full
evaluation of the company’s reserves.

All production and reserves quantities included in this press release
have been prepared in accordance with Canadian practices and
specifically in accordance with NI 51-101. These practices are
different from the practices used to report production and to estimate
reserves in reports and other materials filed with the SEC by United
States companies.

CAUTIONARY STATEMENT ON FORWARD-LOOKING INFORMATION

Certain information contained in this press release, including any
information as to future financial or operating performance and other
statements that express management’s expectations or estimates of
future performance, constitute “forward-looking information” and
“forward-looking statements” within the meaning of applicable Canadian
securities laws and the United States Private Securities Litigation
Reform Act 1995, respectively. All statements, other than statements of
historical fact, are forward-looking statements. The words
“anticipates”, “anticipated”, “believes”, “plans”, “estimate”,
“expect”, “expects”, “expected”, “forecasted”, “targeted” and similar
expressions identify forward-looking statements. Forward-looking
statements are necessarily based upon a number of estimates and
assumptions that, while considered reasonable by management, are
inherently subject to significant business, economic and competitive
uncertainties and contingencies. Readers are cautioned that such
forward-looking statements involve known and unknown risks,
uncertainties and other factors that may cause actual financial
results, performance or achievements to be materially different from
estimated future results, performance or achievements expressed or
implied by those forward-looking statements and the forward-looking
statements are not guarantees of future performance. These risks,
uncertainties and other factors include, but are not limited to: risks
associated with closing of announced acquisitions; fluctuations in the
prices of the primary commodities that drive royalty and stream revenue
(gold, platinum group metals, copper, nickel, uranium, silver, oil and
gas); fluctuations in the value of the Canadian and Australian dollar,
Mexican peso, and any other currency in which revenue is generated,
relative to the US dollar; changes in national and local government
legislation, including permitting and licensing regimes and taxation
policies; regulations and political or economic developments in any of
the countries where properties in which Franco-Nevada holds a royalty,
stream or other interest are located; influence of macroeconomic
developments; business opportunities that become available to, or are
pursued by Franco-Nevada; reduced access to debt and equity capital;
litigation; title, permit or license disputes related to interests or
any of the properties in which Franco-Nevada holds a royalty, stream or
other interest; the Company’s PFIC status; excessive cost escalation as
well as development, permitting, infrastructure, operating or technical
difficulties on any of the properties in which Franco-Nevada holds a
royalty, stream or other interest; rate and timing of production
differences from resource estimates; risks and hazards associated with
the business of development and mining on any of the properties in
which Franco-Nevada holds a royalty, stream or other interest,
including, but not limited to unusual or unexpected geological and
metallurgical conditions, slope failures or cave-ins, flooding and
other natural disasters or civil unrest; and the integration of
acquired assets. The forward-looking statements contained in this press
release are based upon assumptions management believes to be
reasonable, including, without limitation, assumptions relating to: the closing of announced acquisitions; the ongoing operation of the
properties in which Franco-Nevada holds a royalty, stream or other
interest by the owners or operators of such properties in a manner
consistent with past practice; the accuracy of public statements and
disclosures made by the owners or operators of such underlying
properties; no material adverse change in the market price of the
commodities that underlie the asset portfolio; the Company’s ongoing
income and assets relating to determination of its PFIC status; no
adverse development in respect of any significant property in
which Franco-Nevada holds a royalty, stream or other interest; accuracy
of publicly disclosed expectations for the development of underlying
properties that are not yet in production; integration of acquired
assets; and the absence of any other factors that could cause actions,
events or results to differ from those anticipated, estimated or
intended. However, there can be no assurance that forward-looking
statements will prove to be accurate, as actual results and future
events could differ materially from those anticipated in such
statements. Accordingly, readers should not place undue reliance on
forward-looking statements because of the inherent uncertainty. For
additional information with respect to risks, uncertainties and
assumptions, please also refer to the “Risk Factors” section of
Franco-Nevada’s most recent Annual Information Form filed with the
Canadian securities regulatory authorities on SEDAR at www.sedar.com and Franco-Nevada’s most recent Form 40-F filed with the U.S.
Securities and Exchange Commission on EDGAR at www.sec.gov as well as Franco-Nevada’s annual MD&A. The forward-looking statements
herein are made as of the date of this press release only
and Franco-Nevada does not assume any obligation to update or revise them to reflect new
information, estimates or opinions, future events or results or
otherwise, except as required by applicable law.

SOURCE Franco-Nevada Corporation