6-K

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 6-K

Report of Foreign Issuer

Pursuant to Rule 13a-16 or 15d-16 of the Securities Exchange Act of 1934

For the month of November 2016

Commission File Number 001-35286

FRANCO-NEVADA CORPORATION

(Translation of registrant’s name into English)

199 Bay Street, Suite 2000, P.O. Box 285, Commerce Court Postal Station, Toronto, Ontario, Canada M5L 1G9

(Address of principal executive offices)

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F

Form 20-F   ☐ Form 40-F   ☒

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):  ☐

Note: Regulation S-T Rule 101(b)(1) only permits the submission in paper of a Form 6-K if submitted solely to provide an attached annual report to security holders.

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):  ☐

Note: Regulation S-T Rule 101(b)(7) only permits the submission in paper of a Form 6-K if submitted to furnish a report or other document that the registrant foreign private issuer must furnish and make public under the laws of the jurisdiction in which the registrant is incorporated, domiciled or legally organized (the registrant’s “home country”), or under the rules of the home country exchange on which the registrant’s securities are traded, as long as the report or other document is not a press release, is not required to be and has not been distributed to the registrant’s security holders, and, if discussing a material event, has already been the subject of a Form 6-K submission or other Commission filing on EDGAR.

NOTE

Exhibits 99.2 and 99.3 to this current report on Form 6-K are hereby incorporated by reference into our registration statements on Form F-3 (file no. 333-210295), on Form S-8 (file no. 333-176856) and on Form F-10 (file no. 333-210878) (collectively, the “Registration Statements”).

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	FRANCO-NEVADA CORPORATION
	/s/ Lloyd Hong
Date: November 7, 2016	Lloyd Hong
	Chief Legal Officer & Corporate Secretary

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INDEX TO EXHIBITS

99.1	Press Release dated November 7, 2016 – Franco-Nevada Reports Record Q3 Results
99.2	Management’s Discussion and Analysis for the three and nine months ended September 30, 2016
99.3	Interim Consolidated Financial Statements for the three and nine months ended September 30, 2016
99.4	Certification of Chief Executive Officer
99.5	Certification of Chief Financial Officer

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EX-99.1

Exhibit 99.1

NEWS RELEASE

Toronto, 7 November 2016

Franco-Nevada Reports Record Q3 Results

Strong portfolio performance leads to increase in guidance.  $100 million agreement to acquire oil & gas royalties.

Franco-Nevada’s CEO, David Harquail, commented: “Our overall portfolio is performing very well.  We now expect to exceed the high end of our previous guidance range for both Gold Equivalent Ounces1 (“GEOs”) and oil & gas revenues.  In addition, we are benefiting from higher commodity prices.  Even with our ongoing Cobre Panama contributions and industry leading dividend, Franco-Nevada is growing its cash balances and has no debt.  We are also seeing investment opportunities across a range of commodities.  Franco-Nevada has just agreed to acquire for $100 million oil & gas royalty assets in the U.S.”

Financial results for Q3/2016 are reported in U.S. dollars unless otherwise noted.  The highlights include:

· 123,065 GEOs — a new record

· $172.0 million in revenue — a new record

· $142.2 million of Adjusted EBITDA2 or $0.80 per share — a new record

· $54.4 million of Net Income or $0.31 per share

· $53.5million of Adjusted Net Income3 or $0.30 per share

· $277.6 million in cash and cash equivalents at quarter end and no debt

Revenues and GEOs by Asset Categories

	Q3/2016				Q3/2015
		Revenue		GEOs		Revenue		GEOs
		(in millions)		#		(in millions)		#
Precious Metals
Gold		$	113.4	85,127		$	81.9	72,908
Silver			36.2	27,337			4.0	3,522
PGM			12.1	9,098			7.0	6,506
Precious Metals - Total		$	161.7	121,562		$	92.9	82,936
Other Minerals			2.0	1,503			3.0	2,701
Oil & Gas			8.3	—			7.8	—
		$	172.0	123,065		$	103.7	85,637

For Q3/2016, revenue was sourced 94% from precious metals (66% gold, 21% silver and 7% PGM) and 83% from the Americas (15% U.S., 19% Canada and 49% Latin America).  Costs and expenses increased year-over-year due to higher depletion and cost of sales, reflecting deliveries from the Antamina and Antapaccay stream acquisitions which were completed in October 2015 and February 2016, respectively.  Oil & gas production levels and prices were stable year-over-year.  Cash provided by operating activities was $121.6 million, an increase of 67% compared to Q3/2015.

Portfolio Updates

· Precious Metals — U.S.:  GEOs from U.S. precious metals assets increased by 8% year-over-year with decreases from Goldstrike being more than offset by increased production at Marigold and the start of deliveries from the South Arturo mine.  GEOs received from the U.S. precious metal assets were 18,920 GEOs.

· South Arturo (4-9% royalty) – This project, operated by Barrick and Premier Gold, poured its first gold in August.  Initial royalty payments were net of $3.1 million in advance minimum royalties previously paid.  Q4/2016 payments are expected to be stronger as advance minimum royalties will no longer be netted from future payments.

· Marigold (0.5-5% royalty) – Silver Standard provided new 5-year guidance that projects higher production averaging 220,000 ounces per year.

· Bald Mountain (0.875-5% royalty) – Kinross reported that it has received a Record of Decision that will allow for increased exploration activity and a potential expansion.   

· Hollister (3-5% royalty) – Klondex Mines, Franco-Nevada’s partner at Fire Creek/Midas, acquired the Hollister project during the quarter.  Klondex has since reported high grade intersections at the Hatter Graben zone which is on the 5% royalty ground.

· Mesquite (0.5-2% royalty) – New Gold announced that Mesquite’s full-year gold production is expected to be approximately 15,000 ounces below the guidance range of 130,000 to 140,000 ounces.  Q3/2016 production focused on waste stripping with a stronger Q4/2016 expected.

· Fire Creek/Midas (Fixed gold deliveries / 2.5% royalty) – Klondex reported increased mineral reserves and resources for its Fire Creek and Midas operations.

· Stillwater (5% royalty) – Stillwater now anticipates that the Blitz project will add between 270,000 and 330,000 PGM ounces of incremental production annually when fully ramped up by 2021-2022.  This is an increase from the 150,000 to 200,000 PGM ounces that Stillwater previously expected.

· Castle Mountain (2.65% royalty) – During the quarter, NewCastle Gold reported additional promising drill results and raised additional funding for this project in California. 

· Stibnite Gold (1.7% royalty) – Midas Gold filed its Plan of Restoration & Operations to start the environmental assessment for this historic mine in Idaho.

· Precious Metals — Canada:  GEOs from Canadian precious metals assets increased by approximately 34% to 17,749 GEOs compared with Q3/2015.  The main contributor to the increase was the Sudbury operation which benefited from stronger production.

· Detour (2% royalty) – Detour Gold has revised production guidance slightly lower as a result of heavy rains during the summer.  Detour also provided a preliminary 2017 outlook, which estimates production between 540,000 to 590,000 ounces versus the life-of-mine plan for 2017 of 614,000 ounces.   

· Brucejack (1.2% royalty) – Pretium Resources expects to begin commissioning of the underground mine in mid-2017.

· Eagle (1.5-2% royalty) – Victoria Gold provided an updated feasibility study for this project in the Yukon which is part of the larger Dublin Gulch claim block.  

· Musselwhite (5% profit royalty) — Goldcorp has announced approval for a materials handling project which it expects will increase production by 20% over 2016-2018.

· Kirkland Lake (2.5% royalty reducing to 1.5%) – In October 2016, Kirkland Lake exercised its option to buyback 1% of an overlying 2.5% NSR for an aggregate cash consideration of approximately $30.5 million ($36.0 million less royalty proceeds attributable to the buyback portion of the NSR paid to Franco-Nevada prior to the date of the buyback).  The NSR, which covers all of Kirkland Lake’s properties (including the Macassa mine), was acquired in October 2013 for $50.0 million.

· Precious Metals — Latin America: GEOs from Latin American precious metals assets represented the largest year-over-year increase due to the addition of the Antamina and Antapaccay streams.  Precious metal GEOs delivered from Latin America were 63,921 GEOs, an increase of 88% year-over-year.

· Antamina (22.5% silver stream) – Antamina delivered 19,975 GEOs during the quarter and 49,654 GEOs year-to-date.  GEOs received year-to-date are higher than Franco-Nevada’s original full-year 2016 guidance of 40,000 GEOs.

· Antapaccay (gold and silver stream) – Antapaccay delivered 22,186 GEOs in Q3/2016.

· Candelaria (gold and silver stream) – Candelaria delivered 16,807 GEOs, compared to 19,081 GEOs in the prior year quarter, as expected according to its mine plan.  Lundin Mining reported increases in mineral reserves and resources despite depletion.  Lundin also reported that all critical tailings dam construction permits have been received for the Los Diques tailings management facility and that early works are substantially complete.

· Guadalupe (50% gold stream) – Early in the quarter, the 400,000 minimum ounce Palmarejo obligation was paid and fully met by Coeur Mining.  That results in the original Palmarejo gold stream being terminated and the new Guadalupe stream commencing.  Under the new agreement, deliveries are based on 50% of the gold produced from the Palmarejo property (including the new Guadalupe mine and the western portion of the Independencia mine) with ongoing payments equal to the lesser of $800 per ounce and the then prevailing spot price for gold.  During the quarter, Coeur reported high grade intercepts in Guadalupe’s Block C.

· Cobre Panama (gold and silver stream) – During the quarter, Franco-Nevada contributed $40 million of its share of construction capital for the Cobre Panama project.  Franco-Nevada at quarter end has contributed $416 million of

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its total $1 billion commitment for the construction of Cobre Panama.  First Quantum increased its planned 2016 capital expenditure to $450 million from $390 million due to expedited stripping of the pit.  The development remains on track for a phased commissioning in 2018 and continued ramp-up in 2019.

· Cerro Moro (2% royalty) – Yamana reported that the Cerro Moro project in Argentina is expected to achieve production in early 2018.  

· Precious Metals — Rest of World: GEOs from Rest of World precious metals assets increased year-over-year by 16% mainly due to deliveries from the Karma fixed ounce obligation.  Precious metal GEOs from the Rest of World were 20,972 GEOs during the quarter.

· Cooke 4 (7% gold stream) – On October 27th, Sibanye Gold announced it has ceased production at the Cooke 4 underground operation.  Franco-Nevada has an approximate $69 million carrying value for this stream.  Once further information is obtained, an impairment analysis will be carried out and recorded in Q4/2016 as appropriate.

· Karma (fixed gold deliveries and stream) – An additional 1,250 GEOs were sold in the quarter due to the timing of sales being carried over from the previous quarter, for a total of 5,000 GEOs sold in Q3/2016.

· Ity (1.5% capped royalty) – Endeavour Mining previously reported an increase in reserves at Ity.  It has now reported on two new discoveries, Bakatouo and Colline Sud, that are both on the royalty property and are in close proximity to the current mine.

· Sissingué (0.5% royalty) – Also in Cote d’Ivoire, Perseus Mining stated it has started construction of Sissingué and expects to pour its first gold in the fourth quarter of 2017. 

· Sabodala (fixed gold deliveries and stream) – Teranga Gold announced that the mill optimization was commissioned early in August.  It expects throughput to increase by 15%.

· Duketon (2% royalty) – Regis Resources has announced reserve increases at its Duketon belt projects.

· Matilda (3-5% royalty) – Blackham Resources began production at the Matilda Gold Project in July 2016.  The company expects to produce 100,000 ounces per year over an 8 year mine life.  A large land package and large sulphide resource offers longer-term potential.

· Butcher Well (1% royalty after 50,000 ounces produced) – AngloGold Ashanti has entered into an exploration partnership with Saracen whereby AngloGold can earn up to 70% of the Butcher Well and Lake Carey tenements after spending A$25 million over 6 years.  The exploration partnership excludes the Red October operation on which Franco-Nevada has a 1.75% royalty.

· Tasiast (2% royalty) – Kinross continues to advance development of the Tasiast Phase One expansion.  Normal operations resumed after a work stoppage in August and the company has signed a new 3-year collective labour agreement with unionized employees.

· Subika (2% royalty) – Newmont Mining is expected to make a decision in the next quarter regarding an Ahafo mill expansion and the underground development of Subika.

· Oil & Gas: Revenue from oil & gas assets increased to $8.3 million in Q3/2016 compared to $7.8 million in Q3/2015.  Production remains relatively stable.  Subsequent to quarter end, Franco-Nevada agreed to purchase for $100 million, from a private party, royalty rights in the STACK shale play in Oklahoma’s Anadarko basin.  The STACK has been gaining momentum over the past couple of years due to its status as one of the most economic shale plays in North America.  The lands consist of 16,865 acres of GORR and mineral title rights that with pooling provides an estimated gross acreage of 74,880 acres with an estimated average 1.61% royalty rate.  The top two operators of the lands are Newfield Exploration and Devon Energy.  Both companies have made the STACK a major focus of their capital spending, a portion of which will be on the royalty lands. Full-field development is expected to begin in 2017.  Cash flow from the royalty acreage as of September represents an annualized rate of $3 million per year and this is expected to grow substantially as full-field development is rolled out.

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Guidance

Franco-Nevada realized record growth from its mineral assets for the first nine months of 2016.  Mineral assets contributed 342,473 GEOs, while Franco-Nevada’s Oil & Gas assets contributed $19.7 million in revenue in the nine months ended September 30, 2016.  As a result, Franco-Nevada is pleased to raise its guidance for 2016 as follows:

		Previously announced		Revised guidance
Mineral assets - GEO production1	(oz)		425,000 - 445,000 GEOs		445,000 - 455,000 GEOs
Oil & Gas assets - Revenue2	($)		$15.0 million - $25.0 million		$25.0 million - $30.0 million

¹ In forecasting GEOs for the remainder of 2016, gold, silver, platinum and palladium metals have been converted to GEOs using commodity prices of $1,300/oz Au, $18.00/oz Ag, $950/oz Pt and $650/oz Pd. 

² In forecasting revenue from Oil & Gas assets for the remainder of 2016, the WTI oil price is assumed to average $50 per barrel with a $3.50 per barrel price differential for Canadian oil.

Of the 445,000 to 455,000 GEOs, Franco-Nevada expects to receive 315,000 to 325,000 GEOs under its various stream agreements.  For the first nine months of 2016, 243,896 GEOs have been received from stream agreements, while 222,670 GEOs were received for full year 2015.

Dividend Declaration

Franco-Nevada is pleased to announce that its Board of Directors has declared a quarterly dividend of $0.22 per share.  The dividend will be paid on December 22, 2016 to shareholders of record on December 8, 2016.  The Canadian dollar equivalent is determined based on the noon rate posted by the Bank of Canada on November 4, 2016.  Under Canadian tax legislation, Canadian resident individuals who receive “eligible dividends” are entitled to an enhanced gross-up and dividend tax credit on such dividends.

The Company has a Dividend Reinvestment Plan (“DRIP”).  Participation in the DRIP is optional.  The Company will issue additional common shares through treasury at a 3% discount to the Average Market Price, as defined in the DRIP.  However, the Company may, from time to time, in its discretion, change or eliminate the discount applicable to treasury acquisitions or direct that such common shares be purchased in market acquisitions at the prevailing market price, any of which would be publicly announced.  The DRIP and enrollment forms are available on the Company’s website at www.franco-nevada.com.  Registered shareholders may also enroll in the DRIP online through the plan agent’s self-service web portal at www.investorcentre.com/franco-nevada.  Beneficial shareholders should contact their financial intermediary to arrange enrollment.

This press release is not an offer to sell or a solicitation of an offer of securities.  A registration statement relating to the DRIP has been filed with the U.S. Securities and Exchange Commission and may be obtained under the Company’s profile on the U.S. Securities and Exchange Commission’s website at www.sec.gov.

Shareholder Information

The complete Condensed Interim Consolidated Financial Statements and Management’s Discussion and Analysis can be found today on Franco-Nevada’s website at www.franco-nevada.com, on SEDAR at www.sedar.com and on EDGAR at www.sec.gov.

Management will host a conference call tomorrow, Tuesday, November 8, 2016 at 10:00 a.m. Eastern Time to review Franco-Nevada’s Q3/2016 results.  Interested investors are invited to participate as follows:

· Via Conference Call: Toll-Free: (888) 231-8191; International: (647) 427-7450

· Conference Call Replay until November 15: Toll-Free (855) 859-2056; Toronto (416) 849-0833; Pass code 96664262

· Webcast: A live audio webcast will be accessible at www.franco-nevada.com

Corporate Summary

Franco-Nevada Corporation is the leading gold-focused royalty and stream company with the largest and most diversified portfolio of cash-flow producing assets.  Its business model provides investors with gold price and exploration optionality while limiting exposure to many of the risks of operating companies.  Franco-Nevada is debt free and uses its free cash flow to expand its portfolio and pay dividends.  It trades under the symbol FNV on both the Toronto and New York stock exchanges.  Franco-Nevada is the gold investment that works.

For more information, please go to our website at www.franco-nevada.com or contact:

Stefan Axell	Sandip Rana
Director, Corporate Affairs	Chief Financial Officer
(416) 306-6328	(416) 306-6303
info@franco-nevada.com

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Forward Looking Statements

This press release contains “forward looking information” and “forward looking statements” within the meaning of applicable Canadian securities laws and the United States Private Securities Litigation Reform Act of 1995, respectively, which may include, but are not limited to, statements with respect to future events or future performance, management’s expectations regarding Franco-Nevada’s growth, results of operations, estimated future revenues, carrying value of assets, future dividends and requirements for additional capital, mineral reserve and mineral resource estimates, production estimates, production costs and revenue, future demand for and prices of commodities, expected mining sequences, business prospects and opportunities. In addition, statements (including data in tables) relating to reserves and resources and gold equivalent ounces (“GEOs”) are forward looking statements, as they involve implied assessment, based on certain estimates and assumptions, and no assurance can be given that the estimates and assumptions are accurate and that such reserves and resources and GEOs will be realized. Such forward looking statements reflect management’s current beliefs and are based on information currently available to management. Often, but not always, forward looking statements can be identified by the use of words such as “plans”, “expects”, “is expected”, “budgets”, “scheduled”, “estimates”, “forecasts”, “predicts”, “projects”, “intends”, “targets”, “aims”, “anticipates” or “believes” or variations (including negative variations) of such words and phrases or may be identified by statements to the effect that certain actions “may”, “could”, “should”, “would”, “might” or “will” be taken, occur or be achieved. Forward looking statements involve known and unknown risks, uncertainties and other factors, which may cause the actual results, performance or achievements of Franco-Nevada to be materially different from any future results, performance or achievements expressed or implied by the forward looking statements. A number of factors could cause actual events or results to differ materially from any forward looking statement, including, without limitation: fluctuations in the prices of the primary commodities that drive royalty and stream revenue (gold, platinum group metals, copper, nickel, uranium, silver, iron-ore and 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 U.S. dollar; changes in national and local government legislation, including permitting and licensing regimes and taxation policies and the enforcement thereof; regulatory,  political or economic developments in any of the countries where properties in which Franco-Nevada holds a royalty, stream or other interest are located or through which they are held; risks related to the operators of the properties in which Franco-Nevada holds a royalty, stream or other interest, including changes in the ownership and control of such operators; 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 on any of the properties in which Franco-Nevada holds a royalty, stream or other interest; whether or not the Corporation is determined to have “passive foreign investment company” (“PFIC”) status as defined in Section 1297 of the United States Internal Revenue Code of 1986, as amended; potential changes in Canadian tax treatment of offshore streams; 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; actual mineral content may differ from the reserves and resources contained in technical reports; rate and timing of production differences from resource estimates, other technical reports and mine plans; 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, terrorism, civil unrest or an outbreak of contagious diseases; 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: 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 Corporation’s ongoing income and assets relating to determination of its PFIC status; no material changes to existing tax treatment; no adverse development in respect of any significant property in which Franco-Nevada holds a royalty, stream or other interest; the 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. Investors are cautioned that forward looking statements are not guarantees of future performance. Franco-Nevada cannot assure investors that actual results will be consistent with these forward looking statements and investors should not place undue reliance on forward looking statements due to the inherent uncertainty therein. For additional information with respect to risks, uncertainties and assumptions, please refer to the “Risk Factors” section of Franco-Nevada’s most recent Annual Information Form filed with the Canadian securities regulatory authorities on www.sedar.com and Franco-Nevada’s most recent Annual Report filed on Form 40-F filed with the SEC on www.sec.gov. 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.

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NON-IFRS MEASURES:  Adjusted Net Income and Adjusted EBITDA are intended to provide additional information only and do not have any standardized meaning prescribed under IFRS and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS.  These measures are not necessarily indicative of operating profit or cash flow from operations as determined under IFRS.  Other companies may calculate these measures differently. For a reconciliation of these measures to various IFRS measures, please see below or the Company’s current MD&A disclosure found on the Company’s website, on SEDAR and on EDGAR. Comparative information has been recalculated to conform to current presentation.

1 GEOs include our gold, silver, platinum, palladium and other mineral assets. GEOs are estimated on a gross basis for NSR royalties and, in the case of stream ounces, before the payment of the per ounce contractual price paid by the Company. For NPI royalties, GEOs are calculated taking into account the NPI economics. Platinum, palladium, silver and other minerals were converted to GEOs by dividing associated revenue, which includes settlement adjustments, by the average gold price for the period. For Q3 2016, the average commodity prices were as follows: $1,335 gold (2015 - $1,124), $19.62 silver (2015 - $14.91), $1,084 platinum (2015 - $988) and $676 palladium (2015 - $615).

2 Adjusted EBITDA and Adjusted EBITDA per share are non-IFRS financial measures, which exclude the following from net income and EPS: income tax expense/recovery; finance expenses; finance income; depletion and depreciation; non-cash costs of sales; impairment charges related to royalty, stream and working interests and investments; gains/losses on the sale of investments; and foreign exchange gains/losses and other income/expenses.

3 Adjusted Net Income and Adjusted Net Income per share are non-IFRS financial measures, which exclude the following from net income and earnings per share (“EPS”): foreign exchange gains/losses and other income/expenses; gains/losses on the sale of investments; impairment charges related to royalty, stream and working interests and investments; unusual non-recurring items; and the impact of income taxes on these items.

Reconciliation to IFRS measures:

	Three months ended September 30,
(expressed in millions, except per share amounts)	2016		2015
Net Income (Loss)	$	54.4	$	15.2
Income tax expense (recovery)		12.9		8.5
Finance expenses		0.7		0.6
Finance income		(0.5)		(1.3)
Depletion and depreciation		72.9		49.7
Non-cash costs of sales		1.8		1.7
Impairment of investments		—		1.9
Foreign exchange (gains)/losses and other (income)/expenses		—		1.2
Adjusted EBITDA	$	142.2	$	77.5
Basic Weighted Average Shares Outstanding		178.1		156.9
Adjusted EBITDA per share	$	0.80	$	0.49

	Three months ended September 30,
(expressed in millions, except per share amounts)	2016		2015
Net Income (Loss)	$	54.4	$	15.2
Foreign exchange (gains)/losses		0.2		1.3
(Gain) on sale of investments		(0.2)		—
Impairment of investments		—		1.9
Tax effect of adjustments		0.3		1.0
Other tax related adjustments:
Valuation allowance		(1.2)		—
Adjusted Net Income	$	53.5	$	19.4
Basic Weighted Average Shares Outstanding		178.1		156.9
Adjusted Net Income per share	$	0.30	$	0.12

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FRANCO-NEVADA CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

(unaudited, in millions of U.S. dollars)

	September 30, 2016		December 31, 2015
ASSETS
Cash and cash equivalents (Note 4)	$	277.6	$	149.2
Short-term investments (Notes 5 & 8)		—		18.8
Receivables (Note 8)		72.4		65.1
Prepaid expenses and other (Notes 6 & 13)		34.8		41.6
Current assets		384.8		274.7
Royalty, stream and working interests, net		3,684.7		3,257.5
Investments (Notes 5 & 8)		131.7		94.8
Deferred income tax assets		23.3		16.1
Other assets (Notes 7 and 13)		26.5		31.2
Total assets	$	4,251.0	$	3,674.3
LIABILITIES
Accounts payable and accrued liabilities	$	19.5	$	18.0
Current income tax liabilities		7.7		2.8
Current liabilities		27.2		20.8
Debt (Note 13)		—		457.3
Deferred income tax liabilities		35.7		33.2
Total liabilities		62.9		511.3
SHAREHOLDERS’ EQUITY (Note 14)
Common shares		4,654.0		3,709.0
Contributed surplus		43.2		44.3
Deficit		(292.6)		(302.2)
Accumulated other comprehensive loss		(216.5)		(288.1)
Total shareholders’ equity		4,188.1		3,163.0
Total liabilities and shareholders’ equity	$	4,251.0	$	3,674.3
Subsequent events (Note 17)

The accompanying notes are an integral part of these condensed consolidated financial statements and can be found in our Q3 2016 Report available on our website

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FRANCO-NEVADA CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (LOSS)

(unaudited, in millions of U.S. dollars, except per share amounts)

	For the three months ended				For the nine months ended
	September 30,				September 30,
	2016		2015		2016		2015
Revenue (Note 9)	$	172.0	$	103.7	$	454.9	$	322.3
Costs and expenses
Costs of sales (Note 10)		28.0		22.4		80.1		68.8
Depletion and depreciation		72.9		49.7		206.6		150.5
(Gain) loss on sale of gold bullion (Note 16(a))		(0.7)		0.5		(2.8)		0.5
Impairment charges		—		—		—		0.1
Corporate administration (Notes 11 & 14(c))		3.8		4.0		14.9		12.2
Business development		0.5		1.0		1.1		2.8
		104.5		77.6		299.9		234.9
Operating income		67.5		26.1		155.0		87.4
Foreign exchange gain (loss) and other income (expenses) (Notes 5 & 16(a))		—		(1.2)		4.2		(2.4)
Impairment of investments		—		(1.9)		—		(1.9)
Income before finance items and income taxes		67.5		23.0		159.2		83.1
Finance items
Finance income		0.5		1.3		2.6		3.2
Finance expenses (Note 13)		(0.7)		(0.6)		(2.8)		(1.5)
Net income before income taxes		67.3		23.7		159.0		84.8
Income tax expense (Note 12)		12.9		8.5		32.3		28.8
Net income	$	54.4	$	15.2	$	126.7	$	56.0
Other comprehensive income (loss):
Items that may be reclassified subsequently to profit and loss:
Unrealized gain (loss) in the market value of available-for-sale investments, net of income tax expense of $1.2 (2015 - income tax expense of $0.3), income tax expense of $1.7 (2015 - income tax recovery of $1.0) (Note 5)		8.1		0.1		34.7		(4.3)
Realized change in market value of available-for-sale investments		(0.2)		(1.9)		(4.5)		(2.8)
Currency translation adjustment		(4.1)		(67.3)		41.4		(141.8)
Other comprehensive income (loss)		3.8		(69.1)		71.6		(148.9)
Total comprehensive income (loss)	$	58.2	$	(53.9)	$	198.3	$	(92.9)
Basic earnings per share (Note 15)	$	0.31	$	0.10	$	0.72	$	0.36
Diluted earnings per share (Note 15)	$	0.30	$	0.10	$	0.72	$	0.36

The accompanying notes are an integral part of these condensed consolidated financial statements and can be found in our Q3 2016 Report available on our website

8

FRANCO-NEVADA CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited, in millions of U.S. dollars)

	For the nine months ended September 30,
	2016		2015
Cash flows from operating activities
Net income	$	126.7	$	56.0
Adjustments to reconcile net income to net cash provided by operating activities:
Depletion and depreciation		206.6		150.5
Proceeds from sale of gold bullion (Note 16(b))		59.4		36.6
Acquisition of gold bullion (Note 16(b))		(47.8)		(50.9)
Impairment charges		—		0.1
Impairment of investments		—		1.9
Other non-cash items		(0.8)		0.3
Gain on sale of investments (Note 5)		(4.5)		(0.9)
Non-cash costs of sales (Note 10)		5.3		5.0
Deferred income tax expense (Note 12)		2.6		8.0
Share-based payments (Note 14(c))		3.7		4.1
Unrealized foreign exchange loss		0.3		3.0
Mark-to-market on warrants (Note 5)		—		0.3
Operating cash flows before changes in non-cash working capital		351.5		214.0
Changes in non-cash working capital:
(Increase) decrease in receivables		(7.3)		22.1
Increase in prepaid expenses and other		(1.4)		(6.8)
Increase in current liabilities		6.3		0.1
Net cash provided by operating activities		349.1		229.4
Cash flows from investing activities
Proceeds from sale of investments		24.0		24.7
Acquisition of investments		(1.6)		(96.6)
Acquisition of royalty, stream and working interests		(597.1)		(44.2)
Acquisition of oil & gas well equipment		(1.7)		(2.3)
Acquisition of property and equipment		(0.1)		—
Net cash used in investing activities		(576.5)		(118.4)
Cash flows from financing activities
Net proceeds from issuance of common shares (Note 14(a))		883.5		—
Repayment of Credit Facility (Note 13)		(460.0)		—
Credit facility amendment costs		—		(1.2)
Payment of dividends (Note 14(b))		(87.4)		(70.4)
Proceeds from exercise of stock options (Note 14(a))		16.1		0.5
Net cash provided by (used in) financing activities		352.2		(71.1)
Effect of exchange rate changes on cash and cash equivalents		3.6		(27.0)
Net change in cash and cash equivalents		128.4		12.9
Cash and cash equivalents at beginning of period		149.2		592.5
Cash and cash equivalents at end of period	$	277.6	$	605.4
Supplemental cash flow information:
Cash paid for interest expense and loan standby fees	$	2.4	$	1.2
Income taxes paid	$	27.1	$	24.2

The accompanying notes are an integral part of these condensed consolidated financial statements and can be found in our Q3 2016 Report available on our website

9

EX-99.2

Exhibit 99.2

MANAGEMENT’S DISCUSSION AND ANALYSIS

This Management’s Discussion and Analysis (“MD&A”) of financial position and results of operations of Franco-Nevada Corporation (“Franco-Nevada”, the “Company”, “we” or “our”) has been prepared based upon information available to Franco-Nevada as at November 7, 2016 and should be read in conjunction with Franco-Nevada’s unaudited condensed consolidated financial statements and related notes as at and for the three and nine months ended September 30, 2016 and 2015.The unaudited condensed consolidated interim financial statements and MD&A are presented in U.S. dollars and have been prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”) applicable to the preparation of interim financial statements in accordance with IAS 34, Interim Financial Reporting.

Readers are cautioned that the MD&A contains forward-looking statements and that actual events may vary from management’s expectations. Readers are encouraged to read the “Cautionary Statement on Forward-Looking Information” at the end of this MD&A and to consult Franco-Nevada’s audited consolidated financial statements for the year ended December 31, 2015 and the corresponding notes to the financial statements which are available on our website at www.franco-nevada.com,  on SEDAR at www.sedar.com and in our most recent Form 40-F filed with the Securities and Exchange Commission on EDGAR at www.sec.gov.

Additional information related to Franco-Nevada, including our Annual Information Form, is available on SEDAR at www.sedar.com,  and our Form 40-F is available on EDGAR at www.sec.gov. These documents contain descriptions and maps of certain of Franco-Nevada’s producing and advanced royalty and stream assets.  For additional information, our website can be found at www.franco-nevada.com.

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TABLE OF CONTENTS

OVERVIEW	3
HIGHLIGHTS	4
GUIDANCE	6
SELECTED FINANCIAL INFORMATION	8
OVERVIEW OF FINANCIAL PERFORMANCE – Q3 2016 TO Q3 2015	9
OVERVIEW OF FINANCIAL PERFORMANCE – NINE MONTHS 2016 TO NINE MONTHS 2015	19
FINANCIAL CONDITION REVIEW	26
BALANCE SHEET REVIEW	26
FINANCIAL POSITION, LIQUIDITY AND CAPITAL RESOURCES	27
CAPITAL RESOURCES	29
CRITICAL ACCOUNTING ESTIMATES	30
NEW ACCOUNTING STANDARDS ISSUED BUT NOT YET EFFECTIVE	30
OUTSTANDING SHARE DATA	30
INTERNAL CONTROL OVER FINANCIAL REPORTING AND DISCLOSURE CONTROLS AND PROCEDURES	31
NON-IFRS FINANCIAL MEASURES	32
CAUTIONARY STATEMENT ON FORWARD-LOOKING INFORMATION	36

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OVERVIEW

Franco-Nevada is the leading gold-focused royalty and stream company by both gold revenue and number of gold assets. The Company has the largest and most diversified portfolio of royalties and streams by commodity, geography, revenue type and stage of project.  The portfolio is actively managed with the aim to maintain over 80% of revenue from precious metals (gold, silver & PGMs).

Franco-Nevada Asset Count at November 7, 2016

	Precious	Other	Oil &
	Metals	Minerals	Gas	TOTAL
Producing	40	5	59	104
Advanced	33	7	—	40
Exploration	139	38	19	196
TOTAL	212	50	78	340

The Company does not operate mines, develop projects or conduct exploration.  Franco-Nevada’s business model is focused on managing and growing its portfolio of royalties and streams. The advantages of this business model are:

· Exposure to precious metals price optionality;

· A perpetual discovery option over large areas of geologically prospective lands with no additional cost other than the initial investment;

· Limited exposure to many of the risks associated with operating companies; 

· A free cash-flow business with limited cash calls;

· A high-margin business that can generate cash through the entire commodity cycle;

· A scalable and diversified business in which a large number of assets can be managed with a small stable overhead; and

· A forward-looking business in which management focuses on growth opportunities rather than operational or development issues.

Franco-Nevada’s financial results in the short-term are primarily tied to the price of commodities and the amount of production from its portfolio of producing assets.  From time to time, financial results are also supplemented by acquisitions of new producing assets.  Over the longer-term, results are impacted by the availability of exploration and development capital applied by other companies to expand or extend Franco-Nevada’s producing assets or to advance Franco-Nevada’s advanced and exploration assets into production.

Franco-Nevada has a long-term focus in making its investments and recognizes it is in a cyclical industry.  Franco-Nevada has historically operated by maintaining a strong balance sheet so that it can make investments during commodity cycle downturns.

Franco-Nevada’s shares are listed on the Toronto and New York stock exchanges under the symbol FNV.  An investment in Franco-Nevada’s shares is expected to provide investors with yield and exposure to gold price and exploration optionality while limiting exposure to many of the risks of operating companies. Since its IPO almost nine years ago, Franco-Nevada has increased its dividend annually and its share price has outperformed the gold price and all relevant gold equity benchmarks.

3

Franco-Nevada’s Relative Share Price Performance

Highlights

Financial – Three Months ended September 30, 2016

· 123,065 Gold Equivalent Ounces (“GEOs”)1were achieved in the third quarter of 2016, compared to 85,637 GEOs in the third quarter of 2015, an increase of 43.7%;

· $172.0 million of revenue was earned, an increase of 65.9% from the $103.7 million generated in the third quarter of 2015;

· $142.2 million, or $0.80 per share, of Adjusted EBITDA2,3 was generated in the third quarter of 2016, an increase of 83.5% from $77.5 million or $0.49 per share, in the third quarter of 2015;

· 82.7% in Margin2,3 was achieved, compared to 74.7% in the third quarter of 2015;

· $54.4 million, or $0.31 per share, in net income for the third quarter of 2016, compared to $15.2 million, or $0.10 per share for the third quarter of 2015; 

· $53.5 million, or $0.30 per share, in Adjusted Net Income2,3 in the third quarter of 2016, compared to $19.4 million, or $0.12 per share, in the third quarter of 2015;

· Net cash provided by operating activities3 in the third quarter of 2016 was $121.6 million, compared to $73.0 million in the same period in the prior year; and

¹ GEOs include our gold, silver, platinum, palladium and other mineral assets, and do not include Oil & Gas assets. GEOs are estimated on a gross basis for NSR royalties and, in the case of stream ounces, before the payment of the per ounce contractual price paid by the Company. For NPI royalties, GEOs are calculated taking into account the NPI economics. Silver, platinum, palladium and other minerals were converted to GEOs by dividing associated revenue, which includes settlement adjustments, by the average gold price for the period. For average commodity prices used in the calculation of GEOs, please refer to average commodity price tables on pages 9 and 19 of this MD&A.

² Adjusted Net Income, Adjusted EBITDA and Margin are non-IFRS financial measures with no standardized meaning under IFRS. For further information and a detailed reconciliation, please see pages 32-35 of this MD&A.

³ In the third quarter of 2016, the Company adopted a change in accounting policy with respect to its classification of proceeds from sales of gold bullion in its statement of cash flows and statement of income and comprehensive income (loss). For further information, refer to Note 16 of the condensed interim consolidated statements for the three and nine months ended September 30, 2016. The Company’s non-GAAP measures, as defined in pages 32-35 of this MD&A, were also adjusted accordingly to reflect gains/losses on sales of such gold bullion as an operating activity that is part of the Company’s underlying business. Comparative information has been adjusted to conform to current presentation.

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· Dividends paid totaled $39.3 million in the quarter, of which $29.9 million was paid in cash and $9.4 million was paid in common shares issued under the Company’s Dividend Reinvestment Plan (“DRIP”).

Financial – Nine Months ended September 30, 2016

· 342,473 GEOs were achieved in the first nine months of 2016,compared to 253,758 GEOs in the first nine months of 2015, an increase of 35.0%;

· $454.9 million of revenue was generated in the first nine months of 2016, an increase of 41.1% from the $322.3 million generated in the same period in the prior year;

· $366.9 million, or $2.09 per share, of Adjusted EBITDA, an increase of 51.0% to from $242.9 million, or $1.55 per share, in the first nine months of 2015;

· 80.7% in Margin was achieved, compared to 75.4% in the first nine months of 2015;

· $126.7 million, or $0.72 per share, in net income, compared to net income of $56.0 million, or $0.36 per share, in the first nine months of 2015;

· $121.5 million, or $0.69 per share, in Adjusted Net Income, compared to $65.2 million, or $0.42 per share, in the first nine months of 2015;

· Net cash provided by operating activities in the first nine months of 2016 was $349.1 million, compared to $229.4 million in the same period of the prior year; and

· Dividends paid totaled $117.1 million for the nine months ended September 30, 2016, which included cash dividends of $87.4 million and $29.7 million in issued common shares under the Company’s DRIP.

Corporate Update

Oil & Gas U.S. Royalty Acquisition (“STACK”)

On November 7, 2016, Franco-Nevada agreed to acquire a $100.0 million package of royalty rights in the STACK shale play in Oklahoma’s Anadarko basin from a private party. The two primary operators of the lands are Newfield Exploration Company and Devon Energy Corporation. The package of lands provides an estimated royalty rate of 1.61%.

Kirkland Lake Gold

In October 2016, Kirkland Lake Gold Inc. (“Kirkland Lake”) exercised its option to buyback 1% of an overlying 2.5% NSR for an aggregate cash consideration of approximately $30.5 million ($36.0 million less royalty proceeds attributable to the buyback portion of the NSR paid to Franco-Nevada prior to the date of the buyback). The NSR, which covers all of Kirkland Lake’s properties (including the Macassa mine), was acquired in October 2013 for $50.0 million.

Cooke 4

On October 27, 2016, Sibanye Gold Limited (“Sibanye”) announced it has ceased production at the Cooke 4 underground operation.  Franco-Nevada has an approximate $69 million carrying value for this stream.  Once further information is obtained, an impairment analysis will be carried out and recorded in the fourth quarter of 2016 as appropriate.

Termination of Palmarejo Gold Stream and Commencement of Guadalupe Gold Stream

In October 2014, Franco-Nevada agreed with Coeur Mining Inc. (“Coeur”) to terminate the Palmarejo gold stream agreement following the completion of the 400,000 ounce minimum obligation in exchange for a cash payment of $2.0 million. In July 2016, Coeur met the minimum ounce obligation and the Palmarejo agreement was terminated. Deliveries of gold ounces from the Palmarejo project will start under a new agreement with Coeur, the Guadalupe gold stream agreement, pursuant to which Coeur will deliver 50% of its gold production from the Palmarejo

5

project at an ongoing cost of $800 per ounce. As part of the Guadalupe agreement, Franco-Nevada provided an upfront deposit of $22.0 million to partially fund the development of the Guadalupe underground mine.

Cobre Panama

The Company funded an additional $40.0 million towards the Cobre Panama precious metal stream in the third quarter of 2016, for a total of $77.7 million in the first nine months of 2016. As at September 30, 2016, the Company has funded $415.6 million of its $1 billion commitment. First Quantum Minerals Ltd. (“First Quantum”) increased its planned 2016 capital expenditure to $450 million from $390 million for the fourth quarter of 2016 due to expedited stripping of the pit. The development remains on track for a phased commissioning in 2018 and continued ramp-up in 2019.

Castle Mountain

On June 16, 2016, Franco-Nevada and NewCastle Gold Ltd. completed the restructuring of Franco-Nevada’s existing royalties at the Castle Mountain gold project in California, U.S., into a single 2.65% royalty covering a larger property.

Antapaccay Precious Metal Stream

On February 26, 2016, Franco-Nevada completed the acquisition of a $500.0 million precious metal stream from Glencore plc with reference to production from the Antapaccay mine located in Peru. Under the stream agreement, gold and silver deliveries are initially referenced to copper in concentrate shipped. The Company will receive 300 ounces of gold and 4,700 ounces of silver for each 1,000 tonnes of copper in concentrate shipped, until 630,000 ounces of gold and 10.0 million ounces of silver have been delivered. Thereafter, the Company will receive 30% of the gold and silver shipped. The Company will pay an on-going price of 20% of the spot price of gold and silver until 750,000 ounces of refined gold and 12.8 million ounces of refined silver have been delivered. Thereafter, the on-going price will increase to 30% of the spot price of gold and silver.

Equity Financing

On February 19, 2016, the Company completed a bought-deal financing with a syndicate of underwriters for 19.2 million common shares at $47.85 per common share. The net proceeds to the Company were $883.5 million after deducting share issue costs and expenses of $36.6 million.

6

Guidance

The following contains forward-looking statements about our guidance for 2016. Reference should be made to the “Cautionary Statement on Forward-Looking Information” section at the end of this MD&A. For a description of material factors that could cause our actual results to differ materially from the forward-looking statements below, please see the Cautionary Statement and the “Risk Factors” section of our most recent Annual Information Form filed with the Canadian securities regulatory authorities on www.sedar.com and our most recent Form 40-F filed with the Securities and Exchange Commission on www.sec.gov.

Franco-Nevada realized record growth from its mineral assets for the first nine months of 2016. Mineral assets contributed 342,473 GEOs, while Franco-Nevada’s Oil & Gas assets contributed $19.7 million in revenue in the nine months ended September 30, 2016.

Franco-Nevada is pleased to raise its guidance for 2016 as follows:

		Previously announced		Revised guidance
Mineral assets - GEO production1	(oz)		425,000 - 445,000 GEOs		445,000 - 455,000 GEOs
Oil & Gas assets - Revenue2	($)		$15.0 million - $25.0 million		$25.0 million - $30.0 million

¹ In forecasting GEOs for the remainder of 2016, gold, silver, platinum and palladium metals have been converted to GEOs using commodity prices of $1,300/oz Au, $18.00/oz Ag, $950/oz Pt and $650/oz Pd. 

² In forecasting revenue from Oil & Gas assets for the remainder of 2016, the WTI oil price is assumed to average $50 per barrel with a $3.50 per barrel price differential for Canadian oil.

Of the 445,000 to 455,000 GEOs, Franco-Nevada expects to receive 315,000 to 325,000 GEOs under its various stream agreements. For the first nine months of 2016, 243,896 GEOs have been received from stream agreements, while 222,670 GEOs were received for full year 2015.

The Company expects to fund a total of approximately $120.0 million to $140.0 million towards the Cobre Panama precious metal stream in 2016. As at September 30, 2016, the Company has funded a total of $77.7 million in the first nine months of 2016, for a total of $415.6 million of its $1 billion commitment.

In addition, for 2016, the Company estimates depletion and depreciation expense to be $250.0 million to $275.0 million.

2016 guidance assumes the continued steady state of operations from our assets.

7

SELECTED FINANCIAL INFORMATION

(in millions, except Average Gold Price, GEOs, Margin and per share amounts)	For the Three Months Ended September 30,						For the Nine Months Ended September 30,
	2016			2015			2016			2015
Statement of Income and Other Comprehensive Income (Loss)
Revenue	$	172.0		$	103.7		$	454.9		$	322.3
Depletion and depreciation		72.9			49.7			206.6			150.5
Impairments1		—			1.9			—			2.0
Operating income4		67.5			26.1			155.0			87.4
Net income		54.4			15.2			126.7			56.0
Basic earnings per share	$	0.31		$	0.10		$	0.72		$	0.36
Diluted earnings per share	$	0.30		$	0.10		$	0.72		$	0.36
Dividends declared per share	$	0.22		$	0.21		$	0.65		$	0.62
Dividends paid (including DRIP)	$	39.3		$	33.1		$	117.1		$	96.7
Weighted average shares outstanding		178.1			156.9			175.2			156.8
Non-IFRS Measures
Average Gold Price	$	1,335		$	1,124		$	1,258		$	1,179
GEOs2		123,065			85,637			342,473			253,758
Adjusted EBITDA3,4	$	142.2		$	77.5		$	366.9		$	242.9
Adjusted EBITDA3,4 per share	$	0.80		$	0.49		$	2.09		$	1.55
Margin3,4		82.7	%		74.7	%		80.7	%		75.4	%
Adjusted Net Income3,4	$	53.5		$	19.4		$	121.5		$	65.2
Adjusted Net Income3,4 per share	$	0.30		$	0.12		$	0.69		$	0.42
Statement of Cash Flows
Net cash provided by operating activities4	$	121.6		$	73.0		$	349.1		$	229.4
Net cash used in investing activities4	$	(41.5)		$	(44.6)		$	(576.5)		$	(118.4)
Net cash (used in) provided by  financing activities	$	(29.4)		$	(23.2)		$	352.2		$	(71.1)

	As at		As at
	September 30, 2016		December 31, 2015
Statement of Financial Position
Cash and cash equivalents	$	277.6	$	149.2
Short-term investments		—		18.8
Total assets		4,251.0		3,674.3
Debt		—		457.3
Deferred income tax liabilities		35.7		33.2
Total shareholders’ equity		4,188.1		3,163.0
Working capital		357.6		253.9

¹ Impairments include impairment charges on investments, royalties, streams and working interests.

² For average commodity prices used in calculation of GEOs, please refer to average commodity price tables on pages 9 and 19 of this MD&A.  

³ Adjusted EBITDA, Margin and Adjusted Net Income are non-IFRS financial measures with no standardized meaning under IFRS. For further information and a detailed reconciliation, please see pages 32-35 of this MD&A.

⁴ In the third quarter of 2016, the Company adopted a change in accounting policy with respect to its classification of proceeds from sales of gold bullion in its statement of cash flows and statement of income and comprehensive income (loss). For further information, refer to Note 16 of the condensed interim consolidated statements for the three and nine months ended September 30, 2016. The Company’s non-GAAP measures, as defined in pages 32-35 of this MD&A, were also adjusted accordingly to reflect gains/losses on sales of such gold bullion as an operating activity that is part of the Company’s underlying business. Comparative information has been adjusted to conform to current presentation.

8

Overview of Financial Performance – Q3 2016 to Q3 2015 

The prices of precious metals, oil & gas and the actual production from mineral and oil & gas assets are the largest factors in determining profitability and cash flow from operations for Franco-Nevada.

Average Commodity Prices and Exchange Rate

								QOQ		YOY (Q3’16-
Quarterly Averages		Q3 2016		Q2 2016		Q3 2015		(Q3’16-Q2’16)		Q3’15)
Gold1	($/oz)	$	1,335	$	1,259	$	1,124	6.0	%	18.8	%
Silver2	($/oz)		19.62		17.17		14.91	14.3	%	31.6	%
Platinum3	($/oz)		1,084		1,004		988	8.0	%	9.8	%
Palladium3	($/oz)		676		568		615	19.1	%	9.9	%
Edmonton Light	C$bbl		54.41		55.09		55.04	(1.2)	%	(1.1)	%
Quality Differential	C$bbl		(3.80)		(8.08)		(4.58)	(53.0)	%	(17.0)	%
Realized oil price	C$bbl		50.61		47.01		50.46	7.7	%	0.3	%
CAD/USD exchange rate4			0.7663		0.7761		0.7639	(1.3)	%	0.3	%

¹ Based on London Bullion Market Association (“LBMA”) Gold Price PM Fix

² Based on LBMA Silver Price

³ Based on London PM Fix

⁴ Based on Bank of Canada noon rates

Precious metals commodity prices have been in a volatile and declining state for an extended period of time with prices only recently beginning to recover. The gold price has increased approximately 25% since the beginning of the year.

During the third quarter of 2016, average gold prices traded between $1,308/oz and $1,366/oz with an average price of $1,335/oz. This compares to an average gold price of $1,124/oz for the third quarter of 2015, an increase of 18.8%, and $1,259/oz for the third quarter of 2016.  Historically, the price of gold has been subject to volatile price movements over short periods of time and is affected by numerous macroeconomic and industry factors that are beyond the Company’s control. Major influences on the gold price include macroeconomic factors such as the level of interest rates, inflation expectations, currency exchange rate fluctuations including the relative strength of the U.S. dollar, and the supply of and demand for gold.

During the third quarter of 2016, silver prices averaged $19.62/oz for the third quarter of 2016, compared to $14.91/oz in third quarter 2015, an increase of 31.6%. Platinum and palladium prices averaged $1,084/oz and $676/oz, respectively, compared to $988/oz and $615/oz, respectively, for the third quarter of 2015, increases of 9.8% and 9.9% year-over-year, respectively. 

Commodity price volatility not only impacts overall revenues but also impacts the number of GEOs contributed by non-gold assets when converting from silver, platinum, palladium and other minerals to GEOs. 

Despite the volatile commodity prices, our mineral assets continued to deliver strong results as the mineral assets performed well, delivering a significant increase in GEOs over the prior year.  One of the strengths of the Franco-Nevada business model is that our business is not impacted when producer costs increase as long as the producer continues to operate. Royalty and stream payments/deliveries are based on production levels of the underlying operations with no adjustments for the operator’s operating costs, with the exception of NPI royalties which are based on the profit of the underlying mining operation. During the quarter, NPI royalties accounted for approximately 7% of total revenues.

9

GEO Production Growth

Gold Equivalent Ounces and Revenue

Franco-Nevada’s revenue is generated from various forms of agreements, ranging from net smelter return (“NSR”) royalties, streams, net profits interests (“NPI”), net royalty interests (“NRI”), working interests and other. For definitions of the various types of agreements, please refer to our most recent Annual Information Form filed on SEDAR at www.sedar.com or our Form 40-F filed on EDGAR at www.sec.gov.  

Franco-Nevada continued to see significant growth in GEOs with mineral assets contributing 123,065 GEOs in the third quarter of 2016, an increase of 43.7% over the third quarter of 2015.  Revenue for the quarter was $172.0 million compared with $103.7 million for the same period of 2015, an increase of 65.9%.

The impact on revenue of the growth in the number of GEOs received was further enhanced by higher average precious metal prices in third quarter 2016 compared to the same period of the prior year.

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The following table outlines GEOs and revenue attributable to Franco-Nevada for the three months ended September 30, 2016 and 2015 by commodity, geographical location and type of interest:

	Gold Equivalent Ounces1			Revenue (in millions)
For the three months ended September 30,	2016	2015	Variance	2016		2015		Variance
Commodity
Precious Metals
Gold	85,127	72,908	12,219	$	113.4	$	81.9	$	31.5
Silver	27,337	3,522	23,815		36.2		4.0		32.2
PGM	9,098	6,506	2,592		12.1		7.0		5.1
Precious Metals - Total	121,562	82,936	38,626		161.7		92.9		68.8
Other Minerals	1,503	2,701	(1,198)		2.0		3.0		(1.0)
Oil & Gas					8.3		7.8		0.5
	123,065	85,637	37,428	$	172.0	$	103.7	$	68.3
Geography
United States	19,012	17,715	1,297	$	25.5	$	19.9	$	5.6
Canada	18,654	14,211	4,443		32.9		23.4		9.5
Latin America	63,921	34,001	29,920		85.0		38.3		46.7
Rest of World	21,478	19,710	1,768		28.6		22.1		6.5
	123,065	85,637	37,428	$	172.0	$	103.7	$	68.3
Type
Revenue-based	23,522	26,593	(3,071)	$	32.9	$	31.8	$	1.1
Streams	87,422	50,008	37,414		116.3		56.2		60.1
Profit-based	6,555	5,508	1,047		12.8		9.7		3.1
Other	5,566	3,528	2,038		10.0		6.0		4.0
	123,065	85,637	37,428	$	172.0	$	103.7	$	68.3

¹ For average commodity prices used in the calculation of GEOs, please refer to average commodity price tables on pages 9 and 19 of this MD&A.

GEOs and revenue from precious metals were earned from the following geographical locations:

	Gold Equivalent Ounces1			Revenue (in millions)
For the three months ended September 30,	2016	2015	Variance	2016		2015		Variance
Geography for Precious Metals
Precious Metals
United States	18,920	17,551	1,369	$	25.3	$	19.8	$	5.5
Canada	17,749	13,273	4,476		23.5		14.5		9.0
Latin America	63,921	34,001	29,920		85.0		38.3		46.7
Rest of World	20,972	18,111	2,861		27.9		20.3		7.6
Precious Metals - Total	121,562	82,936	38,626	$	161.7	$	92.9	$	68.8
Other Minerals	1,503	2,701	(1,198)		2.0		3.0		(1.0)
Oil & Gas					8.3		7.8		0.5
	123,065	85,637	37,428	$	172.0	$	103.7	$	68.3

¹ For average commodity prices used in calculation of GEOs, please refer to average commodity price tables on pages 9 and 19 of this MD&A.

Our portfolio is well-diversified with GEOs and revenue being earned from 45 mineral assets and 59 oil & gas interests in various jurisdictions.

11

GEO Reconciliation – Q3 2015 to Q3 2016

GEOs earned from precious metal assets increased by 47% to 121,562 GEOs in the third quarter of 2016 from 82,936 GEOs in the third quarter of 2015. Revenue from precious metal assets was $161.7 million in the third quarter of 2016, compared to $92.9 million for the same period in 2015. The largest component of these increases was contributed from our Latin American assets which realized an increase of 88% in GEOs and 122% in revenue compared to the prior year, reflecting the acquisitions of the Antamina and Antapaccay streams in October 2015 and February 2016, respectively.

Quarterly Revenue Breakdown

(expressed in millions)

12

Overall, GEOs and revenue increases for the quarter are attributable to the following:

· The Company received 22,186 GEO deliveries from Antapaccay, a stream added in the first quarter of 2016. 

· The Company received 19,975 GEO deliveries from Antamina, an asset added to the portfolio in the fourth quarter of 2015.

· The Company received 5,000 gold ounces from Karma, of which 1,250 ounces relate to production from the second quarter of 2016. Deliveries from Karma are fixed in the initial years at a rate of 1,250 ounces per month. Karma poured its first gold in April 2016 and is a mine operated by Endeavour Mining Corporation.

· Our Sudbury precious metals assets delivered 7,543 GEOs, an additional 2,908 GEOs compared to the third quarter 2015.  This increase is due to higher gold, platinum and palladium production at the mines, coupled with higher precious metal prices on the conversion to GEOs.

· The Company received its first delivery from South Arturo, totaling 2,269 GEOs, which poured its first gold in August 2016. South Arturo is a mine operated by a joint venture between Barrick and Premier Gold Mines Limited on which the Company owns a 4-9% gross royalty.

· The above significant increases in GEOs were partially offset by decreases in GEO deliveries compared to the third quarter of 2015 from the following properties: Candelaria (decrease of 2,274 GEOs), as 2015 was an exceptionally strong year of production; Goldstrike (decrease of 2,128 GEOs) with fewer ounces received under both the NSR and NPI; and Palmarejo (a decrease of 9,591 GEOs).

· The agreement for Palmarejo ended in July 2016 as Coeur Mining Inc. (“Coeur Mining”) met its obligation to deliver 400,000 ounces. Deliveries will start under a new agreement which partially funded the Guadalupe underground mine. Due to changes in the timing of the deliveries under the new Guadalupe agreement, minimal deliveries were received in the third quarter of 2016, but deliveries will start in the fourth quarter of 2016.

· During the third quarter of 2016, 1,876,775 ounces of silver were delivered from our Candelaria, Antapaccay, Antamina and Cerro San Pedro interests which were converted to 27,337 GEOs.

Other Minerals generated 1,503 GEOs and $2.0 million in revenue.

Oil & Gas assets generated revenue of $8.3 million for the quarter (98% oil and 2% gas), compared to $7.8 million for the same period of 2015 (96% oil and 4% gas), an increase of 6.4%. Production for the quarter was 3.7% lower than the third quarter of 2015; however, this was more than offset by lower operating costs from the operators.

Revenue from the Weyburn Unit for the quarter increased to $6.7 million (2015 - $5.9 million) with $4.0 million earned from the NRI (2015 - $3.5 million), $2.2 million earned from the working interest (2015 - $1.9 million) and $0.5 million earned from the overriding royalties (2015 - $0.5 million). Revenue from the Weyburn NRI was higher due to the lower operating costs. The actual realized price from the NRI was slightly higher in the third quarter of 2016, at C$49.56/boe compared to C$49.37/boe for the third quarter of 2015. 

13

Revenue for the three and nine months ended September 30, 2016 was $172.0 million (2015 - $103.7 million) and $454.9 million (2015 - $322.3 million), respectively, and was comprised of the following:

(expressed in millions)

		For the three months ended				For the nine months ended
		September 30,				September 30,
Property	Interest	2016		2015		2016		2015
PRECIOUS METALS
United States
Goldstrike	NSR 2-4%, NPI 2.4-6%	$	6.6	$	7.9	$	19.8	$	13.9
Stillwater	NSR 5%		4.4		3.3		10.8		12.4
Gold Quarry	NSR 7.29%		3.8		3.0		10.4		10.7
Marigold	NSR 1.75-5%, GR 0.5-4%		2.5		0.5		7.0		3.7
Fire Creek/Midas	Fixed to 2018 / NSR 2.5%		2.7		2.1		7.7		6.6
Bald Mountain	NSR/GR 0.875-5%		1.8		2.0		2.6		6.4
South Arturo	GR  4-9%		3.0		0.2		3.1		0.2
Other			0.5		0.7		1.8		1.5
Canada
Sudbury	Stream 50%	$	10.0		4.8		24.4	$	16.8
Detour Lake	NSR 2%		3.1		2.9		9.5		8.4
East Timmins	NSR 2-15%		3.2		2.3		8.0		7.9
Musselwhite	NPI 5%		1.0		0.7		3.1		2.3
Hemlo	NSR 3%, NPI 50%		3.0		1.2		5.5		1.7
Kirkland Lake1	NSR 2.5-5.5%, NPI 20%		1.7		1.2		4.2		3.5
Timmins West	NSR 2.25%		0.7		0.9		2.3		2.9
Canadian Malartic	GR 1.5%		0.7		0.4		1.8		1.1
Other			—		0.1		0.1		0.1
Latin America
Antapaccay	Stream (indexed)	$	29.4	$	—	$	65.3	$	—
Antamina	Stream 22.5%		26.5		—		62.8		—
Candelaria	Stream 68%		22.5		21.6		64.8		77.3
Palmarejo2	Stream 50%		5.8		15.7		36.3		45.8
Cerro San Pedro	GR 1.95%		0.5		0.8		1.5		2.2
Other			0.3		0.3		0.9		0.9
Rest of World
MWS	Stream 25%	$	7.1	$	6.0	$	21.6	$	19.7
Sabodala	Stream 6%, Fixed to 2019		7.5		6.4		21.4		22.2
Subika	NSR 2%		1.3		0.8		3.4		3.4
Tasiast	NSR 2%		0.6		1.3		2.8		3.9
Karma	Stream 4.875%, Fixed to 75koz		6.7		—		11.4		—
Duketon	NSR 2%		2.2		1.9		5.4		5.1
Edikan	NSR 1.5%		0.9		1.3		2.5		2.8
Cooke 4	Stream 7%		0.8		1.7		3.0		3.5
Other			0.9		0.9		3.7		3.8
		$	161.7	$	92.9	$	428.9	$	290.7
Other Minerals		$	2.0	$	3.0	$	6.3	$	8.0
Oil & Gas
Weyburn	NRI 11.71%, ORR 0.44%, WI 2.56%	$	6.7	$	5.9	$	15.7	$	17.6
Midale	ORR 1.14%, WI 1.59%		0.3		0.5		1.0		1.5
Edson	ORR 15%		0.3		0.4		0.8		1.3
Other			1.0		1.0		2.2		3.2
		$	8.3	$	7.8	$	19.7	$	23.6
Revenue		$	172.0	$	103.7	$	454.9	$	322.3

1 In October 2016, the overlying NSR on the Kirkland Lake Gold properties was reduced from 2.5% to 1.5% pursuant to Kirkland Lake’s exercise to buy back 1% of the NSR.

2 In July 2016, Coeur Mining met its obligation to deliver 400,000 ounces under the Palmarejo agreement. Deliveries will start in the fourth quarter of 2016 under the new Guadalupe agreement.

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Two of the Company’s primary objectives are to build a diversified portfolio of royalties and streams by commodity, geography, revenue type and stage of project, and maintain precious metals revenue above 80% of total revenue.  For the third quarter of 2016, precious metals revenue comprised 94% of total revenue compared to 90% in the third quarter 2015.  In addition, the Company generated 83% of revenue from the Americas.

Quarterly Revenue By Commodity and Geography

(expressed in millions)

   

Costs and Expenses

Costs and expenses for the third quarter of 2016 were $104.5 million compared to $77.6 million in the same period in 2015. The following table provides a list of the costs and expenses incurred for the three months ended September 30, 2016 and 2015.

	Three months ended September 30,
(expressed in millions)	2016		2015		Variance
Costs of sales	$	28.0	$	22.4	$	5.6
Depletion and depreciation		72.9		49.7		23.2
(Gain) loss on sale of gold bullion		(0.7)		0.5		(1.2)
Corporate administration		3.8		4.0		(0.2)
Business development		0.5		1.0		(0.5)
	$	104.5	$	77.6	$	26.9

Costs of Sales

Costs of sales were $28.0 million for the third quarter of 2016 compared with $22.4 million for the third quarter of 2015. The following table provides a breakdown of cost of sales incurred for the three months ended September 30, 2016 and 2015.

	Three months ended September 30,
(expressed in millions)	2016		2015		Variance
Cost of stream sales	$	24.0	$	19.0	$	5.0
Cost of prepaid ounces		1.8		1.7		0.1
Mineral production taxes		1.0		0.7		0.3
Oil & Gas operating costs		1.2		1.0		0.2
	$	28.0	$	22.4	$	5.6

The increase of $5.6 million is attributable to more stream ounces delivered pursuant to the various stream agreements in the third quarter of 2016 when compared to 2015.  The ongoing stream cost per ounces are either a fixed amount per ounce delivered (adjusted for inflation each year) or an amount based as a percentage of spot price of gold or silver. The Company was

15

delivered 87,422 GEOs under its stream agreements during the third quarter of 2016 compared to 50,008 GEOs delivered in the third quarter of 2015. 

Costs of Sales Reconciliation – Q3 2015 to Q3 2016

(expressed in millions)

Depletion and Depreciation

Depletion and depreciation totaled $72.9 million for the quarter compared to $49.7 million in 2015. The majority of the increase of $23.2 million is due to the depletion expense associated with Antamina and Antapaccay, two significant stream acquisitions completed by the Company in the last 12 months, of $12.4 million and $13.2 million, respectively.  In addition, the Company recorded $4.2 million in depletion for Karma for which deliveries started in the first quarter of 2016. These increases were partially offset by lower depletion on Candelaria due to lower expected production than in the third quarter of 2015, and Palmarejo as a result of the termination the original agreement.

Depletion Reconciliation – Q3 2015 to Q3 2016

(expressed in millions)

16

Gain or Loss on Sale of Gold Bullion

The Company recognized a gain on the sale of gold bullion of $0.7 million in the third quarter of 2016, compared to a loss of $0.5 million in the same quarter in 2015. Gold bullion relates to physical ounces of gold received as settlement from certain of the Company’s royalty interests.

Corporate Administration

Corporate administration expenses, representing 2.2% of revenue for the third quarter of 2016, decreased slightly, from $4.0 million to $3.8 million the same period in 2015.

	Three months ended September 30,
(expressed in millions)	2016		2015		Variance
Salaries and benefits	$	1.1	$	1.2	$	(0.1)
Professional fees		0.2		0.4		(0.2)
Office costs		0.2		0.2		—
Board of Directors cost		0.1		0.2		(0.1)
Share based compensation		1.3		1.3		—
Other		0.9		0.7		0.2
	$	3.8	$	4.0	$	(0.2)

Business Development Expenses

Business development expenses totaled $0.5 million compared to $1.0 million in the third quarter of 2015. Timing and amount of these costs typically vary depending upon the level of business development related activity, and the timing of completing transactions. Business development expenses related to completed transactions are capitalized to the relevant mineral interest asset following the closing of transactions.

Foreign Exchange and Other Income/Expenses

Foreign exchange losses and other income/expenses were $nil for the third quarter of 2016, compared to an expense of $1.2 million for the same quarter in 2015, reflecting relatively stable CAD/USD foreign exchange rates year-over-year. The following table provides a list of foreign exchange income and other income/expenses incurred for the three months ended September 30, 2016 and 2015.

	Three months ended September 30,
(expressed in millions)	2016		2015		Variance
Foreign exchange loss	$	(0.2)	$	(1.2)	$	1.0
Gain on sale of investments		0.2		—		0.2
	$	—	$	(1.2)	$	1.2

Foreign exchange gains and losses include foreign exchange movements related to cash and cash equivalents and investments in debt securities, such as treasury bills and intercompany loans, held in the parent company, which are denominated in either U.S. dollars or Mexican pesos. The parent company’s functional currency is the Canadian dollar. Under IFRS, all foreign exchange changes related to monetary assets denominated in a currency other than the functional currency are recorded in net income as opposed to other comprehensive income.

17

Finance Income and Finance Expenses

Finance income was $0.5 million (2015 - $1.3 million) for the quarter while finance expenses were $0.7 million (2015 - $0.6 million).

	Three months ended September 30,
(expressed in millions)	2016		2015		Variance
Finance Income
Interest	$	0.5	$	1.3	$	(0.8)
	$	0.5	$	1.3	$	(0.8)
Finance Expenses
Standby Charges	$	0.6	$	0.5	$	0.1
Amortization		0.1		0.1		—
	$	0.7	$	0.6	$	0.1

Finance income is earned on our cash equivalents and/or short-term investments. Interest income in the amount of $0.2 million was accrued from the Noront Resources Ltd. (“Noront”) loan during the third quarter of 2016.

Income Taxes

Franco-Nevada had an income tax expense of $12.9 million (2015 - $8.5 million) for the quarter comprised of a current income tax expense of $12.6 million (2015 - $7.4 million) and a deferred income tax expense of $0.3 million (2015 - $1.1 million). The reduction in income tax expense as a percentage of net income before tax for the three months ended September 30, 2016 decreased year-over-year as a result of a decrease in non-deductible expenses including amounts related to fluctuations in foreign exchange rates, recognition of deductible temporary differences related to unrealized losses on marketable securities, and other one-time adjustments.

Net Income

Net income for the quarter was $54.4 million, or $0.31 per share, compared to $15.2 million, or $0.10 per share, for the same period in 2015. Adjusted Net Income was $53.5 million, or $0.30 per share, compared to $19.4 million, or $0.12 per share, earned in the third quarter of 2015. The increase in net income and Adjusted Net Income was driven primarily by higher revenue due to the asset acquisitions completed in the fourth quarter of 2015 and first quarter of 2016.

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Quarterly Financial Information

Selected quarterly financial information1 from our financial statements is set out below:

	Q3			Q2			Q1			Q4			Q3			Q2			Q1			Q4
	2016			2016			2016			2015			2015			2015			2015			2014
Revenue	$	172.0		$	150.9		$	132.0		$	121.3		$	103.7		$	109.4		$	109.2		$	123.0
Costs and expenses2, 3		104.5			100.5			94.9			157.6			77.6			78.6			78.8			109.7
Operating income (loss)3		67.5			50.4			37.1			(36.3)			26.1			30.8			30.4			13.3
Other income (expenses)3		—			3.2			1.0			—			(2.4)			2.1			(2.2)			(1.9)
Income tax expense (recovery)		12.9			11.3			8.1			(4.9)			8.5			11.3			9.0			10.2
Net income (loss)		54.4			42.3			30.0			(31.4)			15.2			21.6			19.2			1.2
Basic earnings (loss) per share	$	0.31		$	0.24		$	0.18		$	(0.20)		$	0.10		$	0.14		$	0.12		$	0.00
Diluted earnings (loss) per share	$	0.30		$	0.24		$	0.18		$	(0.20)		$	0.10		$	0.14		$	0.12		$	(0.01)
Net cash provided by operating actvities3	$	121.6		$	103.5		$	124.0		$	84.9		$	73.0		$	72.8		$	83.6		$	94.5
Net cash used in investing activities3		(41.5)			(28.1)			(506.9)			(987.7)			(44.6)			(38.5)			(35.3)			(693.4)
Net cash provided by (used in) financing activities		(29.4)			(23.8)			405.4			445.2			(23.2)			(24.3)			(23.6)			(20.0)
Average Gold Price	$	1,335		$	1,259		$	1,181		$	1,104		$	1,124		$	1,193		$	1,219		$	1,200
GEOs3,4		123,065			112,787			106,621			106,312			85,637			83,040			85,081			92,774
Adjusted EBITDA3,4	$	142.2		$	120.3		$	104.4		$	93.9		$	77.5		$	82.1		$	83.3		$	95.7
Adjusted EBITDA3,4 per share	$	0.80		$	0.68		$	0.63		$	0.60		$	0.49		$	0.52		$	0.53		$	0.61
Margin3,4		82.7	%		79.7	%		79.1	%		77.4	%		74.7	%		75.1	%		76.3	%		77.8	%
Adjusted Net Income3,4	$	53.5		$	40.0		$	28.0		$	23.7		$	19.4		$	22.9		$	22.9		$	31.6
Adjusted Net Income3,4 per share	$	0.30		$	0.22		$	0.17		$	0.15		$	0.12		$	0.15		$	0.15		$	0.20

1 Sum of the quarters may not add up to yearly total due to rounding.

2 Includes impairment charges on royalty, stream and working interests.

3 In the third quarter of 2016, the Company adopted a change in accounting policy with respect to its classification of proceeds from sales of gold bullion in its statement of cash flows and statement of income and comprehensive income (loss). For further information, refer to Note 16 of the condensed interim consolidated statements for the three and nine months ended September 30, 2016. The Company’s non‑GAAP measures, as defined in pages 32-35 of this MD&A, were also adjusted accordingly to reflect gains/losses on sales of such gold bullion as an operating activity that is part of the Company’s underlying business. Comparative information presented above has been adjusted to conform to current presentation.

4 GEOs, Adjusted EBITDA, Margin and Adjusted Net Income are non-IFRS measures with no standardized meaning under IFRS. For further information and a detailed reconciliation, please refer to pages 32-35 of this MD&A.

OVERVIEW OF FINANCIAL PERFORMANCE – NINE MONTHS 2016 TO NINE MONTHS 2015

The prices of precious metals, oil and gas and the actual production from mineral and oil & gas assets are the largest factors in determining profitability and cash flow from operations for Franco-Nevada.

Average Commodity Prices and Exchange Rate

Nine Months Ended September 30,		2016		2015		Variance %
Gold1	($/oz)	$	1,258	$	1,179	6.7	%
Silver2	($/oz)		17.20		16.02	7.4	%
Platinum3	($/oz)		1,001		1,103	(9.3)	%
Palladium3	($/oz)		590		720	(18.1)	%
Edmonton Light	C$/bbl		50.22		59.14	(15.1)	%
Quality Differential	C$/bbl		(6.93)		(7.38)	(6.1)	%
Realized oil price	C$/bbl		43.29		51.76	(16.4)	%
CAD/USD exchange rate4			0.7574		0.7944	(4.7)	%

1 Based on London Bullion Market Association (“LBMA”) Gold Price PM Fix

2 Based on LBMA Silver Price

3 Based on London PM Fix

4 Based on Bank of Canada noon rates

Precious metals commodity prices have largely declined since 2011 and have only started to recover in 2016. During the first nine months of 2016, average gold prices traded between

19

$1,077/oz and $1,366/oz with an average price of $1,258/oz. This compares to an average gold price of $1,179/oz for the nine months ended September 30, 2015. 

Gold Equivalent Ounces and Revenue

Franco-Nevada continued to see significant growth in GEOs contributed with mineral assets contributing 342,473 GEOs in the first nine months of 2016, an increase of 35.0% over the first nine months of 2015.  Revenue for the period was $454.9 million compared with $322.3 million for the same period of 2015, an increase of 41.1% due to the increase in the number of GEOs contributed coupled with stronger average gold precious metal prices.

The following table outlines GEOs and revenue attributable to Franco-Nevada for the nine months ended September 30, 2016 and 2015 by commodity, geographical location and type of interest:

	Gold Equivalent Ounces1			Revenue (in millions)
For the nine months ended September 30,	2016	2015	Variance	2016		2015		Variance
Commodity
Precious Metals
Gold	247,604	211,721	35,883	$	313.2	$	249.5	$	63.7
Silver	68,487	13,315	55,172		86.6		15.8		70.8
PGM	21,347	21,812	(465)		29.1		25.4		3.7
Precious Metals - Total	337,438	246,848	90,590		428.9		290.7		138.2
Other Minerals	5,035	6,910	(1,875)		6.3		8.0		(1.7)
Oil & Gas					19.7		23.6		(3.9)
	342,473	253,758	88,715	$	454.9	$	322.3	$	132.6
Geography
United States	50,103	47,666	2,437	$	63.6	$	55.9	$	7.7
Canada	47,836	40,462	7,374		82.2		70.8		11.4
Latin America	183,329	106,561	76,768		231.7		126.1		105.6
Rest of World	61,205	59,069	2,136		77.4		69.5		7.9
	342,473	253,758	88,715	$	454.9	$	322.3	$	132.6
Type
Revenue-based	70,685	78,872	(8,187)	$	92.5	$	98.8	$	(6.3)
Streams	243,896	156,848	87,048		310.9		185.3		125.6
Profit-based	15,446	7,715	7,731		29.0		19.1		9.9
Other	12,446	10,323	2,123		22.5		19.1		3.4
	342,473	253,758	88,715	$	454.9	$	322.3	$	132.6

¹ For average commodity prices used in the calculation of GEOs, please refer to average commodity price tables on pages 9 and 19 of this MD&A.

GEOs and revenue from precious metals were earned from the following geographical locations:

	Gold Equivalent Ounces1			Revenue (in millions)
For the nine months ended September 30,	2016	2015	Variance	2016		2015		Variance
Geography for Precious Metals
Precious Metals
United States	49,794	47,228	2,566	$	63.1	$	55.5	$	7.6
Canada	44,919	38,333	6,586		59.0		44.7		14.3
Latin America	183,329	106,561	76,768		231.7		126.1		105.6
Rest of World	59,396	54,726	4,670		75.1		64.4		10.7
Precious Metals - Total	337,438	246,848	90,590	$	428.9	$	290.7	$	138.2
Other Minerals	5,035	6,910	(1,875)		6.3		8.0		(1.7)
Oil & Gas					19.7		23.6		(3.9)
	342,473	253,758	88,715	$	454.9	$	322.3	$	132.6

¹ For average commodity prices used in calculation of GEOs, please refer to average commodity price tables on pages 9 and 19 of this MD&A.

20

GEO Reconciliation – Nine Months 2015 to Nine Months 2016

GEOs earned from precious metal assets increased by 37% to 337,438 GEOs in the nine months ended September 30, 2016 from 246,848 GEOs in the same period in 2015. Revenue from precious metal assets was $428.9 million in the first nine months of 2016 compared with $290.7 million for the same period as 2015. The largest increase came from our Latin American assets.

Overall, GEOs and revenue increases are attributable to the following:

· The Company received 50,685 GEO deliveries from Antapaccay. This includes 654,000 silver ounces delivered and sold by the Company.  The asset was acquired in the first quarter of 2016.

· The Company received 49,654 GEO deliveries from Antamina for the first nine months of 2016.

· Karma, a stream asset which started deliveries of 1,250 fixed gold ounces per month in March 2016, has delivered 8,750 GEOs in the first nine months of 2016.

· Goldstrike delivered 15,608 GEOs in the first nine months, an increase of 3,624 GEOs compared to the same period in 2015. The increase in deliveries under the NPI more than offset lower deliveries from the NSR.

· The Company also benefited from Hemlo, which contributed a total of 4,323 GEOs, an increase of 2,831 GEOs, of which 2,599 are from the NPI, reflecting higher gold prices and stronger production.

· Sudbury also provided a total of 17,423 GEOs, an increment of 2,873 GEOs compared to the first nine months of 2015 as a result of higher production and prices across gold, platinum and palladium.

· The above significant increases in GEOs were partially offset by decreases in GEO deliveries compared to the first nine months of 2015 from the following properties: Candelaria (decrease of 13,298 GEOs) as expected according to mine plan; Bald Mountain (decrease of 3,369 GEOs); and Stillwater (decrease of 1,981 GEOs).

· Deliveries under the Palmarejo original agreement (a decrease of 9,591 GEOs) ended in July 2016, but will start under the new Guadalupe agreement.

21

· During the nine months ended September 30, 2016, 5,009,707 ounces of silver were delivered from Candelaria, Antapaccay, Antamina and Cerro San Pedro interests which were converted to 68,487 GEOs.

Other minerals generated 5,035 GEOs and $6.3 million in revenue.

Oil & Gas assets generated revenue of $19.7 million for the first nine months of 2016 (98% oil and 2% gas), compared to $23.6 million for 2015 (95% oil and 5% gas), a decrease of 16.5%. The decrease is due to lower average oil prices realized in 2016. Production for the nine months was 3.4% lower than for the same period in 2015.

Revenue from the Weyburn Unit for the period decreased to $15.7 million (2015 - $ 17.6 million) with $9.3 million earned from the NRI (2015 - $10.3 million), $5.4 million earned from the working interest (2015 - $6.1 million) and $1.0 million earned from the overriding royalties (2015 - $1.2 million). Revenue from the Weyburn NRI was lower due to the decrease in the average oil price. Actual realized price from the NRI was C$43.96/boe for the period, down 14.6% from the realized price of C$51.45/boe for the first nine months of 2015.

For the nine months ended September 30, 2016, precious metals revenue was 94% of total revenue compared to 90% in 2015.  In addition, the Company generated 83% of revenue from the Americas.

Year-To-Date Revenue By Commodity and Geography

(expressed in millions)

 

Costs and Expenses

Costs and expenses for nine months ended September 30, 2016 were $299.9 million compared to $234.9 million in the same period in 2015. The following table provides a list of the costs and expenses incurred for the nine months ended September 30, 2016 and 2015.

	Nine months ended September 30,
(expressed in millions)	2016		2015		Variance
Costs of sales	$	80.1	$	68.8	$	11.3
Depletion and depreciation		206.6		150.5		56.1
(Gain) loss on sale of gold bullion		(2.8)		0.5		(3.3)
Corporate administration		14.9		12.2		2.7
Business development		1.1		2.8		(1.7)
Subtotal	$	299.9	$	234.8	$	65.1
Impairment charges		—		0.1		(0.1)
	$	299.9	$	234.9	$	65.0

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Costs of Sales

Costs of sales totaled $80.1 million for the first nine months of 2016 compared with $68.8 million for the same period in 2015. The following table provides a breakdown of cost of sales incurred for the three months ended September 30, 2016 and 2015.

	Nine months ended September 30,
(expressed in millions)	2016		2015		Variance
Cost of stream sales	$	70.2	$	59.2	$	11.0
Cost of prepaid ounces		5.3		5.0		0.3
Production taxes		2.3		1.8		0.5
Oil & Gas operating costs		2.3		2.8		(0.5)
	$	80.1	$	68.8	$	11.3

The increase of $11.3 million is attributable to more stream ounces delivered pursuant to significant stream agreements entered into in the fourth quarter of 2016 and the first quarter of 2016.  The Company was delivered 243,896 GEOs under its stream agreements during the first nine months of 2016 compared to 156,848 GEOs delivered the first nine months of 2015.  Oil & Gas operating costs were lower due to production and cost efficiencies implemented by the operators.

Costs of Sales Reconciliation – Nine Months 2015 to Nine Months 2016

(expressed in millions)

23

Depletion and Depreciation

Depletion and depreciation totaled $206.6 million for the first nine months of 2016 compared to $150.5 million in 2015. The increase of $56.1 million is due in part to the Antamina acquisition ($32.6 million), the Antapaccay acquisition ($30.5 million), initial depletion for the Karma stream cost due to the initial deliveries received ($7.4 million), and Sudbury ($7.8 million).  These increases were partially offset by lower depletion on Candelaria and Bald Mountain due to lower production, Palmarejo due to termination of the original agreement, and on Oil & Gas assets due to the impact of a weaker Canadian dollar relative to the U.S. dollar.

Depletion Reconciliation – Nine Months 2015 to Nine Months 2016

(expressed in millions)

Gain or Loss on Sale of Gold Bullion

The Company recognized a gain on the sale of gold bullion of $2.8 million in the first nine months of 2016, compared to a loss of $0.5 million in the same period in 2015. Gold bullion relates to physical ounces of gold received as settlement from certain of the Company’s royalty interests.

Corporate Administration

Corporate administration expenses increased to $14.9 million in the first nine months of 2016, from $12.2 million in 2015. The increase is primarily due to higher board of directors’ costs as the deferred share units earned by board members, which are marked-to-market at every period-end, increased in value during the first nine months of 2016 reflecting the increase in the share price of the Company.

	Nine months ended September 30,
(expressed in millions)	2016		2015		Variance
Salaries and benefits	$	3.9	$	3.5	$	0.4
Professional fees		1.0		0.8		0.2
Office costs		0.6		0.6		—
Board of Directors costs		2.3		0.3		2.0
Share based compensation		3.7		4.1		(0.4)
Other		3.4		2.9		0.5
	$	14.9	$	12.2	$	2.7

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Business Development Expenses

Business development expenses for the nine months ended September 30, 2016 were $1.1 million, compared to $2.8 million in the same period in 2015. The year-over-year decrease reflects the capitalization of expenses to the mineral interest following the closing of transactions. Timing and amount of these costs typically vary based on the business development related activities and the timing of completing transactions.

Foreign Exchange and Other Income/Expenses

Foreign exchange losses and other income/expenses were an income of $4.2 million for 2016 and a loss of $2.4 million for 2015. The following table provides a breakdown of items included in foreign exchange income/losses and other expenses for the nine months ended September 30, 2016 and 2015.

	Nine months ended September 30,
(expressed in millions)	2016		2015		Variance
Foreign exchange loss	$	(0.3)	$	(3.0)	$	2.7
Mark-to-market loss on warrants		—		(0.3)		0.3
Gain on sale of investments		4.5		0.9		3.6
	$	4.2	$	(2.4)	$	6.6

Foreign exchange gains and losses include foreign exchange movements related to cash and cash equivalents and investments in debt securities, such as treasury bills and intercompany loans, held in the parent company, which are denominated in either U.S. dollars or Mexican pesos. The parent company’s functional currency is the Canadian dollar. Under IFRS, all foreign exchange changes related to monetary assets denominated in a currency other than the functional currency are recorded in net income as opposed to other comprehensive income.

Finance Income and Finance Expenses

Finance income was $2.6 million (2015 - $3.2 million) for the nine months ended September 30, 2016 while finance expenses were $2.8 million (2015 - $1.5 million).

	Nine months ended September 30,
(expressed in millions)	2016		2015		Variance
Finance Income
Interest	$	2.3	$	3.2	$	(0.9)
Finance Fees		0.3		—		0.3
	$	2.6	$	3.2	$	(0.6)
Finance Expenses
Standby Charges	$	1.6	$	1.2	$	0.4
Interest		0.8		—		0.8
Amortization		0.4		0.3		0.1
	$	2.8	$	1.5	$	1.3

Finance income is earned on our cash equivalents and/or short-term investments. Included in finance income is a fee earned on the additional financing option to True Gold Mining Inc. in relation to the Karma stream agreement. Interest income in the amount of $1.2 million has been accrued in 2016 from the Noront loan.

Finance expenses increased due to interest expense associated with the $460.0 million draw down of the credit facility in Q4 2015.  In addition to the $0.8 million interest expensed, $0.7 million was capitalized to the Cobre Panama stream interest project. The amortization expense relates to amortization of the initial set-up costs incurred with respect to the credit facility.

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Income Taxes

Franco-Nevada had an income tax expense of $32.3 million (2015 –$28.8 million) for the nine months ended September 30, 2016 comprised of a current income tax expense of $29.7 million (2015 - $20.8 million) and a deferred income tax expense of $2.6 million (2015 –$8.0 million). As noted above, the reduction in income tax expense as a percentage of net income before tax for the nine months ended September 30, 2016 decreased year-over-year reflecting fluctuations in foreign exchange rates, changes in unrealized losses on marketable securities, and other one-time adjustments.

Net Income

Net income in the first nine months of 2016 was $126.7 million, or $0.72 per share, compared to a net income of $56.0 million, or $0.36 per share, for the same period in 2015. Adjusted Net Income was $121.5 million, or $0.69 per share, compared to $65.2 million, or $0.42 per share, for 2015.  The increase in net income and Adjusted Net Income was driven primarily by higher revenue due to asset acquisitions completed in the fourth quarter of 2015 and the first quarter of 2016.

Financial Condition Review

Summary Balance Sheet and Key Financial Metrics

	As at		As at
	September 30,		December 31,
(expressed in millions, except ratios)	2016		2015
Total cash and cash equivalents	$	277.6	$	149.2
Current assets		384.8		274.7
Non-current assets		3,866.2		3,399.6
Total assets	$	4,251.0	$	3,674.3
Current liabilities		27.2		20.8
Non-current liabilities		35.7		490.5
Total liabilities	$	62.9	$	511.3
Total shareholders’ equity	$	4,188.1	$	3,163.0
Dividends paid (including DRIP)		117.1		129.0
Debt		—		457.3
Total common shares outstanding		178.2		156.9
Key Financial Ratios
Working Capital	$	357.6	$	253.9
Debt to equity		—		0.14:1

Balance Sheet Review

Total assets were $4,251.0 million at September 30, 2016 compared to $3,674.3 million at December 31, 2015. Our asset base is primarily comprised of non-current assets such as our royalty, stream and working interests, and current assets of cash and cash equivalents.  This reflects our business strategy of growing a diversified portfolio and ensuring cash is available for future acquisitions and dividends. Total liabilities at September 30, 2016 were $62.9 million including current and deferred income tax liabilities, a decrease compared to $511.3 million at December 31, 2015, reflecting the repayment of amounts the Company had borrowed under its credit facility.

26

Financial Position, Liquidity and Capital Resources

Cash flow generated for the three and nine months ended September 30, 2016 and 2015 was as follows:

	For the three months ended				For the nine months ended
	September 30,				September 30,
(expressed in millions)	2016		2015		2016		2015
Cash provided by operating activities1	$	121.6	$	73.0	$	349.1	$	229.4
Cash used in investing activities1		(41.5)		(44.6)		(576.5)		(118.4)
Cash provided by (used in) financing activities		(29.4)		(23.2)		352.2		(71.1)
Effect of exchange rate changes on cash and cash equivalents		1.1		(10.6)		3.6		(27.0)
Change in cash and cash equivalents	$	51.8	$	(5.4)	$	128.4	$	12.9

1. In the third quarter of 2016, the Company adopted a change in accounting policy with respect to its classification of proceeds from sales of gold bullion in its statement of cash flows. Comparative information, including information presented in Quarterly Financial Information on page 19 of this MD&A, has been adjusted to conform to current presentation. For further information, refer to Note 16 of the condensed consolidated interim financial statements for the three and nine months ended September 30, 2016.

Operating Cash Flow

Cash generated by operating activities was $121.6 million and $73.0 million for the three months ended September 30, 2016 and 2015, respectively. Cash generate by operating activities was $349.1 million and $229.4 million for the nine months ended September 30, 2016 and 2015, respectively. The increases are attributable to higher revenues generated since the Antamina and Antapaccay mineral stream acquisitions.

In the third quarter of 2016, the Company adopted a change in accounting policy with respect to its classification of proceeds from sales of gold bullion in its statement of cash flows. IAS 7, “Statement of Cash Flows”, defines operating activities as the principal revenue-producing activities of the entity and other activities that are not investing or financing activities. Management considers the acquisition of gold bullion, which is acquired as a result of the settlement of certain of the Company’s royalty agreements and not held as a long-term asset, to be an operating activity. As a result, the Company has reclassified the cash proceeds from the sale of such gold bullion, and any related gain or loss arising during the hold period, to be a component of operating activities. Management believes this classification to be more useful to financial statement users and, consequently, that this presentation results in reliable and more relevant information. Comparative information, including information presented in Quarterly Financial Information on page 19 of this MD&A, has been adjusted to conform to current presentation. For further information, refer to Note 16 of the condensed consolidated interim financial statements for the three and nine months ended September 30, 2016.

Investing Activities

Cash used in investing activities was $41.5 million for the quarter compared to $44.6 million in the same period of 2015. Investing activities in the third quarter of 2016 included the funding of the Cobre Panama stream of $40.0 million. At September 30, 2016, the Company has funded $77.7 million in 2016, for a total of $415.6 million of its total $1 billion commitment to the construction of Cobre Panama.  First Quantum increased its planned 2016 capital expenditure to $450 million from $390 million due to expedited stripping of the pit.  The development remains on track for a phased commissioning in 2018 and continued ramp-up in 2019.

Cash used in investing activities was $576.5 million for the nine months ended September 30, 2016 compared to $118.4 million in the same period of 2015. The increase was due to the acquisitions of interests in mineral properties in 2016 compared to 2015, in particular the Antapaccay acquisition of $500.0 million.

27

Financing Activities

Net cash used in financing activities was $29.4 million for the quarter compared to $23.2 million for 2015, reflecting payments for cash dividends.

Net cash provided by financing activities was $352.2 million for the first nine months of 2016 compared to a use of $71.1 million for 2015. The increase in cash provided in the first nine months of 2016 is attributable to the funds raised from the equity issuance of 19.2 million common shares resulting in $883.5 million net proceeds to the Company.  This inflow of funds was partially used to repay the $460.0 million then drawn on the credit facility.

Cash Resources and Liquidity

Our performance is impacted by foreign currency fluctuations of the Canadian dollar and Australian dollar relative to the U.S. dollar. The largest exposure is with respect to the Canadian/U.S. dollar exchange rate as we hold a significant amount of our assets in Canada and report our results in U.S. dollars.  The effect of this volatility in these currencies against the U.S. dollar impacts our corporate administration, business development expenses and depletion on mineral and oil & gas interests incurred in our Canadian and Australian entities due to their respective functional currencies. The Canadian dollar traded in a range of $0.7548 to $0.7828, closing the quarter at $0.7624, and the Australian dollar traded between $0.7460 and $0.7709, closing the quarter at $0.7634.  

As at September 30, 2016, our cash, cash equivalents and short-term investments totaled $277.6 million (December 31, 2015 - $168.0 million).  In addition, we held investments at September 30, 2016 with a combined value of $131.7 million (December 31, 2015 - $94.8 million), of which $99.6 million was held in publicly traded equity instruments (December 31, 2015 - $64.5 million).

Management’s objectives when managing capital are to:

(a) ensure the preservation and availability of capital by investing in low risk investments with high liquidity; and

(b) ensure that adequate levels of capital are maintained to meet requirements.

Franco-Nevada invests its excess funds in term deposits, treasury bills of the U.S. government, Canadian federal and provincial governments and high quality corporate bonds.  As at September 30, 2016, the majority of funds were held in cash deposits with several financial institutions. As at September 30, 2016, certain investments with terms to maturity upon acquisition of three months, or 92 days or less, and were classified as term deposits.

Our near-term cash requirements include funding of the Cobre Panama commitments, corporate administration costs, certain costs of operations, payment of dividends and income taxes directly related to the recognition of royalty and stream revenues.  As a royalty/stream company, there are limited requirements for capital expenditures other than for the acquisition of additional royalties/streams and working interests’ capital commitments.  Such acquisitions are entirely discretionary and will be consummated through the use of cash, as available, or through the issuance of common shares or other equity or debt securities or use of our credit facility. We believe that our current cash resources, our available credit facility and future cash flows will be sufficient to cover the cost of our commitments under the various stream agreements, administrative expenses, costs of operations and dividend payments for the foreseeable future.

28

Ore and Refined Gold Purchase Commitments

The following table summarizes Franco-Nevada’s commitments to pay for gold, silver and PGMs to which it has the contractual right pursuant to the associated precious metals agreements:

	Attributable Payable
	Production to be Purchased						Per Ounce Cash Payment 1,2
															Term of		Date of
Interest	Gold		Silver		PGM		Gold			Silver			PGM		Agreement3		Contract
Antamina	0	%	22.5	%4	0	%		n/a			5	%5		n/a	40 years		7-Oct-15
Candelaria	68	%6	68	%6	0	%	$	400		$	4.00			n/a	40 years		6-Oct-14
Cobre Panama	—	%7	—	%8	0	%	$	406		$	6.09			n/a	45 years		2-Nov-15
Karma	4.875	%9	0	%	0	%		20	%10		n/a			n/a	40 years		11-Aug-14
Palmarejo	50	%	0	%	0	%	$	400			n/a			n/a	Life-of-Mine	11	20-Jan-09
Guadalupe	50	%	0	%	0	%	$	800			n/a			n/a	40 years		2-Oct-14
Sabodala	6	%12	0	%	0	%		20	%13		n/a			n/a	40 years		12-Dec-13
MWS	25	%	0	%	0	%	$	400			n/a			n/a	40 years	14	2-Mar-12
Cooke 4	7	%	0	%	0	%	$	400			n/a			n/a	40 years		5-Nov-09
Sudbury15	50	%	0	%	50	%	$	400			n/a		$	400	40 years		15-Jul-08
Antapaccay	—	%16	—	%17	0	%		20	%18		20	%19		n/a	40 years		10-Feb-16

¹ Subject to an annual inflationary adjustment except for Antamina, Karma, Guadalupe, Sabodala and Antapaccay.

² Should the prevailing market price for gold be lower than this amount, the per ounce cash payment will be reduced to the prevailing market price, with the exception of Palmarejo.

³ Subject to successive extensions.

⁴ Subject to a fixed payability of 90%. Percentage decreases to 15.0% after 86,000,000 ounces of silver has been delivered under the agreement.

⁵ Purchase price is 5% of the average silver price at the time of delivery.

⁶ Percentage decreases to 40% after 720,000 ounces of gold and 12.0 million ounces of silver have been delivered under the agreement.

⁷ Gold deliveries are indexed to copper in concentrate produced from the project. 120 ounces of gold per every 1 million pounds of copper produced until 808,000 ounces of gold delivered. Thereafter 81 ounces of gold per 1 million pounds of copper produced to 1,716,188 ounces of gold delivered, thereafter 63.4% of the gold in concentrate.

⁸ Silver deliveries are indexed to copper in concentrate produced from the project. 1,376 ounces of silver per every 1 million pounds of copper produced until 9,842,000 ounces of silver delivered. Thereafter 1,776 ounces of silver per 1 million pounds of copper produced to 29,731,000 ounces of silver delivered, thereafter 62.1% of the silver

⁹ Gold deliveries are fixed at 15,000 ounces per annum until February 28, 2021. Thereafter, percentage is 4.875%.

¹⁰ Purchase price is 20% of the average gold price at the time of delivery.

¹¹ Agreement, which was capped at 400,000 ounces of gold, ended in July 2016. Deliveries will start under the Guadalupe agreement in the fourth quarter of 2016.

¹² Gold deliveries are fixed at 1,875 ounces per month until December 31, 2019. Thereafter, percentage is 6% of gold produced.

¹³ Purchase price is 20% of prevailing market price at the time of delivery.

¹⁴ Agreement is capped at 312,500 ounces of gold.

¹⁵ The Company is committed to purchase 50% of the precious metals contained in ore from the properties. Cash payment is based on gold equivalent ounces.

¹⁶ Gold deliveries are referenced to copper in concentrate shipped with 300 ounces of gold delivered for each 1,000 tonnes of copper in concentrate shipped, until 630,000 ounces of gold has been delivered. Thereafter, percentage is 30% of gold shipped.

¹⁷ Silver deliveries are referenced to copper in concentrate shipped with 4,700 ounces of silver delivered for each 1,000 tonnes of copper in concentrate shipped, until 10.0 million ounces of silver has been delivered. Thereafter, percentage is 30% of silver shipped.

¹⁸ Purchase price is 20% of the spot price of gold until 750,000 ounces of gold has been delivered, thereafter the purchase price is 30% of the spot price of gold.

¹⁹ Purchase price is 20% of the spot price of silver until 12.8 million ounces of silver has been delivered, thereafter the purchase price is 30% of the spot price of silver.

Cobre Panama Stream Agreement

The Company has funding commitments under the Cobre Panama stream agreement as described in the Guidance section above.

29

Capital Resources

As of November 7, 2016 an amount of $1.0 billion, or its Canadian dollar equivalent, is available under our unsecured credit facility.  Advances under the facility bear interest depending upon the currency of the advance and leverage ratio.  In 2015, Franco-Nevada increased its credit facility from $500.0 million to $1.0 billion and extended the maturity to November 12, 2020. As of November 7, 2016, U.S. and Canadian dollar advances under the facility would bear interest rates of 3.95% and 2.90%, respectively. We can also draw funds using LIBOR 30-day rates plus 120 basis points under our credit facility.

Standby fees of $1.6 million (2015 - $1.2 million), interest of $0.8 million (2015 - $Nil) and amortization of issuance costs of $0.4 million (2015 - $0.3 million) were incurred and paid for the nine months ended September 30, 2016.

As at November 7, 2016, there remains 6,510,333 warrants outstanding that have an exercise price of C$75.00 per warrant and an expiry date of June 16, 2017.

Critical Accounting Estimates

The preparation of consolidated financial statements in accordance with IFRS requires the Company to make judgments, estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Estimates and assumptions are continuously evaluated and are based on management’s best knowledge of the relevant facts and circumstances, having regard to previous experience. However, actual outcomes may differ from the amounts included in the consolidated financial statements.

Our significant accounting policies and estimates are disclosed in notes 2 and 3 of our most recent annual consolidated financial statements.

New Accounting Standards Issued But Not Yet Effective

IAS 12 Income Taxes

IAS 12, "Income taxes" ("IAS 12") provides guidance on the recognition of deferred tax assets. In January 2016, the International Accounting Standards board issued amendments to clarify the requirements for recognizing deferred tax assets on unrealized losses. The amendments clarify the accounting for deferred tax where an asset is measured at fair value and that fair value is below the asset’s tax base. They also clarify certain other aspects of accounting for deferred tax assets. The amendments are effective for annual periods beginning on or after January 1, 2017. The Company is currently assessing the impact of IAS 12 on the consolidated financial statements.

Outstanding Share Data

Franco-Nevada is authorized to issue an unlimited number of common and preferred shares.  A detailed description of the rights, privileges, restrictions and conditions attached to each class of authorized shares is included in our Annual Information Form for the year ended December 31, 2015, a copy of which can be found on SEDAR at www.sedar.com and in our 40-F, a copy of which can be found on EDGAR at www.sec.gov.

30

As of November 7, 2016, the number of common shares outstanding or issuable pursuant to other outstanding securities is as follows: 

Common Shares	Number
Outstanding	178,259,490
Issuable upon exercise of Franco-Nevada warrants1	6,510,333
Issuable upon exercise of Franco-Nevada options2	1,040,760
Issuable upon exercise of special warrant3	2,000,000
Issuable upon vesting of Franco-Nevada RSUs	154,013
Diluted common shares	187,964,596

¹ The warrants have an exercise price of C$75.00 per share and an expiry date of June 16, 2017.

² There were 1,040,760 stock options under our share compensation plan outstanding to directors, officers, employees and others with exercise prices ranging from C$15.20 to C$65.76 per share.

³ In connection with the transaction with Taseko Mines Limited, one special warrant was granted to Taseko which will be exchangeable into 2,000,000 purchase share warrants once Taseko’s New Prosperity project gets fully permitted and financed. Each purchase share warrant will entitle Taseko to purchase one Franco-Nevada common share at a price of C$75.00 per share before June 16, 2017. New Prosperity’s most recent permit application was denied in 2014.

Franco-Nevada has not issued any preferred shares.

Internal Control Over Financial Reporting and Disclosure Controls and Procedures

Our Chief Executive Officer and Chief Financial Officer are responsible for establishing and maintaining Franco-Nevada’s internal control over financial reporting and other financial disclosure and our disclosure controls and procedures.

Internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with IFRS.  Franco-Nevada’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of Franco-Nevada; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with IFRS, and that receipts and expenditures of Franco-Nevada are being made only in accordance with authorizations of management and directors of Franco-Nevada; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of Franco-Nevada’s assets that could have a material effect on Franco-Nevada’s financial statements. Internal control over other financial disclosure is a process designed to ensure that other financial information included in this MD&A, fairly represents in all material respects the financial condition, results of operations and cash flows of Franco-Nevada for the periods presented in this MD&A.

Franco-Nevada’s disclosure controls and procedures are designed to provide reasonable assurance that material information relating to Franco-Nevada, including its consolidated subsidiaries, is made known to management by others within those entities, particularly during the period in which this report is prepared and that information required to be disclosed by Franco-Nevada in its annual filings, interim filings or other reports filed or submitted by it under securities legislation is recorded, processed, summarized and reported within the time periods specified in securities legislation.

Due to its inherent limitations, internal control over financial reporting and disclosure may not prevent or detect all misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may change.

31

For the nine months ended September 30, 2016, there has been no change in Franco-Nevada’s internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, Franco-Nevada’s internal control over financial reporting.

Non-IFRS Financial Measures

Adjusted EBITDA and Adjusted EBITDA per share

Adjusted EBITDA and Adjusted EBITDA per share are non-IFRS financial measures, which exclude the following from net income and earnings per share (“EPS”):

· Income tax expense/recovery;

· Finance expenses;

· Finance income;

· Depletion and depreciation;

· Non-cash costs of sales;

· Impairment charges related to royalty, stream and working interests and investments;

· Gains/losses on the sale of investments; and

· Foreign exchange gains/losses and other income/expenses.

Management uses Adjusted EBITDA and Adjusted EBITDA per share to evaluate the underlying operating performance of the Company as a whole for the reporting periods presented, and to assist with the planning and forecasting of future operating results. Management believes that Adjusted EBITDA and Adjusted EBITDA per share allow investors and analysts to better evaluate the results of the underlying business of the Company. While the adjustments to net income and EPS in these measures include items that are both recurring and non-recurring, management believes that Adjusted EBITDA and Adjusted EBITDA per share are useful measures of the Company’s performance because foreign exchange, gains/losses on sale of investments, and impairment charges do not reflect the underlying operating performance of our business and are not necessarily indicative of future operating results. Adjusted EBITDA and Adjusted EBITDA per share are intended to provide additional information to investors and analysts, do not have any standardized meaning under IFRS and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS.

32

Reconciliation of Net Income to Adjusted EBITDA:

	Three months ended				Nine months ended
	September 30,				September 30,
(expressed in millions, except per share amounts)	2016		2015		2016		2015
Net Income (Loss)	$	54.4	$	15.2	$	126.7	$	56.0
Income tax expense (recovery)		12.9		8.5		32.3		28.8
Finance expenses		0.7		0.6		2.8		1.5
Finance income		(0.5)		(1.3)		(2.6)		(3.2)
Depletion and depreciation		72.9		49.7		206.6		150.5
Non-cash costs of sales		1.8		1.7		5.3		5.0
Impairment charges		—		—		—		0.1
Impairment of investments		—		1.9		—		1.9
Foreign exchange (gains)/losses and other (income)/expenses		—		1.2		(4.2)		2.3
Adjusted EBITDA	$	142.2	$	77.5	$	366.9	$	242.9
Basic Weighted Average Shares Outstanding		178.1		156.9		175.2		156.8
Basic EPS	$	0.31	$	0.10	$	0.72	$	0.36
Income tax expense (recovery)		0.07		0.05		0.18		0.18
Finance expenses		—		—		0.02		0.01
Finance income		—		(0.01)		(0.02)		(0.02)
Depletion and depreciation		0.41		0.32		1.18		0.96
Non-cash costs of sales		0.01		0.01		0.03		0.03
Impairment charges		—		—		—		—
Impairment of investments		—		0.01		—		0.01
Foreign exchange (gains)/losses and other (income)/expenses		—		0.01		(0.02)		0.02
Adjusted EBITDA per share	$	0.80	$	0.49	$	2.09	$	1.55

Margin

Margin is a non-IFRS financial measure which is defined by the Company as Adjusted EBITDA divided by revenue. Management uses Margin to evaluate the performance of the Company’s portfolio and we believe Margin provides a meaningful measure for investors and analysts to evaluate our overall ability to generate cash flow from our royalty, stream and working interests. Margin is intended to provide additional information, does not have any standardized definition under IFRS and should not be considered in isolation or as a substitute for a measure of performance in accordance with IFRS.

33

Reconciliation of Net Income to Margin: 

	Three months ended						Nine months ended
	September 30,						September 30,
(expressed in millions, except Margin)	2016			2015			2016			2015
Net Income (Loss)	$	54.4		$	15.2		$	126.7			56.0
Income tax expense (recovery)		12.9			8.5			32.3			28.8
Finance expenses		0.7			0.6			2.8			1.5
Finance income		(0.5)			(1.3)			(2.6)			(3.2)
Depletion and depreciation		72.9			49.7			206.6			150.5
Non-cash costs of sales		1.8			1.7			5.3			5.0
Impairment charges		—			—			—			0.1
Impairment of investments		—			1.9			—			1.9
Foreign exchange (gains)/losses and other (income)/expenses		—			1.2			(4.2)			2.3
Adjusted EBITDA	$	142.2		$	77.5		$	366.9		$	242.9
Revenue		172.0			103.7			454.9			322.3
Margin		82.7	%		74.7	%		80.7	%		75.4	%

Adjusted Net Income and Adjusted Net Income per share

Adjusted Net Income and Adjusted Net Income per share are non-IFRS financial measures, which exclude the following from net income and EPS:

· Foreign exchange gains/losses;

· Gains/losses on the sale of investments;

· Impairment charges related to royalty, stream and working interests and investments;

· Unusual non-recurring items;

· Impact of income taxes on these items.

Management uses Adjusted Net Income and Adjusted Net Income per share to evaluate the underlying operating performance of the Company as a whole for the reporting periods presented, and to assist with the planning and forecasting of future operating results. Management believes that Adjusted Net Income and Adjusted Net Income per share allow investors and analysts to better evaluate the results of the underlying business of the Company. While the adjustments to net income and EPS in these measures include items that are both recurring and non-recurring, management believes that Adjusted Net Income and Adjusted Net Income per share are useful measures of the Company’s performance because foreign exchange, gains/losses on sale of investments, and impairment charges do not reflect the underlying operating performance of our business and are not necessarily indicative of future operating results. Adjusted Net Income and Adjusted Net Income per share are intended to provide additional information to investors and analysts, do not have any standardized meaning under IFRS and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS.

34

Reconciliation of Net Income to Adjusted Net Income:

	Three months ended				Nine months ended
	September 30,				September 30,
(expressed in millions, except per share amounts)	2016		2015		2016		2015
Net Income (Loss)	$	54.4	$	15.2	$	126.7	$	56.0
Foreign exchange (gains)/losses		0.2		1.3		0.3		3.1
Mark-to-market change on derivatives		—		—		—		0.3
(Gain) on sale of investments		(0.2)		—		(4.5)		(0.9)
Impairment charges		—		—		—		0.1
Impairment of investments		—		1.9		—		1.9
Tax effect of adjustments		0.3		1.0		0.5		2.0
Other tax related adjustments:
Indexation adjustment		—		—		0.1		(0.4)
Valuation allowance		(1.2)		—		(1.9)		0.9
Impact of tax increases		—		—		0.4		2.2
Adjusted Net Income	$	53.5	$	19.4	$	121.5	$	65.2
Basic Weighted Average Shares Outstanding		178.1		156.9		175.2		156.8
Basic EPS	$	0.31	$	0.10	$	0.72	$	0.36
Foreign exchange (gains)/losses		—		0.01		—		0.02
Mark-to-market change on derivatives		—		—		—		—
(Gain) on sale of investments		—		—		(0.03)		(0.01)
Impairment charges		—		—		—		—
Impairment of investments		—		0.01		—		0.01
Tax effect of adjustments		—		—		0.01		0.02
Other tax related adjustments:
Indexation adjustment		—		—		—		—
Valuation allowance		(0.01)		—		(0.01)		0.01
Impact of tax increases		—		—		—		0.01
Adjusted Net Income per share	$	0.30	$	0.12	$	0.69	$	0.42

35

Cautionary Statement on Forward-Looking Information

This MD&A contains “forward-looking information” and “forward-looking statements” within the meaning of applicable Canadian securities laws and the United States Private Securities Litigation Reform Act of 1995, respectively, which may include, but are not limited to, statements with respect to future events or future performance, management’s expectations regarding Franco-Nevada’s growth, results of operations, estimated future revenues, carrying value of assets, future dividends and requirements for additional capital, mineral reserve and mineral resource estimates, production estimates, production costs and revenue, future demand for and prices of commodities, expected mining sequences, business prospects and opportunities. In addition, statements (including data in tables) relating to reserves and resources and gold equivalent ounces are forward-looking statements, as they involve implied assessment, based on certain estimates and assumptions, and no assurance can be given that the estimates and assumptions are accurate and that such reserves and resources and gold equivalent ounces (“GEOs”) will be realized. Such forward-looking statements reflect management’s current beliefs and are based on information currently available to management. Often, but not always, forward-looking statements can be identified by the use of words such as “plans”, “expects”, “is expected”, “budgets”, “scheduled”, “estimates”, “forecasts”, “predicts”, “projects”, “intends”, “targets”, “aims”, “anticipates” or “believes” or variations (including negative variations) of such words and phrases or may be identified by statements to the effect that certain actions “may”, “could”, “should”, “would”, “might” or “will” be taken, occur or be achieved. Forward-looking statements involve known and unknown risks, uncertainties and other factors, which may cause the actual results, performance or achievements of Franco-Nevada to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. A number of factors could cause actual events or results to differ materially from any forward-looking statements, including, without limitation: fluctuations in the prices of the primary commodities that drive royalty and stream revenue (gold, platinum group metals, copper, nickel, uranium, silver, iron-ore and oil & gas); fluctuations in the value of the Canadian and Australian dollar and any other currency in which revenue is generated, relative to the U.S. dollar; changes in national and local government legislation, including permitting and licensing regimes and taxation policies and the enforcement thereof; regulatory, political or economic developments in any of the countries where properties in which Franco-Nevada holds a royalty, stream or other interest are located or through which they are held; risks related to the operators of the properties in which Franco-Nevada holds a royalty, stream or other interest, including changes in the ownership and control of such operators; 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 on any of the properties in which Franco-Nevada holds a royalty, stream or other interest; whether or not the Company is determined to have “passive foreign investment company” (“PFIC”) status as defined in Section 1297 of the United States Internal Revenue Code of 1986, as amended; potential changes in Canadian tax treatment of offshore streams; 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; actual mineral content may differ from the reserves and resources contained in technical reports; rate and timing of production differences from resource estimates, other technical reports and mine plans; 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, terrorism, civil unrest or an outbreak of contagious diseases; and the integration of acquired assets. The forward-looking statements contained in this MD&A are based upon assumptions management believes to be

36

reasonable, including, without limitation: 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 material changes to existing tax treatment; no adverse development in respect of any significant property in which Franco-Nevada holds a royalty, stream or other interest; the 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. Investors are cautioned that forward-looking statements are not guarantees of future performance. Franco-Nevada cannot assure investors that actual results will be consistent with these forward-looking statements. Accordingly, investors should not place undue reliance on forward-looking statements due to the inherent uncertainty therein. For additional information with respect to risks, uncertainties and assumptions, please refer to Franco-Nevada’s most recent Annual Information Form filed with the Canadian securities regulatory authorities on www.sedar.com and Franco-Nevada’s most recent Annual Report filed on Form 40-F filed with the SEC on www.sec.gov. The forward-looking statements herein are made as of the date of this MD&A 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.

37

EX-99.3

Exhibit 99.3

FRANCO-NEVADA CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

(unaudited, in millions of U.S. dollars)

	September 30, 2016		December 31, 2015
ASSETS
Cash and cash equivalents (Note 4)	$	277.6	$	149.2
Short-term investments (Notes 5 & 8)		—		18.8
Receivables (Note 8)		72.4		65.1
Prepaid expenses and other (Notes 6 & 13)		34.8		41.6
Current assets		384.8		274.7
Royalty, stream and working interests, net		3,684.7		3,257.5
Investments (Notes 5 & 8)		131.7		94.8
Deferred income tax assets		23.3		16.1
Other assets (Notes 7 and 13)		26.5		31.2
Total assets	$	4,251.0	$	3,674.3
LIABILITIES
Accounts payable and accrued liabilities	$	19.5	$	18.0
Current income tax liabilities		7.7		2.8
Current liabilities		27.2		20.8
Debt (Note 13)		—		457.3
Deferred income tax liabilities		35.7		33.2
Total liabilities		62.9		511.3
SHAREHOLDERS’ EQUITY (Note 14)
Common shares		4,654.0		3,709.0
Contributed surplus		43.2		44.3
Deficit		(292.6)		(302.2)
Accumulated other comprehensive loss		(216.5)		(288.1)
Total shareholders’ equity		4,188.1		3,163.0
Total liabilities and shareholders’ equity	$	4,251.0	$	3,674.3
Subsequent events (Note 17)

The accompanying notes are an integral part of these condensed consolidated financial statements.

1

FRANCO-NEVADA CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (LOSS)

(unaudited, in millions of U.S. dollars, except per share amounts)

	For the three months ended				For the nine months ended
	September 30,				September 30,
	2016		2015		2016		2015
Revenue (Note 9)	$	172.0	$	103.7	$	454.9	$	322.3
Costs and expenses
Costs of sales (Note 10)		28.0		22.4		80.1		68.8
Depletion and depreciation		72.9		49.7		206.6		150.5
(Gain) loss on sale of gold bullion (Note 16(a))		(0.7)		0.5		(2.8)		0.5
Impairment charges		—		—		—		0.1
Corporate administration (Notes 11 & 14(c))		3.8		4.0		14.9		12.2
Business development		0.5		1.0		1.1		2.8
		104.5		77.6		299.9		234.9
Operating income		67.5		26.1		155.0		87.4
Foreign exchange gain (loss) and other income (expenses) (Notes 5 & 16(a))		—		(1.2)		4.2		(2.4)
Impairment of investments		—		(1.9)		—		(1.9)
Income before finance items and income taxes		67.5		23.0		159.2		83.1
Finance items
Finance income		0.5		1.3		2.6		3.2
Finance expenses (Note 13)		(0.7)		(0.6)		(2.8)		(1.5)
Net income before income taxes		67.3		23.7		159.0		84.8
Income tax expense (Note 12)		12.9		8.5		32.3		28.8
Net income	$	54.4	$	15.2	$	126.7	$	56.0
Other comprehensive income (loss):
Items that may be reclassified subsequently to profit and loss:
Unrealized gain (loss) in the market value of available-for-sale investments, net of income tax expense of $1.2 (2015 - income tax expense of $0.3), income tax expense of $1.7 (2015 - income tax recovery of $1.0) (Note 5)		8.1		0.1		34.7		(4.3)
Realized change in market value of available-for-sale investments		(0.2)		(1.9)		(4.5)		(2.8)
Currency translation adjustment		(4.1)		(67.3)		41.4		(141.8)
Other comprehensive income (loss)		3.8		(69.1)		71.6		(148.9)
Total comprehensive income (loss)	$	58.2	$	(53.9)	$	198.3	$	(92.9)
Basic earnings per share (Note 15)	$	0.31	$	0.10	$	0.72	$	0.36
Diluted earnings per share (Note 15)	$	0.30	$	0.10	$	0.72	$	0.36

The accompanying notes are an integral part of these condensed consolidated financial statements.

2

FRANCO-NEVADA CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited, in millions of U.S. dollars)

	For the nine months ended September 30,
	2016		2015
Cash flows from operating activities
Net income	$	126.7	$	56.0
Adjustments to reconcile net income to net cash provided by operating activities:
Depletion and depreciation		206.6		150.5
Proceeds from sale of gold bullion (Note 16(b))		59.4		36.6
Acquisition of gold bullion (Note 16(b))		(47.8)		(50.9)
Impairment charges		—		0.1
Impairment of investments		—		1.9
Other non-cash items		(0.8)		0.3
Gain on sale of investments (Note 5)		(4.5)		(0.9)
Non-cash costs of sales (Note 10)		5.3		5.0
Deferred income tax expense (Note 12)		2.6		8.0
Share-based payments (Note 14(c))		3.7		4.1
Unrealized foreign exchange loss		0.3		3.0
Mark-to-market on warrants (Note 5)		—		0.3
Operating cash flows before changes in non-cash working capital		351.5		214.0
Changes in non-cash working capital:
(Increase) decrease in receivables		(7.3)		22.1
Increase in prepaid expenses and other		(1.4)		(6.8)
Increase in current liabilities		6.3		0.1
Net cash provided by operating activities		349.1		229.4
Cash flows from investing activities
Proceeds from sale of investments		24.0		24.7
Acquisition of investments		(1.6)		(96.6)
Acquisition of royalty, stream and working interests		(597.1)		(44.2)
Acquisition of oil & gas well equipment		(1.7)		(2.3)
Acquisition of property and equipment		(0.1)		—
Net cash used in investing activities		(576.5)		(118.4)
Cash flows from financing activities
Net proceeds from issuance of common shares (Note 14(a))		883.5		—
Repayment of Credit Facility (Note 13)		(460.0)		—
Credit facility amendment costs		—		(1.2)
Payment of dividends (Note 14(b))		(87.4)		(70.4)
Proceeds from exercise of stock options (Note 14(a))		16.1		0.5
Net cash provided by (used in) financing activities		352.2		(71.1)
Effect of exchange rate changes on cash and cash equivalents		3.6		(27.0)
Net change in cash and cash equivalents		128.4		12.9
Cash and cash equivalents at beginning of period		149.2		592.5
Cash and cash equivalents at end of period	$	277.6	$	605.4
Supplemental cash flow information:
Cash paid for interest expense and loan standby fees	$	2.4	$	1.2
Income taxes paid	$	27.1	$	24.2

The accompanying notes are an integral part of these condensed consolidated financial statements.

3

FRANCO-NEVADA CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY

(unaudited, in millions of U.S. dollars)

					Accumulated
					other
	Share capital		Contributed		comprehensive
	(Note 14)		Surplus		income (loss)		Deficit		Total Equity
Balance at January 1, 2016	$	3,709.0	$	44.3	$	(288.1)	$	(302.2)	$	3,163.0
Net income		—		—		—		126.7		126.7
Other comprehensive income		—		—		71.6		—		71.6
Total comprehensive income		—		—		—		—		198.3
Equity offering		893.9		—		—		—		893.9
Exercise of stock options		21.4		(5.3)		—		—		16.1
Share-based payments		—		4.2		—		—		4.2
Dividend reinvestment plan		29.7		—		—		—		29.7
Dividends declared		—		—		—		(117.1)		(117.1)
Balance at September 30, 2016	$	4,654.0	$	43.2	$	(216.5)	$	(292.6)	$	4,188.1
Balance at January 1, 2015	$	3,656.6	$	45.5	$	(98.8)	$	(197.8)	$	3,405.5
Net income		—		—		—		56.0		56.0
Other comprehensive loss		—		—		(148.9)		—		(148.9)
Total comprehensive loss		—		—		—		—		(92.9)
Exercise of stock options		1.0		(0.5)		—		—		0.5
Share-based payments		—		4.1		—		—		4.1
Dividend reinvestment plan		26.1		—		—		—		26.1
Adjustment to finance costs		0.3		—		—		—		0.3
Dividends declared		—		—		—		(96.7)		(96.7)
Balance at September 30, 2015	$	3,684.0	$	49.1	$	(247.7)	$	(238.5)	$	3,246.9

The accompanying notes are an integral part of these condensed consolidated financial statements.

4

FRANCO-NEVADA CORPORATION

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2016 and 2015

(Unaudited, expressed in millions of U.S. dollars except share and per share amounts)

Note 1 – Corporate Information

Franco-Nevada Corporation (“Franco-Nevada” or the “Company”) is incorporated under the Canada Business Corporations Act. The Company is a gold-focused royalty and stream company with additional interests in silver, platinum group metals, oil & gas and other resource assets. The majority of revenues are generated from a diversified portfolio of properties in the United States, Canada, Mexico, Peru, Chile and Africa. The portfolio includes approximately 340 assets covering properties at various stages from production to early stage exploration.

The Company’s shares are listed on the Toronto Stock Exchange and the New York Stock Exchange and the Company is domiciled in Canada. The Company’s head and registered office is located at 199 Bay Street, Suite 2000, Toronto, Ontario, Canada.

Note 2 – Significant accounting policies

a) Basis of presentation

These unaudited condensed consolidated interim financial statements have been prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”) applicable to the preparation of condensed interim financial statements, including IAS 34 “Interim Financial Reporting”.  These condensed consolidated interim financial statements should be read in conjunction with the Company’s annual consolidated financial statements for the year ended December 31, 2015 and were prepared using the same accounting policies, method of computation and presentation as were applied in the annual consolidated financial statements for the year ended December 31, 2015, with the exception of the voluntary change in accounting policy as described in Note 16.  These condensed consolidated interim financial statements were authorized for issuance by the Board of Directors on November 7, 2016.

The financial information included herein reflects all adjustments, consisting only of normal recurring adjustments which, in the opinion of management, are necessary for a fair presentation of the results for the interim periods presented. The results of operations for the three and nine months ended September 30, 2016 are not necessarily indicative of the results to be expected for the full year. Seasonality is not considered to have a significant impact over the condensed consolidated interim financial statements. Taxes on income in the interim period have been accrued using the tax rates that would be applicable to expected total annual income. 

b) New Accounting Standards Issued But Not Yet Effective

IAS 12, “Income taxes” (“IAS 12”) provides guidance on the recognition of deferred tax assets. In January 2016 the International Accounting Standards board issued amendments to clarify the requirements for recognizing deferred tax assets on unrealized losses. The amendments clarify the accounting for deferred tax where an asset is measured at fair value and that fair value is below the asset’s tax base. They also clarify certain other aspects of accounting for deferred tax assets. The amendments are effective for annual periods beginning on or after January 1, 2017. The Company is currently assessing the impact of the amendment to IAS 12 on the consolidated financial statements.

Note 3 – Acquisitions

a) Castle Mountain

On June 16, 2016 Franco-Nevada and NewCastle Gold Ltd. completed the restructuring of Franco-Nevada’s existing royalties at the Castle Mountain gold project in California, USA, into a single 2.65% royalty covering a larger property for C$2.2 million in cash.

In addition the Company purchased 3,636,364 common shares of NewCastle and 1,818,182 common share purchase warrants for C$1.2 million.  Each common share purchase warrant is exercisable to acquire one common share at a price of C$0.64 for a period of five years, expiring on May 9,2021.

5

FRANCO-NEVADA CORPORATION

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2016 and 2015

(Unaudited, expressed in millions of U.S. dollars except share and per share amounts)

b) Antapaccay

On February 26, 2016, the Company acquired a $500.0 million precious metal stream from Glencore plc with reference to production from the Antapaccay mine located in Peru. Under the stream agreement, gold and silver deliveries are initially referenced to copper in concentrate shipped. The Company will receive 300 ounces of gold and 4,700 ounces of silver for each 1,000 tonnes of copper in concentrate shipped, until 630,000 ounces of gold and 10.0 million ounces of silver have been delivered. Thereafter, the Company will receive 30% of the gold and silver shipped. The Company will pay an on-going price of 20% of the spot price of gold and silver until 750,000 ounces of refined gold and 12.8 million ounces of refined silver have been delivered. Thereafter, the on-going price will increase to 30% of the spot price of gold and silver. 

All of the above acquisitions have been classified as asset acquisitions.

Note 4 – Cash and Cash Equivalents

As at September 30, 2016 and December 31, 2015, cash and cash equivalents were primarily held in interest-bearing deposits.

	At September 30, 2016		At December 31, 2015
Cash deposits	$	245.5	$	137.9
Term deposits		32.1		11.3
	$	277.6	$	149.2

Note 5 – Investments

	At September 30, 2016		At December 31, 2015
Short-term investments
Term deposits	$	—	$	18.8
Total short-term investments	$	—	$	18.8
Non-current investments
Equity investments	$	103.6	$	68.3
Warrants		0.5		0.1
Loan Receivable		27.6		26.4
Total Investments	$	131.7	$	94.8

Non-current investments

These investments comprise: (i) equity interests in various public and non-public entities which the Company acquired through the open market or through transactions; (ii) warrants in various publicly-listed companies; and (iii) a loan receivable from Noront acquired through the Ring of Fire transaction in 2015.  Equity investments have been designated as available-for-sale and, as a result, have been recorded at fair value. One equity investment of a non-public entity, having a carrying value of $4.0 million, has been designated as an equity investment held at cost as no reliable estimate of fair value can be determined because there is no publicly available information with which to estimate future cash flows, associated operating costs or capital expenditures and no alternative active market. Management does not intend to dispose of the investment and expects to recover the carrying value through the payment of dividends.

The loan receivable has been designated as loans and receivables under IFRS and is carried at amortized cost using the effective interest rate method.

6

FRANCO-NEVADA CORPORATION

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2016 and 2015

(Unaudited, expressed in millions of U.S. dollars except share and per share amounts)

The unrealized gains (losses) on available-for-sale investments recognized in other comprehensive income (loss) for the three and nine months ended September 30, 2016 and 2015 were as follows:

	For the three months ended				For the nine months ended
	September 30,				September 30,
	2016		2015		2016		2015
Mark-to market gain (loss) on equity investments	$	9.3	$	0.4	$	36.4	$	(5.3)
Deferred tax (expense) recovery in other comprehensive income (loss)		(1.2)		(0.3)		(1.7)		1.0
Unrealized gain (loss) on available-for-sale securities, net of tax		8.1		0.1		34.7		(4.3)
Reclassification for realized loss recognized in net income		(0.2)		(1.9)		(4.5)		(2.8)
	$	7.9	$	(1.8)	$	30.2	$	(7.1)

The increase in the market value of the warrants as at September 30, 2016 compared to their values at December 31, 2015 was primarily due to the acquisition of new warrants of $0.4 million, acquired in connection with the investment in NewCastle Gold Ltd. (Note 3(a)) during the second quarter of 2016 (2015 - $Nil).

Note 6 – Prepaid expenses and other

Prepaid expenses and other current assets comprise the following:

	At September 30, 2016		At December 31, 2015
Gold bullion	$	12.1	$	21.0
Prepaid gold		7.1		7.0
Prepaid expenses		15.0		13.6
Debt issue costs		0.6		—
	$	34.8	$	41.6

Note 7 – Other assets

Other assets comprise the following:

	At September 30, 2016		At December 31, 2015
Prepaid gold	$	8.8	$	14.1
Oil & gas well equipment, net		15.2		16.4
Furniture and fixtures, net		0.7		0.7
Debt issue costs		1.8		—
	$	26.5	$	31.2

Note 8 - Fair value measurements

There were no transfers between the levels of the fair value hierarchy in the three and nine months ended September 30, 2016.  There were also no changes made to any of the valuation techniques applied as of December 31, 2015.  Fair value is a market-based measurement, not an entity-specific measurement. For some assets and liabilities, observable market transactions or market information might be available. For other assets and liabilities, observable market transactions and market information might not be available. However, the objective of a fair value measurement in both cases is the same — to estimate the price at which an orderly transaction to sell the asset or to transfer the liability would take place between market participants at the measurement date under current market conditions (i.e. an exit price at the measurement date from the perspective of a market participant that holds the asset or owes the liability).

7

FRANCO-NEVADA CORPORATION

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2016 and 2015

(Unaudited, expressed in millions of U.S. dollars except share and per share amounts)

The fair value hierarchy establishes three levels to classify the inputs to valuation techniques used to measure fair value. Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities.

Level 2 inputs are quoted prices in markets that are not active, quoted prices for similar assets or liabilities in active markets, inputs other than quoted prices observable for the asset or liability (for example, interest rate and yield curves observable at commonly quoted intervals, forward pricing curves used to value currency and commodity contracts and volatility measurements used to value option contracts), or inputs that are derived principally from or corroborated by observable market data or other means.

Level 3 inputs are unobservable (supported by little or no market activity).

The fair value hierarchy gives the highest priority to Level 1 inputs and the lowest priority to Level 3 inputs.

Assets and Liabilities Measured at Fair Value on a Recurring Basis:

	Quoted Prices in		Significant Other		Significant
	Active Markets for		Observable		Unobservable
	Identical Assets		Inputs		Inputs		Aggregate
As at September 30, 2016	(Level 1)		(Level 2)		(Level 3)		Fair Value
Cash and cash equivalents	$	277.6	$	—	$	—	$	277.6
Receivables from provisional gold equivalent sales		—		12.3		—		12.3
Available-for-sale equity investments		99.6		—		—		99.6
Warrants		—		0.5		—		0.5
	$	377.2	$	12.8	$	—	$	390.0

	Quoted Prices in		Significant Other		Significant
	Active Markets for		Observable		Unobservable
	Identical Assets		Inputs		Inputs		Aggregate
As at December 31, 2015	(Level 1)		(Level 2)		(Level 3)		Fair Value
Cash and cash equivalents	$	149.2	$	—	$	—	$	149.2
Short-term investments		18.8		—		—		18.8
Receivables from provisional gold equivalent sales		—		9.3		—		9.3
Available-for-sale equity investments		64.5		—		—		64.5
Warrants		—		0.1		—		0.1
	$	232.5	$	9.4	$	—	$	241.9

Fair Values of Financial Assets and Liabilities

The fair values of the Company’s remaining financial assets and liabilities, which include receivables, loan receivables, accounts payable and accrued liabilities, approximate their carrying values due to their short-term nature and historically negligible credit losses and/or fair value of collateral. 

The Company has not offset financial assets with financial liabilities.

Assets Measured at Fair Value on a Non-Recurring Basis:

	Quoted Prices in				Significant
	Active Markets for		Significant Other		Unobservable
	Identical Assets		Observable Inputs		Inputs		Aggregate
As at December 31, 2015	(Level 1)		(Level 2)		(Level 3)		Fair Value
Royalty, stream and working interests	$	—	$	—	$	302.0	$	302.0
Oil well equipment		—		—		16.3		16.3
	$	—	$	—	$	318.3	$	318.3

8

FRANCO-NEVADA CORPORATION

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2016 and 2015

(Unaudited, expressed in millions of U.S. dollars except share and per share amounts)

The valuation techniques that are used to measure fair value are as follows:

a) Cash and cash equivalents

The fair values of cash and cash equivalents, including interest bearing deposits, are classified within Level 1 of the fair value hierarchy because they are valued using quoted market prices in active markets. 

b) Receivables

The fair values of receivables arising from gold and platinum group metal sales contracts that contain provisional pricing mechanisms are determined using the appropriate quoted forward prices from the exchange that is the principal active market for the particular metal. As such, these receivables are classified within Level 2 of the fair value hierarchy.

c) Investments

The fair values of publicly-traded investments, including available-for-sale equity investments, are determined based on a market approach reflecting the closing prices of each particular security at the statement of financial position date. The closing prices are quoted market prices obtained from the exchange that is the principal active market for the particular security, and therefore are classified within Level 1 of the fair value hierarchy.

The fair values of warrants are estimated using the Black-Scholes pricing model which requires the use of inputs that are observable in the market. As such, these investments are classified within Level 2 of the fair value hierarchy.  

d) Royalty, stream, working interests and oil well equipment

The fair values of royalty, stream, working interests and oil well equipment are determined primarily using a market approach using unobservable discounted future cash-flows and cash-flow and revenue multiples. As a result, the fair values are classified within Level 3 of the fair value hierarchy.

Note 9 – Revenue

Revenue is comprised of the following:

	For the three months ended				For the nine months ended
	September 30,				September 30,
	2016		2015		2016		2015
Mineral royalties	$	44.7	$	37.6	$	116.6	$	106.8
Mineral streams		116.3		56.2		310.9		185.3
Sale of prepaid gold		2.7		2.1		7.7		6.6
Oil & gas interests		8.3		7.8		19.7		23.6
Total	$	172.0	$	103.7	$	454.9	$	322.3

Note 10 – Costs of sales

Costs of sales are comprised of the following:

	For the three months ended				For the nine months ended
	September 30,				September 30,
	2016		2015		2016		2015
Per ounce stream purchase cost	$	24.0	$	19.0	$	70.2	$	59.2
Cost of prepaid ounces		1.8		1.7		5.3		5.0
Oil & gas operating costs		1.2		1.0		2.3		2.8
Mineral production taxes		1.0		0.7		2.3		1.8
Total	$	28.0	$	22.4	$	80.1	$	68.8

9

FRANCO-NEVADA CORPORATION

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2016 and 2015

(Unaudited, expressed in millions of U.S. dollars except share and per share amounts)

Note 11 – Related party disclosures

Key management personnel include the Board of Directors and executive management team. Compensation for key management personnel of the Company was as follows:

	For the three months ended				For the nine months ended
	September 30,				September 30,
	2016		2015		2016		2015
Short-term benefits1	$	0.6	$	0.8	$	2.0	$	2.5
Share-based payments2		1.0		1.1		4.8		2.9
Total	$	1.6	$	1.9	$	6.8	$	5.4

¹ Includes salary, benefits and short-term accrued incentives/other bonuses earned in the period.

² Represents the expense of stock options, restricted share units earned and mark-to-market charges on deferred share units during the period.

Note 12 - Income taxes

	For the three months ended				For the nine months ended
	September 30,				September 30,
	2016		2015		2016		2015
Current income tax expense	$	12.6	$	7.4	$	29.7	$	20.8
Deferred income tax expense		0.3		1.1		2.6		8.0
Total	$	12.9	$	8.5	$	32.3	$	28.8

Note 13 – Revolving term credit facility

The Company has a five year $1.0 billion unsecured revolving term credit facility (the “Credit Facility”). In 2015, the Company amended its Credit Facility by increasing the available credit from $500.0 million to $1.0 billion and extending the term to November 12, 2020.  Funds are drawn as 30-day LIBOR loans with the associated interest rate based on 30-day LIBOR rates plus 1.20%.

On March 7, 2016 and March 21, 2016, the Company repaid $230.0 million and $230.0 million, respectively, on the Credit Facility (2015 - $Nil).  Since March 21, 2016, no amount remains withdrawn under the Credit Facility and the entire $1.0 billion facility remains available.

The unamortized debt issue costs associated with the Credit Facility are included in prepaid expenses and other current assets in the amount of $0.6 million, and other assets in the amount of $1.8 million.

Note 14 - Shareholders’ equity

a) Common shares

The Company’s authorized capital stock includes an unlimited number of common shares (issued 178,248,426 common shares) having no par value and preferred shares issuable in series (issued - nil).

On February 19, 2016, the Company completed a bought deal financing with a syndicate of underwriters for 19.2 million common shares at $47.85 per common share. The net proceeds to the Company were $883.5 million after deducting share issue costs and expenses of $36.6 million.  The Company recorded a deferred tax asset of $10.4 million relating to the share issue costs.

During the the three and nine months ended September 30, 2016, the Company issued 16,525 common shares (2015 - Nil) and 534,459 common shares (2015 - 29,840 common shares), respectively, upon the exercise of stock options and warrants and the vesting of restricted share units for proceeds of $0.5 million (2015 - $Nil) and $16.1 million (2015 - $0.5 million), respectively. In addition, 132,127 common shares (2015 - 227,384) and 431,618 common shares (2015 - 563,277) were issued pursuant to the terms of the Company’s Dividend Reinvestment Plan (“DRIP”) for the three and nine months ended September 30, 2016.

10

FRANCO-NEVADA CORPORATION

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2016 and 2015

(Unaudited, expressed in millions of U.S. dollars except share and per share amounts)

b) Dividends

The Company declared dividends in the amount of $39.3 million (2015 - $33.1 million), or $0.22 per share (2015 - $0.21 per share) and $117.1 million (2015 - $96.7 million), or $0.65 per share (2015 - $0.62 per share), in the three and nine months ended September 30, 2016, respectively. The Company paid cash dividends in the amount of $29.9 million (2015 - $23.2 million) and $87.4 million (2015 - $70.4 million) and issued common shares pursuant to its DRIP valued at $9.4 million (2015 - $9.6 million) and $29.7 million (2015 - $26.1 million), in the three and nine months ended September 30, 2016, respectively. 

c) Stock-based payments

During the three and nine months ended September 30, 2016, an expense of $1.3 million (2015 - $1.4 million) and $3.7 million (2015 - $4.1 million) related to stock options and restricted share units has been included in corporate administration on the consolidated statements of income. The Company capitalitalized $0.1 million (2015 - $Nil) and $0.5 million (2015 - $Nil) to royalty, stream, and working interest, net, in the three and nine months ended September 30, 2016, respectively.  

Note 15 – Earnings per share (“EPS”)

	For the three months ended September 30, 2016
	Earnings		Shares	Per Share
	(Numerator)		(Denominator)	Amount
Basic EPS	$	54.4	178.1	$	0.31
Effect of dilutive securities		—	2.1		—
Diluted EPS	$	54.4	180.2	$	0.30

	For the three months ended September 30, 2015
	Earnings		Shares	Per Share
	(Numerator)		(Denominator)	Amount
Basic EPS	$	15.2	156.9	$	0.10
Effect of dilutive securities		—	0.9		—
Diluted EPS	$	15.2	157.8	$	0.10

	For the nine months ended September 30, 2016
	Earnings		Shares	Per Share
	(Numerator)		(Denominator)	Amount
Basic EPS	$	126.7	175.2	$	0.72
Effect of dilutive securities		—	1.3		—
Diluted EPS	$	126.7	176.5	$	0.72

	For the nine months ended September 30, 2015
	Earnings		Shares	Per Share
	(Numerator)		(Denominator)	Amount
Basic EPS	$	56.0	156.8	$	0.36
Effect of dilutive securities		—	1.0		—
Diluted EPS	$	56.0	157.8	$	0.36

11

FRANCO-NEVADA CORPORATION

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2016 and 2015

(Unaudited, expressed in millions of U.S. dollars except share and per share amounts)

For the the three and nine months ended September 30, 2016, no stock options (2015 - Nil) and no warrants (2015 - 6,510,769) were excluded in the computation of diluted EPS.  Restricted share units totaling 93,955  (2015 - 85,147) were excluded from the computation of diluted EPS for the three and nine months ended September 30, 2016 due to the performance criteria for the vesting of the RSUs not being measurable as at September 30, 2016.

Note 16 – Changes to comparative presentation

The condensed consolidated interim statement of cash flows for the nine months ended September 30, 2015 reflects the retrospective application of a voluntary change in accounting policy adopted in the third quarter of 2016 to classify, in the consolidated statements of cash flows, proceeds from the sale of gold bullion as an operating activity, rather than an investing activity. The change in accounting policy was accounted for and disclosed in accordance with IAS 8, “Accounting policies, changes in accounting estimates, and errors”.

IAS 7, “Statement of Cash Flows”, defines operating activities as the principal revenue-producing activities of the entity and other activities that are not investing or financing activities. Management considers the acquisition of gold bullion, which is acquired as a result of the settlement of certain of the Company’s royalty agreements and not held as a long-term asset, to be an operating activity. As a result, the Company has reclassified the cash proceeds from the sale of such gold bullion, and any related gain or loss arising during the holding period, to be a component of operating activities. Management believes this classification to be more useful to financial statement users and, consequently, that this presentation results in reliable and more relevant information. For consistency, management has also classified any gains or losses that arise on the sale of gold bullion within operating income in the condensed consolidated interim statements of income and comprehensive income (loss) for the three and nine months ended September 30, 2016, with a reclassification out of “Other income (expenses)” in the comparable periods. Neither of these changes had an impact on the consolidated statement of financial position for the current or prior periods.

a) The following tables outline the effects of this accounting policy change on the consolidated statements of income and comprehensive income (loss):

	For the three months ended September 30, 2015
	Previously			Current
	Reported		Reclassification	Presentation
Operating income	$	26.6	(0.5)	$	26.1
Foreign exchange gain (loss) and other income (expense)		(1.7)	0.5		(1.2)

	For the nine months ended September 30, 2015
	Previously			Current
	Reported		Reclassification	Presentation
Operating income	$	87.9	(0.5)	$	87.4
Foreign exchange gain (loss) and other income (expense)		(2.9)	0.5		(2.4)

b) The following table outlines the effects of this accounting policy change on the consolidated statement of cash flows:

	For the nine months ended September 30, 2015
	Previously			Current
	Reported		Reclassification	Presentation
Net cash provided by operating activities	$	192.8	36.6	$	229.4
Net cash used in investing activities		(81.8)	(36.6)		(118.4)

12

FRANCO-NEVADA CORPORATION

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2016 and 2015

(Unaudited, expressed in millions of U.S. dollars except share and per share amounts)

Note 17 – Subsequent events

a) In October 2016, Kirkland Lake Gold Inc. (“Kirkland Lake”) exercised its option to buyback 1% of an overlying 2.5% net smelter return (“NSR”) for an aggregate cash consideration of approximately $30.5 million ($36.0 million less royalty proceeds attributable to the buyback portion of the NSR paid to Franco-Nevada prior to the date of the buyback). The NSR, which covers all of Kirkland Lake’s properties (including the Macassa mine), was acquired in October 2013 for $50.0 million.

b) On October 27, 2016, Sibanye Gold Limited (“Sibanye”) announced it has ceased production at the Cooke 4 underground operation. Management considers the announcement of the cessation of production to be an indication that the carrying amount of the Cooke 4 mineral interest may not be recoverable. At as September 30, 2016, the carrying amount of the Cooke 4 interest amounted to $69.6 million. The Company will carry out an impairment analysis in the fourth quarter of 2016, and will recognize an impairment loss if the carrying amount exceeds the recoverable amount.

c) On November 7, 2016, Franco-Nevada agreed to acquire a $100.0 million package of royalty rights in the STACK shale play in Oklahoma’s Anadarko basin from a private party. The two primary operators of the lands are Newfield Exploration Company and Devon Energy Corporation. The package of lands provides an estimated royalty rate of 1.61%.

13

EX-99.4

Exhibit 99.4

FORM 52-109F2

CERTIFICATION OF INTERIM FILINGS

FULL CERTIFICATE

I, David Harquail, President and Chief Executive Officer of Franco-Nevada Corporation, certify the following:

1. Review: I have reviewed the interim financial report and interim MD&A (together, the “interim filings”) of Franco-Nevada Corporation (the “issuer”) for the interim period ended September 30, 2016.

2. No misrepresentations: Based on my knowledge, having exercised reasonable diligence, the interim filings do not contain any untrue statement of a material fact or omit to state a material fact required to be stated or that is necessary to make a statement not misleading in light of the circumstances under which it was made, with respect to the period covered by the interim filings.

3. Fair presentation: Based on my knowledge, having exercised reasonable diligence, the interim financial report together with the other financial information included in the interim filings fairly present in all material respects the financial condition, financial performance and cash flows of the issuer, as of the date of and for the periods presented in the interim filings.

4. Responsibility: The issuer’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (DC&P) and internal control over financial reporting (ICFR), as those terms are defined in National Instrument 52-109 Certification of Disclosure in Issuers’ Annual and Interim Filings, for the issuer.

5. Design: Subject to the limitations, if any, described in paragraphs 5.2 and 5.3, the issuer’s other certifying officer(s) and I have, as at the end of the period covered by the interim filings;

(a) designed DC&P, or caused it to be designed under our supervision, to provide reasonable assurance that

(i)  material information relating to the issuer is made known to us by others, particularly during the period in which the interim filings are being prepared; and

(ii) information required to be disclosed by the issuer in its annual filings, interim filings or other reports filed or submitted by it under securities legislation is recorded, processed, summarized and reported within the time periods specified in securities legislation; and

(b) designed ICFR, or caused it to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with the issuer’s GAAP.

5.1  Control framework:  The control framework the issuer’s other certifying officer and I used to design the issuer’s ICFR is Internal Control — Integrated Framework published by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”).

5.2 N/A

5.3 N/A

6. Reporting changes in ICFR: The issuer has disclosed in its interim MD&A any change in the issuer’s ICFR that occurred during the period beginning on July 1, 2016 and ended on September 30, 2016 that has materially affected, or is reasonably likely to materially affect, the issuer’s ICFR.

Date: November 7, 2016

(signed) David Harquail

David Harquail, Chief Executive Officer

Franco-Nevada Corporation

EX-99.5

Exhibit 99.5

FORM 52-109F2

CERTIFICATION OF INTERIM FILINGS

FULL CERTIFICATE

I, Sandip Rana, Chief Financial Officer of Franco-Nevada Corporation, certify the following:

1. Review: I have reviewed the interim financial report and interim MD&A (together, the “interim filings”) of Franco-Nevada Corporation (the “issuer”) for the interim period ended September 30, 2016.

2. No misrepresentations: Based on my knowledge, having exercised reasonable diligence, the interim filings do not contain any untrue statement of a material fact or omit to state a material fact required to be stated or that is necessary to make a statement not misleading in light of the circumstances under which it was made, with respect to the period covered by the interim filings.

3. Fair presentation: Based on my knowledge, having exercised reasonable diligence, the interim financial report together with the other financial information included in the interim filings fairly present in all material respects the financial condition, financial performance and cash flows of the issuer, as of the date of and for the periods presented in the interim filings.

4. Responsibility: The issuer’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (DC&P) and internal control over financial reporting (ICFR), as those terms are defined in National Instrument 52-109 Certification of Disclosure in Issuers’ Annual and Interim Filings, for the issuer.

5. Design: Subject to the limitations, if any, described in paragraphs 5.2 and 5.3, the issuer’s other certifying officer(s) and I have, as at the end of the period covered by the interim filings;

(a) designed DC&P, or caused it to be designed under our supervision, to provide reasonable assurance that

(i)  material information relating to the issuer is made known to us by others, particularly during the period in which the interim filings are being prepared; and

(ii) information required to be disclosed by the issuer in its annual filings, interim filings or other reports filed or submitted by it under securities legislation is recorded, processed, summarized and reported within the time periods specified in securities legislation; and

(b) designed ICFR, or caused it to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with the issuer’s GAAP.

5.1  Control framework: The control framework the issuer’s other certifying officer and I used to design the issuer’s ICFR is Internal Control — Integrated Framework published by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”).

5.2 N/A

5.3 N/A

6. Reporting changes in ICFR: The issuer has disclosed in its interim MD&A any change in the issuer’s ICFR that occurred during the period beginning on July 1, 2016 and ended on September 30, 2016 that has materially affected, or is reasonably likely to materially affect, the issuer’s ICFR.

Date: November 7, 2016

(signed) Sandip Rana

Sandip Rana, Chief Financial Officer

Franco-Nevada Corporation