Franco-Nevada Corp "Cobre Panama Audit: Update encouraging" (Buy) Major

Research evidence excerpt

Franco-Nevada Corp "Cobre Panama Audit: Update encouraging" (Buy) Major

drainage tunnel and decant systems verified on site; no structural deficiencies

identified at this stage; pipelines (concentrate, water, diesel) - pressure control

systems, isolation valves, cathodic protection and monitoring systems are in place

Risks are considered managed within design parameters

5. Geology, resources, and reserves

The auditor reviews processes and controls, not reserve re-estimation

Observations include:

Strong geological database, but restricted access due to confidentiality

Small number of drill-core boxes left exposed during shutdown (minor issue)

Some data density gaps, particularly density measurements in certain deposits

These do not invalidate reserves, but introduce incremental technical risk that could

matter in future reserve audits or re-certifications

Reported Probable + Proven reserves (2023): ~2.77 billion tonnes at ~0.38% Cu

Grade broadly stable over time; Gradual depletion consistent with mining history

No audit finding contradicts the existing economic understanding of the asset

6. Environmental and future liability risk

Environmental risks and future liabilities are identified conceptually, but:

Not yet quantified

Not ranked or monetised

These will be central to the final report, not this interim update.

Valuation: Buy rated, $310/sh unchanged

We base our price target for FNV on 20x 2028E EV/EBITDA; below 5yr average of 22x

and slightly above the lower end of the standard deviation range, reflecting uncertainty

surrounding the timing of the restart of Cobre Panama (UBSe 2H26). Our PT implies

~40% upside but our view is this remains conservative as: (1) target multiple is below

historical average; (2) 2027 does not capture 'normalised production at CP; (3) our