Franco-Nevada to Acquire a 50% Gold Royalty Stream on the Palmarejo Project for US$80 million


    This press release contains forward-looking statements. Reference should
    be made to "Forward-looking Statements" at the end of this press release.
    Figures are in US$ unless otherwise noted.

    TORONTO, Jan. 21 /CNW/ - Franco-Nevada Corporation (TSX:FNV) has agreed
to acquire from Coeur d'Alene Mines Corporation. (NYSE:  CDE, TSX:CDM, ASX:CXC)
a 50% gold royalty stream in the Palmarejo silver and gold project in Mexico
for $80 million. Franco-Nevada has over $400 million in cash and other
facilities to fund this and additional investments.
    Franco-Nevada will receive an interest in 50% of the gold produced from
the Palmarejo property paid on the difference between the spot gold price and
$400 per ounce (increasing by 1% per annum after the fourth anniversary of
closing). The attributable gold ounces will be the greater of actual
production and a minimum amount. The minimum amount will be 50,000 ounces per
annum until payments have been made on 400,000 ounces. The $80 million
purchase price consists of a $75 million cash payment plus special warrants
which are exercisable into 316,436 Franco-Nevada common shares without
additional consideration when the project achieves certain time based
completion tests.
    Coeur in its press release today announcing the transaction and providing
details of a substantially expanded mine plan reported that: "The current
eleven-year mine plan expands the June 2008 feasibility study production
schedule by including the extraction of material that is currently classified
as mineral resources. With this updated mine plan, Palmarejo will have the
capacity to produce an average of approximately 120,000 ounces of gold and 9.0
million ounces of silver annually. Production this initial, start-up year is
expected to total 5.3 million ounces of silver and 72,000 ounces of gold.
Coeur is conducting engineering work to upgrade the current mineral resources
to mineral reserves beyond those reserves reported in the feasibility study
completed last June. Currently, drilling is focused on in-fill work at the
Palmarejo deposit as well as expanding the mineral resources at the nearby
Guadalupe deposit".
    "Franco-Nevada is very pleased to partner with Coeur, one of the world's
leading silver companies, and to bring to fruition a new growth asset for both
companies", commented David Harquail, CEO and President of Franco-Nevada. The
Palmarejo gold stream is expected to contribute significant growth to
Franco-Nevada's gold revenues beginning in the second half of this year. The
transaction increases the gold price leverage of its royalty portfolio,
provides exploration exposure in a prolific mining district and is expected to
be highly accretive to Franco-Nevada on all measures.
    The addition of the Palmarejo gold royalty stream just three weeks after
Franco-Nevada invested $103.5 million in the Gold Quarry royalty in Nevada is
expected to further cement Franco-Nevada's position as the leading gold
royalty company by gold revenues, gold EBITDA and number of gold royalty
interests. Management believes the two transactions are complementary. Gold
Quarry provides stable and secure gold revenue while Palmarejo provides
additional gold leverage and gold growth prospects. Franco-Nevada expects to
make additional gold royalty acquisitions this year.
    Management will host a conference call today, Wednesday the 21st of
January, 2009 at 10:00AM ET to review the transaction. A presentation to
accompany the conference call will be made available on the Company's website
at prior to the call. Analysts and interested investors
are invited to participate as follows:

    -   Conference Call: Local: 416-644-3416; Toll-Free: 1-800-732-9303;
        Conference call title: Franco-Nevada Gold Royalty Stream Acquisition

    -   Conference Call Replay: A recording of the conference call will be
        available until January 28, 2009 at the following numbers: Local:
        416-640-1917; Toll-Free: 1-877-289-8525; Pass code: 21295671 followed
        by the number sign

    -   Audiocast: A live audiocast of the conference call will be accessible
        on Franco-Nevada's website at

    Corporate Summary

    Franco-Nevada Corporation (TSX:FNV) is a gold focused royalty company
with additional interests in platinum metals, oil & gas and other assets. The
majority of revenues are generated from a diversified portfolio of high
quality royalty properties in the United States, Canada and Australia.
Franco-Nevada is the leading gold royalty company by gold revenues, gold
margins and number of gold royalty interests.

    Coeur d'Alene Mines Corporation (NYSE:  CDE, TSX:CDM, ASX:CXC) is one of
the world's leading silver companies and also a significant gold producer.
Coeur, which has no silver production hedged, is now producing silver at what
is considered to be the world's largest pure silver mine - San Bartolome in
Bolivia - and is nearing production at another world-leading silver mine -
Palmarejo in Mexico. The Company also operates underground mines in southern
Chile and Argentina and one surface mine in Nevada, and owns non-operating
interests in two low-cost mines in Australia. The Company also owns a major
gold project - Kensington in Alaska - and conducts exploration activities in
Argentina, Bolivia, Chile, and Mexico.

    Certain information contained in this Press Release, including our
expectation of the level of annual royalty ounces to be received from the
Palmarejo Gold Royalty Stream and the Gold Quarry Royalty and certain
pro-forma financial information including expectation of revenues from the
Palmarejo and the Gold Quarry royalties and their influence on future revenues
of Franco-Nevada and any information as to our strategy, plans or future
financial or operating performance and other statements that express
management's expectations or estimates of future performance, constitute
"forward-looking statements". All statements, other than statements of
historical fact, are forward-looking statements. The words "expects",
"expected", "estimated", "continue" and similar expressions identify
forward-looking statements. Forward-looking statements are necessarily based
upon a number of estimates and assumptions that, while considered reasonable
by management, are inherently subject to significant business, economic and
competitive uncertainties and contingencies. The Company cautions the reader
that such forward-looking statements involve known and unknown risks,
uncertainties and other factors that may cause the actual financial results,
performance or achievements of Franco-Nevada to be materially different from
the Company's estimated future results, performance or achievements expressed
or implied by those forward-looking statements and the forward-looking
statements are not guarantees of future performance. These risks,
uncertainties and other factors include, but are not limited to: fluctuations
in the prices of the primary commodities that drive the Company's royalty
revenue (gold, platinum group metals, copper, nickel, oil and gas);
fluctuations in the value of the Canadian and Australian dollar, and any other
currency in which the Company generates revenue, relative to the U.S. dollar;
changes in national and local government legislation, including taxation
policies; regulations and political or economic developments in any of the
countries where the company holds interests in mineral and oil and gas
properties; influence of macroeconomic developments; business opportunities
that become available to, or are pursued by us; reduced access to debt and
equity capital; litigation; title disputes related to our interests or any of
the properties underlying the Royalty Portfolio; operating or technical
difficulties on any of the properties underlying the Royalty Portfolio; risks
and hazards associated with the business of development and mining on any of
the properties underlying the Royalty Portfolio, including, but not limited to
unusual or unexpected operating difficulties and other natural disasters or
civil unrest. 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 underlying the
Royalty Portfolio 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 Royalty Portfolio, and any other factors that 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. Franco-Nevada cannot assure investors
that actual results will be consistent with these forward-looking statements
and readers are cautioned that forward-looking statements are not guarantees
of future performance. Accordingly, readers 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 also refer to the "Risk Factors" section of our most recent Annual
Information Form filed with the Canadian securities regulatory authorities on, as well as our Annual and Quarterly MD&A's. 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.

For further information:

For further information: David Harquail, CEO & President, (647)
477-2778; Paul Brink, SVP Business Development, (416) 306-6305

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