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NEWS RELEASE: Franco-Nevada Announces US$ 550 Million Bought Deal Financing

http://www.franco-nevada.com/

TORONTO, February 10, 2016 – Franco-Nevada Corporation (“Franco-Nevada” or the “Company”) (TSX: FNV; NYSE: FNV) is pleased to announce that it has entered into an agreement with a syndicate of underwriters led by BMO Capital Markets, CIBC Capital Markets, RBC Capital Markets, and Scotiabank, pursuant to which they have agreed to purchase, on a bought deal basis, 11,500,000 common shares of Franco-Nevada at a price of US$47.85 per common share (the “Offering Price”), for aggregate gross proceeds to Franco-Nevada of approximately US$550 million (the “Offering”).

The underwriters will also have the option, exercisable in whole or in part, at any time for a period of 30 days following the closing of the Offering, to purchase up to an additional 1,725,000 common shares at the Offering Price to cover overallotments,if any. In the event that the option is exercised in its entirety, the aggregate gross proceeds of the Offering to Franco-Nevada will be approximately US$633 million.

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As pressure on BHP and Glencore grows, Australia cuts may signal nickel revival – by Melanie Burton (Reuters U.S. – February 10, 2016)

http://www.reuters.com/

MELBOURNE – Australian nickel miners are under increasing pressure to suspend or cut production, with investors eyeing key announcements in coming weeks after rival producers in New Caledonia won a pledge of support from France.

Benchmark prices of the steel-making material have fallen more than 45 percent since early 2015 to their lowest since 2003, and are seen grinding lower amid ample global stocks and slowing property growth in top consumer China.

Glencore and BHP Billiton, whose high-cost Murrin Murrin and Nickel West facilities are struggling to sustain operations, are both due to make production and profit reports in coming weeks. News of any output cuts could buoy prices.

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France says will help nickel industry in New Caledonia (Reuters U.S. – February 6, 2016)

http://www.reuters.com/

PARIS – Feb 6 France committed on Saturday to support the nickel sector in the Pacific territory of New Caledonia which has been severely hit by a slump in prices amid a mounting supply glut.

The main nickel players on the island are Eramet in which France is the second shareholder, miner and commodity trader Glencore and Brazil’s Vale, the world’s leading iron ore producer.

“Measures will be taken soon to consolidate all the sectors of mining and metallurgy,” a summary of a meeting between Prime Minister Manuel Valls and local representatives said on Saturday, without giving further details.

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S&P downgrades Glencore to just above junk – by Neil Hume (Financial Times – February 4, 2016)

http://www.ft.com/

Standard & Poor’s has downgraded Glencore’s debt to one notch above junk, citing the “challenging outlook” for the mining industry and increasing uncertainty about demand from China, the world’s biggest consumer of raw materials.

The rating agency said Glencore, which has been hard hit by the worst commodities rout in two decades, was now rated triple B minus, from triple B previously.

However, the company is not under review for a further downgrade unlike some of its peers including BHP Billiton. Moody’s, a rival rating agency, put through a similar downgrade of Glencore’s rating before Christmas.

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Signs point to uncertain future for PolyMet’s plans – by Marshall Helmberger (Timberjay.com – February 3, 2016)

http://www.timberjay.com/

The announcement late last Wednesday that Glencore had agreed to loan PolyMet another $11 million to pay for an update to its definitive feasibility study, was greeted by some as a piece of good news— that suggests the giant Swiss-based commodities broker still sees potential in the company’s NorthMet copper-nickel mine despite the recent collapse in metals prices.

Yet the terms of the loan, and the likely results of the feasibility update, point to a project that’s teetering on life support. While PolyMet saw a bump in its stock price in November with the release of the Final Environmental Impact Statement, investors have grown increasingly pessimistic ever since. As of this week, the company’s stock price had recovered slightly, to 89 cents, but is still down 20-percent since its post-FEIS peak.

Savvy investors can’t be unaware that major copper mines around the world are being shuttered by companies like Glencore, Rio Tinto, and others, in a desperate attempt to stem the financial bleeding and the production oversupply that has cut copper prices in half from their peaks in the late 2000s.

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Glencore gets Sudbury extension – by Carol Mulligan (Sudbury Star – January 28, 2016)

http://www.thesudburystar.com/

Sudbury’s second largest mining company, Glencore’s Sudbury Integrated Nickel Operations, has received approval to exceed emission standards while it upgrades its Falconbridge smelter.

Glencore officials are pleased with the Ministry of Environment and Climate Change’s recent decision to grant approval of its site-specific standard application for nickel at the smelter, said company spokeswoman Yonaniko Grenon.

“This approval allows us the required time to research, design and implement the technologies and processes required to further reduce nickel emissions from our Sudbury smelter facility while maintaining compliance with Ontario’s Air Quality Regulation,” she said.

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MOE gives Glencore 10 years to meet new nickel emission limits (CBC News Sudbury – January 26, 2016)

http://www.cbc.ca/news/canada/sudbury/

Laurentian University biologist says industry knew this regulation was coming 10 years ago

Another Sudbury smelter won’t have to meet stricter nickel emissions standards that are set to take effect this summer.

The Ministry of the Environment has given Glencore a 10-year extension to achieve compliance at its Sudbury smelter.

The company first took its emissions plan to the public in 2014, and MOE spokesperson Kate Jordan says the plan has been given a rigorous overview.

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Glencore Mine Sale Said to Draw Interest From Ex-Barrick CEO – by Jesse Riseborough and Dinesh Nair (Bloomberg News – January 14, 2016)

http://www.bloomberg.com/

Former Barrick Gold Corp. Chief Executive Officer Aaron Regent is among the remaining bidders for Glencore Plc’s Lomas Bayas copper mine in the Chilean desert of Atacama, according to people familiar with the sale.

Regent, who runs Magris Resources Inc., is competing against a small number of Chile-focused operators that have offered Glencore close to $1 billion for the mine, said two people who asked not to be identified as the sale is confidential. While the offering is at an advanced stage, Glencore may still decide to retain the asset, the people said.

A sale at such a price would be a boon for cash-strapped Glencore, which is seeking to trim its $30 billion debt load to $18 billion by the end of this year to appease investors concerned about waning commodity prices.

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Sudbury PoV: City’s politicians must work together – by Don MacDonald (Sudbury Star – January 13, 2016)

http://www.thesudburystar.com/

Don MacDonald is the editor of the Sudbury Star.

The thing about commodity prices is you can never be sure when they are going to drop and, when they do, how long it will take for them to recover.

Nationally, Canadians are seeing the effect of low oil prices on the Alberta and Canadian economies: thousands of jobs lost, alarming drops in capital spending, a decline in the value of the loonie and the inflation that causes, and billions in government revenues gone.

Sudbury is experiencing something similar as the prices of nickel, copper and other metals fall. This time last year, nickel was selling for close to $7 a pound U.S. Today, it’s selling for less than $3.80. Experts had predicted nickel would recover by the end of 2015, but that never happened.

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Goldman, JPMorgan, Glencore defeat U.S. lawsuit over zinc prices – by Jonathan Stempel (Reuters U.S. – January 7, 2016)

http://www.reuters.com/

A U.S. judge on Thursday dismissed a private antitrust lawsuit in which zinc purchasers accused affiliates of Goldman Sachs Group Inc (GS.N), JPMorgan Chase & Co (JPM.N) and Glencore Plc (GLEN.L) of conspiring to drive up the metal’s price.

In an 87-page decision, U.S. District Judge Katherine Forrest in Manhattan said purchasers failed to show that the defendants artificially inflated zinc prices by violating the Sherman Act, a federal antitrust law.

“It remains possible that shenanigans drove up the price of physical zinc,” Forrest wrote. “But, at long last, plaintiffs have not adequately alleged that such price movement was due to a plausible antitrust violation, as opposed to parallel, unilateral conduct beyond the reach of that statutory scheme.”

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Glencore and Anglo try to dig themselves out of trouble – by James Wilson and Neil Hume (Financial Times – December 22, 2015)

http://www.ft.com/

When Glencore presented its latest debt reduction plans earlier this month, almost 1,000 phone lines were needed to let anxious investors listen in to chief executive Ivan Glasenberg. They had good reason to dial in: amid the crunching commodities downturn, shares in the mining and trading group have fallen 70 per cent this year.

News that Glencore had met 85 per cent of the debt cut target it set itself in September led one of its largest institutional shareholders, Evy Hambro of BlackRock, to say: “Thank you for a . . . call that is actually delivering on its plan, unlike some of the other things we have seen recently.”

Listeners knew exactly what he meant. Just two days earlier, Anglo American, another laggard among large-cap mining groups, had delivered a strategy that was much less well received.

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Glencore shares jump on debt reduction, spending cuts – by Olivia Kumwenda-Mtambo (Reuters U.K. – December 10, 2015)

http://uk.reuters.com/

JOHANNESBURG – Glencore has increased its debt reduction target and deepened its capital spending cuts, stepping up its response to lower commodity prices and boosting its battered shares by 12 percent on Thursday.

The mining and trading company said it was targeting net debt of between $18 billion and $19 billion by the end of 2016, against a previous target of $20 billion.

Chief Executive Ivan Glasenberg, a veteran of commodities trading who took the company public only four years ago, had to bow to shareholder pressure in September by agreeing to cut Glencore’s debts and protect its credit rating.

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Commodities slump has Glencore exploring its options – by Ian McGugan (Globe and Mail – December 11, 2015)

http://www.theglobeandmail.com/

For sale: One multibillion-dollar agricultural trader. Slightly used. All reasonable offers considered.

Okay, that’s not exactly how Ivan Glasenberg, chief executive officer of embattled Glencore PLC, put things during his conference call with investors on Thursday. But it does capture the flavour of some of his remarks.

Like every other miner, Glencore is taking it on the chin as the great global commodity collapse continues to send prices spiralling lower. Shares in the Anglo-Swiss company are down 68 per cent this year.

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Glencore may shut Murrin Murrin nickel mine in WA – by Peter Ker (Sydney Morning Herald – December 11, 2015)

http://www.smh.com.au/

Swiss miner Glencore says it might close more Australian mines if weak commodity prices persist, with the Murrin Murrin nickel mine in Western Australia the next probable candidate.

Glencore has already shuttered 15 per cent of its Australian coal production and reduced production at its Queensland zinc mines, and the company’s chief executive Ivan Glasenberg has said he was committed to shutting more mines if they were not making money.

Mr Glasenberg said only two mines in Glencore’s global portfolio were not profitable at current prices and Murrin Murrin, which is held in Glencore subsidiary Minara Resources, was one of those.

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Glencore to accelerate debt cuts, capital expenditure – by David Stringer and Jesse Riseborough (Bloomberg News/Mineweb.com – December 10, 2015)

http://www.mineweb.com/

Glencore expanded its debt-reduction plan by pledging more asset sales and wider spending cuts as the Swiss miner and trader reacts to the deepening rout in commodities prices.

The company is seeking to trim its net debt to between $18 billion and $19 billion by the end of 2016, it said on Thursday in a statement. That’s less than the company said in September, when it promised to cut debt by about a third to about $20 billion. The shares rose the most in more than a month.

The world’s biggest miners are reeling from a slump in commodities prices that have cut profits and stretched balance sheets loaded with debt during a decade-long bull run.

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