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Royal Gold Announces Positive Outlook Despite Forecasted Production Decline at the Pipeline Mining Complex
Royal Gold Announces Positive Outlook Despite Forecasted Production Decline at the Pipeline Mining Complex.
About this update from Red Lake Gold Inc
[{"type":"text","content":"\n\n\n\n\nDENVER, Feb. 27 /CNW/ -- ROYAL GOLD, INC.\n(Nasdaq: RGLD; TSX: RGL), the leading precious metals royalty company,\nannounced that, despite the recently forecasted decline in calendar 2006\nproduction at the Pipeline Mining Complex, Royal Gold expects its fiscal 2006\nrevenue and free cash flow to exceed revenue and free cash flow for fiscal\n2005, assuming current gold and other metal prices are maintained throughout\nfiscal 2006.\nManagement has closely monitored Barrick Gold Corporation's (\"Barrick\")\nrecent public announcements, including commentary forecasting a 60%\nyear-over-year decline in production at Placer Dome's Cortez property, which\nincludes the Pipeline Mining Complex. Pipeline has been an important\ncontributor to Royal Gold's revenues in the past, representing nearly 85% of\nthe Company's revenues in fiscal 2005.\nCurrent metal prices and price-related royalty rate increases in Royal\nGold's various sliding-scale royalties will partially offset year-over-year\nproduction declines at the Pipeline Mining Complex in the near term.\nMoreover, Royal Gold has invested significantly in adding to and diversifying\nthe Company's royalty portfolio to reduce the impact of such a decline, as the\nPipeline Mining Complex matures and production moves into new areas of the\nproject that may have lower grades or may not be covered by our royalties.\nStanley Dempsey, Chairman and CEO, stated, \"Our focus over the past few\nyears has been to build our royalty portfolio and lessen our reliance on a\nsingle source of royalty revenue. We have succeeded in adding several\nsignificant new royalties, including three new properties in late calendar\n2005. Despite the smaller revenue contribution from the Pipeline Mining\nComplex, assuming its production is reduced by the forecasted 60% in calendar\n2006 compared to calendar 2005, we still expect to grow our revenue year-over-\nyear in fiscal 2006.\"\n\nPipeline Mining Complex Royalties\nRoyal Gold's royalties at the Pipeline Mining Complex are on the Pipeline,\nSouth Pipeline, GAP, and Crossroads deposits. They do not extend to Cortez\nHills. Production on Royal Gold's ground will reflect Barrick's timing of\nmining of stages 8 and 9 at the Pipeline/South Pipeline pit, and the timing of\ndevelopment of GAP and Crossroads. The Pipeline Mining Complex will continue\nto be a s...