Royal Gold, Inc. · NASDAQ:RGLD
Royal Gold — Denver Gold Forum September 2008
49 slides from Royal Gold's conference presentation, September 2008
Slide 1: Denver Gold Forum
Denver Gold Forum September 2008
Slide 2: Cautionary Statement
Cautionary Statement Under the Private Securities Litigation This presentation contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements involve known and unknown risks, uncertainties and other factors that
Slide 3: Presentation Agenda
Presentation Agenda Strong track record of growth Barrick transaction Royalty portfolio Restructuring of Cortez royalties Key pro forma asset review
Slide 4: Strong Track Record of Growth
Strong Track Record of Growth
Slide 5: Consistent Financial Performance
Consistent Financial Performance Gross Financial Results Per Share Financial Results $70 Net Income Free Cash Flow 1 Royalty Revenue 2.50 Net Income Free Cash Flow 1 Royalty Revenue 2.25 $60 2.00 $50 1.75 ($ in millions) ($ per share) $40 1.50 1.25 $30 1.00 $20 0.75 0.50 $10 0.25 2004 2005 2006 2007
Slide 6: Reserve and Resource Growth
Reserve and Resource Growth 1,2 Copper B lbs Gold Silver 9 8.1 M oz M oz 6.9 7 110 2,500 5 3.0 2.6 103 3 0.8 100 1 ’04 ’05 ’06 ’07 Pro 2,053 2,057 Forma 3 90 2,000 Zinc 80 40 B lbs 33.7 37.3 80 1,790 30 27.5 70 67 20 1,500 10 60 ’04 ’05 ’06 ’07 Pro Forma 3 50 Lead 1,000 12 B lbs 10.9 10.8 11.0 40 10
Slide 7: Asset Growth – Portfolio (as of 12/31/03)
Asset Growth – Portfolio (as of 12/31/03)
Slide 8: Royalty Transactions: Investment ($ Millions)
Royalty Transactions Barrick Royalties 500 El Chanate & Marigold 450 Benso 400 Investment ($ Millions) Battle Mountain 350 Pascua-Lama 300 Peñasquito 250 Gold Hill Taparko 200 Mulatos 150 Robinson 100 Troy 50 2004 2005 2006 2007 2008 Total Investment of $452M 1 1 Includes Barrick royalty transaction
Slide 9: Asset Growth – Pro Forma Portfolio (as of 8/31/08)
Asset Growth – Pro Forma Portfolio (as of 8/31/08) 1 Acquired: 15 producing royalties 7 development properties 20 evaluation projects 51 exploration projects 2 1 Includes Barrick royalty transaction scheduled to close on October 1, 2008 2 Not shown on map
Slide 10: Distribution of Revenue by Royalty
Distribution of Revenue by Royalty 2005A 2006A 2007A 2008A 2009E 1 Fiscal Years Ending June 30 Pipeline SJ Claims Leeville Troy Mine Martha Bald Mountain Robinson Taparko Mulatos Peñasquito Gold Hill Dolores Williams El Limon Don Mario El Chanate Benso Barrick Royalties 1 Assumes nine months of prod
Slide 11: Barrick Transaction
fi B ROVALGOLDING The Leading Precious Metal Royatty Company = Barrick Transaction
Slide 12: Overview of Barrick Transaction
Overview of Barrick Transaction Acquisition of Barrick Gold’s royalty portfolio by Royal Gold Royal Gold consideration $150M net cash Pipeline Mining Complex Royalty restructuring Royal Gold Net $150M GSR2, GSR3 & NVR1 77 Royalties Cash Royalty Restructuring Barrick Gold Closing scheduled for Octobe
Slide 13: Rationale for Transaction
Rationale for Transaction Immediately accretive on all key financial measures Unlocks Crossroads deposit at Cortez Expands and diversifies Royal Gold’s royalty portfolio Provides immediate royalty revenue Enhances pipeline of royalty projects in development Provides significant option value through
Slide 14: Barrick Royalty Portfolio
Barrick Royalty Portfolio One of the largest portfolios of royalties Collection of royalties assembled by Barrick and numerous corporate predecessors Includes royalty interests in 77 properties 59 precious metal properties 3 producing 2 development 15 evaluation 39 exploration 18 base metal and pota
Slide 15: Pro Forma Royalty Revenues
Pro Forma Royalty Revenues 120 100 80 $ (millions) 60 40 20 2005 1 2006 1 2007 1 Q1 2008 Annualized 2 Barrick Royalty Revenue Royal Gold Royalty Revenue 1 Royal Gold actual revenue for CY 2005, 2006 and 2007 combined with estimated Barrick royalty portfolio revenue for CY 2005, 2006 and 2007, respec
Slide 16: Combined Revenue by Commodity
Combined Revenue by Commodity Royal Gold will maintain precious metal focus 1 Barrick 2 Royal Royal Gold Gold -- $54M $54M1 Barrick Portfolio Portfolio -- $12M $12M2 Pro Pro Forma Forma -- $66M $66M 75% Total 44% Total 70% Total Precious Precious Precious Metals Metals Metals 25% Base 56% Base 30% B
Slide 17: Accretive Transaction – Relative Contribution
Accretive Transaction – Relative Contribution Market Value 1 87% 13% CY 2007 Revenue 2 82% 18% Additional Mineralized Material 80% 20% Gold Equiv. Ozs 3,4,5 PP Reserves Gold Equiv. Ozs 3,4,5 59% 41% Producing and Development 66% 34% Properties Exploration and Evaluation Properties 30% 70% 0% 20% 40%
Slide 18: Restructuring of Cortez
fi ROVALGOLDING The Leading Precious Metal Royatty Company Restructuring of Cortez
Slide 19: Cortez Crossroads Rationalization: Current Royalty Structure
Cortez Crossroads Rationalization Current Royalty Structure Restructuring Crossroads royalties PRICE OF GOLD GSR1 GSR2 Unlocks value for Barrick and Royal Gold Below $210 0.40% 0.72% Should accelerate Crossroads development schedule $210 - $229.99 0.50% 0.90% $230 - $249.99 0.75% 1.35% Royalty consi
Slide 20: Cortez Crossroads Rationalization: Future Royalty Structure
Cortez Crossroads Rationalization Future Royalty Structure Restructuring Crossroads royalties PRICE OF GOLD GSR1 and 2 Unlocks value for Barrick and Royal Gold Below $210 0.40% Should accelerate Crossroads development schedule $210 - $229.99 0.50% $230 - $249.99 0.75% Royalty consideration $250 - $2
Slide 21: Current Royalty Interest
Ik ROYAL GOL] ING The Leading Precious Metals Royalty Company Current Royalty Interest
Slide 22: GSR2 Royalty Restructured
GSR2 Royalty Restructured 1 1 Effectively eliminates GSR2 and expands GSR1 footprint
Slide 23: GSR3 Royalty Restructured
ROYALGOLD ING The Leading Precious Metal Royatty Company GSR3 Royalty Restructured
Slide 24: NVR1 Royalty Restructured
Ip ROVALGOLDING The Leading Precious Metal Royatty Company NVR1 Royalty Restructured =seemse= Crossroads
Slide 25: Restructured Royalty Interests at Cortez
Restructured Royalty Interests at Cortez (Pipeline Mining Complex)
Slide 26: Key Pro Forma Asset Review
if B ROVALGOLDING The Leading Precious Metal Royatty Company = Key Pro Forma Asset Review
Slide 27: Core Producing Properties
Core Producing Properties Cortez (Pipeline Mining Leeville Mining Complex) Robinson Taparko Complex Barrick Quadra High River Newmont Est. CY 2008 Production 367,000 oz (Au) 115,000 oz (Au) 91,000 oz (Au) 1 415,000 oz (Au) 150M lbs (Cu) FY’08 Revenue $25.1M $16.6M $7.4M $5.6M Reserves 1.9M oz (Au) 0
Slide 28: Core Producing Properties
Core Producing Properties Goldstrike Siguiri 1 (SJ Claims) Mulatos 1,2 Mt. Goode 1 AngloGold Ashanti Barrick Alamos Gold Xstrata Est. CY 2008 Production 358,000 oz (Au) 3 792,000 oz (Au) 120,000 oz (Au) 4 FY’08 Revenue $5.2M 5,6 $5.1M $5.0M 7 $1.9M 5 Reserves 2.6M oz (Au) 8 7.0M oz (Au) 1.7M oz (Au)
Slide 29: Taparko – Status
Taparko – Status Investment: $35 million Royalty revenue received (as of 6/30/08): $7.4M Operational issues: Grade is meeting expectation Recovery greater than 90% Mill availability ~ 55% Production interrupted Royal Gold’s security
Slide 30: Taparko – Status
Taparko – Status Investment: $35 million Royalty revenue received (as of 6/30/08): $7.4M Operational issues: Grade is meeting expectation Recovery greater than 90% Mill availability ~ 55% Production interrupted Royal Gold’s security
Slide 31: Taparko – Status
Taparko – Status Investment: $35 million Royalty revenue received (as of 6/30/08): $7.4M Operational issues: Grade is meeting expectation Recovery greater than 90% Mill availability ~ 55% Production interrupted Royal Gold’s security
Slide 32: Core Development and Evaluation Properties
Core Development and Evaluation Properties Peñasquito 1 Dolores Pascua-Lama Goldcorp Minefinders Barrick Est. CY 2008 Production 67,000 oz (Au) 10-15,000 oz (Au) 2.2M oz (Ag) 350-375,000 oz (Ag) - Reserves 13.1M oz (Au) 2.4M oz (Au) 14.6M oz (Au)2 863.9M oz (Ag) 126.6M oz (Ag) Additional 13.6M oz (A
Slide 33: Core Development and Evaluation Properties
Core Development and Evaluation Properties Crossroads Malartic 1,2 Holt-Holloway 1,3 Barrick Osisko St. Andrew Goldfields Est. CY 2008 Production - - - Reserves - - 0.5M oz (Au) 4 Additional 1.1M oz (Au) 8.4M oz (Au) 4 0.5M oz (Au) 4 Mineralized Material 5 Est. Production Post 2010 Post 2010 Start-u
Slide 34: Peñasquito – Status
Peñasquito – Status Construction on schedule: Oxide circuit operational Phase I of sulfide circuit - end of CY 2009 Phase II of sulfide circuit - end of CY 2010 Project upside: Exploration ongoing Potential metallurgical enhancements Underground mine potential Current mine life – 19 years
Slide 35: Peñasquito – Status
Peñasquito – Status Construction on schedule: Oxide circuit operational Phase I of sulfide circuit - end of CY 2009 Phase II of sulfide circuit - end of CY 2010 Project upside: Exploration ongoing Potential metallurgical enhancements Underground mine potential Current mine life – 19 years
Slide 36: Peñasquito – Status
Peñasquito – Status Construction on schedule: Oxide circuit operational Phase I of sulfide circuit - end of CY 2009 Phase II of sulfide circuit - end of CY 2010 Project upside: Exploration ongoing Potential metallurgical enhancements Underground mine potential Current mine life – 19 years
Slide 37: Peñasquito – Status
Peñasquito – Status Construction on schedule: Oxide circuit operational Phase I of sulfide circuit - end of CY 2009 Phase II of sulfide circuit - end of CY 2010 Project upside: Exploration ongoing Potential metallurgical enhancements Underground mine potential Current mine life – 19 years
Slide 38: Peñasquito – Status: Annual Production Gold Equiv.
Peñasquito – Status Construction on schedule: Oxide circuit operational Phase I of sulfide circuit - end of CY 2009 Phase II of sulfide circuit - end of CY 2010 3,000 Annual Production - Gold Equiv. ( koz ) Project upside: 2,500 2,000 Exploration ongoing 1,500 Potential metallurgical 1,000 enhanceme
Slide 39: Dolores – Status
Dolores – Status Construction of all critical processing facilities complete Ore currently being placed on heap leach pad Solution application expected by end of September 2008 Gold and silver production expected in early October
Slide 40: Dolores – Status
Dolores – Status Construction of all critical processing facilities complete Ore currently being placed on heap leach pad Solution application expected by end of September 2008 Gold and silver production expected in early October
Slide 41: Dolores – Status
Dolores – Status Construction of all critical processing facilities complete Ore currently being placed on heap leach pad Solution application expected by end of September 2008 Gold and silver production expected in early October
Slide 42: Post Barrick Acquisition: Producing Properties
Post Barrick Acquisition: Producing Properties
Slide 43: Post Barrick Acquisition: Development Properties
Post Barrick Acquisition: Development Properties
Slide 44: Post Barrick Acquisition: Evaluation Properties
Post Barrick Acquisition: Evaluation Properties
Slide 45: Post Barrick Acquisition: Producing, Development and Evaluation Properties
Post Barrick Acquisition: Producing, Development and Evaluation Properties Acquired: 15 producing royalties 20 evaluation projects 1 Includes Barrick royalty transaction scheduled to close on October 1, 2008 2 Not shown on map
Slide 46: Summary
Summary Strong track record of growth Expanded portfolio of producing properties Robust pipeline of development properties Positioned well for future growth
Slide 47: Royal Gold, Inc. contact details
ROYAL GOLD, INC. 1660 Wynkoop Street Denver, CO 80202-1132 PHONE 303.573.1660 FAX 303.595.9385 EMAIL info@royalgold.com WEB www.royalgold.com 9/11/2008 Presentation footer here 47
Slide 48: Appendix
fa ROVALGO LING The Leading Precious Metal Royatty Company Appendix
Slide 49: Company Profile
Company Profile Stock Symbol: NASDAQ:RGLD; TSX:RGL Shares Outstanding: Common 33.9M Dividend Yield1: 0.80% Dividend Payout Ratio2: 28% (fully diluted – 34.7M) $0.28 $0.30 $0.26 Market Cap (9/2/08): $1.1B $0.25 $0.20 $0.22 $0.20 $0.15 $0.15 Average Volume (TTM): 500,000 $0.10 $0.05 $0.00 Insider Owne