Royal Gold, Inc. · NASDAQ:RGLD

Royal Gold — HSBC 2nd Annual Global Natural Resources Conference 2011

37 slides from Royal Gold's conference presentation, September 2011

  1. Slide 1: HSBC 2nd Annual Global Natural Resources Conference

    HSBC 2nd Annual Global Natural Resources Conference September 2011 World Class Royalty Company

  2. Slide 2: Cautionary Statement

    Cautionary Statement Under the Private Securities Litigation Reform Act 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

  3. Slide 3: Royalty Business Model

    Royalty Business Model  Simple Gold Investment Vehicles  No management demands  No operating exposure Exploration  No capex challenges  Efficient Royalty Company Junior Operators  Passive investor Intermediate Operators  No continuing investment Major Operators  High margins/low overhead Ret

  4. Slide 4: Introduction

    Introduction Shares Outstanding: 55.3M ► Efficient royalty and streaming company Market Capitalization: $4.5B ► Strong and growing financials (as of 9/14/11) Insider Ownership: 5.0% ► Robust portfolio of assets • 36 producing Dividend: $0.44/share • 21 development TTM Average Daily Volume: 629,000 •

  5. Slide 5: Introduction

    Introduction Shares Outstanding: 55.3M ► Efficient royalty and streaming company Market Capitalization: $4.5B ► Strong and growing financials (as of 9/14/11) Insider Ownership: 5.0% ► Robust portfolio of assets • 36 producing Dividend: $0.44/share • 21 development TTM Average Daily Volume: 629,000 •

  6. Slide 6: Introduction

    Introduction Shares Outstanding: 55.3M ► Efficient royalty and streaming company Market Capitalization: $4.5B ► Strong and growing financials (as of 9/14/11) Insider Ownership: 5.0% ► Robust portfolio of assets • 36 producing Dividend: $0.44/share • 21 development TTM Average Daily Volume: 629,000 •

  7. Slide 7: Fiscal 2011 – Growing Revenue

    Fiscal 2011 – Growing Revenue Historical Royalty Revenues 250 225 200 175 Dollars (millions) 150 125 100 75 50 25 0 2007 2008 2009 2010 2011 Wolverine Voisey's Bay Robinson ~ Penasquito Mulatos Leeville Las Cruces Inata Holt Gwalia Deeps Dolores Cortez Canadian Malartic Andacollo Other World Class R

  8. Slide 8: Fiscal 2011 – Growing Revenue

    Fiscal 2011 – Growing Revenue Historical Royalty Revenues 250 225 200 175 Andacollo Dollars (millions) 150 125 100 75 Peñasquito 50 25 Voisey’s Bay 0 2007 2008 2009 2010 2011 Wolverine Voisey's Bay Robinson ~ Penasquito Mulatos Leeville Las Cruces Inata Holt Gwalia Deeps Dolores Cortez Canadian Mala

  9. Slide 9: Fiscal 2011 – Growing Revenue

    Fiscal 2011 – Growing Revenue Historical Royalty Revenues 250 225 56% Revenue 44% Growth 200 175 Dollars (millions) 150 Price Metal Prices Production Volume 125 100 75 50 25 0 2007 2008 2009 2010 2011 Wolverine Voisey's Bay Robinson ~ Penasquito Mulatos Leeville Las Cruces Inata Holt Gwalia Deeps Do

  10. Slide 10: Fiscal 2011 – Growing Revenue

    Fiscal 2011 – Growing Revenue 5% Historical Royalty Revenues 15% 250 225 56% Revenue 10% 44% Metal Growth 64% 200 6% 175 Dollars (millions) 150 Price Metal Prices Production Volume Gold Silver Copper 125 Nickel Zinc Lead Other 100 75 50 25 0 2007 2008 2009 2010 2011 Wolverine Voisey's Bay Robinson ~

  11. Slide 11: Fiscal 2011 – Growing Revenue

    Fiscal 2011 – Growing Revenue 5% Historical Royalty Revenues 15% 250 225 56% Revenue 10% 44% Metal Growth 64% 200 6% 175 Dollars (millions) 150 Price Metal Prices Production Volume Gold Silver Copper 125 Nickel Zinc Lead Other 100 13% 75 24% 5% 50 25 18% Geography 0 21% 2007 2008 2009 2010 2011 19%

  12. Slide 12: Fiscal 2011 – Growing Revenue

    Fiscal 2011 – Growing Revenue 5% Historical Royalty Revenues 15% 250 225 56% Revenue 10% 44% Metal Growth 64% 200 6% 175 Dollars (millions) 150 Price Metal Prices Production Volume Gold Silver Copper 125 Nickel Zinc Lead Other 100 13% 20% 75 24% 24% 5% 50 2% Operator 15% 25 18% Geography 5% 0 5% 21%

  13. Slide 13: Rising Industry Costs

    Rising Industry Costs Industry Cash Cost History 1 1,600 $1,387 1,400 $1,225 1,200 $972 1,000 $872 Dollars 800 $695 600 $565 $583 400 $460 $476 $385 200 0 2007 2008 2009 2010 2011 YTD (Calendar Years) Average Gold Price Industry Cash Cost See footnote on page 23 World Class Royalty Company 6

  14. Slide 14: Rising Industry Costs

    Rising Industry Costs Industry Cash Cost History 1 Cash Margin Analysis 1,600 1,600 $1,387 1,400 $1,369 1,400 Cash Cost of Operations ($/Royalty GEO) $1,225 1,200 1,200 $1,089 $972 1,000 Gold Price ($/oz) 1,000 $872 $874 Dollars $821 800 $695 800 $638 600 600 $565 $583 400 $460 $476 $385 400 200 200

  15. Slide 15: Fiscal 2011 – Reserve Growth

    Fiscal 2011 – Reserve Growth Gold Equivalent Royalty Reserves 1 (Royalty Rate x Reserves) 8 7 6 Gold Silver (AuEq) 5 Ounces (millions) 4 3 2 1 0 2006 2007 2008 2009 2010 (calendar years ended December 31) See footnotes on page 23 World Class Royalty Company 7

  16. Slide 16: Fiscal 2011 – Reserve Growth

    Fiscal 2011 – Reserve Growth Gold Equivalent Royalty Reserves 1 (Royalty Rate x Reserves) 8 7 6 Gold Silver (AuEq) 5 Ounces (millions) Other (AuEq) 4 3 2 1 0 2006 2007 2008 2009 2010 (calendar years ended December 31) See footnotes on page 23 World Class Royalty Company 7

  17. Slide 17: Fiscal 2011 – Reserve Growth

    Fiscal 2011 – Reserve Growth Gold Equivalent Royalty Reserves 1 Gold Reserve Replacement (Royalty Rate x Reserves) (Gold Reserves Subject to Royalty Interests) 8 95 83 75 63 Ounces (millions) 7 55 6 35 26 19 Gold 15 Silver (AuEq) 5 -5 Ounces (millions) Other (AuEq) -25 (24) 4 Beginning Reserve Reser

  18. Slide 18: Fiscal 2011 – Reserve Growth

    Fiscal 2011 – Reserve Growth Gold Equivalent Royalty Reserves 1 Gold Reserve Replacement (Royalty Rate x Reserves) (Gold Reserves Subject to Royalty Interests) 8 95 83 75 63 Ounces (millions) 7 55 6 35 26 19 Gold 15 Silver (AuEq) 5 -5 Ounces (millions) Other (AuEq) -25 (24) 4 Beginning Reserve Reser

  19. Slide 19: Cornerstone Producing Properties

    Cornerstone Producing Properties World Class Royalty Company 8

  20. Slide 20: Andacollo

    Andacollo Region IV Update: Royalty: 1 75% NSR until 910K ounces are produced; 50% NSR thereafter ► Mill throughput affected by ore hardness, Reserves: 2 1.6M ozs gold which limited throughput to 39K tpd, or approximately 70% of design capacity. Production: 42K ozs gold (FY 2011) ► Multiple stage pl

  21. Slide 21: Peñasquito

    Peñasquito Zacatecas Update: Royalty: 2.0% NSR ► Mill throughput at approximately 70% Reserves: 1 18.6M ozs gold; 1.1B ozs silver; of design capacity, limited by insufficient 17.6B lbs zinc; 7.3B lbs lead oversize material for the HPGR and Production: 207K ozs gold; 17.3M ozs silver; availability of

  22. Slide 22: Voisey’s Bay

    Voisey’s Bay Labrador and Newfoundland Update: Royalty: 1 2.7% NSR ► Production levels have recovered from Reserves: 1.4B lbs nickel strike which ended February 2011. 788M lbs copper Production: 112.5M lbs nickel ► Currently in high shipping season (FY 2011) 67.8M lbs copper (May 22 - December 6). R

  23. Slide 23: Growth Assets

    Growth Assets Growth Assets World Class Royalty Company 12

  24. Slide 24: Holt, Wolverine, Malartic

    Holt Wolverine Malartic Ontario Yukon Chihuahua Quebec Royalty: 0.00013 x Au Price Royalty NSR (sliding-scale) At Au Prices: NSR (sliding-scale) At Ag Prices: $1,000 13.0% < $5.00 0.0% Royalty: 1.0%-1.5% NSR $1,500 19.5% $5.00-$7.50 3.778% (1.5% above $2,000 26.0% >$7.50 9.445% $350/oz Reserves: 1 5

  25. Slide 25: Pascua-Lama

    Pascua-Lama Region III Update: Royalty: 1,2 0.78%-5.23% NSR (5.23% above $800 gold) ► Engineering: 90% complete Reserves: 3 14.7M ozs gold (limited to gold in Chile) ► Earthworks (Chile): 80% complete Capital: $4.7-$5.0B ► Pre-strip mining to commence: Q4 2011 Initial Production: Mid 2013 Production

  26. Slide 26: Mt. Milligan

    MT. MILLIGAN Canada Mt. Milligan British Columbia Update: Stream: 25% of payable gold ► Capital spent: $208M (to 6/2011) Purchase Price: $400/oz on first 550K ozs; $450/oz thereafter ► Committed capital: $466M (to 6/2011) Reserves: 1 6.0M ozs gold Capital: C$1.3B ► Construction of camp complete. Ini

  27. Slide 27: KSM

    KSM British Columbia Update: Royalty Option: 1.25%-2.0% NSR ► Purchase of 1.0M shares of Seabridge Reserves: 1 38.5M ozs gold common stock for C$30M in June 2011. 214M ozs silver Capital: $4.7B ► After nine-month hold, Royal Gold earns Initial Production: NA the ability to buy 1.25% NSR royalty on g

  28. Slide 28: 2011 – 2012 Key Events

    2011 – 2012 Key Events  Increasing revenue contribution from Andacollo and Peñasquito; further growth to come from throughput expansions or modifications.  Full year of Voisey’s Bay production at capacity.  Continued operational improvements at Dolores, Mulatos, Robinson and Las Cruces.  Ramp up

  29. Slide 29: Growth Profile: Average Gold Equivalent Production

    Growth Profile (Analyst Forecasts) 1,2 Attributable Production 280 260 Average Gold Equivalent Production 240 220 ozs (000’s) 200 180 160 140 120 100 f10(A) f11(A) f12(E) f13(E) f14(E) Growth Properties: Peñasquito Andacollo Dolores Las Cruces Wolverine Holt Canadian Malartic Pascua-Lama Mt. Milliga

  30. Slide 30: Appendix

    Appendix World Class Royalty Company 19

  31. Slide 31: Mulatos and Dolores

    Mulatos and Dolores MEXICO Mulatos Dolores Sonora Chihuahua Royalty: 1 1.0%-5.0% NSR Royalty: 3.25% NSR (gold); 2.0% NSR (5.0% above $400/oz) (silver) Reserves: 2 2.4M ozs gold Reserves: 2 2.0M ozs gold 114.5M ozs silver Production: 151K ozs gold Production: 60K ozs gold (FY 2011) (FY 2011) 2.6M ozs

  32. Slide 32: Cortez, Leeville, Robinson

    Cortez Leeville Robinson Nevada Nevada Nevada Chihuahua Royalty: 1 GSR1 and 2 0.40%-5.0% (5.0% above $470/oz) GSR3 0.71% NVR1 0.39% Royalty: 1.8% NSR Royalty 3.0% NSR Reserves: 2 5.8M ozs gold Reserves: 2 1.64M ozs gold Reserves: 2 1.2B lbs copper 640K ozs gold Production: 193K ozs gold Production:

  33. Slide 33: Footnotes

    Footnotes World Class Royalty Company 22

  34. Slide 34: Footnotes

    Footnotes PAGE 4: INTRODUCTION 1 Barrick, Newmont, AngloGold, Gold Fields, Goldcorp, Kinross and Agnico Eagle. 2 Excluding changes in working capital. PAGE 6: RISING INDUSTRY COSTS 1 ABN AMRO Gold Mine Cost Report, May 2011. PAGE 7: FISCAL 2011 – RESERVE GROWTH 1 Gold equivalent equity reserves were

  35. Slide 35: Footnotes (cont.)

    Footnotes (cont.) PAGE 13: HOLT, WOLVERINE AND MALARTIC 1 Reserves as of December 31, 2010. 2 Reserves as of December 31, 2008. 3 Production guidance reflects the entire project. Operator has not provided a breakdown of production by royalty interest. PAGE 14: PASCUA-LAMA 1 NSR sliding-scale schedul

  36. Slide 36: Footnotes (cont.)

    Footnotes (cont.) PAGE 20: MULATOS AND DOLORES 1 The Company’s royalty is subject to a 2.0 million ounce cap on gold production. There have been approximately 732,000 ounces of cumulative production, as of June 30, 2011. NSR sliding-scale schedule (price of gold per ounce – royalty rate): $0.00 to $

  37. Slide 37: Royal Gold contact details

    1660 Wynkoop Street Denver, CO 80202-1132 303.573.1660 info@royalgold.com www.royalgold.com World Class Royalty Company

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