Royal Gold, Inc. · NASDAQ:RGLD
Royal Gold — CIBC Whistler 16th Annual Institutional Investor Conference 2013
29 slides from Royal Gold's conference presentation, Jan 23, 2013
Slide 1: CIBC 16th Annual Institutional Investor Conference
CIBC 16th Annual Institutional Investor Conference JANUARY 2013 Page 1
Slide 2: Cautionary Statement
Cautionary Statement 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 could cause actual results to differ
Slide 3: Introduction
Introduction Company Overview Cornerstone Property Review Value Creation Page 3
Slide 4: Company Overview
Company Overview A >$5B public royalty & streaming company, listed on both the NASDAQ (RGLD) and the Toronto Stock Exchange (RGL) Focused on gold, which contributed 67% of revenues for the last twelve months ended September 30, 2012 Portfolio of quality assets, including royalty/stream interests in:
Slide 5: Key Strengths: Disciplined Business Strategy
Key Strengths 1 Disciplined Business Strategy Designed to provide a premium return through a lower risk investment vehicle Strategy supports cash flow stability through reinvestment and reserve replacement Royal Gold uses two strategies to replace and grow reserves Royalty/streaming interests typica
Slide 6: Key Strengths: Low Fixed Operating Costs and No Ongoing Development Costs
Key Strengths 2 Low Fixed Operating Costs and No Ongoing Development Costs No responsibility for operating costs at the underlying mining property Not required to contribute to capital or development costs TTM cash operating expenses, including production taxes, represent only 8% 1 of revenue Royal
Slide 7: Key Strengths: Geographically and Operationally Diverse Asset Base
Key Strengths 3 Geographically and Operationally Diverse Asset Base Revenue is derived from a diverse portfolio of assets, located in a variety of highly-regarded mining jurisdictions around the world Over the past several years, Royal Gold has substantially increased the geographical and asset dive
Slide 8: Key Strengths: Stable Mining Operations with Reputable Operating Partners
Key Strengths 4 Stable Mining Operations with Reputable Operating Partners Royal Gold owns interests on mines operated by many of the premier mining companies in the industry 66% of fiscal 2012 revenue was produced from investment grade rated companies FY2012 Revenue by Operator Net Gold Equivalent
Slide 9: Key Strengths: Long Lived Business Interests
Key Strengths 5 Long Lived Business Interests Royalty and streaming interests span, in most cases, the entire life-of-mine The median current projected life of Royal Gold’s 15 largest properties is 15 years The four largest, Mt. Milligan, Andacollo, Pascua-Lama, and Peñasquito, are each projected to
Slide 10: Key Strengths: Strong Margins Drive Steady Cash Flow
Key Strengths 6 Strong Margins Drive Steady Cash Flow Royal Gold’s low fixed operating costs drive strong operating margins Royal Gold’s EBITDA has increased every year since FY2006, reaching $233.2M in FY2012 Royal Gold expects production growth in FY2013 and 2014, with further contribution from th
Slide 11: Cornerstone Property Review
Cornerstone Property Review Page 11
Slide 12: Portfolio of Quality Assets
Portfolio of Quality Assets 1 1,2 3 3 Page 12
Slide 13: Andacollo (Teck)
Andacollo (Teck) Region IV, Chile 75% NSR until 910K ounces are Royalty: 1 produced; 50% NSR thereafter Reserves: 2 1.8M ozs gold FY 2012 Production: 3 51.4K ozs gold FY 2012 Revenue: $64.1M Mine Life: 20+ years Growth expected; fiscal 2012 Status: production of 44,000 TPD vs. design capacity of 55,
Slide 14: Peñasquito (Goldcorp)
Peñasquito (Goldcorp) Zacatecas, Mexico Royalty: 2.0% NSR - 16.5M ozs gold - 6.2B lbs lead Reserves: 1 - 960M ozs silver - 14.8B lbs zinc - 294.5K ozs gold - 164.0M lbs lead FY 2012 Production: 2 - 21.5M ozs silver - 312.6M lbs zinc FY 2012 Revenue: $28.5M Mine Life: 22 years Growth expected; fiscal
Slide 15: Voisey's Bay (Vale)
Voisey’s Bay (Vale) Labrador and Newfoundland, Canada Royalty: 2.7% NSR - 1.2B lbs nickel Reserves: 1 - 668M lbs copper - 131.6M lbs nickel FY 2012 Production: 2 - 107.2M lbs copper FY 2012 Revenue: $36.0M Mine Life: 3 20+ years Status: Steady state; 6,000 TPD Page 15
Slide 16: Mt. Milligan (Thompson Creek): Growth Catalyst
Mt. Milligan (Thompson Creek) Growth Catalyst British Columbia, Canada Mine profile: Open pit copper/gold porphyry Forecast Gold Production 2 300 Reserves: 1 6.0M oz gold Ounces/Thousands 250 262,000 ozs of gold annually during 200 Est. production: 2,3 first six years; 195,000 ozs of gold 150 annual
Slide 17: Mt. Milligan (Thompson Creek): Investment Summary
Mt. Milligan (Thompson Creek) Investment Summary British Columbia, Canada Transaction summary: 25% of gold for $311.5M in July 2010 15% of gold for $270M in December 2011 12.25% of gold for $200M in August 2012 = 52.25% of gold for $781.5M Delivery payment of $435/oz or prevailing market price for l
Slide 18: Mt. Milligan (Thompson Creek): Attractive Attributes
Mt. Milligan (Thompson Creek) Attractive Attributes British Columbia, Canada Favorable geographic location Provincial and Federal permits Strong local and regional infrastructure: Low cost power Adequate water Low strip ratio Road, rail and port access Support communities Long mine life Exploration
Slide 19: Page 19
Page 19
Slide 20: World Class Royalty Company
World Class Royalty Company Page 20 ROYALGOLD INC
Slide 21: Pascua-Lama (Barrick): Growth Catalyst
Pascua-Lama (Barrick) Growth Catalyst Region III, Chile 0.78% to 5.23% NSR Royalty: 1,2 (5.23% above $800 gold) Forecast Royalty Ounces 5 14.7M ozs gold 60 Reserves: 3 (limited to gold in Chile) Ounces (Thousands) 50 Capital: $8.0B to $8.5B 40 30 Initial Production: Second half of CY 2014 20 800K to
Slide 22: Project Development Pipeline
Project Development Pipeline Exploration Evaluation Development Construction Ramp Up to Full Production Near term production growth from cornerstone producing properties – Andacollo (2013) Andacollo and Peñasquito Canadian Malartic (2013) Continued ramp-up at producing Peñasquito (2013) growth asset
Slide 23: Value Creation
Value Creation Page 23
Slide 24: Significant Impact: Mt. Milligan and Pascua-Lama
Significant Impact Mt. Milligan and Pascua-Lama Long-term Impact of Mt. Milligan and Pascua-Lama 350 300 Net Gold Equivalent Ounces (thousands) 250 200 150 100 50 0 -0 FY 2012 1 Mt. Milligan 2,3 Pascua-Lama 2,4 (full production) (full production) Andacollo Peñasquito Voisey’s Bay Other Mt. Milligan
Slide 25: Premium Investment Vehicle
Premium Investment Vehicle Lower Risk + Financial Performance + Growth Price Appreciation 1 3400% 3200% 3000% 2800% 2600% 2400% 26X 2200% 2000% 1800% 1600% 1400% 1200% 1000% 800% 600% 400% 5X 200% 2X 0% 0.2X -200% Jan-13 Jun-01 Jun-02 Jun-03 Jun-04 Jun-05 Jun-06 Jun-07 Jun-08 Jun-09 Jun-10 Jun-11 Ju
Slide 26: Footnotes
Footnotes Page 26
Slide 27: Footnotes
Footnotes PAGE 5. KEY STRENGTHS (Disciplined Business Strategy) PAGE 12: PORTFOLIO OF QUALITY ASSETS PAGE 16: MT. MILLIGAN 1. Reserves within Royal Gold’s area of interest. 1. Three producing oil and gas properties are not 1. Reserves as of October 23, 2009. shown. 2. Per Thompson Creek’s National I
Slide 28: Footnotes
Footnotes PAGE 24: SIGNIFICANT IMPACT 1. Gold equivalent ounces for fiscal 2012 were calculated by dividing actual revenue by the annual annual average gold price of $1,673 for fiscal 2012. 2. Net gold equivalent ounces are calculated by applying the Company’s interests to production at each individ
Slide 29: Contact
1660 Wynkoop Street Denver, CO 80202-1132 303.573.1660 info@royalgold.com www.royalgold.com Page 29
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