Royal Gold, Inc. · NASDAQ:RGLD
Royal Gold — European Gold Forum 2011
27 slides from Royal Gold's conference presentation, Apr 13, 2011
Slide 1: European Gold Forum
European Gold Forum April 2011
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
Slide 3: Agenda
Agenda 2010 – Exceptional Year of Growth World Class Portfolio Attractive Shareholder Value “This year of expansion was exceptional and transformational as we increased the assets of the company by slightly over $1 billion.” Tony Jensen President and CEO 3
Slide 4: 2010 – Exceptional Year of Growth
2010 – Exceptional Year of Growth 4
Slide 5: 2010 Transformational Transactions
2010 Transformational Transactions Acquisition Investments Chronology 1,400 $1.3B January 2010: Acquired gold royalty on the Andacollo mine in Chile from 1,200 Teck Resources February 2010: Acquired International Royalty Corporation (IRC), obtaining 1,000 cornerstone Pascua-Lama and Voisey’s Bay roy
Slide 6: World Class Portfolio – Transition of Properties
World Class Portfolio – Transition of Properties Taparko Cortez Robinson Mulatos Leeville Goldstrike Added in CY2010 Peñasquito Andacollo Voisey’s Bay Pascua-Lama Mt. Milligan Operator: Goldcorp Operator: Teck Operator: Vale Operator: Barrick Operator: Thompson Royalty: 2 75% of gold Royalty: 2.7% N
Slide 7: Reserve Growth – December 2008 to Present
Reserve Growth – December 2008 to Present Precious metal reserves subject to Royal Gold’s interests increased 33% to 105.3M ounces 1 Precious metals equity reserves increased 198% to 4.8M ounces 1 Gold equivalent equity reserves increased 200% to 6.7M ounces Reserves Equity Reserves 2,3 (subject to
Slide 8: World Class Portfolio
ROYALG OLD, INC World Class Royalty Portfolio World Class Portfolio
Slide 9: World Class Portfolio – Large and Gold Focused
World Class Portfolio – Large and Gold Focused 59 producing and development assets 2010 CY Revenue 128 evaluation and exploration assets Strong precious metal exposure 23% 77% Total Precious Metals Asset Distribution (number of properties) 1 Producing 2013E CY Revenue 2,3 Development 20% Evaluation
Slide 10: World Class Portfolio – Cornerstone Assets
World Class Portfolio – Cornerstone Assets 22 Year Mine Life 20 Year Mine Life Peñasquito 20+ Year Mine Life Andacollo 25 Year Mine Life Voisey’s Bay Operator: Goldcorp 22 Year Mine Life Pascua-Lama Royalty: 2.0% NSR Reserves: 1 17.8M oz (Au) Operator: Teck 1.1B oz (Ag) Royalty: 2 75% of gold Mt. Mi
Slide 11: Additional Key Assets
World Class Portfolio – Additional Key Assets Cortez (Barrick - U.S.) Wolverine (Yukon Zinc - Canada) Wolverine Royalty: 1 GSR1 and GSR2: 0.4% to 5.0%; Royalty: 5 0.0% to 9.445% NSR Cortez GSR3: 0.71%; NVR1: 0.39% Reserves: 6 0.2M oz (Au) Reserves: 2 5.2M oz (Au) 42.8M oz (Ag) Leeville (Newmont - U.
Slide 12: World Class Operations & Properties
World Class Portfolio – World Class Operations & Properties 74% Equity Gold Equivalent Ounces in Reserve Pascua-Lama Leeville Peñasquito Gold Hill Andacollo Voisey’s Bay Mt. Goode Goldstrike Twin Creeks Marigold Cortez Wharf Bald Mountain 12
Slide 13: World Class Portfolio – Low Cost Operators
World Class Portfolio – Low Cost Operators Operators of properties subject to Royal Gold’s interests Cash cost of gold production - $452/oz 1 Industry average cash costs: $532/oz 2 Distribution of Cash Costs 1000 900 800 700 Cash Costs Per Oz ($) 600 $532/oz = Industry Average 500 400 300 200 100 0
Slide 14: Favorable Geopolitical Distribution
World Class Portfolio – Favorable Geopolitical Distribution Currently 77% of production from United States, Mexico, Canada, Chile and Australia 97% of reserves from United States, Mexico, Canada and Chile Ounces Subject to Royal Gold’s Interests Current Production 1 Gold Equivalent Reserves 2 United
Slide 15: Asset Diversification and Balance
World Class Portfolio – Asset Diversification and Balance Revenue diversification achieved New long life mines replace maturing assets and provide growth In 2013, 67% of revenues expected from mines with lives greater than 15 years 2010 FY Revenue 2013E CY Revenue 1,2 Cortez Siguiri Other Precious M
Slide 16: Attractive Shareholder Value
Attractive Shareholder Value 16
Slide 17: Attractive Shareholder Value – Efficient Business Model
Attractive Shareholder Value – Efficient Business Model Growing margins Cost control Revenue increases EBITDA Margin Economies of Scale 95% 200 160 EBITDA/ Revenue (%) 85% 120 80 75% 40 65% 0 2007 2008 2009 2010 1 2011 2006 2007 2008 2009 2010 (through 12/31/10) Revenue ($ million) Number of Propert
Slide 18: Royal Gold Leverage
Attractive Shareholder Value – Royal Gold Leverage Superior returns (2001 – 2010) Efficient and timely use of capital Gold price growth: 5.19X Shares outstanding growth, 3.0X (2001 – 2010) Royal Gold growth: 15.6X, share price 22.9X, revenue 42.0X, EBITDA Royal Gold vs. Market Capitalization Gold Pr
Slide 19: Attributable Production Growth (analyst consensus)
Attributable Production Growth (analyst consensus) 1,2 Attributable Production Per Share Analysis 3 250 180 160% 250 Growth in Gold Equivalent Ounces (%) 140% Average Gold Equivalent Ounces 150 200 200 120% 120 134% Increase 150 100% 150 (thousands) 90 80% 100 100 60% 60 40% 50 50 30 25% Increase 20
Slide 20: Attractive Shareholder Value – Financial Return
Attractive Shareholder Value – Financial Return Market Information (as of 3/24/11) NASDAQ: RGLD; TSX: RGL Market cap: $2.9B Average daily volume (TTM): 615,000 2001 – 2010 Compounded Annual Growth Rate (CAGR) 40 Shares Outstanding Common: 55.3M 1 30 Insider ownership: 5% CAGR ( %) 20 Financial Cash:
Slide 21: Footnotes
ROYALGOL D, INC World Class Royalty Portfolio Footnotes 21
Slide 22: Footnotes
Footnotes PAGE 6: WORLD CLASS PORTFOLIO – TRANSITION OF PROPERTIES 1 Reserves as of December 31, 2009. 2 75% of payable gold until 910,000 payable ounces; 50% thereafter. 3 Production commenced in the second quarter of calendar 2010. 4 Based on 2008 Vale Inco EIS. 5 2010 production figures are for F
Slide 23: Footnotes (cont.)
Footnotes (cont.) PAGE 7: RESERVE GROWTH – DECEMBER 2008 TO PRESENT (CONT.) 3 Gold equivalent equity reserves, with the exception of Mt. Milligan, were calculated at year end using the following metal prices: 2005 - $513.00 gold; $8.83 silver; $2.39 copper; 2006 - $632 gold; $12.90 silver; $2.81 cop
Slide 24: Footnotes (cont.)
Footnotes (cont.) PAGE 11: WORLD CLASS PORTFOLIO – ADDITIONAL KEY ASSETS (CONT.) 5 Gold and silver royalty rate is based on the price of silver per ounce. NSR sliding-scale schedule (price of silver per ounce – royalty rate) below $5.00 – 0.0%; $5.00 to $7.50 – 3.778%; >$7.50 – $9.445%. 6 Reserves a
Slide 25: Footnotes (cont.)
Footnotes (cont.) PAGE 15: WORLD CLASS PORTFOLIO – ASSET DIVERSIFICATION AND BALANCE 1 2013 estimates assume development properties are brought into production and reach full-scale production on schedule and also assume certain metal prices and currency exchange rates. See page 26 for additional inf
Slide 26: 2013E Pro Forma Footnote
Footnotes (cont.) 2013E PRO FORMA FOOTNOTE: All pro forma calculations include certain properties that are currently in development stage, and we have assumed for purposes of the 2013 pro forma calculations that such development stage properties are brought into production and achieve full-scale pro
Slide 27: 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