Royal Gold, Inc. · NASDAQ:RGLD
Royal Gold — BMO Capital Markets 2009 Global Metals & Mining Conference
33 slides from Royal Gold's conference presentation, Feb 24, 2009
Slide 1: BMO Capital Markets 2009 Global Metals & Mining Conference
BMO Capital Markets 2009 Global Metals & Mining Conference February 2009
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: Agenda
Agenda Royal Gold Overview Key Asset Review Growth Strategy Attractive Environment for Royal Gold
Slide 4: Overview
fa ROYVALGOLIING The Leading Precious Metal Royatty Company Overview
Slide 5: Company Profile
Company Profile Market Information (as of 2/19/09) NASDAQ: RGLD; TSX: RGL Market cap: $1.5B Average Volume (TTM): 626,000 Shares Outstanding Common: 34.0M Inside ownership: 11% Financial (as of 12/31/08): Cash: $55M Net debt: $0 Available credit line: $125M Annual dividend: $0.32 per share Dividend
Slide 6: Company Profile: Revenue Distribution by Metal Type
Company Profile Market Information (as of 2/19/09) NASDAQ: RGLD; TSX: RGL Revenue Distribution by Metal Type (Calendar Year Ended 12/31/08) Market cap: $1.5B Average Volume (TTM): 626,000 77% Shares Outstanding Common: 34.0M Inside ownership: 11% 3% Financial (as of 12/31/08) Cash: $55M 20% Net debt
Slide 7: Company Profile: Royalty Asset Distribution
Company Profile Market Information (as of 2/19/09) Royalty Asset Distribution NASDAQ: RGLD; TSX: RGL Market cap: $1.5B Producing Average Volume (TTM): 626,000 Development Shares Outstanding Common: 34.0M Evaluation Inside ownership: 11% Financial (as of 12/31/08): Exploration Cash: $55M 10 20 30 40
Slide 8: Effective Business Model
Effective Business Model Simple No management demands No operating exposure No capex challenges Efficient Passive investor No continuing investment High margins/low overhead Option value Unhedged Reserve additions at no cost Sliding-scale structure Exploration portfolio
Slide 9: Effective Business Model: EBITDA and Net Profit Margins
Effective Business Model Simple EBITDA Margins1 (TTM 9/30/08) No management demands 90% 76% 75% No operating exposure 60% No capex challenges 44% 45% Efficient 30% Passive investor 15% No continuing investment Royal Gold North American majors2 High margins/low overhead Net Profit Margins3 (TTM 9/30/
Slide 10: Effective Business Model: Risk Return Continuum
Effective Business Model Simple No management demands No operating exposure Risk Return Continuum No capex challenges Efficient Passive investor Exploration Royalty Company No continuing investment Junior Operators High margins/low overhead Intermediate Operators Return Major Operators ETF Option va
Slide 11: Royal Gold vs. Indices
Effective Business Model Simple No management demands No operating exposure Royal Gold vs. Indices No capex challenges CY2008 Price Performance 170 Efficient 150 130 Passive investor 110 No continuing investment 90 High margins/low overhead 70 50 Option value 30 12/31/2007 6/30/2008 12/31/2008 Unhed
Slide 12: Strong Financial Performance
Strong Financial Performance Gross Financial Results Per Share Financial Results Net Income Free Cash Flow 1 Royalty Revenue Net Income Free Cash Flow 1 Royalty Revenue $70 2.25 $60 2.00 1.75 ($ in millions) $50 ($ per share) 1.50 $40 1.25 $30 1.00 0.75 $20 0.50 $10 0.25 2004 2005 2006 2007 2008 2,3
Slide 13: Execution of Growth Plan
Execution of Growth Plan Barrick Royalties 500 El Chanate & Marigold 450 Benso 400 Investment ($ 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 $453M
Slide 14: Consistent Asset Growth (February 2008)
Consistent Asset Growth (February 2008)
Slide 15: Consistent Asset Growth (February 2009)
Consistent Asset Growth (February 2009)
Slide 16: Exploration Assets (February 2009)
Exploration Assets (February 2009)
Slide 17: 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 18: Key Asset Review
fa ROYVALGOLIING The Leading Precious Metal Royatty Company Key Asset Review
Slide 19: Core Producing Properties
Core Producing Properties Cortez (Pipeline Mining Leeville Mining Complex) Robinson Taparko Complex Barrick Quadra High River Newmont CY 2008 Production 288,000 oz (Au) 128,000 oz (Au) 35,000 oz (Au) 458,000 oz (Au) 147M lbs (Cu) CY 2008 Revenue $18.4M $13.4M $7.3M $7.1M Reserves 1.9M oz (Au) 0.8M o
Slide 20: Core Producing Properties
Core Producing Properties Goldstrike Mulatos (SJ Claims) Siguiri Dolores Alamos Gold Barrick AngloGold Ashanti Minefinders CY 2008 Production 148,000 oz (Au) 801,000 oz (Au) 333,000 oz (Au) 2,000 oz (Au) 42,800 oz (Ag) CY 2008 Revenue $6.5M 1 $6.1M $5.8M 2,3 0.02M 4 Reserves 1.7M oz (Au) 7.0M oz (Au
Slide 21: Core Development and Evaluation Properties
Core Development and Evaluation Properties Peñasquito 1 Malartic 2 Pascua-Lama Goldcorp Osisko Barrick CY 2008 Production 17,000 oz (Au) 1.2M oz (Ag) - - Reserves 13.1M oz (Au) 4.7M oz (Au) 3 14.6M oz (Au) 4 863.9M oz (Ag) Additional Mineralization 5 13.6M oz (Au) 1.58M oz (Au) 3 2.7M oz (Au) 921.5
Slide 22: Core Development and Evaluation Properties
Core Development and Evaluation Properties Crossroads Holt-Holloway 1 Barrick St Andrew Goldfields CY 2008 Production - - Reserves - 0.5M oz (Au) 2 Additional 1.1M oz (Au) 0.5M oz (Au) 2 Mineralized Material 3 Est. Production Post 2010 Start-up Post 2010 1 Royalty applies only to Holt-McDermott clai
Slide 23: Development Pipeline
Development Pipeline 1 EXPLORATION EVALUATION DEVELOPMENT CONSTRUCTION PRODUCTION Peñasquito – Oxide (2008) Benso (2008) Twin Creeks (2008) Taparko (2008) Dolores (2008) Relief Canyon (2009) Pine Cove (2009) Peñasquito – Sulfide I (2009) Reedy’s Burnakura (2009) Marigold (2010) Peñasquito – Sulfide
Slide 24: Growth Strategy
fa ROYVALGOLIING The Leading Precious Metal Royatty Company Growth Strategy
Slide 25: Royalty Acquisition Criteria
Royalty Acquisition Criteria Metal type Goldstrike Cortez Pascua-Lama Quality assets Bald Mountain Gold Hill Williams Major operators Leeville Geopolitical stability Twin Creeks Diversification Balanced portfolio Siguiri Peñasquito Marigold Wharf
Slide 26: Royalty Acquisition Criteria: Revenue and Reserves by Continent
Royalty Acquisition Criteria Metal type Revenue by Continent (Calendar Year Ended 12/31/08) Quality assets 81% Major operators Geopolitical stability 13% 1% 5% Diversification Reserves by Continent (million Au equivalent ozs at 12/31/07) Balanced portfolio 73 16 1 North America Africa South America
Slide 27: Royalty Acquisition Criteria: Pipeline
Royalty Acquisition Criteria Metal type Pipeline Peñasquito Quality assets SJ Claims Gold Hill Leeville Dolores Troy Mine Williams Major operators Martha El Limon Bald Mountain Don Mario Robinson El Chanate Geopolitical stability Taparko Benso Mulatos Barrick Royalties Diversification Balanced portf
Slide 28: Royal Gold Portfolio (as of February 2009)
Royalty Acquisition Criteria Metal type Quality assets Royal Gold Portfolio (as of February 2009) Major operators EXPLORATION EVALUATION DEVELOPMENT PRODUCTION Geopolitical stability 25 Producing Diversification Balanced portfolio 9 Development 24 Evaluation 60 Exploration
Slide 29: Attractive Environment for Royal Gold
Attractive Environment for Royal Gold
Slide 30: Case for Gold
Case for Gold Portfolio diversification Negatively correlated with U.S. dollar Store of value Hedge against inflation Safe haven in turbulent times Diminishing mine supply Financial deterioration in the U.S. Geopolitical uncertainty
Slide 31: Attractive Environment for Royal Gold
Attractive Environment for Royal Gold Royal Gold is well capitalized Debt and equity markets are closed to many mining companies in need of financing De-leveraging in the mining space opens way for royalty financing Outlook for gold is strong
Slide 32: Royal Gold – A Premium Investment
Royal Gold – A Premium Investment Strong track record of growth Expanded portfolio of producing properties Robust pipeline of development properties Positioned well for future growth
Slide 33: 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
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