Royal Gold, Inc. · NASDAQ:RGLD
Royal Gold — Merger or Acquisition (July 2008)
34 slides from Royal Gold's merger presentation, Jul 31, 2008
Slide 1: The Leading Precious Metals Royalty Company: Acquisition of Barrick Gold's Royalty Portfolio
The Leading Precious Metals Royalty Company Acquisition of Barrick Gold’s Royalty Portfolio July 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: Overview of Transaction
Overview of 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 & 77 Cash NVR1 Royalty Royalties Restructuring Barrick Gold ► Closing scheduled for October
Slide 4: Rationale for Transaction
Rationale for Transaction ► Expands and diversifies Royal Gold’s royalty portfolio Provides immediate royalty revenue Enhances pipeline of royalty projects in development Provides significant option value through royalty properties under exploration ► Unlocks Crossroads deposit at Cortez ► Immediate
Slide 5: Barrick Royalty Portfolio Overview
Barrick Royalty Portfolio Overview ► 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 – 17 development and evaluation – 39 exploration 1
Slide 6: Royalty Property Operators
Royalty Property Operators Selected Development Producing Properties and Evaluation Properties 6
Slide 7: Key Producing Assets
Key Producing Assets Mulatos 1 Mt. Goode Siguiri Allan Alamos Gold Xstrata AngloGold Ashanti Potash Corp. of Saskatchewan Mexico Australia Guinea Canada 0.70-3.50% NSR 1.50% NSR 0.00-1.875% NSR $0.36-$1.44 per ton (sliding-scale) (sliding-scale) (sliding-scale) 2 1 Royal Gold currently owns an addit
Slide 8: Key Evaluation and Development Assets
Key Evaluation and Development Assets Malartic Holt-Holloway 2 Ming Kutcho Creek Osisko St. Andrew Goldfields Rambler Metals & Mining Sherwood Copper Canada Canada Canada Canada 2.0-3.0% NSR 1 0.00013 x Au price C$1.00/ton 1.60% NSR (sliding-scale) 1 Royalty subject to third party right of first ref
Slide 9: Key Exploration Assets
Key Exploration Assets Bousquet/Cadillac 1 Bulldog/Creede 2 Meekatharra Twin Creeks Agnico Eagle Hecla/Emerald Ranch Mercator Newmont Canada United States Australia United States 2.0% NSR 3.0% NSR AUD$10/oz – Paddy’s Flat 3 2.0% NSR 1.0-2.5% NSR - Reedy 4 1 Subject to third party right of first refu
Slide 10: Before Acquisition: Current Producing, Development and Evaluation Properties
Before Acquisition: Current Producing, Development and Evaluation Properties 10
Slide 11: Post Acquisition: Producing, Development and Evaluation Properties
Post Acquisition: Producing, Development and Evaluation Properties 11
Slide 12: 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%
Slide 13: Combined Revenue by Geography
Combined Revenue by Geography ► 72% of the combined Royal Gold and Barrick producing and development royalties are located in North America and Australia 1 Barrick 2 Royal Royal Gold Gold -- $54M $54M1 Barrick Portfolio Portfolio -- $12M $12M2 Pro Pro Forma Forma -- $66M $66M North America Australia
Slide 14: Combined Reserves and Additional Mineralized Material
Combined Reserves 1,2 And Additional Mineralized Material 1,3 M lbs 9 Gold 4.5 Silver 1 2.5 Pro Forma RGLD Copper 100 M lbs 12 2.0 80 Ounces (in millions) 6.5 Ounces (in billions) 2 1.5 RGLD Pro Forma 60 Lead M lbs 40 40 1.0 20 5 20 .5 RGLD Pro Forma Zinc M lbs 350 RGLD Pro Forma RGLD Pro Forma 250
Slide 15: Combined Development Pipeline
Combined Development Pipeline 1 EXPLORATION EVALUATION DEVELOPMENT CONSTRUCTION PRODUCTION Taparko (2008) Peñasquito – Oxide (2008) Dolores (2008) Benso (2008) Peñasquito – Sulfide I (2009) Peñasquito – Sulfide II (2010) Marigold (2010) Gold Hill Pascua-Lama Holt-McDermott Meekatharra Crossroads Pos
Slide 16: Cortez Crossroads Rationalization
Cortez Crossroads Rationalization ► Restructuring Crossroads royalties Current Royalty Structure Unlocks value for Barrick and Royal Gold PRICE OF GOLD GSR1 GSR2 Should accelerate Crossroads development schedule Below $210 0.40% 0.72% $210 - $229.99 0.50% 0.90% ► Royalty consideration $230 - $249.99
Slide 17: Cortez Crossroads Rationalization
Cortez Crossroads Rationalization ► Restructuring Crossroads royalties Future Royalty Structure Unlocks value for Barrick and Royal Gold PRICE OF GOLD GSR1 and 2 Should accelerate Crossroads development schedule Below $210 0.40% $210 - $229.99 0.50% ► Royalty consideration $230 - $249.99 0.75% GSR2
Slide 18: Overview of the Cortez Pipeline Mining Complex
Overview Overview of of the the Cortez Cortez Pipeline Pipeline Mining Mining Complex Complex 18
Slide 19: Crossroads – Extending the Value of the Cortez Pipeline Mining Complex
Crossroads Crossroads –– Extending Extending the the Value Value of of the the Cortez Cortez Pipeline Pipeline Mining Mining Complex Complex 19
Slide 20: Current Royalty Interest
Current Current Royalty Royalty Interest Interest 20
Slide 21: GSR2 Royalty Restructured
1 Effectively eliminates GSR2 and expands GSR1 footprint 1 GSR2 GSR2 Royalty Royalty Restructured Restructured 1 21
Slide 22: GSR3 Royalty Restructured
GSR3 GSR3 Royalty Royalty Restructured Restructured 22
Slide 23: NVR1 Royalty Restructured
NVR1 NVR1 Royalty Royalty Restructured Restructured 23
Slide 24: Restructured Royalty Interests at Cortez Pipeline Mining Complex
Restructured Restructured Royalty Royalty Interests Interests at at Cortez Cortez Pipeline Pipeline Mining Mining Complex Complex 24
Slide 25: Pro Forma Royalty Revenues
Pro Forma Royalty Revenues 120 100 80 $ (millions) 60 40 20 2005 1 2006 1 2007 1 Q1 08 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, respecti
Slide 26: Accretive Transaction – Relative Contribution
Accretive Transaction – Relative Contribution Market Value 1 87% 13% CY 2007 Revenue 2 82% 18% Additional Mineralized Material Gold Equiv. Ozs 3,4,5 80% 20% Reserves Gold Equiv. Ozs 3,4,6 59% 41% Producing Properties 65% 35% Development Properties 7 50% 50% Exploration Properties 32% 68% 0% 20% 40%
Slide 27: Rationale for Transaction
Rationale for Transaction ► Expands and diversifies Royal Gold’s royalty portfolio Provides immediate royalty revenue Enhances pipeline of royalty projects in development Provides significant option value through royalty properties under exploration ► Unlocks Crossroads deposit at Cortez ► Immediate
Slide 28: 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 28
Slide 29: Appendix
ROYALGOLD,INC Appendix
Slide 30: Barrick Royalty Portfolio Reserves
Barrick Royalty Portfolio Reserves 1,2 GOLD/SILVER Tons Average Grade Contained Ounces Property Location Ownership NSR Rate % Metal (millions) (opt) (millions) Mulatos 3 Mexico Alamos Gold 0.70 - 3.50 Gold 35.42 0.048 1.689 Siguiri 4 Guinea AngloGold Ashanti 0.00 – 1.875 Gold 122.22 0.022 2.629 Balc
Slide 31: Barrick Royalty Portfolio Reserves
Barrick Royalty Portfolio Reserves 1,2 POTASH Tons Average Grade Contained Tons Property Location Ownership NSR Rate % Element (millions) (%) (millions) Allan 7 Canada Potash Corporation of $0.36 - $1.44 Potash 348.33 25.9 90 Saskatchewan per ton 1 Set forth below are the definitions of proven and p
Slide 32: Barrick Royalty Portfolio Additional Mineralized Material
Barrick Royalty Portfolio Additional Mineralized Material 1,2,3,4 GOLD/SILVER Measured Indicated Inferred Average Average Average Tons Grade Tons Grade Tons Grade Property Location Ownership NSR Rate % Metal (M) (opt) (M) (opt) (M) (opt) Mulatos 5 Mexico Alamos Gold 0.70 - 3.50 Gold 12.31 0.029 58.4
Slide 33: Barrick Royalty Portfolio Additional Mineralized Material
Barrick Royalty Portfolio Additional Mineralized Material 1,2,3,4 BASE METALS Measured Indicated Inferred Average NSR Rate Tons Average Tons Average Tons Grade Property Location Ownership % Metal (M) Grade (%) (M) Grade (%) (M) (%) Mt. Goode Australia Xstrata 1.50 Nickel 0.46 6.39 0.56 6.98 0.65 5.6
Slide 34: Barrick Royalty Portfolio Additional Mineralized Material Footnotes
Barrick Royalty Portfolio Additional Mineralized Material Footnotes 1 Mineralized material is that part of a mineral system that has potential economic significance but cannot be included in the proven and probable ore reserve estimates until further drilling and metallurgical work is completed, and