Royal Gold, Inc. · NASDAQ:RGLD
Royal Gold — Shareholder Meeting (November 2008)
37 slides from Royal Gold's shareholder meeting presentation, Nov 5, 2008
Slide 1: Annual Shareholder Meeting
Annual Shareholder Meeting November 5, 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: Company Overview
fa ROYVALGOLIING The Leading Precious Metal Royatty Company Company Overview
Slide 4: Who We Are
Who We Are Diversified global precious metals royalty company: Significant growth potential Strong financial performance Experienced management team Low operational risk Unique and attractive business model Exposure to world class assets and premier operators
Slide 5: Company Profile
Company Profile Stock Symbol: NASDAQ:RGLD; TSX:RGL Shares Outstanding: Common 33.9M Dividend Yield1: 1.0% Dividend Payout Ratio2: 28% (fully diluted – 34.7M) $0.35 $0.32 $0.28 $0.30 $0.26 Market Cap (10/31/08): $978M $0.25 $0.20 $0.22 $0.20 $0.15 Average Volume (TTM): 577,000 $0.10 $0.05 $0.00 Insid
Slide 6: Year In Review
fa ROYVALGOLIING The Leading Precious Metal Royatty Company Year In Review
Slide 7: 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 8: Assets in 2007 (as of 10/31/07)
Assets in 2007 (as of 10/31/07)
Slide 9: Asset Growth – 2008 (as of 10/31/08)
Asset Growth – 2008 (as of 10/31/08)
Slide 10: Consistent Financial Performance
Consistent 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 $10 0.25 2004 2005 2006 2007 2008
Slide 11: 2008 Portfolio Transactions
2008 Portfolio Transactions
Slide 12: Royalty Transactions
Royalty Transactions Barrick Royalties 500 El Chanate & Marigold 450 Benso 400 Investment ($ 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 13: El Chanate and Marigold
El Chanate and Marigold El Chanate (Mexico) Operated by Capital Gold Corp. Royalty: 2.0 – 4.0% NSR (sliding-scale) 10.0% NPI Reserves: 0.832M oz Au Est. production (CY’08): 50,000 oz Marigold (Nevada) Operated by Goldcorp Royalty: 2.0% NSR Reserves: 0.867M oz Au Est. production start-up: Commencemen
Slide 14: Overview of Barrick Transaction
Overview of Barrick 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 & NVR1 72 Royalties Cash Royalty Restructuring Barrick Gold
Slide 15: Rationale for Transaction
Rationale for Transaction Immediately accretive on all key financial measures Unlocks Crossroads deposit at Cortez Expands and diversifies Royal Gold’s royalty portfolio Provides immediate royalty revenue Enhances pipeline of royalty projects in development Provides significant option value through
Slide 16: Barrick Royalty Portfolio
Barrick Royalty Portfolio One of the largest portfolios of royalties Collection of royalties assembled by Barrick and numerous corporate predecessors Includes royalty interests in 72 properties 57 precious metal properties 5 producing 2 development 16 evaluation 34 exploration 15 base metal and pota
Slide 17: Restructuring of Cortez
fi ROVALGOLDING The Leading Precious Metal Royatty Company Restructuring of Cortez
Slide 18: Cortez Crossroads Rationalization
Cortez Crossroads Rationalization Current Royalty Structure Restructuring Crossroads royalties PRICE OF GOLD GSR1 GSR2 Below $210 0.40% 0.72% Unlocks value for Barrick and Royal Gold $210 - $229.99 0.50% 0.90% Should accelerate Crossroads development schedule $230 - $249.99 0.75% 1.35% $250 - $269.9
Slide 19: Cortez Crossroads Rationalization
Cortez Crossroads Rationalization Future Royalty Structure Restructuring Crossroads royalties PRICE OF GOLD GSR1 and 2 Below $210 0.40% Unlocks value for Barrick and Royal Gold $210 - $229.99 0.50% Should accelerate Crossroads development schedule $230 - $249.99 0.75% $250 - $269.99 1.30% Royalty co
Slide 20: Current Royalty Interest
Ik ROYAL GOL] ING The Leading Precious Metals Royalty Company Current Royalty Interest
Slide 21: GSR2 Royalty Restructured
GSR2 Royalty Restructured 1 1 Effectively eliminates GSR2 and expands GSR1 footprint.
Slide 22: GSR3 Royalty Restructured
ROYALGOLD ING The Leading Precious Metal Royatty Company GSR3 Royalty Restructured
Slide 23: NVR1 Royalty Restructured
Ip ROVALGOLDING The Leading Precious Metal Royatty Company NVR1 Royalty Restructured =seemse= Crossroads
Slide 24: Restructured Royalty Interests at Cortez
Restructured Royalty Interests at Cortez (Pipeline Mining Complex)
Slide 25: Key Asset Review
fa ROYVALGOLIING The Leading Precious Metal Royatty Company Key Asset Review
Slide 26: Core Producing Properties
Core Producing Properties Cortez (Pipeline Mining Leeville Mining Complex) Robinson Taparko Complex Barrick Quadra High River Newmont Est. CY’08 Production 367,000 oz (Au) 115,000 oz (Au) 30,000 oz (Au) 415,000 oz (Au) 150M lbs (Cu) FY’08 Revenue $22.0M $16.6M $7.4M $5.6M Reserves 1.9M oz (Au) 0.8M
Slide 27: Core Producing Properties
Core Producing Properties Goldstrike Siguiri (SJ Claims) Mulatos Mt. Goode AngloGold Ashanti Barrick Alamos Gold Xstrata Est. CY’08 Production 358,000 oz (Au) 1 792,000 oz (Au) 120,000 oz (Au) 2 FY’08 Revenue $5.2M 3,4 $5.1M $5.0M 5 $1.9M 3 Reserves 2.6M oz (Au) 6 7.0M oz (Au) 1.7M oz (Au) 117M lbs
Slide 28: Core Development and Evaluation Properties
Core Development and Evaluation Properties Peñasquito 1 Dolores Pascua-Lama Goldcorp Minefinders Barrick Est. CY’08 Production 67,000 oz (Au) 10-15,000 oz (Au) 2.2M oz (Ag) 350-375,000 oz (Ag) - Reserves 13.1M oz (Au) 2.4M oz (Au) 14.6M oz (Au)2 863.9M oz (Ag) 126.6M oz (Ag) Additional 13.6M oz (Au)
Slide 29: Core Development and Evaluation Properties
Core Development and Evaluation Properties Crossroads Malartic 1 Holt-Holloway 2 Barrick Osisko St. Andrew Goldfields Est. CY’08 Production - - - Reserves - - 0.5M oz (Au) 3 Additional 1.1M oz (Au) 8.4M oz (Au) 3 0.5M oz (Au) 3 Mineralized Material 4 Est. Production Post 2010 Post 2010 Start-up Post
Slide 30: Development Pipeline
Development Pipeline 1 EXPLORATION EVALUATION DEVELOPMENT DEVELOPMENT CONSTRUCTION PRODUCTION Peñasquito – Oxide (2008) Benso (2008) Twin Creeks (2008) Taparko (2008) Dolores (2008) Peñasquito – Sulfide I (2009) Peñasquito – Sulfide II (2010) Marigold (2010) Gold Hill Pascua-Lama Post-2010 Holt-Holl
Slide 31: Why Invest in Royal Gold
fi B ROVALGOLDING The Leading Precious Metal Royatty Company = Why Invest in Royal Gold
Slide 32: Right Time
Right Time Macro economic conditions Subprime meltdown Fiat currencies and monetary policy U.S. balance sheet Geopolitical uncertainty Supply Mine production, permitting, cost Exploration challenges Central Bank selling Demand Traditional consumption Investment consumption Exchange traded funds Sour
Slide 33: Right Time
Right Time Macro economic conditions Subprime meltdown Fiat currencies and monetary policy U.S. balance sheet Geopolitical uncertainty Supply Mine production, permitting, cost Average Yield of Ore Exploration challenges Central Bank selling Demand Traditional consumption Investment consumption Excha
Slide 34: Right Strategy
Right Strategy Exposure to: Production, growth and optimization Discovery and exploration potential Portfolio growth potential Metal price appreciation Higher margins Regional Cash Cost Per Ounce Inflation Reduced exposure to: Capital costs Operating costs Environmental liabilities Closure costs Sou
Slide 35: Right Strategy
Right Strategy Exposure to: Production, growth and optimization Discovery and exploration potential Portfolio growth potential Metal price appreciation Higher margins Royal Gold's Financial Performance Relative to the Gold Price 300% Avg Gold Price Net Income Reduced exposure to: 250% Free Cash Flow
Slide 36: Right Company
Right Company Strong track record of growth Expanded portfolio of producing properties Robust pipeline of development properties Positioned well for future growth
Slide 37: Presentation footer here
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 11/5/2008 Presentation footer here 37