Royal Gold, Inc. · NASDAQ:RGLD
Royal Gold — BMO Capital Markets 2010 Global Metals & Mining Conference
38 slides from Royal Gold's conference presentation, February 2010
Slide 1: BMO Capital Markets 2010 Global Metals & Mining Conference
BMO Capital Markets 2010 Global Metals & Mining Conference February 2010
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 f
Slide 3: Agenda
Agenda Execution of Growth Strategy Expanded Royalty Portfolio Drivers for Future Growth
Slide 4: Execution of Growth Strategy
Execution of Growth Strategy
Slide 5: Transformational Growth
Transformational Growth January – February 2010 completion of: Andacollo gold royalty International Royalty Corporation (IRC) Total investment (2005-2010): $1.4B 1,650 IRC 1,450 1,250 Investment ($ Millions) 1,050 Andacollo El Chanate and Marigold Barrick Portfolio 850 Battle Mountain 650 Pascua-Lam
Slide 6: Transformational Growth: Andacollo
Transformational Growth January – February 2010 completion of: Andacollo gold royalty International Royalty Corporation (IRC) Total investment (2005-2010): $1.4B 1,650 IRC 1,450 1,250 Investment ($ Millions) 1,050 Andacollo Andacollo El Chanate and Marigold Barrick Portfolio 850 Interest: 75% of gol
Slide 7: Transformational Growth: Andacollo and IRC
Transformational Growth January – February 2010 completion of: IRC Andacollo gold royalty Interest: 79 royalty properties International Royalty Corporation (IRC) 11 producing royalties, including Voisey’s Bay Total investment (2005-2010): $1.4B 10 development royalties, including Pascua-Lama 58 expl
Slide 8: Asset Diversification and Balance
Asset Diversification and Balance Revenue diversification achieved New long life mines replace maturing assets and provide growth In 2013, 60% of revenues expected from mines with lives greater than 15 years 2004 CY Revenue 2009 CY Revenue 2013E CY Revenue 1 Cortez Cortez Siguiri Nevada Voisey’s Bay
Slide 9: Strong Gold Focus
Strong Gold Focus Commissioning of near-term projects will grow precious metal exposure Precious metals dominant, long-term growth profile Chile Mexico Canada Australia Africa Andacollo Peñasquito Canadian Malartic Gwalia Deeps Inata Pascua-Lama Dolores Wolverine South Laverton Holt Royal Gold 1 IRC
Slide 10: 2010 Acquisition Reserve Growth
2010 Acquisition Reserve Growth Precious metal reserves subject to royalties increased 20% to 95.0M ounces 1 Precious metals equity reserves increased 129% to 3.7M ounces 1 Gold Reserves Subject to Royalties Royalty Equity Reserves (calendar years) (calendar years) 100 6 90 5 80 70 4 60 (millions) O
Slide 11: 2010 Acquisition Reserve Growth
2010 Acquisition Reserve Growth Precious metal reserves subject to royalties increased 20% to 95.0M ounces 1 Precious metals equity reserves increased 129% to 3.7M ounces 1 Gold Reserves Subject to Royalties Royalty Equity Reserves (calendar years) (calendar years) 100 6 90 5 80 70 4 60 (millions) O
Slide 12: Favorable Geopolitical Distribution of Revenue
Favorable Geopolitical Distribution of Revenue Currently 68% of revenue from United States, Mexico, Canada, Chile and Australia Projected 95% of revenue from United States, Mexico, Canada, Chile and Australia in 2013 Royal Gold 1 IRC 1 Pro Forma 1 2013E 2 United States Mexico Canada Chile Australia
Slide 13: Expanded Royalty Portfolio
Tq Ip A ROYALGOLD,ING The Gold Standard of Royalty Companies Expanded Royalty Portfolio
Slide 14: 51 Producing and Development Properties
51 Producing and Development Properties Properties not shown: 3 producing oil and gas royalties 142 Evaluation/Exploration properties
Slide 15: Key Assets CY 2009
Key Assets CY 2009 Taparko (Burkina Faso) Taparko Royalty: 1 TB-GSR1: 15%; TB-GSR2: 0.0% to 10%; TB-GSR3: 2.0% Reserves: 2,3 0.8M oz (Au) Cortez - Pipeline Mining Complex (U.S.) Cortez Royalty: GSR1 and GSR2: 0.4% to 5.0%; GSR3: 0.71%; NVR1: 0.39% Reserves: 3 4.3M oz (Au) Robinson Robinson (U.S.) Ro
Slide 16: Key Assets 2013
Key Assets 2013 Peñasquito (Mexico) Taparko Royalty: 2.0% NSR Reserves: 1 17.4M oz (Au) 1.0B oz (Ag) 15.4 B lbs (Zn) 7.1B lbs (Pb) Cortez Andacollo (Chile) Royalty: 75% of gold production Reserves: 2 1.6M oz (Au) Robinson Tier One Pascua-Lama (Chile) Royalty: 1.08% to 4.23% 80% of Estimated Reserves
Slide 17: Peñasquito (Goldcorp – Mexico)
Peñasquito (Goldcorp – Mexico) Precious Metals Reserve Profile Royalty: 2.0% NSR (all metals) 50 Reserves: 1 17.4M oz (Au) Gold Equivalent Ounces 3 40 1.0B oz (Ag) (millions) 30 15.4B lbs (Zn) 7.1B lbs (Pb) 20 CY’09 production (actual): 10 89,012 oz (Au) 2006 2007 2008 Gold Reserves Silver Reserves
Slide 18: Andacollo (Teck – Chile)
Andacollo (Teck – Chile) Royalty: 75% of gold until 910,000 payable ounces; 50% thereafter Reserves: 1.6M oz Au 1 Production: Commissioning substantially complete Commercial production: First-half 2010 55,000 tonnes/day mill capacity Estimated annual production: 2 53,000 oz (Au) 76,000 tonnes (Cu) 3
Slide 19: Pascua-Lama (Barrick – Chile)
Pascua-Lama (Barrick – Chile) Gold Royal Gold IRC Combined Royalty: See chart Price/ Royalty Rate Royalty Rate Royalty Rate Oz ($) (NSR) (NSR) (NSR) Reserves: 1,2 14.6M oz (Au) <325 0.16% 0.47% 0.63% 400 0.32% 0.94% 1.26% Estimated production: 3 500 0.56% 1.63% 2.19% Start-up – 2013 600 0.73% 2.14%
Slide 20: Voisey's Bay (Vale – Canada)
Voisey’s Bay (Vale – Canada) Royalty: 2.7% NSR Reserves: 1 1,758M lbs (Ni) 1,011M lbs (Cu) 89M lbs (Co) Production (9M ’09): 2 79M lbs (Ni) Mine life: 20+ years 3 Actual royalty revenue (TTM): 2,4 $23.2M “Voisey’s Bay could continue producing as much as 50,000 metric tons a year through 2049 if Vale
Slide 21: Key Assets 2013
Key Assets 2013 Cortez (Barrick) Location: U.S. Cortez Royalty: GSR1 and GSR2: 0.4% to 5.0%; GSR3: 0.71%; NVR1: 0.39% Reserves: 1 4.3M oz (Au) Leeville (Newmont) Location: U.S. Leeville Royalty: 1.8% NSR 1 Reserves: 2.5M oz (Au) Robinson (Quadra) Location: U.S. Robinson Royalty: 3.0% NSR 1 Reserves:
Slide 22: Key Assets 2013
Key Assets 2013 Wolverine (Yukon Zinc) Wolverine Location: Canada Royalty: 9.45% NSR (Au and Ag) 1 Reserves: 0.2M oz (Au) 46.7M oz (Ag) Holt (St Andrew Goldfields) Location: Canada Holt Royalty: 0.00013 X gold price NSR (equal to 13% at $1,000/oz) Reserves: 2 0.5M oz (Au) Mulatos (Alamos) Location:
Slide 23: Drivers for Future Growth
Tq Ip A ROYALGOLD,ING The Gold Standard of Royalty Companies Drivers for Future Growth
Slide 24: Effective Business Model
Effective Business Model Royalty Asset Distribution Focus on gold (number of properties 1) Producing Option value Development Economies of scale Evaluation Efficient Exploration 0 20 40 60 80 100 Precious Metals Precious Metals as By-Product Diamonds Other
Slide 25: Effective Business Model
Effective Business Model Royalty Asset Distribution Focus on gold (number of properties 1) Producing Option value Development Economies of scale Evaluation Efficient Exploration 0 20 40 60 80 100 Precious Metals Precious Metals as By-Product Diamonds Other Royal Gold’s Asset and 140 Revenue Growth v
Slide 26: Effective Business Model
Effective Business Model Royalty Asset Distribution Focus on gold (number of properties 1) Producing Option value Development Economies of scale Evaluation Efficient Exploration 0 20 40 60 80 100 Precious Metals Precious Metals as By-Product Diamonds Other Royal Gold vs. Royal Gold’s Asset and Major
Slide 27: Royal Gold Market Structure
Royal Gold Market Structure Market Information (as of 2/24/10) Dividend Growth 0.36 NASDAQ: RGLD; TSX: RGL 0.32 0.28 Market cap: $2.0B 0.26 0.22 Average daily volume (TTM): 893,000 Shares Outstanding Common: 1 49.2M Insider ownership: 6% 2006 2007 2008 2009 2010 ($ per share per calendar year) Finan
Slide 28: Growth Pipeline
Growth Pipeline 1 Exploration Evaluation Development Construction Ramp-Up to Full Production Gwalia Deeps (2010) Peñasquito SAG Line 1 (2010) Dolores (2010) Las Cruces (2010) South Laverton (2010) Inata (2010) Andacollo (2010) Troy (2010) Wolverine (2010) Peñasquito SAG Line 2 (2010) Canadian Malart
Slide 29: Growth Pipeline: 2013E Production
Growth Pipeline 1 2013E Estimated Growth Pipeline 4,5 Exploration Evaluation Development Construction Ramp-Up to 160 Full Production Gwalia Deeps (2010) Peñasquito SAG Line 1 (2010) 140 Production – Royalty Gold Equivalent Ounces Dolores (2010) Las Cruces (2010) 120 South Laverton (2010) Inata (2010
Slide 30: Enhanced Shareholder Return
Enhanced Shareholder Return Five-Year Total Shareholder Return (February 24, 2005 – February 24, 2010) 1 160% 148% 140% 120% 100% 80% 58% 60% 40% 20% 0% Average of North American Royal Gold Majors 2
Slide 31: Footnotes
fp if A ROYALGOLD,ING The Gold Standard of Royalty Companies Footnotes
Slide 32: Footnotes
Footnotes PAGE 8: 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 37 for additional information regarding 2013 estimates
Slide 33: Footnotes (cont.)
Footnotes (cont.) PAGE 15: KEY ASSETS CY 2009 1 Royalty percentages: TB-GSR1 – 15.0%; TB-GSR2 – 4.3% when the average monthly gold price ranges between $385 and $430 per ounce. Outside of this range, the royalty rate is calculated by dividing the average monthly gold price by 100 for gold prices abo
Slide 34: Footnotes (cont.)
Footnotes (cont.) PAGE 17: PENASQUITO (GOLDCORP – MEXICO) 1 Reserves as of December 31, 2008. 2 Based on (1) NI 43-101 Peñasquito Technical Report dated March 10, 2009; (2) the operator’s stated life of mine average production of 500,000 ounces of gold, 30 million ounces of silver, 450 million pound
Slide 35: Footnotes (cont.)
Footnotes (cont.) PAGE 22: KEY ASSETS 2013 1 Reserves as of October 2007. 2 Reserves as of December 31, 2008. 3 Reserves as of June 2009. PAGE 24-26: EFFECTIVE BUSINESS MODEL 1 Royalties not shown include three oil and gas royalties: Pederson, Wheeler and Lagerquist. 2 EBITDA margin calculated as EB
Slide 36: Footnotes (cont.)
Footnotes (cont.) PAGE 28: GROWTH PIPELINE (cont.) 4 Calculated using the following commodity prices: gold ($1,000 per ounce); silver ($15.00 per ounce); copper ($2.75 per pound); zinc ($1.00 per pound); lead ($1.00 per pound); nickel ($7.00 per pound). 5 See page 37 for information regarding 2013 e
Slide 37: Footnotes (continued)
Footnotes (continued) 2013 ESTIMATE FOOTNOTE: All 2013 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-sc
Slide 38: Royal Gold, Inc. Contact
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 38
Royal Gold — BMO Capital Markets 2010 Global Metals & Mining Conference on 6ix