Royal Gold, Inc. · NASDAQ:RGLD
Royal Gold — RBC Capital Markets Global Mining and Materials Conference 2013
32 slides from Royal Gold's conference presentation, Jun 18, 2013
Slide 1: RBC Capital Markets Global Mining and Materials Conference
RBC Capital Markets Global Mining and Materials Conference JUNE 2013 Page 1
Slide 2: Cautionary Statement
Cautionary Statement 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 could cause actual results to differ
Slide 3: Introduction
Introduction Company Overview Cornerstone Property Review Value Creation Page 3
Slide 4: Company Overview
Company Overview ~ $3.5B public royalty and streaming company, listed on both the NASDAQ (RGLD) and the Toronto Stock Exchange (RGL) Focused on gold, which contributed 73% of revenues for the past twelve months ended March 31, 2013 Portfolio of quality assets, including royalty/stream interests in:
Slide 5: Key Strengths: Disciplined Business Strategy
Key Strengths 1 Disciplined Business Strategy Pursuing Premium Returns at Cash Flow Stability and Growth Lower Risk Through Accretive Acquisitions, Reinvestment and Reserve Replacement Exploration Gold Reserve Replacement ¹ 105 Junior Operators 85 Intermediate Operators 65 Ounces (millions) 45 Index
Slide 6: Key Strengths: Low Fixed Operating Costs and No Ongoing Development Costs
Key Strengths 2 Low Fixed Operating Costs and No Ongoing Development Costs Royal Gold’s Costs have remained flat with TTM cash operating expenses, including production taxes, at 9% of revenue 1 Royal Gold Cash Cost Margin Reflects Low Fixed Industry Cash Cost Margin Has Been Affected by Rising Opera
Slide 7: Key Strengths: Geographically and Operationally Diverse Asset Base
Key Strengths 3 Geographically and Operationally Diverse Asset Base Royalty Revenue is A Portfolio With A Range of Widely Distributed Structures and Properties Revenue by Geography Operational Diversification (TTM March 31, 2013) 300 8% 250 4% 28% Revenues ($ millions) 200 18% 150 100 19% 23% 50 0 2
Slide 8: Key Strengths: Stable Mining Operations with Reputable Operating Partners
Key Strengths 4 Stable Mining Operations with Reputable Operating Partners We Work With the Premier With 66% of FY2012 Mining Operators Revenue From Investment Grade Rated Companies Net Gold Equivalent Reserves by Operator Revenue by Operator (December 31, 2012) 1,2 (TTM March 31, 2013) 1% 15% 27% 1
Slide 9: Key Strengths: Long Lived Business Interests
Key Strengths 5 Long Lived Business Interests Median projected life of our largest properties is 15 years The four largest properties – Mt. Milligan, Andacollo, Pascua-Lama, and Peñasquito – are each projected to at least 2036 Property Calendar Year '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '1
Slide 10: Key Strengths: Strong Margins Drive Steady Cash Flow
Key Strengths 6 Strong Margins Drive Steady Cash Flow EBITDA has increased every $210.5M EBITDA in the first year since FY 2006, reaching 9 months of FY 2013 alone $237.6M in FY2012 Historical Financial Results ¹ 300 180 250 150 GEO Production (koz) 200 120 US$mm 150 90 100 60 50 30 0 0 FY2008 FY200
Slide 11: Cornerstone Property Review
Cornerstone Property Review Page 11
Slide 12: Portfolio of Quality Assets
Portfolio of Quality Assets Page 12
Slide 13: Andacollo (Teck)
Andacollo (Teck) Region IV, Chile 75% NSR until 910K ounces are Royalty: 1 produced; 50% NSR thereafter Reserves: 2 1.8M ozs gold CY 2013 Production Guidance: 63,000 ozs gold 3 FY 2013 YTD Revenue: $66.0M FY 2012 Revenue: $64.1M Mine Life: 20+ years - Andacollo has established steady state operation
Slide 14: Peñasquito (Goldcorp)
Peñasquito (Goldcorp) Zacatecas, Mexico Royalty: 2.0% NSR - 15.7M ozs gold - 5.8B lbs lead Reserves: 1 - 912M ozs silver - 13.9B lbs zinc - 360,000 to 400,000 ozs gold CY 2013 Production Guidance: 2 - 20M to 21M ozs silver FY 2013 YTD Revenue: $23.0M FY 2012 Revenue: $28.5M Mine Life: 22 years Growt
Slide 15: Voisey's Bay (Vale)
Voisey’s Bay (Vale) Labrador and Newfoundland, Canada Royalty: 2.7% NSR - 1.0B lbs nickel Reserves: 1 - 587.0M lbs copper - 131.6M lbs nickel FY 2012 Production: 2 - 107.2M lbs copper FY 2013 YTD Revenue: $26.0M FY 2012 Revenue: $36.0M Mine Life: 3 20+ years Status: Steady state; 6,000 TPD Page 15
Slide 16: Mt. Milligan (Thompson Creek) Growth Catalyst
Mt. Milligan (Thompson Creek) Growth Catalyst British Columbia, Canada Mine profile: Open pit copper/gold porphyry Forecast Gold Production 2 300 Reserves: 1 6.0M oz gold Ounces/Thousands 250 262,000 ozs of gold annually during 200 Est. production: 2,3 first six years; 194,000 ozs of gold 150 annual
Slide 17: Mt. Milligan (Thompson Creek) Investment Summary
Mt. Milligan (Thompson Creek) Investment Summary British Columbia, Canada Transaction summary: 25% of gold for $311.5M in July 2010 15% of gold for $270M in December 2011 12.25% of gold for $200M in August 2012 = 52.25% of gold for $781.5M Delivery payment of $435/oz or prevailing market price Mt. M
Slide 18: Mt. Milligan (Thompson Creek) Attractive Attributes
Mt. Milligan (Thompson Creek) Attractive Attributes British Columbia, Canada Favorable geographic location Provincial and Federal permits Strong local and regional infrastructure: Low cost power Adequate water Low strip ratio Road, rail and port access Support communities Long mine life Exploration
Slide 19: Mt. Milligan photo
Photo as of September 2012. Page 19
Slide 20: Mt. Milligan photos
Photos as of February 2013. Page 20
Slide 21: Pascua-Lama (Barrick) Growth Catalyst
Pascua-Lama (Barrick) Growth Catalyst Region III, Chile 0.78% to 5.23% NSR Royalty: 1,2 (5.23% above $800 gold) Forecast Royalty Ounces 6 14.7M ozs gold 60 Reserves: 3 (limited to gold in Chile) Ounces (Thousands) 50 Capital: $8.0B to $8.5B 40 30 Initial Production: First gold expected post 2014 4 2
Slide 22: Pascua-Lama photos
Photos as of March 2013. Page 22
Slide 23: Project Development Pipeline
Project Development Pipeline Meekatharra and Peñasquito Wolverine Gold Hill Mt. Milligan and Pascua-Lama Near term production growth Significant longer term growth Continued ramp-up at from cornerstone producing New production potential from cornerstone producing growth asset property development pr
Slide 24: Value Creation
Value Creation Page 24
Slide 25: Significant Upside: Mt. Milligan and Pascua-Lama
Significant Upside Mt. Milligan and Pascua-Lama Mt. Milligan and Pascua-Lama Are Expected to Nearly Double Royal Gold’s Current GEO’s Once in Full Production 350 300 Net Gold Equivalent Ounces (thousands) 250 200 150 100 50 - FY 2012 1 Mt. Milligan 2,3 Pascua-Lama 2,4 (full production) (full product
Slide 26: Footnotes
Footnotes Page 26
Slide 27: Footnotes
Footnotes PAGE 5. KEY STRENGTHS (Disciplined Business Strategy) PAGE 12: PORTFOLIO OF QUALITY ASSETS PAGE 16: MT. MILLIGAN 1. Reserves within Royal Gold’s areas of interest. 1. Producing properties are those that generated 1. Reserves as of October 23, 2009. revenue during fiscal 2012 or are expecte
Slide 28: Footnotes
Footnotes PAGE 21. PASCUA-LAMA (cont.) 5. Based on the Technical Report for the Pascua-Lama project filed by Barrick Gold, March 2011. 6. Royalty ounces are based on production guidance estimated by Barrick (see footnote 5 above). PAGE 23. WORLD CLASS PORTFOLIO – LOW COST OPERATORS 1. Gold royalty/s
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Slide 32: Contact
1660 Wynkoop Street Denver, CO 80202-1132 303.573.1660 info@royalgold.com www.royalgold.com Page 32
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