Royal Gold, Inc. · NASDAQ:RGLD
Royal Gold — Non-Deal Roadshow (October 2013)
25 slides from Royal Gold's roadshow presentation, Oct 9, 2013
Slide 1: West Coast Meetings 2013
West Coast Meetings 2013 Tony Jensen, President and CEO October 9-10, 2013
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: Overview
Overview Growth – Strong track record of growth – Embedded growth, fully invested • Positioned to grow volume ~50% from Mt. Milligan alone Financially Robust – Mt. Milligan investment complete – Low costs with Adjusted EBITDA1 margin at ~90% of revenue – Liquidity of ~$1 billion Attractive Market En
Slide 4: Strong Track Record of Growth
Strong Track Record of Growth In 2010, our growth Exploration Evaluation Development Construction Ramp-Up to Full Production pipeline included Gwalia Deeps (2010) many “new” Peñasquito SAG Line 1 (2010) Dolores (2010) properties including Las Cruces (2010) South Laverton (2010) Andacollo, Inata (201
Slide 5: “New” Properties in 2010
Strong Track Record of Growth Fiscal 2013 Revenue Contribution by Property In 2013, those 100% “New” Properties in 2010 “new” properties Holt 90% contributed over Marigold half of Royal Gold’s 80% Inata total revenue 70% Las Cruces 60% Dolores Malartic 50% Mulatos 40% Wolverine 30% Penasquito 20% An
Slide 6: Embedded Growth, Fully Invested: Estimated Gold Equivalent Ounces
Embedded Growth, Fully Invested 350 Estimated Gold Equivalent Ounces Net Gold Equivalent Ounces in Thousands 300 Pascua-Lama 250 ~50% estimated increase from Current Mt. Milligan FY 2013 due to 200 ~180k oz/yr Mt. Milligan alone 150 Other 100 Voisey’s Bay Peñasquito 50 Andacollo 0 FY 2013 Mt. Millig
Slide 7: Embedded Growth, Fully Invested
Embedded Growth, Fully Invested Development Cornerstone Properties Mt. Milligan Stream 1 52.25% of payable gold : Reserves: 2 6.0M oz (Au) Est. Mine Life: 22 years Commercial Prod: Q4 CY13 Est. Production: 3 262k oz (Au)/yr • Phased start-up of the mill underway • Saleable concentrate production beg
Slide 8: Mt. Milligan Facilities, July 2013
Embedded Growth, Fully Invested Mt. Milligan Facilities, July 2013 October 9-10, 2013 8
Slide 9: Mt. Milligan Primary Crusher, July 2013
Embedded Growth, Fully Invested Mt. Milligan Primary Crusher, July 2013 October 9-10, 2013 9
Slide 10: Mt. Milligan 40ft SAG Mill, July 2013
Embedded Growth, Fully Invested Mt. Milligan 40ft SAG Mill, 60kTPD Design, July 2013 October 9-10, 2013 10
Slide 11: Mt. Milligan Flotation and Regrind, July 2013
Embedded Growth, Fully Invested Mt. Milligan Flotation and Regrind, July 2013 40 October 9-10, 2013 11
Slide 12: Pascua-Lama Processing Facilities, Argentina, May 2013
Embedded Growth, Fully Invested Pascua-Lama Processing Facilities, Argentina, May 2013 40 September 23, 2013 12
Slide 13: Financially Robust: Producing Cornerstone Properties
Financially Robust Producing Cornerstone Properties Andacollo Royalty: 1 75% of Au production (NSR) Contribution to total FY 2013 revenue Reserves: 2 1.8M oz (Au) 28% or $82M Estimated Mine Life: 20+ Years Estimated CY13 production: 3 63k oz (Au) Peñasquito Contribution to total Royalty: 2.0% NSR FY
Slide 14: Cash Margin by Operating Property
Financially Robust Cash Margin by Operating Property1, H1 2013 90% 80% 70% 60% Cash margin 50% Weighted Average Cash Margin 46% 40% 30% 20% 10% 0% 0% 95%* Percentage of H1 2013 Revenue *5% of Royal Gold’s revenue does not have a corresponding cash margin as the operator does not report it to the lev
Slide 15: Efficient Use of Resources Maximizes Margins
Financially Robust Efficient Use of Resources Maximizes Margins $350 $300 The average employee $250 count at a mining company with >$250M $200 in EBITDA is over 9,000. Royal Gold stands out $150 with less than $25 million in overhead and $100 just 21 employees. Adjusted EBITDA margin ~90% of Revenue
Slide 16: Strong Balance Sheet and Cash Flow in an Attractive Market
Financially Robust Strong Balance Sheet and Cash Flow in an Attractive Market $709M $350M Liquidity at June 30, 2013 Working Capital Undrawn Credit $370M convertible Debt and Commitments Debt 2019 @2.875% * FY 2013 Operating Cash Flow $173M $0 $200 $400 $600 $800 $1,000 $1,200 *Indicates $50M commit
Slide 17: Attractive Market Environment
Attractive Market Environment 2012 had lowest percentage Operators, explorers and of mining finance from equity developers facing less in a decade,1 and H1 2013 favorable debt markets as proceeds trended even lower yields have increased Follow-on issues by month (2012 - H1 2013) 2 US High Yield B Ef
Slide 18: Average mine development cycle
Attractive Market Environment Average mine development cycle capital intensive but delivers long term cash flow optionality Capital Consuming 1 Capital Generating 2 Average 10 - 15 years 10 - 30+ years October 9-10, 2013 18
Slide 19: Peñasquito Case Study
Attractive Market Environment Peñasquito Case Study Development Cycle and Optionality 2012 2009 Gold Royal Gold 2006 First sales reserves carrying cost = begin, 15 are greater $102/EqOz Au 1994 Royal Gold than 15M Formal acquires years after 1950’s formal oz with a exploration royalty; 23 year First
Slide 20: Multiple Sources for New Business Opportunities
Attractive Market Environment Multiple Sources for New Business Opportunities 100% 14% 20% 16% 15% 90% The largest 80% source of our 70% gold revenue 31% 44% 60% 48% 48% in fiscal 2013 50% was non- 40% precious 30% metals mines 20% 54% 36% 36% 37% 10% 0% 2010A 2011A 2012A 2013A Primary Gold Mines Po
Slide 21: Share Price Remains at Discount to Historical Multiples
Favorably Positioned Share Price Remains at Discount to Historical Multiples 1 RGLD Price / Book Value 4.5 4 5 year average: 2.5x 3.5 Current: 1.4x 3 2.5 2 1.5 1 0.5 0 Source: Ycharts. Book value is the company's total tangible assets less its total liabilities and shareholders’ equity. October 9-10
Slide 22: Royal Gold’s Growth Profile
Royal Gold’s Growth Profile We are the smallest of the 3 major precious metals royalty/streaming players, and offer strong leverage to growth 18.00% Estimated Volume Growth through 2017 CAGR1 16.00% 14.00% 12.00% 10.00% 8.00% 6.00% 4.00% 2.00% 0.00% FNV SLW RGLD October 9-10, 2013 22
Slide 23: Royal Gold Summary
Royal Gold Summary Mt. Milligan, September 2013 Growth – Strong track record of growth – Embedded growth, fully invested Financially Robust – Mt. Milligan investment complete – EBITDA margin ~90% of revenue – Liquidity of ~$1 billion Attractive Market Environment – a compelling alternative to challe
Slide 24: Endnotes
Endnotes Many of the matters in these endnotes and the accompanying slides constitute forward looking statements and are subject to numerous risks, which could cause actual results to differ. See complete Cautionary Statement on page 2. PAGE 3 OVERVIEW 3. Estimated production of 262,000 ounces of go
Slide 25: 1660 Wynkoop Street Denver, CO
1660 Wynkoop Street Denver, CO 80202-1132 303.573.1660 info@royalgold.com www.royalgold.com