Royal Gold, Inc. · NASDAQ:RGLD
Royal Gold — Cowen and Company 5th Annual Global Metals, Mining & Materials Conference (November 2014)
27 slides from Royal Gold's conference presentation, November 2014
Slide 1: Cowen and Company 5th Annual Global Metals, Mining & Materials Conference
Cowen and Company 5th Annual Global Metals, Mining & Materials Conference Stefan Wenger Chief Financial Officer November 2014 SOLID PORTFOLIO. SOLID FUTURE.
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 m
Slide 3: What Makes Royal Gold Unique
What Makes Royal Gold Unique Growth Near-term growth driven by Mt. Milligan Long mine lives amongst largest investments Quality Focused investment criteria World class portfolio Opportunity >$900m uncommitted capital to invest >$100m deals are meaningful Value Strong per share metrics Low relative v
Slide 4: Long mine lives amongst largest investments
Growth Long mine lives amongst largest investments 1000 25 Estimated Years of Remaining Mine Life 900 800 20 700 600 15 $ Millions 500 400 10 300 200 5 100 0 0 Initial investment Cumulative net revenue through June 30, 2014 Estimated remaining mine life November 2014 4
Slide 5: Mt. Milligan Ramp Up
Mt. Milligan Ramp Up 180 160 Mt. Milligan reported payable production 140 Cumulative ounces 120 100 Production subject to 80 RGLD stream (payable Gold in the system of production *.5225) 60 ~39koz at Sept 30 40 20 RGLD gold received to date 0 CQ4 '13 CQ1 '14 CQ2 '14 CQ3 '14 Calendar year to date pro
Slide 6: Phoenix Project Construction
Phoenix Project Construction Rubicon Minerals photo of Phoenix mill construction, September 2014 Aerial View, June 2014 As of early September: Over half of the project has been completed Mill assembly and construction well underway 24% of lateral and vertical development complete as of early S
Slide 7: Growth: Recent Investments
Growth Recent Investments Ilovitza Project, Macedonia Tetlin Project, Alaska Core shed, Ilovitza Current reserve of 2.45Moz gold and 905M lbs 700,000 acres near Tok, Alaska, on the Alcan copper, 23 year mine life highway, via an all-weather gravel road Production startup planned for 2018 Purchased a
Slide 8: Quality
Quality Focused investment criteria yields a world class portfolio 56% of our FY2014 revenues from Counterparty investment-grade rated companies 1 Place Over 92% of our reserves from S&P “A” or higher rated countries 1 89% of FY2014 Production Weighted average cash cost ~$576/GEO, Andacollo, Peñasqu
Slide 9: Quality: Cash Margin by Operating Property
Quality Cash Margin by Operating Property, First Half 2014 100% 90% 80% 70% The operators of our royalties and streams recognized an average 57%, or $576 per gold equivalent ounce, gross margin in the first half of 2014 on properties 60% subject to our interest 57% average 50% 40% 30% 20% 10% 0% Nov
Slide 10: Quality: World class, long lived portfolio
Quality World class, long lived portfolio Mt. Milligan Royalty: 52.25% of payable gold 1 Contribution to FY2015 Q1 revenue Reserves: 2 6.0M oz (Au) 29% or $19.7M Estimated Mine Life: 20+ Years 5 Andacollo Royalty: 3 75% of Au production (NSR) Contribution to FY2015 Q1 revenue Reserves: 2 1.8M oz (Au
Slide 11: Opportunity: ~$900 million uncommitted
Opportunity ~$900 million uncommitted at a time when royalty/stream financing is needed Capital to invest… Net of future commitments ($m) $1,187 Working capital & undrawn credit at 9-30-14 -$17.0 Phoenix payment (10-3-14) Liquidity at 9/30/2014 $737M Working Capital $450M Undrawn Credit -$7.5 Ilovit
Slide 12: Opportunity: Companies involved in royalty/streaming
Opportunity Average of 12 companies per year involved in royalty/streaming over last decade 16 Callinan Royalties Osisko Royalties Coeur Gold Capital 14 XDM Royalty Global Royalty 12 Average 2004-2014 Premier Royalty Gold Royalties Lumina Royalty 10 Sandstorm Metals & Energy Sandstorm Gold Royalty 8
Slide 13: Opportunity: Industry market cap concentration
Opportunity Most of the industry’s market cap is highly concentrated 1 30 Callinan Royalties XDM Royalty 25 Premier Royalty Tanzanian Royalty Exploration Corp Global Royalty Corp 20 Gold Royalties Corporation Lumina Royalty US$ Billion Sandstorm Metals and Energy 15 Sandstorm Gold Gold Wheaton 10 Am
Slide 14: Trading at a Discount to Historical Price to Book Value
Multiple of Price to Book 0.5x 1.0x 1.5x 2.0x 2.5x 3.0x 3.5x 11/9/09 1/9/10 November 2014 3/9/10 5/9/10 7/9/10 9/9/10 11/9/10 1/9/11 3/9/11 5/9/11 7/9/11 9/9/11 11/9/11 1/9/12 3/9/12 5/9/12 Value 7/9/12 9/9/12 11/9/12 1/9/13 3/9/13 5/9/13 7/9/13 9/9/13 11/9/13 Trading at a Discount to Historical Pri
Slide 15: What Makes Royal Gold Unique
What Makes Royal Gold Unique Growth Near-term growth driven by Mt. Milligan and Phoenix Quality Long mine lives amongst largest investments World class portfolio Opportunity >$900m uncommitted capital to invest >$100m deals are meaningful Value Strong per share metrics Low relative valuation Novembe
Slide 16: Endnotes
Endnotes SOLID PORTFOLIO. SOLID FUTURE.
Slide 17: 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 8 QUALITY 1. Source is S&P CapitaliQ September 10, 2014 fo
Slide 18: Appendix A: Property Portfolio
Appendix A: Property Portfolio SOLID PORTFOLIO. SOLID FUTURE.
Slide 19: What We Do – Royalty and Stream Financing
What We Do – Royalty and Stream Financing We invest $ in a mining project in exchange for a right a to percentage of metal production Mining Company Appropriate for any stage of the project life cycle Production Percent of Transactions can be structured to be tax efficient Cash Transactions are ofte
Slide 20: The Quality Royalty / Streaming Name to Own
Royal Gold The Quality Royalty / Streaming Name to Own Longevity – in business since 1981 Exploration Near-Term Growth – already bought and paid for No cost inflation concerns Junior Operators Quality assets/reputable partners Intermediate Operators ~80% of Revenue => EBITDA $2.1B in investments on
Slide 21: Gold Price vs US Debt Ceiling
Gold Price vs US Debt Ceiling Historical Gold Price and US Debt Ceiling Historical Relationship July 1994 - September 2014 Suggests ~$1500 equilibrium $2,000 $18,000 $2,000 $1,800 $16,000 $1,600 y = 0.1082x - 302.89 $1,500 $14,000 R² = 0.9109 $1,400 $12,000 $1,200 Gold Price $1,000 $10,000 $1,000 $8
Slide 22: Alignment with Counterparties
Alignment with Counterparties Hypothetical example estimate for illustrative purposes only: Equity Stream 200koz/year gold project expansion, 2 year development, 12 yr mine life Current market cap $300,000,000 $300,000,000 Shares outstanding 200,000,000 200,000,000 Share price $1.50 $1.50 Financing
Slide 23: Alignment with Counterparties
Alignment with Counterparties Return of investment based No joint venture involvement on production Royal Gold provides additional No principal amortization or investor exposure maturity date 4-6 week due diligence Deliveries can match key smelter terms Repayment Management Simplified reporting Time
Slide 24: Multiple Investment Entry Points
Alignment with Counterparties Multiple Investment Entry Points 1 Capital Consuming Capital Generating 1 For illustrative purposes only November 2014 24
Slide 25: Appendix B: Property Portfolio
Appendix B: Property Portfolio SOLID PORTFOLIO. SOLID FUTURE.
Slide 26: Property Portfolio
Property Portfolio November 2014 26
Slide 27: Solid Portfolio. Solid Future.
1660 Wynkoop Street Denver, CO 80202-1132 303.573.1660 info@royalgold.com www.royalgold.com SOLID PORTFOLIO. SOLID FUTURE.