Royal Gold, Inc. · NASDAQ:RGLD
Royal Gold — RBC's 18th Annual London Precious Metals Conference 2019
24 slides from Royal Gold's conference presentation, Nov 12, 2019
Slide 1: RBC's 18th Annual London Precious Metals Conference
RBC’s 18th Annual London Precious Metals Conference Bill Heissenbuttel, CFO & VP Strategy November 12, 2019 NASDAQ: RGLD
Slide 2: Cautionary Statement
Cautionary Statement Cautionary “Safe Harbor” Statement Under the Private Securities Litigation Reform Act of 1995: 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
Slide 3: FQ1 2020 Overview
FQ1 2020 Overview Financial/operating performance: Volume of 80,700 GEOs* Revenue of $118.8M, 79% from gold $71.2 cash flow from operations $70.5M net income ($1.07/share) $17.4M in dividends Significant strategic achievements: Balance sheet continues to strengthen • Reduced debt by $50M • ~$1B of l
Slide 4: Royal Gold Attributes
Royal Gold Attributes Business Model Optionality Highly efficient Portfolio Diverse, gold focused High quality Generating organic growth Capital Deployment Discipline Accretive, non-dilutive Financial Position Strong liquidity Solid capital structure Total Shareholder Return (TSR) Leading commitment
Slide 5: Business Model – Lower Risk with Optionality
Business Model – Lower Risk with Optionality Royal Gold seeks upside from metal prices, production expansion and reserve conversion with reduced downside from management risk Producer Royal Gold Illustrative Expected Return Return downside: Return upside: • Higher operating costs • Increased metal p
Slide 6: Business Model – Efficient
Business Model – Efficient Royal Gold revenue per employee ranks second compared to the S&P 500 6
Slide 7: Business Model – Efficient
Business Model – Efficient Royal Gold has a larger operating portfolio and a fraction of the employee count compared to the major gold and base metals producers 7
Slide 8: Portfolio – Diverse, Gold Focused
Portfolio – Diverse, Gold Focused 186 PROPERTIES 41 PRODUCING 16 DEVELOPMENT 47 EVALUATION 82 EXPLORATION PRINCIPAL PROPERTIES 1 ANDACOLLO – Region IV, Chile 2 CORTEZ – Nevada, USA 3 MOUNT MILLIGAN – British Columbia, Canada 4 PEÑASQUITO – Zacatecas, Mexico 5 PUEBLO VIEJO – Sanchez Ramirez, Dominica
Slide 9: Portfolio – High Quality
Portfolio – High Quality ~60% of net revenue from operations in 1st and 2nd quartile of cash cost curve 90% from below 4th quartile 9
Slide 10: Portfolio – Generating Organic Growth
Portfolio – Generating Organic Growth Average remaining mine life of 14 years (weighted by revenue contribution) Asset maturity 10
Slide 11: Capital Deployment – Discipline
Capital Deployment – Discipline Transacting at the right times, not at all times Last wave of large financial restructuring has passed Equity scarcity could bring project development and M&A opportunities Financial Restructuring Lack of Equity 11
Slide 12: Capital Deployment – Accretive, Non Dilutive
Capital Deployment – Accretive, Non Dilutive Growth funded through cash flow and strategic use of debt, independent of the gold price Last follow-on equity offering completed October 15, 2012 12
Slide 13: Strong Financial Position – Capital Structure
Strong Financial Position – Capital Structure Royal Gold is well capitalized ~$1B of liquidity at September 30, 2019 • Including $830M available on Credit Facility FY 2019 OCF of $253.2M Market Statistics(a) Share Price US$/share $110.74 52-Week Range US$/share $70.16 - $138.78 Shares Outstanding(b)
Slide 14: TSR – Leading Commitment to Dividends
TSR – Leading Commitment to Dividends Dividend set at a sustainable level 18% CAGR in dividends per share 2001-2019 14
Slide 15: TSR – Attractive Historical Return
TSR – Attractive Historical Return Efficient business model Strong financial position Diverse portfolio Competitive total shareholder return Disciplined capital deployment 15
Slide 16: Appendix
Appendix Ip DISCIPLINED | SUCCESSFUL /\ ROYALGOLD,INC STRATEGY | RESULTS oy .
Slide 17: Diverse Portfolio of Long-Lived Assets
Diverse Portfolio of Long-Lived Assets Operator Mine Metal Royal Gold Interest Ongoing Payment Remaining CY 2018 CY 2019 Initial Until* Thereafter Initial Until* Thereafter Reserve Life Operator Actual Operator (years)1 Production Production Production Guidance1,2 Guidance1,2 Streams Centerra Mount
Slide 18: Why Gold? Average Annual Return
Why Gold? Gold appeals to those who want: Diversification Hedge against market risk, inflation and currency risk Gold also provides competitive returns Average Annual Return* *As of 31 December 2018. Computations in US dollars of total return indices for ICE 3-month Treasury, Bloomberg Barclays US B
Slide 19: What is a Stream / Royalty?
What is a Stream / Royalty? Both are interests in metal production Stream Royalty General • Streaming company receives a • Streaming company receives a commercial percentage of metal production percentage of gross smelter return terms • Cash payment made for every (GSR), net smelter return (NSR), ne
Slide 20: Case Study – Optionality and Return
Case Study – Optionality and Return Mulatos (Alamos Gold) Royal Gold acquired 1.5% NSR from Kennecott Minerals, Dec. 2005 • 2M oz cap reached March 2019 Pre-tax return ~36% • Excess return from mine life extension (2016 through 2025) and higher gold price 20
Slide 21: Historical Multiples
Historical Multiples Streaming companies have historically traded at relatively high P/NAV and P/CF multiples Source: BMO Capital Markets 21 ** Peers include Franco-Nevada, Wheaton Precious Metals, Osisko Gold Royalties, Sandstorm
Slide 22: Responsible Gold Mining Principles
Responsible Gold Mining Principles Royal Gold helped develop the Responsible Gold Mining Principles (RGMPs) as a member of the World Gold Council’s ESG Taskforce Royal Gold endorses the RGMPs, which are specifically referenced in our Environmental, Social Responsibility and Governance Policy RGMPs:
Slide 23: Disciplined Strategy, Successful Results
Disciplined Strategy, Successful Results Board and Management team positioned for success William Hayes Tony Jensen Sybil Veenman Jamie Sokalsky Christopher M.T. Thompson Ronald J. Vance Kevin McArthur Independent Director and Director; President and Independent Director; Independent Director; Indep
Slide 24: 1660 Wynkoop Street, Denver, Colorado
1660 Wynkoop Street, #1000 Denver, Colorado 80202 303.573.1660 info@royalgold.com www.royalgold.com NASDAQ: RGLD
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