Royal Gold, Inc. · NASDAQ:RGLD
Royal Gold — The Southwestern Showcase Investor Conference 2007
30 slides from Royal Gold's conference presentation, Nov 14, 2007
Slide 1: The Leading Precious Metals Royalty Company
The Leading Precious Metals Royalty Company The Southwestern Showcase Investor Conference November 2007
Slide 2: Cautionary Statement
Cautionary Statement Under the Private Securities Litigation 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
Slide 3: Why Have Gold In Your Portfolio?
Attributes of Gold Why Have Gold In Your Portfolio? Portfolio diversification Negatively correlated with US dollar Store of value Hedge against inflation Safe haven in turbulent times
Slide 4: Factors Impacting The Price of Gold
Attributes of Gold Factors Impacting The Price of Gold Macro economic conditions Fiat currencies U.S. dollar strength India and China Geopolitical uncertainty Supply Mine production, permitting, cost Exploration challenges Central Bank selling Demand Traditional consumption India and China Exchange
Slide 5: Why Royal Gold?
Why Royal Gold? Lower risk gold investment Growth potential Strong financial performance
Slide 6: Diversified Portfolio
Lower Risk Attributes Diversified Portfolio TROY JOE MANN LEEVILLE MINING MONTANA CANADA COMPLEX Revett Campbell NEVADA WILLIAMS Newmont CANADA SJ CLAIMS Barrick/Teck (GOLDSTRIKE MINE) NEVADA MULATOS Barrick DOLORES MEXICO MEXICO Alamos PIPELINE MINING Minefinders TAPARKO COMPLEX BURKINA FASO NEVADA
Slide 7: Distribution of Reserves by Operator
Lower Risk Attributes Distribution of Reserves by Operator Copper Gold Silver Zinc Lead Barrick Goldcorp Newmont Quadra Minefinders High River Gold Other
Slide 8: Distribution of Reserves by Continent
Lower Risk Attributes Distribution of Reserves by Continent Copper Gold Silver Zinc Lead North America Africa S. America Other
Slide 9: Cost Structure
Lower Risk Attributes Cost Structure Insulated from increased operating costs No capital cost contributions required No environmental or closure costs incurred Nevada production costs Five-year change in operating cost drivers 700 350 Gold Prices Energy (Crude Oil Spot Price) Total Cash Costs Constr
Slide 10: High Margins
Lower Risk Attributes High Margins EBITDA margins1 Net profit margins2 (July 2006 to June 2007) (July 2006 to June 2007) 73% 75% 75% 60% 60% 45% 45% 41% 30% 30% 33% 15% 15% 11% 0% 0% Royal Gold North American majors3 Royal Gold North American majors3 1 EBITDA margin = EBITDA divided by revenue 2 Net
Slide 11: Assets in 2006
Growth Potential Assets in 2006 TROY LEEVILLE MINING MONTANA COMPLEX Revett NEVADA Newmont SJ CLAIMS (GOLDSTRIKE MINE) NEVADA MULATOS Barrick MEXICO Alamos PIPELINE MINING TAPARKO COMPLEX BURKINA FASO NEVADA High River Barrick BALD MOUNTAIN NEVADA Barrick ROBINSON NEVADA MARTHA Quadra ARGENTINA Coeu
Slide 12: Assets in 2007
Growth Potential Assets in 2007 TROY JOE MANN LEEVILLE MINING MONTANA CANADA COMPLEX Revett Campbell NEVADA WILLIAMS Newmont CANADA SJ CLAIMS Barrick/Teck (GOLDSTRIKE MINE) NEVADA MULATOS Barrick DOLORES MEXICO MEXICO Alamos Minefinders TAPARKO PIPELINE MINING COMPLEX BURKINA FASO NEVADA High River
Slide 13: Ample Royalty Opportunities
Growth Potential Ample Royalty Opportunities Acquire existing royalties from individuals Pascua-Lama, Cortez GSR-3, Bald Mountain Acquire existing royalties from companies Leeville, SJ Claims, Peñasquito, Robinson, Mulatos, Dolores Finance projects in exchange for royalty interests Taparko, Troy, Ma
Slide 14: Strong Growth In Reserves
Growth Potential Strong Growth In Reserves Copper B lbs 2.3 2,500 2.0 2.0 1,500 Gold Silver 500 0.1 M oz M oz 60 1,100 ‘04 ‘05 ‘061 ‘07 1,020 Zinc 50 14,000 B lbs 12.8 50 900 10,000 8.0 42 6,000 40 700 2,000 0 0 595 ‘04 ‘05 ‘061 ‘072 30 500 Lead M lbs 5.9 21 600 19 20 400 3.7 300 200 10 0 0 100 ‘04
Slide 15: Strong Development Pipeline
Growth Potential Strong Development Pipeline EXPLORATION FEASIBILITY PERMITTING CONSTRUCTION OPERATIONS Leeville (2007) Taparko (2007) Dolores (2008) Peñasquito (2008) Benso (2008) Pascua-Lama (~2010) Gold Hill (~2010) 19 other interests
Slide 16: Leeville (Nevada)
Growth Potential Leeville (Nevada) Operator: Newmont Royalty: 1.8% NSR Reserves1: 2.3M oz Au Production (Est.): 400K oz per year 337K oz CY 2007 Mining Rate: 2,100 TPD October 2006 3,200 TPD planned by November 2007 FY07 Revenue: $2.7M Key Attributes: Grade, infrastructure, potential for exploration
Slide 17: Taparko (Burkina Faso)
Growth Potential Taparko (Burkina Faso) Operator: High River Gold Royalty: GSR1: 15.0% - initial royalty GSR2: 0–10.0% initial royalty (sliding-scale) GSR3: 2.0% - perpetual royalty MR1: 0.75% - milling royalty Reserves1: 0.8M oz Au Production (Est.): 100-140K oz per year 35K oz CY 2007 FY07 Revenue
Slide 18: Dolores (Mexico)
Growth Potential Dolores (Mexico) Operator: Minefinders Royalty: 3.25% NSR Au 2.0% NSR Ag Reserves1: 2.45M oz Au 127.0M oz Ag Production (Est.): Loading pad this fall Commercial production in 2008 120K oz Au per year2 4.43M oz Ag per year2 Key Attributes: Royalty rate, exploration and optimization p
Slide 19: Peñasquito (Mexico)
Growth Potential Peñasquito (Mexico) Operator: Goldcorp Royalty: 2.0% NSR (all metals) Reserves1: 13.1M oz Au, 864.0M Ag, 12.8B lbs Zn, 5.9B lbs Pb Production: Est. commencement 2008 Key Attributes: Low cash (Artist’s rendering of mine site) costs, exploration upside 1,750 1,500 Gold and Silver Prod
Slide 20: Pascua-Lama (Chile)
Growth Potential Pascua-Lama (Chile) Operator: Barrick Royalty1: 0.16%-1.08% NSR (sliding-scale) Reserves2: 13.6M oz Au Production (Est.): 750K–775K oz Au per year Est. commencement in 2010 Key Attributes: Mine life, exploration upside, economies of scale, low cost producer 1 Royalty applies to Chil
Slide 21: Gold Hill (Nevada)
Growth Potential Gold Hill (Nevada) Operator: Kinross (50/50 joint venture with Barrick) Royalty1: 1.0%-2.0% NSR (sliding-scale) Reserves2: 0.8M oz Au Production: Est. commencement ~ 2010 1 RMGC has a $10M buy-back right on the NSR royalty 2 Barrick stated in a September 2006 presentation that, as o
Slide 22: Benso (Ghana)
Growth Potential Benso (Ghana) Operator: Golden Star Royalty: 1.5% NSR Reserves: 0.25M oz Au Production Estimate: Ore haulage projected to begin in 2008 – 3Q
Slide 23: Growing Asset Base and Revenues
Financial Performance Growing Asset Base and Revenues $48.5 $28.4 $25.3 $21.4 2004 2005 2006 2007 Fiscal Years Ending June 30 Pipeline Mining Complex SJ Claims Leeville Troy Mine Bald Mountain Martha Robinson Mulatos Gold Hill
Slide 24: Strong Track Record
Financial Performance Strong Track Record $50 Net Income Free Cash Flow1 Royalty Revenue $40 $30 ($ in millions) $20 $10 $0 2003 2004 2005 2006 2007 Fiscal Years Ending June 30 Source: Company data; fiscal years ended June 30 1 Free cash flow is a non-GAAP measure and is explained in the Company’s S
Slide 25: Current Financial Resources
Financial Performance Current Financial Resources Balance sheet (as of 11/6/07 as Dividend Yield1: 0.8% adjusted) Dividend Payout Ratio2: 27% Cash on hand:3 $207.3M $0.30 $0.26 Net Debt: $0 $0.25 $0.20 $0.22 $0.20 Line of credit: $59.5M $0.15 $0.10 $0.15 $0.10 Shares outstanding: $0.05 – Common 30.1
Slide 26: Lower Risk + Growth + Financial Performance = Premium Investment Vehicle
Lower Risk + Growth + Financial Performance = Premium Investment Vehicle Exploration Royalty Company Junior Operators Intermediate Operators Major Operators Return ETF Index Funds Physical Gold Risk Note: This chart represents the views of Royal Gold
Slide 27: Royal Gold, Inc. contact details
ROYAL GOLD, INC 1660 Wynkoop Street, Suite 1000 Denver, Colorado 80202–1132 PHONE (303) 573-1660 FAX (303) 595-9385 WEB www.royalgold.com
Slide 28: Appendix: Summary of Royalties
Appendix: Summary of Royalties
Slide 29: Portfolio of Producing and Developing Properties
Portfolio of Producing and Developing Properties FY07 Revenue 1Q – FY08 Mine Location Operator Royalty (Gold unless otherwise stated) ($M) Revenue ($M) 0.40-5.0% GSR1 (sliding-scale); 0.72-9.0% GSR2 (sliding-scale); 0.71% GSR3; 0.39% Pipeline Mining Complex Lander County, NV Barrick NVR1 21.5 5.7 3.
Slide 30: Exploration Royalty Portfolio
Exploration Royalty Portfolio Property1 Location Royalty Royalty Operator Santa Cruz Province Argentina 2.00% NSR Hidefield Sega2 Burkina Faso 3.00% NSR Orezone Long Valley California 1.00% NSR Vista Gold Kettukuusikko Finland 2.00% NSR Taranis Resources Rock Creek3 Montana 1.00% NSR Revett Minerals
Royal Gold — The Southwestern Showcase Investor Conference 2007 on 6ix