Royal Gold, Inc. · NASDAQ:RGLD
Royal Gold — Shareholder Meeting (November 2007)
32 slides from Royal Gold's shareholder meeting presentation, Nov 7, 2007
Slide 1: The Leading Precious Metals Royalty Company
The Leading Precious Metals Royalty Company Annual Shareholder Meeting November 7, 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 Royal Gold?
Why Royal Gold? Lower risk gold investment Growth potential Strong financial performance
Slide 4: 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 5: 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 6: 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 7: 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 8: 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 9: 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 10: 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 PIPELINE MINING Minefinders TAPARKO COMPLEX BURKINA FASO NEVADA PEÑASQUITO
Slide 11: 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 12: 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 13: Strong Development Pipeline
Growth Potential Strong Development Pipeline EXPLORATION FEASIBILITY PERMITTING CONSTRUCTION OPERATIONS Leeville (2007) Taparko (2007) Dolores (2008) Peñasquito (2008) Pascua-Lama (~2010) Gold Hill (~2010) 19 other interests
Slide 14: 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 15: 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 16: Taparko (Burkina Faso)
Growth Potential Taparko (Burkina Faso)
Slide 17: Taparko (Burkina Faso)
Growth Potential Taparko (Burkina Faso)
Slide 18: Taparko (Burkina Faso)
Growth Potential Taparko (Burkina Faso)
Slide 19: 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 20: Dolores (Mexico)
Growth Potential Dolores (Mexico)
Slide 21: Dolores (Mexico)
Growth Potential Dolores (Mexico)
Slide 22: Dolores (Mexico)
Growth Potential Dolores (Mexico)
Slide 23: 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 24: Peñasquito (Mexico)
Growth Potential Peñasquito (Mexico)
Slide 25: Peñasquito (Mexico)
Growth Potential Peñasquito (Mexico)
Slide 26: 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 27: 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 28: 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 29: 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 30: 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 31: 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 32: 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