Royal Gold, Inc. · NASDAQ:RGLD
Royal Gold — World Gold Forum 2020
24 slides from Royal Gold's conference presentation, April 2020
Slide 1: World Gold Forum
World Gold Forum April 2020 NASDAQ: RGLD 2
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: FQ2 2020 Overview
FQ2 2020 Overview Financial/operating performance 83,500 $41.3M $123.6M $17.4M $78.3M Volume of GEOs* net income revenue, in dividends cash flow ($0.63/share) 74% from gold from operations * Gold Equivalent Ounces (“GEOs”) are calculated as revenue divided by the average gold price Significant strat
Slide 4: Royal Gold Attributes
Royal Gold Attributes TOTAL CAPITAL FINANCIAL SHAREHOLDER BUSINESS MODEL PORTFOLIO DEPLOYMENT POSITION RETURN (TSR) • Optionality • Diverse, • Discipline • Strong liquidity • Leading • Highly gold focused • Accretive, • Solid capital commitment efficient • High quality non-dilutive structure to divi
Slide 5: Business Model – Lower Risk with Optionality
Business Model – Lower Risk with Optionality Royal Gold seeks upside from metal prices, production expansion and reserve conversion with reduced downside from management risk Producer Royal Gold Illustrative Expected Return Return downside: Return upside: • Higher operating costs • Increased metal p
Slide 6: Business Model – Efficient (Revenue per Employee)
Business Model – Efficient Royal Gold revenue per employee ranks second compared to the S&P 500 REVENUE PER EMPLOYEE* (US$M) S&P 500 Constituents $12.1M $18.4M $30.2M $3.9M $1.4M $1.0M 0 5 10 15 20 25 30 35 Source: S&P CapitalIQ * Calculated as total reported revenue divided by total employees for f
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 Employees Royal Gold 26 Newmont 39,600 Rio Tinto 47,500 BHP Billiton 62,500 Barrick 18,400 0 10 20 30 40 50 Number of Producing Properties
Slide 8: Portfolio – Diverse, Gold Focused
Portfolio – Diverse, Gold Focused REVENUE* BY COMMODITY 5% 187 PROPERTIES 43 PRODUCING Other 15 DEVELOPMENT 9% 47 EVALUATION Copper 82 EXPLORATION ** As of December 31, 2019 9% Silver 78% 3 Gold 7 2 REVENUE* BY COUNTRY 4 5 Australia Other Mexico 6 Africa 37% 8% Canada USA 1 16% Chile 20% Dom. Rep *
Slide 9: Portfolio – High Quality
Portfolio – High Quality Approximately 60% of net revenue from operations in 1st and 2nd quartile of cash cost curve • 90% from below 4th quartile 100% 4th Q 10% $34 75% Rainy River Andacollo Peñasquito Cash Cost Percentile* 3rd Q 33% $113 50% Wassa Mount Milligan 2nd Q 33% $113 25% Cortez Pueblo Vi
Slide 10: Portfolio – Generating Organic Growth
Portfolio – Generating Organic Growth Portfolio has significant average remaining mine life 1200% 1100% Blue shading: greater than 100% of % of Initial Investment Recovered (to end of FY2019) 1000% initial investment recovered 900% 800% 700% 600% 500% Asset maturity 400% Cortez 300% 200% Peñasquito
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 $1,900 Financial Restructuring Lack of Equity $1,800 Follow-on Offering $1,700 $1,600 Mt Mi
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 Total delivered, 12/31/12 - 6/30/19: Dividends 54% $387M OCF 47% $1.5B Revenue 46% $2.3B Share O/S 2% -21%
Slide 13: Strong Financial Position – Capital Structure
Strong Financial Position – Capital Structure Royal Gold is well capitalized • ~$1B of liquidity at December 31, 2019, including $865M available on Credit Facility • FQ2 2020 OCF of $78.3M Market Statistics(a) LIQUIDITY(f) Share Price US$/share $104.81 ($M): 52-Week Range US$/share $59.78 - $138.78
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 $1.20 $2,000 $1,800 $1.00 Annual Dividend (US$/share) $1,600 $0.80 $1,400 Gold Price (US$/oz) $1,200 $0.60 $1,000 $0.40 30% 36% 35% $800 23% 29% 27% 25% 26% 21% 25% 27% 34% 23% $600
Slide 15: TSR – Attractive Historical Return
TSR – Attractive Historical Return EFFICIENT BUSINESS DISCIPLINED CAPITAL STRONG FINANCIAL COMPETITIVE TOTAL MODEL DIVERSE PORTFOLIO DEPLOYMENT POSITION SHAREHOLDER RETURN 400% 350% 300% 250% 200% Total Return (%) 150% 100% 50% 0% -50% -100% May-06 May-07 May-08 May-09 May-10 May-11 May-12 May-13 Ma
Slide 16: Appendix
Appendix DISCIPLINED | SUCCESSFUL STRATEGY | RESULTS RD SY ED Bae Mf ROYALGOLD,INC NASDAQ: RGLD
Slide 17: Diverse Portfolio of Long-Lived Assets
Diverse Portfolio of Long-Lived Assets Royal Gold Interest Ongoing Payment CY 2019 CY 2020 Remaining Operator Operator Reserve Life Production Actual Production Operator Mine Metal Initial Until* Thereafter Initial Until* Thereafter (years)1 Guidance1,2 Production Guidance1,2 Streams Centerra Mount
Slide 18: Why Gold?
Why Gold? Gold appeals to those who want: • Diversification • Hedge against market risk, inflation and currency risk Gold also provides competitive returns 15.0 12.5 10.0 Average Annual Return* 7.5 5.0 2.5 0.0 -2.5 -5.0 Since 1971 20-year 10-year US Cash US Bond Agg. US stocks EAFE Stocks EM stocks
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 (GSR), terms • Cash payment made for every unit of net smelter return (
Slide 20: Case Study – Optionality and Return
Case Study – Optionality and Return Mulatos (Alamos Gold) 2.5 8 7.0 7 6.5 • Royal Gold acquired 1.5% NSR from Kennecott Minerals, 2.0 1.919 1.717 6 Dec. 2005 1.5 5 2M oz cap reached March 2019 1.0 4 3 • Pre-tax return ~36% 0.5 2 1 Excess return from mine life extension (2016 through 0.0 0 2025) and
Slide 21: Historical Multiples
Historical Multiples Streaming companies have historically traded at relatively high P/NAV and P/CF multiples 3.0x 2.5x 2.06x 2.0x P / NAV 1.5x 1.0x 0.5x Jan-10 Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 Jan-16 Jan-17 Jan-18 Jan-19 Jan-20 60.0x 50.0x 40.0x P / CF 30.0x 20.1x 20.0x 10.0x Peer Range Royal Gol
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: Board and Management Team Positioned for Success
Disciplined Strategy, Successful Results Board and Management Team Positioned for Success WILLIAM HAYES WILLIAM SYBIL VEENMAN JAMIE Independent Director HEISSENBUTTEL Independent Director; SOKALSKY and Chairman of the Director; President and Former Sr. Vice President Independent Director; Board; For
Slide 24: Contact details
1144 15th Street, #2500 Denver, Colorado 80202 303.573.1660 investorrelations@royalgold.com www.royalgold.com NASDAQ: RGLD 2