Royal Gold, Inc. · NASDAQ:RGLD
Royal Gold — Shareholder Meeting (November 2014)
26 slides from Royal Gold's shareholder meeting presentation, Nov 14, 2014
Slide 1: 2014 Annual Meeting
2014 Annual Meeting Tony Jensen President, CEO and Director 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: Fiscal 2014 Highlights and Recent Events
Fiscal 2014 Highlights and Recent Events Growth Quality Portfolio Strong volume Long mine lives Quality counterparties, jurisdictions and projects Solid operating margins for underlying properties Opportunities - New Business Value - Financial Performance Robust balance sheet with >$900 mi
Slide 4: Mt. Milligan Ramp Up
Growth Mt. Milligan Ramp Up 180 Mt. Milligan Qtrly Run Rate at Design Capacity reported payable 160 production Cumulative ounces (thousands) 140 Sept 2014 Quarter - Actual 120 100 Production June 2014 Quarter - Actual subject to RGLD 80 Gold in the stream (payable 60 system of ~39koz production Mar
Slide 5: Portfolio Strength
Portfolio Strength Strong Volume Mt. Milligan Royalty: 52.25% of payable gold1 Contribution to FY2015 Q1 revenue Reserves 2 : 6.0M oz (Au) 29% or $19.7M Estimated Mine Life: 20+ Years Andacollo Royalty 3: 75% of Au production (NSR) Contribution to FY2015 Q1 revenue Reserves 2: 1.8M oz (Au) 15% or Es
Slide 6: Estimated Years of Remaining Mine Life
Portfolio Strength 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 6
Slide 7: Portfolio Strength
Portfolio Strength Focused investment criteria yields a world class portfolio 56% of our FY2014 revenues from Counterparty investment-grade rated companies1 Place Over 92% of our reserves from S&P “A” or higher rated countries1 89% of FY2014 Production Weighted average cash cost ~$576/GEO, Andacollo
Slide 8: Cash Margin by Operating Property, First Half 2014
Portfolio Strength 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%
Slide 9: New Business: Cortez NVR1
New Business: Cortez NVR1 NVR1 Crossroads Operator: Barrick Location: Nevada Purchased additional interests in the existing NVR1 royalty covering certain portions of the Pipeline Complex The NVR1 royalty rate attributable to our interest increased from 0.39% to 1.01% outside of the Crossroad Claims
Slide 10: New Business: Goldrush Project
New Business: Goldrush Project Operator: Barrick Location: Approximately four miles from the Cortez mine in Nevada Royalty: 1.0% NSR (Au) on a portion of the deposit (depicted at right) Measured and Indicated Resource (entire deposit): 10M oz (Au)* Resource expansion potential Significant infrastruc
Slide 11: New Business: Phoenix Project
New Business: Phoenix Project Rubicon Minerals photo of Phoenix mill construction, September 2014 Aerial View, June 2014 Operator: Rubicon Minerals Location: Red Lake, Ontario Investment of $75 million to Rubicon Minerals in five installments Stream: 6.3% of Au production (until 135,000 ounces), 3.1
Slide 12: New Business: Ilovitza Project
New Business: Ilovitza Project View towards Ilovitza village Core shed, Ilovitza Operator: Euromax Resources Location: Ilovitza, Macedonia Production startup planned for 2018 Current reserve of 2.45 million ounces of gold, 905 million pounds of copper, 23 year mine life Royal Gold will make two adva
Slide 13: New Business: Tetlin Exploration Project
New Business: Tetlin Exploration Project Location: Near Tok, Alaska, on the Alcan highway, via an all-weather gravel road 700,000 acre property located within the Tintina Gold Belt Royal Gold purchased a 2.0% NSR and a 3.0% NSR on the property in late September Royal Gold signed a master agreement t
Slide 14: Financial Performance
Financial Performance ~$900 million uncommitted at a time when royalty/stream financing is needed Capital to invest… Net of future commitments ($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 $450M Undrawn Credit -$
Slide 15: Financial Performance
Financial Performance Over a decade of increasing dividends and competitive payout ratio1 Annual Dividend Per Share Dividends Paid as Percentage of Operating Cash Flow2 $0.90 60% $0.80 50% $0.70 $0.60 40% RGLD: 36% in FY2014 $0.50 DJIA current 30% average: 28% $0.40 $0.30 20% $0.20 10% $0.10 $0.00 0
Slide 16: Percentage change in Royal Gold versus the gold price
Financial Performance Percentage change in Royal Gold versus the gold price demonstrates our historic outperformance relative to the metal 1800 1600 1400 1200 Percentage change1 1000 800 RGLD +1,080% 600 400 200 Gold +311% 0 11/1/01 11/1/02 11/1/03 11/1/04 11/1/05 11/1/06 11/1/07 11/1/08 11/1/09 11/
Slide 17: 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 >$900m uncommitted capital to invest Opportunities >$100m deals are meaningful 14 straight years of dividend growth Value Competitive payo
Slide 18: Endnotes
Endnotes SOLID PORTFOLIO. SOLID FUTURE.
Slide 19: 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 4 GROWTH 1. Full run rate Mt. Milligan gold deliveries con
Slide 20: Appendix A: Background
Appendix A: Background SOLID PORTFOLIO. SOLID FUTURE.
Slide 21: 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 to a percentage of metal production Mining Company Appropriate for any stage of the project life cycle Transactions can be structured to be tax efficient Production Percent of Cash Transactions are ofte
Slide 22: Royal Gold: The Quality Royalty / Streaming Name to Own
Royal Gold The Quality Royalty / Streaming Name to Own Longevity – in business since 1981 Near-Term Growth – already bought and paid for No cost inflation concerns Quality assets/reputable partners Exploration ~80% of Revenue => EBITDA $2.1B in investments on the balance sheet Junior Operators and 5
Slide 23: 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 24: Appendix B: Property Portfolio
Appendix B: Property Portfolio SOLID PORTFOLIO. SOLID FUTURE.
Slide 25: Property Portfolio
Property Portfolio November 2014 25
Slide 26: SOLID PORTFOLIO. SOLID FUTURE.
1660 Wynkoop Street Denver, CO 80202-1132 303.573.1660 info@royalgold.com www.royalgold.com SOLID PORTFOLIO. SOLID FUTURE.