Royal Gold, Inc. · NASDAQ:RGLD
Royal Gold — Gold Forum Europe 2022
37 slides from Royal Gold's conference presentation, Apr 12, 2022
Slide 1: Gold Forum Europe
I ROYALGOLD, INC Gold Forum Europe April 2022
Slide 2: Cautionary Statement
Cautionary Statement Forward-Looking Statements: This presentation includes “forward-looking statements” within the meaning of U.S. federal securities laws. Forward-looking statements are any statements other than statements of historical fact. Forward-looking statements are not guarantees of future
Slide 3: Company Overview
Company Overview Opportunity to capture value in the precious metals sector without incurring many of the costs and risks associated with mining operations Dual Business Segments… …Across A Diverse, Gold-Focused Portfolio… …With Standout Performance Royalty Interests: 190 12 $654M 360,900 An interes
Slide 4: Royal Gold: Core Attributes
Royal Gold: Core Attributes Differentiated model with disciplined capital management and a focus on shareholder returns UNIQUE Business model provides optionality to gold price and production and reserve growth MODEL Efficient model with high operating margin and revenue generation per employee
Slide 5: Royal Gold Offers Unique Exposure to Gold
Royal Gold Offers Unique Exposure to Gold Exploration No Direct No Direct Exposure Portfolio Sustainable Upside / Exposure to Exposure to to Gold Diversification Dividend Optionality Operating Costs Capital Costs ETFs, Bars and Coins Senior Operating Companies Junior Operating Companies Development
Slide 6: Business Model Offers Protection Against Cost Inflation
Business Model Offers Protection Against Cost Inflation Royal Gold has limited exposure to cost inflation Cost Structure Less Exposed to Variable Inputs • Changes in operating and capital costs are absorbed by 800 US$/oz the mine operator Royalty Metal Price Dependent 700 TCRC & Shipment • In commod
Slide 7: Optionality to Reserve and Resource Growth
Optionality to Reserve and Resource Growth Royal Gold seeks to provide exposure to resource growth and metal price optionality. Resource growth and mine life extensions can significantly enhance returns over time. PUEBLO VIEJO WASSA Millions of Gold Ounces5 68% Millions of Gold Ounces of Initial Inv
Slide 8: Highly Efficient Business Model
Highly Efficient Business Model The efficiency of Royal Gold’s business model exceeds that of the largest mining and technology companies ENTERPRISE VALUE1/EMPLOYEE2 TOTAL REVENUE/EMPLOYEE2 (US$ 000s as of Dec. 31, 2021) $961 $670 (US$ 000s 12 Mo. Ending Dec. 31, 2021) $1,678 $1,296 $709 $1,509 $2,5
Slide 9: Highly Efficient Business Model
Highly Efficient Business Model High margin business model drives profitability… …for peer-leading margins and metrics CASH FLOW METRICS1 US$ 654M Revenue Adjusted EBITDA Margin2 80% US$ 523M Adjusted EBITDA US$ 462M Operating Cash Flow Operating Cash Flow/Revenue 71% Cash G&A3 Expenses/Revenue 4% U
Slide 10: Diverse Portfolio in Established Mining Jurisdictions
Diverse Portfolio in Established Mining Jurisdictions PRINCIPAL PROPERTIES 1 ANDACOLLO 3 Region IV, Chile 3 2 2 CORTEZ Nevada, USA 4 5 3 MOUNT MILLIGAN 4 British Columbia, Canada 5 6 6 4 PEŇASQUITO 7 Zacatecas, Mexico 1 5 PUEBLO VIEJO 1 Sanchez Ramirez, Dominican Republic 44 PRODUCING 6 WASSA 190 17
Slide 11: Diverse Portfolio Safeguards Stable, Predictable and Sustainable Cash Flow
Diverse Portfolio Safeguards Stable, Predictable and Sustainable Cash Flow Royal Gold’s revenue is sourced from a geographically and operationally diverse portfolio, underpinned by primary precious metals mines • Globally-diverse portfolio minimizes • Principal property revenues • Revenue contributi
Slide 12: Portfolio Spans the Stages of Project Development
Portfolio Spans the Stages of Project Development Broad range of properties at various stages of development provides potential for organic revenue growth and optionality PROPERTIES CLASSIFICATION COUNT STATUS Khoemacau, King of the Hills, LaRonde Zone 5, NX Gold, Peñasquito, Pueblo Viejo, Red Chris
Slide 13: Expected Catalysts in the Portfolio
Expected Catalysts in the Portfolio In production Organic growth opportunities expected to add to portfolio revenue and duration Defined startup date Longer-dated production WASSA – Southern Extension to add 11 years to 6-year reserve life PEÑASQUITO – potential for exploration to extend life to 204
Slide 14: Newest Assets Provide Attractive Growth Potential
Newest Assets Provide Attractive Growth Potential KHOEMACAU RED CHRIS NX GOLD CÔTÉ BOTSWANA CANADA BRAZIL CANADA • 90% payable silver stream • 1% NSR royalty on a producing • 25% gold stream on a producing • 1% NSR royalty on the Chester 3 - At KCM option, potential copper/gold/silver mine, acquired
Slide 15: Sound ESG Practices are Fundamental to Success
Sound ESG Practices are Fundamental to Success Recent improved disclosure of Royal Gold’s approach to sustainability has materially improved market perception and recognition of leading ESG practices 60 51.9 50 SEVERE RISK 40 RATING HIGH 30 23.4 22.8 MEDIUM 19.1 20 10 LOW 0 2018 2019 2020 2021 Sourc
Slide 16: ESG Overview: Sustainability Is Our Business Model
ESG Overview: Sustainability Is Our Business Model Royal Gold is committed to sustainability at the corporate and local levels, and seeks counterparties with leading approaches to ESG practices Environmental Social Governance Committed to analyzing and mitigating the Committed to supporting social c
Slide 17: Robust Due Diligence Drives Disciplined Approach to Acquisitions
Robust Due Diligence Drives Disciplined Approach to Acquisitions Royal Gold’s due diligence process includes: • Management references • ESG • Technical Due Diligence • Infrastructure • Environmental Impact • Geology, reserve/resource • Marketing (concentrates) • Financial/Credit Analysis • Social li
Slide 18: Strong Liquidity Position and Financing Strategy Drive Shareholder Returns
Strong Liquidity Position and Financing Strategy Drive Shareholder Returns We anticipate financing acquisitions with non-dilutive Disciplined capital allocation prioritizes forms of capital in the following priority: balance sheet, dividends and investment2 • Existing cash balances • Cash flow from
Slide 19: Liquidity and Financing Strategy
Liquidity and Financing Strategy For over 20 years, Royal Gold’s growth has been financed accretively and without significant equity dilution $4.9B Cumulative Revenue Revenue Operating Cash Flow $3.0B Cumulative Operating Cash Flow Cash G&A Expenses $298M Avg. Gold Price Cum. Cash G&A1 Expenses Shar
Slide 20: Royal Gold Offers a Consistent, Increasing and Sustainable Dividend
Royal Gold Offers a Consistent, Increasing and Sustainable Dividend Since 2000, Royal Gold shareholders have received a dividend regardless of the gold price, and is the only precious metal company in the S&P High Yield Dividend Aristocrats Index CONSISTENT - INCREASING - SUSTAINABLE US$/share US$/o
Slide 21: Appendix
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Slide 22: Stream/Royalty Investment Process
Stream/Royalty Investment Process Royal Gold’s role in the mining value chain can be tailored to fit the needs of the operating partner EXPLORATION DEVELOPMENT PRODUCTION Royal Gold Payment • Investment is typically • Investment typically • Investment typically in the form of a in the form of a in t
Slide 23: Stream/Royalty Detail
Stream/Royalty Detail From a cash flow perspective, streams and royalties are comparable in that the revenue from a stream less the ongoing cash price paid roughly equals a royalty-like interest in production ROYALTIES • Typically structured as gross smelter return (GSR), net smelter return (NSR), n
Slide 24: Experienced Independent Directors
Experienced Independent Directors Highly capable, independent board, with deep experience across the gold sector William Hayes Fabiana Chubbs Kevin McArthur Independent Director and Independent Director; Independent Director; Chairman of the Board; Former Former Chief Financial Former Executive Chai
Slide 25: Management Compensation Structure
Management Compensation Structure Short-term and long-term incentive program seeks to align compensation with the factors that drive and measure total shareholder return • Short Term Incentives focused on financial, operational, strategic, and individual performance • Long Term Incentives involve ne
Slide 26: Shareholder Base Reflects Company’s Unique Position
Shareholder Base Reflects Company’s Unique Position Shareholder base is institutional with some unique characteristics • 42% of identifiable investors (34% of total) are Index investors • High-quality shareholder register, with large and long-term Identified Investor Styles institutional investors c
Slide 27: Quality Portfolio of Asset Investments
Quality Portfolio of Asset Investments MOUNT MILLIGAN $173M PEÑASQUITO $53M Au Stream: 35% Revenue* 2.1 2028 90% Royalty: 2% NSR Revenue* 7.1 2032 339% Au Cash Price: $435/oz Au reserves mine % of investment Au reserves mine % of investment Cu Stream: 18.75% m ounces life returned** m ounces life re
Slide 28: Strong Runway of Growth Opportunities
Strong Runway of Growth Opportunities KHOEMACAU Investment Sources 21 2021 Red Kite $275M Ag Stream: 80-100% $212M 50.9 $239M Ag Cash Price: 20% of Spot years Royal Gold $265M 80% stream Overrun Facility $ 25M Ag reserves mine life start up Funded to Equity $ 75M $265M m ounces October 2021 Total $
Slide 29: Optionality
Optionality Royal Gold seeks to provide exposure to resource growth and metal price optionality. Resource growth and mine life extensions can significantly enhance returns over time. Case Study Reserves & Resources* Mine Life Contained Gold M oz Years Mulatos – Alamos Gold 2P Reserves • Royal Gold a
Slide 30: Historical Trading Multiples
0.0x 0.5x 1.0x 1.5x 2.0x 2.5x 3.0x 3.5x Jan-12 May-12 Sep-12 Jan-13 May-13 Sep-13 Jan-14 May-14 Sep-14 Jan-15 May-15 Sep-15 Jan-16 May-16 Sep-16 Peer Range Jan-17 May-17 Sep-17 Jan-18 P / NAV RGLD May-18 Sep-18 Jan-19 May-19 Sep-19 Jan-20 May-20 Historical Trading Multiples Sep-20 Jan-21 May-21 Sep-
Slide 31: Non-GAAP Measures
Non-GAAP Measures Non-GAAP Financial Measures and Certain Other Measures Overview of non-GAAP financial measures: Non-GAAP financial measures are intended to provide additional information only and do not have any standard meaning prescribed by U.S. generally accepted accounting principles (“GAAP”).
Slide 32: Non-GAAP Measures
Non-GAAP Measures Non-GAAP Financial Measures and Certain Other Measures Overview of non-GAAP financial measures: 4. Free cash flow is a non-GAAP financial measure that is calculated by the Company as net cash provided by operating activities for a period minus acquisition of stream and royalty inte
Slide 33: Non-GAAP Measures
Non-GAAP Measures Reconciliation of non-GAAP financial measures to U.S. GAAP measures Adjusted EBITDA and Net cash to TTM adjusted EBITDA: Three Months Ended December 31, September 30, June 30, March 31, (amounts in thousands) 2021 2021 2021 2021 Net income and comprehensive income $ 68,362 $ 70,466
Slide 34: Non-GAAP Measures
Non-GAAP Measures Reconciliation of non-GAAP financial measures to U.S. GAAP measures (cont.) Cash G&A: Three Months Ended December 31, September 30, June 30, March 31, (amounts in thousands) 2021 2021 2021 2021 General and administrative expense $ 8,034 $ 7,129 $ 7,212 $ 6,932 Non-cash employee sto
Slide 35: Non-GAAP Measures
Non-GAAP Measures Reconciliation of non-GAAP financial measures to U.S. GAAP measures (cont.) Free cash flow: Three Months Ended Six Months Ended December 31, December 31, (amounts in thousands) 2021 2020 2021 2020 Net cash provided by operating activities $ 118,898 $ 99,912 $ 248,783 $ 194,064 Acqu
Slide 36: Other Disclaimers
Other Disclaimers DISCLAIMER STATEMENT FOR USE OF MSCI ESG RATING THE USE BY ROYAL GOLD OF ANY MSCI ESG RESEARCH LLC OR ITS AFFILIATES (“MSCI”) DATA, AND THE USE OF MSCI LOGOS, TRADEMARKS, SERVICE MARKS OR INDEX NAMES HEREIN, DO NOT CONSTITUTE A SPONSORSHIP, ENDORSEMENT, RECOMMENDATION, OR PROMOTION
Slide 37: Contact
Tel. 303.573.1660 investorrelations@royalgold.com www.royalgold.com