Royal Gold, Inc. · NASDAQ:RGLD
Royal Gold — CIBC 17th Annual Whistler Institutional Investor Conference (January 2014)
27 slides from Royal Gold's conference presentation, Jan 23, 2014
Slide 1: CIBC Whistler Institutional Investor Conference
CIBC Whistler Institutional Investor Conference Tony Jensen President and CEO January 23, 2014
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: Royal Gold Overview
Royal Gold Overview Embedded Growth – Positioned to grow volume ~50% from Mt. Milligan alone Financially Robust – Mt. Milligan investment complete – Low costs with Adjusted EBITDA 1 margin at ~90% of revenue – Liquidity of ~$1 billion Attractive Market Environment – Royalty/streaming a compelling al
Slide 4: Strong Track Record of Growth
Strong Track Record of Growth January 23, 2014 4
Slide 5: Embedded Growth: Thousands of Gold Equivalent Ounces
Embedded Growth Fully Invested 350 300 Pascua Lama Thousands of Gold Equivalent Ounces 250 Mt. Milligan 200 150 Other ~50% estimated increase over 100 FY2013 due to Mt. Milligan alone Voisey's Bay Peñasquito 50 Andacollo 0 FY 2013 (1,2) Mt. Milligan(3,4) and Pascua-Lama(5) contribution at full produ
Slide 6: Embedded Growth: Growth Compared with Peers
Embedded Growth Royal Gold Growth Compared with Peers 1,2 5-Year Estimated Volume Growth CAGR 18.00% 16.00% 14.00% 12.00% 10.00% 8.00% 6.00% 4.00% 2.00% 0.00% Silver Wheaton Franco-Nevada Royal Gold Updated as of December 31, 2013 January 23, 2014 6
Slide 7: Embedded Growth: Development Cornerstone Properties
Embedded Growth Development Cornerstone Properties Mt. Milligan Stream: 1 52.25% of payable gold Reserves: 2 6.0M oz (Au) Est. Mine Life: 22 Years Commercial Prod: Q1 CY14 Est. Production: 3 262k oz (Au)/yr • Production ramp-up • First concentrate production in September 2013 Photo: July 2013 • Firs
Slide 8: Mt. Milligan Stream Ramping Up
Embedded Growth Mt. Milligan Stream Ramping Up Mt. Milligan Facilities Mt. Milligan Primary Crusher Mt. Milligan Two 24ft Ball Mills Mt. Milligan Flotation Circuit January 23, 2014 8
Slide 9: Financially Robust
Financially Robust Diverse Portfolio of Assets January 23, 2014 9
Slide 10: Producing Cornerstone Properties
Financially Robust Producing Cornerstone Properties Andacollo Contribution to Royalty: 1 75% of Au production (NSR) FY2014 Q1 revenue Reserves: 2 1.8M oz (Au) 30% Estimated Mine Life: 20+ Years or $17.2M Peñasquito Contribution to Royalty: 2.0% NSR FY2014 Q1 revenue Reserves: 3,4 11.6M oz (Au), 605M
Slide 11: Cash Margin by Operating Property
Financially Robust Cash Margin by Operating Property 1 80% 70% 60% Cash Margin 50% Weighted Average Cash Margin 48% 40% 30% 20% 10% 0% 97% Percentage of 9Mo CY2013 Revenue *3% of Royal Gold’s revenue does not have a corresponding cash margin, as the operator does not report it to the level of detail
Slide 12: Efficient Use of Resources Maximizes Margins
Financially Robust Efficient Use of Resources Maximizes Margins $350 $300 $250 Millions $200 $150 $100 Adjusted EBITDA Margin ~ 90% Revenue $50 January 23, 2014 12
Slide 13: Strong Balance Sheet and Cash Flow in an Attractive Market
Financially Robust Strong Balance Sheet and Cash Flow in an Attractive Market $687M $350M Liquidity at September 30, 2013 Working Capital Undrawn Credit $370M convertible Debt and Commitments Debt 2019 @ 2.875% * LTM Operating Cash Flow $154.5M $0 $200 $400 $600 $800 $1,000 $1,200 *Indicates $50M co
Slide 14: Mineral industry sources of capital are limited
Attractive Market Environment Mineral industry sources of capital are limited Capital Raised, by Asset Class ($B) 1 January 23, 2014 14
Slide 15: Multiple Investment Entry Points
Attractive Market Environment Multiple Investment Entry Points Capital Consuming 1 Capital Generating 2 January 23, 2014 15
Slide 16: Multiple Sources for New Business Opportunities
Attractive Market Environment Multiple Sources for New Business Opportunities 100% 14% 20% 16% 15% 90% The largest 80% source of our 70% 31% gold revenue 48% 48% 60% 44% in fiscal 2013 50% was non- 40% precious 30% metals mines 20% 54% 36% 36% 37% 10% 0% 2010A 2011A 2012A 2013A Primary Gold Mines Po
Slide 17: Favorably Positioned
Favorably Positioned RGLD Price to Book Value EBITDA Per Share 4.5 $3.00 4 $2.50 3.5 3 $2.00 2.5 Five-year average: 2.3x $1.50 FNV 2 SLW Current: 1.5x RGLD 1.5 $1.00 1 $0.50 0.5 0 $0.00 Jan-09 Jan-10 Jan-11 Jan-12 Jan-13 Jan-14 2009 2010 2011 2012 CQ1-CQ3 Calendar year figures. Source: Ycharts 2013
Slide 18: Royal Gold Summary
Royal Gold Summary Embedded Growth Mt. Milligan, September 2013 – Positioned to grow via Mt. Milligan Financially Robust – Mt. Milligan investment complete – EBITDA margin ~90% of revenue – Liquidity of ~$1 billion Attractive Market Environment – Compelling alternative to challenging equity/debt mar
Slide 19: Appendix
APPENDIX Ih : (A ROYALGOLD,INC 9
Slide 20: Royalty vs Stream
Royalty vs Stream Royalty Financing Life of Mine Upfront Payment Stream Financing Life of Mine Upfront Delivery Payment ($/oz) Payment January 23, 2014 20
Slide 21: Differences Between Royalties and Streams
Differences Between Royalties and Streams ROYALTY STREAM Receive a percentage of the Purchase all, or percentage of the production from a mine, usually over designated metal at a fixed or variable OWNER HOLDS RIGHT TO: the LOM, often after deducting offsite (% of spot) price over LOM or specified re
Slide 22: Royalty/Streaming Sector
Royalty/Streaming Sector Metal royalty model established by Royal Gold (1992) and Franco Nevada (1985) Silver Wheaton began metal streaming in 2004 Business model success has attracted new companies Sector market capitalization ~US$16.3B; dominated by three companies: Silver Wheaton, Franco Nevada a
Slide 23: Market Capitalization: Precious Metal Companies
$US Millions 0 10,000 15,000 20,000 5,000 Goldcorp January 23, 2014 Barrick Fresnillo companies Newmont Polyus Silver Wheaton Yamana Gold Franco-Nevada Randgold Newcrest Kinross Gold AngloGold Ashanti Agnico Eagle Eldorado Gold Royal Gold Buenaventura New Gold Osisko Mining Gold Fields (as of 1/15/1
Slide 24: Over US$9B Deployed Over Past 10 Years in Royalty and Stream Finance
Over US$9B Deployed Over Past 10 Years in Royalty and Steam Finance Royal/stream finance is now a well known source of capital with nearly 70 transactions over past decade Streams can be used for project development, mergers and acquisitions, debt or hedge restructuring or other purposes Stream and
Slide 25: 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 3 ROYAL GOLD OVERVIEW announced a temporary suspension of
Slide 26: Endnotes (cont.)
Endnotes (cont.) 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 7 EMBEDDED GROWTH: PAGE 14 ATTRACTIVE MARKET ENVIR
Slide 27: 1660 Wynkoop Street Denver, CO 80202-1132
1660 Wynkoop Street Denver, CO 80202-1132 303.573.1660 info@royalgold.com www.royalgold.com
Royal Gold — CIBC 17th Annual Whistler Institutional Investor Conference (January 2014) on 6ix