Royal Gold, Inc. · NASDAQ:RGLD
Royal Gold — Shareholder Meeting (November 2006)
24 slides from Royal Gold's shareholder meeting presentation, Nov 8, 2006
Slide 1: The Precious Metals Royalty Company
The Precious Metals Royalty Company Royal Gold Annual Meeting November 8, 2006
Slide 2: Cautionary Statement Under the Private Securities Litigation Reform Act of 1995
Cautionary Statement Under the Private Securities Litigation Reform Act of 1995 Some matters contained in this presentation are forward-looking statements that involve risks and uncertainties that could cause actual events to differ materially from these projections or estimates. Such forward-lookin
Slide 3: Who We Are
Who We Are Leading major precious metals royalty company Royalties on some of the best mines in the best mining districts Solid financial strength Strong track record of growth
Slide 4: Strong Track Record of Growth
Strong Track Record of Growth Fiscal Years Ending June 30 * The term “free cash flow” is a non-GAAP financial measure. For a reconciliation of free cash flow to the most directly comparable GAAP financial measure, see Free Cash Flow Reconciliation in the Company’s Fiscal 2006 Annual Report on Form 1
Slide 5: Five-year Price Performance Compared with Peer Companies
Five-year Price Performance Compared with Peer Companies
Slide 6: Five-year Price Performance Compared with Gold
Five-year Price Performance Compared with Gold *Gold price – London PM Fix
Slide 7: Growth Drivers
Growth Drivers High margins Low operating risk Efficient business model Exposure to no-cost organic growth Strong balance sheet
Slide 8: Fiscal 2005 Royalty Portfolio
Fiscal 2005 Royalty Portfolio
Slide 9: Pipeline Mining Complex
Pipeline Mining Complex (Nevada) Operator: Barrick Four royalties: • GSR1 sliding-scale (0.40% − 5.0%) • GSR2 sliding-scale (0.72% − 9.0%) • 0.71% GSR3 • 0.39% NVR1 Reserves: 4.4M oz. Au Additional mineralization: 136.0M tons at 0.026 opt Au (123.4 tonnes at 0.89 gpt) CY 2006 Production: 385,000 oz.
Slide 10: SJ Claims
SJ Claims (Nevada) Operator: Barrick 0.9% NSR royalty Reserves: • 8.9M oz. Au CY 2006 Production: • 903,000 oz. Au *Reserves as of 12/31/05
Slide 11: Leeville North and South
Leeville North and South (Nevada) Operator: Newmont 1.8% NSR royalty Reserves: • 2.4M oz. Au Additional mineralization: • 1.4M tons at 0.435 opt (1.3M tonnes at 14.83 gpt) CY 2006 Production: • Leeville South: 32,000 oz. Au • Leeville North: 209,000 oz. Au Leeville North: est. 400,000 oz. Au at full
Slide 12: Bald Mountain
Bald Mountain (Nevada) Operator: Barrick NSR sliding-scale royalty (1.75–3.5%) Reserves: 1.8M oz. Au Additional mineralization: • 20.6M tons at 0.027 opt (18.7M tonnes at 0.926 gpt) CY 2006 Production: 248,000 oz. Au *Reserves as of 12/31/05
Slide 13: Troy
Troy (Montana) Operator: Revett Minerals Three sequential royalties: • 7.0% GSR (Initial) • 6.1% GSR (Interim) • 2.0% GSR (Perpetual) Reserves: • 14.7M oz. Ag • 124.9M lbs. Cu Additional mineralization: • 46.3M tons at 1.54 opt Ag (42.0 tonnes at 52.80 gpt) • 46.3M tons at 0.75% Cu (42.0M tonnes at
Slide 14: Martha
Martha (Argentina) Operator: Coeur d’Alene 2.0% NSR royalty Reserves: • 4.1M oz. Ag Additional mineralization: • 0.135M tons at 45.36 opt (0.122M tonnes at 1,555.5 gpt) CY 2006 Production: • 2.5M oz. Ag *Reserves as of 12/31/05
Slide 15: Fiscal 2006–2007 Property Additions
Fiscal 2006–2007 Property Additions
Slide 16: Robinson
Robinson (Nevada) Operator: Quadra Mining Open pit mining; mill concentrator 3.0% NSR royalty Reserves: • 1.2M oz. Au • 2.2B lbs. Cu CY 2006 Production: • 53,500 oz. Au • 115B lbs. Cu • 0.5 to 1.0M lbs. Mo Receipt of royalty revenue began May 2006 Mine life: 10 years *Reserves as of 12/31/05
Slide 17: Mulatos
Mulatos (Mexico) Operator: Alamos Gold Open pit mining; heap leach processing 0.30–1.5% NSR sliding-scale royalty (capped at 2.0M oz. production) Reserves: 1.9M oz. Au Additional mineralization: • 153.2M tons at 0.026 opt (139.0M tonnes at 0.893 gpt) CY 2006 Production: • 110,000–120,000 oz. Au Roya
Slide 18: Taparko
Taparko (Burkina Faso) Operator: High River Gold $35.0M investment Open pit mining; CIL processing; mine under construction Four royalties: • TB-GSR1: 15.0% • TB-GSR2: 4.30% between $385- $430 Au (sliding-scale outside of this range) • TB-GSR3: 2.0% perpetual royalty • TB-MR: 0.75% milling royalty (
Slide 19: Gold Hill
Gold Hill (Nevada) Operator: Kinross Owner: JV between Kinross and Barrick $3.3M purchase price 1.0–2.0% NSR sliding-scale royalty Reserves*: 750,000 oz. Au $10.0M RMGC buy-back right Deposit in permitting stage Satellite deposit to Round Mountain mine *Barrick stated in a September 2006 Nevada Mine
Slide 20: Current Royalty Portfolio
I ROYALGOLD,INC LEEVILLE NORTH & SOUTH EUREKA COUNTY, NEVADA Current Royalty Portfolio “> 2 SONORA, MEXICO MULATOS Newmont SJ CLAIMS NEV AID A (GOLDSTRIKE MINE) eee | > TROY EUREKA COUNTY, NEVADA — i Barrick MONTANA Mee Revett GOLD HILL X NYE COUNTY, NEVADA ‘> itis ards raarene ~% NEVADA | | Quadra
Slide 21: Reserves Subject to Royalty Interests
I ROYALGOLD,INC Reserves Subject to Royalty Interests at December 31, 2004 and December 31, 2005 Gold Silver* Copper* 22.0M oz. 2,500M lbs. 1,250M Ibs. TO"sW os *A portion of Ag and Cu reserves are subject to a $10.5M maximum royalty payout.
Slide 22: Increased Revenue Diversification
Increased Revenue Diversification 2004 2005 2006 2007 E* *Assuming no additional royalties added to portfolio.
Slide 23: Creating Value for Shareholders
Creating Value for Shareholders Dividend Yield*: 0.90% Pursue acquisitions that are Dividend Payout Ratio**: 32% $0.26 both strategic and accretive Efficient business model Protect margins and grow cash flow Maintain financial strength and flexibility • Cash: $73.2M • No debt • Line of credit: $30M
Slide 24: An investment with weight to it
An investment with weight to it