Royal Gold, Inc. · NASDAQ:RGLD
Royal Gold — Scotiabank Mining Conference 2012
27 slides from Royal Gold's conference presentation, November 2012
Slide 1: Scotiabank Mining Conference 2012
Scotiabank Mining Conference 2012 NOVEMBER 2012 Page 1
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
Slide 3: Royal Gold Profile
Royal Gold Profile World Class Royalty Company >$5B precious metals royalty and streaming company Exploration Focused on gold Junior Operators Designed to provide: Intermediate Operators A lower risk investment vehicle Index Funds A premium return Major Operators Return Portfolio of quality assets E
Slide 4: Royal Gold Business Model: Diversification by Property
Royal Gold Business Model Lower Risk Attributes Asset diversification Stable host countries Experienced operators Fixed costs Diversification by Property Revenue Net Gold Equivalent Reserves 1,2 (Fiscal 2012) (as of 12/31/11) Andacollo Voisey’s Bay Peñasquito Mt. Milligan Andacollo Peñasquito Holt M
Slide 5: Royal Gold Business Model: Diversification by Country
Royal Gold Business Model Lower Risk Attributes Asset diversification Stable host countries Experienced operators Fixed costs Diversification by Country Revenue Net Gold Equivalent Reserves 1,2 (Fiscal 2012) (as of 12/31/11) Chile Canada Mexico Canada Chile US US Australia Other Mexico Australia Oth
Slide 6: Royal Gold Business Model: Diversification by Operator
Royal Gold Business Model Lower Risk Attributes Asset diversification Stable host countries Experienced operators Fixed costs Diversification by Operator Revenue Net Gold Equivalent Reserves 1,2 (Fiscal 2012) (as of 12/31/11) Teck Vale Goldcorp Thompson Creek Teck Barrick Barrick St. Andrew Alamos G
Slide 7: Royal Gold Business Model: Cash Margin
Royal Gold Business Model Lower Risk Attributes Royal Gold Cash Margin Asset diversification 1,800 1,600 1,400 Stable host countries 1,200 $/Ounce 1,000 800 Experienced operators 600 400 200 Fixed costs 0 2008 2009 2010 2011 2012 (Fiscal Years) Margin Production Taxes Cash Cost of Operations Industr
Slide 8: Royal Gold Business Model: Reserve Growth
Royal Gold Business Model Premium Return Attributes No cost organic reserve growth Efficient use of capital Net Gold Equivalent Reserves 2,3 8 Strong and growing financial results 7 Gold Reserve Replacement 1 6 95 5 Ounces/Millions 75 4 Ounces/Millions 55 3 35 2 1 15 0 -5 2007 2008 2009 2010 2011 -2
Slide 9: Royal Gold Business Model: Market Capitalization
Royal Gold Business Model Premium Return Attributes No cost organic reserve growth Efficient use of capital Strong and growing financial results Market Capitalization 7.0 6.0 5.0 $3.7B Shareholder US$ Billions 4.0 Value Created 3.0 2.0 $2.0B in Equity 1.0 Issued 0.0 Jun '02 Sept '02 Dec '02 Sept '05
Slide 10: Royal Gold Business Model: Financial Results and Dividend Growth
Royal Gold Business Model Premium Return Attributes No cost organic reserve growth Efficient use of capital Strong and growing financial results Financial Results Dividend Growth 5.00 0.90 4.50 0.80 4.00 0.70 3.50 0.60 3.00 0.50 $/Share $/Share 2.50 0.40 2.00 0.30 1.50 1.00 0.20 0.50 0.10 0.00 0.00
Slide 11: Portfolio of Quality Assets
Portfolio of Quality Assets 1 2 3 3 Page 11
Slide 12: Andacollo (Teck)
Andacollo (Teck) Region IV, Chile 75% NSR until 910K ounces are Royalty: 1 produced; 50% NSR thereafter Reserves: 2 1.8M ozs gold FY 2012 Production: 3 51.4K ozs gold FY 2012 Revenue: $64.1M Mine Life: 20+ years Growth expected; fiscal 2012 Status: production of 44,000 TPD vs. design capacity of 55,
Slide 13: Peñasquito (Goldcorp)
Peñasquito (Goldcorp) Zacatecas, Mexico Royalty: 2.0% NSR - 16.5M ozs gold - 6.2B lbs lead Reserves: 1 - 960M ozs silver - 14.8B lbs zinc - 294.5K ozs gold - 164.0M lbs lead FY 2012 Production: 2 - 21.5M ozs silver - 312.6M lbs zinc FY 2012 Revenue: $28.5M Mine Life: 22 years Growth expected; fiscal
Slide 14: Voisey's Bay (Vale)
Voisey’s Bay (Vale) Labrador and Newfoundland, Canada Royalty: 2.7% NSR - 1.2B lbs nickel Reserves: 1 - 668M lbs copper - 131.6M lbs nickel FY 2012 Production: 2 - 107.2M lbs copper FY 2012 Revenue: $36.0M Mine Life: 3 20+ years Status: Steady state; 6,000 TPD Page 14
Slide 15: Mt. Milligan (Thompson Creek) Growth Catalyst
Mt. Milligan (Thompson Creek) Growth Catalyst British Columbia, Canada Mine profile: Open pit copper/gold porphyry Forecast Gold Production 2 300 Reserves: 1 6.0M oz gold Ounces/Thousands 250 262,000 ozs of gold annually during 200 Est. production: 2,3 first six years; 195,000 ozs of gold 150 annual
Slide 16: Mt. Milligan (Thompson Creek) Investment Summary
Mt. Milligan (Thompson Creek) Investment Summary British Columbia, Canada Transaction summary: 25% of gold for $311.5M in July 2010 15% of gold for $270M in December 2011 12.25% of gold for $200M in August 2012 = 52.25% of gold for $781.5M Delivery payment of $435/oz or prevailing market price for l
Slide 17: Mt. Milligan (Thompson Creek) Attractive Attributes
Mt. Milligan (Thompson Creek) Attractive Attributes British Columbia, Canada Favorable geographic location Provincial and Federal permits Strong local and regional infrastructure: Low cost power Adequate water Low strip ratio Road, rail and port access Support communities Long mine life Exploration
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Slide 19: World Class Royalty Company
World Class Royalty Company. Page 19 ROYALGOLD INC
Slide 20: Pascua-Lama (Barrick) Growth Catalyst
Pascua-Lama (Barrick) Growth Catalyst Region III, Chile 0.78% to 5.23% NSR Royalty: 1,2 (5.23% above $800 gold) Forecast Royalty Ounces 5 14.7M ozs gold 60 Reserves: 3 (limited to gold in Chile) Ounces (Thousands) 50 Capital: $8.0B to $8.5B 40 30 Initial Production: Second half of CY 2014 20 800K to
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ROYALGOLD INC
Slide 22: Significant Impact: Mt. Milligan and Pascua-Lama
Significant Impact Mt. Milligan and Pascua-Lama Long-term Impact of Mt. Milligan and Pascua-Lama 350 300 Net Gold Equivalent Ounces/Thousands 250 200 150 100 50 0 -0 FY 2012 1 Mt. Milligan 2,3 Pascua-Lama 2,4 (full production) (full production) Andacollo Peñasquito Voisey’s Bay Other Mt. Milligan Pa
Slide 23: Premium Investment Vehicle
Premium Investment Vehicle Lower Risk + Financial Performance + Growth 3400% Price Appreciation 1 3200% 3000% 2800% 2600% 26X 2400% 2200% 2000% 1800% 1600% 1400% 1200% 1000% 800% 600% 5X 400% 200% 2X 0% 0.1X -200% Nov-12 Jun-01 Jun-02 Jun-03 Jun-04 Jun-05 Jun-06 Jun-07 Jun-08 Jun-09 Jun-10 Jun-11 Ju
Slide 24: Footnotes
I> ROYALGOLD INC Footnotes
Slide 25: Footnotes
Footnotes PAGES 4,5,6. ROYAL GOLD BUSINESS MODEL 2009 - $1,087.50 gold; $16.99 silver; $3.33 3. Royal Gold considers and categorizes an 1. Net gold equivalent reserves are calculated by copper; $1.09 lead; $1.17 zinc; $8.38 nickel; exploration property to be an evaluation stage applying the Company’
Slide 26: Footnotes
Footnotes PAGE 15: MT. MILLIGAN 3. Reserves as of December 31, 2011. Royalty PAGE 23. PREMIUM INVESTMENT VEHICLE 1. Reserves as of October 23, 2009. applies to all gold production from an area 1. Does not include dividend distribution. 2. Per Thompson Creek’s National Instrument of interest in Chile
Slide 27: Royal Gold contact details
1660 Wynkoop Street Denver, CO 80202-1132 303.573.1660 info@royalgold.com www.royalgold.com Page 27