Royal Gold, Inc. · NASDAQ:RGLD
Royal Gold — Denver Gold Forum 2007
26 slides from Royal Gold's conference presentation, September 2007
Slide 1: The Leading Precious Metals Royalty Company
The Leading Precious Metals Royalty Company Denver Gold Forum September 2007
Slide 2: Cautionary Statement
Cautionary Statement Under the Private Securities Litigation 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
Slide 3: Why Royal Gold?
Why Royal Gold? Lower risk gold investment Growth potential Strong financial performance
Slide 4: Diversified Portfolio
Lower Risk Attributes Diversified Portfolio1 TROY JOE MANN LEEVILLE MINING MONTANA CANADA COMPLEX Revett Campbell NEVADA WILLIAMS Newmont CANADA SJ CLAIMS Barrick/Teck (GOLDSTRIKE MINE) NEVADA MULATOS Barrick DOLORES MEXICO MEXICO Alamos PIPELINE MINING Minefinders TAPARKO COMPLEX BURKINA FASO NEVAD
Slide 5: Distribution of Reserves by Operator
Lower Risk Attributes Distribution of Reserves by Operator 1 Copper Gold Silver Zinc Lead Barrick Goldcorp Newmont Quadra Minefinders 1 Includes Battle Mountain assets High River Gold Other
Slide 6: Distribution of Reserves by Continent
Lower Risk Attributes Distribution of Reserves by Continent1 Copper Gold Silver Zinc Lead North America W. Africa S. America Other 1 Includes Battle Mountain assets
Slide 7: Cost Structure
Lower Risk Attributes Cost Structure Insulated from increased operating costs No capital cost contributions required No environmental or closure costs incurred Nevada Production Costs Five-year change in operating cost drivers 700 350 Gold Prices Energy (Crude Oil Spot Price) Total Cash Costs Constr
Slide 8: High Margins
Lower Risk Attributes High Margins EBITDA margin1 Net profit margins2 (July 2006 to June 2007) (July 2006 to June 2007) 73% 75% 75% 60% 60% 45% 45% 41% 30% 30% 33% 15% 15% 11% 0% 0% Royal Gold North American majors3 Royal Gold North American majors3 1 EBITDA margin = EBITDA divided by revenue 2 Net
Slide 9: Assets in 2006
Growth Potential Assets in 2006 TROY LEEVILLE MINING MONTANA COMPLEX Revett NEVADA Newmont SJ CLAIMS (GOLDSTRIKE MINE) NEVADA MULATOS Barrick MEXICO Alamos PIPELINE MINING TAPARKO COMPLEX BURKINA FASO NEVADA High River Barrick BALD MOUNTAIN NEVADA Barrick ROBINSON NEVADA MARTHA Quadra ARGENTINA Coeu
Slide 10: Assets in 2007
Growth Potential Assets in 20071 TROY JOE MANN LEEVILLE MINING MONTANA CANADA COMPLEX Revett Campbell NEVADA WILLIAMS Newmont CANADA SJ CLAIMS Barrick/Teck (GOLDSTRIKE MINE) NEVADA MULATOS Barrick DOLORES MEXICO MEXICO Alamos Minefinders PIPELINE MINING TAPARKO COMPLEX BURKINA FASO NEVADA PEÑASQUITO
Slide 11: Ample Royalty Opportunities
Growth Potential Ample Royalty Opportunities Acquire existing royalties from individuals Pascua-Lama, Cortez GSR-3, Bald Mountain Acquire existing royalties from companies Peñasquito, Robinson, Mulatos Finance projects in exchange for royalty interests Taparko, Troy, Martha Enter into explorat
Slide 12: Strong Growth In Reserves
Growth Potential Strong Growth In Reserves Copper B lbs 2,500 2.3 2.0 2.0 1,500 Gold Silver 500 102 M oz M oz 60 1,100 ‘04 ‘05 ‘061 ‘07 1,020 Zinc B lbs 50 14,000 12.8 50 900 10,000 8.0 42 6,000 40 700 2,000 0 0 595 ‘04 ‘05 ‘061 ‘072 30 500 Lead 600 M lbs 5.9 21 19 20 400 3.7 300 200 10 0 0 100 ‘04
Slide 13: Strong Development Pipeline
Growth Potential Strong Development Pipeline EXPLORATION FEASIBILITY PERMITTING CONSTRUCTION OPERATIONS Leeville (2007) Taparko (2007) Dolores (2007)1 Peñasquito (2008) Pascua-Lama (~2010) Gold Hill (~2010) 19 other interests1 1 Includes Battle Mountain assets
Slide 14: Leeville (Nevada)
Growth Potential Leeville (Nevada) Operator: Newmont Royalty: 1.8% NSR Reserves1: 2.3M oz Au Production (Est.): 400K oz per year 337K oz CY 2007 Mining Rate: 2,100 TPD October 2006 3,200 TPD planned by November 2007 FY07 Revenue: $2.7M Key Characteristics: Grade, infrastructure, exploration
Slide 15: Leeville (Nevada)
Growth Potential Leeville (Nevada) Operator: Newmont Royalty: 1.8% NSR Reserves1: 2.3M oz Au Production (Est.): 400K oz per year 337K oz CY 2007 Mining Rate: 2,100 TPD October 2006 3,200 TPD planned by November 2007 FY07 Revenue: $2.7M Key Characteristics: Grade, infrastructure, exploration
Slide 16: Taparko (Burkina Faso)
Growth Potential Taparko (Burkina Faso) Operator: High River Gold Royalty: GSR1: 15.0% - initial royalty GSR2: 0–10.0% initial royalty (sliding-scale) GSR3: 2.0% - perpetual royalty MR1: 0.75% - milling royalty Reserves1: 0.8M oz Au Production (Est.): 100-140K oz per year 35K oz CY 2007
Slide 17: Dolores (Mexico)
Growth Potential Dolores (Mexico) Operator: Minefinders Royalty: 3.25% NSR Au 2.0% NSR Ag Reserves1: 2.45M oz Au 127.0M oz Ag Production (Est.): Loading pad this fall Commercial production in 2008 120K oz Au per year2 4.43M oz Ag per year2 Key Characteristics: Royalty rate, exploration and o
Slide 18: Peñasquito (Mexico)
Growth Potential Peñasquito (Mexico) Operator: Goldcorp Royalty: 2.0% NSR (all metals) Reserves1: 13.1M oz Au, 864.0M Ag, 12.8B lbs Zn, 5.9B lbs Pb Production: Est. commencement 2008 Key Characteristics: Low cash (Artist’s rendering of mine site) costs, exploration upside 1,750 1,500 Gold and Silver
Slide 19: Pascua-Lama (Chile)
Growth Potential Pascua-Lama (Chile) Operator: Barrick Royalty1: 0.16%-1.08% NSR (sliding-scale) Reserves2: 13.6M oz Au Production (Est.): 750K–775K oz Au per year Est. commencement in 2010 Key Characteristics: Mine life, exploration potential, economies of scale, low cost producer 1 Royalty app
Slide 20: Gold Hill (Nevada)
Growth Potential Gold Hill (Nevada) Operator: Kinross (50/50 joint venture with Barrick) Royalty1: 1.0%-2.0% NSR (sliding-scale) Reserves2: 0.8M oz Au Production: Est. commencement ~ 2010 1 RMGC has a $10M buy-back right on the NSR royalty 2 Barrick stated in a September 2006 presentation that, as
Slide 21: Growing Asset Base and Revenues
Financial Performance Growing Asset Base and Revenues $48.5 $28.4 $25.3 $21.4 2004 2005 2006 2007 Fiscal Years Ending June 30 Pipeline Mining Complex SJ Claims Leeville Troy Mine Bald Mountain Martha Robinson Mulatos Gold Hill
Slide 22: Strong Track Record
Financial Performance Strong Track Record $50 Net Income Free Cash Flow1 Royalty Revenue $40 $30 ($ in millions) $20 $10 $0 2003 2004 2005 2006 2007 Fiscal Years Ending June 30 Source: Company data; fiscal years ended June 30 1 Free cash flow is a non-GAAP measure and is explained in the Company’s S
Slide 23: Growth in Leverage to Gold Price
Financial Performance Growth in Leverage to Gold Price 200 Free cash flow1 per share Earnings per share Average gold price 150 Percentage 100 50 0 2003 2004 2005 2006 2007 Fiscal Years Ending June 30 1 Free cash flow is a non-GAAP measure and is explained in the Company’s SEC filings
Slide 24: Dividends
Financial Performance Dividends Balance sheet (as of 9/20/07 as Dividend Yield1: 0.8% adjusted) Dividend Payout Ratio2: 27% Cash on hand: $91.5M $0.30 $0.26 Debt: $0 $0.25 $0.20 $0.22 $0.20 Line of credit: $71.4M $0.15 $0.10 $0.15 $0.10 Shares outstanding: 28.9M $0.05 Insider Ownership: 14
Slide 25: Lower Risk + Growth + Financial Performance = Premium Investment Vehicle
Lower Risk + Growth + Financial Performance = Premium Investment Vehicle Exploration Royalty Company Junior Operators Intermediate Operators Major Operators Return ETF Index Funds Physical Gold Risk Note: This chart represents the views of Royal Gold
Slide 26: Royal Gold, Inc. contact details
ROYAL GOLD, INC 1660 Wynkoop Street, Suite 1000 Denver, Colorado 80202–1132 PHONE (303) 595-1660 FAX (303) 595-9385 WEB www.royalgold.com