Royal Gold, Inc. · NASDAQ:RGLD
Royal Gold — Bank of America Merrill Lynch 15th Annual Canada Mining Conference 2009
27 slides from Royal Gold's conference presentation, September 2009
Slide 1: Bank of America Merrill Lynch 15th Annual Canada Mining Conference
Bank of America Merrill Lynch 15th Annual Canada Mining Conference September 2009
Slide 2: Cautionary Statement Under the Private Securities Litigation Reform Act
Cautionary Statement Under the Private Securities Litigation Reform Act 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 f
Slide 3: Royal Gold Overview
Me RovALGOLNINC The Leading Precious Metats Royalty Company = "i Royal Gold Overview
Slide 4: Company Profile
Company Profile Market Information (as of 9/3/09) Royalty Asset Distribution (number of properties) NASDAQ: RGLD; TSX: RGL Gold/Silver Polymetallic Other Metals Market cap: $1.9B Producing Average daily volume (TTM): 887,000 Development Shares Outstanding Evaluation Common: 40.7M Exploration 0 10 20
Slide 5: Effective Business Model
Effective Business Model Simple News Clippings Limited management demands Indirect operating exposure No capex challenges Efficient Passive investor No continuing investment Historically high margins/ low overhead Option value Unhedged Reserve additions at no cost Exploration portfolio
Slide 6: Strong Financial Performance
Strong Financial Performance Gross Financial Results Revenue by Metal Type Net Income Free Cash Flow1 Royalty Revenue (fiscal 2009) 13% 3% Gold Silver Total Other Metals $90 84% $80 $70 ($ in millions) Composition of Revenue $60 (fiscal 2008-2009) 80 $50 9.9 Revenue ($ in millions) -1.6 1.5 $40 75 3
Slide 7: Diversification and Economies of Scale
Diversification and Economies of Scale Diversification Diversification Effectiveness (fiscal 2005-2009) Barrick portfolio contribution Cortez Production Index Gold Price Index Free Cash Flow Index Offset Cortez and Robinson 400 350 Percentage Change (2005 = 100%) 300 Economies of Scale 250 200 17 pe
Slide 8: Reserve Growth
Reserve Growth Gold reserves increased 30% to 64.2M ounces 1 Silver reserves increased 16% to 1.2B ounces 1 Portfolio with upside potential managed by top quality operators Gold Equivalent Royalty Ounces (2003 = 1.00) 2.00 Property Au Reserves Operator Royalty Reserves (000s AuEq Ounces) 1.80 (oz) 2
Slide 9: Core Producing Properties
‘A Roy ALGOLTING The Leading Precious Metals Royalty Company = gs Core Producing Properties
Slide 10: Principal Producing Properties
Principal Producing Properties Cortez (Pipeline Mining Complex) Taparko Mulatos Barrick High River Alamos Gold Royalty GSR1 and GSR2: 0.4 – 5.0% TB-GSR1: 15% 1.0 – 5.0% NSR GSR3: 0.71% TB-GSR2: 0 – 10% NVR1: 0.39% TB-GSR3: 2.0% CY 2009 Production (Est.) 63,000 oz (Au) 1 160,000 oz (Au) 2 346,000 oz
Slide 11: Principal Producing Properties
Principal Producing Properties Peñasquito 1 Dolores Goldcorp Minefinders Royalty 2.0% NSR (all metals) 3.25% NSR (Au) 2.0% NSR (Ag) CY 2009 Production (Est.) 70,000 oz (Au) 85,000 oz (Au) 2 2.3M oz (Ag) 1.8M oz (Ag) FY 2009 Revenue $1.5M $0.90M 3 Reserves 17.4M oz (Au) 4 2.4M oz (Au) 5 1.0B oz (Ag)
Slide 12: Core Development Properties
Core Development Properties
Slide 13: Principal Development Properties
Principal Development Properties Pascua-Lama Canadian Malartic Holt 1 Barrick Osisko St Andrew Goldfields Royalty 0.16 – 1.08% NSR 2.0 - 3.0% NSR 2 0.00013 x gold price NSR Reserves 14.6M oz (Au) 3,4 4.7M oz (Au) 5 0.5M oz (Au) 3 Est. Production Start-up 6 2013 2011 2010 Mine Life 6 6 years 25 years
Slide 14: Andacollo (CDA – Chile)
Andacollo (CDA – Chile) Royalty 75% of gold until 910,000 payable ounces; 50% thereafter Total consideration: $218M cash 1.2M shares Closing expected prior to January 29, 2010
Slide 15: Andacollo Hypogene Project
Andacollo Hypogene Project Sulfide plant production: Initial production: late 2009 Commercial production: early 2010 55,000 tonnes/day mill capacity Proven and probable reserves: 1.6M oz Au (394M tonnes at 0.13 gpt) 1 Estimated annual production: 2 53,000 oz gold 76,000 tonnes copper 3 Estimated ann
Slide 16: Development Pipeline
Development Pipeline 1 Estimated Revenue Contributions (new assets) 100 90 80 70 60 ($ millions) 50 40 30 20 10 0 FY 2009 Selected Projects at Full Production 5 Actual Revenue Holt Peñasquito Canadian Malartic Dolores Pascua-Lama 1 The date in parentheses indicates the estimated date of royalty reve
Slide 17: Creating Value for Shareholders
Creating Value for Shareholders Pursue acquisitions that are both Dividend Yield: 1 0.69% Dividend Payout Ratio: 2 34% strategic and accretive $0.35 $0.32 $0.30 $0.28 $0.26 Efficient business model with $0.25 $0.20 $0.22 historically low overhead $0.20 $0.15 $0.10 Protect margins and grow cash flow
Slide 18: Royal Gold, Inc. Contact Details
ROYAL GOLD, INC. 1660 Wynkoop Street Denver, CO 80202-1132 PHONE 303.573.1660 FAX 303.595.9385 EMAIL info@royalgold.com WEB www.royalgold.com
Slide 19: Appendix A: Summary of Principal Properties & Royalty Portfolio
Appendix A: Summary of Principal Properties & Royalty Portfolio
Slide 20: Properties – Producing Royalty Interests
Properties – Producing Royalty Interests Royalty FY2009 FY2008 Mine Location Operator (Gold unless otherwise stated) ($ millions) ($ millions) GSR1 1: 0.40%-5.0% Cortez (Pipeline GSR2 1: 0.40%-5.0% USA, Nevada Barrick 16.3 21.9 Mining Complex) GSR3 1: 0.71% GSR NVR1 1: 0.39% NVR 15% GSR (TB-GSR1) 2
Slide 21: Properties – Producing Royalty Interests (cont.)
Properties – Producing Royalty Interests (cont.) Royalty FY2009 FY2008 Mine Location Operator (Gold unless otherwise stated) ($ millions) ($ millions) 2.0% Gross Proceeds Twin Creeks USA, Nevada Newmont 1.1 6 - Royalty (“GPR”) El Limon Nicaragua, El Limon B2Gold 3.0% NSR 0.9 0.7 Wharf USA, South Dak
Slide 22: Footnotes
Footnotes 1 Royalty percentages: GSR1 and GSR2 – 0.40-5.0% (sliding-scale); GSR3 – 0.71%; NVR1 – 0.39%. As of October 1, 2008, the GSR2 royalty percentage was restructured to match the current GSR1 rate 2 Royalty percentages: TB-GSR1 – 15.0%; TB-GSR2 – 4.3% when the average monthly gold price ranges
Slide 23: Properties – Development Stage Royalty Interests
Properties – Development Stage Royalty Interests Royalty Mine Location Operator (Gold unless otherwise stated) Koolanooka Australia, Western Australia Midwest AUD$0.25/per tonne (iron ore) Meekatharra Australia, Western Australia Mercator Gold A$10.00 per gold ounce produced 1 (Paddy’s Flat) Reedy’s
Slide 24: Footnotes
Footnotes 1 Royalty applies on production above 50,000 ounces 2 The royalty applies to cumulative production at both the Burnakura and Reedy’s Meekatharra properties above 300,000 ounces. Once 300,000 ounces have been produced, the royalty rate is 1.5% NSR for the first 75,000 ounces per year and 2.
Slide 25: Royalty Portfolio
Royalty Portfolio (September 2009) 1 Pipeline, including Crossroads deposit 2 Royal Gold acquired this property in the Battle Mountain transaction. The parties claiming interests in the mining concessions subject to this royalty have disputed any royalty obligation 3 Closing of Andacollo transaction
Slide 26: Exploration Assets
Exploration Assets (September 2009) 1 Royal Gold acquired this property in the Battle Mountain transaction. The parties claiming interests in the mining concessions subject to this royalty have disputed any royalty obligation
Slide 27: Royal Gold, Inc. Contact Details
ROYAL GOLD, INC. 1660 Wynkoop Street Denver, CO 80202-1132 PHONE 303.573.1660 FAX 303.595.9385 EMAIL info@royalgold.com WEB www.royalgold.com
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