Royal Gold, Inc. · NASDAQ:RGLD
Royal Gold — World Gold Forum (Virtual) 2021
34 slides from Royal Gold's conference presentation, April 2021
Slide 1: Investor Presentation April 2021
Investor Presentation April 2021
Slide 2: Cautionary Statement
Cautionary Statement Cautionary “Safe Harbor” Statement Under the Private Securities Litigation Reform Act of 1995: This presentation includes “forward-looking statements” within the meaning of U.S. federal securities laws. Forward-looking statements are any statements other than statements of histo
Slide 3: Company Overview
Company Overview Opportunity to capture value in the precious metals sector without incurring many of the costs and risks associated with mining operations Dual Business Segments… …Across A Diverse, Gold-Focused Portfolio… …With Standout Performance Royalty Interests: 189 12 $499M 320,000 An interes
Slide 4: Royal Gold: Core Attributes
Royal Gold: Core Attributes Differentiated model with disciplined capital management and a focus on shareholder returns UNIQUE Business model provides optionality to gold price and production and reserve growth MODEL Efficient model with high operating margin and revenue generation per employee
Slide 5: Optionality
Optionality Royal Gold seeks to provide exposure to resource growth and metal price optionality. Resource growth and mine life extensions can significantly enhance returns over time. Case Study Reserves & Resources* Mine Life Contained Gold M oz Years Mulatos – Alamos Gold 2P Reserves • Royal Gold a
Slide 6: Highly Efficient Business Model
Highly Efficient Business Model The efficiency of Royal Gold’s business model exceeds that of the largest mining and technology companies ENTERPRISE VALUE1/EMPLOYEE2 TOTAL REVENUE/EMPLOYEE2 (US$ 000s as of Apr. 30, 2020) $515 $474 (US$ 000s 12 Mo. Ending Dec. 31, 2019) $1,877 $938 $637 $2,414 $3,029
Slide 7: Highly Efficient Business Model
Highly Efficient Business Model High margin business model drives profitability… …for peer-leading margins and metrics CASH FLOW METRICS1 US$ 499M Revenue Adjusted EBITDA Margin2 78% US$ 388M Adjusted EBITDA US$ 341M Operating Cash Flow Operating Cash Flow/Revenue 68% Cash G&A3 Expenses/Revenue 4% U
Slide 8: Diverse Portfolio in Established Mining Jurisdictions
Diverse Portfolio in Established Mining Jurisdictions PRINCIPAL PROPERTIES 1 ANDACOLLO 3 Region IV, Chile 3 2 2 CORTEZ Nevada, USA 4 5 3 MOUNT MILLIGAN 4 British Columbia, Canada 5 6 6 4 PEŇASQUITO 7 Zacatecas, Mexico 1 5 PUEBLO VIEJO 1 Sanchez Ramirez, Dominican Republic 41 PRODUCING 6 WASSA 189 17
Slide 9: Diverse Portfolio Safeguards Stable, Predictable and Sustainable Cash Flow
Diverse Portfolio Safeguards Stable, Predictable and Sustainable Cash Flow Royal Gold’s revenue is sourced from a geographically and operationally diverse portfolio, underpinned by primary precious metals mines • Globally-diverse portfolio minimizes • Principal property revenues • Revenue contributi
Slide 10: Portfolio Spans the Stages of Project Development
Portfolio Spans the Stages of Project Development Broad range of properties at various stages of development provides potential for organic revenue growth and optionality PROPERTIES CLASSIFICATION COUNT STATUS Allan, Andacollo, Balcooma, Bald Mountain, Borax, Canadian Malartic, Cortez, Dolores, Don
Slide 11: Portfolio Updates
Portfolio Updates KHOEMACAU PUEBLO VIEJO PEAK GOLD JV WASSA BOTSWANA DOMINICAN REPUBLIC USA GHANA • Construction 85% complete (to • Expansion project to maintain • Project interests sold to Kinross • Southern Extension PEA: December 31, 2020) production at 800,000 oz/year for cash and incremental NS
Slide 12: Sound ESG Practices are Fundamental to Success
Sound ESG Practices are Fundamental to Success Recent improved disclosure of Royal Gold’s approach to sustainability has materially improved market perception and recognition of leading ESG practices 60 51.9 50 SEVERE RISK 40 RATING HIGH 30 23.4 22.8 MEDIUM 18.7 20 10 LOW 0 2018 2019 2020 2021 Sourc
Slide 13: ESG Overview: Sustainability Is Our Business Model
ESG Overview: Sustainability Is Our Business Model Royal Gold is committed to sustainability at the corporate and local levels, and seeks counterparties with leading approaches to ESG practices Environmental Social Governance Committed to analyzing and mitigating the Committed to supporting social c
Slide 14: Stream and Royalty Financing is Significant
Stream and Royalty Financing is Significant Stream and royalty financing has become a mainstream source of capital to the global mining industry $5 40% $4 $18.6B PROJECT DEVELOPMENT 52% USE OF $3 Total Stream Investments by all companies BALANCE SHEET PROCEEDS US$ M RESTRUCTURING/ All Industry VALUE
Slide 15: Robust Due Diligence Drives Disciplined Approach to Acquisitions
Robust Due Diligence Drives Disciplined Approach to Acquisitions Royal Gold’s due diligence process includes: • Management references • ESG • Technical Due Diligence • Infrastructure • Environmental Impact • Geology, reserve/resource • Marketing (concentrates) • Financial/Credit Analysis • Social li
Slide 16: Strong Liquidity Position and Financing Strategy Drive Shareholder Returns
Strong Liquidity Position and Financing Strategy Drive Shareholder Returns We anticipate financing acquisitions with non-dilutive Disciplined capital allocation prioritizes forms of capital in the following priority: balance sheet, dividends and investment2 • Existing cash balances • Cash flow from
Slide 17: Liquidity and Financing Strategy
Liquidity and Financing Strategy For almost 20 years, Royal Gold’s growth has been financed accretively and without significant equity dilution $3.9B Cumulative Revenue Revenue Operating Cash Flow $2.4B Cumulative Operating Cash Flow Cash G&A Expenses $264M Avg. Gold Price Cum. Cash G&A1 Expenses Sh
Slide 18: Royal Gold Offers a Consistent, Increasing and Sustainable Dividend
Royal Gold Offers a Consistent, Increasing and Sustainable Dividend Since 2000, Royal Gold shareholders have received a dividend regardless of the gold price CONSISTENT - INCREASING - SUSTAINABLE US$/share US$/oz $1.40 $2,200 17% $1.20 Dividend Payout Ratio Gold Price $2,000 $1,800 Dividend CAGR (FY
Slide 19: Appendix
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Slide 20: Stream/Royalty Investment Process
Stream/Royalty Investment Process Royal Gold’s role in the mining value chain can be tailored to fit the needs of the operating partner EXPLORATION DEVELOPMENT PRODUCTION Royal Gold Payment • Investment is typically • Investment typically • Investment typically in the form of a in the form of a in t
Slide 21: Stream/Royalty Detail
Stream/Royalty Detail From a cash flow perspective, streams and royalties are comparable in that the revenue from a stream less the ongoing cash price paid roughly equals a royalty-like interest in production ROYALTIES • Typically structured as gross smelter return (GSR), net smelter return (NSR), n
Slide 22: Experienced Independent Directors
Experienced Independent Directors Highly capable, independent board, with deep experience across the gold sector William Hayes Fabiana Chubbs Kevin McArthur Independent Director and Independent Director; Independent Director; Chairman of the Board; Former Former Chief Financial Former Executive Chai
Slide 23: Management Compensation Structure
Management Compensation Structure Short-term and long-term incentive program seeks to align compensation with the factors that drive and measure total shareholder return • Short Term Incentives focused on financial, operational, strategic, and individual performance • Long Term Incentives involve ne
Slide 24: Shareholder Base Reflects Company's Unique Position
Shareholder Base Reflects Company’s Unique Position Shareholder base is institutional with some unique characteristics • 36% of identifiable investors (28% of total) are Index investors • High-quality shareholder register, with large and long-term Identified Investor Styles institutional investors c
Slide 25: Quality Portfolio of Asset Investments
Quality Portfolio of Asset Investments MOUNT MILLIGAN $131M PEÑASQUITO $25M Au Stream: 35% Revenue* 2.4 2028 70% Royalty: 2% NSR Revenue* 8.1 2032 272% Au Cash Price: $435/oz Au reserves mine % of investment Au reserves mine % of investment Cu Stream: 18.75% m ounces life returned** m ounces life re
Slide 26: Strong Runway of Growth Opportunities
Strong Runway of Growth Opportunities KHOEMACAU Investment Sources 21 2021 Red Kite $275M Ag Stream: 80-100% $212M 50.9 $212M Ag Cash Price: 20% of Spot years Royal Gold $265M 80% stream Overrun Facility $ 25M Ag reserves mine life estimated Funded to Equity $ 75M $265M m ounces start up Jan 2021 To
Slide 27: Historical Trading Multiples
Historical Trading Multiples Streaming Companies have historically traded at relatively high P/NAV and P/CF multiples P / NAV P / CF 2.02x 17.6x ** Peers include Franco-Nevada, Wheaton Precious Metals, Osisko Gold Royalties, Sandstorm; peer range excludes Royal Gold. Source: BMO Capital Markets ROYA
Slide 28: Non-GAAP Measures
Non-GAAP Measures Non-GAAP Financial Measures and Certain Other Measures Overview of non-GAAP financial measures: Non-GAAP financial measures are intended to provide additional information only and do not have any standard meaning prescribed by U.S. generally accepted accounting principles (“GAAP”).
Slide 29: Non-GAAP Measures
Non-GAAP Measures Non-GAAP Financial Measures and Certain Other Measures Overview of non-GAAP financial measures: 4. Free cash flow is a non-GAAP financial measure that is calculated by the Company as net cash provided by operating activities for a period minus acquisition of stream and royalty inte
Slide 30: Non-GAAP Measures
Non-GAAP Measures Reconciliation of non-GAAP financial measures to U.S. GAAP measures Adjusted EBITDA and Net cash to TTM adjusted EBITDA: Year Ended June 30, (amounts in thousands) 2020 2019 Net income and comprehensive income $ 196,250 $ 89,079 Depreciation, depletion and amortization 175,434 163,
Slide 31: Non-GAAP Measures
Non-GAAP Measures Reconciliation of non-GAAP financial measures to U.S. GAAP measures (cont.) Adjusted net income and adjusted net income per share: ROYAL GOLD, INC. | INVESTOR PRESENTATION | APRIL 2021 31
Slide 32: Non-GAAP Measures
Non-GAAP Measures Reconciliation of non-GAAP financial measures to U.S. GAAP measures (cont.) Free cash flow: Other measures We use certain other measures in managing and evaluating our business. We believe these measures may provide useful information to investors for analysis of our business. We u
Slide 33: Other Disclaimers
Other Disclaimers DISCLAIMER STATEMENT FOR USE OF MSCI ESG RATING THE USE BY ROYAL GOLD OF ANY MSCI ESG RESEARCH LLC OR ITS AFFILIATES (“MSCI”) DATA, AND THE USE OF MSCI LOGOS, TRADEMARKS, SERVICE MARKS OR INDEX NAMES HEREIN, DO NOT CONSTITUTE A SPONSORSHIP, ENDORSEMENT, RECOMMENDATION, OR PROMOTION
Slide 34: Contact
Tel. 303.573.1660 investorrelations@royalgold.com www.royalgold.com