Royal Gold, Inc. · NASDAQ:RGLD
Royal Gold — 2016 Denver Gold Forum
24 slides from Royal Gold's conference presentation, Sep 19, 2016
Slide 1: Denver Gold Forum
Denver Gold Forum Tony Jensen, President and CEO Royal Gold, Inc. September 19, 2016
Slide 2: Cautionary Statement
Cautionary Statement 2 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: Gold Investment Opportunity with a Dividend and Reserve Optionality
NASDAQ:RGLD 3 Gold Investment Opportunity with a Dividend and Reserve Optionality We provide capital in exchange for a life-of- mine percentage of the production, usually gold, via a streaming or royalty interest Exploration Longevity—in business since 1981 in Denver, CO Junior Operators 21 em
Slide 4: Royal Gold Vision and Strategy
Royal Gold Vision and Strategy 4 Gold Focused Reinvest Free Invest at the Pay a Be the Most Cash Flow in Troughs and Growing and Valuable, Not Long Lived be Patient at Sustainable Necessarily Properties the Top Dividend the Largest Value created by providing gold price optionality and reserve upside
Slide 5: Gold Focused: Percentage of Net Revenue
Gold Focused 5 Royal Gold expects 75% of estimated net revenue from gold1 on a pro-forma basis Gold Silver Other 100% 90% 80% Percentage of Net Revenue 70% 60% 50% 40% 30% 20% 10% 0% 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Fiscal Years 1 Pro-Forma include
Slide 6: Reinvest Cash Flow in Long Lived Properties
Reinvest Cash Flow in Long Lived Properties 6 80% of our portfolio asset value is in mines with reserve life >15 years,1 including: Years of remaining mine life 25 20 15 Years 10 5 Disciplined 0 capital allocation 1 Based on reserves and mine life reported by the operators of our stream and royalty
Slide 7: Reinvest Cash Flow in Long Lived Properties: Gross Revenue
Reinvest Cash Flow in Long Lived Properties 7 Cornerstone properties generate cash flow and lead to more diversification: $350 Pueblo $300 Viejo Wassa and Gross Revenue $USD millions Prestea $250 $200 Peñasquito $150 Voisey’s Bay $100 Disciplined Mount Milligan capital allocation $50 Andacollo Corte
Slide 8: Long Lived Properties, Update
Long Lived Properties, Update 8 Seizing unique opportunities to enhance diversity and drive long term growth Acting as a catalyst for Centerra -Thompson Creek deal Mount Milligan stream to be amended; 35% gold, 18.75% copper Royal Gold value whole Strong operator and balance sheet Completing t
Slide 9: Long Lived Properties, Growth
Long Lived Properties, Growth 9 Operators’ innovation, capital and exploration at no incremental capital cost to Royal Gold1 Pen͂asquito Pyrite Leach under construction Incremental annual production; 100-140k ozs Au, +4-6m ozs Ag Pueblo Viejo tailings expansion Potential additional reserves (u
Slide 10: Long Lived Properties, Growth: Attributable Gold Ounces
Long Lived Properties, Growth 10 Organic growth represents reserve optionality ~20% growth in attributable gold reserves after acquisition Equity Reserve Growth Acquired Reserves $Au (EOY) 10 $2,000 9 $1,800 8 $1,600 Attributable Gold Ounces (millions) 7 $1,400 6 $1,200 Gold price1 5 $1,000 4 $800 3
Slide 11: Reinvest Cash Flow in Long Lived Properties
Reinvest Cash Flow in Long Lived Properties 11 80% of our portfolio asset value is in mines with reserve life >15 years,1 including: Years of remaining mine life Years in production since we've owned our stream or royalty interest 25 20 Years 15 10 5 Disciplined capital 0 Mt. Andacollo Voisey's Pueb
Slide 12: Invest at the Troughs, Be Patient at the Top
Invest at the Troughs, Be Patient at the Top 12 We have maintained a strong balance sheet and deployed capital at opportunistic times; gold price up ~20% since Pueblo Viejo transaction1 $1,900 $1,800 $1,700 Spot Gold Price in US Dollars $1,600 $1,500 Andacollo Stream $1,400 $1,300 Pueblo Viejo $1,20
Slide 13: Pay a Growing and Sustainable Dividend
Pay a Growing and Sustainable Dividend 13 15 straight years of dividend increases Dividend increased in calendar 2016 to $0.92 per share 27% payout ratio of adjusted operating cash flow1 in FY2016 21% compound annual growth rate (CAGR) since 2001 Equates to 1.2% annual yield (September 9, 2016) $1.0
Slide 14: Most Valuable, Not Necessarily the Largest
Most Valuable, Not Necessarily the Largest 14 Cash margins protected Our low expenses reflect the scalability of our business RGLD SG&A Expense (Annual)($m) RGLD Revenue (Annual)($m) 400 350 300 $USD millions Annual Revenue 250 200 150 100 50 0 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 201
Slide 15: Most Valuable, Not Necessarily the Largest: Conservative Balance Sheet
Most Valuable, Not Necessarily the Largest 15 Conservative Balance Sheet Good access to additional capital for accretive acquisitions if necessary: Financing focused on minimizing cost of capital and per share metrics Regular evaluation of all available financing alternatives Date Item ($USD mil
Slide 16: Most Valuable, Not Necessarily the Largest
Most Valuable, Not Necessarily the Largest 16 RGLD total return outperformed S&P 500 Total Return & Gold Price since 2000 RGLD Total Return Gold Price in US Dollars % Change S&P 500 Total Return Level % Change 3,500 3,000 2,500 Percentage Total Return 2,000 1,500 1,000 500 0 -500 2000 2001 2002 2003
Slide 17: Most Valuable, Not Necessarily the Largest
Most Valuable, Not Necessarily the Largest 17 Despite recent strong performance, still undervalued relative to peers RGLD Price to Tangible Book Value FNV Price to Tangible Book Value SLW Price to Tangible Book Value 4.0x 3.5x 3.0x 2.5x 2.0x 1.5x 1.0x 0.5x 0.0x Price to Book Value calculated by Ycha
Slide 18: Most Valuable, Not Necessarily the Largest
Most Valuable, Not Necessarily the Largest 18 Attractive near-term net GEO growth profile 340,000 Estimated Net Gold Equivalent Ounces- Pro Forma1 300,000 260,000 Pro Forma Net GEO’s 220,000 180,000 140,000 100,000 2016 2017 2018 2019 2020 2021 Actual Fiscal Years 1 Pro-Forma net gold equivalent oun
Slide 19: Most Valuable, Not Necessarily the Largest
Most Valuable, Not Necessarily the Largest 19 We have demonstrated positive stewardship of shareholder capital We focus on value per share metrics Millions of Common Shares Outstanding Net Gold Equivalent Ounces (GEOs) per Million Shares1 SLW FNV RGLD SLW FNV RGLD 500 4,000 450 3,500 400 3,000 350 3
Slide 20: Royal Gold Vision and Strategy
Royal Gold Vision and Strategy 20 Gold Focused Reinvest Free Invest at the Pay a Be the Most Cash Flow in Troughs and Growing and Valuable, Not Long Lived be Patient at Sustainable Necessarily Properties the Top Dividend the Largest Value created by providing gold price optionality and reserve upsid
Slide 21: Board of Directors
Directors (from left to right): Jamie Sokalsky, Independent Director; Former President and CEO, Barrick Gold Corporation Kevin McArthur, Independent Director; Executive Chair, Tahoe Resources and Former CEO and Director, Goldcorp, Inc. Gordon Bogden, Independent Director; Former Vice Chairman, Minin
Slide 22: 1660 Wynkoop Street, Denver, CO
1660 Wynkoop Street, #1000 Denver, CO 80202-1132 303.573.1660 info@royalgold.com www.royalgold.com
Slide 23: Adjusted Operating Cash Flow Reconciliation
Adjusted Operating Cash Flow Reconciliation 23 Cash Flows From Operating Activities Reconciliation: For The Years Ended June 30, (Unaudited, in thousands) 2016 2015 Cash flows from operating activities: Net cash provided by operating activities $ 169,859 $ 192,099 Tax on Andacollo royalty sale and C
Slide 24: Portfolio of Assets
Portfolio of Assets 24 Diverse, Long Lived Properties Streams (at June 30, 2016) Reserve CY2016 RGLD RGLD RGLD pays RGLD pays Remaining Operator Operator Mine Metal RGLD interest until until until until until interest interest (per ounce) (per ounce) Mine Life Guidance (Years) (ounces)2 Mount Thomps