Royal Gold, Inc. · NASDAQ:RGLD
Royal Gold — Shareholder Meeting (November 2012)
46 slides from Royal Gold's shareholder meeting presentation, November 2012
Slide 1: Annual Stockholders' Meeting
Annual Stockholders’ Meeting 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 Penasquito Mt Milligan Andacollo Penasquito Holt Mu
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 US Australia Other Canada Chile US 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 Go
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: Total Costs vs. Margin
Royal Gold Business Model Lower Risk Attributes Royal Gold Total Costs vs. Margin 1,800 Asset diversification 1,600 1,400 Stable host countries 1,200 $/Ounce 1,000 800 Experienced operators 600 400 200 Fixed costs 0 1 1 2008 2009 2010 2011 2012 (Fiscal Years) DDA Cost of Operations Production Taxes
Slide 9: Premium Return: No Cost Organic Reserve Growth
Royal Gold Business Model Premium Return Attributes No cost organic reserve growth Strong and growing financial results Net Gold Equivalent Reserves 2,3 8 Efficient use of capital 7 6 5 Ounces/Millions Gold Reserve Replacement 1 4 95 75 3 Ounces/Millions 55 2 35 1 15 -5 0 2007 2008 2009 2010 2011 -2
Slide 10: Financial Results and Dividend Growth
Royal Gold Business Model Premium Return Attributes No cost organic reserve growth Strong and growing financial results Efficient use of capital 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: Market Capitalization
Royal Gold Business Model Premium Return Attributes No cost organic reserve growth Strong and growing financial results Efficient use of capital 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 12: Transaction History
$/Billions 500 0 1,000 1,500 2,000 2,500 Taparko 2005 Robinson Mulatos 2006 Gold Hill Peñasquito Pascua-Lama 2007 Battle Mountain Benso El Chanate and Marigold 2008 Barrick Portfolio Page 12 Total Investment (2005 – 2012): $2.2B Andacollo Transaction History IRC (includes Voisey’s Bay) 2010 Mt. Mill
Slide 13: Tulsequah Chief Project (Chieftain)
Tulsequah Chief Project (Chieftain) British Columbia, Canada - 12.5% of payable gold until 48K oz of payable gold; 7.5% thereafter Interest: - 22.5% of payable silver until 2.78M oz of payable silver; 9.75% thereafter - $60 million ($50 million following closing) - $450/oz on first 48K oz of gold; $
Slide 14: Ruby Hill (Barrick)
Ruby Hill (Barrick) Nevada, United States Consideration: $38 million Reserves: 978,000 oz of gold 107.6M tons @ 0.021 oz per Additional Mineralization: ton Production CY 2012 YTD: 1 33,000 oz of gold Page 14
Slide 15: 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 16: 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
Slide 17: Portfolio Overview
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Slide 18: Portfolio of Quality Assets
Portfolio of Quality Assets 204 properties with royalty or similar interests 39 producing 26 development 5 cornerstone 39 Producing Properties 1, 2 26 Development Properties 41 Evaluation Properties 3 88 98 Exploration Properties Page 18
Slide 19: 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 20: 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 21: 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 21
Slide 22: 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
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Slide 24: World Class Royalty Company
World Class Royalty Company. Page 24 ROYALGOLD INC
Slide 25: World Class Royalty Company
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Slide 28: World Class Royalty Company
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Slide 29: 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) 14.7M ozs gold Forecast Royalty Ounces 5 Reserves: 3 60 (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
Slide 30: World Class Royalty Company
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Slide 31: World Class Royalty Company
World Class Royalty Company. Page 31 ROYALGOLD INC
Slide 32: World Class Royalty Company
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Slide 35: World Class Royalty Company
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Slide 36: Holt, Wolverine, Canadian Malartic
Holt Wolverine Canadian Malartic (St Andrew Goldfields) (Yukon Zinc) (Osisko) Ontario, Canada Yukon Territory, Quebec, Canada Canada Royalty: 0.00013 x Au price Royalty at Ag NSR (sliding- At Au Prices: NSR (sliding-scale) Prices: scale) 1.0% to 1.5% NSR $1,000 13.0% < $5.00 0.0% Royalty: (1.5% abov
Slide 37: Mulatos, Dolores, Las Cruces
Mulatos Dolores Las Cruces (Alamos) (Pan American Silver) (Inmet) Sonora, Mexico Chihuahua, Mexico Andalucia, Spain 1.0% to 5.0% 3.25% NSR (gold) Royalty: 1 NSR (5.0% Royalty: Royalty: 1.5% NSR 2.0% NSR (silver) above $400/oz) 1.8M ozs gold Reserves: 2 2.4M ozs gold Reserves: 2 Reserves: 2 1.8B lbs
Slide 38: Cortez, Leeville, Robinson
Cortez Leeville Robinson (Barrick) (Newmont) (KGHM) Nevada, USA Nevada, USA Nevada, USA Royalty: 1 0.40% to 5.0% GSR1 and 2 (5.0% above $470/oz) Royalty: 1.8% NSR Royalty: 3.0% NSR GSR3 0.71% NVR 1 0.39% 812K ozs gold Reserves: 2 5.5M ozs gold Reserves: 2 882,000 ozs gold Reserves: 2 1.3B lbs copper
Slide 39: Value Creation
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Slide 40: Significant Impact: Mt. Milligan and Pascua-Lama
Significant Impact Mt. Milligan and Pascua-Lama Long-term Impact of Mt. Milligan and Pascua-Lama Consensus Gold Equivalent Ounces 5 350 350 300 Net Gold Equivalent Ounces/Thousands 300 250 Ounces/Thousands 250 200 150 200 100 150 50 0 -0 100 FY 2012 1 Mt. Milligan 2,3 Pascua-Lama 2,4 f10(A) f11(A) f
Slide 41: Premium Investment Vehicle
Premium Investment Vehicle Lower Risk + Financial Performance + Growth Price Appreciation 1 2550% 23X 2250% 1950% 1650% 1350% 1050% 750% 5X 450% 2X 150% 0.1X -150% Exploration Jun-01 Jun-02 Jun-03 Jun-04 Jun-05 Jun-06 Jun-07 Jun-08 Jun-09 Jun-10 Jun-11 Jun-12 Royal Gold Gold Price Average of Senior
Slide 42: Footnotes
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Slide 43: Footnotes
Footnotes PAGES 4,5,6. ROYAL GOLD BUSINESS MODEL 3. Gold equivalent reserve ounces were 3. Net income for FY2012 was impacted by a 1. Net gold equivalent reserves are calculated by calculated using metal ratios, as of December royalty restructuring charge at Relief Canyon applying the Company’s inte
Slide 44: Footnotes
Footnotes PAGE 19: ANDACOLLO PAGE 29: PASCUA-LAMA PAGE 37: MULATOS, DOLORES AND LAS CRUCES 1. 75% of payable gold until 910,000 payable 1. NSR sliding-scale schedule (price of gold per 1. The Company’s royalty is subject to a 2.0 ounces; 50% thereafter. As of September 30, ounce – royalty rate): les
Slide 45: Footnotes
Footnotes PAGE 40: SIGNIFICANT IMPACT PAGE 41. PREMIUM INVESTMENT VEHICLE 1. Gold equivalent ounces for fiscal 2012 were 1. Does not include dividend distribution. calculated by dividing actual revenue by the 2. Senior producers include Barrick, Newmont, annual average gold price of $1,673 for fisca
Slide 46: Contact details
1660 Wynkoop Street Denver, CO 80202-1132 303.573.1660 info@royalgold.com www.royalgold.com Page 46