Royal Gold, Inc. · NASDAQ:RGLD
Royal Gold — Better Investing National Convention 2008
28 slides from Royal Gold's conference presentation, June 2008
Slide 1: The Leading Precious Metals Royalty Company
The Leading Precious Metals Royalty Company Better Investing National Convention June 2008
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: Company Overview
Ih ROYALGOLD,INC Company Overview
Slide 4: Who We Are
Who We Are Diversified global precious metals royalty company: Significant growth potential Strong financial performance Experienced management team Low operational risk Unique and attractive business model Exposure to world class assets and premier operators Leading Leading Precious Precious Metals
Slide 5: Company Profile
Company Profile Stock Symbol: NASDAQ:RGLD; TSX:RGL Institutional Price (6/16/08): $29.73 69% Shares Outstanding: 12% 12% 19% 19% Common 33.9M Retail (fully diluted – 34.7M) Insiders Market Cap (6/16/08): $1.0B Average Volume (TTM):519,000 Insider Ownership: 12% Number of Employees: 16 Insider Inside
Slide 6: Gold Investment Vehicles
Gold Investment Vehicles 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 Royal Royal Gold Gold –– Premium Premium Gold Gold Investment Investment Vehicle Vehicle 6
Slide 7: Why Invest in Gold?
Ih ROYALGOLD,INC Why Invest in Gold?
Slide 8: Case for Gold
Case for Gold Portfolio diversification Negatively correlated with U.S. dollar Store of value Hedge against inflation 5-Year Gold Safe haven in turbulent times Diminishing mine supply Financial deterioration in the U.S. Geopolitical uncertainty 8
Slide 9: Impacts On Gold Price
Impacts On Gold Price Macro economic conditions 1,050 Five-Year Gold Price Chart High $1,011.25 Low $342.50 Fiat currencies 950 850 U.S. dollar strength/monetary policy $ per ounce 750 Geopolitical uncertainty 650 550 Supply 450 350 Mine production, permitting, 250 Jun-07 Jun-08 Jun-05 Jun-06 Jun-04
Slide 10: Benefits of Royalty Business Model
Benefits of Royalty Business Model 10
Slide 11: What is a Royalty?
What is a Royalty? Cost free share of production or profit from a mine Treated as real property interest Favorable tax treatment Passive interest No capital or operating expenses 11
Slide 12: Benefits of the Royalty Model
Benefits of the Royalty Model Reserve Growth at Cortez - Exposure to: Pipeline Mining Complex M oz 10.5 Production, growth and optimization 11 Discovery and exploration potential 6 Portfolio growth potential 0.3 1.9 1 Metal price appreciation Reserves 12/31/1995 New discoveries & additions Reserves
Slide 13: Benefits of the Royalty Model (continued)
Benefits of the Royalty Model (continued) Reduced exposure to: Capital costs Operating costs Environmental liabilities Closure costs Nevada production costs Five-year change in operating cost drivers 400 +295% 700 Gold Prices Energy (Crude Oil Spot Price) Total Cash Costs 350 Construction (Iron & St
Slide 14: How Royalties are Obtained
How Royalties are Obtained Acquire existing royalties from individuals Acquire existing royalties from companies Finance projects in exchange for royalty interests Enter into exploration alliances Numerous Numerous Opportunities Opportunities for for Portfolio Portfolio Growth Growth 14
Slide 15: Portfolio Highlights
Ih ROYALGOLD,INC Portfolio Highlights
Slide 16: Property Portfolio – Assets in 2006
Property Portfolio – Assets in 2006 TROY LEEVILLE MINING MONTANA COMPLEX Revett NEVADA Newmont GOLDSTRIKE (SJ CLAIMS) NEVADA Barrick MULATOS TAPARKO MEXICO BURKINA FASO Alamos High River PIPELINE MINING COMPLEX NEVADA Barrick BALD MOUNTAIN NEVADA Barrick ROBINSON MARTHA NEVADA ARGENTINA Quadra Coeur
Slide 17: Property Portfolio – Assets in 2008
Property Portfolio – Assets in 2008 TROY LEEVILLE MINING MONTANA COMPLEX Revett WILLIAMS NEVADA CANADA Newmont Barrick/Teck GOLDSTRIKE (SJ CLAIMS) EL CHANATE NEVADA MEXICO DOLORES Barrick Capital Gold MEXICO Minefinders MARIGOLD MULATOS TAPARKO NEVADA MEXICO BURKINA FASO Goldcorp Alamos High River P
Slide 18: Distribution of Reserves by Operator
Distribution of Reserves by Operator Gold Silver Copper Zinc Lead Barrick Goldcorp Newmont Quadra Minefinders High River Gold Other Experienced Experienced Operators Operators 18
Slide 19: Distribution of Reserves by Continent
Distribution of Reserves by Continent Gold Silver Copper Zinc Lead North America Africa South America Royalties Royalties in in Stable Stable Geographic Geographic Areas Areas 19
Slide 20: Reserve Growth
Reserve Growth Copper1 B lbs 2,500 2.3 2.0 1.8 1,500 Gold1 Silver1 500 0.1 M oz M oz 60 1,100 ’04 ’05 ’06 ’07 1,014 Zinc1 50 14,000 B lbs 12.8 50 900 10,000 8.0 42 6,000 40 700 2,000 0 0 595 ’04 ’05 ’06 ’07 30 500 Lead1 B lbs 5.9 21 600 19 20 3.7 400 300 200 10 0 0 100 ’04 ’05 ’06 ‘07 16 19 2004 200
Slide 21: Development Pipeline
Development Pipeline EXPLORATION FEASIBILITY PERMITTING CONSTRUCTION OPERATIONS (Operators) Newmont Leeville High River Taparko Minefinders Dolores (2008) Goldcorp Peñasquito - Oxide (2008) Golden Star Benso (2008) Goldcorp Peñasquito - Sulfide Phase I (2009) Goldcorp Marigold (2010) Goldcorp Peñasq
Slide 22: Development Pipeline
Development Pipeline CY08 Projected EXPLORATION FEASIBILITY PERMITTING CONSTRUCTION OPERATIONS Revenue from (Operators) Development Pipeline* Newmont Leeville 40 High River Taparko 30 Minefinders Dolores (2008) Goldcorp Peñasquito - Oxide (2008) 20 US$ (millions) Golden Star Benso (2008) 10 Goldcorp
Slide 23: Premium Gold Investment Opportunity
Premium Gold Investment Opportunity 23
Slide 24: Distribution of Revenue by Royalty
Distribution of Revenue by Royalty 2005A 2006A 2007A 2008E 2009E Fiscal Years Ending June 30 Pipeline SJ Claims Leeville Troy Mine Bald Mountain Martha Robinson Taparko Mulatos Peñasquito Gold Hill Dolores Williams El Limon Don Mario El Chanate Benso Increasing Increasing Portfolio Portfolio Diversi
Slide 25: Five-Year Performance
Five-Year Performance Gross Financial Results Per Share Financial Results $50 Net Income Free Cash Flow1 Royalty Revenue Net Income per Share Free Cash Flow per Share1 Royalty Revenue per Share $40 2.25 2.00 ($ in millions) $30 1.75 ($ per share) 1.50 1.25 $20 1.00 0.75 $10 0.50 0.25 2003 2004 2005
Slide 26: Current Financial Status
Current Financial Status Balance sheet Dividends Yield1: 0.9% Dividend Payout Ratio2: 30% (as of 6/16/08 as adjusted) $0.28 $0.26 Cash on hand: $191M $0.20 $0.22 Net debt: $0 $0.15 Available line of credit: $71M 2004 2005 2006 2007 2008 Growing Dividend ($ per Share) Source: Company data 1 CY2008 di
Slide 27: Growth Strategy
Growth Strategy Pursue precious metals opportunities Build a portfolio of producing royalty assets Focus on per share financial accretion Enhance high margins by maintaining low cost structure and growing revenues Creating Creating Value Value for for Shareholders Shareholders 27
Slide 28: Royal Gold, Inc. Contact
ROYAL GOLD, INC. 1660 Wynkoop Street Denver, CO 80202-1132 INVESTOR RELATIONS CONTACT Karen Gross PHONE 303.573.1660 FAX 303.595.9385 EMAIL info@royalgold.com WEB www.royalgold.com 28
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