Royal Gold, Inc. · NASDAQ:RGLD
Royal Gold — Denver Gold Forum 2015
24 slides from Royal Gold's conference presentation, Sep 21, 2015
Slide 1: Denver Gold Forum
Denver Gold Forum Tony Jensen, President and CEO September 21, 2015
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 m
Slide 3: What Makes Royal Gold Unique
What Makes Royal Gold Unique Quality Mount Milligan continues to produce at below world average production costs; new additions to the portfolio are all projected to produce in the lower half of worldwide production costs Growth Existing portfolio delivered record volume in FY2015; and the four new
Slide 4: Quality – FY2015 Financial Results
Quality – FY2015 Financial Results Annual Net Gold Equivalent Ounces 250 (GEOs)1 Record volume of nearly 200,000 Net Gold Equivalent Ounces Mt. Milligan 200 net gold equivalent ounces (GEOs) (in thousands) in FY2015 150 8% CAGR 100 Strong increase since FY2010 50 Mt. Milligan 0 FY2010 FY2011 FY2
Slide 5: Quality – Strong 2015 Outcomes
Quality – Strong 2015 Outcomes All Values in $USD, Based on Trailing 12 Months Ended June 30, 2015 Operating Cash Flow Per Share Net Income Per Share $4.00 $2.00 NEM NEM $1.00 RGLD $3.00 RGLD FNV CG AEM JSE:ANG SLW $0.00 OR AEM TSX:ELD JSE:ANG $2.00 TSX:CG TSX:IMG FNV TSX:ABX -$1.00 TSX:NGD TSX:K TS
Slide 6: Quality – Investment History
Quality – Investment History Average mine life of 14 years amongst investments, plus significant upside Estimated Years of Remaining Reserves $1,000 25 $800 20 $600 15 $USD Millions * $400 10 $200 5 $- 0 Initial investment Cumulative net revenue through June 30, 2015 Estimated remaining mine life *
Slide 7: Quality – Mount Milligan Highlights
Quality – Mount Milligan Highlights Mount Milligan 70 Mount Milligan Quarterly Payable Gold Production1 Payable gold production of nearly 60,000 ounces in the June quarter (100% basis) 60 50 83% of design throughput achieved in 40 May and June 2015 with additional 30 improvements underway: 20 Inst
Slide 8: Growth – Investment Summary
Growth – Investment Summary Four new streams added to the portfolio in recent months Opportunistically reinvesting in our business Favorable point in the commodity cycle Focusing on high quality producing or near-term producing assets Diversifying revenue Pueblo Viejo Rainy River Andacollo Gol
Slide 9: Growth – New Streams Added
Growth – New Streams Added Estimated Effective Annual Net Date or Total Operator Property Strategic Rationale GEOs (1st 5 Estimated Investment years)1 Startup Producing; one of only 3 mines July 1, 2015 in the world to produce >1m oz 50,500 - Au Barrick Pueblo Viejo per year; first quartile costs; $
Slide 10: Growth – Portfolio Transformation: Pueblo Viejo
Growth – Portfolio Transformation Pueblo Viejo – Barrick Gold (60% interest), Dominican Republic Project (100% basis): 2014 production of 1.1 million ounces (“Moz”) of gold and 3.8 Moz silver at all-in sustaining costs of $588 per ounce Proven and probable reserves of 15.5 Moz gold and 97.2 Moz
Slide 11: Growth – Portfolio Transformation: Rainy River
Growth – Portfolio Transformation Rainy River – New Gold, Canada Project: Over its first nine years of full production, the 21,000 tonne per day, combined open pit-underground operation is expected to produce an average of 325,000 ounces of gold per year at all-in sustaining costs of approximately
Slide 12: Growth – Portfolio Transformation: Andacollo
Growth – Portfolio Transformation Andacollo – Teck, Chile Andacollo – Teck, Chile Project: Long operating history Well-respected partner in Teck, Canada’s largest diversified resource company Proven and probable reserves of 1.6 Moz gold and a 22 year mine life Stream:1 100% gold stream to 90
Slide 13: Growth – Portfolio Transformation: Wassa and Prestea
Growth – Portfolio Transformation Wassa and Prestea – Golden Star Resources, Ghana Projects: Higher quality Wassa and Prestea underground projects under construction Proven and probable reserves of 1.9 Moz gold across all deposits Measured and indicated gold resources of 3.5 Moz at Wassa and 3
Slide 14: Growth – New Investment Diversity
Growth – New Investment Diversity FY2015 GEO Volume Plus Relative Estimated Estimated Distribution of Future GEO Volume1 Contribution From New and Expanding Streams1 Mount Milligan 100.00% 100% Mount Milligan Golden Star 90.00% 300 Net Gold Equivalent Ounces (GEOs) in Thousands Rainy River Golden Pu
Slide 15: Opportunity – Capital Deployment
Opportunity – Capital Deployment Aggregate Streaming and Royalty Transactions By Year $3,000,000 Evolution of Royalty and Stream Finance $2,500,000 2004: Royal Gold’s first royalty In $USD 000’s $2,000,000 financing for project development $1,500,000 2004: Silver Wheaton’s first stream financing
Slide 16: Opportunity – Liquidity
Opportunity – Liquidity Expected leverage ratio of Estimated FY2016 Sources and Uses approximately 2x Forward $2,000 EBITDA based on current gold Operating price and current production Cash Flow assumptions Revolver at June 30, 2015, Golden Star, $135 Additional post-June 30 2016 $650 Golden Star, $
Slide 17: Opportunity – OCF Multiple
Opportunity – OCF Multiple Operating Cash Flow Multiple – Trailing 12 Months 60 Trading Multiple of Last 12 months’ Operating Cash Flow 50 40 30 RGLD FNV SLW 20 10 September 2015: RGLD net GEO’s of ~200koz June 2013: RGLD net at prior quarter end, with 4 additional streams GEO’s of ~180koz and a new
Slide 18: Opportunity – Return of Capital
Opportunity – Return of Capital Consistent dividend increase demonstrates ability to balance growth with return of capital $1.00 $0.90 Annual Dividends Paid Per Share $0.80 $0.70 $0.60 $0.50 $0.40 $0.30 $0.20 $0.10 $0.00 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Sept
Slide 19: What Makes Royal Gold Unique
What Makes Royal Gold Unique Quality Mount Milligan continues to produce at below world average production costs; new additions to the portfolio are all projected to produce in the lower half of worldwide production costs Growth Existing portfolio delivered record volume in FY2015; and the four new
Slide 20: Endnotes
QUALITY GROWTH OPPORTUNITY Endnotes ROYALGOLD,INC
Slide 21: Endnotes
Endnotes Many of the matters in these endnotes and the accompanying slides constitute forward looking statements and are subject to numerous risks, which could cause actual results to differ. See complete Cautionary Statement on page 2. PAGE 4 FY2015 FINANCIAL RESULTS 1. Royal Gold defines Gold Equi
Slide 22: Endnotes (cont.)
Endnotes (cont.) Many of the matters in these endnotes and the accompanying slides constitute forward looking statements and are subject to numerous risks, which could cause actual results to differ. See complete Cautionary Statement on page 2. PAGE 10 GROWTH – PORTFOLIO TRANSFORMATION, PUEBLO VIEJO
Slide 23: Quality – Key Properties
Quality – Key Properties The only mine in the world with >1 million ounces of gold production per year at less than $700/oz all in sustaining costs Pueblo Viejo One of world’s lowest cost Mt. Milligan Peñasquito Goldcorp’s largest and lowest copper mines These five cost mine Ranks 11th amongst 267 g
Slide 24: Royal Gold contact details
1660 Wynkoop Street, #1000 Denver, CO 80202-1132 303.573.1660 info@royalgold.com www.royalgold.com