Royal Gold, Inc. · NASDAQ:RGLD
Royal Gold — Merrill Lynch Canada 14th Annual Mining Conference 2008
34 slides from Royal Gold's conference presentation, Sep 4, 2008
Slide 1: The Leading Precious Metals Royalty Company
The Leading Precious Metals Royalty Company Merrill Lynch Canada 14th Annual Mining Conference September 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: Presentation Agenda
Presentation Agenda Strong track record of growth Barrick transaction Royalty portfolio Restructuring of Cortez royalties Key pro forma asset review AA Premium Premium Precious Precious Metals Metals Investment Investment
Slide 4: Strong Track Record of Growth
Strong Track Record of Growth
Slide 5: Financial Growth
Financial Growth Gross Financial Results Per Share Financial Results $70 Net Income Free Cash Flow 1 Royalty Revenue 2.50 Net Income Free Cash Flow 1 Royalty Revenue 2.25 $60 2.00 $50 1.75 ($ in millions) ($ per share) $40 1.50 1.25 $30 1.00 $20 0.75 0.50 $10 0.25 2004 2005 2006 2007 2008 2004 2005
Slide 6: Reserve and Resource Growth
Reserve and Resource Growth 1,2 Copper B lbs Gold Silver 8.1 9 110 M oz M oz 2,500 7 6.9 103 5 3.0 100 3 2.6 0.8 2,053 2,057 1 90 2,000 ’04 ’05 ’06 ’07 Pro Forma 3 80 1,790 80 Zinc B lbs 40 33.7 37.3 27.5 70 67 20 1,500 10 60 ’04 ’05 ’06 ’07 Pro Forma 3 50 1,000 Lead B lbs 10.9 10.8 11.0 12 40 10 8
Slide 7: Asset Growth – Portfolio (as of 12/31/03)
Asset Growth – Portfolio (as of 12/31/03) Early Early Investment Investment in in Future Future Growth Growth
Slide 8: Asset Growth – Portfolio (as of 6/30/08)
Asset Growth – Portfolio (as of 6/30/08) Substantial Substantial Investment Investment in in Future Future Growth Growth
Slide 9: Asset Growth – Pro Forma Portfolio (as of 7/31/08)
Asset Growth – Pro Forma Portfolio (as of 7/31/08) 1 Investment: $446M Acquired: 15 producing royalties 7 development properties 20 evaluation projects 51 exploration projects 2 1 Includes Barrick royalty transaction scheduled to close on October 1, 2008 2 Not shown on map Substantial Substantial In
Slide 10: Barrick Transaction
Ih ROYALGOLD,INC Barrick Transaction
Slide 11: Overview of Barrick Transaction
Overview of Barrick Transaction Acquisition of Barrick Gold’s royalty portfolio by Royal Gold Royal Gold consideration $150M net cash Pipeline Mining Complex Royalty restructuring Royal Gold Net $150M GSR2, GSR3 & 77 Cash NVR1 Royalty Royalties Restructuring Barrick Gold Closing scheduled for Octobe
Slide 12: Rationale for Transaction
Rationale for Transaction Immediately accretive on all key financial measures Unlocks Crossroads deposit at Cortez Expands and diversifies Royal Gold’s royalty portfolio Provides immediate royalty revenue Enhances pipeline of royalty projects in development Provides significant option value through
Slide 13: Barrick Royalty Portfolio
Barrick Royalty Portfolio One of the largest portfolios of royalties Collection of royalties assembled by Barrick and numerous corporate predecessors Includes royalty interests in 77 properties 59 precious metal properties 3 producing 2 development 15 evaluation 39 exploration 18 base metal and pota
Slide 14: Combined Revenue by Commodity
Combined Revenue by Commodity ► Royal Gold will maintain precious metal focus 1 Barrick 2 Royal Royal Gold Gold -- $54M $54M1 Barrick Portfolio Portfolio -- $12M $12M2 Pro Pro Forma Forma -- $66M $66M 75% Total 44% Total 70% Total Precious Precious Precious Metals Metals Metals 25% Base 56% Base 30%
Slide 15: Pro Forma Royalty Revenues
Pro Forma Royalty Revenues 120 100 80 $ (millions) 60 40 20 2005 1 2006 1 2007 1 Q1 08 Annualized 2 Barrick Royalty Revenue Royal Gold Royalty Revenue 1 Royal Gold actual revenue for CY 2005, 2006 and 2007 combined with estimated Barrick royalty portfolio revenue for CY 2005, 2006 and 2007, respecti
Slide 16: Accretive Transaction – Relative Contribution
Accretive Transaction – Relative Contribution Market Value 1 87% 13% CY 2007 Revenue 2 82% 18% Additional Mineralized Material 80% 20% Gold Equiv. Ozs 3,4,5 PP Reserves Gold Equiv. Ozs 3,4,6 59% 41% Producing and Development 66% 34% Properties Exploration and Evaluation Properties 30% 70% 0% 20% 40%
Slide 17: Restructuring of Cortez
Ih ROYALGOLD,INC Restructuring of Cortez
Slide 18: Cortez Crossroads Rationalization
Cortez Crossroads Rationalization Restructuring Crossroads royalties Current Royalty Structure Unlocks value for Barrick and Royal Gold PRICE OF GOLD GSR1 GSR2 Should accelerate Crossroads development schedule Below $210 0.40% 0.72% $210 - $229.99 0.50% 0.90% Royalty consideration $230 - $249.99 0.7
Slide 19: Cortez Crossroads Rationalization
Cortez Crossroads Rationalization Restructuring Crossroads royalties Future Royalty Structure Unlocks value for Barrick and Royal Gold PRICE OF GOLD GSR1 and 2 Should accelerate Crossroads development schedule Below $210 0.40% $210 - $229.99 0.50% Royalty consideration $230 - $249.99 0.75% GSR2 roya
Slide 20: Current Royalty Interest
Current Current Royalty Royalty Interest Interest
Slide 21: GSR2 Royalty Restructured
1 Effectively eliminates GSR2 and expands GSR1 footprint 1 GSR2 GSR2 Royalty Royalty Restructured Restructured 1
Slide 22: GSR3 Royalty Restructured
GSR3 GSR3 Royalty Royalty Restructured Restructured
Slide 23: NVR1 Royalty Restructured
NVR1 NVR1 Royalty Royalty Restructured Restructured
Slide 24: Restructured Royalty Interests at Cortez Pipeline Mining Complex
Restructured Restructured Royalty Royalty Interests Interests at at Cortez Cortez Pipeline Pipeline Mining Mining Complex Complex
Slide 25: Key Pro Forma Asset Review
Ih ROYALGOLD,INC Key Pro Forma Asset Review
Slide 26: Core Producing Properties
Core Producing Properties Cortez (Pipeline Mining Leeville Mining Complex) Robinson Taparko Complex Barrick Quadra High River Newmont Est. CY’08 Production 367,000 oz (Au) 115,000 oz (Au) 91,000 oz (Au) 1 415,000 oz (Au) 150M lbs (Cu) FY’08 Revenue $25.1M $16.6M $7.4M $5.6M Reserves 1.9M oz (Au) 0.8
Slide 27: Core Producing Properties
Core Producing Properties Goldstrike Siguiri 1 (SJ Claims) Mulatos 1,2 Mt. Goode 1 AngloGold Ashanti Barrick Alamos Gold Xstrata Est. CY’08 Production 358,000 oz (Au) 3 792,000 oz (Au) 120,000 oz (Au) 4 FY’08 Revenue $5.2M 6,7 $5.1M $5.0M 5 $1.9M 6 Reserves 2.6M oz (Au) 7.0M oz (Au) 1.7M oz (Au) 117
Slide 28: Core Development and Evaluation Properties
Core Development and Evaluation Properties Peñasquito 1 Dolores Pascua-Lama Goldcorp Minefinders Barrick Est. CY’08 Production 67,000 oz (Au) 10-15,000 oz (Au) - 350-375,000 oz (Ag) Reserves 13.1M oz (Au) 2.4M oz (Au) 14.6M oz (Au)2 863.9M oz (Ag) 126.6M oz (Ag) Additional 13.6M oz (Au) 1.4M oz (Au)
Slide 29: Core Development and Evaluation Properties
Core Development and Evaluation Properties Crossroads Malartic 1,2 Holt-Holloway 1,3 Barrick Osisko St. Andrew Goldfields Est. CY’08 Production - - - Reserves - - 0.5M oz (Au) Additional 1.1M oz (Au) 8.4M oz (Au) 5 0.5M oz (Au) Mineralized Material 4 Est. Production Post 2010 Post 2010 Post 2010 Sta
Slide 30: Post Barrick Acquisition: Producing, Development and Evaluation Properties
Post Barrick Acquisition: Producing, Development and Evaluation Properties
Slide 31: Summary
Summary Strong track record of growth Expanded portfolio of producing properties Robust pipeline of development properties Positioned well for future growth AA Premier Premier Precious Precious Metals Metals Investment Investment
Slide 32: Royal Gold, Inc. Contact Details
ROYAL GOLD, INC. 1660 Wynkoop Street Denver, CO 80202-1132 PHONE 303.573.1660 FAX 303.595.9385 EMAIL info@royalgold.com WEB www.royalgold.com
Slide 33: Appendix
ROYALGOLD,INC Appendix
Slide 34: Company Profile
Company Profile Stock Symbol: NASDAQ:RGLD; TSX:RGL Shares Outstanding: Dividend Yield1: 0.80% Common 33.9M Dividend Payout Ratio2: 28% (fully diluted – 34.7M) $0.30 $0.28 $0.26 $0.25 $0.22 Market Cap (8/28/08): $1.2B $0.20 $0.20 $0.15 $0.15 Average Volume (TTM): 500,000 $0.10 $0.05 Insider Ownership
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