Royal Gold, Inc. · NASDAQ:RGLD
Royal Gold — Bank of America Merrill Lynch Global Metals & Mining Conference 2011
33 slides from Royal Gold's conference presentation, May 12, 2011
Slide 1: Bank of America Merrill Lynch Global Metals & Mining Conference 2011
Bank of America Merrill Lynch Global Metals & Mining Conference 2011 Barcelona May 2011
Slide 2: Cautionary Statement Under the Private Securities Litigation Reform Act
Cautionary Statement Under the Private Securities Litigation Reform Act 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
Slide 3: Agenda
Agenda 2010 – Exceptional Year of Growth World Class Portfolio Attractive Shareholder Value “This year of expansion was exceptional and transformational as we increased the assets of the company by slightly over $1 billion.” Tony Jensen President and CEO 3
Slide 4: 2010 – Exceptional Year of Growth
2010 – Exceptional Year of Growth 4
Slide 5: 2010 Transformational Transactions
2010 Transformational Transactions Acquisition Investments Chronology 1,400 $1.3B January 2010: Acquired gold royalty on the Andacollo mine in Chile from 1,200 Teck Resources February 2010: Acquired International Royalty Corporation (IRC), obtaining 1,000 cornerstone Pascua-Lama and Voisey’s Bay roy
Slide 6: World Class Portfolio – Transition of Properties
World Class Portfolio – Transition of Properties Taparko Cortez Robinson Mulatos Leeville Goldstrike Peñasquito Andacollo Voisey’s Bay Pascua-Lama Mt. Milligan Operator: Goldcorp Operator: Teck Operator: Vale Operator: Barrick Operator: Thompson Royalty: 2 75% of gold Royalty: 2.7% NSR Creek Royalty
Slide 7: World Class Portfolio – Transition of Properties
World Class Portfolio – Transition of Properties Taparko Cortez Robinson Mulatos Leeville Goldstrike Added in CY2010 Peñasquito Andacollo Voisey’s Bay Pascua-Lama Mt. Milligan Operator: Goldcorp Operator: Teck Operator: Vale Operator: Barrick Operator: Thompson Royalty: 2 75% of gold Royalty: 2.7% N
Slide 8: Reserve Growth
Reserve Growth Precious metal reserves subject to Royal Gold’s interests increased 15% to 113.8M ounces 1 Precious metals equity reserves increased 40% to 5.2M ounces 1 Gold equivalent equity reserves increased 25% to 7.0M ounces Reserves Equity Reserves 2,3 (subject to Royal Gold’s interests) 120 8
Slide 9: World Class Portfolio
ROYALG OLD, INC World Class Royalty Portfolio World Class Portfolio
Slide 10: World Class Portfolio – Large and Gold Focused
World Class Portfolio – Large and Gold Focused 59 producing and development assets 2010 CY Revenue 128 evaluation and exploration assets Strong precious metal exposure 23% Asset Distribution (number of properties) 1 77% Total Precious Metals Producing 2013E CY Revenue 2,3 Development 20% Evaluation
Slide 11: World Class Portfolio – Cornerstone Assets
World Class Portfolio – Cornerstone Assets 22 Year Mine Life Peñasquito Operator: Goldcorp Royalty: 2.0% NSR Reserves: 1 18.6M oz (Au) 1.1B oz (Ag) 17.6B lbs (Zn) 7.3B lbs (Pb) Estimated Mine Life: 22 Years CY2011(Est.) Production: 350,000 oz (Au) See footnotes on page 23 10
Slide 12: World Class Portfolio – Cornerstone Assets
World Class Portfolio – Cornerstone Assets 22 Year Mine Life 20 Year Mine Life Peñasquito Andacollo Operator: Goldcorp Royalty: 2.0% NSR Reserves: 1 18.6M oz (Au) 1.1B oz (Ag) Operator: Teck 17.6B lbs (Zn) Royalty: 2 75% of gold 7.3B lbs (Pb) production Estimated (NSR) Mine Life: 22 Years Reserves:
Slide 13: World Class Portfolio – Cornerstone Assets
World Class Portfolio – Cornerstone Assets 22 Year Mine Life 20 Year Mine Life Peñasquito 20+ Year Mine Life Andacollo Voisey’s Bay Operator: Goldcorp Royalty: 2.0% NSR Reserves: 1 18.6M oz (Au) 1.1B oz (Ag) Operator: Teck 17.6B lbs (Zn) Royalty: 2 75% of gold 7.3B lbs (Pb) production Operator: Vale
Slide 14: World Class Portfolio – Cornerstone Assets
World Class Portfolio – Cornerstone Assets 22 Year Mine Life 20 Year Mine Life Peñasquito 20+ Year Mine Life Andacollo 25 Year Mine Life Voisey’s Bay Operator: Goldcorp Royalty: 2.0% NSR Pascua-Lama Reserves: 1 18.6M oz (Au) 1.1B oz (Ag) Operator: Teck 17.6B lbs (Zn) Royalty: 2 75% of gold 7.3B lbs
Slide 15: World Class Portfolio – Cornerstone Assets
World Class Portfolio – Cornerstone Assets 22 Year Mine Life 20 Year Mine Life Peñasquito 20+ Year Mine Life Andacollo 25 Year Mine Life Voisey’s Bay Operator: Goldcorp 22 Year Mine Life Royalty: 2.0% NSR Pascua-Lama Reserves: 1 18.6M oz (Au) 1.1B oz (Ag) Operator: Teck 17.6B lbs (Zn) Royalty: 2 75%
Slide 16: World Class Portfolio – Cornerstone Assets
World Class Portfolio – Cornerstone Assets 22 Year Mine Life 20 Year Mine Life Peñasquito 20+ Year Mine Life Andacollo 25 Year Mine Life Voisey’s Bay Operator: Goldcorp 22 Year Mine Life Royalty: 2.0% NSR Pascua-Lama Reserves: 1 18.6M oz (Au) 1.1B oz (Ag) Operator: Teck 17.6B lbs (Zn) Royalty: 2 75%
Slide 17: Additional Key Assets
World Class Portfolio – Additional Key Assets Cortez (Barrick - U.S.) Wolverine (Yukon Zinc - Canada) Wolverine Royalty: 1 GSR1 and GSR2: 0.4% to 5.0%; Royalty: 5 0.0% to 9.445% NSR Cortez GSR3: 0.71%; NVR1: 0.39% Reserves: 2 0.2M oz (Au) Reserves: 2 5.8M oz (Au) 46.7M oz (Ag) Leeville (Newmont - U.
Slide 18: World Class Operations & Properties
World Class Portfolio – World Class Operations & Properties Pascua-Lama Leeville Peñasquito Gold Hill Andacollo Voisey’s Bay Mt. Goode Goldstrike Twin Creeks Marigold Cortez Wharf Bald Mountain 12
Slide 19: Low Cost Operators
World Class Portfolio – Low Cost Operators Operators of properties subject to Royal Gold’s interests Cash cost of gold production - $452/oz 1 Industry average cash costs: $532/oz 2 Distribution of Cash Costs 1000 900 800 700 Cash Costs Per Oz ($) 600 $532/oz = Industry Average 500 400 300 200 100 0
Slide 20: Favorable Geopolitical Distribution
World Class Portfolio – Favorable Geopolitical Distribution Currently 77% of production from United States, Mexico, Canada, Chile and Australia 96% of reserves from United States, Mexico, Canada and Chile Ounces Subject to Royal Gold’s Interests Current Production 1 Gold Equivalent Reserves 2 United
Slide 21: Asset Diversification and Balance
World Class Portfolio – Asset Diversification and Balance Revenue diversification achieved New long life mines replace maturing assets and provide growth In 2013, 67% of revenues expected from mines with lives greater than 15 years 2010 FY Revenue 2013E CY Revenue 1,2 Cortez Siguiri Other Precious M
Slide 22: Attractive Shareholder Value
Attractive Shareholder Value 16
Slide 23: Attractive Shareholder Value – Efficient Business Model
Attractive Shareholder Value – Efficient Business Model Growing margins Cost control Revenue increases EBITDA Margin Economies of Scale 100% 200 95% 160 EBITDA/ Revenue (%) 90% 120 85% 80 80% 75% 40 70% 0 2007 2008 2009 2010 1 2011 2006 2007 2008 2009 2010 (through 3/31/11) Revenue ($ million) Numbe
Slide 24: Attractive Shareholder Value – Royal Gold Leverage
Attractive Shareholder Value – Royal Gold Leverage Superior returns (2001 – 2010) Efficient and timely use of capital Gold price growth: 5.19X Shares outstanding growth, 3.0X (2001 – 2010) Royal Gold growth: 15.6X, share price 22.9X, revenue 42.0X, EBITDA Royal Gold vs. Market Capitalization Gold Pr
Slide 25: Attributable Production Growth (analyst consensus)
Attributable Production Growth (analyst consensus) 1,2 Attributable Production Per Share Analysis 3 250 180 160% Growth in Gold Equivalent Ounces (%) 140% Average Gold Equivalent Ounces 150 200 120% 120 134% Increase 100% 150 (thousands) 90 80% 100 60% 60 39% Increase 40% (as of May 6, 2011) 50 30 2
Slide 26: Attractive Shareholder Value – Financial Return
Attractive Shareholder Value – Financial Return Market Information (as of 5/6/11) NASDAQ: RGLD; TSX: RGL Market cap: $3.2B Average daily volume (TTM): 627,000 2001 – 2010 Compounded Annual Growth Rate (CAGR) 40 Shares Outstanding Common: 55.3M 1 30 Insider ownership: 5% CAGR ( %) 20 Financial Cash:
Slide 27: Footnotes
ROYALGOL D, INC World Class Royalty Portfolio Footnotes 21
Slide 28: Footnotes
Footnotes PAGE 6: WORLD CLASS PORTFOLIO – TRANSITION OF PROPERTIES 1 Reserves as of December 31, 2010. 2 75% of payable gold until 910,000 payable ounces; 50% thereafter. 3 Based on 2008 Vale Inco EIS. 4 NSR sliding-scale schedule (price of gold per ounce – royalty rate): less than or equal to $325
Slide 29: Footnotes (cont.)
Footnotes (cont.) PAGE 7: RESERVE GROWTH 3 Gold equivalent equity reserves were calculated at year end using the following metal prices 2006 - $632 gold; $12.90 silver; $2.81 copper; $0.78 lead; $1.93 zinc; 2007 - $833.75 gold; $14.76 silver; $3.03 copper; $1.15 lead; $1.04 zinc; 2008 - $869.75 gold
Slide 30: Footnotes (cont.)
Footnotes (cont.) PAGE 11: WORLD CLASS PORTFOLIO – ADDITIONAL KEY ASSETS (CONT.) 5 Gold and silver royalty rate is based on the price of silver per ounce. NSR sliding-scale schedule (price of silver per ounce – royalty rate) below $5.00 – 0.0%; $5.00 to $7.50 – 3.778%; >$7.50 – $9.445%. 6 In Novembe
Slide 31: Footnotes (cont.)
Footnotes (cont.) PAGE 15: WORLD CLASS PORTFOLIO – ASSET DIVERSIFICATION AND BALANCE 1 2013 estimates assume development properties are brought into production and reach full-scale production on schedule and also assume certain metal prices and currency exchange rates. See page 26 for additional inf
Slide 32: Footnotes (cont.)
Footnotes (cont.) 2013E PRO FORMA FOOTNOTE: All pro forma calculations include certain properties that are currently in development stage, and we have assumed for purposes of the 2013 pro forma calculations that such development stage properties are brought into production and achieve full-scale pro
Slide 33: 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
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