Royal Gold, Inc. · NASDAQ:RGLD
Royal Gold — BMO Capital Markets 25th Global Metals & Mining Conference (March 2016)
25 slides from Royal Gold's conference presentation, March 2016
Slide 1: BMO Capital Markets 25th Global Metals & Mining Conference
BMO Capital Markets 25th Global Metals & Mining Conference Tony Jensen President and CEO March 2016
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: Record Q2 Results
Record Q2 Results Record revenue of $98.1 million, an increase of 60% Record volume of 88,700 Gold Equivalent Ounces (“GEOs”)1, an increase of 74% Record Stream Segment Sales in Q2FY16 Included Initial Contribution from Pueblo Viejo 70,000 60,000 Gross Gold Equivalent Ounces from Stream Segment 50,0
Slide 4: Growing Margins
Growing Margins We grew revenue and cash flow per share despite a lower gold price 1 Revenue per share Operating Cash Flow per share Gold Price Per Oz $1,240 $1.80 Quarterly Revenue and Operating Cash Flow1 per share $1,220 $1.60 $1,200 $1.40 Average Gold Price Per Ounce $1,180 $1.20 $1,160 $1.00 $1
Slide 5: Maximizing Returns Per Share
Maximizing Returns Per Share Top quartile cash flow per share LTM Operating Cash Flow Per Share Last 12 months’ operating cash flow per share in $USD $4.00 NEM $3.50 $3.00 RGLD AEM $2.50 ABX $2.00 CG FNV $1.50 GG $1.00 SLW KGC PAAS NGD $0.50 CDE HL OR AGI ELD IMG $0.00 March 2016 5
Slide 6: Growing and Diversifying Portfolio
Growing and Diversifying Portfolio Pueblo Viejo and Rainy River expected to build on FY2015 success FY2015 GEO Volume Plus Relative Estimated Estimated Distribution of Future GEO Volume1 Contribution From New and Expanding Streams1 350 Thousands of Annual Net Gold Equivalent Ounces 300 Andacollo Oth
Slide 7: Returning Capital to Shareholders
Returning Capital to Shareholders 15 straight years of dividend increases Dividend increasing in calendar 2016 to $0.92 per share 29% payout ratio of operating cash flow in FY20151 21% compound annual growth rate (CAGR) since 2001 Equates to 2.0% annual yield (as of Feb 23, 2016) $1.00 3.50% $0.90 A
Slide 8: Key Assets: Mount Milligan Performing as Designed
Key Assets Mount Milligan Performing as Designed Mount Milligan – Thompson Creek, Canada Peñasquito 60ktpd design capacity achieved at the end of December 20151 CY2016 volume guidance of 240,000‐270,000 ounces of gold Mount Milligan ranks 11th in Wood Mackenzie’s list of 267 copper mines ranke
Slide 9: Key Assets: Pueblo Viejo Contributions Growing
Key Assets Pueblo Viejo Contributions Growing Pueblo Viejo – Barrick Gold (60% interest), Dominican Republic Will deliver ~50,000 gold equivalent ounces of production per year to Royal Gold1 Gold deliveries began in December 2015; silver deliveries begin in January 2016 Latest Update (Barrick’
Slide 10: Key Assets: Rainy River In Construction
Key Assets Rainy River In Construction Rainy River – New Gold, Canada Project (as of December 31, 2015): o Overall construction progress is currently 25% complete o Plant site earthworks over 85% complete o Assembly of initial mine fleet largely complete – have successfully commissioned seven, 218
Slide 11: Key Assets: Cortez Crossroads On Schedule
Key Assets Cortez Crossroads On Schedule Cortez Crossroads – Nevada, USA Crossroads is an area of approximately 3 million ounces subject to Royal Gold’s 5% NSR royalty interest Waste stripping in the Crossroads pit began in 2015 Dewatering wells were completed in 2015 Stripping expected to c
Slide 12: Investment Results and Thesis
Investment Results and Thesis History of generating strong returns $1,000 25 Estimated Years of Remaining Reserves $800 20 $600 15 Millions $400 10 $200 5 $‐ 0 Initial investment Cumulative net revenue through December 31, 2015 Estimated remaining mine life * Includes proceeds from sale of the Andac
Slide 13: Capital Allocation Success
Capital Allocation Success We have invested nearly $3 billion since 2001 and have impaired a total of $48 Mount Milligan million, or 1% of those invested dollars, through December 31, 20151 2001‐2016 Cumulative Investments, Cash Flow and Impairments 3,000 $2,884 2,500 $USD Millions 2,000 1,500 $1,13
Slide 14: Investment Summary
Investment Summary 38 producing mines driving growth beyond FY15’s record volume and cash flow Net Gold Equivalent Ounces Record volume of nearly 200,000 Net Gold Equivalent Ounces1 250,000 net gold equivalent ounces (GEOs) 200,000 in FY2015 150,000 8% CAGR since FY2010 100,000 Mt. Milligan High
Slide 15: Valuation Opportunity
Valuation Opportunity 25% of the industry’s economics, trading at just 15% of the market cap1 RGLD Peer Group Total Net GEOs 0% 20% 40% 60% 80% 100% Op. Income 0% 20% 40% 60% 80% 100% Market Cap. Golden Star 0% 20% 40% 60% 80% 100% Peer group includes Franco Nevada and Silver Wheaton for the trailin
Slide 16: Endnotes
QUALITY GROWTH OPPORTUNITY Endnotes ROYALGOLD,INC
Slide 17: Endnotes
Endnotes Many of the matters in these endnotes and the accompanying slides constitute forward looking statements and are subject to numerous risks, which could cause actual results to differ. See complete Cautionary Statement on page 2. PAGE 3 RECORD Q2 RESULTS 1. The Company defines Gold Equivalent
Slide 18: Endnotes (cont.)
Endnotes (cont.) Many of the matters in these endnotes and the accompanying slides constitute forward looking statements and are subject to numerous risks, which could cause actual results to differ. See complete Cautionary Statement on page 2. PAGE 10 KEY ASSETS – RAINY RIVER IN CONSTRUCTION 1. Cau
Slide 19: Appendix
QUALITY GROWTH OPPORTUNITY Appendix ROYALGOLD,INC
Slide 20: Quality – Strong Balance Sheet
Quality – Strong Balance Sheet Date Item ($USD millions) December 31, 2015 Undrawn Revolver $300.0m December 31, 2015 Working Capital $142.3m December 31, 2015 Total Available Liquidity $442.3m Strong and Growing For example, Fiscal 2Q Operating Cash $52.1m Operating Cash flow flow (included in work
Slide 21: Opportunity – Strong Performance
Opportunity – Strong Performance Strengthening quarterly cash flow and volume despite a lower gold price Calendar Quarter Ended YTD RGLD Sep‐13 Dec‐13 Mar‐14 Jun‐14 Sep‐14 Dec‐14 Mar‐15 Jun‐15 Sep‐15 Dec‐15 2016 Operating Income $26 $23 $29 $31 $31 $25 $32 $28 $21 TBR TBR ($m) Operating Cash Flow $3
Slide 22: Growth – New Stream Transactions
Growth – New Stream Transactions Estimated Effective Date or Annual Net Operator Property Strategic Rationale Estimated Current Status GEOs Startup (1st 5 years)1 Producing; one of only three mines in the world to produce >1m oz per Gold deliveries July 1, 2015 ‐ Au Barrick Pueblo Viejo year; first
Slide 23: Growth – Portfolio Transformation: Wassa and Prestea
Growth – Portfolio Transformation Wassa and Prestea – Golden Star Resources, Ghana Projects: o Higher quality Wassa and Prestea underground projects under construction o Proven and probable reserves of 1.9 Moz gold across all deposits o Measured and indicated gold resources of 3.5 Moz at Wassa and
Slide 24: Growth – Portfolio Transformation: Andacollo
Growth – Portfolio Transformation Andacollo – Teck, Andacollo Project: o Long operating history o Well respected partner in Teck, Canada’s largest diversified resource company o Proven and probable reserves of 1.6 Moz gold and a 22 year mine life Stream: o 100% gold stream to 900 koz; 50% therea
Slide 25: 1660 Wynkoop Street, Denver, CO
1660 Wynkoop Street, #1000 Denver, CO 80202-1132 303.573.1660 info@royalgold.com www.royalgold.com
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