Royal Gold, Inc. · NASDAQ:RGLD
Royal Gold — Shareholder Meeting (November 2011)
29 slides from Royal Gold's shareholder meeting presentation, November 2011
Slide 1: Annual Stockholders' Meeting
Annual Stockholders’ Meeting November 2011 World Class Royalty Company
Slide 2: Cautionary Statement
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: Introduction
Introduction Company Profile Strong and growing financials Efficient business model World class assets Portfolio Overview Cornerstone producing properties Growth assets Other core properties Value Creation Growth pipeline Increasing shareholder value World Class Royalty Company 3
Slide 4: Company Profile
Company Profile Shares Outstanding: 55.6M Market Capitalization: $4.5B (as of 11/11/11) Insider Ownership: 5.0% TTM Average Daily Volume: 727,000 Ticker: RGLD (Nasdaq) Share Price Performance RGL (TSX) (2006 – 2011) 3.50 3.00 Share Price Index 2.50 2.00 1.50 1.00 0.50 0.00 1 RGLD GLD Average of Seni
Slide 5: Strong and Growing Financials
Strong and Growing Financials 5% 15% Historical Royalty Revenues 56% Revenue 10% 44% Metal 250 Growth 64% 6% 225 200 Price Metal Prices Production Volume Gold Silver Copper Nickel Zinc Lead 175 Other Dollars (millions) 150 Mix of Volume and 70% Precious Price Growth Metals 125 FY 2011 Revenue 100 13
Slide 6: Reserve Growth
Reserve Growth Gold Equivalent Royalty Reserves 1 Gold Reserve Replacement (Royalty Rate x Reserves) (Gold Reserves Subject to Royalty Interests) 95 83 8 75 63 Ounces (millions) 7 55 35 26 6 19 15 Gold -5 Ounces (millions) 5 Silver (AuEq) Other (AuEq) -25 (24) Beginning Reserve Reserve Reserve Endin
Slide 7: Efficient Business Model
Efficient Business Model Industry Cash Cost History 1 Royal Gold Cash Margin Analysis 1,600 1,600 $1,387 1,400 $1,369 1,400 Cash Cost of Operations ($/Royalty GEO) $1,225 1,200 1,200 $1,089 $972 1,000 Gold Price ($/oz) 1,000 $872 Dollars ($) $874 $821 800 $695 800 $638 600 600 $565 $583 400 $460 $47
Slide 8: World Class Assets
World Class Assets Andacollo Peñasquito Voisey’s Bay Pascua-Lama Mt. Milligan World Class Royalty Company 8
Slide 9: Portfolio Overview: Cornerstone Producing Properties
Portfolio Overview Cornerstone Producing Properties World Class Royalty Company 9
Slide 10: Andacollo
Andacollo Region IV Update: Royalty: 1 75% NSR until 910K ounces are produced; 50% NSR thereafter ► Mill throughput affected by ore hardness, Reserves: 2 1.6M ozs gold which limited throughput to 40K tpd, or approximately 73% of design capacity Production: 42K ozs gold (FY 2011) ► Multiple stage pla
Slide 11: Peñasquito
Peñasquito Zacatecas Update: Royalty: 2.0% NSR ► Mill throughput at approximately 78% Reserves: 1 18.6M ozs gold; 1.1B ozs silver; of design capacity, limited by insufficient 17.6B lbs zinc; 7.3B lbs lead oversize material for the HPGR and Production: 207K ozs gold; 17.3M ozs silver; availability of
Slide 12: Voisey's Bay
Voisey’s Bay Labrador and Newfoundland Update: Royalty: 1 2.7% NSR ► Production levels have recovered from Reserves: 1.4B lbs nickel strike which ended February 2011 788M lbs copper Production: 112.5M lbs nickel ► Currently in high shipping season (FY 2011) 67.8M lbs copper (May 22 - December 6) Rev
Slide 13: Growth Assets
Growth Assets Growth Assets World Class Royalty Company 13
Slide 14: Holt, Wolverine, Malartic
Holt Wolverine Malartic Quebec Ontario Yukon Chihuahua Royalty: 0.00013 x Au Price Royalty NSR (sliding-scale) At Au Prices: NSR (sliding-scale) At Ag Prices: $1,000 13.0% < $5.00 0.0% Royalty: 1.0%-1.5% NSR $1,500 19.5% $5.00-$7.50 3.778% (1.5% above $2,000 26.0% >$7.50 9.445% $350/oz Reserves: 1 5
Slide 15: Pascua-Lama
Pascua-Lama Region III Update: Royalty: 1,2 0.78%-5.23% NSR (5.23% above $800 gold) ► Engineering: 90% complete Reserves: 3 14.7M ozs gold (limited to gold in Chile) ► Earthworks (Chile): 80% complete Capital: $4.7-$5.0B ► Pre-strip mining to commence: Q4 2011 Initial Production: Mid 2013 Production
Slide 16: Mt. Milligan
MT. MILLIGAN Canada Mt. Milligan British Columbia Update: Stream: 25% of payable gold ► Capital spent: Cdn$383.1 (to 9/30/11) Purchase Price: $400/oz on first 550K ozs; $450/oz thereafter ► Remaining capital: Cdn$882.0M (to 9/30/2011) Reserves: 1 6.0M ozs gold Capital: C$1.3B ► Construction of camp
Slide 17: Other Core Properties
Other Core Properties World Class Royalty Company 17
Slide 18: Mulatos and Dolores
Mulatos and Dolores MEXICO Mulatos Dolores Sonora Chihuahua Royalty: 1 1.0%-5.0% NSR Royalty: 3.25% NSR (gold); 2.0% NSR (5.0% above $400/oz) (silver) Reserves: 2 2.4M ozs gold Reserves: 2 2.0M ozs gold 114.5M ozs silver Production: 151K ozs gold Production: 60K ozs gold (FY 2011) (FY 2011) 2.6M ozs
Slide 19: Cortez, Leeville, Robinson
Cortez Leeville Robinson Nevada Nevada Nevada Nevada Chihuahua Royalty: 1 GSR1 and 2 0.40%-5.0% (5.0% above $470/oz) GSR3 0.71% NVR1 0.39% Royalty: 1.8% NSR Royalty 3.0% NSR Reserves: 2 5.8M ozs gold Reserves: 2 1.64M ozs gold Reserves: 2 1.2B lbs copper 640K ozs gold Production: 193K ozs gold Produ
Slide 20: Value Creation
Value Creation World Class Royalty Company 20
Slide 21: Growth Pipeline
Growth Pipeline Near term growth from cornerstone producing properties – Andacollo and Peñasquito Full year of Voisey’s Bay production Continued ramp-up at producing growth assets – Holt, Wolverine and Malartic Increased production at Mulatos and Dolores due to construction of new mills and other op
Slide 22: KSM
KSM British Columbia Update: Royalty Option: 1.25%-2.0% NSR ► Purchase of 1.0M shares of Seabridge Reserves: 1 38.5M ozs gold common stock for C$30M in June 2011 214M ozs silver Capital: $4.7B ► After nine-month hold, Royal Gold earns Initial Production: NA the ability to buy 1.25% NSR royalty on go
Slide 23: Gold Reserve Trends
Gold Reserve Trends Little reserve growth over time Higher grade deposits are being depleted Industry looking for growth in more remote areas Cumulative Reserves for Top Producers and Weighted Average Reserve Grade Reserves (Million Ounces) Reserve Grade (g/t) 1,000 2.50 900 2.25 800 2.00 Reserves 7
Slide 24: Increasing Shareholder Value
Increasing Shareholder Value Compounded Annual Growth Rates Dividend Growth 0.60 0.44 31% 30% 21% 0.36 0.32 0.28 0.26 0.22 Adjusted Operating EBITDA Cash Flow Earnings (per share) 1 (per share ) 2 (per Share) $3.45 $2.57 $1.29 2006 2007 2008 2009 2010 2011 2012 FY 2006–2011 CAGR FY 2011 Financial Re
Slide 25: Footnotes
Footnotes World Class Royalty Company 25
Slide 26: Footnotes
Footnotes PAGE 4: COMPANY PROFILE 1 Barrick, Newmont, AngloGold, Gold Fields, Goldcorp, Kinross and Agnico Eagle. PAGE 6: RESERVE GROWTH 1 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 zin
Slide 27: Footnotes (cont.)
Footnotes (cont.) PAGE 14: HOLT, WOLVERINE AND MALARTIC 1 Reserves as of December 31, 2010. 2 Reserves as of December 31, 2008. 3 Production guidance reflects the entire project. Operator has not provided a breakdown of production by royalty interest. PAGE 15: PASCUA-LAMA 1 NSR sliding-scale schedul
Slide 28: Footnotes (cont.)
Footnotes (cont.) PAGE 19: CORTEZ, LEEVILLE AND ROBINSON 1 GSR sliding-scale schedule (price of gold per ounce – royalty rate): Below $210 – 0.40%; $210 to $229.99 – 0.50%; $230 to $249.99 – 0.75%; $250 to $269.99 – 1.30%; $270 to $309.99 – 2.25%; $310 to $329.99 – 2.60%; $330 to $349.00 – 3.00%; $3
Slide 29: 1660 Wynkoop Street Denver, CO 80202-1132
1660 Wynkoop Street Denver, CO 80202-1132 303.573.1660 info@royalgold.com www.royalgold.com World Class Royalty Company