Royal Gold, Inc. · NASDAQ:RGLD
Royal Gold — Gold and Resource Investing - Singapore (October 2009)
34 slides from Royal Gold's conference presentation, October 2009
Slide 1: Gold and Resource Investing Singapore
Gold and Resource Investing Singapore October 2009
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 f
Slide 3: Why Royal Gold?
Why Royal Gold? Royalty Asset Distribution Right commodity (number of properties) Favorable supply/demand Producing Favorable macroeconomic conditions Effective business model Development Lower risk Evaluation Higher margins Efficient Exploration Strong assets 60 10 20 30 40 50 High quality, gold-fo
Slide 4: Gold Characteristics
Tq Ip A ROYALGOLD,ING The Gold Standard of Royalty Companies Gold Characteristics
Slide 5: Declining World Gold Mine Production
Declining World Gold Mine Production Supply from Mine Production vs. Price 2,500 1,000 900 2,000 800 700 1,500 600 $ Per Ounce Tonnes 500 1,000 400 300 500 200 100 0 0 Production Gold Price Source: CPM Group 5
Slide 6: Fewer Major Gold Discoveries
Fewer Major Gold Discoveries 12 10 8 Number of Discoveries 6 4 2 0 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 Source: Metals Economics Group and Kinross Gold Corporation’s presentation, Denver Gold Forum, September 2009 6 Note: Major discovery is defined as 3.0 million ounces or greater
Slide 7: Declining Reserve Grade
Declining Reserve Grade Cumulative Reserves and Weighted Average Reserve Grade 1,000 2.00 900 1.80 800 1.60 700 1.40 Reserves (million oz) 600 1.20 Reserve Grade (g/t) 500 1.00 400 0.80 300 0.60 200 0.40 100 0.20 0 0.00 2003 2004 2005 2006 2007 2008 Cumulative Reserves for Top 15 Producers Weighted
Slide 8: Increasing Cash Production Costs
Increasing Cash Production Costs Cash Production Costs for Nevada Producers 950 850 750 650 $ Per Ounce 550 450 350 250 150 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 Total Cash Costs Gold Prices Source: Per John Dobra; University of Nevada, Reno in preparation for the publicat
Slide 9: Growing Demand For Gold
Growing Demand For Gold Supply from Net Central Bank Sales Gold Tonnage in ETFs 500 500 400 400 300 300 Tonnes 200 200 100 100 0 0 -100 -100 H1’02 H1’03 H1’04 H1’05 H1’06 H1’07 H1’08 H1’09 CBGA Sales Non-CBGA Sales/Purchases Source: Gold Demand Trends; World Gold Council; Chart 5; Source: Dr. Martin
Slide 10: Favorable Macroeconomics
Favorable Macroeconomics United States Surplus/(Deficit) Reagan Bush Sr. Clinton Bush Jr. Obama Foreign Exchange Reserves Source: BMO Capital Markets; Fig. 35; September 4, 2009 Source: Dr. Martin Murenbeeld with Dundee Wealth Economics 10 1 Source: Gold Outlook (WHERE SHOULD FOOTNOTE BE DENOTED?)
Slide 11: Royalty Business Model
Tq Ip A ROYALGOLD,ING The Gold Standard of Royalty Companies Royalty Business Model
Slide 12: Effective Business Model
Effective Business Model Simple Gold Investment Vehicles No management demands No operating exposure Exploration No capex challenges Junior Operators Efficient Royalty Company Passive investor Intermediate Operators No continuing investment Major Operators Return High margins/low overhead Index Fund
Slide 13: Effective Business Model
Effective Business Model Simple Royal Gold vs. Major Gold Mining Companies Calendar year ended December 31, 2008 1,2,3 No management demands 90% 78% No operating exposure 75% 60% No capex challenges 45% 34% 29% 30% Efficient 15% 17% 0% Passive investor EBITDA Margins Net Profit Margins Royal Gold No
Slide 14: Effective Business Model: Gold Reserve Growth at Peñasquito
Effective Business Model Simple Gold Reserve Growth at Peñasquito 20 No management demands 17.4 No operating exposure 15 No capex challenges 10.0 Efficient 10 (Gold M oz) 7.4 Passive investor 5 No continuing investment High margins/low overhead 0 -0.02 Option value Reserves Depletion New Discoveries
Slide 15: Strong Assets
fp if A ROYALGOLD,ING The Gold Standard of Royalty Companies Strong Assets
Slide 16: Royalty Assets
Royalty Assets 1 Pipeline, including Crossroads deposit 2 Royal Gold acquired this property in the Battle Mountain transaction. The parties claiming interests in the mining concessions subject to this royalty have disputed any royalty 16 obligation 3 Closing of Andacollo transaction pending
Slide 17: Reserve Growth
Reserve Growth 1 Gold reserves increased 30% to 64.2M ounces 2 Precious metals account for 82% of gold equivalent reserves 3 Organic growth has offset consumption over the last five years Gold Reserves Subject to Royalty Interests Gold Reserves Subject to Royalties (calendar years) 120 100 60 Gold E
Slide 18: Principal Producing Properties
Principal Producing Properties Cortez (Pipeline Mining Complex – Nevada) Operator: Barrick Royalty: GSR 1 and GSR2: 0.4% to 5.0% GSR 3: 0.71% NVR1: 0.39% CY 2009 Production (Est.): 346,000 oz (Au) FY 2009 Revenue: $16.3M Reserves 1: 4.3M oz (Au) Taparko (Burkina Faso) Operator: High River Royalty: T
Slide 19: Principal Producing Properties
Principal Producing Properties Leeville (Nevada) Operator: Newmont Royalty: 1.8% NSR CY 2009 Production (Est.): 426,000 oz (Au) FY 2009 Revenue: $6.7M Reserves 1: 2.5M oz (Au) Mulatos (Mexico) Operator: Alamos Gold Royalty: 1.0% to 5.0% NSR CY 2009 Production (Est.) 2: 160,000 oz (Au) FY 2009 Revenu
Slide 20: Key Growth Properties
Key Growth Properties 1 Peñasquito (Mexico) Operator: Goldcorp Project Schedule Royalty: 2.0% NSR (all metals) Reserves 1,2: 17.4M oz (Au) 1.0B oz (Ag) Estimated production start-up: - 1st sulfide circuit – 2009 - 2nd sulfide circuit – 2010 - High pressure grind rolling circuit – 2010 Annual royalty
Slide 21: Key Growth Properties
Key Growth Properties 1 Holt (Canada) Operator: St Andrew Goldfields Production Profile 9 120 Gold Ounces (thousands) Royalty 8: 0.00013 X gold price (NSR): 100 $1,000/oz gold = 13% royalty rate 80 Reserves 1: 0.5M oz (Au) 60 Estimated production start-up: 2010 40 20 Annual royalty revenue potential
Slide 22: Key Growth Properties – Footnotes
Key Growth Properties – Footnotes 1 Reserves are as of December 31, 2008 for all key growth properties except Dolores and Andacollo. Dolores reserves are as of March 25, 2008 (reserve numbers have not been updated to remove material consumed in late 2008 commissioning activities). See footnote 13 fo
Slide 23: Andacollo (Teck – Chile)
Andacollo (Teck – Chile) Royalty: 75% of gold until 910,000 payable ounces; 50% thereafter Ownership: 90% CDA (subsidiary of Teck Resources Limited) 10% Empresa Nacional de Minería (Chilean, state-owned mining company) Total consideration: $218M cash 1.2M shares Closing by January 29, 2010 23
Slide 24: Andacollo Hypogene Project
Andacollo Hypogene Project Sulfide plant production: Construction complete: 4Q’09 Commercial production: first half 2010 55,000 tonnes/day mill capacity Proven and probable reserves: 1 1.6M oz Au (394M tonnes at 0.13 gpt) Estimated annual production: 2 53,000 oz gold 76,000 tonnes copper 3 Estimated
Slide 25: Estimated Revenue Contribution – New Assets
Estimated Revenue Contribution – New Assets 1 100 90 80 70 60 ($ millions) 50 40 30 20 10 0 Dolores Andacollo Holt Peñasquito Canadian Pascua-Lama Estimated Total Fiscal 2009 2009 2010 2 2010 2 2011 2 Malartic 2013 2 New Revenue Actual Royalty 2011 2 Revenue 1 Refer to page 22 for applicable footnot
Slide 26: Financial Strength
Tq Ip A ROYALGOLD,ING The Gold Standard of Royalty Companies Financial Strength
Slide 27: Strong Financial Growth
Strong Financial Growth Gross Financial Results Per Share Financial Results $90 2.25 $80 2.00 $70 1.75 $60 1.50 llions) ($ millions ($ per share) $50 1.25 $40 1.00 $30 0.75 $20 0.50 $10 0.25 $0 0.00 2005 2006 2007 2008 1 2009 2 2005 2006 2007 2008 1 2009 2,3 (fiscal years ended June 30) (fiscal year
Slide 28: Enhanced Shareholder Return
Enhanced Shareholder Return Royal Gold vs. Gold Price and Index Five-Year Total Shareholder Return (indexed June 30, 2004 = 100) (September 2004 - September 2009) 400 250% 222% 350 200% 300 250 150% 200 100% 91% 150 100 50% 50 0% 2004 2005 2006 2007 2008 2009 Average North Royal Gold American Majors
Slide 29: Financial Strength
Financial Strength Market Information (as of 10/06/09) NASDAQ: RGLD; TSX: RGL Dividend Growth Market cap: $2.0B 0.32 Average daily volume (TTM): 893,000 0.28 0.26 Shares Outstanding 0.22 0.20 Common: 40.7M Insider ownership: 8% Financial Cash: $307M 1 Total debt: $0 2005 2006 2007 2008 2009 Availabl
Slide 30: Appendix: Management Team
Tq Ip A ROYALGOLD,ING The Gold Standard of Royalty Companies Appendix Management Team
Slide 31: Senior Management Team
Senior Management Team Tony Jensen Stefan Wenger President and CEO CFO and Treasurer Tony Jensen has over 25 years of mining industry Stefan L. Wenger has over 13 years experience in the experience and is President and Chief Executive mining industry and is the Chief Financial Officer and Officer an
Slide 32: Senior Management Team (cont.)
Senior Management Team (cont.) Bill Heissenbuttel Bruce Kirchhoff VP, Business Development VP and General Counsel William Heissenbuttel has served as Vice President Bruce Kirchhoff has over 20 years experience in a Business Development of Royal Gold, Inc. since April broad range of business, commerc
Slide 33: Senior Management Team (cont.)
Senior Management Team (cont.) Karen Gross Bill Zisch VP and Corporate Secretary VP, Operations Ms. Karen Gross has served as Vice President of William M. Zisch has over 25 years of experience Royal Gold since 1994 and as Corporate Secretary in the mining industry and joined Royal Gold as since 1989
Slide 34: 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 34
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