Royal Gold, Inc. · NASDAQ:RGLD
Royal Gold — Gold Forum Europe 2024
52 slides from Royal Gold's conference presentation, April 2024
Slide 1: Gold Forum Europe
I ROYALGOLD, INC Gold Forum Europe April 2024
Slide 2: Cautionary Statements
Cautionary Statements Forward-Looking Statements: This presentation includes “forward-looking statements” within the meaning of U.S. federal securities laws. Forward-looking statements are any statements other than statements of historical fact. Forward-looking statements are not guarantees of futur
Slide 3: Precious Metals Exposure with Consistent Financial Performance
Precious Metals Exposure with Consistent Financial Performance OVERVIEW LOW RISK GOLD LEVERAGE & OPTIONALITY BUSINESS DEVELOPMENT MARKET DISCIPLINED APPROACH TO GROWTH A UNIQUE COMPANY ROYAL GOLD, INC. | GOLD FORUM EUROPE | APRIL 2024 3
Slide 4: Company Overview
Company Overview Opportunity to capture value in the precious metals sector without incurring many of the costs and risks associated with mining operations Dual Business Segments… …Across A Diverse, Gold-Focused Portfolio… …With Standout Performance Royalty Interests: 177 17 $606M 312,100 An interes
Slide 5: Global Portfolio in Established Mining Jurisdictions
Global Portfolio in Established Mining Jurisdictions PRINCIPAL PROPERTIES 3 1 ANDACOLLO Region IV, Chile 2 CORTEZ Nevada, USA 2 4 5 3 MOUNT MILLIGAN British Columbia, Canada 4 PEŇASQUITO Zacatecas, Mexico 6 5 PUEBLO VIEJO Sanchez Ramirez, Dominican Republic 1 37 PRODUCING 6 KHOEMACAU 177 Botswana 24
Slide 6: Well-Diversified Portfolio Reduces Single-Asset Risk
Well-Diversified Portfolio Reduces Single-Asset Risk Geographically and operationally diverse portfolio, underpinned by primary precious metals mines Calendar 2023 Revenue Contribution by Geography by Mine by Mine Type* Other Mexico Mount Copper Others Canada Milligan Botswana Ghana Wassa Gold Khoem
Slide 7: Sound Investment Stewardship Practices are Fundamental to Success
Sound Investment Stewardship Practices are Fundamental to Success Materially better market perception with improved disclosure 60 50 SEVERE RISK 40 RATING HIGH 30 23.4 22.8 MEDIUM 19.1 20 9.1 9.7 10 LOW 0 2019 2020 2021 2022 2023 Source: Sustainalytics AAA 7 ESG AA 6 AA AA AA RATING 5A A A 4 BBB 3 B
Slide 8: Royal Gold is Large Enough to Compete, Small Enough to Show Growth
Royal Gold is Large Enough to Compete, Small Enough to Show Growth • Significant cash flow provides a source of financing for large $991.2 transactions $750.8 Operating Cash Flow1 ($M) Market Capitalization2 ($B) • “Small” transactions, like Khoemacau ($265M), can move the needle for Royal Gold $23.
Slide 9: Trading at Historically Attractive Multiples
Trading at Historically Attractive Multiples P / NAV P / CF 1.76x 17.2x 3.5x 60x 3.0x 50x 2.5x 40x 2.0x 1.76x 30x 1.5x 20x 1.0x 17.2x 0.5x 10x 0.0x 0x Jul-12 Jul-13 Jul-14 Jul-15 Jul-16 Jul-17 Jul-18 Jul-19 Jul-20 Jul-21 Jul-22 Jul-23 Jan-12 Jan-13 Jan-14 Jan-15 Jan-16 Jan-17 Jan-18 Jan-19 Jan-20 Ja
Slide 10: Precious Metals Exposure with Consistent Financial Performance
Precious Metals Exposure with Consistent Financial Performance OVERVIEW LOW RISK GOLD LEVERAGE & OPTIONALITY BUSINESS DEVELOPMENT MARKET DISCIPLINED APPROACH TO GROWTH A UNIQUE COMPANY ROYAL GOLD, INC. | GOLD FORUM EUROPE | APRIL 2024 10
Slide 11: Exposure to Gold and Optionality with Reduced Risks
Exposure to Gold and Optionality with Reduced Risks Exploration No Direct No Direct Exposure Portfolio Sustainable Upside / Exposure to Exposure to to Gold Diversification Dividend Optionality Operating Costs Capital Costs ETFs, Bars and Coins Senior Operating Companies Junior Operating Companies De
Slide 12: Exposure to Resource Growth and Metal Price Optionality
Exposure to Resource Growth and Metal Price Optionality Mine expansions and resource growth can significantly enhance returns with no cost to Royal Gold PUEBLO VIEJO WASSA Millions of Gold Ounces5 85% Millions of Gold Ounces of Initial Investment Recovered6 0.2 143% of Initial Investment Recovered5
Slide 13: Cost Structure and Business Model Reduce Inflation Exposure
Cost Structure and Business Model Reduce Inflation Exposure Operator costs tend to increase with commodity prices while Royal Gold’s costs remain stable Comparison of Cost Structures: Royal Gold Cash G&A Expense3: US$/oz 1000 Metal Price 900 Royalty Dependent TCRC & Shipment 7% 800 6% Salaries 700 O
Slide 14: Gold Leverage with Market-Leading Return
Gold Leverage with Market-Leading Return A stable, sustainable investment… …with a heritage of market outperformance (5/22/06 – 4/1/24) Indexed since the formation of the GDX 5.0 1.85 Beta vs. Gold Price RGLD Will provide higher 4.5 GDX 4.21 leverage to gold… β Gold 4.0 Spot Gold 4.15 SP500 3.5 3.56
Slide 15: Precious Metals Exposure with Consistent Financial Performance
Precious Metals Exposure with Consistent Financial Performance OVERVIEW LOW RISK GOLD LEVERAGE & OPTIONALITY BUSINESS DEVELOPMENT MARKET DISCIPLINED APPROACH TO GROWTH A UNIQUE COMPANY ROYAL GOLD, INC. | GOLD FORUM EUROPE | APRIL 2024 15
Slide 16: Stream and Royalty Financing is Significant
Stream and Royalty Financing is Significant Stream and royalty financing has become a mainstream source of capital to the global mining industry $23.3B Streaming is a flexible product that is relevant throughout the commodity cycle Total Stream Investments by all companies 5% Primarily Balance Prima
Slide 17: Recent Transactions Enhance Royal Gold Portfolio
Recent Transactions Enhance Royal Gold Portfolio Strategic objective: Further strengthen and diversify the portfolio by adding high quality precious metals assets • ~$1.2B of gold-focused Near Term Long Mine Lives investments since June Revenue Contribution Xavantina 30, 2021 without raising Red Chr
Slide 18: Robust Due Diligence Drives Disciplined Approach to Acquisitions
Robust Due Diligence Drives Disciplined Approach to Acquisitions Due diligence process includes: • Technical • Legal • Financial/Credit analysis − Geology, reserve/resource − Title, permitting, mining law • Management references definition • ESG − Mining − Environmental impact − Metallurgy − Social
Slide 19: Precious Metals Exposure with Consistent Financial Performance
Precious Metals Exposure with Consistent Financial Performance OVERVIEW LOW RISK GOLD LEVERAGE & OPTIONALITY BUSINESS DEVELOPMENT MARKET DISCIPLINED APPROACH TO GROWTH A UNIQUE COMPANY ROYAL GOLD, INC. | GOLD FORUM EUROPE | APRIL 2024 19
Slide 20: Accretive Growth Financed Without Significant Equity Dilution
Accretive Growth Financed Without Significant Equity Dilution Since calendar year 2000: $6.1B Revenue 64x Cumulative Revenue Operating Cash Flow 98x $3.9B Cumulative Operating Cash Flow Cash G&A Expenses 18x $354M Cum. Cash G&A1 Expenses Avg. Gold Price 6x Up to $1,941 /ounce Shares Outstanding 4x O
Slide 21: Financing and Capital Allocation Strategy Drives Shareholder Returns
Financing and Capital Allocation Strategy Drives Shareholder Returns Financing strategy – prioritizes non-dilutive forms of capital in the order of: • Existing cash balances • Cash flow from operations • Debt (revolving credit facility) • Equity, when accretive 2023 Sources / Uses Liquidity1 $US M $
Slide 22: Precious Metals Exposure with Consistent Financial Performance
Precious Metals Exposure with Consistent Financial Performance OVERVIEW LOW RISK GOLD LEVERAGE & OPTIONALITY BUSINESS DEVELOPMENT MARKET DISCIPLINED APPROACH TO GROWTH A UNIQUE COMPANY ROYAL GOLD, INC. | GOLD FORUM EUROPE | APRIL 2024 22
Slide 23: Attributes that Make Royal Gold Unique
Attributes that Make Royal Gold Unique • Only U.S. based streaming and royalty company U.S. BASED • Member of >200 U.S. indices 66M LOW SHARE • Lowest share count in the GDX COUNT • Preference to finance growth using non-dilutive financing 23YR INCREASING • Only GDX member to raise the dividend ever
Slide 24: Efficiency Drives High Margins
Efficiency Drives High Margins CASH FLOW METRICS1 US$ 606M Revenue Adjusted EBITDA2/Revenue 79% US$ 480M Adjusted EBITDA US$ 416M Operating Cash Flow Operating Cash Flow/Revenue 69% Cash G&A3 Expenses/Revenue 5% US$ 30M Cash G&A3 1 – Calendar 2023. 2 – Adjusted EBITDA is a non-GAAP financial measure
Slide 25: Growing and Sustainable Dividend Despite Gold Price Volatility
Growing and Sustainable Dividend Despite Gold Price Volatility Royal Gold is the only precious metal company in the S&P High Yield Dividend Aristocrats Index US$/share US$/oz $1.60 $2,800 Dividend Payout Ratio Gold Price 16% $1.40 $2,400 $1.20 Dividend CAGR $2,000 (2000-2024) $1.00 $1,600 $0.80 $916
Slide 26: Revenue Growth Expected from Producing and Development Assets
Revenue Growth Expected from Producing and Development Assets In production Expansions and extensions add to portfolio revenue and duration Defined startup date Longer-dated production MOUNT MILLIGAN – mine life extended 2 years to 2035, PEA to evaluate potential to extend beyond 2035 expected in H1
Slide 27: Appendix
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Slide 28: Gold is a Unique Strategic Asset
Gold is a Unique Strategic Asset Gold is uncorrelated, and is a diversifier that provides a hedge against systemic risk, currency depreciation and inflation Correlation of Gold vs. US Stock Returns Value of Currencies and Broad Commodities Relative to Gold Annual Gold Return and Inflation Weekly ret
Slide 29: Stream/Royalty Acquisition Process
Stream/Royalty Acquisition Process Royal Gold’s role in the mining value chain can be tailored to fit the needs of the operating partner EXPLORATION DEVELOPMENT PRODUCTION Royal Gold Payment • Interest is typically in • Interest typically in • Interest typically in the form of a royalty, the form of
Slide 30: Stream/Royalty Detail
Stream/Royalty Detail From a cash flow perspective, streams and royalties are comparable in that the revenue from a stream less the ongoing cash price paid roughly equals a royalty-like interest in production ROYALTIES • Royalties are typically cash-settled Royal Gold • A royalty is typically struct
Slide 31: ESG Overview: Sustainability Is Our Business Model
ESG Overview: Sustainability Is Our Business Model Royal Gold is committed to sustainability at the corporate and local levels, and seeks counterparties with leading approaches to ESG practices Environmental Social Governance Committed to analyzing and mitigating the Committed to supporting social c
Slide 32: Experienced Independent Directors
Experienced Independent Directors Highly capable, independent board, with deep experience across the gold sector William Hayes Fabiana Chubbs Kevin McArthur Independent Director Independent Director Independent Director Chair of the Board Retired CFO Retired Executive Retired EVP Project Eldorado Go
Slide 33: Experienced Management Team
Experienced Management Team Senior Management William Heissenbuttel Martin Raffield Paul Libner Randy Shefman Daniel Breeze President and CEO SVP, Operations SVP and CFO SVP and General SVP, Corporate of Royal Gold, Inc. Counsel Development, RGLD Gold AG Alistair Baker Allison Forrest Jason Hynes Da
Slide 34: Management Compensation Structure
Management Compensation Structure Short-term and long-term incentive program seeks to align compensation with the factors that drive and measure total shareholder return Compensation breakdown:1 • Short Term Incentives focused on financial, operational, strategic, and individual performance • Long T
Slide 35: US Domicile and Register are Unique
US Domicile and Register are Unique • Only U.S. based streaming and royalty company U.S. BASED • Member of >200 U.S. indices • 66M shares outstanding; lowest in the GDX index Register Breakdown Dominant Orientation Remainder Retail 14% 15% Top 5 Passive 43% 44% Other Identifiable 24% Active 41% Top
Slide 36: Shareholder Base Reflects Company’s Unique Position
Shareholder Base Reflects Company’s Unique Position Shareholder base is institutional with some unique characteristics • 44% of identifiable investors (38% of total) are Index investors • High-quality shareholder register, with large and long-term Identified Investor Styles institutional investors c
Slide 37: Credit Facility is a Flexible and Strategic Financing Tool
Credit Facility is a Flexible and Strategic Financing Tool Credit facility provides low-cost tool to manage liquidity • $1B credit facility with uncommitted $250M accordion feature Current Leverage1: 0.30x • Strong and diversified syndicate: BNS, CIBC, BofA, BMO, NBF, RBC, GS, TD • Maturity date: Ju
Slide 38: Quality Portfolio of Asset Investments
Quality Portfolio of Asset Investments Operator Mine Metal Royal Gold Interest Ongoing Payment Expected Mine CY 2024 1 Current Until* Thereafter Initial Until* Thereafter Life to Year Operator Production 2 Guidance Principal Streams Gold 35.0% LOM ---------- See footnote 4 ---------- 180-200 koz Cen
Slide 39: Cortez Royalties: Exposure Now Covers the Entire Cortez Complex
Cortez Royalties: Exposure Now Covers the Entire Cortez Complex Transactions in 2022 expanded Royal Gold’s royalty exposure to the entirety of the Cortez Complex Legacy Royalty position Rio Tinto Royalty Idaho Royalty Acquired August 2, 2022 Acquired December 29, 2022 Notes: 1. Location of claim are
Slide 40: Overlapping Royalties at Cortez Create High Royalty Rates
Overlapping Royalties at Cortez Create High Royalty Rates Simplified Royalty Detailed Royal Gold Royalty Coverage and Rates Rates Rio Tinto Idaho Legacy Royalties2 Royalty Royalty Mine/Deposit/Area Mine Type Ore Process Approximate Royalty Rate Blended GSR Rate 1 Royalty Approximate Royalty Rate Roy
Slide 41: Great Bear Royalty: Adds Long-Term Duration, Scale, Optionality
Great Bear Royalty: Adds Long-Term Duration, Scale, Optionality Life of mine exposure to an emerging world-class project in Ontario operated by Kinross Gold 2.0%1 net smelter return royalty: • Life of mine without stepdowns or caps (except for Kinross option1) • Covers entirety of 9,140 ha Great Bea
Slide 42: Great Bear Project: High-Grade Resource Additions at Depth
Great Bear Project: High-Grade Resource Additions at Depth • Added >1 million higher-grade, underground inferred ounces with year-end 2023 update • Inferred grade increased from 3.6 g/t to 4.5 g/t Year-end 2023 resource: 2.8 M oz Indicated 3.3 M oz Inferred • Kinross’ focus for 2024 is to continue t
Slide 43: Optionality
Optionality Royal Gold seeks to provide exposure to resource growth and metal price optionality. Resource growth and mine life extensions can significantly enhance returns over time. Case Study Reserves & Resources Mine Life Contained Gold M oz Years Mulatos – Alamos Gold 2P Reserves • Royal Gold ac
Slide 44: World Gold Council – 247 Initiative
World Gold Council – 247 Initiative ROYAL GOLD, INC. | GOLD FORUM EUROPE | APRIL 2024 44
Slide 45: Non-GAAP Measures
Non-GAAP Measures Overview of non-GAAP financial measures: Non-GAAP financial measures are intended to provide additional information only and do not have any standard meaning prescribed by U.S. generally accepted accounting principles (“GAAP”). These measures should not be considered in isolation o
Slide 46: Non-GAAP Measures
Non-GAAP Measures Overview of non-GAAP financial measures: 4. Free cash flow is a non-GAAP financial measure that is calculated by the Company as net cash provided by operating activities for a period minus acquisition of stream and royalty interests for that same period. We believe that free cash f
Slide 47: Non-GAAP Measures
Non-GAAP Measures Reconciliation of non-GAAP financial measures to U.S. GAAP measures Adjusted EBITDA, Adjusted EBITDA margin, net debt/cash and net debt/cash to TTM adjusted EBITDA: Three Months Ended Year Ended December 31, December 31, (amounts in thousands) 2023 2022 2023 2022 Net income and com
Slide 48: Non-GAAP Measures
Non-GAAP Measures Reconciliation of non-GAAP financial measures to U.S. GAAP measures (cont.) Cash G&A: Three Months Ended Year Ended December 31, December 31, (amounts in thousands) 2023 2022 2023 2022 General and administrative expense $ 9,741 $ 8,815 $ 39,761 $ 34,612 Non-cash employee stock comp
Slide 49: Non-GAAP Measures
Non-GAAP Measures Reconciliation of non-GAAP financial measures to U.S. GAAP measures (cont.) Free cash flow: Three Months Ended Year Ended December 31, December 31, (amounts in thousands) 2023 2022 2023 2022 Net cash provided by operating activities $ 101,088 $ 101,026 $ 415,792 $ 417,345 Acquisiti
Slide 50: Certain Other Measures
Certain Other Measures We use certain other measures in managing and evaluating our business. We believe these measures may provide useful information to investors for analysis of our business. We use these measures to compare period-over-period performance and liquidity on a consistent basis and wh
Slide 51: Other Disclaimers
Other Disclaimers DISCLAIMER STATEMENT FOR USE OF MSCI ESG RATING THE USE BY ROYAL GOLD OF ANY MSCI ESG RESEARCH LLC OR ITS AFFILIATES (“MSCI”) DATA, AND THE USE OF MSCI LOGOS, TRADEMARKS, SERVICE MARKS OR INDEX NAMES HEREIN, DO NOT CONSTITUTE A SPONSORSHIP, ENDORSEMENT, RECOMMENDATION, OR PROMOTION
Slide 52: Contact
Tel. 303.573.1660 investorrelations@royalgold.com www.royalgold.com