Royal Gold, Inc. · NASDAQ:RGLD
Royal Gold — Investor Day (April 2023)
108 slides from Royal Gold's investor day presentation, Apr 20, 2023
Slide 1: Investor Update
Investor Update April 20, 2023
Slide 2: Agenda
Agenda 1. Introduction and Strategic Bill Heissenbuttel, President & CEO Overview 2. 2022 ESG Report Allison Forrest, VP Investment Stewardship Mark Isto, EVP and Chief Operating Officer, Royal Gold Corp. 3. Portfolio Update Mark Isto, EVP and Chief Operating Officer, Royal Gold Corp. Jason Hynes, V
Slide 3: Cautionary Statement
Cautionary Statement 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 4: Introduction and Strategic Overview
Introduction and Strategic Overview
Slide 5: Introduction and Strategic Overview – Topics
Introduction and Strategic Overview – Topics LOW RISK EXPOSURE TO PRECIOUS METALS ATTRIBUTES PROVIDE UPSIDE, GROWTH AND RETURNS THROUGH THE CYCLE STRATEGIC GOALS REMAIN STABLE AND CONSISTENT ROYAL GOLD, INC. | INVESTOR UPDATE | APRIL 2023 5
Slide 6: Royal Gold Aspires to be the Gold Standard in Everything We Do
Royal Gold Aspires to be the Gold Standard in Everything We Do VISION MISSION To be the gold standard as an To shape the future of mine finance employer, financing partner, an through creativity, collaboration and a commitment to mutually beneficial investment and a community member. outcomes for al
Slide 7: 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: 182 17 $603M 335,100 An interes
Slide 8: Royal Gold Provides Low-Risk Exposure to Precious Metals
Royal Gold Provides Low-Risk Exposure to Precious Metals 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 Compani
Slide 9: High Beta to Gold Provides Excellent Leverage
High Beta to Gold Provides Excellent Leverage Revenue Sensitivity to 10% change in Metal Price 1.85 Twelve months ended December 31, 2022 Beta vs. Gold Price Will provide higher β Gold leverage to gold… -7.5% 7.5% Gold 0.42 -2.2% 2.2% Copper Beta vs. S&P 500 …with lower exposure to β S&P general mar
Slide 10: 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 2022 Revenue Contribution by Geography by Mine by Mine Type* Others Other Chile Copper Mount Milligan Canada Mexico Wassa Gold Africa Rainy R
Slide 11: High Quality and Established Counterparties
High Quality and Established Counterparties 2022 Revenue Distribution Across Top Counterparties $64M1 $47M $123M1 $19M $18M $32M $181M $31M 1 - Revenue generated from Cortez has been allocated to Barrick and Newmont based on their respective interests in Nevada Gold Mines ROYAL GOLD, INC. | INVESTOR
Slide 12: Precious Metals Provide Majority of Revenue
Precious Metals Provide Majority of Revenue • Gold is the dominant revenue growth driver • Efficient business structure allows for pass-through to earnings and cash flow 9% 10% 5-yr CAGR 5-yr CAGR Revenue Operating Cash Flow $US M $US M Gold Silver Copper Other $654 $603 $462 $561 $417 $385 $468 $43
Slide 13: Lean Business Model Reduces Inflation and Margin Compression Risks
Lean Business Model Reduces Inflation and Margin Compression Risks Efficient business model with high operating margin Our business is built on a core of highly qualified individuals, with… • Low G&A expense and highly scalable business • Ability to leverage third party resources when needed 31 1 1
Slide 14: Cost Structure and Business Model Reduce Inflation Exposure
Cost Structure and Business Model Reduce Inflation Exposure Operator costs tend to increase with commodity prices while Royal Gold’s costs remain stable Comparison of Cost Structures: Royal Gold Cash G&A Expense3: US$/oz 900 Metal Price Royalty Dependent 800 TCRC & Shipment 7% 700 6% Salaries Other
Slide 15: 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 $999.5 a source of financing for large transactions $743.4 Operating Cash Flow ($M) Market Capitalization ($B) • “Small” transactions, like Khoemacau ($265M), can move the needle for Royal Gold $27.5
Slide 16: Stream and Royalty Financing Provides Through-Cycle Opportunities
Stream and Royalty Financing Provides Through-Cycle Opportunities Stream and royalty financing is a mainstream source of capital to the global mining industry $22.3B Streaming is a flexible product that is relevant throughout the commodity cycle Total Stream Investments by all companies 5% Primarily
Slide 17: 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 2022 Sources / Uses Liquidity1 $US M $
Slide 18: 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 40% Passive Other 44% Identifiable 25% Active 41% Top
Slide 19: Dividend History Has Provided Growing Capital Returns
Dividend History Has Provided Growing Capital Returns 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 (2000-2023) $1.00 $1,600 $0.80 $815M $0.60 $
Slide 20: Experienced Team Reduces Management Risk
Experienced Team Reduces Management Risk Board of Directors Senior Management William Hayes Fabiana Chubbs Kevin McArthur William Heissenbuttel Mark Isto Paul Libner Randy Shefman Daniel Breeze Independent Director Independent Director Independent Director President and CEO EVP and COO, CFO and Trea
Slide 21: Royal Gold’s Strategy Remains Consistent
Royal Gold’s Strategy Remains Consistent Strategic goals are simple and long-standing • Acquire high-quality and long-life assets in safe jurisdictions • Finance growth with limited equity dilution • Maintain strong balance sheet and liquidity • Increase return to shareholders ROYAL GOLD, INC. | INV
Slide 22: 2022 Achievements Were Consistent with Strategy
2022 Achievements Were Consistent with Strategy Long-Lived Asset Acquisitions Portfolio Events Corporate MOUNT MILLIGAN Received full return of $781.5 million advance payment Extended mine life to 2033 2.0% 1.2% FINANCING DIVIDEND Financed >$900 Increased dividend to PUEBLO VIEJO million of acquisit
Slide 23: Recent Acquisitions Meet Quality, Mine Life and Jurisdictional Goals
Recent Acquisitions Meet Quality, Mine Life and Jurisdictional Goals • ~$1.2B of gold-focused investments since June 30, 2021 without raising equity • Funding with cash provides shareholders with full exposure to high quality and long duration assets in low-risk jurisdictions Near Term Long Mine Liv
Slide 24: Share Price Has Overperformed Over the Long Term
Share Price Has Overperformed Over the Long Term (5/22/06 – 3/31/23) 5.0 Indexed since the formation of the GDX RGLD 4.5 GDX 4.46 4.0 Spot Gold SP500 3.5 DJIA 3.26 3.0 2.99 2.5 2.50 2.0 1.5 1.0 0.87 0.5 0.0 2006 2008 2010 2012 2014 2016 2018 2020 2022 Source: FactSet. ROYAL GOLD, INC. | INVESTOR UPD
Slide 25: Takeaways: Introduction and Strategic Review
Takeaways: Introduction and Strategic Review Royal Gold can be a “set and forget” full cycle investment As an investment, Royal Gold provides shareholders with: 1. Low-risk exposure to precious metals 2. Upside exposure and growth through the cycle 3. Simple and consistent strategy Strategy Exposure
Slide 26: 2022 ESG Report
I ooscovive 2022 ESG Report
Slide 27: 2022 ESG Report Topic Highlights
2022 ESG Report Topic Highlights ESG REPORT OVERVIEW ESG FRAMEWORKS AND SCORECARDS CLIMATE CHANGE SCENARIO ANALYSIS ROYAL GOLD, INC. | INVESTOR UPDATE | APRIL 2023 27
Slide 28: 2022 ESG Report
2022 ESG Report ROYAL GOLD, INC. | INVESTOR UPDATE | APRIL 2023 28
Slide 29: ESG Data
ESG Data ESG data tables are now available on our website ta tables on our website ROYAL GOLD, INC. | INVESTOR UPDATE | APRIL 2023 29
Slide 30: Third-party ESG Ratings
Third-party ESG Ratings Materially better market perception with improved disclosure 60 51.9 50 SEVERE RISK 40 RATING HIGH 30 23.4 22.8 MEDIUM 19.1 20 9.1 10 LOW 0 2018 2019 2020 2021 2022 Source: Sustainalytics AAA 7 ESG AA 6 AA AA RATING 5A A A A 4 BBB 3 BB 2B 1 CCC LAST UPDATE: October 25, 2022 0
Slide 31: Royal Gold ESG Committee
Royal Gold ESG Committee A formal committee responsible for sustainability and ESG initiatives AA AA A A A ROYAL GOLD, INC. | INVESTOR UPDATE | APRIL 2023 31
Slide 32: ESG Scorecards – Corporate
ESG Scorecards – Corporate 2019 2020 2021 2022 3-Year Trend 2019 2020 2021 2022 3-Year Trend Energy and Climate Change Safe Operation Total Scope 2 GHG Emissions (tCO2e) 87.0 87.1 93.5 Total Recordable Incident Frequency 0 0 0 0 Rate (TRIFR) Total Scope 3 GHG Emissions (tCO2e) 68.3 43.6 312.3 • Comm
Slide 33: ESG Scorecards – Portfolio
ESG Scorecards – Portfolio A useful performance management tool Sample: • Provides asset assurance team an additional tool Stream and Royalty portfolio performance scorecard to monitor portfolio ESG performance 2018 2019 2020 2021 Trend • Results reported annually, performance tracked Energy and Cli
Slide 34: Corporate and Operator Charitable Donations and SDGs
Corporate and Operator Charitable Donations and SDGs AA AA A A A ROYAL GOLD, INC. | INVESTOR UPDATE | APRIL 2023 34
Slide 35: Takeaways: 2022 ESG Report
Takeaways: 2022 ESG Report Royal Gold continues to make progress on TCFD alignment and ESG disclosures ROYAL GOLD, INC. | INVESTOR UPDATE | APRIL 2023 35
Slide 36: Increasing Our Disclosure in Alignment with TCFD Guidelines
Increasing Our Disclosure in Alignment with TCFD Guidelines Royal Gold began reporting under TCFD guidelines in 2022 Our approach to TCFD • Measure performance • Understand the risk and reduce impacts • Disclose our performance Achievements • Assessed our corporate carbon footprint and purchased hig
Slide 37: Inaugural Reporting of Our Climate Scenario Analysis
Inaugural Reporting of Our Climate Scenario Analysis Advancing our understanding of the potential impacts of climate change on our business Our approach to climate scenario analysis: • Scenarios defined by the Network for Greening the Financial System (NGFS) • 3 Scenarios: i. Current Policies ii. De
Slide 38: Our Climate Scenario Analysis Takeaways
Our Climate Scenario Analysis Takeaways Climate scenario analysis has improved our understanding of portfolio risks and opportunities Conclusions: • Geographically and climatologically diverse portfolio • We could expect delayed revenue impacts • Carbon taxation has potential to impact mine economic
Slide 39: Portfolio Update
IN ROYALGOLD,INC Portfolio Update
Slide 40: Portfolio Update – Topics
Portfolio Update – Topics 2023 GUIDANCE DEVELOPMENTS AT RECENT ACQUISITIONS ORGANIC GROWTH POTENTIAL ROYAL GOLD, INC. | INVESTOR UPDATE | APRIL 2023 40
Slide 41: 2023 Sales Guidance
2023 Sales Guidance Guidance(i)(ii) January 1 – December 31, 2023 Total GEO(iii) Sales GEO 320,000 – 345,000 Gold Oz 235,000 – 250,000 Other Metals GEO 85,000 – 95,000 i. Based on 2023 commodity price assumptions including $1,825/oz gold, $22.50/oz silver, $3.80/lb copper, $11.50/lb nickel, $0.90/lb
Slide 42: 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 40 PRODUCING 6 KHOEMACAU 182 Botswana 19
Slide 43: Portfolio Covers Life Cycle of Mining Assets
Portfolio Covers Life Cycle of Mining Assets Properties at various stages of development provide optionality and organic revenue growth potential EXPLORATION EVALUATION DEVELOPMENT PRODUCTION 71 52 19 40 • Earliest stage of • Published resource • Published reserve • Producing development • No publis
Slide 44: Assets Producing ~35% of 2022 Revenue Have Noteworthy Growth
Assets Producing ~35% of 2022 Revenue Have Noteworthy Growth Pueblo Viejo Plant expansion and new TSF 14% Other 66% $603M 2022 Revenue Cortez Goldrush ROD / Robertson 8% Wassa Southern extension 5% Khoemacau First full year of production 3% Red Chris Xavantina NX60 project 1% 3% Transition to block
Slide 45: Cortez
Cortez Consolidated Exposure to a Growing World Class Gold Complex ROYAL GOLD, INC. | INVESTOR UPDATE | APRIL 2023 45
Slide 46: Royal Gold has a Long and Profitable History at Cortez
Royal Gold has a Long and Profitable History at Cortez Cortez revenue since 1995 has provided capital to reinvest, grow and diversify Royal Gold’s portfolio 1987: 1992: 1999: 2001 - 2016: 2022: Royal Gold forms Royal Gold South Pipeline NPI Royal Gold acquires further Royal Gold acquires additional
Slide 47: Royalty Exposure Now Covers the Entire Cortez Complex
Royalty Exposure Now Covers the Entire Cortez Complex Recent transactions 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 areas shown ar
Slide 48: Overlapping Royalties Create High Royalty Rates
Overlapping Royalties 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 Royalty Rate
Slide 49: New Royalties Provide Further Optionality to Resource Growth
New Royalties Provide Further Optionality to Resource Growth Cortez Reserves & Resources (100% basis) (contained gold, 000 oz) 2022 - Royal Gold acquires Rio Tinto and Idaho royalties 2008 - Reserves and resources grew significantly from 2021 to 2022 - Barrick consolidates Cortez ownership Additiona
Slide 50: NGM’s Forecast of Production Growth is Significant
NGM’s Forecast of Production Growth is Significant Robertson first production 2027 Cortez - 100% Production (koz) (0.45% GSR) 1,400 1,200 1,000 Cortez Hills, Goldrush 800 1.6% GSR Equivalent 600 Legacy Royalties: 9.4% GSR Equivalent 450-480k oz 2023 400 200 ~330k oz/year 2024-2027 0 2022 Actual 2023
Slide 51: Target-Rich Environment within a Producing Complex
Target-Rich Environment within a Producing Complex Land package potential being unlocked with evolving 1 understanding of geologic framework High potential targets include: North Canyons – northern extensions of key Fourmile structures Dorothy – 800m N of Fourmile; mineralization in a lower horizon
Slide 52: Great Bear Project
Great Bear Project Emerging World-Class Project ROYAL GOLD, INC. | INVESTOR UPDATE | APRIL 2023 52
Slide 53: Royalty Provides Life of Mine Exposure to the Entire Project Area
Royalty Provides Life of Mine Exposure to the Entire Project Area 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 Bear Project land package • Will be payable quarterly on all metals with standard applicable d
Slide 54: Multiple Zones of High-Grade Mineralization
Multiple Zones of High-Grade Mineralization Kinross conceptual development plan: • High-grade open pit mined concurrently with sizeable bulk-tonnage underground operation at the LP Fault Zone • Potential for further underground operations in areas of higher-grade Red Lake-style mineralization • Sequ
Slide 55: Initial Resource Includes Drilling to ~500m Depth Only
Initial Resource Includes Drilling to ~500m Depth Only • 225,000m of diamond drilling and 35,000m of grade control drilling in 2022 Initial resource: 2.7 M oz Indicated 2.3 M oz Inferred • Exploration decline expected to enable efficient drilling of underground material • Kinross’ focus for 2023 is
Slide 56: Early Works Expected to Start by Early 2027
Early Works Expected to Start by Early 2027 • Kinross continues to advance detailed studies and permitting activities, with plans to release a preliminary economic assessment in 2024 Source: Kinross ROYAL GOLD, INC. | INVESTOR UPDATE | APRIL 2023 56
Slide 57: Red Chris
Red Chris Exploration Success Adds to Long Term Growth Potential ROYAL GOLD, INC. | INVESTOR UPDATE | APRIL 2023 57
Slide 58: Block Cave Study and Updated Mineral Resource Expected in 2023
Block Cave Study and Updated Mineral Resource Expected in 2023 Red Chris, British Columbia, Canada P&P M&I Inf. Reserves & Resources (Jun. 30, 2022) Gold (Moz) 7.9 12.4 1.9 Copper (Mt) 2.1 3.6 0.6 Reserve life1 (yrs) 35+ Royal Gold interest: 2022 2021 2020 Revenue2 (US$M) $3.4 -- -- NSR royalty (%)
Slide 59: Plan View of Porphyry Corridor Shows Growth of East Ridge Target
Plan View of Porphyry Corridor Shows Growth of East Ridge Target East Ridge Status: June 30, 2021 March 14, 2023 Considered as a “Conceptual Exploration Target” outside of the Mineral Resource with potential for future production Identified as a new discovery Lower case potential: 5.4Moz gold 1.9Mt
Slide 60: East Ridge Could Provide Further Production Optionality and Potential
East Ridge Could Provide Further Production Optionality and Potential June 30, 2021 March 14, 2023 Source: Newcrest Quarterly Exploration Report for the 3 months ended June 30, 2021. Source: Newcrest Exploration Update, Mar. 14, 2023. • Per Newcrest, East Ridge could contain higher gold and copper g
Slide 61: Xavantina
Xavantina Exploration Results Demonstrate Upside ROYAL GOLD, INC. | INVESTOR UPDATE | APRIL 2023 61
Slide 62: NX60 Project to Sustain Higher Production Over the Longer Term
NX60 Project to Sustain Higher Production Over the Longer Term Xavantina, Brazil P&P M&I Inf. Reserves & Resources1 (koz) 361.6 436.4 120.2 (Oct. 31, 2022) Reserve life (yrs) 6 Royal Gold interest: 2022 2021 2020 Revenue2 (US$M) $18.4 $7.7 -- Initial Threshold Thereafter Gold stream3 (oz) 25% 93,000
Slide 63: High Prospectivity of Xavantina Rapidly Being Realized
High Prospectivity of Xavantina Rapidly Being Realized Ero highlighting exploration potential at Santo Antônio and Matinha veins and regional exploration targets 55,000-60,000 in 2024+ 53,000 Production Actual: 42,669oz 50,000 Guidance Range (oz) Actual: 37,798oz 42,000 37,500 39,000 34,500 2021 202
Slide 64: Khoemacau
Khoemacau Full Production Achieved at Zone 5 ROYAL GOLD, INC. | INVESTOR UPDATE | APRIL 2023 64
Slide 65: 2023 Expected to be First Full Year of Production from Zone 5
2023 Expected to be First Full Year of Production from Zone 5 Khoemacau Zone 5, Zone 5 Payable Silver Profile Botswana (k oz) P&P M&I Inf. Reserves & Resources (June 2021) Copper (kt) 689 274 1,017 Silver (Moz) 21 8 36 Mine life (yrs) 20+ Royal Gold interest: 2022 2021 2020 Revenue (US$M) $18.8 $5.1
Slide 66: Detailed Expansion Planning Underway
Detailed Expansion Planning Underway Royal Gold stream Area of Interest provides exposure to expanded Zone 5 and new mine at Mango NE (1) Current Operations production average for the period 2023 to 2039, Expansion is the average for the period 2027 to 2035. (2) Expansion is inclusive of Current Ope
Slide 67: Pueblo Viejo
Pueblo Viejo New Tailings Facility Unlocks Resource Conversion ROYAL GOLD, INC. | INVESTOR UPDATE | APRIL 2023 67
Slide 68: World Class Operation to Continue Through 2044
World Class Operation to Continue Through 2044 Pueblo Viejo, Dominican Republic P&P M&I Inf. Reserves & Resources1 (Moz) 12 12 0.3 (60% Barrick share, Dec. 31, 2022) Reserve life2 (yrs) 22 Royal Gold interest: 2022 2021 2020 Revenue (US$M) $85.9 $109.7 $110.6 Initial Threshold Thereafter Gold stream
Slide 69: Mount Milligan
Mount Milligan Updated Mine Plan Extends Life to 2033 ROYAL GOLD, INC. | INVESTOR UPDATE | APRIL 2023 69
Slide 70: New 43-101 Report Provides Production to 2033
New 43-101 Report Provides Production to 2033 Mount Milligan, British Columbia, Canada P&P M&I Inf. Reserves & Resources (Moz) 2.6 1.7 0.1 (Dec. 31, 2022) (Mlb) 902 695 8 Reserve life (yrs) 11 Royal Gold interest: 2022 2021 2020 Revenue (US$M) $180.5 $173.1 $149.6 LOM Rate • 43-101 report filed Nove
Slide 71: Revenue Growth Expected from Development Assets
Revenue Growth Expected from Development Assets In production Several projects within the portfolio are advancing with production expected in the near term Defined startup date Longer-dated production KING OF THE HILLS – commercial production achieved in December 2022 GOLDRUSH (Cortez) – Record of D
Slide 72: King of the Hills Open Pit and Underground Mining Underway
King of the Hills Open Pit and Underground Mining Underway King of the Hills, Western Australia P&P M&I Inf. Reserves & Resources (Jun. 30, 2022) Gold (Moz) 2.7 0.9 1.2 Reserve life1 (yrs) 15 Royal Gold interest: 2022 2021 2020 Revenue2 (US$M) 0.9 0.2 -- NSR royalty (%) 1.5% • Commercial production
Slide 73: First Production on Track for H2 2023 at Bellevue Gold
First Production on Track for H2 2023 at Bellevue Gold Bellevue Gold, Western Australia P&P M&I Inf. Reserves (Jun. 2022) & Resources (May. 2022) Gold (Moz) 1.3 0.4 1.5 Mine life1 (yrs) +10 Royal Gold interest: NSR royalty (%) 2.0% 1. Mine life includes 27.6% Inferred resources. Bellevue Gold ASX Re
Slide 74: First Production Expected from Côté Gold in Early 2024
First Production Expected from Côté Gold in Early 2024 Côté Gold, Northeastern Ontario, Canada P&P M&I Inf. Reserves & Resources (Dec. 31, 2022) Gold (Moz) 7.2 3.0 3.8 Reserve life1 (yrs) +18 Royal Gold interest: NSR royalty2 (%) 2.0% 1. Mine life based on August 2022 Technical Report. 2. Royalty co
Slide 75: Hochschild Targeting First Production from Mara Rosa in 2024
Hochschild Targeting First Production from Mara Rosa in 2024 Mara Rosa, Brazil P&P M&I Inf. Reserves & Resources (Aug. 2020) Gold (Moz) 0.9 0.3 0.0 Reserve life1 (yrs) 10 Royal Gold interest: NSR royalty2 (%) 1.0% and 1.75% 1. Initial mine life based on August 2020 Feasibility Study. 2. 1.0% NSR roy
Slide 76: Manh Choh First Production Expected H2 2024
Manh Choh First Production Expected H2 2024 Manh Choh, Alaska, USA P&P M&I Inf. Reserves & Resources (Dec. 31, 2022)1 Gold (Moz) 1.0 0.1 0.0 Silver (Moz) 1.7 0.2 0.0 Reserve life2 (yrs) 4.5 Royal Gold interest: NSR royalty (%) 3% (all metals) 28% (silver only) 1. 100% basis. 2. Mine plan consists of
Slide 77: First Gold at Back River Expected in Q1 2025
First Gold at Back River Expected in Q1 2025 Back River, Nunavut, Canada P&P M&I Inf. Reserves (Jan 15, 2021) & Resources (Dec. 31, 2020) Gold (Moz) 3.6 2.7 2.9 Reserve life1 (yrs) 15 Royal Gold interest: NSR royalty2 (%) 1.95% GSR on Goose Lake and 2.35% GSR on George Lake 1. Based on March 2021 Fe
Slide 78: High Potential Targets Located Near Infrastructure at Ruby Hill
High Potential Targets Located Near Infrastructure at Ruby Hill Ruby Hill, Nevada, USA P&P M&I Inf. Ruby Hill Reserves & Resources (Oct. 22, 2021) Gold – Open Pit (Moz) -- 3.9 2.1 Gold – Underground (Moz) -- 0.2 1.6 Reserve life (yrs) -- Royal Gold interest: NSR royalty1 (%) 3.0% 1. Royal Gold holds
Slide 79: Our Approach to Value and Returns
Our Approach to Value and Returns
Slide 80: Our Approach to Value and Returns – Topics
Our Approach to Value and Returns – Topics DCF VALUATION AND HOW WE THINK ABOUT VALUE DISCOUNT RATES AND THE ROYALTY/STREAMER MODEL DUE DILIGENCE IS A KEY VALUE DRIVER LONG LIFE ASSETS PROVIDE SUSTAINABLE RETURNS ROYAL GOLD, INC. | INVESTOR UPDATE | APRIL 2023 80
Slide 81: DCF Valuation and How We Think About Value
DCF Valuation and How We Think About Value DCF most impacted by: RGLD approach: 1. Gold price assumption 1. Provide investors with exposure to gold price via long-life assets 2. Discount rate assumption 2. Business model provides for relatively lower risk than producers 3. Life extension / productio
Slide 82: Gold Prices Are Inherently Difficult to Predict
Gold Prices Are Inherently Difficult to Predict Our strategy is not to predict gold prices, but to provide investors with gold price exposure • Gold price volatility means the spot price at announcement can be meaningfully different from that of the date of agreement • Long life assets provide value
Slide 83: Actual Gold Price Exposure has Contributed to Revenue
Actual Gold Price Exposure has Contributed to Revenue • Flat price outlook on date of acquisition has been a conservative assumption $900 $846 Cumulative Net Revenue to end of 2022 $800 $733 $700 $600 $500 $474 $400 $400 $357 $363 $322 $300 $281 $200 $135 $106 $109 $100 $76 $0 1 2 Andacollo Pueblo V
Slide 84: Our Cost Structure Provides Material Benefits from Rising Gold Price
Our Cost Structure Provides Material Benefits from Rising Gold Price Producer Royalty/streamer • Holding gold price flat compensates for • Holding the gold price flat understates the value for inflation effects the royalty business model, especially as gold is an inflation hedge 1 120% $/oz $/oz Fla
Slide 85: Discount Rates and the Royalty/Streamer Model
Discount Rates and the Royalty/Streamer Model Trading multiples for different business models are more comparable if appropriate discount rates are used Industry practice Royalty/streamer model is fundamentally different • 5% discount rate for all precious metal equities • Lower risk to CF projectio
Slide 86: Discount Rates Should Reflect Risk
Discount Rates Should Reflect Risk Gold sector valuations often assume a standard 5% discount rate for all companies and assets Discount rates should be adjusted: • Assets – should be informed by specific factors and based on due diligence • Business model – Royalty/streamer top-line revenue exposur
Slide 87: Extensive Technical Due Diligence Identifies the Right Assets
Extensive Technical Due Diligence Identifies the Right Assets External return estimates do not include the benefit of detailed reviews • Unique technical teams with appropriate expertise are assembled for each opportunity • Due diligence process is comprehensive and lengthy Cortez Recent Transaction
Slide 88: Our Investing Success Rate is High
Our Investing Success Rate is High Royal Gold is a good steward of shareholder capital $6,000 Total Invested $5,000 Capital $4,876 • Impairments have been limited over a long investing history • ~2.6% of Total Invested USD Millions $4,000 Pascua Lama, Pascua Lama Phoenix Gold, and royalty remains in
Slide 89: The Right Assets Should Show Return Growth Over Time
The Right Assets Should Show Return Growth Over Time The business model works when you get more than what you paid for • Assets with growth potential provide multiples of payback and higher returns as mine lives lengthen 19.2% 14.5% 9.6% IRR at Deal Date 8.2% 8.6% 8.7% 7.6% IRR at December 2022 6.3%
Slide 90: Assets with Growth Potential Provide Excess Returns Over Time
Assets with Growth Potential Provide Excess Returns Over Time Royal Gold has a track record of adding value through investing in assets with growth potential • As of December 31, 2022, cash flow received to date and forward Street estimates of stream/royalty net asset values exceed initial investmen
Slide 91: Takeaways: Our Approach to Value and Returns
Takeaways: Our Approach to Value and Returns Royal Gold’s investment horizon is long term Royal Gold has a successful record of investing in the right assets 1. Long-life assets provide investors with exposure to gold price optionality 2. Risk is reduced due to low-cost business model and portfolio
Slide 92: Capital Allocation and Financing Strategy
Capital Allocation and Financing Strategy
Slide 93: Capital Allocation and Financing Strategy – Topics
Capital Allocation and Financing Strategy – Topics HISTORY OF GROWTH WITHOUT EQUITY DILUTION ROYAL GOLD IS POSITIONED WELL WITH STRONG CASH FLOW, LIQUIDITY AND BALANCE SHEET ROYAL GOLD, INC. | INVESTOR UPDATE | APRIL 2023 93
Slide 94: Long Record of Accretive Growth
Long Record of Accretive Growth Since calendar year 2000: $5.5B Revenue 64x Cumulative Revenue Operating Cash Flow 99x $3.5B Cumulative Operating Cash Flow Cash G&A Expenses 16x $324M Cum. Cash G&A1 Expenses Avg. Gold Price 6x Up to $1,800 /ounce Shares Outstanding 4x Only 65.6M shares Change from C
Slide 95: Growth Financed with Cash Flow and Debt is Accretive to Shareholders
Growth Financed with Cash Flow and Debt is Accretive to Shareholders • Royal Gold has the lowest share count in the VanEck Vectors Gold Miners ETF (“GDX”) 120% AEM 100% Indexed Share Count (2015=0%) 80% RGLD share count has increased <1% since 2015 60% GOLD NEM 40% FNV 20% WPM 0% RGLD 2015 2016 2017
Slide 96: 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 $250M accordion feature Current Leverage: 0.96x • Strong and diversified syndicate: BNS, CIBC, BofA, BMO, NBF, RBC, GS, TD • Maturity date: July 7, 2026 •
Slide 97: Strong Balance Sheet and Undrawn Credit Facility Provide Liquidity
Strong Balance Sheet and Undrawn Credit Facility Provide Liquidity Liquidity1 Credit Facility Balance April 20, 2023 $US M $US M $122M $575 WORKING CAPITAL $500 $547M $75 TOTAL AVAILABLE LIQUIDITY1 $425M $575M UNDRAWN CREDIT FACILITY DRAWN ON CREDIT FACILITY Balance, Dec. 31, 2022 March 6 repayment
Slide 98: Takeaways: Capital Allocation and Financing Strategy
Takeaways: Capital Allocation and Financing Strategy Royal Gold has a long history of disciplined capital allocation Royal Gold is in a strong position to grow accretively 1. High-margin business provides consistent cash flows 2. Conservative use of debt provides accretive growth to shareholders 3.
Slide 99: Q&A Session
IP rexmcowwive Q&A Session
Slide 100: Appendix
I> RoyYALGOLD,INC
Slide 101: Non-GAAP Measures
Non-GAAP Measures Non-GAAP Financial Measures and Certain Other 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”).
Slide 102: Non-GAAP Measures
Non-GAAP Measures Non-GAAP Financial Measures and Certain Other 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 inte
Slide 103: Non-GAAP Measures
Non-GAAP Measures Reconciliation of non-GAAP financial measures to U.S. GAAP measures Adjusted EBITDA and Net cash to TTM adjusted EBITDA: Tw elve Months Ended Decem ber 31, (amounts in thousands) 2022 2021 2020 2019 2018 Net income (loss) $ 56,700 274,940 215,334 163,346 (95,092) Depreciation, depl
Slide 104: Non-GAAP Measures
Non-GAAP Measures Reconciliation of non-GAAP financial measures to U.S. GAAP measures (cont.) Cash G&A: Three Months Ended The Year Ended December 31, December 31, (amounts in thousands) 2022 2021 2022 2021 General and administrative expense $ 8,815 $ 8,034 $ 34,612 $ 29,306 Non-cash employee stock
Slide 105: Non-GAAP Measures
Non-GAAP Measures Reconciliation of non-GAAP financial measures to U.S. GAAP measures (cont.) Free cash flow: Three Months Ended The Year Ended December 31, December 31, (amounts in thousands) 2022 2021 2022 2021 Net cash provided by operating activities $ 101,026 $ 118,898 $ 417,345 $ 461,869 Acqui
Slide 106: Non-GAAP Measures
Non-GAAP Measures Reconciliation of non-GAAP financial measures to U.S. GAAP measures (cont.) 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 measure
Slide 107: 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 108: Investor Relations Contact
Tel. 303.573.1660 investorrelations@royalgold.com www.royalgold.com