Royal Gold, Inc. · NASDAQ:RGLD
Royal Gold — Denver Gold Forum 2012
40 slides from Royal Gold's conference presentation, September 2012
Slide 1: Denver Gold Forum
Denver Gold Forum SEPTEMBER 2012 Page 1
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Slide 3: 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
Slide 4: Royal Gold Profile
Royal Gold Profile World Class Royalty Company >$5B precious metals royalty and streaming company Exploration Focused on gold Junior Operators Designed to provide: Intermediate Operators A lower risk investment vehicle Index Funds A premium return Major Operators Return Portfolio of quality assets E
Slide 5: Royal Gold Business Model: Diversification by Property
Royal Gold Business Model Lower Risk Attributes Asset diversification Stable host countries Experienced operators Fixed costs Diversification by Property Revenue Net Gold Equivalent Reserves 1,2 (Fiscal 2012) (as of 12/31/11) Andacollo Voisey's Bay Penasquito Mt Milligan Andacollo Penasquito Holt Mu
Slide 6: Royal Gold Business Model: Diversification by Country
Royal Gold Business Model Lower Risk Attributes Asset diversification Stable host countries Experienced operators Fixed costs Diversification by Country Revenue Net Gold Equivalent Reserves 1,2 (Fiscal 2012) (as of 12/31/11) Chile Canada Mexico US Australia Other Canada Chile US Mexico Australia Oth
Slide 7: Royal Gold Business Model: Diversification by Operator
Royal Gold Business Model Lower Risk Attributes Asset diversification Stable host countries Experienced operators Fixed costs Diversification by Operator Revenue Net Gold Equivalent Reserves 1,2 (Fiscal 2012) (as of 12/31/11) Teck Vale Goldcorp Thompson Creek Teck Barrick Barrick St Andrew Alamos Go
Slide 8: Royal Gold Business Model: Cash Margin
Royal Gold Business Model Lower Risk Attributes Royal Gold Cash Margin 1,800 Asset diversification 1,600 1,400 Stable host countries 1,200 $/Ounce 1,000 800 Experienced operators 600 400 200 Fixed costs 0 2008 2009 2010 2011 2012 (Fiscal Years) Margin Production Taxes Cash Cost of Operations Industr
Slide 9: Royal Gold Business Model: Reserve Growth
Royal Gold Business Model Premium Return Attributes No cost reserve growth Efficient use of capital Net Gold Equivalent Reserves 2,3 8 Financial results 7 6 Ounces/Millions Gold Reserve Replacement 1 5 4 95 75 3 Ounces/Millions 55 2 35 1 15 -5 0 2007 2008 2009 2010 2011 -25 Beginning Reserve Reserve
Slide 10: Royal Gold Business Model: Shareholder Value Created
Royal Gold Business Model Premium Return Attributes No cost reserve growth Efficient use of capital Financial results 6.0 Market Capitalization 5.0 4.0 $3.7B Shareholder $/Billions Value 3.0 Created 2.0 1.0 $1.6B in Equity Issued 0.0 Jun '02 Sept '02 Dec '02 Sept '05 Jan '07 Apr '07 Oct '07 Mar '08
Slide 11: Royal Gold Business Model: Financial Results and Dividend Growth
Royal Gold Business Model Premium Return Attributes No cost reserve growth Efficient use of capital Financial results Financial Results Dividend Growth 5.00 0.70 4.50 0.60 4.00 3.50 0.50 3.00 $/Share 0.40 $/Share 2.50 2.00 0.30 1.50 0.20 1.00 0.10 0.50 0.00 0.00 2008* 2009 1 2010 2 2011 2012 3 2008
Slide 12: Portfolio of Quality Assets
Portfolio of Quality Assets 202 properties with royalty interests 39 producing 26 development 5 cornerstone 39 Producing Properties 1, 2 26 Development Properties 41 Evaluation Properties 3 96 Exploration Properties Page 12
Slide 13: Andacollo
Andacollo Region IV, Chile 75% NSR until 910K ounces are Royalty 1 produced; 50% NSR thereafter Reserves 2 1.8M ozs gold FY 2012 Production 3 51.4K ozs gold FY 2012 Revenue $64.1M Mine Life 20+ years Growth expected; fiscal 2012 Status production of 44,000 TPD vs. design capacity of 55,000 TPD Page
Slide 14: Peñasquito
Peñasquito Zacatecas, Mexico Royalty 2.0% NSR 16.5M ozs gold 6.2B lbs lead Reserves 1 960M ozs silver 14.8B lbs zinc 294.5K ozs gold 164.0M lbs lead FY 2012 Production 2 21.5M ozs silver 312.6M lbs zinc FY 2012 Revenue $28.5M Mine Life 22 years Growth expected; fiscal 2012 Status production of 93,50
Slide 15: Voisey's Bay
Voisey’s Bay Labrador and Newfoundland, Canada Royalty 2.7% NSR 1.2B lbs nickel Reserves 1 668M lbs copper 131.6M lbs nickel FY 2012 Production 2 107.2M lbs copper FY 2012 Revenue $36.0M Mine Life 3 20+ years Status Steady state; 6,000 TPD Page 15
Slide 16: Mt. Milligan Growth Catalyst
Mt. Milligan Growth Catalyst British Columbia, Canada Mine profile Open pit copper/gold porphyry Forecast Gold Production 2 300 Reserves 1 6.0M oz gold Ounces/Thousands 250 262,000 ozs of gold annually during 200 Est. production: 2,3 first six years; 195,000 ozs of gold 150 annually over life of min
Slide 17: Mt. Milligan Investment Summary
Mt. Milligan Investment Summary British Columbia, Canada Transaction summary: 25% of gold for $311.5M in July 2010 15% of gold for $270M in December 2011 12.25% of gold for $200M in August 2012 = 52.25% of gold for $781.5M Delivery payment of $435/oz or prevailing market price for life of mine (no i
Slide 18: Mt. Milligan Attractive Attributes
Mt. Milligan Attractive Attributes British Columbia, Canada Favorable geographic location Provincial and Federal permits Strong local and regional infrastructure Low cost power Adequate water Low strip ratio Road, rail and port access Support communities Long mine life Exploration upside Constructio
Slide 19: Mt. Milligan
Mt. Milligan J+ World Class Royalty Company. Page 19 IR roxcoro INC
Slide 20: Pascua-Lama Growth Catalyst
Pascua-Lama Growth Catalyst Region III, Chile 0.78% to 5.23% NSR Royalty 1,2 (5.23% above $800 gold) 14.7M ozs gold Forecast Royalty Ounces 5 Reserves 3 60 (limited to gold in Chile) Ounces (Thousands) 50 Capital $7.5B to $8.0B 40 30 Initial Production Mid CY 2014 20 800K to 850K ozs gold 10 Product
Slide 21: Significant Impact: Mt. Milligan and Pascua-Lama
Significant Impact Mt. Milligan and Pascua-Lama Long-term Impact of Mt. Milligan and Pascua-Lama Consensus Gold Equivalent Ounces 5 (Net gold equivalent ounces in thousands) 350 350 300 Net Gold Equivalent Ounces/Thousands 300 250 Ounces/Thousands 250 200 150 200 100 150 50 0 -0 100 FY 2012 1 Mt. Mi
Slide 22: Premium Investment Vehicle
Premium Investment Vehicle Lower Risk + Financial Performance + Growth Price Appreciation 1 2550% 23X 2250% 1950% 1650% 1350% 1050% 750% 5X 450% 2X 150% 0.1X -150% Exploration Jun-01 Jun-02 Jun-03 Jun-04 Jun-05 Jun-06 Jun-07 Jun-08 Jun-09 Jun-10 Jun-11 Jun-12 Royal Gold Gold Price Average of Senior
Slide 23: Footnotes
Footnotes Page 23
Slide 24: Footnotes
Footnotes PAGES 5,6,7. ROYAL GOLD BUSINESS MODEL silver; $3.43 copper; $0.90 lead; $0.83 zinc; $8.29 3. Reported production relates to the amount of 1. Net gold equivalent reserves are calculated by nickel; $13.74 cobalt; $13.61 molybdenum. metal sales subject to our royalty interest as applying the
Slide 25: Footnotes
Footnotes PAGE 20: PASCUA-LAMA 3. Net gold equivalent ounces at Mt. Milligan are 1. NSR sliding-scale schedule (price of gold per ounce – based upon an estimated annual production royalty rate): less than or equal to $325 – 0.78%; rate of 262,100 ounces of gold for the first six $400 – 1.57%; $500 –
Slide 26: Appendix A: Summary of Producing and Development Properties
Appendix A Summary of Producing and Development Properties Page 26
Slide 27: Properties: Producing Royalty Interests
Properties Producing Royalty Interests Royalty Reserves 1,2,3,4,5 Revenue Revenue Property Location Operator (gold unless otherwise Contained oz FY2012 FY2011 stated) Or lbs (M) ($ millions) ($ millions) 75% gold until 910,000 Chile, Andacollo Teck payable ounces; 50% 1.799 Au 64.1 43.6 Region IV th
Slide 28: Properties: Producing Royalty Interests
Properties Producing Royalty Interests Royalty Reserves 1,2,3,4,5 Revenue Revenue Property Location Operator (gold unless otherwise Contained oz FY2012 FY2011 stated) Or lbs (M) ($ millions) ($ millions) Australia, Gwalia Deeps St Barbara 1.5% NSR 2.301 Au 4.9 2.8 W. Australia Mexico, El Chanate AuR
Slide 29: Properties: Producing Royalty Interests
Properties Producing Royalty Interests Royalty Reserves 1,2,3,4,5 Revenue Revenue Property Location Operator (gold unless otherwise Contained oz FY2012 FY2011 stated) Or lbs (M) ($ millions) ($ millions) 17 0.001 Au 0.380 Ag 17 Australia, 1.5% NSR (gold, silver, Balcooma Kagara 32.466 Cu 17 1.5 0.3
Slide 30: Footnotes
Footnotes 1. Reserves have been reported by the operators as of December 31, 2011, with the exception of the following properties: Meekatharra (Reedys, Paddy’s Flat and Yaloginda) – March 2012; Taparko – January 2012; Mara Rosa – October 2011; Merlin Orbit and South Laverton – September 2011; Balcoo
Slide 31: Footnotes
Footnotes 4. Set forth below are the definitions of proven and probable reserves used by the U.S. Securities and Exchange Commission. “Reserve” is that part of a mineral deposit which could be economically and legally extracted or produced at the time of the reserve determination. “Proven (Measured)
Slide 32: Footnotes
Footnotes 13. The 2.0% GSR royalty applies to gold production from defined portions of the Taparko-Bouroum project. There is also a 0.75% GSR milling royalty applies to ore that is mined outside of the defined areas of the Taparko-Bouroum project that is processed through the Taparko facilities up t
Slide 33: Properties: Developing Royalty Interests
Properties Developing Royalty Interests Royalty Reserves 1,2,3,4,5 Property Location Operator (gold unless otherwise stated) (contained oz or lbs) M 6 Argentina, Don Nicolas Minera IRL 2.0% NSR 0.108 (Au); 0.130 (Ag) Santa Cruz Australia, ̶ 7 Avebury Minmetals Resources 2.0% NSR (nickel) Tasmania Au
Slide 34: Properties: Developing Royalty Interests
Properties Developing Royalty Interests Royalty Reserves 1,2,3,4,5 Property Location Operator (gold unless otherwise stated) (contained oz or lbs) M 6 Canada, 1.6% NSR (gold, silver, copper 0.124 (Au); 11.618 (Ag); Kutcho Creek Capstone Mining British Columbia and zinc) 462.687 (Cu); 734.300(Zn) Can
Slide 35: Footnotes
Footnotes 1. Reserves have been reported by the operators as of December 31, 2011, with the exception of the following properties: Meekatharra (Reedys, Paddy’s Flat and Yaloginda) – March 2012; Taparko – January 2012; Mara Rosa – October 2011; Merlin Orbit and South Laverton – September 2011; Balcoo
Slide 36: Footnotes
Footnotes 4. Set forth below are the definitions of proven and probable reserves used by the U.S. Securities and Exchange Commission. “Reserve” is that part of a mineral deposit which could be economically and legally extracted or produced at the time of the reserve determination. “Proven (Measured)
Slide 37: Footnotes
Footnotes 14. Reserves have not been updated since the 2008 43-101 technical report. 15. This is a metal stream whereby Royal Gold is entitled to 12.5% of payable gold until 48,000 ounces of payable gold have been delivered; 7.5% thereafter. 16. This is a metal stream whereby the purchase price for
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Slide 40: 1660 Wynkoop Street Denver, CO
1660 Wynkoop Street Denver, CO 80202-1132 303.573.1660 info@royalgold.com www.royalgold.com Page 40