Royal Gold, Inc. · NASDAQ:RGLD
Royal Gold — Morgan Stanley Wealth Management Presentation (September 2015)
24 slides from Royal Gold's conference presentation, Sep 16, 2015
Slide 1: Morgan Stanley Wealth Management Presentation
Morgan Stanley Wealth Management Presentation Tony Jensen President and Chief Executive Officer September 2015 SOLID PORTFOLIO. SOLID FUTURE.
Slide 2: 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 m
Slide 3: Preface – About Royal Gold (NASDAQ:RGLD)
Preface – About Royal Gold (NASDAQ:RGLD) Established in 1981 $3B Market cap 65 million shares outstanding 20 employees worldwide Record operating cash flow (Last 12 months) – $192M Nearly 200 properties with royalties and/or streaming interests: 38 producing assets 24 development stage assets 14
Slide 4: Preface – A Diversified Opportunity in Precious Metals
Preface – A Diversified Opportunity in Precious Metals We invest in mines in exchange for a piece of the life of mine production Nearly 40 producing assets in our Exploration portfolio No cost inflation concerns Junior Operators Quality assets/reputable partners ~70% of Revenue => EBITDA Intermediat
Slide 5: Preface – Record Volume in FY2015
Preface – Record Volume in FY2015 8% Compounded Annual Growth Rate Achieved Despite Pressure on the Gold Price 250 FY2010 through FY2015 200 Net Gold Equivalent Ounces (GEOs)1 150 (in thousands) Mt Milligan 100 Other 50 0 FY2010 FY2011 FY2012 FY2013 FY2014 FY2015 September 16, 2015 5
Slide 6: Preface – Record Operating Cash Flow in FY2015
Preface – Record Operating Cash Flow in FY2015 Cash from Operations Average Gold Price $250 $1,800 $1,600 $200 $1,400 Cash from operations $1,200 Average Gold Price/oz $150 (in millions) $1,000 $800 $100 $600 $50 $400 $200 $0 $0 FY2010 FY2011 FY2012 FY2013 FY2014 FY2015 September 16, 2015 6
Slide 7: What Makes Royal Gold Unique
What Makes Royal Gold Unique Quality Mount Milligan continues to produce at below world average production costs; new additions to the portfolio are all projected to produce in the lower half of worldwide production costs Growth Existing Portfolio Delivered Record Volume in FY2015; and the four new
Slide 8: Quality
Quality Focused investment criteria yields a world class portfolio 42% of our FY2015 revenues from Counterparty investment-grade rated companies1 Place Over 92% of our reserves from S&P “A” or higher rated countries1 Weighted average cash cost Andacollo, Peñasquito, Project ~$507/GEO, gross margin o
Slide 9: Quality Reflected in Our World Class Portfolio
Quality Reflected in Our World Class Portfolio The only mine in the world with >1 million ounces of gold production per year at less than $700/oz all in sustaining costs Mt. Milligan Pueblo Viejo One of world’s lowest cost Mt. Milligan Peñasquito Goldcorp’s largest and lowest copper mines These five
Slide 10: Asset Quality And Investment History
Asset Quality And Investment History Average mine life of 14 years amongst largest investments, plus significant upside $1,000 25 Estimated Years of Remaining Reserves $900 $800 20 $700 $600 15 Millions $500 $400 10 $300 $200 5 $100 $- 0 Initial investment Cumulative net revenue through June 30, 201
Slide 11: Growth Investment Summary
Growth Investment Summary Four new streams added to the portfolio in recent months ($1.4B committed investments) Opportunistically reinvesting in our business Favorable point in the commodity cycle Focusing on high quality producing or near-term producing assets Diversifying revenue Pueblo Vie
Slide 12: Growth and Diversity from New Investments
Growth and Diversity from New Investments FY2015 Record Volume Plus Relative Contribution from New and Expanding Streams 100.00% 100% Mount Milligan 90.00% 300 Rainy River Golden Star Percentage of Total Net Revenue 80.00% Net Gold Equivalent Ounces (GEOs) Pueblo Viejo 70.00% (in thousands) 60.00% 2
Slide 13: Four New Growth Streams Added to the Portfolio
Four New Growth Streams Added to the Portfolio Estimated Effective Annual Net Date or Total Operator Property Strategic Rationale GEO’s (1st 5 Estimated Investment years) Startup Producing; one of only 3 mines in July 1, 2015 - the world to produce >1m oz per 50,500 Au Barrick Pueblo Viejo year; fir
Slide 14: New Business Transforming the RGLD Portfolio – Pueblo Viejo
New Business Transforming the RGLD Portfolio Pueblo Viejo Reserves1,3: 15.5m oz (Au) 97.2m oz (Ag) Resources : 10.5m oz (Au) 2,3 61.2m oz (Ag) Production3: 1.11m oz (Au) 3.85m oz (Ag) AISC3: $ 588/oz Mine Life: 20+ years Au Stream4: 7.5%/3.75% Ag Stream4: 75%/37.5% Cash Price4: 30-60% of Spot Barric
Slide 15: New Business Transforming the RGLD Portfolio – Rainy River
New Business Transforming the RGLD Portfolio RAINY RIVER Reserves1: 3.8m oz (Au) 9.4m oz (Ag) Resources2: 2.9m oz (Au) 10.0m oz (Ag) Production3: 325,000 oz (Au) AISC3: $ 670/oz Mine Life : 3 14 years Start-up: Mid 2017 Au Stream4: 6.5%/3.25% Ag Stream4: 60%/30% Cash Price4: 25% of Spot September 16
Slide 16: New Business Transforming the RGLD Portfolio – Andacollo
New Business Transforming the RGLD Portfolio ANDACOLLO Reserves1,3: 1.6m oz (Au) Resources2,3: 0.4m oz (Au) Production3: 41,900 oz (Au) AISC: NA Mine Life: 20+ years Au Stream4: 100%/50% Cash Price4: 15% of Spot September 16, 2015 16
Slide 17: New Business Transforming the RGLD Portfolio – Wassa/Prestea
New Business Transforming the RGLD Portfolio WASSA/PRESTEA Reserves1,3: 1.9m oz (Au) Resources2,3: 6.6m oz (Au) Production3: 260,788 oz (Au) AISC3: $ 1,252/oz WUG AISC : $ 778/oz 4 PUG AISC4: $ 519/oz Mine Life : 4 5-9 years Au Stream5: 8.5/5.0/3.0% Cash Price5: 20-30% of Spot September 16, 2015 17
Slide 18: Opportunity
Opportunity Positive Market Acceptance of our Streaming Product Share Price Performance at Announcement1 Counterparty Shareholder Benefits Attractive cost of capital with +27.29% advantageous NPV/share or cash flow/share basis +35.0% Lower financing risk with no fixed amortization schedule, no h
Slide 19: Consistent dividend growth demonstrates ability to balance growth with return of capital
Opportunity Consistent dividend growth demonstrates ability to balance growth with return of capital $1.00 $0.90 $0.80 $0.70 Annual Dividends Paid Per Share $0.60 $0.50 $0.40 $0.30 $0.20 $0.10 $0.00 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 September 16, 2015 19
Slide 20: Endnotes
Endnotes SOLID PORTFOLIO. SOLID FUTURE.
Slide 21: Endnotes
Endnotes Many of the matters in these endnotes and the accompanying slides constitute forward looking statements and are subject to numerous risks, which could cause actual results to differ. See complete Cautionary Statement on page 2. PAGE 5 RECORD VOLUME IN FY2015 1. Royal Gold defines Gold Equiv
Slide 22: Endnotes (cont.)
Endnotes (cont.) Many of the matters in these endnotes and the accompanying slides constitute forward looking statements and are subject to numerous risks, which could cause actual results to differ. See complete Cautionary Statement on page 2. PAGE 15 NEW BUSINESS TRANSFORMING THE RGLD PORTFOLIO –
Slide 23: Endnotes (cont.)
Endnotes (cont.) Many of the matters in these endnotes and the accompanying slides constitute forward looking statements and are subject to numerous risks, which could cause actual results to differ. See complete Cautionary Statement on page 2. PAGE 17 NEW BUSINESS TRANSFORMING THE RGLD PORTFOLIO –
Slide 24: SOLID PORTFOLIO. SOLID FUTURE.
1660 Wynkoop Street Denver, CO 80202-1132 303.573.1660 info@royalgold.com www.royalgold.com SOLID PORTFOLIO. SOLID FUTURE.
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