Royal Gold, Inc. · NASDAQ:RGLD
Royal Gold — Bank of America Merrill Lynch Global Metals and Mining Conference 2010
37 slides from Royal Gold's conference presentation, May 2010
Slide 1: Bank of America Merrill Lynch Global Metals and Mining Conference
Bank of America Merrill Lynch Global Metals and Mining Conference May 2010
Slide 2: Cautionary Statement Under the Private Securities Litigation Reform Act
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: Agenda
Agenda Execution of Growth Strategy Expanded Royalty Portfolio Drivers for Future Growth
Slide 4: Execution of Growth Strategy
Execution of Growth Strategy
Slide 5: Transformational Growth
Transformational Growth January – February 2010 completion of: Andacollo gold royalty International Royalty Corporation (IRC) Total investment (2005-2010): $1.4B 1,650 IRC 1,450 1,250 Investment ($ Millions) 1,050 Andacollo El Chanate and Marigold Barrick Portfolio 850 Battle Mountain 650 Pascua-Lam
Slide 6: Transformational Growth: Andacollo
Transformational Growth January – February 2010 completion of: Andacollo gold royalty International Royalty Corporation (IRC) Total investment (2005-2010): $1.4B 1,650 IRC 1,450 1,250 Investment ($ Millions) 1,050 Andacollo Andacollo El Chanate and Marigold Barrick Portfolio 850 Interest: 75% of gol
Slide 7: Transformational Growth: Andacollo and IRC
Transformational Growth January – February 2010 completion of: IRC Andacollo gold royalty Interest: 80 royalty properties International Royalty Corporation (IRC) 11 producing royalties, including Voisey’s Bay Total investment (2005-2010): $1.4B 10 development royalties, including Pascua-Lama 59 expl
Slide 8: Asset Diversification and Balance
Asset Diversification and Balance Revenue diversification achieved New long life mines replace maturing assets and provide growth In 2013, 60% of revenues expected from mines with lives greater than 15 years 2004 CY Revenue 2009 CY Revenue 2013E CY Revenue 1 Cortez Cortez Siguiri Nevada Voisey’s Bay
Slide 9: Strong Gold Focus
Strong Gold Focus Commissioning of near-term projects will grow precious metal exposure Precious metals dominant, long-term growth profile Chile Mexico Canada Australia Africa Andacollo Peñasquito Canadian Malartic Gwalia Deeps Inata Pascua-Lama Dolores Wolverine South Laverton Holt Royal Gold 1 IRC
Slide 10: 2010 Acquisition Reserve Growth
2010 Acquisition Reserve Growth Precious metal reserves subject to royalties increased 25% to 99.1M ounces 1 Precious metals equity reserves increased 131% to 3.7M ounces 1 Reserves Subject to Royalties Royalty Equity Reserves (calendar years ended December 31) (calendar years ended December 31) 120
Slide 11: Favorable Geopolitical Distribution of Revenue
Favorable Geopolitical Distribution of Revenue Currently 68% of revenue from United States, Mexico, Canada, Chile and Australia Projected 95% of revenue from United States, Mexico, Canada, Chile and Australia in 2013 Royal Gold 1 IRC 1 Pro Forma 1 2013E 2 United States Mexico Canada Chile Australia
Slide 12: Expanded Royalty Portfolio
lf A ROYALGOLD,INC The Gold Standard of Royalty Companies Expanded Royalty Portfolio
Slide 13: 56 Producing and Development Properties
56 Producing and Development Properties Properties not shown: 3 producing oil and gas royalties See footnotes on page 26 136 Evaluation/Exploration properties
Slide 14: Key Assets CY 2009
Key Assets CY 2009 Taparko (Burkina Faso) Taparko Royalty: 1 TB-GSR1: 15%; TB-GSR2: 0.0% to 10%; TB-GSR3: 2.0% Reserves: 2,3 0.7M oz (Au) Cortez - Pipeline Mining Complex (U.S.) Cortez Royalty: GSR1 and GSR2: 0.4% to 5.0%; GSR3: 0.71%; NVR1: 0.39% Reserves: 3 5.2M oz (Au) Robinson Robinson (U.S.) Ro
Slide 15: Key Assets 2013
Key Assets 2013 Peñasquito (Mexico) Taparko Royalty: 2.0% NSR Reserves: 1 17.8M oz (Au) 1.1B oz (Ag) 15.9B lbs (Zn) 7.2B lbs (Pb) Cortez Andacollo (Chile) Royalty: 2 75% of gold production (NSR) Reserves: 1 1.6M oz (Au) Robinson Tier One Pascua-Lama (Chile) Royalty: 3 0.63% to 4.23% NSR 80% of Estim
Slide 16: Peñasquito (Goldcorp – Mexico)
Peñasquito (Goldcorp – Mexico) Royalty: 2.0% NSR (all metals) 40 Precious Metals Reserve Profile 35 Reserves: 1 17.8M oz (Au) Gold Equivalent Ounces 3 30 1.1B oz (Ag) 25 15.9B lbs (Zn) (millions) 20 7.2B lbs (Pb) 15 CY’09 production (actual): 10 5 89,012 oz (Au) - 2006 2007 2008 2009 3.4M oz (Ag) Go
Slide 17: Andacollo (Teck – Chile)
Andacollo (Teck – Chile) Royalty: 75% of gold until 910,000 payable ounces; 50% thereafter (NSR) Reserves: 1.6M oz Au 1 Production: Commissioning substantially complete Commercial production: First-half 2010 55,000 tonnes/day mill capacity Estimated annual production: 2 55,000 oz (Au) (in concentrat
Slide 18: Pascua-Lama (Barrick – Chile)
Pascua-Lama (Barrick – Chile) Royalty: See chart 1,2 Gold Royal Gold IRC Combined Price/ Royalty Rate Royalty Rate Royalty Rate Oz ($) (NSR) (NSR) (NSR) Reserves: 3,4 14.6M oz (Au) <325 0.16% 0.47% 0.63% Estimated production: 5 400 0.32% 0.94% 1.26% 500 0.56% 1.63% 2.19% Start-up – 2013 600 0.73% 2.
Slide 19: Voisey's Bay (Vale – Canada)
Voisey’s Bay (Vale – Canada) Royalty: 2.7% NSR Reserves: 1 1,581M lbs (Ni) 928M lbs (Cu) 78M lbs (Co) Production Capacity: 2 84.0M lbs (Ni) 67.2M lbs (Cu) Mine life: 20+ years 3 Actual royalty revenue (TTM): 4 $13.9M “Voisey’s Bay could continue producing as much as 50,000 metric tons a year through
Slide 20: Key Assets 2013
Key Assets 2013 Cortez (Barrick) Location: U.S. Cortez Royalty: GSR1 and GSR2: 0.4% to 5.0%; GSR3: 0.71%; NVR1: 0.39% Reserves: 1 5.2M oz (Au) Leeville (Newmont) Location: U.S. Leeville Royalty: 1.8% NSR 1 Reserves: 1.8M oz (Au) Robinson (Quadra) Location: U.S. Robinson Royalty: 3.0% NSR 1 Reserves:
Slide 21: Key Assets 2013 (cont.)
Key Assets 2013 (cont.) Wolverine (Yukon Zinc) Wolverine Location: Canada Royalty: : 1 0.0% to 9.45% NSR Reserves: 2 0.2M oz (Au) 42.8M oz (Ag) Holt (St Andrew Goldfields) Location: Canada Holt Royalty: 3 0.00013 X gold price NSR (equal to 13% at $1,000/oz) Reserves: 4 0.5M oz (Au) Mulatos (Alamos)
Slide 22: Drivers for Future Growth
lf A ROYALGOLD,INC The Gold Standard of Royalty Companies Drivers for Future Growth
Slide 23: Effective Business Model
Effective Business Model Royalty Asset Distribution Focus on gold (number of properties 1) Producing Option value Development Economies of scale Evaluation Efficient Exploration 0 20 40 60 80 100 Precious Metals Polymetalic + Precious Metals Diamonds Other See footnotes on page 29
Slide 24: Effective Business Model
Effective Business Model Royalty Asset Distribution Focus on gold (number of properties 1) Producing Option value Development Economies of scale Evaluation Efficient Exploration 0 20 40 60 80 100 Precious Metals Polymetalic + Precious Metals Diamonds Other 140 Royal Gold’s Asset and 120 Revenue Grow
Slide 25: Effective Business Model
Effective Business Model Royalty Asset Distribution Focus on gold (number of properties 1) Producing Option value Development Economies of scale Evaluation Efficient Exploration Royal Gold vs. 0 20 40 60 80 100 Major Gold Mining Companies 100% (TTM – 3/31/10) Precious Metals Polymetalic + Precious M
Slide 26: Royal Gold Market Structure
Royal Gold Market Structure Market Information (as of 5/5/10) Dividend Growth 0.36 NASDAQ: RGLD; TSX: RGL 0.32 0.28 Market cap: $2.4B 0.26 0.22 Average daily volume (TTM): 743,000 Shares Outstanding Common: 1 49.2M (includes ~ 1.6M exchangeable shares) 2006 2007 2008 2009 2010 Insider ownership: 6%
Slide 27: Growth Pipeline
Growth Pipeline 1 Exploration Evaluation Development Construction Ramp-Up to Full Production Peñasquito Sulfide Processing Line 1 (2010) Dolores (2010) South Laverton (2010) Las Cruces (2010) Inata (2010) Andacollo (2010) Troy (2010) Wolverine (2010) Peñasquito Sulfide Processing Line 2 (2010) Canad
Slide 28: Growth Pipeline and Royalty Gold Equivalent Ounces
Growth Pipeline 1 Exploration Evaluation Development Construction Ramp-Up to Full Production 2013E Estimated Growth Pipeline 4.5 Peñasquito Sulfide Processing Line 1 (2010) Dolores (2010) South Laverton (2010) 160 Las Cruces (2010) Inata (2010) 140 Andacollo (2010) Production – Royalty Gold Equivale
Slide 29: Enhanced Shareholder Return
Enhanced Shareholder Return Five-Year Total Shareholder Return (May 5, 2005 – May 5, 2010) 1 180% 161% 160% 140% 120% 120% 100% 80% 60% 40% 20% 0% Average of North American Royal Gold Majors 2 See footnotes on page 30
Slide 30: Footnotes
lf A ROYALGOLD,INC The Gold Standard of Royalty Companies Footnotes
Slide 31: Footnotes
Footnotes PAGE 6: ASSET DIVERSIFICATION AND BALANCE 1 2013 estimates assume development properties are brought into production and reach full-scale production on schedule and also assume certain metal prices and currency exchange rates. See page 31 for additional information regarding 2013 estimates
Slide 32: Footnotes (cont.)
Footnotes (cont.) PAGE 12: KEY ASSETS CY 2009 1 Royalty percentages: TB-GSR1 – 15.0%; TB-GSR2 – 4.3% when the average monthly gold price ranges between $385 and $430 per ounce. Outside of this range, the royalty rate is calculated by dividing the average monthly gold price by 100 for gold prices abo
Slide 33: Footnotes (cont.)
Footnotes (cont.) PAGE 14: PENASQUITO (GOLDCORP – MEXICO) 1 Reserves as of December 31, 2009. 2 Based on (1) NI 43-101 Peñasquito Technical Report dated March 10, 2009; (2) the operator’s stated life of mine average production of 500,000 ounces of gold, 30 million ounces of silver, 450 million pound
Slide 34: Footnotes (cont.)
Footnotes (cont.) PAGE 18: KEY ASSETS 2013 1 Reserves as of December 31, 2009. 2 Royalty is subject to a buy-down right of $1.0 to $1.5 million depending on the price of gold, exercisable at any time, for one half of the royalty. 3 Reserves as of December 31, 2008. PAGE 19: KEY ASSETS 2013 (cont.) 1
Slide 35: Footnotes (cont.)
Footnotes (cont.) PAGE 22: ROYAL GOLD MARKET STRUCTURE 1 Includes approximately 1.6M exchangeable shares and approximately 26,000 shares in reserve account related to IRC transaction. 2 Calculated as dividends paid divided by cash flow from operations for the twelve months ended March 31, 2009. 3 CY
Slide 36: Footnotes (cont.)
Footnotes (cont.) 2013 ESTIMATE FOOTNOTE: All 2013 pro forma calculations include certain properties that are currently in development stage, and we have assumed for purposes of the 2013 pro forma calculations that such development stage properties are brought into production and achieve full-scale
Slide 37: 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 37
Royal Gold — Bank of America Merrill Lynch Global Metals and Mining Conference 2010 on 6ix