Royal Gold, Inc. · NASDAQ:RGLD
Royal Gold — Denver Gold Forum September 2009
52 slides from Royal Gold's conference presentation, September 2009
Slide 1: Denver Gold Forum
Denver Gold Forum September 2009
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: Key Attributes
Key Attributes Efficient and effective business model Proven performance Core royalties on high-quality, long-lived mines Strong development pipeline Growing cash flow Royalty Asset Distribution Revenue by Metal Type (number of properties) (fiscal 2009) 13% Producing 3% Development Evaluation Explor
Slide 4: Performance
;, if. A ROYALGOLD,ING The Gold Standard of Royalty Companies Performance
Slide 5: Execution on Growth Strategy
Execution on Growth Strategy Increased reserves Expanded asset growth Diversification of revenue Strong financial growth Enhanced shareholder return
Slide 6: Reserve Growth
Reserve Growth 1 Gold reserves increased 30% to 64.2M ounces 2 Precious metals account for 82% of gold equivalent reserves 3 Organic growth has offset consumption over the last five years Gold Reserve Subject to Royalty Interests 120 100 Gold Equivalent Ounces 3 80 (millions) 60 40 20 2004 2005 2006
Slide 7: Reserve Growth
Reserve Growth 1 Gold reserves increased 30% to 64.2M ounces 2 Precious metals account for 82% of gold equivalent reserves 3 Organic growth has offset consumption over the last five years Gold Reserve Subject to Royalty Interests Gold Reserves Subject to Royalties (calendar years) 120 100 60 Gold Eq
Slide 8: Asset Growth
Asset Growth (December 2004) 1 1 Pipeline, including Crossroads deposit
Slide 9: Asset Growth
Asset Growth (September 2009) 1 Pipeline, including Crossroads deposit
Slide 10: Asset Growth
Asset Growth (September 2009) 1 Pipeline, including Crossroads deposit 2 Royal Gold acquired this property in the Battle Mountain transaction. The parties claiming interests in the mining concessions subject to this royalty have disputed any royalty obligation 3 Closing of Andacollo transaction pend
Slide 11: Asset Growth
Asset Growth (September 2009) 1 Pipeline, including Crossroads deposit 2 Royal Gold acquired this property in the Battle Mountain transaction. The parties claiming interests in the mining concessions subject to this royalty have disputed any royalty obligation 3 Closing of Andacollo transaction pend
Slide 12: Asset Growth
Asset Growth (September 2009) 1 Pipeline, including Crossroads deposit 2 Royal Gold acquired this property in the Battle Mountain transaction. The parties claiming interests in the mining concessions subject to this royalty have disputed any royalty obligation 3 Closing of Andacollo transaction pend
Slide 13: Revenue Diversification
Revenue Diversification 80 70 60 millions) 50 ($ mi 40 30 20 10 2005 2006 2007 2008 2009 (fiscal years ended June 30) Cortez - Pipeline Troy Peñasquito Dolores Twin Creeks Los Chancas Goldstrike - SJ Claims Robinson Joe Mann Benso El Toqui Leeville Mulatos El Limon El Chanate Mt. Goode Bald Mountain
Slide 14: Strong Financial Growth
Strong Financial Growth Gross Financial Results Per Share Financial Results $90 2.25 $80 2.00 $70 1.75 $60 1.50 llions) ($ millions ($ per share) $50 1.25 $40 1.00 $30 0.75 $20 0.50 $10 0.25 $0 0.00 2005 2006 2007 2008 1 2009 2 2005 2006 2007 2008 1 2009 2,3 (fiscal years ended June 30) (fiscal year
Slide 15: Enhanced Shareholder Return
Enhanced Shareholder Return Royal Gold vs. Gold Price and Index Five-Year Total Shareholder Return 1 (indexed June 30, 2004 = 100) (September 2004 - September 2009) 400 250% 222% 350 200% 300 250 150% 200 100% 91% 150 100 50% 50 0% 2004 2005 2006 2007 2008 2009 Average North Royal Gold American Majo
Slide 16: Property Overview
;, Ip A ROYALGOLD,ING The Gold Standard of Royalty Companies Property Overview
Slide 17: Key Producing and Development Properties
Key Producing and Development Properties 17
Slide 18: Mexico
lhe Gola Stanaa A Of IO) alty Companies
Slide 19: Chile
Companies Of Loyalty ay L aara Old Sta G ive
Slide 20: Canada
The Gold Standard of Royalty Compantes
Slide 21: Peñasquito (Goldcorp – Mexico)
Peñasquito (Goldcorp – Mexico) Royalty: 2.0% NSR (all metals) Reserve Profile Reserves: 1,2 17.4M oz (Au) 1.0B oz (Ag) 50 CY’09 production (est.): 70,000 oz (Au) 40 2.3M oz (Ag) Gold Equivalent Ounces 4 Estimated production start-up: 30 1st sulfide circuit - 2009 (millions) 2nd sulfide circuit - 201
Slide 22: Peñasquito (Goldcorp – Mexico)
Peñasquito (Goldcorp – Mexico) Royalty: 2.0% NSR (all metals) Reserve Profile Reserves: 1,2 17.4M oz (Au) 1.0B oz (Ag) 50 CY’09 production (est.): 70,000 oz (Au) 40 2.3M oz (Ag) Gold Equivalent Ounces 4 Estimated production start-up: 30 1st sulfide circuit - 2009 (millions) 2nd sulfide circuit - 201
Slide 23: Peñasquito (Goldcorp – Mexico)
Peñasquito (Goldcorp – Mexico) Royalty: 2.0% NSR (all metals) Reserves: 1,2 17.4M oz (Au) 1.0B oz (Ag) CY’09 production (est.): 70,000 oz (Au) 2.3M oz (Ag) Estimated production start-up: 1st sulfide circuit - 2009 2nd sulfide circuit - 2010 High pressure grind rolling circuit - 2010 Mine life: 25 ye
Slide 24: Peñasquito (Goldcorp – Mexico)
Peñasquito (Goldcorp – Mexico) Royalty: 2.0% NSR (all metals) Reserves: 1,2 17.4M oz (Au) 1.0B oz (Ag) CY’09 production (est.): 70,000 oz (Au) 2.3M oz (Ag) Estimated production start-up: 1st sulfide circuit - 2009 2nd sulfide circuit - 2010 High pressure grind rolling circuit - 2010 Mine life: 25 ye
Slide 25: Peñasquito (Goldcorp – Mexico)
Peñasquito (Goldcorp – Mexico) Royalty: 2.0% NSR (all metals) Project Schedule Reserves: 1,2 17.4M oz (Au) 1.0B oz (Ag) CY’09 production (est.): 70,000 oz (Au) 2.3M oz (Ag) Estimated production start-up: 1st sulfide circuit - 2009 2nd sulfide circuit - 2010 High pressure grind rolling circuit - 2010
Slide 26: Dolores (Minefinders – Mexico)
Dolores (Minefinders – Mexico) Royalty: 3.25% NSR (Au) 2.0% NSR (Ag) Reserves: 1 2.4M oz (Au) 126.6M oz (Ag) CY’09 production (est.): 2 85,000 oz (Au) 1.8M oz (Ag) Mine life: 15 years Annual royalty revenue potential: ~ $5.0M 3 1 Reserves as of March 25, 2008 (reserve numbers have not been updated t
Slide 27: Dolores (Minefinders – Mexico)
Dolores (Minefinders – Mexico) Royalty: 3.25% NSR (Au) 2.0% NSR (Ag) Reserves: 1 2.4M oz (Au) 126.6M oz (Ag) CY’09 production (est.): 2 85,000 oz (Au) 1.8M oz (Ag) Mine life: 15 years Annual royalty revenue potential: ~ $5.0M 3 1 Reserves as of March 25, 2008 (reserve numbers have not been updated t
Slide 28: Dolores (Minefinders – Mexico)
Dolores (Minefinders – Mexico) Royalty: 3.25% NSR (Au) Production Profile 2.0% NSR (Ag) 250 Reserves: 1 2.4M oz (Au) 126.6M oz (Ag) Gold Equivalent Ounces 3 200 CY’09 production (est.): 2 85,000 oz (Au) (thousands) 1.8M oz (Ag) 150 Mine life: 15 years 100 Annual royalty revenue potential: ~ $5.0M 3
Slide 29: Andacollo (Teck – Chile)
Andacollo (Teck – Chile) Royalty: 75% of gold until 910,000 payable ounces; 50% thereafter Ownership: 90% CDA (subsidiary of Teck Resources Limited) 10% Empresa Nacional de Minería (Chilean, state-owned mining company) Total consideration: $218M cash 1.2M shares Closing by January 29, 2010
Slide 30: Andacollo (Teck – Chile)
Andacollo (Teck – Chile) Royalty: 75% of gold until 910,000 payable ounces; 50% thereafter Ownership: 90% CDA (subsidiary of Teck Resources Limited) 10% Empresa Nacional de Minería (Chilean, state-owned mining company) Total consideration: $218M cash 1.2M shares Closing by January 29, 2010
Slide 31: Andacollo (Teck – Chile)
Andacollo (Teck – Chile) Royalty: 75% of gold until 910,000 payable ounces; 50% thereafter Ownership: 90% CDA (subsidiary of Teck Resources Limited) 10% Empresa Nacional de Minería (Chilean, state-owned mining company) Total consideration: $218M cash 1.2M shares Closing by January 29, 2010
Slide 32: Andacollo (Teck – Chile)
Andacollo (Teck – Chile) Royalty: 75% of gold until 910,000 payable ounces; 50% thereafter Ownership: 90% CDA (subsidiary of Teck Resources Limited) 10% Empresa Nacional de Minería (Chilean, state-owned mining company) Total consideration: $218M cash 1.2M shares Closing by January 29, 2010
Slide 33: Andacollo (Teck – Chile)
Andacollo (Teck – Chile) Royalty: 75% of gold until 910,000 payable ounces; 50% thereafter Ownership: 90% CDA (subsidiary of Teck Resources Limited) 10% Empresa Nacional de Minería (Chilean, state-owned mining company) Total consideration: $218M cash 1.2M shares Closing by January 29, 2010
Slide 34: Andacollo (Teck – Chile)
Andacollo (Teck – Chile) Royalty: 75% of gold until 910,000 payable ounces; 50% thereafter Ownership: 90% CDA (subsidiary of Teck Resources Limited) 10% Empresa Nacional de Minería (Chilean, state-owned mining company) Total consideration: $218M cash 1.2M shares Closing by January 29, 2010
Slide 35: Andacollo Hypogene Project
Andacollo Hypogene Project Sulfide plant production: Construction complete: 4Q’09 Commercial production: first half 2010 55,000 tonnes/day mill capacity Proven and probable reserves: 1 1.6M oz Au (394M tonnes at 0.13 gpt) Estimated annual production: 2 53,000 oz gold 76,000 tonnes copper 3 Estimated
Slide 36: Andacollo Hypogene Project
Andacollo Hypogene Project Sulfide plant production: Construction complete: 4Q’09 Commercial production: first half 2010 55,000 tonnes/day mill capacity Proven and probable reserves: 1 1.6M oz Au (394M tonnes at 0.13 gpt) Estimated annual production: 2 53,000 oz gold 76,000 tonnes copper 3 Estimated
Slide 37: Andacollo Hypogene Project
Andacollo Hypogene Project Sulfide plant production: Construction complete: 4Q’09 Commercial production: first half 2010 55,000 tonnes/day mill capacity Proven and probable reserves: 1 1.6M oz Au (394M tonnes at 0.13 gpt) Estimated annual production: 2 53,000 oz gold 76,000 tonnes copper 3 Estimated
Slide 38: Andacollo Hypogene Project
Andacollo Hypogene Project Sulfide plant production: Construction complete: 4Q’09 Commercial production: first half 2010 55,000 tonnes/day mill capacity Proven and probable reserves: 1 1.6M oz Au (394M tonnes at 0.13 gpt) Estimated annual production: 2 53,000 oz gold 76,000 tonnes copper 3 Estimated
Slide 39: Pascua-Lama (Barrick – Chile)
Pascua-Lama (Barrick – Chile) Royalty: 0.16 to 1.08% NSR > $800/oz gold = 1.08% royalty rate Reserves: 1,2 14.6M oz (Au) Estimated production: 3 Start-up – 2013 750,000 to 800,000 ounces of gold (average during first five years) 600,000 to 700,000 ounces of gold (average during life of mine) $200 to
Slide 40: Pascua-Lama (Barrick – Chile)
Pascua-Lama (Barrick – Chile) Royalty: 0.16 to 1.08% NSR > $800/oz gold = 1.08% royalty rate Reserves: 1,2 14.6M oz (Au) Estimated production: 3 Start-up – 2013 750,000 to 800,000 ounces of gold (average during first five years) 600,000 to 700,000 ounces of gold (average during life of mine) $200 to
Slide 41: Canadian Malartic (Osisko – Canada)
Canadian Malartic (Osisko – Canada) Royalty: 1 2.0 to 3.0% NSR Reserves: 2 4.7M oz (Au) Estimated production start-up: 2011 Mine life: 10 years Annual royalty revenue potential: ~ $6.0M 3 1 2.0% to 3.0% NSR royalty subject to buy-down right which could reduce the royalty rate to a range of 1.0% to 1
Slide 42: Canadian Malartic (Osisko – Canada)
Canadian Malartic (Osisko – Canada) Royalty: 1 2.0 to 3.0% NSR Reserves: 2 4.7M oz (Au) Estimated production start-up: 2011 Mine life: 10 years Annual royalty revenue potential: ~ $6.0M 3 Production Profile 3 700 Gold Ounces (thousands) 600 500 400 300 200 100 2011 2012 2013 2014 2015 2016 2017 2018
Slide 43: Holt (St Andrew Goldfields – Canada)
Holt (St Andrew Goldfields – Canada) Royalty: 1 0.00013 X gold price NSR $1,000/oz gold = 13% royalty rate Party responsible for royalty in dispute Reserves: 2 0.5M oz (Au) Estimated production start-up: 2010 Mine life: 7 years Annual royalty revenue potential: $8.0M 3 (life of mine average) 1 In No
Slide 44: Holt (St Andrew Goldfields – Canada)
Holt (St Andrew Goldfields – Canada) Royalty: 1 0.00013 X gold price NSR $1,000/oz gold = 13% royalty rate Party responsible for royalty in dispute Reserves: 2 0.5M oz (Au) Estimated production start-up: 2010 Mine life: 7 years Production Profile Annual royalty revenue potential: 120 Production Prof
Slide 45: Estimated Revenue Contribution – New Assets
Estimated Revenue Contribution – New Assets 1 100 90 80 70 60 ($ millions) 50 40 30 20 10 0 Dolores Andacollo Holt Peñasquito Canadian Pascua-Lama Estimated Total 2009 2010 2 2010 2 2011 2 Malartic 2013 2 New Revenue 2011 2 1 Refer to prior property slides for applicable footnotes 2 As estimated by
Slide 46: Estimated Revenue Contribution – New Assets
Estimated Revenue Contribution – New Assets 1 100 90 80 70 60 ($ millions) 50 40 30 20 10 0 Dolores Andacollo Holt Peñasquito Canadian Pascua-Lama Estimated Total Fiscal 2009 2009 2010 2 2010 2 2011 2 Malartic 2013 2 New Revenue Actual Royalty 2011 2 Revenue 1 Refer to prior property slides for appl
Slide 47: Drivers For Future Growth
;, Ip A ROYALGOLD,ING The Gold Standard of Royalty Companies Drivers For Future Growth
Slide 48: Expanding Money Supply and Deficit
Expanding Money Supply and Deficit United States Surplus/(Deficit) Our Exploding Money Supply (Annual percentage change in the monetary base, Jan. 1, 1961-April 1, 2009) Source: BMO Capital Markets; Fig. 35; September 4, 2009 2006 1961 1966 1971 1976 1981 1986 1991 1996 2001 2006 Source: Laffer Asso
Slide 49: Low Cost Structure
Low Cost Structure Insulated from increased operating costs No capital cost contributions required No environmental or closure costs incurred Total Cash Production Costs for Nevada Gold Producers, 1996 – 2008 1 950 850 750 ($ per ounce) 650 550 450 350 250 150 1996 1997 1998 1999 2000 2001 2002 2003
Slide 50: Low Cost Structure
Low Cost Structure Insulated from increased operating costs No capital cost contributions required No environmental or closure costs incurred Total Cash Production Costs for Royal Gold’s Asset Nevada Gold Producers, 1996 – 2008 1 and Revenue Growth vs. Cost 950 140 850 120 750 100 ($ per ounce) 650
Slide 51: Financial Strength
Financial Strength Market Information (as of 9/10/09) NASDAQ: RGLD; TSX: RGL Dividend Growth Market cap: $1.9B 0.32 Average daily volume (TTM): 898,000 0.28 0.26 Shares Outstanding 0.20 0.22 Common: 40.7M Insider ownership: 8% Financial (as of 9/10/09) Cash: $307M 1 2005 2006 2007 2008 2009 ($ per s
Slide 52: 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 52