Royal Gold, Inc. · NASDAQ:RGLD
Royal Gold — Scotiabank London Mining Day (June 2015)
28 slides from Royal Gold's conference presentation, June 2015
Slide 1: Scotiabank London Mining Day
Scotiabank London Mining Day Tony Jensen President and Chief Executive Officer June 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
Slide 3: What Makes Royal Gold Unique
What Makes Royal Gold Unique Growth Mount Milligan is proving transformational and providing an excellent platform for growth High quality properties, counterparties and Quality jurisdictions and record of strong returns We have approximately $1.4 billion in liquidity Opportunity and are balancing g
Slide 4: An Excellent Platform for Growth
An Excellent Platform for Growth Recent Financial Results compared to prior year quarter: Record volume of 60,832 Gold Equivalent Ounces (GEO’s), up 36%1 Revenue of $74.1 million, up 28% Adjusted EBITDA1 of $57.7 million, up 16% $14.3 million in dividends paid, up 5% Operating cash flow of $65.9 mil
Slide 5: Growth: Mount Milligan – Thompson Creek Metals
Growth Mount Milligan – Thompson Creek Metals Qtrly Run Rate at Design Capacity Mar 2015 Quarter Dec 2014 Quarter Sept 2014 Quarter June 2014 Quarter Mar 2014 Quarter Dec 2013 Quarter 0 10 20 30 Thousands of Mount Milligan ounces sold by Royal Gold Already our largest contributor, generating 26% of
Slide 6: Growth: Peñasquito – Goldcorp
Growth Peñasquito – Goldcorp1 RGLD 1.4% NSR Gold/Copper on ~30% of El Morro RGLD 2% NSR, Gold/Silver/Lead/Zinc at Peñasquito Contributed 10% of Royal Gold’s March quarterly revenue Peñasquito 2015 production volume expected to increase 20-30% Metallurgical Enhancement Process (MEP) feasibility study
Slide 7: Growth: Phoenix Gold Project – Rubicon Minerals
Growth Phoenix Gold Project – Rubicon Minerals1 Royal Gold commitment fully funded Expected to become one of Royal Gold’s top 10 revenue sources Mill commissioning process has commenced, projected startup mid-2015 Rubicon will deliver 6.3% of the gold from the Phoenix Gold Project until 135,000 ounc
Slide 8: Growth: Wassa, Bogoso and Prestea – Golden Star Resources
Growth Wassa, Bogoso and Prestea – Golden Star Resources Royal Gold to provide $130 million stream financing and a $20 million loan in stages to fund underground development projects at Wassa and Prestea Gold streams will be on Wassa, Bogoso and Prestea and will apply to all production from April 1,
Slide 9: Growth: Ilovitza – Euromax Resources
Growth Ilovitza – Euromax Resources Pre-feasibility study envisions a conventional open pit mine using large scale fleet for a planned 10 million tonne per year mill operation Former European Goldfields’ management team Current reserve of 2.45 million ounces of gold and 905 million pounds of copper,
Slide 10: Quality
Quality Focused investment criteria yields a world class portfolio 56% of our FY2014 revenues from Counterparty investment-grade rated companies1 Over 92% of our reserves from S&P Place “A” or higher rated countries1 Weighted average cash cost ~$591/GEO, Andacollo, Peñasquito, gross margin of 52% fo
Slide 11: Quality: Cash Margin by Operating Property
Quality Cash Margin by Operating Property Calendar Year 2014 90% 80% The operators of our royalties and streams recognized an average 52% gross margin in the calendar year 2014, which is an average cash cost 70% of $591 per gold equivalent ounce, on properties subject to our interests. 60% 52% avera
Slide 12: Quality: World class, long lived portfolio
Quality World class, long lived portfolio Mt. Milligan Stream: 52.25% of payable gold1 Contribution to FY2015 Q3 revenue Reserves2: 6.2M oz (Au) 40% or $29.7M Estimated Mine Life: 20+ Years (gross basis; 26% net) Andacollo Royalty3: 75% of Au production (NSR) Contribution to FY2015 Q3 revenue Reserv
Slide 13: Estimated Years of Remaining Mine Life
Quality Long mine lives amongst largest investments $1,000 25 $900 Estimated Years of Remaining Mine Life $800 20 $700 $600 15 $ Millions $500 $400 10 $300 $200 5 $100 $- 0 Initial investment Cumulative net revenue through December 31, 2014 Estimated remaining mine life 1 June 2015 13
Slide 14: Opportunity: Over $1.4 billion available
Opportunity Over $1.4 billion available at a time when royalty/stream financing is needed Capital to invest… Net of future commitments ($M) $1,410.0 Working capital & undrawn credit at 4-30-15 Liquidity at 4-30-15 $760M Working Capital $650M Revolver -$150.0 Golden Star Advance Payment & Loan Curren
Slide 15: Opportunity: Positive Market Acceptance of our Streaming Product
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 16: Opportunity: Consistent dividend growth
Opportunity Consistent dividend growth demonstrates ability to balance growth with return of capital $1.00 $0.90 $0.80 $0.70 $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 June 2015 16
Slide 17: What Makes Royal Gold Unique
What Makes Royal Gold Unique Growth Mount Milligan is proving transformational and providing an excellent platform for growth High quality properties, counterparties and Quality jurisdictions and record of strong returns We have approximately $1.4 billion in liquidity Opportunity and are balancing g
Slide 18: Endnotes
Endnotes SOLID PORTFOLIO. SOLID FUTURE.
Slide 19: 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 4 GROWTH: AN EXCELLENT PLATFORM FOR GROWTH 1. On a gross b
Slide 20: Appendix A: Background
Appendix A: Background SOLID PORTFOLIO. SOLID FUTURE.
Slide 21: Royal Gold: The Quality Royalty / Streaming Name to Own
Royal Gold The Quality Royalty / Streaming Name to Own Longevity – in business since 1981 Near-Term Growth – already bought and paid for Exploration No cost inflation concerns Junior Operators Quality assets/reputable partners ~80% of Revenue => EBITDA Intermediate Operators $2.1 billion in investme
Slide 22: Alignment with Counterparties
Alignment with Counterparties Hypothetical example estimate for illustrative purposes only: Equity Stream 200koz/year gold project expansion, 2 year development, 12 yr mine life Current market cap $300,000,000 $300,000,000 Shares outstanding 200,000,000 200,000,000 Share price $1.50 $1.50 Financing
Slide 23: Alignment with Counterparties
Alignment with Counterparties Return of investment based No joint venture involvement on production Royal Gold provides additional No principal amortization or investor exposure maturity date 4-6 week due diligence Deliveries can match key smelter terms Repayment Management Simplified reporting Time
Slide 24: Multiple Investment Entry Points
Alignment with Counterparties Multiple Investment Entry Points1 Capital Consuming Capital Generating 1 For illustrative purposes only June 2015 24
Slide 25: Appendix B: Property Portfolio
Appendix B: Property Portfolio SOLID PORTFOLIO. SOLID FUTURE.
Slide 26: Property Portfolio
Property Portfolio June 2015 26
Slide 27: Slide 27
Slide 28: SOLID PORTFOLIO. SOLID FUTURE.
1660 Wynkoop Street, #1000 Denver, CO 80202-1132 303.573.1660 info@royalgold.com www.royalgold.com SOLID PORTFOLIO. SOLID FUTURE.
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