Royal Gold, Inc. · NASDAQ:RGLD
Royal Gold — Bank of America Merrill Lynch 20th Annual Canada Mining Conference (September 2014)
21 slides from Royal Gold's conference presentation, Sep 4, 2014
Slide 1: Bank of America Merrill Lynch 20th Annual Canada Mining Conference
Bank of America Merrill Lynch 20th Annual Canada Mining Conference William Heissenbuttel Vice President Corporate Development
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: Royal Gold: The Quality Royalty/Streaming Name to Own
Royal Gold: The Quality Royalty/Streaming Name to Own Exploration Longevity – in business since 1981 Near-Term Growth – ~60% volume growth Junior Operators expected Intermediate Operators No cost inflation concerns Quality assets/reputable partners Index Funds Major Operators Return ~85% of Revenue
Slide 4: Quality is What Sets Us Apart
Quality is What Sets Us Apart We do our own due diligence, leveraging our operating experience carefully and seeking out People strong management teams with technical capability for long-term partnerships. Example: Rubicon Minerals’ Phoenix Gold Project We invest where we have, or can develop, an un
Slide 5: Strong Near Term Growth
Strong Near Term Growth What Mt. Milligan will deliver on a quarterly basis 1 What Mt. Milligan will contribute to our total GEO’s 2 Full Projected Quarterly Run 300,000 Rate June 2014 Quarter - Actual 200,000 Mt Milligan Mar 2014 Quarter - Actual Dec 2013 Quarter - Actual Other 100,000 0 10 20 30 4
Slide 6: Strong Near Term Growth: Mt. Milligan Stream Agreement Details
Strong Near Term Growth Mt. Milligan Stream Agreement Details Stream: 1 52.25% of payable Au Reserves: 2 6.0M oz Au Mine Life: 3 22 Years Commercial Production achieved in February 2014 Calendar 2014 guidance 185,000-195,000 oz Mt. Milligan Mine payable Au production (100% basis)4 Full Production Ou
Slide 7: Strong Near Term Growth: Phoenix Stream Agreement Overview
Strong Near Term Growth Phoenix Stream Agreement Overview Investment of $75 million to Rubicon Minerals in five installments Project Attributes: – High grade deposit – Stable political jurisdiction – Project permitted and at an advanced stage of construction – Experienced management team Phoenix Gol
Slide 8: Strong Near Term Growth: Phoenix Stream Agreement Details
Strong Near Term Growth Phoenix Stream Agreement Details Stream: 6.3% of Au production (until 135,000 ounces); 3.15% thereafter Delivery payment of 25% of spot price at time of delivery LOM projected production: 2.19M oz (Au) 1 Production start-up: mid-2015 2 Phoenix headframe and ore bin, April 201
Slide 9: High Quality Portfolio
High Quality Portfolio Producing Cornerstone Properties Andacollo Contribution to Royalty: 1 75% of Au production (NSR) FY2014 Q4 revenue Reserves: 2 1.8M oz (Au) 14% or Estimated Mine Life: 20+ Years $9.7M Peñasquito Contribution to FY2014 Q4 revenue Royalty: 2.0% NSR Reserves: 3,4 11.6M oz (Au), 6
Slide 10: 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 11: Alignment with Counterparties
Alignment with Counterparties Return of investment based on No joint venture involvement 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 12: Alignment with Counterparties
Alignment with Counterparties Multiple Investment Entry Points 1 Capital Consuming Capital Generating September 2014 12
Slide 13: Financial Strength
Financial Strength Strong Balance Sheet and Cash Flow in an Attractive Market Liquidity at $714M Working Capital $450M Undrawn Credit 6/30/2014 Debt and $370M convertible Commitments debt 2019 @2.875% * LTM Operating Cash $147M Flow $0 $200 $400 $600 $800 $1,000 $1,200 $1,400 $USD Millions * Include
Slide 14: Financial Strength
Financial Strength Three consecutive quarters of growing contribution from Mt. Milligan, totaling $27.2 million in revenue Reported net income of $0.96 per share, down 12% from a year ago despite a 19% decline in gold price Adjusted EBITDA 1 of $3.11 per basic share, or 85% of revenue Cash dividends
Slide 15: Financial Strength
Financial Strength Efficient Use of Resources Maximizes Margins $350 $300 The average employee count at a $250 mining company with >$250M in EBITDA was over Millions $200 9,000 in CY2013. $150 Royal Gold stands out with less than $100 $25 million in overhead and just 20 employees $50 Adjusted EBITDA
Slide 16: Endnotes
Endnotes World Class Royalty Company <3 Ip ROYALG OLD, INC
Slide 17: 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 STRONG NEAR TERM GROWTH 1. Full run rate Mt. Milligan Go
Slide 18: 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 9 HIGH QUALITY PORTFOLIO: PRODUCING CORNERSTONE PR
Slide 19: Appendix A: Property Portfolio
Appendix A: Property Portfolio
Slide 20: Financially Robust
Financially Robust Diverse Portfolio of Assets September 2014 20
Slide 21: 1660 Wynkoop Street Denver, CO 80202-1132 info@royalgold.com
1660 Wynkoop Street Denver, CO 80202-1132 303.573.1660 info@royalgold.com www.royalgold.com