Royal Gold, Inc. · NASDAQ:RGLD
Royal Gold — Bank of America Merrill Lynch 2014 Global Metals, Mining & Steel Conference
22 slides from Royal Gold's conference presentation, May 13, 2014
Slide 1: Bank of America Merrill Lynch 2014 Global Metals, Mining & Steel Conference
Bank of America Merrill Lynch 2014 Global Metals, Mining & Steel Conference Tony Jensen President and CEO May 2014
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: A Growing Royalty/Stream Company
A Growing Royalty/Stream Company Established in 1981 Market Cap – $4.2B (as of 5/6/14) Operating cash flow (Last 12 months) – $155M Over 200 properties with royalties and/or streaming interests: – 37 producing assets – 22 development stage assets Approximately $1.1 billion in available liquidity 12
Slide 4: Royal Gold Overview
Royal Gold Overview Embedded Growth – Strong track record of growth – Positioned to grow volume ~50% from Mt. Milligan alone – Recent addition of Rubicon Minerals’ Phoenix project Financially Robust – Strong performance from Cornerstone properties – Portfolio features projects with attractive averag
Slide 5: Embedded Growth
Embedded Growth Strong Track Record of Growth May 2014 5
Slide 6: Embedded Growth: Mt. Milligan Payable Gold Deliveries
Embedded Growth Fully Invested 350 Mt. Milligan Payable Gold Deliveries 6 300 Net Gold Equivalent Ounces in Thousands Pascua-Lama ~50% estimated Full Projected Quarterly 250 increase from Mt. Milligan FY 2013 due to Run Rate Current ~180k oz/yr Mt. Milligan alone 200 Apr 2014 Month ended 150 Mar 201
Slide 7: Mt. Milligan Stream Agreement Details
Embedded 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 Mt. Milligan Facilities, July 2013 Calendar 2014 guidance 165,000-175,000 oz payable Au production (100% basis) Full Produ
Slide 8: Phoenix Stream Agreement Overview
Embedded Growth Phoenix Stream Agreement Overview Investment of $75 million to Rubicon Minerals in five installments – $30 million paid in FQ3, expect to pay balance of $45 million later this year Project Attributes: ‒ High grade deposit ‒ Stable political jurisdiction ‒ Project permitted and at an
Slide 9: Phoenix Stream Agreement Details
Embedded 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 Phoenix headframe and ore bin, April 2014 Production start-up: mid-2015 2 Estima
Slide 10: Producing Cornerstone Properties
Financially Robust Producing Cornerstone Properties Andacollo Contribution to Royalty: 1 75% of Au production (NSR) FY2014 Q3 revenue Reserves: 2 1.8M oz (Au) 17.5% or Estimated Mine Life: 20+ Years $10.2M Peñasquito Contribution to FY2014 Q3 revenue Royalty: 2.0% NSR Reserves: 3,4 11.6M oz (Au), 60
Slide 11: Cash Margin by Operating Property
Financially Robust Cash Margin by Operating Property Calendar Year 2013 80% 70% 60% 50% Weighted Average Cash Margin 49% 40% 30% 20% 10% 0% May 2014 11
Slide 12: Efficient Use of Resources Maximizes Margins
Financially Robust Efficient Use of Resources Maximizes Margins $350 The average employee count at a mining $300 company with >$250M in EBITDA is $250 over 9,000. Millions $200 Royal Gold stands out $150 with less than $25 million in annual G&A $100 and just 21 $50 employees. Adjusted EBITDA Margin
Slide 13: Strong Balance Sheet and Cash Flow in an Attractive Market
Financially Robust Strong Balance Sheet and Cash Flow in an Attractive Market Liquidity at 3/31/2014 $687M Working Capital $450M Undrawn Credit Debt and $370M convertible Commitments debt 2019 @2.875% * LTM Operating Cash $155.2M Flow $0 $200 $400 $600 $800 $1,000 $1,200 $USD Millions * Includes Com
Slide 14: Mineral industry sources of capital are limited
Attractive Market Environment Mineral industry sources of capital are limited Capital Raised by Asset Class ($B) 1 400 350 300 250 Proceeds ($B) 200 150 100 50 0 2007 2008 2009 2010 2011 2012 2013 Loans Bonds Convertibles Follow ons IPOs May 2014 14
Slide 15: Royal Gold continues to trade below historical valuation levels
Favorably Positioned Royal Gold continues to trade below historical valuation levels RGLD Price to Book Value 1 4 3.5 3 2.5 5-year average:2.2x 2 1.5 Current price to book: 1.8x 1 May 2014 15
Slide 16: Delivering on Growth Objectives
Favorably Positioned Delivering on Growth Objectives Deliveries from Mt. Milligan continue to grow New investment with Rubicon Minerals’ Phoenix project Strong balance sheet with ~$1.1 billion in liquidity Few near-term commitments for cash flow Growth profile already embedded in the company Attract
Slide 17: Endnotes
Endnotes World Class Royalty Company <3 Ip ROYALG OLD, INC
Slide 18: Endnotes
Endnotes PAGE 4 ROYAL GOLD OVERVIEW 1. Adjusted EBITDA is defined by the Company as net income plus depreciation, depletion and amortization, non-cash charges, income tax expense, interest and other expense, and any impairment of mining assets, less non-controlling interests in operating income of c
Slide 19: Endnotes (cont.)
Endnotes (cont.) PAGE 7 EMBEDDED GROWTH: MT. MILLIGAN STREAM AGREEMENT DETAILS 1. This is a metal stream whereby the purchase price for gold ounces delivered is $435 per ounce, or the prevailing market price of gold, if lower; no inflation adjustment. 2. Reserves as of October 23, 2009. 3. Mine life
Slide 20: Appendix A: Property Portfolio
Appendix A: Property Portfolio
Slide 21: Property Portfolio
Property Portfolio Diverse Portfolio of Assets May 2014 21
Slide 22: Royal Gold contact details
1660 Wynkoop Street Denver, CO 80202-1132 303.573.1660 info@royalgold.com www.royalgold.com
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