Royal Gold, Inc. · NASDAQ:RGLD
Royal Gold — Scotia Capital Mining Conference 2011
28 slides from Royal Gold's conference presentation, November 2011
Slide 1: Scotia Capital Mining Conference 2011
Scotia Capital Mining Conference 2011 November 2011 World Class Royalty Company
Slide 2: Cautionary Statement
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
Slide 3: Introduction
Introduction Company Profile Strong and growing financials Efficient business model Growing reserve base Portfolio Overview World class portfolio Cornerstone producing properties Growth assets Value Creation Growth profile Increasing shareholder value World Class Royalty Company 3
Slide 4: Company Profile
Company Profile Shares Outstanding: 55.6M Market Capitalization: $4.3B (as of 11/17/11) Insider Ownership: 5.0% TTM Average Daily Volume: 727,000 Ticker: RGLD (Nasdaq) Share Price Performance RGL (TSX) (2006 – 2011) 3.50 3.00 Share Price Index 2.50 2.00 1.50 1.00 0.50 0.00 1 RGLD GLD Average of Seni
Slide 5: Strong and Growing Financials
Strong and Growing Financials 5% 15% Historical Royalty Revenues 56% Revenue 10% 44% Metal 250 Growth 64% 6% 225 200 Price Metal Prices Production Volume Gold Silver Copper Nickel Zinc Lead 175 Other Dollars (millions) 150 Mix of Volume and 70% Precious Price Growth Metals 125 FY 2011 Revenue 100 13
Slide 6: Efficient Business Model
Efficient Business Model Industry Cash Cost History 1 Royal Gold Cash Margin Analysis 1,600 1,600 $1,387 1,400 $1,369 1,400 Cash Cost of Operations ($/Royalty GEO) $1,225 1,200 1,200 $1,089 $972 1,000 Gold Price ($/oz) 1,000 $872 Dollars ($) $874 $821 800 $695 800 $638 600 600 $565 $583 400 $460 $47
Slide 7: Reserve Growth
Reserve Growth Gold Equivalent Royalty Reserves 1 Gold Reserve Replacement (Royalty Rate x Reserves) (Gold Reserves Subject to Royalty Interests) 95 83 8 75 63 Ounces (millions) 7 55 35 26 6 19 15 Gold -5 Ounces (millions) 5 Silver (AuEq) Other (AuEq) -25 (24) Beginning Reserve Reserve Reserve Endin
Slide 8: Portfolio Overview: Cornerstone Producing Properties
Portfolio Overview Cornerstone Producing Properties World Class Royalty Company 8
Slide 9: World Class Portfolio
World Class Portfolio Andacollo Peñasquito Voisey’s Bay Pascua-Lama Mt. Milligan World Class Royalty Company 9
Slide 10: Andacollo
Andacollo Region IV Update: Royalty: 1 75% NSR until 910K ounces are produced; 50% NSR thereafter ► Mill throughput affected by ore hardness, Reserves: 2 1.6M ozs gold which limited throughput to 40K tpd, or approximately 73% of design capacity Production: 42K ozs gold (FY 2011) ► Multiple stage pla
Slide 11: Peñasquito
Peñasquito Zacatecas Update: Royalty: 2.0% NSR ► Mill throughput at approximately 78% Reserves: 1 18.6M ozs gold; 1.1B ozs silver; of design capacity, limited by insufficient 17.6B lbs zinc; 7.3B lbs lead oversize material for the HPGR and Production: 207K ozs gold; 17.3M ozs silver; availability of
Slide 12: Voisey's Bay
Voisey’s Bay Labrador and Newfoundland Royalty: 2.7% NSR Update: Reserves: 1 1.4B lbs nickel 788M lbs copper ► Production levels have recovered from strike which ended February 2011 Production: 112.5M lbs nickel (FY 2011) 67.8M lbs copper ► Currently in high shipping season Revenue: $32.7M (May 22 -
Slide 13: Growth Assets
Growth Assets Growth Assets World Class Royalty Company 13
Slide 14: Holt, Wolverine, Malartic
Holt Wolverine Malartic Ontario Yukon Chihuahua Quebec Royalty: 0.00013 x Au Price Royalty NSR (sliding-scale) At Au Prices: NSR (sliding-scale) At Ag Prices: $1,000 13.0% < $5.00 0.0% Royalty: 1.0%-1.5% NSR $1,500 19.5% $5.00-$7.50 3.778% (1.5% above $2,000 26.0% >$7.50 9.445% $350/oz Reserves: 1 5
Slide 15: Pascua-Lama
Pascua-Lama Region III Update: Royalty: 1,2 0.78%-5.23% NSR (5.23% above $800 gold) ► Engineering: 90% complete Reserves: 3 14.7M ozs gold (limited to gold in Chile) ► Earthworks (Chile): 80% complete Capital: $4.7-$5.0B ► Pre-strip mining to commence: Q4 2011 Initial Production: Mid 2013 Production
Slide 16: Mt. Milligan
MT. MILLIGAN Canada Mt. Milligan British Columbia Update: Stream: 25% of payable gold Purchase Price: $400/oz on first 550K ozs; ► Capital spent: Cdn$383.1 (to 9/30/11) $450/oz thereafter Reserves: 1 6.0M ozs gold ► Remaining capital: Cdn$882.0M (to 9/30/2011) Capital: C$1.3B ► Construction of camp
Slide 17: KSM
KSM British Columbia Update: Royalty Option: 1.25%-2.0% NSR Reserves: 1 38.5M ozs gold ► Purchase of 1.0M shares of Seabridge 214M ozs silver common stock for C$30M in June 2011 Capital: $4.7B Initial Production: NA ► After nine-month hold, Royal Gold earns the ability to buy 1.25% NSR royalty on Pr
Slide 18: Value Creation
Value Creation World Class Royalty Company 18
Slide 19: Growth Profile
Growth Profile Near term growth from cornerstone Attributable Production 1,2 (Analysts’ Forecasts) producing properties – Andacollo 280 and Peñasquito 260 Full year of Voisey’s Bay production Average Gold Equivalent Production 240 Continued ramp-up at producing growth assets – Holt, Wolverine 220 an
Slide 20: Increasing Shareholder Value
Increasing Shareholder Value Compounded Annual Growth Rates Dividend Growth 0.60 0.44 31% 30% 21% 0.36 0.32 0.28 Adjusted Operating EBITDA Cash Flow Earnings (per share) 1 (per share) 2 (per share) $3.45 $2.57 $1.29 2008 2009 2010 2011 2012 FY 2006–2011 CAGR FY 2011 Financial Results ($ per share, p
Slide 21: Appendix
Appendix World Class Royalty Company 21
Slide 22: Mulatos and Dolores
Mulatos and Dolores MEXICO Mulatos Dolores Sonora Chihuahua Royalty: 1 1.0%-5.0% NSR Royalty: 3.25% NSR (gold); 2.0% NSR (5.0% above $400/oz) (silver) Reserves: 2 2.4M ozs gold Reserves: 2 2.0M ozs gold 114.5M ozs silver Production: 151K ozs gold Production: 60K ozs gold (FY 2011) (FY 2011) 2.6M ozs
Slide 23: Cortez, Leeville, Robinson
Cortez Leeville Robinson Nevada Nevada Nevada Nevada Chihuahua Royalty: 1 GSR1 and 2 0.40%-5.0% (5.0% above $470/oz) GSR3 0.71% NVR1 0.39% Royalty: 1.8% NSR Royalty 3.0% NSR Reserves: 2 5.8M ozs gold Reserves: 2 1.64M ozs gold Reserves: 2 1.2B lbs copper 640K ozs gold Production: 193K ozs gold Produ
Slide 24: Footnotes
Footnotes World Class Royalty Company 24
Slide 25: Footnotes
Footnotes PAGE 4: COMPANY PROFILE 1 Barrick, Newmont, AngloGold, Gold Fields, Goldcorp, Kinross and Agnico Eagle. PAGE 6: EFFICIENT BUSINESS MODEL 1 ABN AMRO Gold Mine Cost Report, May 2011. PAGE 7: RESERVE GROWTH 1 Gold equivalent equity reserves were calculated at year end using the following meta
Slide 26: Footnotes (cont.)
Footnotes (cont.) PAGE 14: HOLT, WOLVERINE AND MALARTIC 1 Reserves as of December 31, 2010. 2 Reserves as of December 31, 2008. 3 Production guidance reflects the entire project. Operator has not provided a breakdown of production by royalty interest. PAGE 15: PASCUA-LAMA 1 NSR sliding-scale schedul
Slide 27: Footnotes (cont.)
Footnotes (cont.) PAGE 20: INCREASING SHAREHOLDER VALUE 1 The Company defines Adjusted EBITDA, a non-GAAP financial measure, 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-co
Slide 28: Royal Gold contact details
1660 Wynkoop Street Denver, CO 80202-1132 303.573.1660 info@royalgold.com www.royalgold.com World Class Royalty Company