denver gold forum screen final
TRANSCRIPT
NASDAQ: RGLD
Tony JensenPresident and CEOSeptember 25, 2017
NASDAQ: RGLD
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This presentation contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Suchforward-looking statements involve known and unknown risks, uncertainties, and other factors that could cause actual results to differ materiallyfrom the projections and estimates contained herein and include, but are not limited to: ability to maintain solid cash flow generation and quicklydeliver and enjoy embedded growth, a diverse portfolio, strong margins, lean structure, opportunistic capital allocation, capital stewardship anddividend returns in line with historical track records; sequential growth catalysts and estimated start-up and production at the Rainy River, CortezCrossroads and Peñasquito Pyrite Leach projects in calendar 2017, 2018 and 2019, respectively; estimated revenue and percentages of futurerevenue expected from the Company’s stream and royalty portfolio in the aggregate; a new phase of growth; mine life and reserves estimates andforecasts of throughput, recoveries and production from the operators of our stream and royalty interests; and the lack of additional fundingrequirements. Factors that could cause actual results to differ materially from these forward-looking statements include, among others: the risksinherent in the operation of mining properties; a decreased price environment for gold and other metals on which our stream and royalty interestsare determined; performance of and production at properties, and variation of actual production from the production estimates and forecastsmade by the operators of those stream and royalty properties from fiscal 2017 to fiscal 2020; decisions and activities of the Company’smanagement affecting margins, use of capital and changes in strategy; unexpected operating costs, decisions and activities of the operators of theCompany’s stream and royalty properties; changes in operators’ mining and processing techniques or stream or royalty calculation methodologies;resolution of regulatory and legal proceedings; unanticipated grade, geological, metallurgical, environmental, processing or other problems at theproperties; revisions or inaccuracies in technical reports, reserve, resources and production estimates; changes in project parameters as plans of theoperators are refined; the results of current or planned exploration activities; errors or disputes in calculating stream deliveries and royaltypayments, or deliveries or payments under stream or royalty agreements; the liquidity and future financial needs of the Company; economic andmarket conditions; the impact of future acquisitions and stream and royalty financing transactions; the impact of issuances of additional commonstock; and risks associated with conducting business in foreign countries, including application of foreign laws to contract and other disputes,environmental laws, enforcement and uncertain political and economic environments. These risks and other factors are discussed in more detail inthe Company’s public filings with the Securities and Exchange Commission. Statements made herein are as of the date hereof and should not berelied upon as of any subsequent date. The Company’s past performance is not necessarily indicative of its future performance. The Companydisclaims any obligation to update any forward-looking statements.
Third-party information: Certain information provided in this presentation has been provided to the Company by the operators of propertiessubject to our stream and royalty interests, or is publicly available information filed by these operators with applicable securities regulatory bodies,including the Securities and Exchange Commission. The Company has not verified, and is not in a position to verify, and expressly disclaims anyresponsibility for the accuracy, completeness or fairness of such third-party information and refers readers to the public reports filed by theoperators for information regarding those properties.
Cautionary Statement
2
NASDAQ: RGLD
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DisciplineEfficiency
20+ Year Track Record
Cash flow generationQuickly deleveringEmbedded growth
Diverse portfolio Strong marginsLean structure
Strategic capital allocation Equity stewardshipDividend returns
3
Performance
NASDAQ: RGLD
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12 monthsJun-30-2013
12 monthsJun-30-2014
12 monthsJun-30-2015
12 monthsJun-30-2016
12 monthsJun-30-2017
Gold
Pric
e in
Us D
olla
rs
Cash
from
Ope
ratio
ns
Cash From Operations Average Gold Price (Kitco)
Cash from operations(OCF) vs gold price, FY13-17
OCF average = $170m per year
$266m
Operating cash flow up 56% over prior year
Cash Flow GenerationPerformance
4
FY16 Revenue$359m
Mount Milligan
$11.3
Pueblo Viejo $51.9
Andacollo $11.0
Peñasquito $3.9
Wassa Prestea
$2.1
Cortez$0.4
Other $0.4
Incremental $m revenue by property FY16 to FY17FY17
Revenue$441m
Pueblo Viejo was a major revenue driver
NASDAQ: RGLD
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$45mRepaid
March 31, 2017
$50mRepaid
June 30, 2017
$50mRepaid
Sept 5, 2017
Quickly DeleveringPerformance
5
<1.7x net debt to EBITDA,1 liquidity of over $850 million, both at 6-30-17
1 The term “EBITDA” is a non-GAAP financial measure. See slide 18 for additional information.
NASDAQ: RGLD
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Sequential growth catalyst in each of calendar 2017, 2018, and 2019
Rainy River - 2017
1 Information has been provided to the Company by the operators of those properties or is publicly available information filed bythese operators. Please see page 2.
2 See slide 17 for details on the scope of Royal Gold’s streaming and these royalty interests.
Rainy River - 2017
Embedded Growth
Rainy River - 2017
New Gold: First production expected September 20171
Stream on 6.5% of gold and 60% of silver1
3.9Moz gold in reserves; 10.0Moz silver in reserves1,2
Rainy River - 2017
Performance
6
Cortez Crossroads - 2018
Barrick: CY18 startup expected1 and stripping underway 4.43% NVR & 5% GSR royalty2
3.2Moz gold in reserves1
Peñasquito Leach - 2019
Goldcorp: CQ4 2018 commissioning currently expected1
Progress at 9/25/17: 40% complete1
Expected to add 1Moz gold, 44Moz silver to mine life1
NASDAQ: RGLD
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1 Producing properties not highlighted in the map include Allan, Bald Mountain, Canadian Malartic, Dolores, Don Mario, El Limon, Gold Hill, Goldstrike, Gwalia, Holt, King of the Hills, Las Cruces, Leeville, Marigold, Meekathara, Mulatos, Rambler North, Robinson, Ruby Hill, Skyline, Soledad Mountain, South Laverton, Southern Cross, Taparko, Twin Creeks, Wharf, Williams, and others.
2 In FY2017.
Diverse PortfolioEfficiencyEfficiency
7
195 property interests, of which 39 are producing1 and 22 are in development93% revenue from precious metals2
88% of revenue from Canada, Chile, US, Mexico and Dominican Republic 2
NASDAQ: RGLD
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Our gross margin is within the top 6% of S&P 500 constituents
Strong MarginsEfficiency
Source: S&P Capital iQ. Gross margin calculated as total revenue less cost of goods sold, divided by total revenue. A total of 456 of the S&P 500 constituents reported positive gross margin in the last 12 months.
8
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Gross margin, last 12 months
S&P 500 Constituent
RGLD, 80% margin
Gros
s Mar
gin
NASDAQ: RGLD
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Our revenue per employee is higher than 497 of the S&P 500
Lean StructureEfficiency
Source: S&P Capital iQ. Revenue per employee calculated as total reported revenue for the last 12 months, divided by total reported employees. 498 of the S&P 500 companies report total employees.
$0 $10,000,000 $20,000,000NasdaqGS:MAR
NYSE:APHNYSE:UHS
NYSE:MNYSE:LEG
NYSE:OMCNasdaqGS:FAST
NYSE:KSSNYSE:AJG
NasdaqGS:FISVNasdaqGS:IDXXNasdaqGS:INFONasdaqGS:NAVI
NYSE:UTXNYSE:SEE
NYSE:ITNYSE:WFCNYSE:DPS
NYSE:KNYSE:TMO
NYSE:ALKNYSE:JPMNYSE:BACNYSE:CATNYSE:ADSNYSE:UAANYSE:GPNNYSE:TAP
NYSE:AMGNasdaqCM:AMD
NYSE:NINYSE:VNONYSE:BF.BNYSE:PEG
NasdaqGS:PDCONYSE:CHDNYSE:UNHNYSE:AIGNYSE:TRV
NasdaqGS:SNINYSE:HPQ
NasdaqGS:VRSNNYSE:CF
NYSE:PXDNYSE:NRGNYSE:NBLNYSE:DHI
NasdaqGS:CBOENasdaqGS:GILD
NYSE:VTR
$25m(REIT)
$1m
$1.3m
$3m
$2m
$19m$11m (REIT)
S&P
500
Cons
titue
nt
Revenue per employee
9
NASDAQ: RGLD
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We maintained a strong balance sheet and deployed capital opportunistically
Strategic Capital AllocationDiscipline
10
Rainy River
Cortez Crossroads
Gold price at the time of recent transaction agreements
Gold
Pric
e in
US
Dolla
rs
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$1,100
$1,300
$1,500
$1,700
$1,900
Nov-01-2011 Nov-01-2012 Nov-01-2013 Nov-01-2014 Nov-01-2015 Nov-01-2016
$USD
Mill
ions
of C
onsid
erat
ion
Cortez Crossroads
Royalty
Pueblo Viejo
Wassa & Prestea
Andacollo
RainyRiver
Sep-1-2017
NASDAQ: RGLD
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-$2,000
-$1,500
-$1,000
-$500
$0
$500
$1,000
$1,500
$2,000
$2,500
$3,000
2015-2017
Net revenue3 on capital 2015-2017
Capital Deployed
Net Revenue
Current Weighted Avg Remaining Mine Life
1,3
Rem
aini
ng Y
ears
of M
ine
Life20
15
10
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2
17 years
$USD
Mill
ions
-$2,000
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1991-2014
Net revenue on capital 1991-2014
Capital Deployed
Net Revenue
Current Weighted Avg Remaining Mine Life
1
2
12 years
20
15
10
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0 Rem
aini
ng Y
ears
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ine
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Strong net revenue on capital deployed, with significant mine life remaining
Strategic Capital AllocationDiscipline
11
1 Net revenue calculated as gross revenue less cost of goods sold (COGS) for streaming payments.2 Weighted average remaining mine life calculated by weighting each property’s current remaining mine life in years by the
proven and probable reserves for the year ended 2016, based on data provided by the operators of those mines.3 Includes Andacollo, Pueblo Viejo, Wassa and Prestea only
NASDAQ: RGLD
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GDX constituents sorted by shares outstanding
Mill
ions
of S
hare
s Out
stan
ding
at Ju
ne 3
0, 2
017
RGLD has 14 million outstanding shares less than the next-highest GDX member
Equity StewardshipDiscipline
12* Company with an incorporation date that pre-dates Royal Gold, which was incorporated in 1981.
NASDAQ: RGLD
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Rainy River
Cortez Crossroads
20% CAGR in dividends per share since 2001, and currently equates to $0.96 per share, a 1.1% annual yield, and an average 23% OCF yield1
Dividend ReturnsDiscipline
1 Calculated as reported cash from operations divided by common dividends paid during the same period. 2017 reflects trailingtwelve months as reported through June 30, 2017.
13
27% 29%
12%
21%19%
25% 26%23%
34%30%
15%18%
25%
36%
29%35%
23%
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$1.00Dividend Per Share Operating Cash Flow Yield Average Gold Price (source: Kitco)
Annu
al D
ivid
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rs
NASDAQ: RGLD
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Highly Skilled Board Leadership
Jamie SokalskyIndependent Director;
Former President and CEO, Barrick Gold Corporation
Kevin McArthur Independent Director; Executive Chair, Tahoe
Resources and Former CEO and Director, Goldcorp, Inc.
Tony JensenDirector; President and CEO,
Royal Gold, Inc.
M. Craig Haase Independent Director; Former EVP and
Chief Legal Officer, Franco-Nevada Mining Corporation
William Hayes Independent Director and Chairman of the
Board; Former EVP, Placer Dome Inc.
Ronald J. Vance Independent Director; Former SVP Corporate Development,
Teck Resources
Christopher M.T. ThompsonIndependent Director; Former Chairman and CEO, Gold Fields
Limited
Sybil VeenmanIndependent Director; Former
Senior Vice President and General Counsel, Barrick Gold Corporation
Discipline
14
NASDAQ: RGLD
|Source: YCharts
20+ Years of Solid PerformancePerformance
15
-200
0
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1,000
1,200
1,400
Gold Price in US Dollars % Change Royal Gold Total Return Price % ChangeS&P 500 Total Return Level % Change
RGLD+1261%
S&P 500+287%
Gold Price+313%
%
%
%
%
%
%
%
%
%
20-year total shareholder return
Perc
enta
ge C
hang
e in
Tota
l Ret
urn
Pric
e
Our focus is total shareholder return (TSR)
NASDAQ: RGLD
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Portfolio of Assets
1 Includes largest royalties by revenue. An additional 27 royalties from producing mines in Royal Gold’s portfolio not shown. 2 Production estimates are received from our operators and there can be no assurance that production estimates received from
our operators will be achieved. Please refer to our cautionary language regarding forward-looking statements on slide 2, as wellas the Risk Factors identified in Part I, Item 1A, of our Fiscal 2017 10-K for information regarding factors that could affect actual results.
17
Streams (at June 30, 2017)
Operator Mine Metal RGLD interest until RGLD interest until RGLD
interest until RGLD pays (per unit) until RGLD pays
(per ounce) until
ReserveRemaining Mine Life
(Years)
CY2017Operator Guidance (oz/lbs)2
Centerra Gold Mount Milligan Gold 35% LOM (life of
mine) $435 LOM 21 Low end of 260,000-290,000
Centerra Gold Mount Milligan Copper 18.75% LOM - - - - 15% of spot LOM - - 21 Low end of 55-
65Mlbs
Barrick Pueblo Viejo Gold 7.50% 990koz 3.75% remaining
LOM - - 30% of spot 550koz 60% of spot remaining LOM 25+ 625,000-650,000
Barrick Pueblo Viejo Silver 75% at fixed
70% recovery 50Moz 37.50% remaining LOM - - 30% of spot 23.1Moz 60% of spot - 25+ Not provided
New Gold Rainy River Gold 6.50% 230koz 3.25% remaining LOM - - 25% of spot - - - 14
Productionexpected to begin
in 2017
New Gold Rainy River Silver 60% 3.1Moz 30% remaining LOM - - 25% of spot - - - 14
Productionexpected to begin
in 2017
Teck Andacollo Gold 100% 900koz 50% remaining LOM - - 15% of spot - - - 17 TBA
Golden Star Wassa/Prestea Gold 9.25% 12/31/2017 10.50% 240koz 5.50% LOM 20% of spot 240koz 30% of spot thereafter 6 Wassa
4 Prestea255,000-280,000
Key Royalties1(at June 30, 2017) RGLD interest Until
Goldcorp Peñasquito Gold Silver Lead Zinc 2.00% LOM 10 410,0000 (gold)
Barrick Cortez Gold Various LOM 12 TBA
Agnico-Eagle & Yamana Malartic Gold 1-1.5% LOM 10 Not available
Newmont Leeville Gold 1.80% LOM 11 Not available
KGHM Robinson Gold Copper 3.00% LOM 5 Not available
Kirkland Lake Holt Gold 0.00013 x the gold price LOM 8 Not available
Alamos Gold Mulatos Gold 1-5%
capped; expect to
reach within 5 years
5 150,000-160,000
NASDAQ: RGLD
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Non-GAAP Financial Measures
Non-GAAP financial measures are intended to provide additional information only and do not have any standard meaning prescribed by generally acceptedaccounting principles (“GAAP”). These measures should not be considered in isolation or as a substitute for measures of performance prepared in accordancewith GAAP.
Our management uses Adjusted EBITDA and Adjusted Net Income as measures of operating performance to assist in comparing performance fromperiod to period on a consistent basis; as a measure for planning and forecasting overall expectations and for evaluating actual results against suchexpectations; in communications with the board of directors, stockholders, analysts and investors concerning our financial performance; as usefulcomparisons to the performance of our competitors; and as metrics of certain management incentive compensation calculations. We believe thatthese measures are used by and are useful to investors and other users of our financial statements in evaluating our operating performance becausethey provide an additional tool to evaluate our performance without regard to special and non-core items, which can vary substantially from companyto company depending upon accounting methods, book value of assets and capital structure. We have provided reconciliations of all non-GAAPmeasures to their nearest U.S. GAAP measures and have consistently applied the adjustments within our reconciliations in arriving at each non-GAAPmeasure. We consider these items to be necessary adjustments for purposes of evaluating our ongoing business performance and are oftenconsidered non-recurring. Such adjustments are subjective and involve significant management judgment.
Adjusted EBITDA Reconciliation
Adjusted EBITDA is defined by the Company as net income (loss) 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 loss (income) of consolidated subsidiaries,interest and other income, and any royalty portfolio restructuring gains or losses. Other companies may define and calculate this measure differently.Adjusted EBITDA identifies the cash generated in a given period that will be available to fund the Company's future operations, growth opportunities,shareholder dividends and to service the Company's debt obligations. This information differs from measures of performance determined in accordance withU.S. GAAP and should not be considered in isolation or as a substitute for measures of performance determined in accordance with U.S. GAAP. See the tablebelow for a reconciliation of net income to Adjusted EBITDA.
Non-GAAP Financial Measures andAdjusted EBITDA Reconciliation
For The Three Months Ended Fiscal Years EndedJune 30, June 30,
(Unaudited, in thousands) (Unaudited, in thousands)2017 2016 2017 2016
Net income (loss) 16,836$ 18,082$ 92,425$ (82,438)$ Depreciation, depletion and amortization 39,851 35,391 159,636 141,108 Non-cash employee stock compensation 3,224 2,250 9,983 10,039 Impairment of stream and royalty interests and royalty receivables - - - 98,588 Interest and other, net 10,067 5,409 27,075 26,574 Income tax expense 7,717 5,025 26,441 60,680 Non-controlling interests in operating loss of consolidated subsidiaries 3,422 2,357 10,628 5,289
Adjusted EBITDA 81,117$ 68,514$ 326,188$ 259,840$ 18
NASDAQ: RGLD
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Good mines get better: many of our interests are at properties that have a robust reserve profile years, or even decades after startup
Opportunistic Capital Allocation
19
1 Includes proceeds from sale of the Andacollo Royalty; see Andacollo Stream.2 The Mulatos royalty is subject to a 2.0 million ounce cap on gold production. There have been approximately 1.71 million
ounces of cumulative production as of June 30, 2017.
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ions
Initial investment Cumulative net revenue through June 30, 2017 Estimated remaining mine life
