Embed Size (px)
Citation preview
NASDAQ: RGLD
CIBC 2018 Whistler Institutional ConferenceTony Jensen President and CEO
January 24, 2018
NASDAQ: RGLD
|
Cautionary Statement
2
This presentation contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of1995. Such forward-looking statements involve known and unknown risks, uncertainties, and other factors that could cause actualresults to differ materially from the projections and estimates contained herein and include, but are not limited to: statementsconcerning cash flow generation, and operating cash flow growth in Q1 FY18 building on record fiscal year 2017 performance; quicklydelevering; embedded growth and sequential growth catalysts and estimated production at Rainy River, Cortez Crossroads andPeñasquito Pyrite Leach in 2018; diverse portfolio; strong margins; lean structure; strategic capital allocation and strong net revenueon capital deployed, with significant mine life remaining; equity stewardship; dividend returns and historic and current compoundedannual growth rate in dividends per share, annual yield and operating cash flow yield; focus on total shareholder return; ability ofRainy River project to complete main tailings storage facility and ramp-up to capacity; expected start-up date for Cortez Crossroads;expected accelerated start-up date for and estimated production from the Pyrite Leach project; estimated production at each of RainyRiver, Cortez Crossroads and the Pyrite Leach project; mine life and reserves estimates and forecasts of throughput, recoveries andproduction from the operators of our stream and royalty interests; and lack of additional funding requirements. Factors that couldcause actual results to differ materially from these forward-looking statements include, among others: the risks inherent in theoperation 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 andforecasts made by the operators of those stream and royalty properties; decisions and activities of the Company’s managementaffecting 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 calculationmethodologies; resolution of regulatory and legal proceedings; unanticipated grade, geological, metallurgical, environmental,processing or other problems at the properties; revisions or inaccuracies in technical reports, reserve, resources and productionestimates; changes in project parameters as plans of the operators are refined; the results of current or planned exploration activities;errors or disputes in calculating stream deliveries and royalty payments, or deliveries or payments under stream or royaltyagreements; the liquidity and future financial needs of the Company; economic and market conditions; the impact of futureacquisitions and stream and royalty financing transactions; the impact of issuances of additional common stock; and risks associatedwith conducting business in foreign countries, including application of foreign laws to contract and other disputes, environmentallaws, 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 andshould not be relied upon as of any subsequent date. The Company’s past performance is not necessarily indicative of its futureperformance. The Company disclaims 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 ofproperties subject to our stream and royalty interests, or is publicly available information filed by these operators with applicablesecurities regulatory bodies, including the Securities and Exchange Commission. The Company has not verified, and is not in a positionto verify, and expressly disclaims any responsibility for the accuracy, completeness or fairness of such third-party information andrefers readers to the public reports filed by the operators for information regarding those properties.
NASDAQ: RGLD
|
Creating Long Term Value
Cash flow generationEmbedded growth
Strong marginsLean structure
Equity stewardshipDividend returns
3
DisciplineEfficiencyPerformance
NASDAQ: RGLD
|
0x
5x
10x
15x
20x
25x
30x
35x
40x Historical OCF multiple1
OCF Multiple +1 Standard Deviation
Q1FY18 cash flow growth building on FY17 records…
Performance - Cash Flow Generation
4
$173
$147
$192
$170
$266$282
$0
$200
$400
$600
$800
$1,000
$1,200
$1,400
$1,600
$1,800
$2,000
$0
$50
$100
$150
$200
$250
$300
12 monthsJun-30-2013
12 monthsJun-30-2014
12 monthsJun-30-2015
12 monthsJun-30-2016
12 monthsJun-30-2017
LTM Sept-30-2017
Cash from Operations Gold Price
OCF average = $170m per year
Gold Price in US Dollars
Cash
from
Ope
ratio
ns in
USD
Mill
ions
Cash from operations vs gold price
...yet RGLD is trading at a discount to historical levels
RGLD at 19x vs historical of 23x and peers at 25x
OCF
Mul
tiple
1 Multiple calculated as reported cash from operations
NASDAQ: RGLD
|
Sequential growth catalysts, bought and paid for
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.
Rainy River - 2017
Performance - Embedded Growth
Rainy River - 2017
New Gold: Commercial production began October 20171
Stream on 6.5% of gold and 60% of silver1
3.9Moz gold in reserves; 10.0Moz silver in reserves1Rainy River – Ramp 2018
5
Cortez Crossroads - 2018
Barrick: CY18 startup expected1 and stripping underway 4.5% NVR & 5% GSR royalty3.2Moz gold in reserves1
Peñasquito Leach – CQ418
Goldcorp: Commissioning accelerated to CQ4181
Construction progress at 1/16/18: 62% complete1
Expected to add 1Moz gold, 44Moz silver to mine life1
NASDAQ: RGLD
|
Our gross margin is within the top 6% of S&P 500 constituents
0%
20%
40%
60%
80%
100%
NYS
E:FL
RN
YSE:
ADM
Nas
daqG
S:ES
RXN
YSE:
LLL
NYS
E:SL
BN
asda
qGS:
EXPD
Nas
daqG
S:PC
ARN
YSE:
FTI
NYS
E:TX
TN
YSE:
CNC
NYS
E:LY
BN
YSE:
UPS
NYS
E:G
DN
YSE:
DLP
HN
YSE:
ADS
NYS
E:H
RLN
YSE:
ALL
Nas
daqG
S:PD
CON
YSE:
CSRA
NYS
E:PH
NYS
E:CM
IN
YSE:
DTE
NYS
E:D
VAN
asda
qGS:
HSI
CN
YSE:
HPE
NYS
E:D
ALN
YSE:
TRV
NYS
E:IP
NYS
E:CA
GN
YSE:
CBN
asda
qGS:
AAL
NYS
E:AC
NN
YSE:
PRU
NYS
E:CI
NYS
E:AP
HN
asda
qGS:
DISH
NYS
E:H
DN
asda
qGS:
MU
NYS
E:LN
TN
YSE:
FCX
Nas
daqG
S:U
LTA
NYS
E:W
ECN
YSE:
LUV
Nas
daqG
S:Q
RVO
NYS
E:AL
BN
YSE:
WM
NYS
E:CM
SN
YSE:
EIX
NYS
E:SI
GN
YSE:
DG
XN
YSE:
MN
YSE:
AEP
NYS
E:G
LWN
YSE:
AON
NYS
E:CC
LN
YSE:
UHS
NYS
E:RO
KN
asda
qGS:
ADP
NYS
E:YU
MN
YSE:
FLN
YSE:
ALLE
Nas
daqG
S:AM
ATN
YSE:
NKE
Nas
daqG
S:VI
ABN
YSE:
DIS
NYS
E:CH
DN
YSE:
PNW
NYS
E:IB
MN
YSE:
DU
KN
YSE:
MSI
NYS
E:VF
CN
YSE:
STZ
NYS
E:LV
LTN
YSE:
SNA
NYS
E:AZ
ON
YSE:
MO
NN
asda
qGS:
XRAY
Nas
daqG
S:RE
GN
NYS
E:N
EEN
asda
qGS:
GRM
NN
YSE:
CTL
NYS
E:RM
DN
YSE:
ORC
LN
YSE:
KORS
NYS
E:D
PSN
YSE:
CLN
asda
qGS:
INFO
Nas
daqG
S:N
TAP
Nas
daqG
S:IN
TCN
YSE:
TIF
Nas
daqG
S:CS
CON
asda
qGS:
VRSK
Nas
daqG
S:H
OLX
Nas
daqG
S:M
NST
Nas
daqG
S:AK
AMN
YSE:
EQR
NYS
E:AM
TN
asda
qGS:
CMCS
.AN
asda
qGS:
WYN
NN
YSE:
EQT
NYS
E:AR
EN
YSE:
MCO
NYS
E:ZB
HN
YSE:
LLY
NYS
E:PL
DN
YSE:
ABBV
NYS
E:PF
EN
YSE:
SPG
Nas
daqG
S:FF
IVN
asda
qGS:
CTXS
Nas
daqG
S:CD
NS
NYS
E:G
SN
asda
qGS:
CELG
NYS
E:D
FS
Gross Margin, Last 12 Months
S&P 500 Constituent
RGLD, 80% margin
Gros
s Mar
gin
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.
Efficiency - Strong Margins
6
NASDAQ: RGLD
|
$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
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.
Efficiency - Lean Structure
Our revenue per employee is higher than 497 of the S&P 500
7
NASDAQ: RGLD
|
0
200
400
600
800
1,000
1,200
1,400
1,600
1,800
Roya
l Gol
d, In
c.*T
orex
Gol
d Re
sour
ces I
ncEn
deav
our M
inin
g Co
rpor
atio
nRa
ndgo
ld R
esou
rces
Lim
ited
Osis
ko G
old
Roya
lties
Ltd
.*S
SR M
inin
g In
c.Fo
rtun
a Si
lver
Min
es In
c.*P
an A
mer
ican
Silv
er C
orp.
Sand
stor
m G
old
Ltd.
Klon
dex
Min
es L
td.
Firs
t Maj
estic
Silv
er C
orp.
Kirk
land
Lak
e Go
ld L
td.
Guya
na G
oldf
ield
s Inc
.De
tour
Gol
d Co
rpor
atio
nFr
anco
-Nev
ada
Corp
orat
ion
*Coe
ur M
inin
g, In
c.*A
gnic
o Ea
gle
Min
es L
imite
d*C
ompa
ñía
de M
inas
Bue
nave
ntur
a S.
A.A.
Cent
erra
Gol
d In
c.Al
amos
Gol
d In
c.*M
cEw
en M
inin
g In
c.Ta
hoe
Reso
urce
s Inc
.SE
MAF
O In
c.*H
ecla
Min
ing
Com
pany
*Ang
loGo
ld A
shan
ti Li
mite
dW
heat
on P
reci
ous M
etal
s Cor
p.IA
MGO
LD C
orpo
ratio
nHa
rmon
y Go
ld M
inin
g Co
mpa
ny L
imite
dRe
gis R
esou
rces
Lim
ited
St B
arba
ra L
imite
d*N
ewm
ont M
inin
g Co
rpor
atio
nN
ew G
old
Inc.
Inde
pend
ence
Gro
up N
LN
orth
ern
Star
Res
ourc
es L
imite
dO
cean
aGol
d Co
rpor
atio
nEl
dora
do G
old
Corp
orat
ion
Reso
lute
Min
ing
Lim
ited
*New
cres
t Min
ing
Lim
ited
Sara
cen
Min
eral
Hol
ding
s Lim
ited
*Gol
d Fi
elds
Lim
ited
*Gol
dcor
p In
c.Si
bany
e Go
ld L
imite
dYa
man
a Go
ld In
c.B2
Gold
Cor
p.*C
enta
min
Plc
Barr
ick
Gold
Cor
pora
tion
*Kin
ross
Gol
d Co
rpor
atio
nEv
olut
ion
Min
ing
Lim
ited
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
Discipline
* Company with an incorporation date that pre-dates Royal Gold, which was incorporated in 1981.
Discipline - Equity Stewardship
8
NASDAQ: RGLD
|
Rainy River
Cortez Crossroads
19% CAGR in dividends per share since 2001, and currently equates to $1.00 per share, a 1.2% annual yield, and an average 22% OCF yield1
Discipline - Dividend Returns
1 Calculated as reported cash from operations divided by common dividends paid during the same period. 9
27% 29%
12%
21%19%
25% 26%23%
34%30%
15%18%
25%
36%
29%35%
22%
$0
$200
$400
$600
$800
$1,000
$1,200
$1,400
$1,600
$1,800
$0.00
$0.10
$0.20
$0.30
$0.40
$0.50
$0.60
$0.70
$0.80
$0.90
$1.00Dividend Per Share Operating Cash Flow Yield Average Gold Price (source: Kitco)
Annu
al D
ivid
ends
Per
Sha
re
Gold
Pric
e in
US
Dolla
rs
Latest increase
NASDAQ: RGLD
|
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.
William HayesIndependent 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
10
