By Chelsea Stevenson
Royal Gold Inc.'s (RGLD, RGL.T) fiscal fourth-quarter earnings
fell 5.1% as the company booked higher interest and income tax
expenses, though its costs slid and revenue edged up.
The owner of royalties on gold and other precious-metals mines
had previously posted surging profits on higher commodity prices
and increased production. A royalty is a right to receive a
percentage of production from a mine. The company has benefited
from higher gold prices, though it hadn't yet incurred operating
and capital costs for the facilities.
The company said Thursday it plans to acquire through its
subsidiary RGLD Gold AG an additional 12.25% of the payable gold
produced from the Mt. Milligan copper-gold project, from a unit of
Thompson Creek Metals Co. (TC, TCM.T). The transaction is expected
to cost $200 million and cash payments equal to the lesser value of
$435 or the prevailing market price for each payable ounce of gold
from the British Columbia-based site. Combined with prior
transactions, Royal Gold will be entitled to 52.25% of the Mt.
Milligan gold.
For the quarter ended June 30, Royal Gold reported a profit of
$20.6 million, or 34 cents a share, down from $21.7 million, or 39
cents a share, a year earlier. The latest quarter included an
income tax expense of $13.4 million and a interest expense of $2.7
million, up from $10.3 million and $1.6 million, respectively.
Royalty revenue edged up 1.3% to $60.1 million.
Analysts polled by Thomson Reuters expected per-share earnings
of 44 cents on revenue of $69 million.
Operating margin rose to 61.7% from 58.1%.
Shares closed Wednesday at $78.79 and were inactive premarket.
The stock is up 31% in the past three months.
Write to Chelsea Stevenson at chelsea.stevenson@dowjones.com
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