Royal Gold, Inc. (NASDAQ: RGLD; TSX: RGL) (together with
its subsidiaries, “Royal Gold” or the “Company”) recorded the
second consecutive quarter of record volume at 65,868 gold
equivalent ounces (“GEOs”)1 in the first quarter of fiscal 2016
(ended September 30, 2015, “first quarter”), up 22% from the
year-ago quarter. Revenue of $74.1 million reflected a 7% increase
over the prior year quarter. Physical gold inventory held on the
balance sheet and not reflected in revenue increased to 11,500
ounces during the first quarter, a 117% increase over the physical
gold inventory of 5,300 ounces as of June 30, 2015.
Earnings were impacted by a discrete tax expense associated with
the first quarter sale of our Andacollo royalty and the planned
liquidation of our Chilean subsidiary. Gross proceeds of $345
million were realized from this sale, resulting in a taxable gain.
As expected, the gain was taxable in the United States and Chile,
and the Company incurred a tax expense of $56.0 million. However,
there was not a corresponding gain recorded for financial reporting
purposes under U.S. GAAP. This resulted in a net loss attributable
to Royal Gold stockholders of $45.0 million, or $0.69 per basic
share during the first quarter, as compared to net income to Royal
Gold stockholders of $18.7 million, or $0.29 per basic share, for
the quarter ended September 30, 2014. Excluding this discrete tax
expense, net income would have been approximately $0.17 per share.
The reduction in net income per basic share compared to the prior
year quarter was also impacted by the items discussed within
Adjusted EBITDA below.
The Company executed on its strategy to grow and diversify
through the acquisition of four major streaming interests in the
first quarter. Tony Jensen, President and CEO, commented, “Our
September quarter was the most active period in Royal Gold’s
history. We committed over $1.4 billion to new streaming
investments which we expect will drive our near term growth, with
Golden Star and Andacollo already contributing to the September
quarter, Pueblo Viejo set to commence deliveries in the December
quarter, and Rainy River expected to begin production in calendar
year 2017. The stream on the world class Pueblo Viejo mine should
rise to our second largest revenue source over the next two
quarters.”
First Quarter Highlights Compared with the Year-ago
Quarter:
- Revenue of $74.1 million, an increase
of 7% despite a 12% lower gold price and a 117% increase in gold
inventory
- Record volume of 65,868 GEO’s2, an
increase of 22%
- Higher volume driven by Mount Milligan
and Peñasquito, where production is expected to exceed 2015
guidance of between 700,000 and 750,000 ounces
- Entered into four new stream agreements
during the quarter
- New contributions from the Golden Star
and Andacollo streams
Revenue increased during our first quarter compared with the
year-ago quarter, primarily due to higher revenue from Mount
Milligan and Peñasquito, as well as new revenue from the Golden
Star streams. The higher revenue was partially offset by an
increase in gold inventory, lower commodity prices, and lower
production in our area of interest at Cortez. The average gold
price was $1,124 per ounce for the first quarter, down 12% from
$1,282 per ounce in the year ago quarter. Physical gold inventory
increased to 11,500 ounces during the first quarter, up 117% from
5,300 ounces at June 30, 2015.
Adjusted EBITDA3 for the first quarter was $52.5 million ($0.81
per basic share), representing 71% of revenue, compared with
Adjusted EBITDA of $55.7 million ($0.86 per basic share), or 81% of
revenue, for the year-ago quarter. Adjusted EBITDA was lower during
the quarter due to $3.2 million of exploration expenses associated
with the Peak Gold joint venture. Adjusted EBITDA, as a percentage
of revenue, was also lower due to the inclusion of ongoing stream
payments for Mount Milligan, Andacollo and Golden Star, which
are recorded as a cost of sales and totaled $11.5
million during the first quarter.
During the first quarter, the Company borrowed $350 million
under its revolving credit facility to fund acquisitions, resulting
in $300 million in remaining availability under the facility at
September 30, 2015. Working capital totaled approximately $125.2
million at September 30, 2015. When combined with the availability
under the Company’s revolving credit facility, total liquidity at
September 30, 2015 was $425.2 million.
The Company entered into several new significant transactions
that, when added to existing firm commitments, will require
approximately $72.5 million in anticipated capital expenditures for
the remainder of fiscal year 2016. The Company plans to fund these
commitments with its existing liquidity plus cash flow from
operations. Cash flow from operations was $2.5 million for the
first quarter, which was reduced by approximately $47.7 million of
estimated total cash taxes related to the sale of the Andacollo
royalty. Operating cash flow is expected to increase during the
remainder of fiscal year 2016, assuming similar gold prices, as
three of the new transactions are expected to deliver incremental
operating cash flow during fiscal year 2016.
During the first quarter, we recognized an income tax expense
totaling $59.2 million compared with income tax expense of $4.0
million during the year-ago quarter. The higher tax expense is
primarily related to a discrete tax expense of approximately $56.0
million attributable to the termination of the Company’s royalty
interest at Andacollo and the planned liquidation of our Chilean
subsidiary. Excluding the discrete item, our effective tax rate for
the first quarter would have been 22.2%.
RECENT DEVELOPMENTS
Temporary Suspension of Underground Activities at the Phoenix
Gold Project
On November 3, 2015, Rubicon Minerals reported that it was
moving to suspend underground activities at the Phoenix Gold
Project while it enhances its geological model and develops a
project implementation plan, which they expect to complete in the
second calendar quarter 2016. The mill is currently operating and
Rubicon reported that it has a stockpile of approximately 11,000
tonnes of mineralized material at a grade of approximately 4.0
grams per tonne that they expect to process in November 2015.
Acquisition of Gold and Silver Stream at Pueblo Viejo
On September 29, 2015, Royal Gold closed its Precious Metals
Purchase and Sale Agreement with a wholly owned subsidiary of
Barrick Gold Corporation (“Barrick”) for a percentage of the gold
and silver production attributable to Barrick’s 60% interest in the
Pueblo Viejo mine located in the Dominican Republic.
Royal Gold made a single $610 million advance
payment to Barrick as part of the closing. The transaction is
effective July 1, 2015 for the gold stream
and January 1, 2016 for the silver stream. Under the
terms of the Purchase and Sale Agreement, Barrick will deliver
to Royal Gold, on a quarterly basis, an amount of gold equal
to 7.50% of Barrick’s interest in the gold produced at Pueblo Viejo
until 990,000 ounces of gold have been delivered, and 3.75%
thereafter; and an amount of silver equal to 75% of Barrick’s
interest in the silver produced at Pueblo Viejo (with silver
deliveries based on a fixed 70% recovery rate) until 50.00 million
ounces have been delivered, and 37.50% thereafter. Royal
Gold will pay Barrick’s 30% of the spot price per ounce of
gold until 550,000 ounces of gold have been delivered, and 60% of
the spot price per ounce thereafter; and 30% of the spot price per
ounce of silver until 23.10 million ounces of silver have been
delivered, and 60% of the spot price per ounce thereafter.
Royal Gold expects to receive its first delivery of gold
with respect to Pueblo Viejo on December 15 for the
period July 1 to November 30, 2015. Barrick informed the
Company that the first delivery will include approximately 8,900
ounces relating to July and August 2015 production, in
addition to delivery of gold for the period including September,
October and November 2015.
Acquisition of Gold Streams on Wassa, Bogoso and Prestea
On July 28, 2015, Royal Gold closed its $130 million gold stream
transaction with a wholly owned subsidiary of Golden Star Resources
Ltd. (“Golden Star”), pursuant to which RGLD Gold will advance
financing to Golden Star, subject to certain conditions, for
development projects at certain of Golden Star’s mines in Ghana,
and in return for which Golden Star will sell and deliver gold to
Royal Gold.
Also on July 28, 2015 and separate from the stream transaction,
the Company funded a previously announced $20 million, four-year
term loan to Golden Star and received warrants to purchase five
million shares of Golden Star Resources Ltd. common stock. Interest
under the term loan will be due quarterly at a rate equal to 62.50%
of the average daily gold price for the relevant quarter divided by
10,000, but not to exceed 11.50%. The warrants have a term of four
years and an exercise price of $0.27, which equals a 30% premium to
Golden Star’s weighted average share price for the ten-day period
ending two days prior to announcement of the transaction (May 7,
2015).
Pursuant to the stream transaction and subject to certain
conditions, Royal Gold will make $130 million in advance payments
to Golden Star in stages, including the $40 million upfront payment
made in connection with closing, $15 million paid in September 2015
and the balance on a pro rata basis with spending on the Wassa and
Prestea underground projects, which Royal Gold expects to make in
four quarterly payments, as follows: (i) $30 million on December 1,
2015 and (ii) $15 million on each of March 1, 2016, June 1, 2016
and September 1, 2016. Golden Star will deliver to Royal Gold 8.5%
of gold produced from Wassa, Bogoso and Prestea until 185,000
ounces have been delivered, 5.0% until an additional 22,500 ounces
have been delivered, and 3.0% thereafter. Royal Gold will pay
Golden Star a cash price equal to 20% of the spot price for each
ounce delivered at the time of delivery until 207,500 ounces have
been delivered, when the cash price will increase to 30% of the
spot price for each ounce delivered thereafter.
Acquisition of Gold and Silver Stream at Rainy River
On July 20, 2015, Royal Gold entered into a $175 million
Purchase and Sale Agreement with New Gold, Inc. (“New Gold”), for a
percentage of the gold and silver production from the Rainy River
Project located in Ontario, Canada (“Rainy River”). Pursuant to the
Purchase and Sale Agreement, Royal Gold will make two advance
payments to New Gold, consisting of $100 million, which was paid at
closing on July 20, 2015, and $75 million once capital spending at
Rainy River is 60% complete (currently expected by mid-calendar
2016). New Gold will deliver to Royal Gold 6.50% of the gold
produced at Rainy River until 230,000 gold ounces have been
delivered, and 3.25% thereafter. New Gold also will deliver 60% of
the silver produced at Rainy River until 3.10 million silver ounces
have been delivered, and 30% thereafter. Royal Gold will pay New
Gold 25% of the spot price per ounce of gold and silver at the time
of delivery.
Acquisition of Gold Stream at Carmen de Andacollo
On July 9, 2015, Royal Gold entered into a Long Term Offtake
Agreement (the “Andacollo Stream Agreement”) with a 90% owned
subsidiary of Teck Resources Limited (“Teck”). Royal Gold made a
single $525 million advance payment to Teck as part of the closing.
The agreement is effective July 1, 2015, and applies to all final
settlements of gold received on or after that date. Teck will
deliver to Royal Gold, on a monthly basis, 100% of payable gold
from the Carmen de Andacollo mine until 900,000 ounces have been
delivered, and 50% thereafter, subject to a fixed payable
percentage of 89%. Royal Gold will pay Teck 15% of the monthly
average gold price for the month preceding the delivery date for
each delivered ounce.
Termination of Royalty Interest at Carmen de Andacollo
On July 9, 2015, Royal Gold entered into a Royalty Termination
Agreement with Teck. The Royalty Termination Agreement terminated
an amended Royalty Agreement originally dated January 12, 2010.
Teck paid total consideration of $345 million to Royal Gold in
connection with the Royalty Termination Agreement.
PROPERTY HIGHLIGHTS
Highlights at certain of the Company’s principal producing and
development properties during the first quarter, compared with the
prior fiscal year quarter ended September 30, 2014, are listed
below. Production for our producing properties reflects the actual
production subject to our interests reported to us by the various
operators or from the operator’s publicly available
information.
Principal Producing
Properties
Andacollo – Royal Gold purchased approximately 9,800
ounces of physical gold from Andacollo during the quarter. Royal
Gold sold approximately 9,500 ounces of gold during the period at
an average price of $1,126 per ounce, and held approximately 300
ounces of gold in inventory as of September 30, 2015.
In late September 2015, a major earthquake in Chile damaged
Teck’s ship loading facilities at the port of Coquimbo. Teck
reported that production to date has not been materially affected,
and alternate loading arrangements have been arranged.
Andacollo delivers gold to Royal Gold within five business days
following the end of the month in which final smelter settlement
occurs. Royal Gold typically sells gold ounces over three weeks
following physical receipt. Andacollo final settlements generally
take five to six months from the bill-of-lading date. The
difference in timing between Andacollo quarterly production and
final smelter settlements may result in divergences of ounces
reported by Teck and those reported by Royal Gold for future
quarters.
Cortez – Production attributable to our royalty interest
at Cortez decreased approximately 62% over the prior year quarter
as mining moved into Cortez Hills, which is not subject to our
royalty interest. Barrick indicated that mining in calendar 2015
will include Cortez Hills and Crossroads pre-stripping. As a
result, production subject to our interest is expected to be lower
during the remainder of calendar 2015.
Holt – Production attributable to our royalty interest at
Holt increased 10% over the prior year quarter as a result of
higher head grades due to stope sequencing and lower dilution. St
Andrew reported Zone 4 contributed 80% of the ore and Zone 6
contributed the remainder of production at Holt. Throughput was
similar to the previous two quarters and mill recoveries were at
their expected level of 95%.
Mount Milligan – Royal Gold purchased approximately
23,800 ounces of physical gold from the Mt. Milligan mine during
the quarter. Royal Gold sold approximately 21,000 ounces of gold
during the period at an average price of $1,120 per ounce, and held
approximately 8,100 ounces of gold in inventory as of September 30,
2015.
Thompson Creek reported production of 53,800 ounces of payable
gold during the quarter, a decrease of 11% over the prior year
quarter. Thompson Creek reported some challenges in further
increasing mill throughput in the quarter due to issues with the
SAG screen deck. Thompson Creek scheduled installation of a second
SAG discharge screen deck in October 2015, which they expect will
allow them to increase throughput. Mill availability was impacted
by scheduled shutdowns to complete maintenance on the primary
crusher, reline the ball mills and to perform the annual inspection
of the SAG mill motor. Gold recoveries were slightly lower during
the quarter, averaging 67.3%.
Mount Milligan delivers gold to Royal Gold within two business
days of receipt of final smelter settlement proceeds and Royal Gold
typically sells gold ounces over three weeks following physical
receipt. Mount Milligan final settlements generally take five
months from the bill-of-lading date. The difference in timing
between Mount Milligan quarterly production results and final
smelter settlements may result in divergences of ounces reported by
Thompson Creek and those reported by Royal Gold for each
quarter.
Peñasquito – Gold, silver, lead and zinc production
attributable to our royalty interest at Peñasquito increased
approximately 58%, 12%, 19% and 39%, respectively. Production was
driven primarily by higher gold grades in sulphide as a result of
positive model reconciliation. As a result of continued strong
performance, Goldcorp has stated they expect to exceed their
production guidance of between 700,000 and 750,000 ounces.
Peñasquito continued with the Metallurgical Enhancement Project
("MEP") feasibility study which remains on schedule to be completed
in early calendar 2016.
Voisey’s Bay – In April 2015 we announced our intention
to recognize Voisey’s Bay royalty revenue on a cash basis, or in
the period in which actual payment information is received from
Vale, beginning with the June 2015 quarter. Production attributable
on a cash basis to our royalty interest at Voisey’s Bay for the
September 2015 quarter (from Vale’s production during the June 2015
quarter) was 1.7 million pounds of copper and 37.8 million pounds
of nickel. Royal Gold continues to disagree with Vale’s calculation
of royalty payments, the basis for those calculations and is
aggressively pursuing its legal remedies.
Wassa, Bogoso and Prestea – Royal Gold purchased
approximately 6,300 ounces of physical gold from Wassa, Bogoso and
Prestea during the quarter. Royal Gold sold approximately 3,200
ounces of gold during the period at an average price of $1,118 per
ounce, and held approximately 3,100 ounces of gold in inventory as
of September 30, 2015.
Golden Star reported total production of 51,898 ounces of gold
for the quarter from Wassa, Bogoso and Prestea. Golden Star stated
they are on track to meet production guidance of 110,000-115,000
ounces of gold at Wassa and 95,000-100,000 ounces of gold from
Bogoso/Prestea for calendar 2015.
Development of the Wassa underground project in commenced in
July 2015 and Golden Star reported completion of 382 meters of
development on the main and ventilation declines through October
28. Production from development ore is expected in March 2016. The
processing of non-refractory tailings at Bogoso was suspended
during the quarter in order to make way for the processing of
higher grade ore from the Prestea open pits at the Bogoso
non-refractory plant. The Prestea open pits are now in operation,
while the underground mine is currently in re-development. Stoping
at Prestea is expected to start in mid-2017, ramping up to 500
tonnes per day by the end of 2017.
Golden Star delivers gold to RGLD Gold within five business days
of the receipt of the final smelter settlement proceeds and RGLD
Gold typically sells gold ounces over three weeks following
physical receipt. The difference in timing between Wassa, Bogoso
and Prestea quarterly production results and final smelter
settlements may result in divergences of ounces reported by Golden
Star figures and those reported by Royal Gold for each quarter.
First quarter revenue and reported production for the Company’s
principal royalty and stream interests are shown in Table 1,
historical production data is shown in Table 2, a comparison of
operators’ 2015 production estimates to actual production is shown
in Table 3, and the stream summary is shown in Table 4. For more
detailed information about each of our principal royalty and stream
properties, please refer to the Company’s most recent Annual Report
on Form 10-K, our Quarterly Reports on Form 10-Q and Current
Reports on Form 8-K filed with the SEC and available on the SEC’s
website located at www.sec.gov, or our website located at
www.royalgold.com.
CORPORATE PROFILE
Royal Gold is a precious metals royalty and stream company
engaged in the acquisition and management of precious metal
royalties, streams, and similar production based interests. The
Company owns interests on 197 properties on six continents,
including interests on 39 producing mines and 23 development stage
projects. Royal Gold is publicly traded on the NASDAQ Global Select
Market under the symbol “RGLD,” and on the Toronto Stock Exchange
under the symbol “RGL.” The Company’s website is located at
www.royalgold.com.
Note: Management’s conference call reviewing the first
quarter results will be held Thursday, November 5, at 10:00 a.m.
Mountain Time (noon Eastern Time) and will be available by calling
(855) 209-8260 (North America) or (412) 542-4106 (international),
conference title “Royal Gold.” The call will be simultaneously
broadcast on the Company’s website at www.royalgold.com
under the “Presentations” section. A replay of this webcast will be
available on the Company’s website approximately two hours after
the call ends.
___________________________
1 The Company defines Gold Equivalent Ounces as revenue
divided by the average gold price for the same period. 2 GEOs net
of stream payments were 55,669 in the first quarter, compared with
47,999 net GEOs in the year-ago quarter, an increase of 15%. 3 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-controlling interests in
operating income of consolidated subsidiaries, interest and other
income, and any royalty portfolio restructuring gains or losses
(see Schedule A).
Cautionary “Safe Harbor” Statement Under the Private
Securities Litigation Reform Act of 1995: With the exception of
historical matters, the matters discussed in this press release are
forward-looking statements that involve risks and uncertainties
that could cause actual results to differ materially from
projections or estimates contained herein. Such forward-looking
statements include statements about the Company’s ability to invest
in additional quality properties; operators’ expectations about
construction, ramp up, production, and mine life; resolution of
regulatory and legal proceedings (including with Vale regarding
Voisey’s Bay); statements about the new streaming agreements at
Wassa, Bogoso and Prestea, Andacollo, Rainy River and Pueblo Viejo,
and expectations concerning near-term growth; and statements about
development, ramp-up, production and mine life at all the
operations which are subject to our streaming agreements, including
without limitation our new streaming agreements, Mount Milligan,
Phoenix Gold and Ilovica. Factors that could cause actual results
to differ materially from the projections include, among others,
precious metals, copper and nickel prices; performance of and
production at the Company's royalty and stream properties; the
ability of operators of development properties to finance project
construction to completion and bring projects into production as
expected; delays in securing or inability to secure necessary
governmental permits; decisions and activities of the operators of
the Company's royalty and stream properties; unanticipated grade,
environmental, geological, metallurgical, processing, liquidity or
other problems the operators of the mining properties may
encounter; completion of feasibility studies; changes in operators’
project parameters as plans continue to be refined; changes in
estimates of reserves and mineralization by the operators of the
Company’s royalty and stream properties; contests to the Company’s
royalty and stream interests and title and other defects to the
Company’s royalty and stream properties; errors or disputes in
calculating royalty and stream payments, or payments not made in
accordance with royalty and stream agreements; economic and market
conditions; risks associated with conducting business in foreign
countries; changes in laws governing the Company and its royalty
and stream properties or the operators of such properties; and
other subsequent events; as well as other factors described in the
Company's Annual Report on Form 10-K, Quarterly Reports on Form
10-Q, and other filings with the Securities and Exchange
Commission. Most of these factors are beyond the Company’s ability
to predict or control. The Company disclaims any obligation to
update any forward-looking statement made herein. Readers are
cautioned not to put undue reliance on forward-looking
statements.
TABLE 1First Quarter Fiscal
2016Revenue and Reported Production for Principal Royalty
and Stream Interests(In thousands, except reported
production in oz. and lbs.)
Three Months Ended Three Months Ended
September 30, 2015 September 30, 2014
Reported
Reported
Royalty/Stream
Metal(s)
Revenue
Production1
Revenue
Production1 Stream:
Mount
Milligan Gold $ 23,465 21,000 oz. $
19,657 15,300 oz. Andacollo Gold $ 10,716
9,500 oz. N/A N/A Wassa, Bogoso,
Prestea Gold $ 3,624 3,200 oz.
N/A N/A Other Gold $ 52 N/A
N/A N/A
Royalty:
Peñasquito
$ 8,046 $ 7,111 Gold
226,500 oz. 143,100 oz. Silver
7.3 Moz. 6.5 Moz. Lead
49.1 Mlbs. 41.3 Mlbs.
Zinc 118.7 Mlbs.
85.4 Mlbs. Voisey's Bay $ 5,444
$ 5,609 Nickel 37.8 Mlbs.
17.1 Mlbs. Copper
1.7 Mlbs. 22.0 Mlbs. Holt Gold
$ 2,678 16,300 oz. $ 3,159 14,800 oz.
Cortez Gold $ 1,812 22,600 oz. $ 4,734
59,500 oz. Andacollo Gold N/A
N/A $ 10,499 11,000 oz. Other Various $
18,219 N/A $ 18,257 N/A
Total Revenue
$ 74,056
$ 69,026
TABLE 2
Historical Production
Reported Production For The Quarter
Ended1
Property
Royalty/Stream
Operator
Metal(s) Sep. 30, 2015 Jun.
30, 2015 Mar. 31, 2015 Dec. 31,
2014 Sep. 30, 2014 Stream:
Andacollo
100% of goldproduced
Teck Gold 9,500 oz. N/A N/A
N/A N/A Mount Milligan
52.25% of payablegold
Thompson Creek Gold 21,000 oz. 23,000
oz. 24,200 oz. 14,300 oz. 15,300 oz. Wassa,
Bogoso, Prestea
8.5% of goldproduced up to185,000
ounces;5.0% thereafter
Golden Star Gold 3,200 oz. N/A
N/A N/A N/A
Royalty
Andacollo2 75 % Teck
Gold N/A 10,500 oz. 9,500 oz.
10,500 oz. 11,000 oz. Cortez
GSR1 and GSR2,GSR3, NVR1
Barrick Gold 22,600 oz. 43,900 oz.
65,200 oz. 60,400 oz. 59,500 oz. Holt
0.00013 x quarterlyaverage gold price
St AndrewGoldfields
Gold
16,300 oz. 15,800 oz. 16,700 oz. 14,300
oz. 14,800 oz. Peñasquito 2.0% NSR Goldcorp
Gold
226,500 oz. 296,900 oz. 177,200 oz.
125,000 oz. 143,100 oz. Silver 7.3 Moz. 7.0
Moz. 6.0 Moz. 5.1 Moz. 6.5 Moz. Lead
49.1 Mlbs. 48.2 Mlbs. 39.5 Mlbs. 29.5 Mlbs.
41.3 Mlbs. Zinc
118.7 Mlbs. 88.9 Mlbs. 82.6 Mlbs. 84.0
Mlbs. 85.4 Mlbs. Voisey's Bay 2.7% NSR Vale
Nickel 37.8 Mlbs. 9.0 Mlbs. 17.2 Mlbs.
19.6 Mlbs. 17.1 Mlbs.
Copper 1.7 Mlbs. 20.8 Mlbs. NA Mlbs.
30.1 Mlbs. 22.0 Mlbs.
FOOTNOTESTables 1 and 2
1 Reported production relates to the amount of metal sales
that are subject to our royalty and stream interests for the stated
period, as reported to us by operators of the mines. 2 This royalty
was terminated effective July 1, 2015.
TABLE 3Calendar 2015 Operators’
Production Estimate
Calendar 2015
Operator’s Production Estimate1,2 Calendar
2015 Operator's Production
Actual3,4 Gold Silver
Base Metals Gold Silver
Base Metals Royalty/Stream (oz.)
(oz.) (lbs.) (oz.)
(oz.) (lbs.) Andacollo5 52,200 -
- 33,600 - - Cortez GSR1 104,100
- - 101,300 - - Cortez GSR2
27,900 - - 30,400 - -
Cortez GSR3 132,000 - - 131,700
- - Cortez NVR1 97,200 - -
97,600 - - Holt 64,000 - -
48,700 - - Mount Milligan6
200,000-220,000 - - 159,800 - -
Peñasquito7,8 700,000-750,000 24-26 million -
690,400 19.5 million - Lead7,8
175-185 million
133.4 million Zinc7,8
400-415 million 299.5 million
Pueblo Viejo9 625,000-675,000
438,000 - - Wassa, Bogoso, Prestea10
205,000-215,000 170,300
1 Production estimates received
from our operators are for calendar 2015. 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 preceding Table 1 above, as well as the Risk
Factors identified in Part I, Item 1A, of our Fiscal 2015 10-K for
information regarding factors that could affect actual results. 2
The operators of our Voisey’s Bay interest did not release public
production guidance for calendar 2015, thus estimated and actual
production information is not shown in the table. 3 Actual
production figures shown are for the period January 1, 2015 through
September 30, 2015, unless otherwise noted. 4 Actual production
figures for Andacollo and Cortez are based on information provided
to us by the operators, and actual production figures for Holt,
Mount Milligan, Peñasquito (gold) and Wassa, Bogoso, and Prestea
are the operators’ publicly reported figures. 5 The estimated and
actual production figures shown for Andacollo are contained gold in
concentrate. 6 The estimated and actual production figures shown
for Mount Milligan are payable gold in concentrate. 7 The estimated
gold and silver production figures reflect payable gold and silver
in concentrate and doré, while the estimated lead and zinc
production figures reflect payable metal in concentrate 8 The
actual gold production figure for gold reflects payable gold in
concentrate and doré as reported by the operator. The actual
production for silver, lead and zinc were not publicly available.
The Company’s royalty interest at Peñasquito includes gold, silver,
lead and zinc. 9 The gold and silver stream at Pueblo Viejo was
acquired during the quarter ended September 30, 2015 and the first
gold delivery is expected in December 2015 for the period July 1 –
November 30, 2015. The estimated production figure shown is payable
gold in doré and represents Barrick’s 60% interest in Pueblo Viejo.
10 The gold streams at Wassa, Bogoso and Prestea were acquired
during the quarter ended September 30, 2015. The estimated
production figure shown is payable gold in doré.
TABLE 4Stream Summary(As
of September 30, 2015)
Three Months Ended September 30, 2015 As of
September 30, 2015 Stream
Gold OuncesPurchased
Gold OuncesSold
Average Realized
GoldPrice/Ounce
Gold Ounces In Inventory
Mount Milligan 23,783 20,956 $ 1,120 8,084 Andacollo
9,788 9,513 $ 1,126 275 Wassa, Bogoso, Prestea 6,335 3,242 $ 1,118
3,094 Phoenix Gold 75 47 $ 1,133 28
Total 39,981 33,758 $ 1,121 11,481
ROYAL GOLD, INC.Consolidated
Balance Sheets(In thousands except share data)
September 30, June 30, 2015 2015
ASSETS Cash
and equivalents $ 104,310 $ 742,849 Royalty receivables 24,539
37,681 Income tax receivable 13,550 6,422 Prepaid expenses and
other 9,912 3,798 Total current assets
152,311 790,750 Royalty and stream interests, net 3,012,952
2,083,608 Available-for-sale securities 5,824 6,273 Other assets
57,608 44,801 Total assets $ 3,228,695
$ 2,925,432
LIABILITIES Accounts
payable 8,383 4,911 Dividends payable 14,357 14,341 Foreign
withholding taxes payable - 199 Other current liabilities
4,380 5,522 Total current liabilities 27,120
24,973 Debt 674,780 322,110 Deferred tax liabilities 145,256
146,603 Uncertain tax positions 15,207 15,130 Other long-term
liabilities 6,510 689 Total liabilities
868,873 509,505 Commitments and
contingencies
EQUITY
Preferred stock, $.01 par value,
authorized 10,000,000 sharesauthorized; and 0 shares issued
- -
Common stock, $.01 par value, 100,000,000
shares authorized; and 65,065,461 and
65,033,547 shares outstanding,
respectively
651 650 Additional paid-in capital 2,174,720 2,170,643 Accumulated
other comprehensive loss (3,741 ) (3,292 ) Accumulated earnings
125,717 185,121 Total Royal Gold
stockholders’ equity 2,297,347 2,353,122 Non-controlling interests
62,475 62,805 Total equity
2,359,822 2,415,927 Total liabilities and
equity $ 3,228,695 $ 2,925,432
ROYAL GOLD, INC.Consolidated
Statements of Operations and Comprehensive (Loss) Income(In
thousands except for per share data)
For The Three Months Ended September 30,
September 30, 2015 2014 Revenue $
74,056 $ 69,026 Costs and expenses Cost of sales 11,466
6,674 General and administrative 9,510 7,142 Production taxes 1,592
1,690 Exploration Costs 3,156 - Depreciation, depletion and
amortization 27,147 22,212 Impairment of royalty and stream
interests - 1,769 Total costs and
expenses 52,871 39,487 Operating
income 21,185 29,539 Interest and other income 265 51
Interest and other expense (7,214 ) (6,712 ) Income
before income taxes 14,236 22,878 Income tax expense
(59,177 ) (3,959 ) Net (loss) income (44,941 ) 18,919 Net
income attributable to non-controlling interests (105 )
(239 ) Net (loss) income attributable to Royal Gold common
stockholders $ (45,046 ) $ 18,680 Net (loss) income $
(44,941 ) $ 18,919 Adjustments to comprehensive (loss) income, net
of tax Unrealized change in market value of
available-for-sale securities (449 ) (1,340 )
Comprehensive (loss) income (45,390 ) 17,579 Comprehensive income
attributable to non-controlling interests (105 ) (239
) Comprehensive (loss) income attributable to Royal Gold
stockholders $ (45,495 ) $ 17,340 Net (loss) income
per share available to Royal Gold common stockholders: Basic (loss)
earnings per share $ (0.69 ) $ 0.29 Basic weighted average
shares outstanding 65,048,439 64,962,883
Diluted (loss) earnings per share $ (0.69 ) $
0.29
Diluted weighted average shares outstanding
65,048,439 65,107,481 Cash dividends declared
per common share $ 0.22 $ 0.21
ROYAL GOLD, INC.Consolidated
Statements of Cash Flows(In Thousands)
For The Three Months Ended September 30, September
30, 2015 2014 Cash flows from operating
activities: Net (loss) income $ (44,941 ) $ 18,919 Adjustments to
reconcile net (loss) income to net cash provided by operating
activities: Depreciation, depletion and amortization 27,147 22,212
Non-cash employee stock compensation expense 4,227 2,449
Amortization of debt discount 2,670 2,473 Impairment of royalty and
stream interests - 1,769 Tax benefit of stock-based compensation
exercises 150 303 Deferred tax benefit 11,767 (5,374 ) Other (390 )
- Changes in assets and liabilities: Royalty receivables 13,142
3,427 Prepaid expenses and other assets (4,136 ) 2,147 Accounts
payable 3,266 (1,570 ) Foreign withholding taxes payable (199 )
(1,320 ) Income taxes receivable (17,192 ) 5,373 Uncertain tax
positions 77 483 Other liabilities 6,903 1,167
Net cash provided by operating activities $ 2,491 $
52,458 Cash flows from investing activities:
Acquisition of royalty and stream interests (1,300,881 ) (6,209 )
Andacollo royalty sale 345,000 - Golden Star term loan (20,000 ) -
Other (228 ) (127 ) Net cash used in investing
activities $ (976,109 ) $ (6,336 ) Cash flows from financing
activities: Borrowings from revolving credit facility 350,000 - Net
proceeds from issuance of common stock - 199 Common stock dividends
(14,341 ) (13,678 ) Distribution to non-controlling interests (422
) (465 ) Tax expense of stock-based compensation exercises (150 )
(303 ) Other (8 ) - Net cash provided by (used
in) financing activities $ 335,079 $ (14,247 ) Net
(decrease) increase in cash and equivalents (638,539 )
31,875 Cash and equivalents at beginning of period
742,849 659,536 Cash and equivalents at
end of period $ 104,310 $ 691,411
SCHEDULE A
Non-GAAP Financial
Measures
The Company computes and discloses
Adjusted EBITDA. Adjusted EBITDA is a non-GAAP financial
measure. Adjusted EBITDA is defined by the Company as net (loss)
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 consolidated subsidiaries, interest and other
income, and any royalty portfolio restructuring gains or losses.
Other companies may define and calculate this measure
differently. Management believes that Adjusted EBITDA is
a useful measure of the performance of our royalty and stream
portfolio. 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 with U.S.
generally accepted accounting principles (“GAAP”) and should not be
considered in isolation or as a substitute for measures of
performance determined in accordance with U.S. GAAP. Below is a
reconciliation of net income to Adjusted EBITDA.
ROYAL GOLD, INC.Adjusted EBITDA
Reconciliation
For The Three Months Ended September 30, (Unaudited, in
thousands) 2015 2014 Net
(loss) income $ (44,941 ) $ 18,919 Depreciation, depletion and
amortization 27,147 22,212 Non-cash employee stock compensation
4,227 2,449 Impairment of royalty and stream interests - 1,769
Interest and other income (265 ) (51 ) Interest and other expense
7,214 6,712 Income tax expense 59,177 3,959 Non-controlling
interests in operating income of consolidated subsidiaries
(105 ) (239 ) Adjusted EBITDA $ 52,454 $ 55,730
View source
version on businesswire.com: http://www.businesswire.com/news/home/20151104007029/en/
Royal Gold, Inc.Karli Anderson, 303-575-6517Vice
President Investor Relations
Royal Gold (NASDAQ:RGLD)
Historical Stock Chart
From Mar 2024 to Apr 2024
Royal Gold (NASDAQ:RGLD)
Historical Stock Chart
From Apr 2023 to Apr 2024