Royal Gold, Inc. (NASDAQ: RGLD; TSX: RGL) (together with
its subsidiaries, “Royal Gold” or the “Company”) reports results
for its second quarter of fiscal 2016 (“second quarter”), including
record revenue of $98.1 million, up 60% from $61.3 million in the
prior year quarter. Net income attributable to Royal Gold
stockholders was $15.1 million, or $0.23 per share, as compared to
a net loss attributable to Royal Gold stockholders of $6.5 million,
or ($0.10) per share, for the prior year quarter.
Second Quarter Highlights Compared with the Year-ago
Quarter:
- Record revenue of $98.1 million, an
increase of 60%
- Record volume of 88,700 Gold Equivalent
Ounces (“GEOs”1), an increase of 74%
- Operating cash flow of $52.1 million,
an increase of 75%
- Record dividends paid of $14.4 million,
or 28% of operating cash flow, yielding 3.0% at the current share
price
- Adjusted EBITDA of $70.0 million, an
increase of 46%
“Increased production from Mount Milligan and contributions from
our recently acquired streams at Pueblo Viejo, Andacollo, Wassa and
Prestea drove our record performance in the second quarter as
expected,” commented Tony Jensen, President and CEO. “Impressive
volume growth at these properties and stability within the rest of
the portfolio are yielding solid financial results and generating
strong free cash flow.”
Second quarter revenue was comprised of stream revenue of $67.3
million and royalty revenue of $30.8 million, at an average gold
price of $1,106 per ounce. Stream segment gold purchases totaled
approximately 75,800 ounces in the second quarter. The Company sold
approximately 61,600 ounces of gold from its stream segment, and
had approximately 25,700 ounces in inventory at December 31, 2015,
as previously guided, up from 11,500 ounces at September 30,
2015.
Net income attributable to Royal Gold stockholders was $15.1
million, or $0.23 per share, compared to a net loss attributable to
Royal Gold stockholders of $6.5 million, or ($0.10) per share for
the prior year quarter. The increase in our earnings per share was
primarily attributable to an increase in our revenue. During the
prior year quarter, the Company recognized impairment charges of
$29.6 million on certain non-principal royalty interests, which
impacted earnings per share by $0.34 per share, after taxes.
Cost of sales was approximately $22.6 million for the second
quarter, which equates to an average purchase price of $370 per
stream ounce. This is compared to $6.2 million, or $435 per stream
ounce for the prior year quarter. The increased cost of sales is
primarily attributable to higher production at Mount Milligan and
new stream production at Andacollo, Pueblo Viejo and Wassa/Prestea.
Cost of sales is specific to each of our stream agreements, where
we purchase gold for a cash payment.
Adjusted EBITDA2 for the second quarter was $70.0 million ($1.08
per basic share), representing 71% of revenue, compared with
Adjusted EBITDA of $48.0 million ($0.74 per basic share), or 78% of
revenue, for the year-ago quarter. Adjusted EBITDA as a percentage
of revenue declined due to increased contribution from the
Company’s streaming segment, which includes a cost of sales.
We recognized income tax expense totaling $4.7 million in the
second quarter compared with an income tax benefit of $1.8 million
during the prior year quarter. This resulted in an effective tax
rate of 25.4% in the current period, compared with 22.4% in the
quarter ended December 31, 2014.
Depreciation, depletion and amortization increased to $40.4
million for the quarter ended December 31, 2015, from $20.3 million
for the quarter ended December 31, 2014, reflecting the ramp-up of
production from Mount Milligan and new stream production.
Interest and other expense increased to $8.9 million for the
quarter ended December 31, 2015, from $6.4 million for the quarter
ended December 31, 2014. This was primarily due to an increase in
interest expense associated with the outstanding balance on our
revolving credit facility. The Company had $350 million outstanding
under the revolving credit facility as of December 31, 2015, and
did not have any amounts outstanding under the revolving credit
facility during the quarter ended December 31, 2014.
Working capital totaled approximately $142.3 million at December
31, 2015. When combined with the $300 million of availability under
our revolving credit facility, total liquidity at December 31,
2015, was approximately $442.3 million. Cash flow from operations
was $52.1 million for the three months ended December 31, 2015.
RECENT DEVELOPMENTS
Amendment of Gold Stream at Wassa and Prestea
On December 30, 2015, RGLD Gold AG (“RGLD Gold”), a wholly-owned
subsidiary of the Company, amended its $130 million gold stream
transaction with a wholly-owned subsidiary of Golden Star Resources
Ltd. (together “Golden Star”). The parties executed an amendment
providing for an additional $15 million investment (for a total
investment of $145 million) by RGLD Gold. If Golden Star procures a
minimum of $5 million of third party investment, RGLD Gold will
increase its investment by a further $5 million (for a total
investment of $150 million) subject to satisfaction of certain
conditions.
As of December 31, 2015, RGLD Gold has advanced $75 million, and
has received 12,700 ounces of gold deliveries, resulting in $13.4
million in sales in just two quarters. RGLD Gold expects to advance
the balance of our commitment in four quarterly payments as
follows: (i) $20 million on each of April 1, July 1 and October 1,
2016, and (ii) $10 million on January 1, 2017; however funds will
be advanced on a pro rata basis with project development spending,
subject to satisfaction of certain conditions. Golden Star will
deliver to RGLD Gold 9.25% of gold produced from all their Ghanaian
properties, until the earlier of (i) December 31, 2017 or (ii) the
date at which the Wassa and Prestea underground projects achieve
commercial production. At that point, the stream percentage will
increase to 10.5% (or to 10.9% if the total investment increases to
$150 million) of gold produced until an aggregate 240,000 ounces
have been delivered (or 250,000 ounces if the total investment
increases to $150 million). Once the applicable delivery threshold
is met, the stream percentage will decrease to 5.5% for all
production thereafter.
RGLD Gold will pay Golden Star a cash price equal to 20% of the
spot price for each ounce of gold delivered at the time of delivery
until the applicable delivery threshold is met, and 30% of the spot
price for each ounce of gold delivered thereafter.
Mount Milligan
Thompson Creek reported production of 58,300 ounces of payable
gold during the quarter, an increase of 42% over the prior year
quarter. Mill throughput averaged 48,176 tonnes per day for the
quarter, an increase of 10% over the prior year quarter. Thompson
Creek surpassed the mill design capacity of 60,000 tonnes per day
during the last week of December when mill throughput averaged
61,212 tonnes with highest daily throughput in December of 64,478
tonnes. Thompson Creek continues to optimize the operation and
expects to make a decision on construction of the permanent
secondary crusher during the March 2016 quarter.
Gold grades averaged 0.63 grams per tonne, an increase of 17%
over the prior year quarter and gold recoveries averaged 67.3% for
the quarter, an increase of 11% over the prior year quarter.
For calendar 2016, Thompson Creek forecasts annual gold payable
production of 240,000 to 270,000 ounces, an increase of
approximately 10% to 24% over calendar year 2015 production of
approximately 218,000 ounces.
Thompson Creek announced that they have engaged Moelis &
Company and BMO Capital Markets to assist them in evaluating
strategic and financial alternatives, including debt refinancing
and restructuring, new capital transactions and asset sales. The
Company continues to monitor Thompson Creek’s financial situation
and is working to ensure our interests at Mount Milligan are
protected.
Phoenix Gold
On January 11, 2016, Rubicon Minerals Corporation (“Rubicon”)
provided an updated geological model and mineralized material
statement for the Phoenix Gold Project that included a significant
reduction in mineralized material compared to previous statements
provided by Rubicon. Rubicon suspended activities related to their
previously announced Phoenix Project Implementation Plan and has
retained BMO Capital Markets, TD Securities, and Stikeman Elliott
LLP as advisors to assist in evaluating strategic alternatives
available to the Company.
Royal Gold anticipates that it will conclude its technical
evaluation of the revised geologic model and mineralized material
statement prior to the release of our financial results for the
period ended March 31, 2016. Upon completion of our evaluation and
upon consideration of any strategic developments with Rubicon or
the Phoenix Gold Project, the Company could determine that an
impairment of its carrying value in the near future is necessary.
For the period ended December 31, 2015, the carrying value of the
Phoenix Gold Project comprised approximately 2.5% of the Company’s
total royalty and stream interests, net.
Pueblo Viejo
In November 2015, Barrick announced that two of three electric
motors at the Pueblo Viejo oxygen plant experienced unexpected
failures and were shipped to the United States for repair. A
comprehensive plan to mitigate the impact of the motor failure was
implemented by Barrick in December 2015, which involved installing
a number of portable compressors in December and early January.
This restored mill production to near full capacity during the
second week in January. One of the two repaired motors has arrived
in the Dominican Republic and will be installed and tested by the
end of January 2016. The second motor is due to arrive on-site in
mid-February 2016.
Voisey’s Bay
Production attributable to royalty revenue recognized at
Voisey's Bay during the second quarter was 15.2 million pounds of
copper and 23.6 million pounds of nickel. Vale reported that its
new Long Harbour hydrometallurgical plant will begin processing
only Voisey’s Bay concentrate by the first calendar quarter of
2016. Vale has made clear its intention to deduct full Long Harbour
operating costs, depreciation and cost of capital from actual
proceeds when calculating the net smelter return royalty which
could have the effect of further reducing or eliminating royalty
payments. Royal Gold strongly disagrees with Vale’s position that
operating costs, capital costs and cost of capital are permissible
net smelter return deductions pursuant to the royalty agreement and
is aggressively pursuing its legal remedies.
Wassa and Prestea Development
Golden Star reported that the Wassa Underground project made
substantial progress during calendar 2015, with stope development
of the upper mineralization is expected to commence in the June
2016 quarter and first ore production expected mid-calendar 2016.
Infill drilling early in calendar 2015 was successful in expanding
the F Shoot target and further drilling will be conducted to
determine additional mineral potential in the area.
Golden Star also reported work on the Prestea Underground
project is progressing as scheduled with first ore production is
expected in early calendar 2017.
PROPERTY HIGHLIGHTS
A summary of calendar year production estimates versus actuals
at certain producing properties can be found on Table 3. Highlights
at certain of the Company’s principal producing and development
properties during the second quarter, compared with the prior
fiscal year quarter ended December 31, 2014, are detailed in our
form 10-Q. 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.
__________________________________________
1 GEOs are calculated as revenue divided by the average
quarterly price per ounce of gold. Net of stream payments GEOs were
68,300 in the second quarter, compared with 45,900 net GEOs in the
year-ago quarter, an increase of 49%. 2 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).
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 195 properties on six continents,
including interests on 38 producing mines and 24 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 second
fiscal quarter results will be held Thursday, February 4, 2016 at
10:00 a.m. Mountain Standard Time (noon Eastern Standard 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.
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 amended
streaming agreements at Wassa and Prestea, 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
Wassa, Prestea, Andacollo, Holt, Pueblo Viejo, Mount Milligan and
Phoenix Gold. 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, seismic, 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 1
Second Quarter Fiscal 2016
Revenue and Reported Production for
Principal Royalty and Stream Interests
Three Months Ended December 31, 2015
and December 31, 2014
(In thousands, except reported
production in oz. and lbs.)
Three Months Ended Three Months Ended December 31,
2015 December 31, 2014
Reported
Reported
Royalty/Stream
Metal(s)
Revenue
Production1
Revenue Production1
Stream:
Mount Milligan Gold
$ 42,294 38,700 oz.
$ 17,318 14,300 oz.
Wassa/Prestea Gold $ 9,776
8,800 oz. N/A
N/A Pueblo Viejo Gold
$ 9,400 8,800 oz.
N/A N/A Andacollo Gold
$ 5,718 5,200 oz.
N/A N/A Other Gold
$ 124 100 oz.
N/A N/A
Royalty:
Peñasquito
$ 6,952
$ 5,573 Gold
195,400 oz.
125,000 oz. Silver
6.8 Moz.
5.1 Moz. Lead
41.7 Mlbs.
29.5 Mlbs. Zinc
98.0 Mlbs.
84.0 Mlbs. Voisey's Bay
$ 2,822
$ 6,117 Nickel
23.6 Mlbs.
19.6 Mlbs.
Copper 15.2
Mlbs. 30.1 Mlbs.
Holt Gold $ 2,391
15,000 oz. $ 2,676
14,300 oz. Cortez Gold $ 1,175
17,000 oz. $ 5,001
60,400 oz. Andacollo Gold
$ - - oz. $ 9,594
10,500 oz. Other Various
$ 17,466 N/A
$ 15,025 N/A
Total Revenue
$ 98,118
$ 61,304
TABLE 1
Second Quarter Fiscal 2016
Revenue and Reported Production for
Principal Royalty and Stream Interests
Six Months Ended December 31, 2015 and
December 31, 2014
(In thousands, except reported
production in oz. and lbs.)
Six Months Ended Six Months Ended December 31,
2015 December 31, 2014
Reported
Reported
Royalty/Stream
Metal(s)
Revenue
Production1
Revenue Production1
Stream:
Mount Milligan Gold
$ 65,758 59,600 oz.
$ 36,975 29,700 oz. Andacollo
Gold $ 16,433
14,700 oz. N/A N/A
Wassa/Prestea Gold $ 13,400
12,000 oz. N/A
N/A Pueblo Viejo Gold
$ 9,400 8,800 oz.
N/A N/A Other Gold
$ 177 200 oz. N/A
N/A
Royalty:
Peñasquito
$ 14,998
$ 12,684 Gold
421,900 oz.
268,100 oz. Silver
14.1 Moz.
11.6 Moz. Lead
90.8 Mlbs.
70.8 Mlbs. Zinc
216.7 Mlbs.
169.4 Mlbs. Voisey's Bay
$ 8,266
$ 11,726 Nickel
61.4 Mlbs.
36.7 Mlbs.
Copper 16.9 Mlbs.
52.1 Mlbs. Holt
Gold $ 5,069
31,300 oz. $ 5,835
29,100 oz. Cortez Gold $ 2,987
39,600 oz. $ 9,736
119,900 oz. Andacollo Gold
$ - - oz. $
20,093 21,500 oz. Other Various
$ 35,685 N/A
$ 33,281 N/A
Total
Revenue $
172,173 $
130,330
TABLE 2
Historical Production
Reported Production For The Quarter Ended1
Property
Royalty/Stream
Operator
Metal(s) Dec. 31, 2015
Sep. 30, 2015 Jun. 30,
2015 Mar. 31, 2015 Dec.
31, 2014 Stream:
Andacollo
100% of goldproduced
Teck Gold 5,200 oz.
9,500 oz. N/A N/A
N/A Mount Milligan
52.25% of payablegold
Thompson Creek Gold
38,700 oz. 21,000 oz. 23,000 oz.
24,200 oz. 14,300 oz. Pueblo Viejo
7.5% of goldproduced up to990,000
ounces;3.75% therafter
Barrick (60%) Gold 8,800
oz. N/A N/A N/A
N/A Wassa/Prestea
8.5% of goldproduced up to185,000
ounces;5.0% therafter
Golden Star Gold 8,800
oz. 3,200 oz. N/A N/A
N/A
Royalty
Andacollo2 75% Teck
Gold N/A N/A
10,500 oz. 9,500 oz. 10,500 oz. Cortez
GSR1 and GSR2,GSR3, NVR1
Barrick Gold 17,000 oz.
22,600 oz. 43,900 oz.
65,200 oz. 60,400 oz. Holt
0.00013 x quarterlyaverage gold price
St Andrew Goldfields Gold
15,000 oz. 16,300 oz. 15,800 oz.
16,700 oz. 14,300 oz. Peñasquito 2.0% NSR
Goldcorp
Gold
195,400 oz. 226,500 oz. 296,900
oz. 177,200 oz. 125,000 oz. Silver
6.8 Moz. 7.3 Moz. 7.0
Moz. 6.0 Moz. 5.1 Moz. Lead
41.7 Mlbs. 49.1 Mlbs. 48.2 Mlbs.
39.5 Mlbs. 29.5 Mlbs.
Zinc
98.0 Mlbs. 118.7 Mlbs. 88.9 Mlbs.
82.6 Mlbs. 84.0 Mlbs. Voisey's Bay 2.7%
NSR Vale
Nickel
23.6 Mlbs. 37.8 Mlbs. 9.0
Mlbs. 17.2 Mlbs. 19.6 Mlbs.
Copper
15.2 Mlbs. 1.7 Mlbs. 20.8
Mlbs. N/A Mlbs. 30.1 Mlbs.
FOOTNOTES
Tables 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 3
Calendar 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
- - 47,600
- - Cortez GSR1
104,100 - -
113,700 - -
Cortez GSR2 27,900 -
- 35,000
- - Cortez GSR3
132,000 - -
148,700 - - Cortez
NVR1 97,200 -
- 110,100 -
- Holt 64,000
- - 63,000
- - Mount Milligan6
200,000-220,000 -
- 218,100 -
- Penasquito
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
572,000 -
- Wassa/Prestea10
205,000-215,000
222,400
1 Production estimates received
from our operators are for calendar 2015, except for Peñasquito and
Pueblo Viejo. 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 operator 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 December 31, 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), Wassa 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
through September 30, 2015. 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 was
received in December 2015 for the period July 1 – November 30,
2015. The estimated and actual production figures shown are payable
gold in doré and represent Barrick’s 60% interest in Pueblo Viejo.
10 The gold streams at Wassa and Prestea were acquired during the
quarter ended September 30, 2015. The estimated production figure
shown is payable gold in doré.
TABLE 4
Stream Summary
Three months ended December
31,2015
Three months ended December
31,2014
As ofDecember31,
2015
Stream
Goldouncespurchased
Goldouncessold
Averagerealized
goldprice/ounce
Goldouncespurchased
Goldouncessold
Averagerealized
goldprice/ounce
Goldounces
ininventory
Mount Milligan 38,700 38,700 $ 1,093
13,000 14,300 $ 1,208
8,068 Wassa/Prestea 6,300 8,800 $ 1,116 N/A N/A N/A 699 Pueblo
Viejo 20,600 8,800 $ 1,068 N/A N/A N/A 11,769 Andacollo 10,100
5,200 $ 1,102 N/A N/A N/A 5,152 Phoenix Gold 100 100
$ 1,126 N/A N/A N/A
-
Total 75,800 61,600 $ 1,094
13,000 14,300 $ 1,208 25,688
Six months ended December
31,2015
Six months ended December
31,2014
As ofDecember31,
2015
Stream
Goldouncespurchased
Goldouncessold
Averagerealized
goldprice/ounce
Goldouncespurchased
Goldouncessold
Averagerealized
goldprice/ounce
Goldounces
ininventory
Mount Milligan 62,400 59,600 $ 1,103 26,600 29,700 $ 1,246 8,068
Andacollo 19,800 14,700 $ 1,118 N/A N/A N/A 5,152 Wassa/Prestea
12,700 12,000 $ 1,116 N/A N/A N/A 699 Pueblo Viejo 20,600 8,800 $
1,068 N/A N/A N/A 11,769 Phoenix Gold 200 200
$ 1,128 N/A N/A N/A -
Total 115,700 95,300 $ 1,104
26,600 29,700 $ 1,246 25,688
ROYAL GOLD, INC.
Consolidated Balance Sheets
(In thousands except share data)
December 31, 2015 June 30, 2015
ASSETS Cash and
equivalents $ 117,600 $ 742,849 Royalty receivables 22,913 37,681
Income tax receivable 12,828 6,422 Stream inventory 8,289 2,287
Prepaid expenses and other 1,230 1,511
Total current assets 162,860 790,750 Royalty and stream
interests, net 2,996,421 2,083,608 Available-for-sale securities
8,411 6,273 Other assets 55,576 44,801
Total assets $ 3,223,268 $ 2,925,432
LIABILITIES Accounts payable 2,781 4,911 Dividends payable
15,010 14,341 Foreign withholding taxes payable - 199 Other current
liabilities 2,727 5,522 Total current
liabilities 20,518 24,973 Debt 677,494 322,110 Deferred tax
liabilities 140,614 146,603 Uncertain tax positions 15,935 15,130
Other long-term liabilities 6,489 689
Total liabilities 861,050 509,505
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; and65,082,861 and 65,033,547 shares outstanding,
respectively
651 650 Additional paid-in capital 2,175,845 2,170,643 Accumulated
other comprehensive loss (1,154 ) (3,292 ) Accumulated earnings
125,821 185,121 Total Royal Gold
stockholders’ equity 2,301,163 2,353,122 Non-controlling interests
61,055 62,805 Total equity
2,362,218 2,415,927 Total liabilities and
equity $ 3,223,268 $ 2,925,432
ROYAL GOLD, INC.
Consolidated Statements of Operations and
Comprehensive Income (Loss)
(In thousands except for per share
data)
For The Three Months Ended For The Six Months Ended December
31, December 31, December 31, December 31,
2015 2014 2015 2014
Revenue $ 98,118 $ 61,304 $ 172,173 $ 130,330 Costs
and expenses Cost of sales 22,572 6,236 34,038 12,910 General and
administrative 5,841 8,511 15,352 15,652 Production taxes 996 1,731
2,588 3,421 Exploration costs 1,129 - 4,285 - Depreciation,
depletion and amortization 40,407 20,278 67,555 42,490 Impairment
of royalty and stream interests - 26,570
- 28,339 Total costs and
expenses 70,945 63,326 123,818
102,812 Operating income (loss) 27,173
(2,022 ) 48,355 27,518 Interest and other income 386 228 615
279 Interest and other expense (8,899 ) (6,358 )
(16,076 ) (13,070 ) Income (loss) before income taxes
18,660 (8,152 ) 32,894 14,727 Income tax (expense) benefit
(4,740 ) 1,827 (63,917 ) (2,131
) Net income (loss) 13,920 (6,325 ) (31,023 ) 12,596 Net loss
(income) attributable to non-controlling interests 1,194
(223 ) 1,090 (462 ) Net income
(loss) attributable to Royal Gold common stockholders $ 15,114
$ (6,548 ) (29,933 ) $ 12,134 Net
income (loss) $ 13,920 $ (6,325 ) $ (31,023 ) $ 12,596 Adjustments
to comprehensive income (loss) , net of tax Unrealized change in
market value of available-for-sale securities 2,587
(481 ) 2,138 (1,820 ) Comprehensive
income (loss) 16,507 (6,806 ) (28,885 ) 10,776 Comprehensive loss
(income) attributable to non-controlling interests 1,194
(223 ) 1,090 (462 )
Comprehensive income (loss) attributable to Royal Gold stockholders
$ 17,701 $ (7,029 ) $ (27,795 ) $ 10,314 Net
income (loss) per share available to Royal Gold common
stockholders: Basic earnings (loss) per share $ 0.23
$ (0.10 ) $ (0.46 ) $ 0.19 Basic weighted average shares
outstanding 65,073,678 65,002,307
65,061,059 64,982,595 Diluted earnings
(loss) per share $ 0.23 $ (0.10 ) $ (0.46 ) $ 0.19
Diluted weighted average shares outstanding 65,121,744
65,002,307 65,061,059
65,122,185 Cash dividends declared per common share $ 0.23
$ 0.22 $ 0.45 $ 0.43
ROYAL GOLD, INC.
Consolidated Statements of Cash Flows
(In Thousands)
For The Three Months Ended For The Six Months Ended December
31, December 31, December 31, December 31, 2015
2014 2015 2014
Cash flows from operating activities: Net income (loss) $ 13,920 $
(6,325 ) $ (31,023 ) $ 12,596 Adjustments to reconcile net income
(loss) to net cash provided by operating activities: Depreciation,
depletion and amortization 40,407 20,278 67,555 42,490 Non-cash
employee stock compensation expense 1,222 375 5,449 2,824
Amortization of debt discount 2,713 2,540 5,383 5,013 Impairment of
royalty and stream interests - 26,570 - 28,339 Tax expense
(benefit) of stock-based compensation exercises 97 (377 ) 247 (74 )
Deferred tax benefit - (11,729 ) (11,767 ) (17,103 ) Other - - (390
) - Changes in assets and liabilities: Royalty receivables 1,626
5,913 14,768 9,340 Stream inventory (4,021 ) 565 (6,002 ) 1,308
Prepaid expenses and other assets 5,255 632 3,100 2,036 Accounts
payable (5,358 ) 388 (2,092 ) (1,182 ) Foreign withholding taxes
payable - (679 ) (199 ) (1,999 ) Income taxes receivable (2,812 )
(7,151 ) 3,530 (1,778 ) Uncertain tax positions 729 544 806 1,027
Other liabilities (1,673 ) (1,728 ) 5,231
(563 ) Net cash provided by operating activities $
52,105 $ 29,816 $ 54,596 $ 82,274
Cash flows from investing activities: Acquisition of royalty
and stream interests (24,103 ) (32,525 ) (1,324,984 ) (38,734 )
Andacollo royalty termination - - 345,000 - Golden Star term loan -
- (20,000 ) - Other (43 ) (390 ) (271 )
(517 ) Net cash used in investing activities $ (24,146 ) $ (32,915
) $ (1,000,255 ) $ (39,251 ) Cash flows from financing
activities: Borrowings from revolving credit facility - - 350,000 -
Net proceeds from issuance of common stock - 576 - 775 Common stock
dividends (14,358 ) (13,691 ) (28,699 ) (27,369 ) Distribution to
non-controlling interests (214 ) (446 ) (636 ) (911 ) Tax (benefit)
expense of stock-based compensation exercises (97 ) 377 (247 ) 74
Other - - (8 ) -
Net cash (used in) provided by financing activities $ (14,669 ) $
(13,184 ) $ 320,410 $ (27,431 ) Net increase (decrease) in
cash and equivalents 13,290 (16,283 ) (625,249 ) 15,592 Cash and
equivalents at beginning of period 104,310
691,411 742,849 659,536 Cash and
equivalents at end of period $ 117,600 $ 675,128 $
117,600 $ 675,128
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 For The Six
Months Ended December 31, December 31, (Unaudited, in thousands)
(Unaudited, in thousands) 2015 2014 2015 2014 Net
income (loss) $ 13,920 $ (6,325) $ (31,023) $ 12,596 Depreciation,
depletion and amortization 40,407 20,278 67,555 42,490 Non-cash
employee stock compensation 1,222 375 5,449 2,824 Allowance for
uncollectible royalty receivables - 2,997 - 2,997 Impairment of
royalty and stream interests - 26,570 - 28,339 Interest and other
income (386) (228) (615) (279) Interest and other expense 8,899
6,358 16,076 13,070 Income tax expense (benefit) 4,740 (1,827)
63,917 2,131
Non-controlling interests in operating
loss (income) ofconsolidated subsidiaries
1,194 (223) 1,090 (462) Adjusted EBITDA $ 69,996 $ 47,975 $ 122,449
$ 103,706
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version on businesswire.com: http://www.businesswire.com/news/home/20160203006566/en/
Royal GoldKarli Anderson, 303-575-6517Vice President
Investor Relations
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