Royal Gold, Inc. (NASDAQ: RGLD) (together with its
subsidiaries, “Royal Gold,” the “Company,” “we,” “us,” or “our”)
reports net income of $47.2 million, or $0.72 per share, for the
quarter ended March 31, 2024, ("first quarter") on revenue of
$148.9 million and operating cash flow of $138.3 million. Adjusted
net income1 was $59.8 million, or $0.91 per share.
First Quarter 2024 Highlights:
- Solid financial results with revenue of $148.9
million, operating cash flow of $138.3 million and
earnings of $47.2 million
- Revenue split: 75% gold, 13% silver, 9%
copper
- Sales volume of 71,900 GEOs2
- Sustained high adjusted EBITDA margin1 of
79%
- Repaid $100 million of debt, reducing total debt to $150
million
- Total available liquidity increased to $966 million
- Paid quarterly dividend of $0.40 per share, a 7%
increase over the prior year period
- Additional Mount Milligan agreement provides near-term
consideration in return for long-term support that allows for an
extended mine life
- Received repayment of $37.0 million Khoemacau loan facility
Post Quarter Events:
- Repaid $75 million of debt, further reducing total debt
to $75 million
“Our portfolio performed well during the first quarter and we
started 2024 off on a positive note,” commented Bill Heissenbuttel,
President and CEO of Royal Gold. “Our low and stable cost structure
meant that we were able to benefit from the record gold price and
our underlying cash flow from operations was solid for the quarter.
In addition, we received payments from Centerra and MMG during the
quarter, which combined with our cash flow, allowed us to repay
$175 million of debt already in 2024. We have now rebuilt our
available liquidity to approximately $1 billion."
"During the quarter we also announced an additional agreement
with Centerra that we expect will unlock significant long-term
value from the large resource base around the Mount Milligan mine,"
continued Mr. Heissenbuttel. "We were able to complete a mutually
beneficial agreement, and we are looking forward to seeing how
Centerra progresses its plans to surface the upside at Mount
Milligan and add to the mine life beyond 2035."
1
Adjusted net income, adjusted net
income per share and adjusted EBITDA margin are non-GAAP financial
measures. See Schedule A of this press release for additional
information, including a detailed description of adjustments to net
income.
2
See Schedule A of this press
release for additional information about gold equivalent ounces, or
GEOs.
Recent Portfolio Developments
Principal Property Updates
Notable recent updates as reported by the operators of our
Principal Properties include:
Preliminary Economic Assessment Underway to Extend Mount
Milligan Mine Life Beyond 2035
On February 13, 2024, we entered into a Processing Cost Support
Agreement with Centerra Gold Inc. (“Centerra”) that provides
near-term cash and gold consideration to Royal Gold in return for
long-term cost support that allows an extension of the mine life of
Mount Milligan to 2035 and the potential for future increases in
mine life beyond 2035. With the announcement of the agreement,
Centerra described a three-part strategy to further increase the
Mount Milligan mine life that includes the completion of a
Preliminary Economic Assessment (“PEA”) in the first half of 2025
to evaluate mine life extension opportunities, further exploration
drilling, and a site optimization program that began in the fourth
quarter of 2023.
On February 22, 2024, Centerra confirmed 2024 production
guidance for Mount Milligan. Centerra expects gold production of
between 180,000 and 200,000 ounces, which, at the midpoint, is 23%
higher than last year’s production. This is mainly due to mine
sequencing and higher gold grades. Copper production is expected to
be between 55 million and 65 million pounds, which, at the
midpoint, is 3% lower than last year’s production. Both gold and
copper production are expected to be evenly weighted throughout the
year. Royal Gold receives gold stream deliveries based on a 97%
payability factor, and copper stream deliveries based on a
payability factor of the greater of 95% or the actual payability
rate received by Centerra. There is an approximate 5 month lag
between mine site production and stream deliveries to Royal Gold
due to the normal-course timing of shipments and deliveries.
Official Opening of the Goldrush Mine and Overall Production
On Track to Deliver on 2024 Guidance at the Cortez Complex
On April 25, 2024, Barrick Gold Corporation ("Barrick")
announced the official opening of the Goldrush underground mine in
the Cortez Complex. Barrick reported that Goldrush is on track to
produce 130,000 ounces of gold this year, with ramp-up to
progressively increase each quarter over 2024, and is expected to
reach commercial production in 2026. Barrick expects Goldrush to
have a 24-year mine life, with production expected to grow to
approximately 400,000 ounces per year by 2028 (100% basis).
On May 1, 2024, Barrick further reported that production from
the Cortez Complex delivered on plan in the first quarter. Barrick
continues to expect 2024 gold production of approximately 620,000
to 680,000 ounces (100% basis), with production affected by lower
oxide grades and tonnes at Crossroads, over which Royal Gold has an
approximate 9.4% GSR equivalent royalty rate, partially offset by a
higher contribution from Goldrush, over which Royal Gold has an
approximate 1.6% GSR royalty rate.
Plant Expansion Construction Complete with Ramp-Up to
Commence at Pueblo Viejo
On May 1, 2024, Barrick provided an update on the plant
expansion and mine life extension project at Pueblo Viejo.
According to Barrick, process plant construction has been completed
with the focus now on increasing production from the crushing and
milling circuits and operational stability and recovery
improvements in the flotation circuit. Reconstruction of the ore
stockpile feed conveyor was completed in April, which will allow
the plant to commence throughput ramp-up in the second quarter.
With respect to the mine life extension project, Barrick reported
that the technical and social studies for additional tailings
storage capacity at the El Naranjo facility continued to advance
and the feasibility study is due for completion in the third
quarter of 2024.
Silver stream deliveries were approximately 218,200 ounces for
the first quarter compared to 362,300 ounces for the prior year
quarter, and an additional 123,300 ounces of silver deliveries were
deferred during the current period. As of March 31, 2024,
approximately 966,000 ounces remain deferred, and the timing for
the delivery of the entire deferred amount is uncertain. We expect
that silver recoveries could remain highly variable and material
deliveries of deferred silver ounces are not expected until the
expanded plant is running at full production levels. We do not
expect material deliveries of the outstanding balance of deferred
silver in 2024.
Barrick continues to expect its share of 2024 gold production to
remain in the range of 420,000 to 490,000 ounces for 2024.
Continued Water Restrictions at Andacollo
On April 25, 2024, Teck reported that Andacollo continues to
face extreme drought conditions, and continued water restrictions
resulted in lower tonnes milled in the first quarter. According to
Teck, it continues to assess steps that can be taken to mitigate
these water restriction risks, with a solution expected to be in
place in 2025. As a result, and with the benefit of higher-grade
ore, production is expected to increase between 2025 and 2027,
compared to 2024. Gold and copper grades are relatively well
correlated at Andacollo and gold production tends to track copper
production.
Teck expects that 2024 gold production from Andacollo will range
between 18,000 and 24,000 ounces. Royal Gold receives stream
deliveries based on a fixed payability factor of 89%, and there is
an approximate 5 month lag between mine site production and stream
deliveries to Royal Gold due to the normal-course timing of
shipments and deliveries.
Peñasquito Gold Production Weighted to Second Half of
2024
On April 25, 2024, Newmont reported that it expects gold
production at the Peñasquito mine in Mexico to be weighted
approximately 60% toward the second half of 2024, with higher gold
production from the Peñasco pit in the fourth quarter of 2024 and
into 2025.
Newmont also reported that there is no change to the 2024
production guidance at Peñasquito of 250,000 ounces of gold, 34
million ounces of silver, 95,000 tonnes of lead and 245,000 tonnes
of zinc.
Completion of Ownership Change of Khoemacau and Repayment of Debt Facility
On March 22, 2024, MMG Limited (“MMG”) completed its acquisition
of Cuprous Capital, the parent company that owns the
Khoemacau mine in Botswana. As part of
the transaction, MMG repaid a subordinated debt facility that Royal
Gold made available to the previous owner during construction.
Including capitalized interest, the amount repaid was approximately
$37.0 million.
MMG expects payable silver production in 2024 at
Khoemacau to range between 1.2 to 1.4
million ounces, which is below the average life of mine production
of 1.8 to 2.0 million ounces per year due to lower silver grades in
the upper portion of the Zone 5 deposit and the top-down mining
sequence. Royal Gold receives stream deliveries based on a fixed
payability factor of 90%.
Other Property Updates
Notable recent updates as reported by the operators of other
select portfolio assets include:
Producing Properties
Bellevue (2% NSR royalty): Bellevue
Gold Limited (“Bellevue”) announced on May 7, 2024, that commercial
production has been declared at the Bellevue Gold mine in Western
Australia. Bellevue reported that gold production of 37,338 ounces
in the first quarter positions the company to achieve production
guidance of 75,000-85,000 ounces for the six months ended June 30,
2024, and expects to publish fiscal year 2025 guidance as part of
its multi-year outlook in July 2024. Bellevue also announced that a
scoping study has commenced to review expanding the plant to 1.5
million tonnes per year, a 50% increase, with completion expected
in the first half of calendar 2025.
Gwalia (1.5% NSR royalty) and Ulysses
(0.9% NSR royalty): On April 18, 2024, Genesis Minerals Limited
(“Genesis”), owner of the Gwalia mine and Ulysses development
project in Western Australia, provided an update on the production
growth strategy to fill the under-utilized Gwalia mill. At the
Gwalia mine, Genesis reported that paste-filling of multiple large
stopes in the “Heart of Gold” was completed during the first
quarter, which should allow for production from adjacent high-grade
stopes during the June 2024 quarter. At Ulysses, Genesis reported
that the access portal was cut in the first quarter and the decline
had advanced approximately 42 meters. Genesis is targeting
production from Gwalia of approximately 120,000 to 140,000 ounces
per year, and the ramp-up of the shallow Ulysses underground mine
has the potential to increase production to approximately 195,000
ounces per year.
Wharf (2% GSR royalty): On February
21, 2024, Coeur Mining, Inc. ("Coeur") provided 2024 gold
production guidance for the Wharf mine in South Dakota of 86,000 to
96,000 ounces. Coeur also reported that exploration at Wharf in
2024 is focused on adding mineral reserves.
Xavantina (25% gold stream): On May 7,
2024, Ero Copper Corp. ("Ero") announced that 2024 gold production
guidance for the Xavantina mine in Brazil is increasing to 60,000
to 65,000 ounces from the previous range of 55,000 to 60,000
ounces. According to Ero, record first quarter gold production was
driven by favorable grade reconciliations that have continued into
the current quarter, and while this trend may continue, Ero is
projecting a reversion to long-term block model grades for planned
mining areas in the second half of 2024.
Development and Evaluation
Properties
Côté Gold (1% NSR royalty): IAMGOLD
Corporation ("IAMGOLD") reported achievement of the first gold pour
at the Côté Gold Project in Ontario on March 31, 2024, with the
next step focused on the ramp up of the operation to commercial
production in the third quarter of 2024. Royal Gold's royalty
covers approximately 70% of the resource area at the Côté Gold
Project.
Fourmile (approximate 1.6% GSR
royalty): Barrick provided an update of activity at the
Fourmile Project in the Cortez Complex in Nevada on May 1, 2024.
Barrick is targeting the extension of the existing mineral
resources through the Sophia and Dorothy targets and assessing
options for an independent exploration decline. Barrick is planning
to spend approximately $40 million in 2024 on drilling, evaluation
and modeling with the intention to commence a pre-feasibility study
at the end of 2024.
Mara Rosa (1.0% NSR and 1.75% NSR
royalties): On April 24, 2024, Hochschild Mining PLC
(“Hochschild”) provided an update on the Mara Rosa Project in
Brazil. According to Hochschild, Mara Rosa produced approximately
1,060 ounces of gold in the first quarter following the first gold
pour on February 21, 2024, and commercial production is expected to
be achieved in the next few weeks. Hochschild previously provided
2024 gold production guidance of 83,000 to 93,000, and is targeting
production of approximately 100,000 ounces per year for the first
four years of operations.
Great Bear (2% NSR royalty): Kinross
Gold Corporation (“Kinross”) provided an update on activity at the
Great Bear Project in Ontario on May 7, 2024. Kinross reported that
recent exploration results show the extension of mineralization at
depth across multiple zones. Kinross also reported that it
continues to advance technical studies and is on track to release a
PEA in the second half of 2024, and expects to file its Impact
Statement with permitting authorities in the first half of
2025.
Manh Choh (3% NSR royalty and 28% NSR
royalty on silver): According to an update on May 7, 2024,
provided by Kinross, the operator and 70% owner of the Manh Choh
Project in Alaska, ore and waste mining is ongoing and
transportation of ore to the Fort Knox mine, where the ore will be
processed, continues to ramp up. Kinross reported that it is on
track for first production from Manh Choh early in the third
quarter of 2024.
First Quarter 2024 Overview
In the first quarter, we recorded net income and comprehensive
income of $47.2 million, or $0.72 per basic and diluted share, as
compared to net income of $63.9 million, or $0.97 per basic and
diluted share, for the three months ended March 31, 2023. The
decrease in net income was primarily attributable to lower revenue
and higher income tax expense, as discussed below.
For the first quarter, we recognized total revenue of $148.9
million, comprised of stream revenue of $102.5 million and royalty
revenue of $46.4 million at an average gold price of $2,070 per
ounce, an average silver price of $23.34 per ounce and an average
copper price of $3.83 per pound. This is compared to total revenue
of $170.4 million for the three months ended March 31, 2023,
comprised of stream revenue of $115.0 million and royalty revenue
of $55.4 million, at an average gold price of $1,890 per ounce, an
average silver price of $22.55 per ounce and an average copper
price of $4.05 per pound.
The decrease in our total revenue resulted primarily from lower
gold production at the Cortez Legacy Zone, lower gold and copper
sales at Mount Milligan and lower gold and silver sales at Pueblo
Viejo. These decreases were partially offset by higher average gold
and silver prices and higher gold sales from Wassa and Xavantina
when compared to the prior year period.
Cost of sales, which excludes depreciation, depletion and
amortization ("DD&A"), decreased to $21.8 million for the three
months ended March 31, 2024, from $25.0 million for the three
months ended March 31, 2023. The decrease, when compared to the
prior year quarter, was primarily due to lower gold and copper
sales at Mount Milligan. Cost of sales is specific to our stream
agreements and is the result of our purchase of metal for a cash
payment that, in most cases, is a set contractual percentage of the
spot price.
DD&A decreased to $38.8 million for the first quarter, from
$46.3 million for the three months ended March 31, 2023. The
decrease was primarily due to lower depletion rates and lower gold
and copper sales at Mount Milligan in the first quarter. The
decrease was also due to lower gold production at the Cortez Legacy
Zone compared to the prior year period.
Interest and other expense decreased to $4.6 million for the
first quarter, from $9.2 million for the three months ended March
31, 2023. The decrease was primarily due to lower interest expense
as a result of lower average amounts outstanding under our
revolving credit facility compared to the prior year period. We had
$150 million outstanding under our revolving credit facility as of
March 31, 2024, compared to $500 million outstanding as of March
31, 2023. The all-in borrowing rate under our revolving credit
facility was 6.5% as of March 31, 2024, compared to 6.2% for the
comparable prior year period.
For the first quarter, we recorded income tax expense of $27.0
million, compared with income tax expense of $15.9 million for the
three months ended March 31, 2023. The income tax expense resulted
in an effective tax rate of 36.4% in the current period, compared
with 19.9% for the three months ended March 31, 2023. The first
quarter included a $13.0 million discrete U.S. GILTI income tax
expense related to consideration received from the Mount Milligan
Cost Support Agreement.
Net cash provided by operating activities totaled $138.3 million
for the first quarter, compared to $108.7 million for the three
months ended March 31, 2023. The increase, when compared to the
prior year period, was primarily due to cash proceeds of $24.5
million received for the Mount Milligan Cost Support Agreement and
$12.0 million of interest from the repayment of the
Khoemacau debt facility. This increase
was partially offset by lower cash receipts from the stream and
royalty segments when compared to the prior year period.
Net cash provided by investing activities totaled $23.6 million
for the first quarter, compared to net cash used in investing
activities of $0.2 million for the three months ended March 31,
2023. The change from the comparable prior year period was
primarily due to the Khoemacau debt
facility principal repayment of $25 million.
Other Corporate Updates
Total Available Liquidity Increases to Approximately $966
Million at the end of the First Quarter
On March 6, 2024, we repaid $100 million of outstanding
borrowings on the $1 billion revolving credit facility, resulting
in $150 million outstanding and $850 million available as of March
31, 2024. Total liquidity at the end of the first quarter increased
to approximately $966 million, which consisted of $116 million of
working capital and the $850 million undrawn amount available under
the revolving credit facility.
After the end of the first quarter, we repaid a further $75
million of outstanding borrowings on the credit facility from cash
flow and the proceeds of the repayment of the Khoemacau debt facility as described above. These
payments were $25 million on April 8, 2024, and $50 million on May
8, 2024, reducing the outstanding revolver balance to $75
million.
Property Highlights
A breakdown of revenue for the Company’s stream and royalty
portfolio can be found on Table 1 for the quarters ended March 31,
2024 and March 31, 2023. Table 2 shows stream metal sales and metal
sales attributable to the Company’s royalty interests for the
Company’s principal stream and royalty properties. Table 3 shows
Royal Gold's 2024 sales volume guidance and year to date sales
volume achieved. Stream segment purchases and sales for the
quarters ended March 31, 2024 and March 31, 2023 and inventories
for March 31, 2024 and December 31, 2023 can be found on Table 4.
Highlights at certain of the Company’s principal producing and
development properties during the quarter ended March 31, 2024,
compared to the quarter ended March 31, 2023, are detailed in the
Quarterly Report on Form 10-Q.
CORPORATE PROFILE
Royal Gold is a precious metals stream and royalty company
engaged in the acquisition and management of precious metal
streams, royalties and similar production-based interests. As of
March 31, 2024, the Company owned interests on 177 properties on
five continents, including interests on 37 producing mines and 24
development stage projects. Royal Gold is publicly traded on the
Nasdaq Global Select Market under the symbol “RGLD.” The Company’s
website is located at www.royalgold.com.
For further information, please
contact:
First Quarter 2024 Call
Information:
Alistair Baker
Dial-In Numbers:
844-200-6205 (U.S.); toll free
Senior Vice President, Investor Relations
and Business Development
833-950-0062 (Canada); toll free
646-904-5544 (International)
(303) 573-1660
Access Code:
251350
Note: Management’s conference call
reviewing the first quarter 2024 results will be held on
Thursday,
May 9, 2024, at 12:00 pm Eastern Time
(10:00 am Mountain Time). The call will be webcast and archived on
the Company’s website for a limited time.
Webcast URL:
www.royalgold.com under Investors, Events
& Presentations
Additional Investor Information: Royal Gold routinely
posts important information, including information about upcoming
investor presentations and press releases, on its website under the
Investors tab. Investors and other interested parties are
encouraged to enroll at www.royalgold.com to receive automatic
email alerts for new postings.
Forward-Looking Statements: This press release includes
“forward-looking statements” within the meaning of U.S. federal
securities laws. Forward-looking statements are any statements
other than statements of historical fact. Forward-looking
statements are not guarantees of future performance, and actual
results may differ materially from these statements.
Forward-looking statements are often identified by words like
“will,” “may,” “could,” “should,” “would,” “believe,” “estimate,”
“expect,” “anticipate,” “plan,” “forecast,” “potential,” “intend,”
“continue,” “project,” or negatives of these words or similar
expressions. Forward-looking statements include, among others,
statements about the following: our expected financial performance
and outlook, including our 2024 guidance; operators’ expected
operating and financial performance, including production,
deliveries, mine plans, environmental and feasibility studies,
technical reports, mine facilities, estimates of mineral resources
and mineral reserves, developments relating to their properties and
operations, and asset assessments; and the timing of royalty
payments and metal deliveries, including deferred amounts at Pueblo
Viejo.
Factors that could cause actual results to differ materially
from these forward-looking statements include, among others, the
following: a lower-price environment for gold, silver, copper or
other metals; operating activities or financial performance of
properties on which we hold stream or royalty interests, including
variations between actual and forecasted performance, operators’
ability to complete projects on schedule and as planned, operators’
changes to mine plans and mineral reserves and mineral resources
(including updated mineral reserve and mineral resource
information), liquidity needs, mining and environmental hazards,
labor disputes, distribution and supply chain disruptions,
permitting and licensing issues, other adverse government or court
actions, or operational disruptions; contractual issues involving
our stream or royalty agreements; the timing of deliveries of
metals from operators and our subsequent sales of metal; risks
associated with doing business in foreign countries; increased
competition for stream and royalty interests; environmental risks,
including those caused by climate change; potential cyber-attacks,
including ransomware; our ability to identify, finance, value and
complete acquisitions; adverse economic and market conditions;
impact of health epidemics and pandemics; changes in laws or
regulations governing us, operators or operating properties;
changes in management and key employees; and other factors
described in our reports filed with the Securities and Exchange
Commission, including Item 1A. Risk Factors of our most recent
Annual Report on Form 10-K. Most of these factors are beyond our
ability to predict or control. Other unpredictable or unknown
factors not discussed in this release could also have material
adverse effects on forward-looking statements.
Forward-looking statements speak only as of the date on which
they are made. We disclaim any obligation to update any
forward-looking statements, except as required by law. Readers are
cautioned not to put undue reliance on forward-looking
statements.
Statement Regarding Third-Party Information: Certain
information provided in this press release, including production
estimates, has been provided to us by the operators of the relevant
properties or is publicly available information filed by these
operators with applicable securities regulatory bodies, including
the Securities and Exchange Commission. Royal Gold has not
verified, and is not in a position to verify, and expressly
disclaims any responsibility for the accuracy, completeness or
fairness of any such third-party information and refers the reader
to the public reports filed by the operators for information
regarding those properties.
Certain information in this press release concerning the
Khoemacau Copper Project was provided
to the Company by Khoemacau Copper
Mining (Pty.) Limited, the former privately held operator of
Khoemacau. Such information may not
have been prepared in accordance with applicable laws, stock
exchange rules or international standards governing preparation and
public disclosure of technical data and information relating to
mineral properties. Royal Gold has not verified, and is not in a
position to verify, and expressly disclaims any responsibility for
the accuracy, completeness or fairness of this third-party
information, and investors are cautioned not to rely unduly upon
this information.
TABLE 1
Revenue by Stream and Royalty Interests
for First Quarter 2024 and 2023
(In thousands)
Three Months Ended
March 31,
Stream/Royalty
Metal(s)
Current Stream/Royalty
Interest1
2024
2023
Stream:
Canada
Mount Milligan
Gold, copper
35% of payable gold and 18.75% of payable
copper
$
34,995
$
46,656
Rainy River
Gold, silver
6.5% of gold produced and 60% of silver
produced
9,709
10,325
Latin America
Pueblo Viejo
Gold, silver
7.5% of Barrick's interest in payable gold
and 75% of Barrick's interest in payable silver
$
17,760
$
22,358
Andacollo
Gold
100% of payable gold
11,689
12,934
Xavantina
Gold
25% of gold produced
9,274
5,179
Africa
Khoemacau
Silver
100% of payable silver
$
7,758
$
9,153
Wassa
Gold
10.5% of payable gold
11,343
7,353
Bogoso and Prestea
Gold
5.5% of payable gold
—
1,032
Total stream revenue
$
102,528
$
114,990
Royalty:
Canada
Voisey's Bay
Copper, nickel, cobalt
2.7% NVR
$
1,139
$
1,497
Red Chris
Gold, copper
1.0% NSR
2,617
3,170
LaRonde Zone 5
Gold
2.0% NSR
808
548
Canadian Malartic
Gold
1.0%-1.5% sliding-scale NSR
(29
)
740
Williams
Gold
0.97% NSR
351
344
Other-Canada
Various
Various
245
292
United States
Cortez
Legacy Zone
Gold
Approx. 9.4% GSR Equivalent
$
13,365
$
23,087
CC Zone
Gold
Approx. 0.45%-2.2% GSR Equivalent
4,411
3,206
Robinson
Gold, copper
3.0% NSR
1,783
2,718
Marigold
Gold
2.0% NSR
1,406
1,171
Leeville
Gold
1.8% NSR
1,485
958
Wharf
Gold
0.0%-2.0% sliding-scale GSR
821
581
Goldstrike
Gold
0.9% NSR
496
497
Other-United States
Various
Various
312
1,363
Latin America
Peñasquito
Gold, silver, lead, zinc
2.0% NSR
$
9,229
$
7,433
Dolores
Gold, silver
3.25% NSR (gold), 2.0% NSR (silver)
1,539
1,861
El Limon
Gold
3.0% NSR
1,310
1,201
Other-Latin America
Various
Various
111
338
Australia
South Laverton
Gold
1.5% NSR, 4.0% NPI
$
1,899
$
1,533
King of the Hills
Gold
1.5% NSR
1,190
850
Gwalia
Gold
1.5% NSR
771
798
Bellevue
Gold
2.0% NSR
578
—
Meekatharra
Gold
0.45% or 1.5% NSR and A$10/oz
33
536
Other-Australia
Various
Various
504
383
Europe
Las Cruces
Copper
1.5% NSR (copper)
$
-
$
297
Total royalty revenue
$
46,374
$
55,402
Total revenue
$
148,902
$
170,392
1
Refer to Part I, Item 2, of the
Company’s Annual Report on Form 10-K for a full description of the
Company’s stream and royalty interests.
TABLE 2
Stream Metal and Royalty Sales for
Principal Properties
Reported Production For The
Quarter Ended2
Property
Operator
Current Stream/ Royalty
Interest1
Metal(s)
Mar. 31, 2024
Dec. 31, 2023
Sep. 30, 2023
Jun. 30, 2023
Mar. 31, 2023
Stream:
Mount Milligan
Centerra
35% of payable gold
Gold
12,500
oz
14,000
oz
11,300
oz
17,500
oz
15,200
oz
18.75% of payable copper
Copper
2.5
Mlb
2.4
Mlb
3.2
Mlb
1.7
Mlb
4.5
Mlb
Pueblo Viejo
Barrick (60%)
7.5% of Barrick's interest in payable
gold
Gold
6,200
oz
5,000
oz
6,800
oz
7,400
oz
7,900
oz
75% of Barrick's interest in payable
silver3
Silver
223,000
oz
171,100
oz
150,700
oz
362,200
oz
337,900
oz
Andacollo
Teck
100% of payable gold
Gold
5,700
oz
7,000
oz
7,500
oz
4,000
oz
7,000
oz
Khoemacau
MMG
100% of payable silver
Silver
332,000
oz
323,800
oz
386,100
oz
373,000
oz
404,100
oz
Royalty:
Cortez
Nevada Gold Mines LLC
9.4% GSR on Legacy Zone4
Gold
68,700
oz
111,900
oz
98,800
oz
68,100
oz
117,200
oz
0.45%-2.2% GSR on CC Zone4
Gold
124,900
oz
156,600
oz
120,000
oz
111,500
oz
106,600
oz
Peñasquito
Newmont Corporation
2.0% NSR
Gold
44,000
oz
25,900
oz
-
oz
48,100
oz
55,600
oz
Silver
9.8
Moz
4.6
Moz
-
Moz
6.0
Moz
6.1
Moz
Lead
64.9
Mlb
34.9
Mlb
-
Mlb
35.6
Mlb
36.4
Mlb
Zinc
134.8
Mlb
33.5
Mlb
-
Mlb
89.7
Mlb
99.2
Mlb
1
Refer to Part I, Item 2, of the
Company’s Annual Report on Form 10-K for a full description of the
Company’s stream and royalty interests.
2
Reported production relates to
the amount of stream metal sales and the metal sales attributable
to the Company’s royalty interests for the stated periods and may
differ from the operators’ public reporting.
3
The Pueblo Viejo silver stream is
determined based on a fixed metallurgical recovery of 70% of silver
in mill feed.
4
Approximate blended royalty rates
as described in the press release “Royal Gold Announces Acquisition
of Additional Royalty Interests on the World-Class Cortez Gold
Complex in Nevada and Outlines Simplified Approach to Describing
Royal Gold’s Multiple Royalty Interests at Cortez” issued January
5, 2023.
TABLE 3
2024 Sales Volume Guidance and Year to
Date Sales Volume Achieved
2024 Guidance
Metal Sales by Segment for the
Three Months Ended March 31, 2024
Stream Sales1
Royalty Sales2
Total Sales
Gold
(oz)
215,000 - 230,000
38,100
16,182
54,282
Silver
(M oz)
3.2-3.8
0.6
0.2
0.8
Copper
(M lb)
14.0 - 16.0
2.5
0.9
3.4
Other Metals
(M)
$17.0 - $20.0
N/A
$4.9
$4.9
1. Stream Sales represents physical metal
sold.
2. Royalty Sales represents royalty
revenue divided by the average metal price for the period.
TABLE 4
Stream Segment Summary
Three Months Ended
March 31, 2024
Three Months Ended
March 31, 2023
As of March 31,
2024
As of December 31,
2023
Gold Stream
Purchases (oz)
Sales (oz)
Purchases (oz)
Sales (oz)
Inventory (oz)
Inventory (oz)
Mount Milligan
15,200
12,500
13,900
15,200
6,700
4,000
Pueblo Viejo
5,800
6,200
7,400
7,900
5,800
6,200
Andacollo
4,900
5,700
5,200
7,000
—
800
Other
13,800
13,700
13,200
12,000
4,300
4,200
Total
39,700
38,100
39,700
42,100
16,800
15,200
Three Months Ended
March 31, 2024
Three Months Ended
March 31, 2023
As of March 31,
2024
As of December 31,
2023
Silver Stream
Purchases (oz)
Sales (oz)
Purchases (oz)
Sales (oz)
Inventory (oz)
Inventory (oz)
Khoemacau
298,500
332,000
427,500
404,100
101,900
135,300
Pueblo Viejo
218,200
223,000
362,300
337,900
218,200
223,000
Other
84,600
80,000
69,400
66,200
29,300
24,800
Total
601,300
635,000
859,200
808,200
349,400
383,100
Three Months Ended
March 31, 2024
Three Months Ended
March 31, 2023
As of March 31,
2024
As of December 31,
2023
Copper Stream
Purchases (Mlb)
Sales (Mlb)
Purchases (Mlb)
Sales (Mlb)
Inventory (Mlb)
Inventory (Mlb)
Mount Milligan
3.4
2.5
3.6
4.5
0.9
—
ROYAL GOLD, INC.
Consolidated Balance Sheets
(Unaudited, in thousands except share
data)
March 31, 2024
December 31, 2023
ASSETS
Cash and equivalents
$
137,950
$
104,167
Royalty receivables
38,757
48,884
Income tax receivable
3,109
2,676
Stream inventory
11,417
9,788
Prepaid expenses and other
1,815
1,911
Total current assets
193,048
167,426
Stream and royalty interests, net
3,038,495
3,075,574
Other assets
81,765
118,057
Total assets
$
3,313,308
$
3,361,057
LIABILITIES
Accounts payable
$
11,599
$
11,441
Dividends payable
26,311
26,292
Income tax payable
22,022
15,557
Other current liabilities
17,213
19,132
Total current liabilities
77,145
72,422
Debt
146,187
245,967
Deferred tax liabilities
133,934
134,299
Mount Milligan support liability
25,000
—
Other liabilities
7,676
7,728
Total liabilities
389,942
460,416
Commitments and contingencies
EQUITY
Preferred stock, $.01 par value,
10,000,000 shares authorized; and 0 shares issued
—
—
Common stock, $.01 par value, 200,000,000
shares authorized; and 65,648,831 and 65,631,760 shares
outstanding, respectively
656
656
Additional paid-in capital
2,223,021
2,221,039
Accumulated earnings
687,377
666,522
Total Royal Gold stockholders’ equity
2,911,054
2,888,217
Non-controlling interests
12,312
12,424
Total equity
2,923,366
2,900,641
Total liabilities and equity
$
3,313,308
$
3,361,057
ROYAL GOLD, INC.
Consolidated Statements of Operations and
Comprehensive Income
(Unaudited, in thousands except for per
share data)
Three Months Ended
March 31, 2024
March 31, 2023
Revenue
$
148,902
$
170,392
Costs and expenses
Cost of sales (excludes depreciation,
depletion and amortization)
21,751
25,020
General and administrative
11,412
11,000
Production taxes
1,449
1,989
Depreciation, depletion and
amortization
38,765
46,328
Total costs and expenses
73,377
84,338
Operating income
75,525
86,055
Fair value changes in equity
securities
447
799
Interest and other income
2,977
2,263
Interest and other expense
(4,607
)
(9,175
)
Income before income taxes
74,342
79,942
Income tax expense
(27,033
)
(15,871
)
Net income and comprehensive income
47,309
64,071
Net income and comprehensive income
attributable to non-controlling interests
(143
)
(196
)
Net income and comprehensive income
attributable to Royal Gold common stockholders
$
47,166
$
63,875
Net income per share attributable to Royal
Gold common stockholders:
Basic earnings per share
$
0.72
$
0.97
Basic weighted average shares
outstanding
65,637,428
65,594,977
Diluted earnings per share
$
0.72
$
0.97
Diluted weighted average shares
outstanding
65,740,260
65,709,095
Cash dividends declared per common
share
$
0.400
$
0.375
ROYAL GOLD, INC.
Consolidated Statements of Cash Flows
(Unaudited, in thousands)
Year Ended
March 31, 2024
March 31, 2023
Cash flows from operating activities:
Net income and comprehensive income
$
47,309
$
64,071
Adjustments to reconcile net income and
comprehensive income to net cash provided by operating
activities:
Depreciation, depletion and
amortization
38,765
46,328
Non-cash employee stock compensation
expense
2,988
2,636
Fair value changes in equity
securities
(447
)
(799
)
Deferred tax expense
648
1,092
Other
222
214
Changes in assets and liabilities:
Royalty receivables
10,127
2,471
Stream inventory
(1,629
)
1,056
Income tax receivable
(433
)
1,342
Prepaid expenses and other assets
10,763
(914
)
Accounts payable
158
1,166
Income tax payable
6,465
(7,840
)
Mount Milligan support liability
25,000
—
Other liabilities
(1,652
)
(2,168
)
Net cash provided by operating
activities
$
138,284
$
108,655
Cash flows from investing activities:
Acquisition of stream and royalty
interests
(1,104
)
—
Proceeds from Khoemacau debt facility
25,000
—
Other
(305
)
(197
)
Net cash provided by (used in) investing
activities
$
23,591
$
(197
)
Cash flows from financing activities:
Repayment of debt
(100,000
)
(75,000
)
Net payments from issuance of common
stock
(1,369
)
(397
)
Common stock dividends
(26,292
)
(24,629
)
Other
(431
)
(202
)
Net cash used in financing activities
$
(128,092
)
$
(100,228
)
Net increase in cash and equivalents
33,783
8,230
Cash and equivalents at beginning of
period
104,167
118,586
Cash and equivalents at end of period
$
137,950
$
126,816
Schedule A – Non-GAAP Financial Measures and
Certain Other Measures
Overview of non-GAAP financial measures:
Non-GAAP financial measures are intended to provide additional
information only and do not have any standard meaning prescribed by
U.S. generally accepted accounting principles (“GAAP”). These
measures should not be considered in isolation or as a substitute
for measures prepared in accordance with GAAP. In addition, because
the presentation of these non-GAAP financial measures varies among
companies, these non-GAAP financial measures may not be comparable
to similarly titled measures used by other companies.
We have provided below reconciliations of our non-GAAP financial
measures to the comparable GAAP measures. We believe these non-GAAP
financial measures provide useful information to investors for
analysis of our business. We use these non-GAAP financial measures
to compare period-over-period performance on a consistent basis and
when planning and forecasting for future periods. We believe these
non-GAAP financial measures are used by professional research
analysts and others in the valuation, comparison and investment
recommendations of companies in our industry. Many investors use
the published research reports of these professional research
analysts and others in making investment decisions. The adjustments
made to calculate our non-GAAP financial measures are subjective
and involve significant management judgement. Non-GAAP financial
measures used by management in this release or elsewhere include
the following:
- Adjusted earnings before interest, taxes, depreciation,
depletion and amortization, or adjusted EBITDA, is a non-GAAP
financial measure that is calculated by the Company as net income
adjusted for certain items that impact the comparability of results
from period to period, as set forth in the reconciliation below.
The net income and adjusted EBITDA margins represent net income or
adjusted EBITDA divided by total revenue. We consider adjusted
EBITDA to be useful because the measure reflects our operating
performance before the effects of certain non-cash items and other
items that we believe are not indicative of our core
operations.
- Net debt (or net cash) is a non-GAAP financial measure that is
calculated by the Company as debt (excluding debt issuance costs)
as of a date minus cash and equivalents for that same date. Net
debt (or net cash) to trailing twelve months (TTM) adjusted EBITDA
is a non-GAAP financial measure that is calculated by the Company
as net debt (or net cash) as of a date divided by the TTM adjusted
EBITDA (as defined above) ending on that date. We believe that
these measures are important to monitor leverage and evaluate the
balance sheet. Cash and equivalents are subtracted from the GAAP
measure because they could be used to reduce our debt obligations.
A limitation associated with using net debt (or net cash) is that
it subtracts cash and equivalents and therefore may imply that
there is less Company debt than the most comparable GAAP measure
indicates. We believe that investors may find these measures useful
to monitor leverage and evaluate the balance sheet.
- Adjusted net income and adjusted net income per share are
non-GAAP financial measures that are calculated by the Company as
net income and net income per share adjusted for certain items that
impact the comparability of results from period to period, as set
forth in the reconciliations below. We consider these non-GAAP
financial measures to be useful because they allow for
period-to-period comparisons of our operating results excluding
items that we believe are not indicative of our fundamental ongoing
operations. The tax effect of adjustments is computed by applying
the statutory tax rate in the applicable jurisdictions to the
income or expense items that are adjusted in the period presented.
If a valuation allowance exists, the rate applied is zero.
- Free cash flow is a non-GAAP financial measure that is
calculated by the Company as net cash provided by operating
activities for a period minus acquisition of stream and royalty
interests for that same period. We believe that free cash flow
represents an additional way of viewing liquidity as it is adjusted
for contractual investments made during such period. Free cash flow
does not represent the residual cash flow available for
discretionary expenditures. We believe it is important to view free
cash flow as a complement to our consolidated statements of cash
flows.
- Cash general and administrative expense, or cash G&A, is a
non-GAAP financial measure that is calculated by the Company as
general and administrative expenses for a period minus non-cash
employee stock compensation expense for the same period. We believe
that cash G&A is useful as an indicator of overhead efficiency
without regard to non-cash expenses associated with employee stock
compensation.
Reconciliation of non-GAAP financial
measures to U.S. GAAP measures
Adjusted EBITDA, Adjusted EBITDA
margin, net debt, and net debt to TTM adjusted EBITDA:
Three Months Ended
March 31,
(amounts in thousands)
2024
2023
Net income and comprehensive income
47,309
$
64,071
Depreciation, depletion and
amortization
38,765
46,328
Non-cash employee stock compensation
2,988
2,636
Fair value changes in equity
securities
(447
)
(799
)
Interest and other, net
1,630
6,912
Income tax expense
27,033
15,871
Non-controlling interests in operating
income of consolidated subsidiaries
(143
)
(196
)
Adjusted EBITDA
$
117,135
$
134,823
Net income margin
32
%
38
%
Adjusted EBITDA margin
79
%
79
%
Three Months Ended
March 31,
December 31,
September 30,
June 30,
(amounts in thousands)
2024
2023
2023
2023
Net income and comprehensive income
$
47,309
$
62,963
$
49,499
$
63,600
Depreciation, depletion and
amortization
38,765
40,090
40,106
38,412
Non-cash employee stock compensation
2,988
2,354
2,763
1,943
Fair value changes in equity
securities
(447
)
(25
)
462
509
Other non-recurring adjustments
—
—
—
2,440
Interest and other, net
1,630
3,396
4,849
5,758
Income tax expense
27,033
13,356
10,752
2,029
Non-controlling interests in operating
income of consolidated subsidiaries
(143
)
(183
)
(162
)
(151
)
Adjusted EBITDA
$
117,135
$
121,951
$
108,269
$
114,540
Net income margin
32
%
41
%
36
%
44
%
Adjusted EBITDA margin
79
%
80
%
78
%
80
%
TTM adjusted EBITDA
$
461,895
Debt
$
146,187
Debt issuance costs
3,813
Cash and equivalents
(137,950
)
Net debt
$
12,050
Net debt to TTM adjusted EBITDA
0.03x
Cash G&A:
Three Months Ended
March 31,
(amounts in thousands)
2024
2023
General and administrative expense
$
11,412
$
11,000
Non-cash employee stock compensation
(2,988
)
(2,636
)
Cash G&A
$
8,424
$
8,364
Three Months Ended
March 31,
December 31,
September 30,
June 30,
(amounts in thousands)
2024
2023
2023
2023
General and administrative expense
$
11,412
$
9,741
$
9,927
$
9,093
Non-cash employee stock compensation
(2,988
)
(2,354
)
(2,763
)
(1,943
)
Cash G&A
$
8,424
$
7,387
$
7,164
$
7,150
TTM cash G&A
$
30,125
Adjusted net income and adjusted net
income per share:
Three Months Ended
March 31,
(amounts in thousands, except per share
data)
2024
2023
Net income and comprehensive income
attributable to Royal Gold common stockholders
$
47,166
$
63,875
Fair value changes in equity
securities
(447
)
(799
)
Discrete tax expense related to Mount
Milligan Cost Support Agreement
12,978
—
Tax effect of adjustments
118
212
Adjusted net income and comprehensive
income attributable to Royal Gold common stockholders
$
59,815
63,288
Net income attributable to Royal Gold
common stockholders per diluted share
$
0.72
$
0.97
Fair value changes in equity
securities
(0.01
)
(0.01
)
Discrete tax expense related to Mount
Milligan Cost Support Agreement
0.20
—
Tax effect of adjustments
—
—
Adjusted net income attributable to Royal
Gold common stockholders per diluted share
$
0.91
$
0.96
Free cash flow:
Three Months Ended
March 31,
(amounts in thousands)
2024
2023
Net cash provided by operating
activities
$
138,284
$
108,655
Acquisition of stream and royalty
interests
(1,104
)
—
Free cash flow
$
137,180
$
108,655
Net cash provided by (used in) investing
activities
$
23,591
$
(197
)
Net cash used in financing activities
$
(128,092
)
$
(100,228
)
Other measures
We use certain other measures in managing and evaluating our
business. We believe these measures may provide useful information
to investors for analysis of our business. We use these measures to
compare period-over-period performance and liquidity on a
consistent basis and when planning and forecasting for future
periods. We believe these measures are used by professional
research analysts and others in the valuation, comparison, and
investment recommendations of companies in our industry. Many
investors use the published research reports of these professional
research analysts and others in making investment decisions. Other
measures used by management in this release and elsewhere include
the following:
- Gold equivalent ounces, or GEOs, is calculated by the Company
as revenue (in total or by reportable segment) for a period divided
by the average LBMA PM fixing price for gold for that same
period.
- Depreciation, depletion, and amortization, or DD&A, per GEO
is calculated by the Company as depreciation, depletion, and
amortization for a period divided by GEOs (as defined above) for
that same period.
- Working capital is calculated by the Company as current assets
as of a date minus current liabilities as of that same date.
Liquidity is calculated by the Company as working capital plus
available capacity under the Company’s revolving credit
facility.
- Dividend payout ratio is calculated by the Company as dividends
paid during a period divided by net cash provided by operating
activities for that same period.
- Operating margin is calculated by the Company as operating
income for a period divided by revenue for that same period.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240508954271/en/
Alistair Baker Senior Vice President, Investor Relations and
Business Development (303) 573-1660
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