Royal Gold, Inc. (NASDAQ: RGLD) (together with its
subsidiaries, “Royal Gold,” the “Company,” “we,” “us,” or “our”)
reports net income of $81.2 million, or $1.23 per share, for the
quarter ended June 30, 2024, ("second quarter") on revenue of
$174.1 million and operating cash flow of $113.5 million. Adjusted
net income1 was $82.6 million, or $1.25 per share.
Second Quarter 2024 Highlights:
- Strong financial results with revenue of $174.1
million, operating cash flow of $113.5 million and
earnings of $81.2 million; after minor adjustments,
adjusted earnings were a quarterly record
- Revenue split: 74% gold, 13% silver, 10%
copper
- Sales volume of 74,500 GEOs2
- Sustained high adjusted EBITDA margin1 of
81%
- Repaid $100 million of debt, reducing total debt to $50
million
- Total available liquidity was approximately $1 billion,
and balance sheet returned to net cash position
- Paid quarterly dividend of $0.40 per share, a 7%
increase over the prior year period
- Acquired additional royalties on the Back River Project
for cash consideration of $51 million
Post Quarter Events:
- Repaid further $25 million of debt, reducing total debt
to $25 million
“The second quarter of 2024 was an excellent quarter for Royal
Gold, with near-record revenue, and increased operating cash flow
and earnings. After minor adjustments, earnings for the quarter
were a quarterly record,” commented Bill Heissenbuttel, President
and CEO of Royal Gold. “Our portfolio performed well and benefited
from the record high quarterly gold price, and we took advantage of
the strong results to continue to pay down our debt. Including a
further repayment in July, we have repaid $225 million of debt so
far in 2024 and have now returned to a net cash position with total
available liquidity of approximately $1 billion."
"We also reinvested in the business and acquired additional
royalty interests at the Back River Gold District, including the
Goose Project, in Nunavut for $51 million," continued Mr.
Heissenbuttel. "The acquisition increases our exposure to an
attractive development project in a stable jurisdiction with an
experienced operator. The Goose Project is one of the most unique
gold projects under development globally in terms of scale and
economic robustness, and we think the exploration potential of the
Back River Gold District will support production beyond the current
15 year mine life."
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:
Work Continues on Site-Wide Optimization and Preliminary
Economic Assessment at Mount Milligan
On August 1, 2024, Centerra Gold Inc. ("Centerra") reported that
it continued to execute on its site-wide optimization program at
Mount Milligan, initially launched in the fourth quarter of 2023.
According to Centerra, the program is focused on a holistic
assessment of occupational health and safety, as well as
improvements in mine and plant operations, and covers all aspects
of the operation to maximize the potential of the orebody. Centerra
reported that milling costs in the first six months of 2024 were
12% lower than the first six months of last year. Due to the
longer-term nature of the mining optimization initiatives, Centerra
expects to see improvements in mining costs per tonne in 2025.
Centerra also reported that work is progressing on a preliminary
economic assessment ("PEA") to evaluate the substantial mineral
resources at the Mount Milligan mine with a goal to unlock
additional value beyond its current 2035 mine life. Centerra
continues to expect that the PEA will be completed in the first
half of 2025.
Water Restrictions Improving at Andacollo
On July 23, 2024, Teck Resources Limited ("Teck") reported that
production at the Andacollo mine in Chile continued to be impacted
by low water availability due to extreme drought conditions which
limited ore processing rates. However, Teck also reported that the
water restrictions improved during the second quarter and Teck
expects that improvement to continue in the second half of
2024.
Update on Expansion Project Provided at Khoemacau
On July 24, 2024, MMG Limited (“MMG”) provided an operational
update for the second quarter at the Khoemacau mine in Botswana.
MMG reported that it is committed to supporting the ramp-up of
Khoemacau to achieve an annual production of 60,000 tonnes of
copper by 2026, facilitated by ongoing mining development efforts
to increase mining fronts, operational flexibility and mined
grades. MMG expects these efforts will be further enhanced by the
completion of the primary vent fans as well as the paste fill
project.
In addition, MMG reported that it is dedicated to completing the
construction of an expansion project by 2028, which aims to
increase production capacity to 130,000 tonnes of copper, and is
expected to reach full capacity by 2029. Any expanded production
from the Zone 5 and Mango NE deposits falls within the area of
interest covered by Royal Gold's silver stream interest.
Shift to Optimization of Recovery at Pueblo Viejo
On July 16, 2024, Barrick Gold Corporation ("Barrick") provided
an operational update for the second quarter at Pueblo Viejo in the
Dominican Republic. According to Barrick, production at Pueblo
Viejo during the second quarter was flat compared to the prior
quarter, as throughput is ramped up with a shift to recovery rate
optimization in the second half of 2024.
Higher Gold Grade Expected from the Peñasco Pit at
Peñasquito
On July 24, 2024, Newmont Corporation ("Newmont") reported that
it continues to expect full year 2024 production at Peñasquito to
be second half weighted driven primarily by improved grades.
Newmont reported that Peñasquito delivered strong gold and zinc
grades from the Chile Colorado pit during the second quarter, and
stripping in the Peñasco pit is expected to allow access to ore
with 50% higher gold grades in the December 2024 quarter.
Portfolio Additions
Royal Gold Acquires Additional Royalties on the Back River
Gold District in Nunavut, Canada
On June 26, 2024, International Royalty Corporation, a
wholly-owned subsidiary of Royal Gold, added to its existing
royalty interests on the Back River Gold District ("Back River")
with the acquisition of two royalties for aggregate cash
consideration of $51 million. The royalties acquired are:
- The Hill Royalty, which is a 0.7% net smelter return ("NSR")
royalty that declines by 50% after C$5 million in royalty revenue
is received, and
- The KM Royalty, which is a 26.25% interest in a 5% gross
smelter return ("GSR") royalty that is payable after approximately
780,000 ounces have been produced from Back River.
The royalty coverage includes all reserves, resources and
potential extensions thereof on the Back River Gold District.
Payments for the Hill Royalty are deductible from the KM
Royalty, and as a result, Royal Gold will account for the purchase
of the two royalties as one asset. When considered together, the
royalties are equivalent to an approximate effective 1.1% GSR
royalty rate over the majority of the mine life. Royal Gold expects
net income after depletion from these royalty interests to be taxed
in Canada at a rate of approximately 26.5%.
Back River is located in Western Nunavut, approximately 520
kilometers northeast of Yellowknife, and is owned and operated by
B2Gold Corp. ("B2Gold"). B2Gold owns the entire 80 kilometer Back
River Gold District, which includes five mineral claim blocks
comprising mining leases and claims covering approximately 580
square kilometers. The most advanced of these is the Goose Project,
which is fully permitted and under construction. B2Gold is a
well-capitalized gold producer listed on the TSX and NYSE, and the
management team has relevant arctic construction and operating
experience.
Back River is an attractive gold development project with
significant resource potential. The project has a total gold
resource of 9.2 million ounces, including 3.6 million ounces in
Proven and Probable Reserves. Construction of the Goose Project is
currently underway and B2Gold expects production of first gold in
the second quarter of 2025, with ramp-up to full production in the
third quarter of 2025. According to B2Gold, gold production in
calendar year 2025 will be between 120,000 and 150,000 ounces, and
average annual gold production from 2026 to 2030 will be in excess
of 310,000 ounces per year. The Updated Feasibility Study for the
Goose Project prepared in 2021 indicated production of over 3.3
million ounces of gold over a 15-year mine life. B2Gold is also
investing heavily in exploration, with an annual expenditure of $20
million for the next five years.
Prior to these acquisitions, Royal Gold owned a 51.25% interest
in the KM royalty. In total, after the acquisition of these
additional royalty interests, Royal Gold expects to receive royalty
revenue from the Goose Project based on the following royalty rates
and cumulative production thresholds:
- 0.7% NSR royalty rate until the receipt of C$5 million of
royalty revenue, declining to 0.35% thereafter, on all gold
produced from startup through to the cumulative production of
400,000 ounces;
- 2.5% GSR royalty rate on all gold produced after the cumulative
production of 400,000 ounces up to a cumulative total of
approximately 780,000 ounces; and
- 3.3% GSR royalty rate on all production above cumulative
production of approximately 780,000 ounces.
Based on the current mine plan, the two thresholds are expected
to be reached in 2026 and 2028, respectively, although royalty
rates and production thresholds are approximate due to assumptions
related to the gold price and the timing and applicability of
certain deductions and adjustments. Royal Gold's royalty position
prior to these acquisitions also included a 2.1-2.9% GSR royalty on
the George portion of Back River, which is payable after cumulative
production of 800,000 ounces.
Other Property Updates
Notable recent updates as reported by the operators of other
select portfolio assets include:
Producing Properties
Bellevue (2% NSR royalty): On July 15,
2024, Bellevue Gold Limited (“Bellevue”) reported gold production
of approximately 42,700 ounces in the quarter ended June 30, 2024,
with production for the first six months of calendar 2024 in line
with guidance, and on July 24, 2024, Bellevue announced a five-year
plan to significantly increase production at the Bellevue Gold mine
in Western Australia. Bellevue expects to grow production by
increasing underground ore movement and processing capacity, and is
targeting gold production of 165,000 to 180,000 ounces in fiscal
year 2025; 200,000 to 215,000 ounces in fiscal year 2026; 220,000
to 235,000 ounces in fiscal year 2027; 240,000 to 255,000 ounces in
fiscal 2028; and 240,000 to 260,000 in fiscal year 2029.
Additionally, Bellevue announced a A$60 million exploration program
for fiscal years 2025 and 2026 with the goal of targeting 1.5 to
2.5 million ounces grading 8-10 g/t of gold to the south and
covering the down plunge extent of the ore system. According to
Bellevue, the current 3.2 million ounce resource is defined within
the top 800 meters of the ore body and remains open in all
directions.
Mara Rosa (1.0% NSR and 1.75% NSR
royalties): On July 24, 2024, Hochschild Mining PLC
(“Hochschild”) reported gold production from the Mara Rosa mine in
Brazil of approximately 13,300 ounces in the second quarter.
According to Hochschild, Mara Rosa reached commercial production in
mid-May and the processing plant has reached a nominal capacity of
7,000 tonnes per day, with ongoing optimization initiatives
underway to achieve a stable throughput of 8,000 tonnes per day.
Hochschild further reported that brownfield exploration has
confirmed that mineralization continues at lower levels below the
Posse pit.
Rainy River (6.5% gold stream, 60% silver
stream): New Gold Inc. ("New Gold") reported on July 30, 2024,
that gold production from the Rainy River mine in Ontario in the
second quarter was approximately 50,300 ounces, and is expected to
strengthen in the second half of the year as higher grade ore is
accessed in the open pit. Additionally, New Gold reported that
underground development rates continue to ramp up, and with the
development of the in-pit portal expected to commence in the third
quarter, the underground Main Zone remains on track for first ore
in the fourth quarter of 2024.
Development and Evaluation
Properties
Celtic/Wonder North (1.5% NSR
royalty): Northern Star Resources Limited ("Northern Star")
reported on July 25, 2024, that the first high-grade development
ore feed from Wonder underground was introduced into the Thunderbox
mill blend in the second quarter. According to Northern Star, the
Wonder underground ramp-up will continue with the commencement of
production stoping by the end of 2024. Northern Star has referred
to an initial reserve at Wonder containing approximately 455,000
ounces of gold at a grade of 3.2 g/t.
Côté Gold (1% NSR royalty): IAMGOLD
Corporation ("IAMGOLD") reported on August 2, 2024, that commercial
production, which is defined as the achievement of reaching a
minimum of 30 consecutive days of operations with the mill
operating at an average of 60% of the nameplate throughput of
36,000 tonnes per day, has been reached at the Côté Gold Mine in
Ontario. IAMGOLD also reported that ramp-up of the plant continues
to progress with the goal of throughput reaching 90% of nameplate
capacity by the end of the year.
Great Bear (2% NSR royalty): On July
31, 2024, Kinross Gold Corporation (“Kinross”) provided an update
on the Great Bear Project in Ontario. According to Kinross, recent
drill results continue to support the view of a high-grade,
long-life mining complex, with results showing the extension of
mineralization at depth across multiple zones, including
mineralization well outside the current resource. Kinross reported
that various work streams are underway in 2024, including continued
exploration drilling below and along strike of known
mineralization, preparation for the start of surface construction
in the second half of 2024 for the underground exploration decline,
the release of a PEA for the Great Bear Project in September, 2024,
and other technical studies and permitting. Kinross noted that the
PEA is expected to include only a subset of the ounces in the
measured, indicated and inferred resources drilled to date.
Manh Choh (3% NSR royalty and 28% NSR
royalty on silver): Kinross (70% owner and operator) provided
an update on July 31, 2024, on progress at the Manh Choh Project in
Alaska. Kinross reported the first gold pour at the Fort Knox mill
occurred on schedule on July 8, 2024, ore transportation has ramped
up to planned volumes, full commissioning of the Fort Knox mill
modifications is expected to be completed in the third quarter, and
the project remains on track to deliver planned production this
year.
Second Quarter 2024 Overview
In the second quarter, we recorded net income and comprehensive
income of $81.2 million, or $1.23 per basic and diluted share, as
compared to net income of $63.4 million, or $0.97 per basic and
diluted share, for the three months ended June 30, 2023. The
increase in net income was primarily attributable to higher
revenue, as discussed below.
For the second quarter, we recognized total revenue of $174.1
million, comprised of stream revenue of $123.0 million and royalty
revenue of $51.1 million at an average gold price of $2,338 per
ounce, an average silver price of $28.84 per ounce and an average
copper price of $4.42 per pound. This is compared to total revenue
of $144.0 million for the three months ended June 30, 2023,
comprised of stream revenue of $106.0 million and royalty revenue
of $38.0 million, at an average gold price of $1,976 per ounce, an
average silver price of $24.13 per ounce and an average copper
price of $3.84 per pound.
The increase in our total revenue resulted primarily from higher
average gold, silver and copper prices compared to the prior
period. Higher copper sales at Mount Milligan, and higher gold and
silver production at Peñasquito also contributed to the increase.
These increases were partially offset by lower gold and silver
sales at Pueblo Viejo compared to the prior year period.
Cost of sales, which excludes depreciation, depletion and
amortization ("DD&A"), increased to $24.2 million for the
second quarter, from $23.4 million for the three months ended June
30, 2023. The increase, when compared to the prior year quarter,
was primarily due to higher copper sales at Mount Milligan. Cost of
sales is specific to our stream agreements and, except for Mount
Milligan, is the result of our purchase of metal for a cash payment
that is a set contractual percentage of the spot price for that
metal near the date of metal delivery. For Mount Milligan, the cash
payments under the existing stream agreement are the lesser of $435
per ounce for gold or the prevailing market price of gold when
purchased, and 15% of the spot price for copper near the date of
metal delivery. Separately, and in addition to the cash payments
under the existing stream agreement, the Mount Milligan Cost
Support Agreement (detailed in Note 5 of our notes to consolidated
financial statements in our Quarterly Report on Form 10-Q) provides
for cash payments on gold and copper deliveries that are expected
to begin after certain thresholds are met.
General and administrative costs increased to $10.5 million for
the second quarter, from $9.1 million for the three months ended
June 30, 2023. The increase was primarily due to an increase in
non-cash stock compensation expense compared to the prior year
period.
DD&A decreased to $35.7 million for the second quarter, from
$38.4 million for the three months ended June 30, 2023. The
decrease was primarily due to lower depletion rates at
Khoemacau and lower gold and silver
sales at Pueblo Viejo compared to the prior year period.
Interest and other expense decreased to $2.5 million for the
second quarter, from $8.4 million for the three months ended June
30, 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. For
the three months ended June 30, 2024, amounts outstanding under our
revolving credit facility averaged $92 million at an average all-in
borrowing rate of 6.5% compared to average amounts outstanding of
$473 million at an average all-in borrowing rate of 6.3% for the
prior year period.
For the second quarter, we recorded income tax expense of $19.0
million, compared to $2.0 million for the three months ended June
30, 2023. The income tax expense resulted in an effective tax rate
of 18.9% in the current period, compared with 3.1% for the three
months ended June 30, 2023. The three months ended June 30, 2023
included a discrete tax benefit of $8.5 million attributable to the
release of a valuation allowance on certain foreign deferred tax
assets.
Net cash provided by operating activities totaled $113.5 million
for the second quarter, compared to $107.9 million for the three
months ended June 30, 2023. The increase, when compared to the
prior year period, was primarily due to higher cash receipts from
the stream segment when compared to the prior year period.
Net cash used in investing activities totaled $50.9 million for
the second quarter, compared to net cash used in investing
activities of $2.6 million for the three months ended June 30,
2023. The change from the comparable prior year period was
primarily due to the $51 million acquisition of two Back River Gold
District royalties.
Net cash used in financing activities totaled $126.3 million for
the second quarter, in line with $126.0 million for the three
months ended June 30, 2023. Repayments of $100 million of
outstanding borrowings on the revolving credit facility were made
in both the current and prior year quarters.
Other Corporate Updates
Balance Sheet Returned to Net Cash Position with
Approximately $1 Billion of Total Available Liquidity at the end of
the Second Quarter
During the second quarter, we repaid $100 million of outstanding
borrowings on the $1 billion revolving credit facility, resulting
in $50 million outstanding and $950 million undrawn and available
as of June 30, 2024. Total liquidity at the end of the second
quarter was approximately $961 million, which consisted of $11
million of working capital and $950 million undrawn and available
under the revolving credit facility.
After the end of the second quarter, on July 10, 2024, we repaid
a further $25 million of outstanding borrowings on the credit
facility from cash flow, reducing the outstanding balance to $25
million. We expect this remaining balance to be repaid on August
12, 2024, which would reduce debt outstanding to $0. The
outstanding balance under our revolving credit facility was
classified as short-term as of June 30, 2024, with the submission
of a repayment notice to our banking syndicate.
Property Highlights
A breakdown of revenue for the Company’s stream and royalty
portfolio can be found on Table 1 for the three and six month
periods ended June 30, 2024 and June 30, 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. Table 4 shows stream
segment purchases and sales for the quarters ended June 30, 2024
and June 30, 2023 and inventories at June 30, 2024 and December 31,
2023. Highlights at certain of the Company’s principal producing
and development properties during the quarter ended June 30, 2024,
compared to the quarter ended June 30, 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
June 30, 2024, the Company owned interests on 177 properties on
five continents, including interests on 38 producing mines and 22
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.
Second Quarter 2024 Call
Information:
Dial-In
833-470-1428 (U.S.); toll free
Numbers:
833-950-0062 (Canada); toll free
929-526-1599 (International)
Access Code:
862469
Webcast URL:
www.royalgold.com under Investors, Events
& Presentations
Note: Management’s conference call reviewing the second
quarter 2024 results will be held on Thursday, August 8, 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.
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 and other anticipated
developments relating to their properties and operations, including
production, deliveries, estimates of mineral resources and mineral
reserves, environmental and feasibility studies, technical reports,
mine plans, capital requirements, liquidity and capital
expenditures; anticipated liquidity, capital resources and debt
repayments; 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 and Quarterly Reports on Form 10-Q. 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.
TABLE 1
Revenue by Stream and Royalty Interests
for the Three and Six Months ended June 30, 2024 and June 30,
2023
(In thousands)
Three Months Ended June
30,
Six Months Ended June
30,
Stream/Royalty
Metal(s)
Current Stream/Royalty
Interest1
2024
2023
2024
2023
Stream:
Canada
Mount Milligan
Gold, copper
35% of payable gold and 18.75% of payable
copper
$
52,139
$
41,208
$
87,134
$
87,863
Rainy River
Gold, silver
6.5% of gold produced and 60% of silver
produced
10,522
9,640
20,231
19,965
Latin America
Pueblo Viejo
Gold, silver
7.5% of Barrick's interest in payable gold
and 75% of Barrick's interest in payable silver
$
19,801
$
23,540
$
37,562
$
45,898
Andacollo
Gold
100% of payable gold
10,608
7,823
22,297
20,757
Xavantina
Gold
25% of gold produced
9,486
5,040
18,760
10,219
Africa
Khoemacau
Silver
100% of payable silver
$
8,394
$
8,881
$
16,152
$
18,035
Wassa
Gold
10.5% of payable gold
12,002
8,928
23,345
16,280
Bogoso and Prestea
Gold
5.5% of payable gold
—
955
—
1,988
Total stream revenue
$
122,952
$
106,015
$
225,481
$
221,005
Royalty:
Canada
Voisey's Bay
Copper, nickel, cobalt
2.7% NVR
$
1,315
$
553
$
2,453
$
2,050
Red Chris
Gold, copper
1.0% NSR
—
—
2,617
3,170
LaRonde Zone 5
Gold
2.0% NSR
712
694
1,520
1,241
Canadian Malartic
Gold
1.0%-1.5% sliding-scale NSR
110
292
80
1,032
Williams
Gold
0.97% NSR
488
(2,104
)
839
(1,760
)
Other-Canada
Various
Various
410
469
657
762
United States
Cortez
Legacy Zone
Gold
Approx. 9.4% GSR Equivalent
$
11,214
$
14,305
$
24,579
$
37,393
CC Zone
Gold
Approx. 0.45%-2.2% GSR Equivalent
$
4,548
3,520
8,959
6,726
Robinson
Gold, copper
3.0% NSR
3,764
1,439
5,547
4,157
Marigold
Gold
2.0% NSR
1,303
607
2,709
1,778
Leeville
Gold
1.8% NSR
2,137
1,195
3,622
2,153
Wharf
Gold
0.0%-2.0% sliding-scale GSR
370
1,011
1,191
1,592
Goldstrike
Gold
0.9% NSR
475
135
971
632
Other-United States
Various
Various
1,462
1,052
1,774
2,414
Latin America
Peñasquito
Gold, silver, lead, zinc
2.0% NSR
$
11,279
$
6,105
$
20,508
$
13,538
Dolores
Gold, silver
3.25% NSR (gold), 2.0% NSR (silver)
1,609
2,050
3,148
3,911
El Limon
Gold
3.0% NSR
2,077
1,294
3,387
2,495
Mara Rosa
Gold, silver
2.75% NSR
739
—
739
—
Other-Latin America
Various
Various
84
118
196
457
Australia
South Laverton
Gold
1.5% NSR, 4.0% NPI
$
2,253
$
2,097
$
4,152
$
3,630
King of the Hills
Gold
1.5% NSR
1,494
1,095
2,685
1,945
Gwalia
Gold
1.5% NSR
1,042
1,051
1,813
1,849
Bellevue
Gold
2.0% NSR
1,210
—
1,788
—
Meekatharra
Gold
0.45% or 1.5% NSR and A$10/oz
330
535
363
1,071
Celtic/Wonder North
Gold, silver
1.5% NSR
179
—
179
—
Other-Australia
Various
Various
539
303
1,042
685
Europe
Las Cruces
Copper
1.5% NSR (copper)
$
—
$
211
$
—
$
508
Total royalty revenue
$
51,144
$
38,027
$
97,518
$
93,429
Total revenue
$
174,096
$
144,042
$
322,999
$
314,434
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)
Jun. 30, 2024
Mar. 31, 2024
Dec. 31, 2023
Sep. 30, 2023
Jun. 30, 2023
Stream:
Mount Milligan
Centerra
35% of payable gold
Gold
16,100
oz
12,500
oz
14,000
oz
11,300
oz
17,500
oz
18.75% of payable copper
Copper
3.4
Mlb
2.5
Mlb
2.4
Mlb
3.2
Mlb
1.7
Mlb
Pueblo Viejo
Barrick (60%)
7.5% of Barrick's interest in payable
gold
Gold
5,800
oz
6,200
oz
5,000
oz
6,800
oz
7,400
oz
75% of Barrick's interest in payable
silver3
Silver
218,200
oz
223,000
oz
171,100
oz
150,700
oz
362,200
oz
Andacollo
Teck
100% of payable gold
Gold
4,500
oz
5,700
oz
7,000
oz
7,500
oz
4,000
oz
Khoemacau
MMG
100% of payable silver
Silver
295,500
oz
332,000
oz
323,800
oz
386,100
oz
373,000
oz
Royalty:
Cortez
Nevada Gold Mines LLC
9.4% GSR on Legacy Zone4
Gold
42,600
oz
68,700
oz
111,900
oz
98,800
oz
68,100
oz
0.45%-2.2% GSR on CC Zone4
Gold
119,800
oz
124,900
oz
156,600
oz
120,000
oz
111,500
oz
Peñasquito
Newmont Corporation
2.0% NSR
Gold
64,200
oz
44,000
oz
25,900
oz
-
oz
48,100
oz
Silver
8.0
Moz
9.8
Moz
4.6
Moz
-
Moz
6.0
Moz
Lead
42.9
Mlb
64.9
Mlb
34.9
Mlb
-
Mlb
35.6
Mlb
Zinc
113.3
Mlb
134.8
Mlb
33.5
Mlb
-
Mlb
89.7
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
Six Months Ended June 30, 2024
Stream Sales1
Royalty Sales2
Total Sales
Gold
(oz)
215,000 - 230,000
77,300
32,078
109,378
Silver
(M oz)
3.2-3.8
1.2
0.4
1.6
Copper
(M lb)
14.0 - 16.0
5.8
1.8
7.6
Other Metals
(M)
$17.0 - $20.0
N/A
$10.3
$10.3
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 June
30, 2024
Three Months Ended June
30, 2023
As of June 30,
2024
As of December 31,
2023
Gold Stream
Purchases (oz)
Sales (oz)
Purchases (oz)
Sales (oz)
Inventory (oz)
Inventory (oz)
Mount Milligan
9,800
16,100
17,300
17,500
500
4,000
Pueblo Viejo
7,000
5,800
6,800
7,400
7,000
6,200
Andacollo
5,800
4,500
3,700
4,000
1,200
800
Other
11,800
12,800
11,200
11,600
3,300
4,200
Total
34,400
39,200
39,000
40,500
12,000
15,200
Silver Stream
Purchases (oz)
Sales (oz)
Purchases (oz)
Sales (oz)
Inventory (oz)
Inventory (oz)
Khoemacau
281,600
295,500
398,700
373,000
88,000
135,300
Pueblo Viejo1
332,700
218,200
150,700
362,200
332,700
223,000
Other
80,000
79,500
70,600
65,700
29,800
24,800
Total
694,300
593,200
620,000
800,900
450,500
383,100
Copper Stream
Purchases (Mlb)
Sales (Mlb)
Purchases (Mlb)
Sales (Mlb)
Inventory (Mlb)
Inventory (Mlb)
Mount Milligan
2.5
3.4
2.5
1.7
—
—
Six Months Ended June
30, 2024
Six Months Ended June
30, 2023
Gold Stream
Purchases (oz)
Sales (oz)
Purchases (oz)
Sales (oz)
Mount Milligan
25,100
28,600
31,200
32,700
Pueblo Viejo
12,700
12,000
14,200
15,300
Andacollo
10,700
10,200
9,000
11,000
Other
25,600
26,500
24,200
23,500
Total
74,100
77,300
78,600
82,500
Silver Stream
Purchases (oz)
Sales (oz)
Purchases (oz)
Sales (oz)
Khoemacau
580,200
627,400
826,200
777,000
Pueblo Viejo1
550,900
441,200
513,000
700,100
Other
164,500
159,600
140,000
131,900
Total
1,295,600
1,228,200
1,479,200
1,609,000
Copper Stream
Purchases (Mlb)
Sales (Mlb)
Purchases (Mlb)
Sales (Mlb)
Mount Milligan
5.8
5.8
6.0
6.2
1
Silver stream purchases do not include
142,800 ounces of silver permitted to be deferred in the three
month period ending June 30, 2024, and 266,100 ounces of silver
permitted to be deferred in the six month period ending June 30,
2024, based on the terms of the Pueblo Viejo stream agreement.
Total deferred deliveries were approximately 1.12 million ounces at
June 30, 2024, and the timing for the delivery of the entire
deferred amount is uncertain.
ROYAL GOLD, INC.
Consolidated Balance Sheets
(Unaudited, in thousands except share
data)
June 30, 2024
December 31, 2023
ASSETS
Cash and equivalents
$
74,232
$
104,167
Royalty receivables
40,338
48,884
Income tax receivable
5,637
2,676
Stream inventory
10,904
9,788
Prepaid expenses and other
2,387
1,911
Total current assets
133,498
167,426
Stream and royalty interests, net
3,053,988
3,075,574
Other assets
81,535
118,057
Total assets
$
3,269,021
$
3,361,057
LIABILITIES
Accounts payable
$
13,227
$
11,441
Dividends payable
26,314
26,292
Current portion of long-term debt
50,000
—
Income tax payable
18,103
15,557
Other current liabilities
14,739
19,132
Total current liabilities
122,383
72,422
Debt
—
245,967
Deferred tax liabilities
133,351
134,299
Mount Milligan deferred liability
25,000
—
Other liabilities
7,094
7,728
Total liabilities
287,828
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 65,656,625 and 65,631,760 shares
outstanding, respectively
656
656
Additional paid-in capital
2,225,942
2,221,039
Accumulated earnings
742,270
666,522
Total Royal Gold stockholders’ equity
2,968,868
2,888,217
Non-controlling interests
12,325
12,424
Total equity
2,981,193
2,900,641
Total liabilities and equity
$
3,269,021
$
3,361,057
ROYAL GOLD, INC.
Consolidated Statements of Operations
and Comprehensive Income
(Unaudited, in thousands except share
data)
Three Months Ended
Six Months Ended
June 30, 2024
June 30, 2023
June 30, 2024
June 30, 2023
Revenue
$
174,096
$
144,042
$
322,999
$
314,434
Costs and expenses
Cost of sales (excludes depreciation,
depletion and amortization)
24,174
23,367
45,924
48,387
General and administrative
10,511
9,093
21,923
20,093
Production taxes
1,581
1,274
3,031
3,263
Depreciation, depletion and
amortization
35,747
38,412
74,512
84,741
Total costs and expenses
72,013
72,146
145,390
156,484
Operating income
102,083
71,896
177,609
157,950
Fair value changes in equity
securities
(63
)
(509
)
383
291
Interest and other income
807
2,650
3,783
4,912
Interest and other expense
(2,516
)
(8,408
)
(7,123
)
(17,582
)
Income before income taxes
100,310
65,629
174,652
145,571
Income tax expense
(18,991
)
(2,029
)
(46,025
)
(17,900
)
Net income and comprehensive income
81,320
63,600
128,627
127,671
Net income and comprehensive income
attributable to non-controlling interests
(112
)
(151
)
(255
)
(347
)
Net income and comprehensive income
attributable to Royal Gold common stockholders
$
81,208
$
63,449
$
128,372
$
127,324
Net income per share attributable to Royal
Gold common stockholders:
Basic earnings per share
$
1.23
$
0.97
$
1.95
$
1.94
Basic weighted average shares
outstanding
65,650,801
65,605,391
65,644,115
65,600,213
Diluted earnings per share
$
1.23
$
0.97
$
1.95
$
1.93
Diluted weighted average shares
outstanding
65,767,538
65,762,903
65,753,899
65,736,028
Cash dividends declared per common
share
$
0.40
$
0.375
$
0.80
$
0.750
ROYAL GOLD, INC.
Consolidated Statements of Cash
Flows
(Unaudited, in thousands)
Three Months Ended
Six Months Ended
June 30, 2024
June 30, 2023
June 30, 2024
June 30, 2023
Cash flows from operating activities:
Net income and comprehensive income
$
81,320
$
63,600
$
128,627
$
127,671
Adjustments to reconcile net income and
comprehensive income to net cash provided by operating
activities:
Depreciation, depletion and
amortization
35,747
38,412
74,512
84,741
Non-cash employee stock compensation
expense
3,348
1,943
6,336
4,579
Fair value changes in equity
securities
63
509
(383
)
(291
)
Deferred tax expense (benefit)
2,771
(8,231
)
3,419
(7,139
)
Other
262
231
484
445
Changes in assets and liabilities:
Royalty receivables
(1,581
)
10,477
8,546
12,948
Stream inventory
513
942
(1,116
)
1,998
Income tax receivable
(2,528
)
(7,878
)
(2,961
)
(6,536
)
Prepaid expenses and other assets
(233
)
(1,727
)
10,530
(2,641
)
Accounts payable
1,628
700
1,786
1,866
Income tax payable
(3,918
)
7,378
2,547
(462
)
Mount Milligan deferred liability
—
—
25,000
—
Other liabilities
(3,877
)
1,571
(5,528
)
(597
)
Net cash provided by operating
activities
$
113,515
$
107,927
$
251,799
$
216,582
Cash flows from investing activities:
Acquisition of stream and royalty
interests
(51,152
)
(2,670
)
(52,256
)
(2,670
)
Proceeds from Khoemacau debt facility
—
—
25,000
—
Other
220
46
(85
)
(151
)
Net cash used in investing activities
$
(50,932
)
$
(2,624
)
$
(27,341
)
$
(2,821
)
Cash flows from financing activities:
Repayment of debt
(100,000
)
(100,000
)
(200,000
)
(175,000
)
Net payments from issuance of common
stock
(63
)
650
(1,432
)
253
Common stock dividends
(26,311
)
(24,642
)
(52,603
)
(49,271
)
Other
73
(1,970
)
(358
)
(2,172
)
Net cash used in financing activities
$
(126,301
)
$
(125,962
)
$
(254,393
)
$
(226,190
)
Net decrease in cash and equivalents
(63,718
)
(20,659
)
(29,935
)
(12,429
)
Cash and equivalents at beginning of
period
137,950
126,816
104,167
118,586
Cash and equivalents at end of period
$
74,232
$
106,157
$
74,232
$
106,157
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 June
30,
Six Months Ended June
30,
(amounts in thousands)
2024
2023
2024
2023
Net income and comprehensive income
81,320
$
63,600
$
128,627
$
127,671
Depreciation, depletion and
amortization
35,747
38,412
74,512
84,741
Non-cash employee stock compensation
3,348
1,943
6,336
4,579
Fair value changes in equity
securities
63
509
(383
)
(291
)
Other non-recurring adjustments
—
2,440
—
2,440
Interest and other, net
1,709
5,758
3,340
12,670
Income tax expense
18,991
2,029
46,025
17,900
Non-controlling interests in operating
income of consolidated subsidiaries
(112
)
(151
)
(255
)
(347
)
Adjusted EBITDA
$
141,066
$
114,540
$
258,202
$
249,363
Net income margin
47
%
44
%
40
%
41
%
Adjusted EBITDA margin
81
%
80
%
80
%
79
%
Three Months Ended
June 30,
March 31,
December 31,
September 30,
(amounts in thousands)
2024
2024
2023
2023
Net income and comprehensive income
$
81,320
$
47,309
$
62,963
$
49,499
Depreciation, depletion and
amortization
35,747
38,765
40,090
40,106
Non-cash employee stock compensation
3,348
2,988
2,354
2,763
Fair value changes in equity
securities
63
(447
)
(25
)
462
Interest and other, net
1,709
1,630
3,396
4,849
Income tax expense
18,991
27,033
13,356
10,752
Non-controlling interests in operating
income of consolidated subsidiaries
(112
)
(143
)
(183
)
(162
)
Adjusted EBITDA
$
141,066
$
117,135
$
121,951
$
108,269
Net income margin
47
%
32
%
41
%
36
%
Adjusted EBITDA margin
81
%
79
%
80
%
78
%
TTM adjusted EBITDA
$
488,421
Debt
$
50,000
Cash and equivalents
(74,232
)
Net debt / (cash)
$
(24,232
)
Net debt / (cash) to TTM adjusted
EBITDA
(0.05)x
Cash G&A:
Three Months Ended June
30,
Six Months Ended June
30,
(amounts in thousands)
2024
2023
2024
2023
General and administrative expense
$
10,511
$
9,093
$
21,923
$
20,093
Non-cash employee stock compensation
(3,348
)
(1,943
)
(6,336
)
(4,579
)
Cash G&A
$
7,163
$
7,150
$
15,587
$
15,514
Three Months Ended
June 30,
March 31,
December 31,
September 30,
(amounts in thousands)
2024
2024
2023
2023
General and administrative expense
$
10,511
$
11,412
$
9,741
$
9,927
Non-cash employee stock compensation
(3,348
)
(2,988
)
(2,354
)
(2,763
)
Cash G&A
$
7,163
$
8,424
$
7,387
$
7,164
TTM cash G&A
$
30,138
Adjusted net income and adjusted net
income per share:
Three Months Ended June
30,
Six Months Ended June
30,
(amounts in thousands, except per share
data)
2024
2023
2024
2023
Net income and comprehensive income
attributable to Royal Gold common stockholders
$
81,208
$
63,449
$
128,372
$
127,324
Fair value changes in equity
securities
63
509
(383
)
(291
)
Other non-recurring adjustments
—
2,440
—
2,440
Discrete tax expense related to Mount
Milligan Cost Support Agreement
30
—
13,008
—
Other discrete tax expense (benefit)
1,279
(8,462
)
1,279
(8,462
)
Tax effect of adjustments
(17
)
(781
)
102
(569
)
Adjusted net income and comprehensive
income attributable to Royal Gold common stockholders
$
82,563
$
57,155
$
142,378
$
120,442
Net income attributable to Royal Gold
common stockholders per diluted share
$
1.23
$
0.97
$
1.95
$
1.94
Fair value changes in equity
securities
—
0.01
(0.01
)
—
Other non-recurring adjustments
—
0.04
—
0.04
Discrete tax expense related to Mount
Milligan Cost Support Agreement
—
—
0.20
—
Other discrete tax expense (benefit)
0.02
(0.13
)
0.02
(0.13
)
Tax effect of adjustments
$
—
$
(0.01
)
$
—
$
(0.01
)
Adjusted net income attributable to Royal
Gold common stockholders per diluted share
$
1.25
$
0.88
$
2.16
$
1.84
Free cash flow:
Three Months Ended June
30,
Six Months Ended June
30,
(amounts in thousands)
2024
2023
2024
2023
Net cash provided by operating
activities
$
113,515
$
107,927
$
251,799
$
216,582
Acquisition of stream and royalty
interests
(51,152
)
(2,670
)
(52,256
)
(2,670
)
Free cash flow
$
62,363
$
105,257
$
199,543
$
213,912
Net cash used in investing activities
$
(50,932
)
$
(2,624
)
$
(27,341
)
$
(2,821
)
Net cash used in financing activities
$
(126,301
)
$
(125,962
)
$
(254,393
)
$
(226,190
)
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/20240807267655/en/
Alistair Baker Senior Vice President, Investor Relations and
Business Development (303) 573-1660
Royal Gold (NASDAQ:RGLD)
Gráfica de Acción Histórica
De Jul 2024 a Ago 2024
Royal Gold (NASDAQ:RGLD)
Gráfica de Acción Histórica
De Ago 2023 a Ago 2024
