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Press release from Business Wire

Royal Gold Reports Record Results for First Quarter Fiscal Year 2013

<ul> <li class='bwlistitemmargb'> <b>Record royalty revenue of $77.9 million, a 21% increase year-over-year</b> </li> <li class='bwlistitemmargb'> <b>Record Adjusted EBITDA </b><sup><b>1 </b></sup><b>of $71.0 million, a 23% increase year-over-year</b> </li> <li class='bwlistitemmargb'> <b>Record cash flow from operations of $53.5 million, a 16% increase year-over-year</b> </li> </ul>

Thursday, November 01, 2012

Royal Gold Reports Record Results for First Quarter Fiscal Year 201308:00 EDT Thursday, November 01, 2012 DENVER (Business Wire) -- Royal Gold, Inc. (NASDAQ:RGLD) (TSX:RGL) today announced net income attributable to Royal Gold stockholders of $24.8 million, or $0.42per basic share, on record royalty revenue of $77.9 million for the first quarter of fiscal 2013. This compares to net income attributable to Royal Gold stockholders of $22.5 million, or $0.41 per basic share, on royalty revenue of $64.5 million for the first quarter of fiscal 2012. Adjusted EBITDAfor the first quarter of fiscal 2013 was a record $71.0 million representing 91% of revenue, an increase of 23% compared to Adjusted EBITDA of $57.6 million or 89% of revenue for the prior year period. Cash flow from operations for the quarter was $53.5 million compared with $46.2 million for the first quarter of fiscal 2012. The 21% increase in revenue for the quarter was largely driven by increased production at Andacollo, Peñasquito, and Voisey's Bay, the Company's cornerstone assets, in addition to production growth at Mulatos, Las Cruces, Holt, Wolverine, and Canadian Malartic. These increases were partially offset during the period by production declines at Cortez and Leeville and lower average metal prices. The average price of gold for the quarter was $1,652 per ounce compared with $1,702 per ounce for the comparable period, a decrease of 3%. As of September 30, 2012, the Company had a working capital surplus of $352.5 million. Current assets were $371.8 million (including $302 million in cash and equivalents), compared to current liabilities of $19.3 million, resulting in a current ratio of approximately 19 to 1. In addition to available working capital, the Company had $350 million available under its revolving line of credit. In October 2012, Royal Gold completed an offering of 5.25 million shares of common stock. Proceeds from the offering were $472.5 million before expenses. The Company intends to use the proceeds from this offering for the acquisition of additional royalty or similar interests and general corporate purposes. Tony Jensen, President and CEO, commented, “Our assets continue to deliver strong financial results and it is particularly gratifying to see several properties have success in ramping up production towards design capacities. We anticipate further incremental production increases from Andacollo, Peñasquito, and Canadian Malartic in the coming quarters. This is also an important time for Royal Gold to have sufficient resources to respond to new business opportunities. Our offering in October, coupled with cash on hand and our undrawn credit facility, puts us in a strong position, with over $1.0 billion of liquidity to further expand our portfolio.” PROPERTY HIGHLIGHTS Highlights at certain of the Company's principal producing and development properties during the quarter ended September 30, 2012 are listed below: Producing PropertiesAndacollo – Teck reported record production during the quarter primarily due to increased mill throughput as a result of the commissioning of the pre-crushing circuit. The plant began to reach design capacity during the end of the quarter with throughput of just over 54,000 tonnes per day in September versus design capacity of 55,000 tonnes per day. Canadian Malartic – Osisko reported record gold production during the quarter. The mill processed ore at an average rate of 40,834 tonnes per day and, post quarter end, the mill achieved throughput rates consistently above 50,000 tonnes per day. Osisko reported that the second pebble crusher is scheduled to be installed and commissioned in the fourth quarter and that they expect the operation to move towards the design rate of 55,000 tonnes per day at that point. Cortez – Barrick continued to prioritize production from their higher grade Cortez Hills operations that is not covered by our royalty interest. As a result, production decreased during the period. Royal Gold expects production to remain at these lower levels until Barrick returns to steady state mining at the Pipeline Complex. Dolores – Pan American reported that they continue to finalize construction of a new heap leach pad, complete a new reserve model and life of mine plan, and evaluate mill options to improve recoveries and increase production. Holt – St Andrew Goldfields reported strong production for the quarter, largely driven by higher grades, and that production was sustained at design capacity for the entire period. Las Cruces – Strong mill performance at Las Cruces resulted in increased production for the quarter. Las Cruces is approaching its designed mill capacity of 6,000 tonnes per day. Leeville – A portion of the mine production at Leeville was derived from an area outside of our royalty interest resulting in a decrease in royalty revenue over the prior period. Mulatos – Alamos reported that they achieved record quarterly crusher throughput, averaging 15,200 tonnes per day despite the rainy season. The significantly higher gold production during the quarter versus the comparable period was primarily due to new production from the gravity mill. Peñasquito –Goldcorp reported that record production of gold and other metals during the quarter was driven by strong grades in the deeper portion of the current phase of mining. However, mill throughput continued to be limited at an average rate of about 102,000 tonnes per day due to water shortages, compared to the design capacity is 130,000 tonnes per day. Work continues on the drilling of additional water wells and optimization of tailings operations to sustain the necessary water supply. Goldcorp stated that water availability is expected to be sufficient to achieve their annual guidance of between 370,000 and 390,000 ounces of gold for 2012. Voisey's Bay – Increased metal sales reflected higher shipments of copper concentrate during the quarter. The variability in Vale's shipping schedule will continue to result in uneven metal sales quarter-over-quarter. Vale reported that the Long Harbour hydrometallurgical facility is 75% complete. Wolverine –Yukon Zinc stated that production increased during the quarter with an average output of 1,300 tonnes per day, compared to the design capacity of 1,700 tonnes per day. Work is also continuing on integrating new mining equipment, increasing mill concentrate grade and recoveries, and completing construction of the tailings dam to reach its ultimate height. Development PropertiesMt. Milligan – Thompson Creek reported that, as of September 30, 2012, construction progress on the Mt. Milligan project was 65% complete with overall progress 79% complete. They also reiterated that the overall project remains on schedule, with commencement of commercial production expected in the fourth quarter of calendar 2013. Pascua-Lama – Barrick reported that they have taken actions to strengthen the Pascua-Lama project management and mitigate cost pressures as a combination of factors has increased the project capital cost and extended the construction schedule. At the end of the July 2012 quarter, pre-stripping was underway, the ore transfer tunnel was 40% complete, the power line in Chile was 50% complete, the plant concrete placement and steel erection was underway, and the camp was being expanded to handle peak construction activity. Initial gold production is now expected in mid-2014. Additional Property Information First quarter fiscal 2013 production and revenue for the Company's principal royalty interests are shown in Table 1 and historical production data is shown in Table 2. For more detailed information about each of our principal royalty properties, please refer to the Company's most recent Annual Report on Form 10-K, our Quarterly Reports on Form 10-Q and Current Reports on Form 8-K filed with the SEC and available on the SEC's website located at www.sec.gov, or our website located at www.royalgold.com. CORPORATE PROFILE Royal Gold is a precious metals royalty company engaged in the acquisition and management of precious metals royalties and similar interests. The Company owns royalties on 201 properties on six continents, including royalties on 39 producing mines and 26 development stage projects. Royal Gold is publicly traded on the NASDAQ Global Select Market under the symbol “RGLD,” and on the Toronto Stock Exchange under the symbol “RGL.” The Company's website is located at www.royalgold.com. Note: Management's conference call reviewing the first quarter results will be held todayat 10:00 a.m. Mountain Time (noon Eastern Time) and will be available by calling (800) 603-2779 (North America) or (973) 200-3960(international), access #42043945. The call will be simultaneously broadcast on the Company's website at www.royalgold.com under the “Presentations” section. A replay of this webcast will be available on the Company's website approximately two hours after the call ends. Cautionary “Safe Harbor” Statement Under the Private Securities Litigation Reform Act of 1995: With the exception of historical matters, the matters discussed in this press release are forward-looking statements that involve risks and uncertainties that could cause actual results to differ materially from projections or estimates contained herein. Such forward-looking statements include statements about the Company's assets continuing to deliver strong financial results; properties reaching full-design capacity; further production increases at Andacollo, Peñasquito and Canadian Malartic; sufficient resources to respond to new business opportunities; use of proceeds of the recent common stock offering, and the operators' expectation of construction, ramp up, production, throughput, mine life, water availability and other developments at various mines. Factors that could cause actual results to differ materially from the projections include, among others, precious metals, copper and nickel prices; performance of and production at the Company's royalty properties; decisions and activities of the operators of the Company's various properties; unanticipated grade, geological, metallurgical, processing or other problems the operators of the mining properties may encounter; delays in the operators securing or their inability to secure necessary governmental permits; changes in operator's project parameters as plans continue to be refined; economic and market conditions; the ability of the various operators to bring projects into production as expected; and other subsequent events; as well as other factors described in the Company's Annual Report on Form 10-K, Quarterly Report on Form 10-Q, and other filings with the Securities and Exchange Commission. Most of these factors are beyond the Company's ability to predict or control. The Company disclaims any obligation to update any forward-looking statement made herein. Readers are cautioned not to put undue reliance on forward-looking statements. 1 The Company defines Adjusted EBITDA, a non-GAAP financial measure, as net income plus depreciation, depletion and amortization, non-cash charges, income tax expense, interest and other expense, and any impairment of mining assets, less non-controlling interests in operating income from consolidated subsidiaries, interest and other income, and any royalty portfolio restructuring gains or losses (see Schedule A).   TABLE 1First Quarter Fiscal 2013Royalty Production and Revenue for Principal Royalty Interests   PROPERTY   ROYALTY   OPERATOR   METAL(S)   THREE MONTHS ENDED   THREE MONTHS ENDEDSEPTEMBER 30, 2012   SEPTEMBER 30, 2011         RoyaltyRevenue($ millions)   ReportedProduction 1   RoyaltyRevenue($ millions)   ReportedProduction 1 Andacollo 2,3   75% NSR   Teck   Gold   19.70   15,937 oz.   16.84   13,286 oz. Peñasquito 3   2.0% NSR   Goldcorp   GoldSilverLeadZinc   11.15   131,239 oz.7.4M oz.41.7M lbs.96.6M lbs.   5.83   48,621 oz.3.9M oz.29.2M lbs.67.4M lbs. Voisey's Bay 3   2.7% NSR   Vale   NickelCopper   9.20   33.9M lbs.43.6M lbs.   7.23   22.7M lbs.16.0M lbs. Holt   0.00013 x quarterlyaverage gold price   St Andrew Goldfields   Gold   4.56   12,870 oz.   3.59   9,397 oz. Robinson 3   3.0% NSR   KGHM   GoldCopper   3.75   9,072 oz.36.9M lbs.   3.69   8,972 oz.27.9M lbs. Mulatos 4   1.0% to 5.0% NSR   Alamos   Gold   3.50   42,310 oz.   2.40   29,476 oz. Cortez 5   GSR1 and GSR2GSR3NVR1   Barrick   Gold   2.78   25,751 oz.   5.11   42,855 oz. Las Cruces 3   1.5% NSR   Inmet   Copper   2.46   46.2M lbs.   1.31   23.8 M lbs. Canadian Malartic 6   1.0% to 1.5% NSR   Osisko   Gold   2.14   91,737 oz.   1.31   60,826 oz. Leeville   1.8% NSR   Newmont   Gold   2.07   68,026 oz.   3.07   101,240 oz. Wolverine 3,7   0.0% to9.445% NSR   Yukon Zinc   GoldSilver   1.29   1,200 oz.494,496 oz.   - 8   - 8 Dolores   3.25% NSR2.0% NSR   Pan American Silver   GoldSilver   1.14   13,244 oz.773,369 oz.   1.42   15,945 oz.693,531 oz. Other Royalty Properties 9           Various   14.12   N/A   12.67   N/A Total Royalty Revenue           77.86       64.47         FOOTNOTES1   Reported production relates to the amount of metal sales that are subject to our royalty interests for the periods ended September 30, 2012 and September 30, 2011, as reported to us by the operators of the mines.   2 The royalty rate is 75% until 910,000 payable ounces of gold have been produced – 50% thereafter. There have been approximately 114,000 cumulative payable ounces produced as of September 30, 2012. Gold is produced as a by-product of copper.   3 Revenues consist of provisional payments for concentrates produced during the current period and final settlements for prior production periods.   4 The Company's royalty is subject to a 2.0 million ounce cap on gold production. There have been approximately 943,000 ounces of cumulative production, as of September 30, 2012. NSR sliding-scale schedule (price of gold per ounce – royalty rate): $0.00 to $299.99 – 1.0%; $300 to $324.99 – 1.50%; $325 to $349.99 – 2.0%; $350 to $374.99 – 3.0%; $375 to $399.99 – 4.0%; $400 or higher – 5.0%.   5 Royalty percentages: GSR1 and GSR2 – 0.40 to 5.0% (sliding-scale); GSR3 – 0.71%; NVR1 – 0.39%.   6 NSR sliding-scale schedule (price of gold per ounce – royalty rate): $0.00 to $350 – 1.0%; above $350 – 1.5%.   7 Gold royalty rate is based on the price of silver per ounce. NSR sliding-scale schedule (price of silver per ounce – royalty rate): Below $5.00 – 0.0%; $5.00 to $7.50 – 3.778%; >$7.50 – 9.445%.   8 Royalty revenue did not commence until the quarter ended December 31, 2011 at the Wolverine mine.   9 “Other” includes all of the Company's non-principal producing royalties for the periods ended September 30, 2012 and 2011. Individually, no royalty included within “Other” contributed greater than 5% of our total royalty revenue for any of the periods.     TABLE 2Historical Production   PROPERTY2   ROYALTY   OPERATOR   METAL(S)   REPORTED PRODUCTION 1FOR THE QUARTER ENDED         June 30,2012   March 31,2012   December 31,2011   September 30,2011 Andacollo   75% NSR   Teck   Gold   11,908 oz.   13,174 oz.   13,070 oz.   13,286 oz. Peñasquito   2.0% NSR   Goldcorp   GoldSilverLeadZinc   90,554 oz.6.0M oz.42.2M lbs.90.8M lbs.   87,517 oz.6.6M oz.52.4M lbs.75.9M lbs.   67,827 oz.5.0M oz.40.2M lbs.78.4M lbs.   48,621 oz.3.9M oz.29.2M lbs.67.4M lbs. Voisey's Bay   2.7% NSR   Vale   NickelCopper   30.6M lbs.2.9M lbs.   50.9M lbs.9.7M lbs.   27.4M lbs.78.6M lbs.   22.7M lbs.16.0M lbs. Holt   0.00013 x quarterlyaverage gold price   St Andrew Goldfields   Gold   11,469 oz.   8,839 oz.   11,461 oz.   9,397 oz. Robinson   3.0% NSR   KGHM   GoldCopper   9,191 oz.32.5M lbs.   5,673 oz.23.8M lbs.   7,193 oz.21.1M lbs.   8,972 oz.27.9M lbs. Mulatos   1.0% to 5.0% NSR   Alamos   Gold   46,077 oz.   50,493 oz.   43,223 oz.   29,476 oz. Cortez   GSR1 and GSR2GSR3NVR1   Barrick   Gold   26,845 oz.   23,362 oz.   23,609 oz.   42,855 oz. Las Cruces   1.5% NSR   Inmet   Copper   37.3M lbs.   29.9M lbs.   28.1M lbs.   23.8M lbs. Canadian Malartic   1.0% to 1.5% NSR   Osisko   Gold   91,734 oz.   90,845 oz.   54,141 oz.   60,826 oz. Leeville   1.8% NSR   Newmont   Gold   36,582 oz.   64,291 oz.   102,946 oz.   101,240 oz. Wolverine   0.0% to9.445% NSR   Yukon Zinc   GoldSilver   842 oz.338,736 oz.   393 oz.326,017 oz.   294 oz.366,922 oz.   - Dolores   3.25% NSR2.0% NSR   Pan American Silver   GoldSilver   10,085 oz.643,972 oz.   14,510 oz.858,600 oz.   20,663 oz.887,007 oz.   15,945 oz.693,531 oz. 1   Reported production relates to the amount of metal sales that are subject to our royalty interests for the stated period, as reported to us by the operators of the mines.   2 See individual property footnotes on page 6.   ROYAL GOLD, INC.Consolidated Balance Sheets(Unaudited, in thousands except share data)     September 30, June 30, 2012 2012 ASSETS Cash and equivalents $ 302,037 $ 375,456 Royalty receivables 64,735 53,946 Income tax receivable - 11,046 Prepaid expenses and other current assets   5,075     4,760   Total current assets 371,847 445,208   Royalty interests in mineral properties, net 1,989,692 1,890,988 Available for sale securities 20,044 15,015 Other assets   21,776     21,834   Total assets $ 2,403,359   $ 2,373,045     LIABILITIES Accounts payable $ 3,087 $ 2,615 Dividends payable 8,966 8,947 Income tax payable 1,702 - Other current liabilities   5,572     3,647   Total current liabilities 19,327 15,209   Debt 295,440 293,248 Net deferred tax liabilities 179,769 178,716 Uncertain tax positions 20,095 19,469 Other long-term liabilities   2,674     2,974   Total liabilities   517,305     509,616     Commitments and contingencies   EQUITY Preferred stock, $.01 par value, 10,000,000 shares authorized; and 0 shares issued - - Common stock, $.01 par value, 100,000,000 shares authorized; and 58,755,634 and 58,614,221 shares outstanding, respectively 588 586 Exchangeable shares, no par value, 1,806,649 shares issued, less 1,042,823 and 1,007,823 redeemed shares, respectively 33,616 35,156 Additional paid-in capital 1,660,001 1,656,357 Accumulated other comprehensive (loss) income (8,716 ) (13,763 ) Accumulated earnings   175,925     160,123   Total Royal Gold stockholders' equity 1,861,414 1,838,459 Non-controlling interests   24,640     24,970   Total equity   1,886,054     1,863,429   Total liabilities and equity $ 2,403,359   $ 2,373,045     ROYAL GOLD, INC.Consolidated Statements of Operations and Comprehensive Income(Unaudited, in thousands except share data)     For The Three Months Ended September 30, September 30, 2012 2011 Royalty revenues $ 77,862 $ 64,465   Costs and expenses General and administrative 6,070 6,298 Production taxes 2,478 2,150 Depreciation, depletion and amortization 21,500 17,221 Restructuring on royalty interests in mineral properties   -     1,328   Total costs and expenses   30,048     26,997     Operating income 47,814 37,468   Interest and other income 110 2,833 Interest and other expense   (6,169 )   (1,779 ) Income before income taxes 41,755 38,522   Income tax expense   (16,461 )   (12,381 ) Net income 25,294 26,141 Net income attributable to non-controlling interests   (523 )   (3,646 ) Net income attributable to Royal Gold stockholders $ 24,771   $ 22,495     Net income $ 25,294 $ 26,141 Adjustments to comprehensive income, net of tax Unrealized change in market value of available for sale securities   5,046     (5,304 ) Comprehensive income 30,340 20,837 Comprehensive income attributable to non-controlling interests   (523 )   (3,646 ) Comprehensive income attributable to Royal Gold stockholders $ 29,817   $ 17,191     Net income per share available to Royal Gold common stockholders: Basic earnings per share $ 0.42   $ 0.41   Basic weighted average shares outstanding   59,435,867     55,183,719   Diluted earnings per share $ 0.41   $ 0.40   Diluted weighted average shares outstanding   59,679,807     55,491,354   Cash dividends declared per common share $ 0.15   $ 0.11     ROYAL GOLD, INC. Consolidated Statements of Cash Flows (Unaudited, in thousands)     For The Three Months Ended September 30, September 30, 2012 2011 Cash flows from operating activities: Net income $ 25,294 $ 26,141 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation, depletion and amortization 21,500 17,221 Gain on distribution to non-controlling interest (88 ) (3,018 ) Non-cash stock-based compensation expense 2,095 2,198 Tax benefit of stock-based compensation exercises (773 ) (1,567 ) Restructuring on royalty interests in mineral properties - 1,328 Deferred tax expense 1,746 508 Amortization of debt discount 2,192 - Changes in assets and liabilities: Royalty receivables (10,789 ) (5,950 ) Prepaid expenses and other assets (249 ) 197 Accounts payable 53 70 Income taxes payable 10,309 9,762 Other liabilities   2,252     (716 ) Net cash provided by operating activities $ 53,542   $ 46,174   Cash flows from investing activities: Acquisition of royalty interests in mineral properties (120,035 ) - Proceeds on sale of Inventory - restricted 118 4,455 Other   (17 )   (111 ) Net cash (used in) provided by investing activities $ (119,934 ) $ 4,344   Cash flows from financing activities: Repayment of debt - (33,900 ) Common stock dividends (8,949 ) (6,095 ) Distribution to non-controlling interests (562 ) (5,380 ) Proceeds from the issuance of common stock 1,711 2,536 Tax benefit of stock-based compensation exercises   773     1,567   Net cash used in financing activities $ (7,027 ) $ (41,272 ) Net increase (decrease) in cash and equivalents   (73,419 )   9,246   Cash and equivalents at beginning of period   375,456     114,155   Cash and equivalents at end of period $ 302,037   $ 123,401     SCHEDULE ANon-GAAP Financial Measures The Company computes and discloses Adjusted EBITDA. Adjusted EBITDA is a non-GAAP financial measure. Adjusted EBITDA is defined by the Company as net income plus depreciation, depletion and amortization, non-cash charges, income tax expense, interest and other expense, and any impairment of mining assets, less non-controlling interests in operating income of consolidated subsidiaries, interest and other income, and any royalty portfolio restructuring gains or losses. Other companies may define and calculate this measure differently. Management believes that Adjusted EBITDA is a useful measure of the performance of our royalty portfolio. Adjusted EBITDA identifies the cash generated in a given period that will be available to fund the Company's future operations, growth opportunities, shareholder dividends and to service the Company's debt obligations. This information differs from measures of performance determined in accordance with U.S. generally accepted accounting principles (“GAAP”) and should not be considered in isolation or as a substitute for measures of performance determined in accordance with U.S. GAAP. Below is a reconciliation of net income to Adjusted EBITDA: Royal Gold, Inc.Adjusted EBITDA Reconciliation   For The Three Months Ended September 30, (Unaudited, in thousands) 2012   2011   Net income $ 25,294 $ 26,141 Depreciation, depletion and amortization 21,500 17,221 Non-cash employee stock compensation 2,095 2,198 Restructuring on royalty interests in mineral properties - 1,328 Interest and other income (110 ) (2,833 ) Interest and other expense 6,169 1,779 Income tax expense 16,461 12,381 Non-controlling interests in operating income of consolidated subsidiaries   (435 )   (628 ) Adjusted EBITDA $ 70,974   $ 57,587   Royal Gold, Inc.Karen Gross, 303-575-6504Vice President and Corporate Secretary