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Press release from Business Wire

Royal Gold Reports Record Revenue for Fiscal 2013, the Acquisition of a Royalty on El Morro, and Commissioning at Mt. Milligan

Thursday, August 08, 2013

Royal Gold Reports Record Revenue for Fiscal 2013, the Acquisition of a Royalty on El Morro, and Commissioning at Mt. Milligan

08:13 EDT Thursday, August 08, 2013

DENVER (Business Wire) -- Royal Gold, Inc. (NASDAQ:RGLD) (TSX: RGL) (“Royal Gold” or the “Company”) today announced net income attributable to Royal Gold stockholders (“net income”) of $69.2 million, or $1.09 per basic share, on record annual royalty revenue of $289.2 million for fiscal 2013 (ended June 30). This compares to net income for fiscal 2012 of $92.5 million, or $1.61 per basic share, on royalty revenue of $263.1 million. The Company also announced that it has acquired a 70% interest in a 2.0% net smelter return royalty on certain portions of the El Morro copper gold project (“El Morro”) in Chile, from Xstrata Copper Chile S.A., for $35 million.

Fiscal 2013 Highlights:

  • Royalty revenue of $289.2 million, up 10% from fiscal 2012;
  • Operating cash flow of $172.6 million, up 6% from fiscal 2012;
  • Net income of $69.2 million, down 25% from fiscal 2012 due mainly to a non-cash impairment loss recorded in the fiscal third quarter and higher interest expense;
  • Adjusted EBITDA1 of $4.12 per basic share, or 90% of revenue; and
  • Cash dividends of $43.9 million, representing a payout ratio of 25% of operating cash flow.

Other Highlights:

  • Acquisition of a royalty on the El Morro copper-gold project in Chile for $35 million;
  • Announcement that Barrick intends to re-sequence construction of the process plant and other facilities in Argentina to target first production at Pascua-Lama by mid-2016; and
  • A phased start-up of the concentrator at Mt. Milligan is planned for early August, with all circuits expected to be operational in September.

Tony Jensen, President and CEO, commented, “Royal Gold is reporting record annual revenue today despite a lower gold price, due to production increases at several of our principal properties in fiscal 2013. We expect to build on this success and enter a new phase of growth as Mt. Milligan begins processing ore this month, and as we continue to look for opportunities to put our $1 billion in available liquidity to work for our shareholders on other quality properties. In addition, we have acquired a royalty at El Morro, which is among the world's highest grade undeveloped gold and copper porphyries with reserves of 9.5 million ounces of gold and 7 billion pounds of copper.”

Net income for the fiscal year was impacted by an impairment loss recognized on available-for-sale securities recorded in the third fiscal quarter that had an effect, net of tax, of $0.23 per basic share. Net income was also impacted by an increase in depletion expense as several properties reported higher production during the year. The decrease in earnings per share was also attributable to an increase in interest expense associated with the Company's 2019 Notes and the issuance of 5.25 million shares of common stock in October 2012 as part of a registered offering. These impacts were partially offset by higher royalty revenue.

Adjusted EBITDA for fiscal 2013 was $260.8 million ($4.12 per basic share), representing 90% of revenue. This compares to Adjusted EBITDA for fiscal 2012 of $237.6 million ($4.15 per basic share), or 90% of revenue. Operating cash flow for fiscal 2013 totaled $172.6 million, up 6% from $162.2 million in the prior year.

The increase in fiscal 2013 revenue was largely driven by increased production at Andacollo, Robinson, Mulatos, Holt, Canadian Malartic, Las Cruces and Wolverine. These increases were partially offset during the period by lower revenue from Voisey's Bay and production declines at Cortez and Leeville. The average gold price in fiscal 2013 of $1,605 per ounce was 4% lower than the average gold price of $1,673 per ounce in fiscal 2012.

As of June 30, 2013, the Company had a working capital surplus of $709.4 million. Current assets were $744.5 million (including $664.0 million in cash and equivalents), compared to current liabilities of $35.1 million, resulting in a current ratio of 21 to 1.

For the fourth quarter ended June 30, 2013, net income was $10.7 million, or $0.16 per basic share compared with net income of $20.6 million, or $0.35 per basic share for the quarter ended June 30, 2012. Royalty revenue was $57.3 million for the fourth fiscal quarter of 2013, compared with royalty revenue of $60.1 million for the same period in fiscal 2012. Adjusted EBITDA for the fourth quarter of fiscal 2013 was $50.3 million ($0.78 per basic share), or 88% of revenue, compared to Adjusted EBITDA of $54.3 million ($0.91 per basic share), or 90% of revenue, for the prior year quarter. Operating cash flow was essentially unchanged from the prior year quarter.

Results for the fourth quarter were impacted by a lower average gold price of $1,414 per ounce, representing a 12% decrease over the prior year quarter, lower production at Peñasquito and lower contribution from Cortez relative to the prior year quarter, along with higher depreciation and interest expense.

RECENT DEVELOPMENTS

Mt. Milligan

Thompson Creek reports that commissioning of all major equipment in the mill is underway and progressing on schedule. The primary crusher and conveyor have been commissioned, the coarse ore stockpile has been bedded, and the mine is positioned to deliver ore to the crusher. A phased start-up of the concentrator is scheduled to commence in early August, with the first ore feed expected to occur by mid-August. All of the concentrator grinding and flotation circuits are expected to be operational in September.

El Morro

On August 7, 2013, Royal Gold acquired a 70% interest in a 2.0% net smelter return royalty on certain portions of the El Morro copper gold project in Chile (“El Morro”), from Xstrata Copper Chile S.A., for $35 million. Goldcorp holds 70% ownership of the El Morro project and is the operator, with the remaining 30% held by New Gold. Goldcorp and New Gold reported that as of December 31, 2012, proven and probable reserves totaled 9.5 million ounces of gold and 7 billion pounds of copper on a 100% basis. This royalty encompasses some legacy BHP concessions that are currently estimated by Royal Gold to cover approximately one-third of the total reserve.

Goldcorp has indicated that all El Morro project field construction activities have been suspended since April 27, 2012 pending the definition and implementation by the Chilean environmental permitting authority (the Servicio de Evaluación Ambiental or SEA) of a community consultation process which corrects certain deficiencies in that process as specifically identified by the Antofogasta Court of Appeals. The Chilean authorities and local communities continue to refine and advance this new consultation process with Goldcorp's support.

Pascua-Lama

In mid-July 2013, Barrick announced that a ruling from the Chilean Court of Appeals requires it to complete Pascua-Lama's water management system to the satisfaction of Chile's Environmental Superintendent before resuming construction activities in Chile.

In early July, Barrick stated that it has submitted a plan to construct the project's water management system in compliance with permit conditions for completion by the end of 2014. After this, Barrick expects to complete remaining construction works in Chile, including pre-stripping. Barrick also stated that it intends to re-sequence construction of the process plant and other facilities in Argentina in order to target first production by mid calendar 2016, replacing the previous schedule which called for production in the second half of calendar 2014.

PROPERTY HIGHLIGHTS

Highlights at certain of the Company's principal producing and development properties during the fiscal year ended June 30, 2013, compared with the prior fiscal year ended June 30, 2012 are listed below. Production for our producing properties reflects the actual production subject to our interests reported to us by the various operators through June 30, 2013.

Producing Properties

Andacollo – Production increased 33% over the prior year primarily due to higher mill throughput and higher ore grades, with mill throughput averaging about 47,000 tonnes per day during our fourth fiscal quarter of 2013.

Cortez – Production decreased 30% over the prior year as Barrick continues to prioritize production from their higher grade Cortez Hills operation that is not covered by our royalty interest. During our fiscal fourth quarter, mining resumed at the Pipeline Complex, which is subject to our royalty interests, as surface mining equipment returned from the Cortez Hills pit. Our royalty interests cover all of the Pipeline pit and part of the Gap pit.

Holt – Production increased 37% over the prior year as underground operations at Holt continued to ramp-up and are now at steady state production levels.

Las Cruces – Production increased 29% over the prior year due to a full year run rate at design capacity. First Quantum Minerals completed an acquisition of Inmet Mining in April 2013 and now operates the Las Cruces mine. First Quantum plans to test the plant at higher ore throughput and lower grade to assess the effects on plant performance before Las Cruces enters into lower copper grade areas of the mine, which is expected in calendar 2014.

Mulatos – Production increased 29% over the prior year due to the contribution of the high grade mill installed during the year and higher crusher throughput for the heap leach operations. Alamos expects to have sufficient Escondida high-grade zone reserves to continue processing until the first quarter of calendar 2014, at which point the Escondida Deep zone is expected to provide additional feed to continue mill production to the end of the second quarter of calendar 2014. The Mulatos royalty is capped at 2.0 million gold ounces of production. As of June 30, 2013, approximately 1.1 million cumulative ounces of gold have been produced.

Peñasquito – Gold production increased 26% over the prior year, while reported production for silver, lead and zinc decreased. Goldcorp's annual guidance for Peñasquito anticipated lower production in the first half of calendar 2013 as the mine moved from a lower grade portion of the pit to higher grade ore. The sulphide plant achieved throughput of over 105,000 tonnes per day during the second calendar quarter of 2013 following the completion of crusher maintenance, blasting improvements, and the addition of new fresh water wells. In June, 2013, the sulphide plant achieved throughput of over 120,000 tonnes per day.

Goldcorp announced that it has identified a new water source within their current permitted basin that has the potential to supply sufficient water necessary to reach full design capacity. The Company is currently working to acquire necessary rights-of-way and is evaluating alternative routes to access the well field. The new water source will provide the flexibility to resume ramp-up to the design throughput of 130,000 tonnes per day. Construction is expected to begin in the fourth quarter of 2013 with completion expected in the second half of calendar 2014.

Robinson – Copper production increased 39% over the prior year, primarily due to improved mill recovery and higher productivity at the mine. Mining of higher grade gold areas has resulted in favorable gold production during calendar 2013. Production during the remainder of calendar 2013 is likely to return to more normal gold grades.

Voisey's Bay – Nickel production increased 9% over the prior year, while copper production decreased approximately 5%. We note that the timing of port schedules impacts the shipping calendar, generally favoring the quarters ended March and September.

In late March 2013, the Government of Newfoundland and Labrador, announced amendments to their Voisey's Bay Development Agreement including a commitment from Vale to pursue underground mining to extend the mine life. The agreement also allows Vale to continue processing concentrate outside of the province while construction is being finalized at the Long Harbour processing plant.

WolverineProduction increased significantly over the prior year. Yukon Zinc reported that process circuit modifications and the integration of new equipment have improved plant performance. In June 2013, Yukon Zinc announced that it reduced production at Wolverine by 40% and its workforce by 30% in an effort to reduce costs. Yukon Zinc has committed to review the project economics later this year and evaluate the possibility of resuming full production.

Full-year and fourth quarter fiscal 2013 production and revenue for the Company's principal royalty interests are shown in Tables 1 and 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 metal royalty and similar production based interests. The Company owns interests on 204 properties on six continents, including interests on 36 producing mines and 20 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 fourth quarter and year-end 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 #85827803. 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 expectation of a new phase of growth as Mt. Milligan begins production (in August); the Company's ability to invest in additional quality properties; and the operators' expectation of construction, ramp up, production, mine life, resolution of regulatory and legal proceedings 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 royalty properties; unanticipated grade, geological, metallurgical, processing or other problems the operators of the mining properties may encounter; completion of feasibility studies; delays in the operators securing or their inability to secure necessary governmental permits; changes in operators' 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 Reports on Form 10-Q, and other filings with the Securities and Exchange Commission. Most of these factors are beyond the Company's ability to predict or control. The Company disclaims any obligation to update any forward-looking statement made herein. Readers are cautioned not to put undue reliance on forward-looking statements.

TABLE 1

Fiscal 2013

Royalty Production and Revenue for Principal Royalty Interests

(In thousands, except reported production in oz. and lbs.)

 

Property

 

Royalty

 

Metal(s)

 

Metal(s)

 

Fiscal Year Ended
June 30, 2013

 

Fiscal Year Ended
June 30, 2012

 

Royalty
Revenue

 

Reported
Production
1

 

Royalty
Revenue

 

Reported
Production
1

           

Andacollo2,3

 

75% NSR

 

Teck

 

Gold

 

$

82,272

 

68,600 oz.

 

$

64,075

 

51,400 oz

 

Voisey's Bay3

2.7% NSR

Vale

$

32,517

 

$

36,030

Nickle

143.9 million lbs.

131.6 million lbs.

     

Copper

     

101.9 million lbs.

     

107.2 million lbs.

 

Peñasquito3

2.0% NSR

Goldcorp

$

28,500

$

28,468

Gold

371,100 oz.

294,500 oz.

Silver

21.1 million oz.

21.5 million oz.

Lead

126.3 million lbs.

164.0 million lbs.

     

Zinc

     

282.3 million lbs.

     

312.6 million lbs.

 

Holt

 

0.00013 x quarterly
average gold price

 

St Andrew Goldfields

 

Gold

 

$

19,028

 

56,400 oz.

 

$

14,966

 

41,200 oz.

 

Mulatos4

 

1.0% - 5.0% NSR

 

Alamos

 

Gold

 

$

17,376

 

218,000 oz.

 

$

13,794

 

169,300 oz.

 

Robinson3

3.0% NSR

KGHM

$

15,664

$

11,687

Gold

49,100 oz.

31,000 oz.

     

Copper

     

146.2 million lbs.

     

105.3 million lbs.

 

Cortez5

 

GSR1 and GSR2,
GSR3, NVR1

 

Barrick

 

Gold

 

$

8,980

 

82,100 oz

 

$

13,160

 

116,700 oz.

 

Canadian Malarctic6

 

1.0% - 5.0% NSR

 

Osisko

 

Gold

 

$

8,043

 

347,000 oz

 

$

7,133

 

297,500 oz.

 

Las Cruces3

 

1.5% NSR

 

First Quantum

 

Copper

 

$

8,012

 

153.4 million lbs.

 

$

6,448

 

119.1 million lbs.

 

Leeville

 

1.8% NSR

 

Newmont

 

Gold

 

$

6,893

 

232,000 oz.

 

$

9,159

 

305,100 oz.

 

Wolverine3,7

0.0% - 9.445% NSR

Yukon Zinc

$

6,353

$

2,155

Gold

11,300 oz.

1,300 oz.

     

Silver

     

2.8 million oz.

     

1.0 million oz.

 

Dolores

3.25% NSR

Pan American Silver

$

4,767

$

5,323

2.0% NSR

Gold

56,700 oz.

61,200 oz.

       

Silver

     

3.2 million oz.

     

3.1 million oz.

 

Other8

 

-

 

-

 

Various

 

$

51,314

 

N/A

 

$

50,656

 

N/A

 

Total Royalty Revenue

 

$

289,224

     

$

263,054

   
 

TABLE 2

Fourth Quarter Fiscal 2013

Royalty Production and Revenue for Principal Royalty Interests

(In thousands, except reported production in oz. and lbs.)

 

Property

  Royalty  

Metal(s)

  Metal(s)  

Fiscal Quarter Ended
June 30, 2013

 

Fiscal Quarter Ended
June 30, 2012

  Royalty
Revenue
 

Reported
Production 1

  Royalty
Revenue
 

Reported
Production 1

           

Andacollo2,3

  75% NSR   Teck   Gold   $

16,330

 

15,700 oz.

  $

14,275

 

11,900 oz

 

Voisey's Bay3

2.7% NSR Vale $

6,704

$

6,031

Nickle

36.5 million lbs.

30.6 million lbs.

      Copper      

11.4 million lbs.

     

2.9 million lbs.

 

Peñasquito3

2.0% NSR Goldcorp $

4,876

$

7,179

Gold

80,700 oz.

90,600 oz.

Silver

5.2 million oz.

6.0 million oz.

Lead

36.8 million lbs.

42.2 million lbs.

      Zinc      

61.8 million lbs.

     

90.8 million lbs.

 
Holt   0.00013 x quarterly
average gold price
  St Andrew Goldfields   Gold   $

3,493

 

13,500 oz.

  $

3,858

 

11,500 oz.

 

Mulatos4

  1.0% - 5.0% NSR   Alamos   Gold   $

3,840

 

54,900 oz.

  $

3,595

 

46,100 oz.

 

Robinson3

3.0% NSR KGHM $

$4,503

$

3,447

Gold

18,400 oz.

9,200 oz.

      Copper      

43.4 million lbs.

     

32.5 million lbs.

 

Cortez5

  GSR1 and GSR2,
GSR3, NVR1
  Barrick   Gold   $

2,030

 

22,100 oz

  $

2,802

 

26,900 oz.

 

Canadian Malarctic6

  1.0% - 5.0% NSR   Osisko   Gold   $

1,391

 

70,900 oz

  $

1,937

 

91,700 oz.

 

Las Cruces3

  1.5% NSR   First Quantum   Copper   $

1,452

 

30.6 million lbs.

  $

1,954

 

37.3 million lbs.

 
Leeville   1.8% NSR   Newmont   Gold   $

954

 

37,500 oz.

  $

1,032

 

36,600 oz.

 

Wolverine3,7

0.0% - 9.445% NSR Yukon Zinc $

806

$

475

Gold

2,800 oz.

800 oz.

      Silver      

700,000 oz.

     

339,000 oz.

 
Dolores 3.25% NSR Pan American Silver $

1,194

$

876

2.0% NSR Gold

16,200 oz.

10,100 oz.

        Silver      

932,000 oz.

     

644,000 oz.

 

Other8

  -   -   Various   $

9,753

  N/A   $

12,648

  N/A
 

Total Royalty Revenue

  $

57,326

      $

60,109

   

FOOTNOTES

1 Reported production relates to the amount of metal sales that are subject to our royalty interests for the periods ended June 30, 2013 and June 30, 2012, 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 167,000 cumulative payable ounces produced as of June 30, 2013. 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 1.1 million ounces of cumulative production, as of June 30, 2013. 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 “Other” includes all of the Company's non-principal producing royalties for the periods ended June 30, 2013 and 2012. Individually, no royalty included within “Other” contributed greater than 5% of our total royalty revenue for any of the periods.

 

TABLE 3

Historical Production

 
PROPERTY 2   ROYALTY   OPERATOR   METAL(S)  

REPORTED PRODUCTION 1

FOR THE QUARTER ENDED

       

June 30,
2013

 

March 31,
2013

 

December 31,
2012

 

September 30,
2012

 

June 30,
2012

Andacollo   75% NSR   Teck   Gold   15,700 oz.   19,000 oz.   18,000 oz.   16,000 oz.   11,900 oz.

Canadian
Malartic

 

1.0% to 1.5%
NSR

  Osisko   Gold   70,900 oz.   88,100 oz.   96,300 oz.   91,700 oz.   91,700 oz.
Cortez  

GSR1 and GSR2
GSR3
NVR1

 

  Barrick   Gold   22,100 oz.   16,000 oz.   18,200 oz.   25,800 oz.   26,900 oz.
Dolores  

3.25% NSR
2.0% NSR

 

  Pan American Silver  

Gold
Silver

 

 

16,200 oz.
932,000 oz.

 

 

12,300 oz.
671,000 oz.

 

 

15,000 oz.
854,700 oz.

 

 

13,200 oz.
773,400 oz.

 

 

10,100 oz.
644,000 oz.

 

Holt  

0.00013 x
quarterly average
gold price

  St Andrew Goldfields   Gold   13,500 oz.   15,000 oz.   15,100 oz.  

12,900 oz.

  11,500 oz.
Las Cruces   1.5% NSR   First Quantum   Copper   30.6M lbs.   38.0M lbs.   38.0M lbs.  

46.0M lbs.

  37.0M lbs.
Leeville   1.8% NSR   Newmont   Gold   37,500 oz.   56,700 oz.   69,800 oz.   68,000 oz.   36,600 oz.
Mulatos  

1.0% to 5.0%
NSR

  Alamos  

Gold

  54,900 oz.   59,500 oz.   61,300 oz.   42,300 oz.   46,100 oz.
Peñasquito   2.0% NSR   Goldcorp  

Gold
Silver
Lead
Zinc

 

80,700 oz.
5.2M oz.
36.8M lbs.
61.8M lbs.

 

 

68,200 oz.
4.0M oz.
24.0M lbs.
50.0M lbs.

 

91,000 oz.
5.0M oz.
24.0M lbs.
74.0M lbs.

 

131,200 oz.
7.0M oz.
42.0M lbs.
97.0M lbs.

 

 

90,600 oz.
6.0M oz.
42.0M lbs.
91.0M lbs.

Robinson   3.0% NSR   KGHM  

Gold
Copper

 

 

18,400 oz.
43.4M lbs.

 

 

10,000 oz.
25.0M lbs.

 

 

11,600 oz.
41.0M lbs.

 

 

9,100 oz.
37.0M lbs.

 

 

9,200 oz.
33.0M lbs.

 

Voisey's Bay   2.7% NSR   Vale  

Nickel
Copper

  36.5M lbs.

11.4M lbs.

 

45.0M lbs.
16.0M lbs.

 

 

29.0M lbs.
31.0M lbs.

 

34.0M lbs.
44.0M lbs.

 

31.0M lbs.
3.0M lbs.

Wolverine  

0.0% to
9.445% NSR

 

  Yukon Zinc  

Gold
Silver

 

 

2,800 oz.
700,000 oz.

 

 

4,100 oz.
903,500 oz.

 

 

3,200 oz.
742,900 oz.

 

 

1,200 oz.
494,500 oz.

 

 

850 oz.
338,700 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 9.

 

ROYAL GOLD, INC.

Consolidated Balance Sheets

As of June 30,

(In thousands except per share data)

 
     

2013
(unaudited)

 

 

2012

ASSETS
Cash and equivalents $ 664,035 $ 375,456
Royalty receivables 50,385 53,946
Income tax receivable 15,158 11,046

Prepaid expenses and other current assets

  14,919     4,760  
Total current assets 744,497 445,208
 
Royalty interests in mineral properties, net 2,120,268 1,890,988
Available-for-sale securities 9,695 15,015
Other assets   30,881     25,155  
Total assets $ 2,905,341   $ 2,376,366  
 
LIABILITIES
Accounts payable $ 2,838 $ 2,615
Dividends payable 13,009 8,947
Foreign withholding taxes payable 15,518 224
Other current liabilities   3,720     3,423  
Total current liabilities 35,085 15,209
 
Debt 302,263 293,248
Deferred tax liabilities 174,267 182,037
Uncertain tax positions 21,166 19,469
Other long-term liabilities   1,924     2,974  
Total liabilities   534,705     512,937  
 
Commitments and contingencies
 
EQUITY

Preferred stock, $.01 par value, authorized
10,000,000 shares authorized; and 0 shares issued

- -
 

Common stock, $.01 par value, 100,000,000 shares
authorized; and 64,184,036 and 58,614,221 shares
outstanding, respectively

642 586
 

Exchangeable shares, no par value, 1,806,649
shares issued, less 1,139,420 and 1,007,823
redeemed shares, respectively

 

29,365 35,156
 

Additional paid-in capital

2,142,173 1,656,357
Accumulated other comprehensive (loss) (4,572 ) (13,763 )
Accumulated earnings   181,279     160,123  
Total Royal Gold stockholders' equity 2,348,887 1,838,459
Non-controlling interests   21,749     24,970  
Total equity   2,370,636     1,863,429  
Total liabilities and equity $ 2,905,341   $ 2,376,366  
 

ROYAL GOLD, INC.

Consolidated Statements of Operations and Comprehensive Income
For the Years Ended June 30,
(In thousands except per share data)
 
    For The Three Months Ended June 30,     For The Years Ended June 30,
2013     2012 2013     2012
(unaudited) (unaudited) (unaudited)  
Royalty Revenues

$

57,326

$

60,109

$

289,224

$

263,054

 

Costs and expenses

General and administrative

4,737

4,607

23,690

20,393

Production taxes

 

1,912

1,754

9,010

9,444

Depreciation, depletion and amortization

20,751

16,641

85,020

75,001

Restructuring on royalty interests in mineral properties  

-

   

-

   

-

   

1,328

 
Total costs and expenses  

27,400

   

23,002

   

117,720

   

106,166

 
 
Operating income

29,926

37,107

171,504

156,888

 
Loss on available-for-sale securities

-

-

(12,121

)

-

Interest and other income

2,634

38

2,902

3,836

Interest and other expense  

(6,203

)

 

(2,766

)

 

(25,117

)

 

(7,705

)

Income before income taxes

26,357

34,379

137,168

153,019

 
Income tax expense  

(12,697

)

 

(13,413

)

 

(63,759

)

 

(54,710

)

Net income

13,660

20,966

73,409

98,309

Net income attributable to non-controlling interests  

(2,957

)

 

(395

)

 

(4,256

)

 

(5,833

)

Net income available to Royal Gold common stockholders

$

10,703

 

$

20,571

 

$

69,153

 

$

92,476

 
 
Net income

$

13,660

$

20,966

$

73,409

$

98,309

Adjustments to comprehensive income, net of tax

 

Unrealized change in market value of available for sale securities

(4,459

)

(5,459

)

(4,526

)

(13,817

)

Realized loss on available-for-sale-securities  

-

   

-

   

13,716

   

-

Comprehensive income

9,201

15,507

82,599

84,492

Comprehensive income attributable to non-controlling interest

 

(2,957

)

 

(395

)

 

(4,256

)

 

(5,833

)

Comprehensive income attributable to Royal Gold stockholders

$

6,244

 

$

15,112

 

$

78,343

 

$

78,659

 
 
Net income per share available to Royal Gold common stockholders:

 

Basic earnings per share

$

0.16

 

$

0.35

 

$

1.09

 

$

1.61

 
Basic weighted average shares outstanding  

64,837,598

   

59,411,916

   

63,250,247

   

57,220,040

 
Diluted earnings per share

$

0.16

 

$

0.34

 

$

1.09

 

$

1.61

 
Diluted weighted average shares outstanding  

64,972,144

   

59,632,426

   

63,429,822

   

57,463,850

 
Cash dividends declared per common share

$

0.20

 

$

0.15

 

$

0.75

 

$

0.56

 
 
ROYAL GOLD, INC.
Consolidated Statements of Cash Flows
(In thousands)
 
     

For The Three Months Ended June 30,

 

For The Year Ended June 30

2013
(unaudited)

 

2012
(unaudited)

2013
(unaudited)

 

2012

Cash flows from operating activities:

Net income

$

13,660

$

20,966

$

73,409

$

98,309

Adjustments to reconcile net income to net cash provided by operating
activities:

Depreciation, depletion and amortization

20,751

16,641

85,202

75,001

Non-cash employee stock compensation

(107

)

947

5,701

6,507

Gain on distribution to non-controlling interest

(2,675

)

-

(2,837

)

(3,725

)

Amortization of debt discount

2,302

-

9,015

-

Recognized loss on available-for-sale securities

-

-

12,121

-

Restructuring on royalty interests in mineral properties

-

-

-

1,328

Tax benefit of stock-based compensation exercises

(1,752

)

(3,031

)

(2,966

)

(6,348

)

Deferred tax expense (benefit)

(5,587

)

2,285

(11,419

)

1,571

Other

100

2,117

100

2,117

Changes in assets and liabilities:

 

Royalties receivables

8,635

8,140

3,562

(5,118

)

Prepaid expenses and other assets

(8,077

)

(40

)

(12,300

)

88

Accounts payable

694

846

113

530

Foreign withholding taxes payable

15,294

19

15,294

19

Income taxes payable (receivable)

(1,778

)

(10,340

)

(3,127

)

(7,170

)

Other liabilities

 

(1,343

)

 

712

   

944

   

(936

)

Net cash provided by operating activities

$

40,117

 

$

39,262

 

$

172,630

 

$

162,164

 

Cash flows from investing activities:

Acquisition of royalty interests in mineral properties

(37,181

)

(83,021

)

(314,262

)

(276,683

)

Proceeds on sale inventory - restricted

4,679

-

4,916

5,514

Deferred acquisition costs

-

(11

)

-

(11

)

Other

 

(41

)

 

(19

)

 

(96

)

 

(176

)

Net cash used in investing activities

$

(32,543

)

$

(83,051

)

$

(309,442

)

$

(271,356

)

Cash flows from financing activities:

Net proceeds from debt

-

357,023

-

457,023

Repayment of debt

-

(114,400

)

-

(326,100

)

Net proceeds from issuance of common stock

-

96

473,771

271,536

Common distribution dividends

(13,009

)

(8,950

)

(43,934

)

(29,504

)

Distribution to non-controlling interests

(5,385

)

(893

)

(7,412

)

(8,810

)

Tax benefit of stock-based compensation exercises

 

1,752

   

3,031

   

2,966

   

6,348

 

Net cash provided by (used in) financing activities

$

(16,642

)

$

235,907

 

$

425,391

 

$

370,493

 

Net increase (decrease) in cash and equivalents

 

(9,068

)

 

192,118

   

288,579

   

261,301

 

Cash and equivalents at beginning of period

 

673,103

   

183,338

   

375,456

   

114,155

 

Cash and equivalents at end of period

$

664,035

 

$

375,456

 

$

664,035

 

$

375,456

 

Non-GAAP Financial Measures

The Company computes and discloses Adjusted EBITDA. Adjusted EBITDA is a non-GAAP financial measure. Adjusted EBITDA is defined by the Company as net 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   For The Years Ended
June 30, June 30,
(Unaudited, in thousands) (Unaudited, in thousands)
2013   2012 2013   2012
 
Net income

 

$

13,660

$

20,966

$

73,409

$

98,309

Depreciation, depletion and amortization 20,751 16,641 85,020 75,001
Non-cash employee stock compensation (107 ) 947 5,701 6,507
Restructuring on royalty interests in mineral properties - - - 1,328
Loss on available-for-sale securities - - 12,121 -
Interest and other income (2,634 ) (38 ) (2,902 ) (3,836 )
Interest and other expense 6,203 2,766 25,117 7,705
Income tax expense 12,697 13,413 63,759 54,710
Non-controlling interest in operating income of consolidated subsidiaries   (282 )   (395 )   (1,420 )   (2,108 )
Adjusted EBITDA

 

$

50,288

 

$

54,300

 

$

260,805

 

$

237,616

 

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 of consolidated subsidiaries, interest and other income, and any royalty portfolio restructuring gains or losses (see Schedule A).

Royal Gold, Inc.
Karli Anderson
Vice President Investor Relations
(303) 575-6517

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