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Royal Gold Inc NASDAQ: RGLD-Q

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Royal Gold Reports Record Revenue and Operating Cash Flow for the September Quarter of 2021

Business Wire - Wed Nov 3, 2021

Royal Gold, Inc. (NASDAQ: RGLD) (together with its subsidiaries, “Royal Gold” or the “Company,” “we,” “us,” or “our”) reports for the quarter ended September 30, 2021 (the “September quarter”) net income of $70.2 million, or $1.07 per share, record revenue of $174.4 million and record operating cash flow of $129.9 million. Adjusted net income1 was $70.0 million, or $1.07 per share.

Key September Quarter Highlights:

  • Records for revenue of $174.4 million, operating cash flow of $129.9 million and volume of 97,400 GEOs2
  • 73% of revenue from gold, 10% from silver, 14% from copper
  • Ended the quarter with cash of $160 million, net cash3 of $60 million and available liquidity of $1.1 billion
  • Received first silver delivery from Khoemacau
  • Closed stream on the NX Gold Mine, and received first gold delivery
  • Acquired royalty on the world-class Red Chris Mine
  • Continued progress on ESG initiatives including upgraded MSCI ESG Rating of AA and achieved net zero carbon emissions for direct operations
  • Paid quarterly dividend of $0.30 per share, a 7% increase over the prior year quarter

Post Quarter Events:

  • Khoemacau stream rate increased to 90% of payable silver
  • Reduced debt by $50 million

“I am pleased to report that Royal Gold turned in another quarter of very strong financial and operating performance with record revenue, operating cash flow and GEO2 volume in the September quarter,” commented Bill Heissenbuttel, President and CEO of Royal Gold. “The portfolio continued to deliver consistent gold-focused revenue and we saw excellent progress at our newest portfolio assets:

  • Newcrest released a pre-feasibility study on the block cave at the Red Chris Mine that shows forecast production to 2040 that is substantially similar to our valuation expectations and indicates potential for significant upside well into the future,
  • Ero Copper announced exciting exploration results at the NX Gold Mine that indicate further potential for high-grade resource growth, and
  • IAMGOLD showed steady progress on construction at the Côté Gold Project with expected first production in 2023.

We also received our first silver deliveries from our biggest growth project, Khoemacau, and after quarter end we increased our stream interest to 90% of payable silver, giving us further exposure to this high-quality, long-life mine.”

“During the quarter we also received an upgrade in our MSCI ESG Rating to AA,” continued Mr. Heissenbuttel, “and it’s gratifying to see external recognition of our approach to managing ESG risks in our business. With the consistent performance of our portfolio, embedded growth projects, solid balance sheet and approach to sustainability, we are positioned well for continued strong performance in the future.”

1 Adjusted net income and adjusted net income per share 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.

3 Net debt (and net cash) is a non-GAAP financial measure. See Schedule A of this press release for additional information.

Recent Developments

Increase in Silver Stream to 90% and First Silver Delivery from the Khoemacau Project

As previously announced, first concentrate was shipped in mid-July from the long-life Khoemacau Project (“Khoemacau”) in Botswana. Royal Gold received its first silver stream deliveries totaling approximately 105,800 ounces for the September quarter.

According to Khoemacau Copper Mining (Pty.) Limited (“KCM”), construction at Khoemacau is substantially complete and activity is focused on ramping up to full production levels. Progress within the mine has been slower than planned due to underground equipment operator shortages caused by international travel restrictions, the late arrival of key underground equipment caused by COVID-19 considerations and recent unrest in South Africa, and typical ramp up issues related to drilling and blasting of the first stopes. With an improvement in the availability of operators, all required equipment now on site, and experience gained from mining the first stopes, progress is being made on resolving these issues and the mining rate at the end of October has steadily improved to approximately 40% of the target mining rate of 10,000 tonnes per day. Stope mining began in September and ground conditions, ore body grades and widths are all in line with expectations.

KCM reported that progress in the process plant has also been in line with expectations, and nameplate capacity of 10,000 tonnes per day was reached consistently for discrete periods during the commissioning period using stockpiled ore. Average recoveries in October were 85% for copper and 81% for silver, and are expected to reach target recoveries of 88% for copper and 84% for silver as the plant operations progress to steady state, in addition to other ongoing adjustments to the process. Copper concentrate produced so far has met required offtake specifications.

KCM expects that the mining rate will continue to ramp-up steadily and reach approximately 75% of target production at the end of the first calendar quarter of 2022, and reach full, sustained production during the third calendar quarter of 2022. While the Government of Botswana lifted the COVID-19 state of emergency on September 30, 2021, KCM has advised that COVID-19 considerations, both locally and internationally, remain a risk to ramp-up progress.

On October 8, 2021, Royal Gold acquired the right to receive a further 6% of the payable silver from Khoemacau with an advance payment of $15.9 million, which was requested by KCM to maintain appropriate working capital levels during the ramp up period. With project construction essentially complete, KCM has advised that it is well advanced in closing out all major project contracts and there is limited scope for change to the remaining project capital cost to completion. Royal Gold has remaining committed funding of $26.5 million to KCM in the form of additional advance payments under the stream, which may be drawn at the election of KCM prior to the earlier of completion of development or 60 days after the start of commercial production. KCM has advised that it expects to have sufficient working capital available through the ramp-up period and it does not expect to draw materially on this remaining available funding.

With the results experienced during the ramp-up period, KCM continues to expect Khoemacau to produce 155,000 to 165,000 tonnes of high-grade copper and silver concentrate a year once full production levels are reached, containing approximately 60,000 to 65,000 tonnes of payable copper and 1.8 to 2.0 million ounces of payable silver, over a mine life of approximately 20 years.

Royal Gold holds the right to receive 90% of the payable silver produced from Khoemacau until the delivery of 36.0 million silver ounces, and 45% thereafter. Royal Gold will pay a cash price equal to 20% of the spot silver price for each ounce delivered; however, if KCM achieves mill expansion throughput levels above 13,000 tonnes per day (30% above current mill design capacity), Royal Gold will pay a higher ongoing cash price for silver ounces delivered in excess of specific annual thresholds.

Positive Red Chris Mine Block Cave Pre-Feasibility Study

As previously announced, on August 11, 2021, Royal Gold acquired a 1.0% net smelter return royalty on certain areas of the Red Chris Mine (the “Red Chris Royalty”) in British Columbia, Canada, which covers the currently known mineralization and prospective exploration areas. The Red Chris Mine is an operating open pit mine producing gold, copper and silver, and is owned by the Red Chris Joint Venture, which is owned 70% by Newcrest Mining Ltd. (“Newcrest”) and 30% by Imperial Metals Corporation, in which Newcrest is the operator. The effective date of the transaction was January 1, 2021 and Royal Gold expects the first royalty payment for production during calendar 2021 to be made within the first 90 days of 2022. Production from the Red Chris Mine for the 9 months ending September 30, 2021, was 46,549 ounces of gold, 22,999 tonnes of copper and 129,543 ounces of silver.

After the end of the quarter, on October 12, 2021, Newcrest released the results of a Pre-Feasibility Study (“PFS”) detailing the long term mine plan and transition from an open pit to an underground block cave operation. Newcrest reported a mine life of 36 years with total production of 480 million tonnes of ore containing 5.3 million ounces of gold and 1.7 million tonnes of copper. Potential sources of additional upside not incorporated in the PFS include exploration success at the recently discovered East Ridge target and a new zone of higher-grade mineralization southwest of the Main Zone, potential acceleration of mining of high-grade pods, and further analysis of the inclusion of next generation mining systems. Results of this study are consistent with the due diligence estimates that provided the basis for Royal Gold’s valuation of the Red Chris Royalty.

Newcrest outlined plans to complete a Feasibility Study by mid-2023 that will include studies to consider early mining of high-grade pods in the East Zone, and accommodate the potential development of the East Ridge discovery and further resource upside. Newcrest reported that drilling to define the extent of the East Ridge mineralization is ongoing and follow up drilling is planned to test extensions of the porphyry corridor further to the east, where step out drilling has intercepted mineralization 700 meters from East Ridge. Newcrest reported that an exploration decline and support infrastructure to provide access for underground exploration had progressed to 393 meters as of October 20, 2021.

Continued Exploration Success and First Gold Stream Delivery at the NX Gold Mine

As previously announced, on August 6, 2021, Royal Gold closed a stream agreement for gold produced from the operating NX Gold Mine (the “NX Gold Stream”) in Brazil with Ero Gold Corp., a wholly owned subsidiary of Ero Copper Corp., and certain of its affiliates (together, “Ero”). The first gold delivery of 2,468 ounces was received upon closing, representing deliveries from the transaction effective date of May 1, 2021 through to closing.

As previously reported, Ero continues exploration at and around the NX Gold Mine. After the end of the quarter on October 14, Ero provided a further positive update on exploration activities, which are focused on infill and extension drilling of the Santo Antonio Vein, delineation and discovery of new gold-bearing veins within the NX Gold Mine, and executing the first regional exploration program on the broader NX Gold Mine land package. Ero reported that nine drill rigs are currently operating. Reported highlights included:

  • New drilling down-plunge of the deepest known gold mineralization and 115 meters beyond the limit of the current mineral resource shell that confirms the continuity of high-grade gold mineralization within the Santo Antonio Vein extension, which remains open to depth.
  • Drilling of the recently discovered Matinha Vein continues to extend the known limits of mineralization with recent intercepts located approximately 65 meters down-plunge of prior drilling highlighting apparent thickening at depth. Exploration of the Matinha Vein also highlighted the presence of a second parallel structure at depth where drilling is ongoing. Ero indicated that the Matinha Vein has the potential to become an additional feed source for the mill while leveraging the nearby mine infrastructure of the Brás Vein.
  • Ongoing exploration at the Mata Verde System, located approximately 25 kilometers north-north-east of the NX Gold Mine, which to date has been traced over approximately 10.5 kilometers.

Ero expects to incorporate the exploration results into year-end mineral reserve and resource estimates.

Overall Construction Progress at the Côté Gold Project Reaches 36%

On October 18, 2021, IAMGOLD Corporation (“Iamgold”) reported continued construction progress at the Côté Gold Project in Northern Ontario, Canada. Iamgold reported that as of September 30, 2021, the overall project was approximately 36% complete, detailed engineering was 85% complete and the project remains on track for commercial production in the second half of calendar 2023. Iamgold expects to file an updated NI 43-101 Technical Report within 45 days of October 18 that will include optimization of the mine plan since the last Technical Report published in 2018.

Expansion Continues at Pueblo Viejo and First Deferred Silver Delivery Received

Barrick Gold Corporation (“Barrick”) reported that the plant expansion project to increase throughput and allow the mine to maintain average annual gold production of approximately 800,000 ounces after calendar year 2022 (on a 100% basis) is progressing well. Barrick also continues to work on a new tailings storage facility that will support the expansion and extension of the mine life until the 2040’s. Barrick reported that the Government of the Dominican Republic has launched independent studies to review alternatives for a new tailings storage facility and that the Pueblo Viejo Joint Venture will be completing site investigations to improve confidence in the preferred options. Barrick has cautioned that an inability to obtain the additional tailings storage capacity would result in an end to production in 2030.

Silver deliveries during the September quarter totaled 396,500 ounces, and included normal-course stream deliveries of approximately 377,800 ounces and previously deferred deliveries of approximately 18,700 ounces. The deferred ounces are the result of a mechanism in the stream agreement that allows for the deferral of deliveries in a period if silver recoveries fall below a fixed 70% recovery rate, with delivery of those deferred ounces to be made in future periods as silver recovery allows. Temporary operational issues with the silver circuit caused recoveries to fall below the fixed 70% recovery rate and deferral of silver deliveries started in the quarter ended March 31, 2021, and continued into the quarter ended June 30, 2021. Barrick advised that it completed maintenance work on the silver recovery circuit in the quarter ended June 30, 2021, and continues to make modifications to further improve recoveries. As of September 30, 2021, approximately 418,300 ounces remain deferred and Royal Gold expects delivery of these deferred ounces to continue over the next several quarters.

On October 19, 2021, Barrick reported that Pueblo Viejo is on track to deliver production guidance for 2021 of 470,000 to 510,000 ounces of gold (60% Barrick share).

Repayment of $50 Million of Revolving Credit Facility Balance Leaving $950 Million Available

As previously announced, on August 9, 2021, the Company drew $100 million on its revolving credit facility for business development activities. In keeping with Royal Gold’s capital allocation strategy to repay outstanding debt as cash flow allows, on October 8, 2021, the Company repaid $50 million of the credit facility balance leaving an outstanding balance of $50 million and $950 million available under the credit facility.

Upgrade in MSCI ESG Rating to AA

Royal Gold received a rating of AA in the MSCI ESG Ratings assessment during the September quarter citing Company practices in the areas of governance and operations. The AA rating (on a scale of AAA-CCC) places Royal Gold within the category of “Leader,” the highest rating given to companies in the Metals and Mining – Precious Metals sector.

Achieved Net Zero Carbon Emissions for Fiscal Year 2020 Corporate Operations

During the quarter Royal Gold acquired carbon credits to fully offset emissions from its direct corporate operations for fiscal year 2020.

Established Support for the Riverside Foundation for Healthcare and Mikinaak Center for Wellness

Royal Gold seeks opportunities to support our counterparties and their sustainability initiatives in the areas surrounding the operations in which the Company has interests. Agreements were completed in the September quarter to provide donations to the Riverside Foundation for Healthcare (C$60,000 per year for three years) and the Mikinaak Center for Wellness (C$34,000) in Fort Frances, Ontario, Canada, to support health and wellness programs in the catchment area of the Rainy River Mine.

September Quarter 2021 Overview

September quarter revenue was $174.4 million, compared to $146.9 million in the prior year quarter, with stream revenue of $115.9 million and royalty revenue of $58.5 million. The increase in total revenue for the September quarter compared to the prior year quarter resulted primarily from higher gold sales at Mount Milligan, higher gold production at Cortez, gold sales from the newly acquired NX Gold Stream and an increase in average copper prices, offset by a decrease in gold sales from Andacollo and lower average gold prices compared to the prior period.

Cost of sales, which excludes depreciation, depletion and amortization, increased to $27.2 million for the September quarter from $21.9 million for the prior year quarter. The increase was primarily due to an increase in gold and copper sales from Mount Milligan and an increase in the average copper price. This increase was partially offset by a decrease in the average gold price and a decrease in gold sales at Andacollo when compared to the prior period. Cost of sales is specific to the Company’s stream agreements and is the result of the purchase of gold, silver and copper for a cash payment.

Depreciation, depletion and amortization increased to $50.6 million for the September quarter from $46.3 million for the prior year quarter. The increase compared to the prior period was primarily due to higher gold sales from Mount Milligan, higher gold production at Cortez and maiden gold sales from the newly acquired NX Gold Stream. The increase was offset by lower gold and silver sales from Pueblo Viejo and lower gold sales from Andacollo.

Income tax expense totaling $16.0 million was recorded in the September quarter, compared with an income tax benefit of $2.4 million for the prior year quarter. The income tax expense resulted in an effective tax rate of 18.5% in the current period, compared with (2.3%) for the prior year quarter.

At September 30, 2021, the Company had current assets of $232.1 million compared to current liabilities of $60.3 million, which resulted in working capital of $171.8 million. This compares to current assets of $297.1 million and current liabilities of $52.1 million at June 30, 2021, resulting in working capital of $245.0 million. The decrease in working capital was primarily due to the cash payments associated with the acquisitions of the Red Chris Royalty and NX Gold Stream during the September quarter.

Net cash provided by operating activities totaled $129.9 million for the September quarter compared to $94.2 million for the prior year quarter. The increase was primarily due to an increase in cash proceeds received from the Company’s stream and royalty interests, net of cost of sales and production taxes, of approximately $33.1 million.

As of September 30, 2021, the Company had $900 million available and $100 million outstanding under the revolving credit facility. Working capital, combined with available capacity under the revolving credit facility, resulted in approximately $1.1 billion of total liquidity at September 30, 2021. On October 8, 2021, the Company repaid $50 million of the outstanding borrowings under the revolving credit facility, which increased the amount available under the revolving credit facility to $950 million and decreased the amount outstanding to $50 million.

Outlook

Royal Gold increased its guidance for total stream segment and royalty sales volume to a range of between 180,000 and 190,000 GEOs4 for the 6-month transition period ending December 31, 2021. For the same period, depreciation, depletion and amortization expense is expected to range between $525 and $575 per GEO, and the effective tax rate is expected to range between 18% and 22%.

Other than potential remaining conditional funding at Khoemacau of $26.5 million and potential exploration and resource payments under the NX Gold Stream of $10 million, Royal Gold has no other project capital commitments or financing obligations.

4 Commodity price assumptions for GEO projections include: $1,750 per ounce of gold, $25.50 per ounce of silver, $4.15 per pound of copper, $8.00 per pound of nickel, $0.95 per pound of lead, and $1.25 per pound of zinc

Property Highlights

A breakdown of revenue for the stream and royalty portfolio can be found on Table 1. Historical production reported by operators of the Company’s principal stream and royalty properties can be found on Table 2. Calendar year 2021 operator production estimates for the Company’s principal stream and royalty properties compared to actual production at these properties through September 30, 2021, can be found on Table 3. Results of the streaming business for the September quarter, compared to the prior year quarter, can be found on Table 4. Highlights at certain of the Company’s principal producing and development properties during the September quarter, compared to the prior year quarter, 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 September 30, 2021, the Company owned interests on 190 properties on five continents, including interests on 44 producing mines and 16 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.

September Quarter 2021 Call Information:

 

Dial-In

 

855-209-8260 (U.S.); toll free

Numbers:

 

855-669-9657 (Canada); toll free

412-542-4106 (International)

Conference Title:

 

Royal Gold

 

 

 

Webcast URL:

 

www.royalgold.com under Investors, Events & Presentations

Note: Management’s conference call reviewing the results for the quarter ended September 30, 2021 will be held on Thursday, November 4, 2021, at noon Eastern Time (10:00 a.m. 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, the following: statements about our expected financial performance and outlook, including sales volume, revenue, expenses, tax rates, earnings or cash flow; operators’ expected operating and financial performance, including production, deliveries, mine plans and reserves, development, cash flows and capital expenditures; planned and potential acquisitions or dispositions, including funding schedules and conditions; liquidity, financing and stockholder returns; our overall investment portfolio; macroeconomic and market conditions including the impacts of COVID-19; prices for gold, silver, copper, nickel and other metals; potential impairments; or tax changes.

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, nickel 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, changes to mine plans and reserves, liquidity needs, mining and environmental hazards, labor disputes, distribution and supply chain disruptions, permitting and licensing issues, contractual issues involving our stream or royalty agreements, or operational disruptions due to COVID-19, including due to variant strains of the virus; risks associated with doing business in foreign countries; increased competition for stream and royalty interests; environmental risks, included those caused by climate change; potential cyber-attacks, including ransomware; our ability to identify, finance, value and complete acquisitions; adverse economic and market conditions; 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 our Form 10-K for the fiscal year ended June 30, 2021. Most of these factors are beyond our ability to predict or control.

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.

Information in this press release concerning the Khoemacau Project was provided to the Company by Cupric Canyon Capital L.P., the privately held owner and developer of Khoemacau. Such information may not have been prepared in accordance with applicable laws, stock exchange rules or international standards governing preparation and public disclosure of technical data and information relating to mineral properties. Royal Gold has not verified, and is not in a position to verify, and expressly disclaims any responsibility for the accuracy, completeness or fairness of this third-party information, and investors are cautioned not to rely upon this information.

TABLE 1

September 2021 Quarter End

Revenue by Stream and Royalty Interests

(In thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

 

 

 

 

September 30,

Stream/Royalty

Metal(s)

 

Current Stream/Royalty Interest1

 

 

2021

 

 

2020

Stream:

 

 

 

 

 

 

 

 

 

Canada

 

 

 

 

 

 

 

 

 

Mount Milligan

Gold, copper

 

35% of payable gold and 18.75% of payable copper

 

$

53,455

 

$

34,620

Rainy River

Gold, silver

 

6.5% of gold produced and 60% of silver produced

 

 

10,575

 

 

6,966

Latin America

 

 

 

 

 

 

 

 

 

Pueblo Viejo

Gold, silver

 

7.5% of Barrick's interest in payable gold and 75% of Barrick's interest in payable silver

 

$

27,198

 

$

31,270

Andacollo

Gold

 

100% of payable gold

 

 

11,601

 

 

23,509

NX Gold

Gold

 

25% of gold produced

 

 

4,412

 

 

-

Africa

 

 

 

 

 

 

 

 

 

Wassa

Gold

 

10.5% of payable gold

 

$

8,033

 

$

9,108

Prestea and Bogoso

Gold

 

5.5% of payable gold

 

 

540

 

 

1,030

Khoemacau

Silver

 

90% of payable silver

 

 

107

 

 

-

Total stream revenue

 

 

 

 

$

115,921

 

$

106,503

Royalty:

 

 

 

 

 

 

 

 

 

Canada

 

 

 

 

 

 

 

 

 

Voisey's Bay

Copper, nickel, cobalt

 

2.7% NVR

 

 

3,406

 

 

3,259

Canadian Malartic

Gold

 

1.0%-1.5% sliding-scale NSR

 

 

1,628

 

 

2,444

Williams

Gold

 

0.97% NSR

 

 

571

 

 

798

LaRonde Zone 5

Gold

 

2.0% NSR

 

 

630

 

 

736

Other-Canada

Various

 

Various

 

 

167

 

 

173

United States

 

 

 

 

 

 

 

 

 

Cortez

Gold

 

GSR1, GSR2, GSR3, NVR1, NVR1C

 

$

17,101

 

$

5,684

Robinson

Gold, copper

 

3.0% NSR

 

 

4,592

 

 

3,063

Marigold

Gold

 

2.0% NSR

 

 

1,776

 

 

1,944

Goldstrike

Gold

 

0.9% NSR

 

 

810

 

 

820

Wharf

Gold

 

0.0%-2.0% sliding-scale GSR

 

 

974

 

 

1,275

Other-United States

Various

 

Various

 

 

1,827

 

 

912

Latin America

 

 

 

 

 

 

 

 

 

Peñasquito

Gold, silver, lead, zinc

 

2.0% NSR

 

$

12,212

 

$

10,209

Dolores

Gold, silver

 

3.25% NSR (gold), 2.0% NSR (silver)

 

 

3,215

 

 

1,368

El Limon

Gold

 

3.0% NSR

 

 

1,100

 

 

1,172

Other-Latin America

Various

 

Various

 

 

526

 

 

-

Africa

 

 

 

 

 

 

 

 

 

Taparko

Gold

 

2.0% GSR, 0.75% GSR (milling royalty)

 

$

602

 

$

750

Australia

 

 

 

 

 

 

 

 

 

South Laverton

Gold

 

1.5% NSR, 4.0% NPI

 

$

4,323

 

$

1,831

Gwalia Deeps

Gold

 

1.5% NSR

 

 

1,218

 

 

605

Meekatharra

Gold

 

0.45% or 1.5% NSR

 

 

961

 

 

1,331

Other-Australia

Various

 

Various

 

 

415

 

 

775

Europe

 

 

 

 

 

 

 

 

 

Las Cruces

Copper

 

1.5% NSR

 

$

456

 

$

1,228

Total royalty revenue

 

 

 

 

$

58,510

 

$

40,377

Total revenue

 

 

 

 

$

174,431

 

$

146,880

1

 

Refer to Part I, Item 2, of the Company’s Fiscal 2021 Form 10-K for a full description of the Company’s stream and royalty interests.

TABLE 2

Operators’ Historical Production

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reported Production For The Quarter Ended(1)

Property

 

Operator

 

Stream/Royalty(2)

 

Metal(s)

 

Sep. 30, 2021

 

Jun. 30, 2021

 

Mar. 31, 2021

 

Dec. 31, 2020

 

Sep. 30, 2020

Stream:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mount Milligan

 

Centerra

 

35% of payable gold

 

Gold

 

19,300

 

oz

 

16,100

 

oz

 

9,200

 

oz

 

16,900

 

oz

 

11,800

 

oz

 

 

 

 

18.75% of payable copper

 

Copper

 

4.4

 

Mlb

 

4.4

 

Mlb

 

4.4

 

Mlb

 

4.1

 

Mlb

 

4.1

 

Mlb

Pueblo Viejo

 

Barrick (60%)

 

7.5% of Barrick's interest in payable gold up to 990,000 ounces; 3.75% thereafter

 

Gold

 

9,800

 

oz

 

10,500

 

oz

 

10,500

 

oz

 

9,400

 

oz

 

11,100

 

oz

 

 

 

 

75% of Barrick's interest in payable silver up to 50 million ounces; 37.5% thereafter(3)

 

Silver

 

386,500

 

oz

 

247,500

 

oz

 

418,200

 

oz

 

408,600

 

oz

 

451,200

 

oz

Andacollo

 

Teck

 

100% of payable gold up to 900,000 ounces; 50% thereafter

 

Gold

 

6,500

 

oz

 

15,400

 

oz

 

7,100

 

oz

 

9,500

 

oz

 

12,200

 

oz

Wassa

 

Golden Star

 

10.5% of payable gold up to 240,000 ounces; 5.5% thereafter

 

Gold

 

4,500

 

oz

 

4,000

 

oz

 

4,800

 

oz

 

3,600

 

oz

 

4,900

 

oz

Khoemacau

 

Khoemacau Copper Mining

 

90% of payable silver up to 36 million ounces; 45% thereafter

 

Silver

 

4,500

 

oz

 

 

oz

 

 

oz

 

 

oz

 

 

oz

Royalty:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Peñasquito

 

Newmont Corporation

 

2.0% NSR

 

Gold

 

170,400

 

oz

 

179,800

 

oz

 

180,400

 

oz

 

210,600

 

oz

 

130,700

 

oz

 

 

 

 

 

 

Silver

 

7.8

 

Moz

 

7.6

 

Moz

 

8.1

 

Moz

 

8.7

 

Moz

 

6.4

 

Moz

 

 

 

 

 

 

Lead

 

42.0

 

Mlb

 

41.8

 

Mlb

 

50.1

 

Mlb

 

52.1

 

Mlb

 

41.7

 

Mlb

 

 

 

 

 

 

Zinc

 

98.3

 

Mlb

 

101.7

 

Mlb

 

119.3

 

Mlb

 

93.8

 

Mlb

 

98.0

 

Mlb

Cortez

 

Nevada Gold Mines LLC

 

GSR1, GSR2, GSR3, NVR1, NVR1C(4)

 

Gold

 

106,300

 

oz

 

89,800

 

oz

 

51,900

 

oz

 

57,600

 

oz

 

37,600

 

oz

1

Reported production relates to the amount of metal sales subject to our stream and royalty interests for the stated periods and may differ from the operators’ public reporting.

2

Current stream/royalty interests shown. Refer to Part I, Item 2, of the Company’s Fiscal 2021 Form 10-K for a full description of the Company’s stream and royalty interests.

3

The Pueblo Viejo silver stream is determined based on a fixed metallurgical recovery of 70% of silver in mill feed.

4

Production includes applicable royalty deductions. Please refer to Part I, Item 2, of the Company’s Fiscal 2021 Form 10-K for a full description of the Company’s royalty interests at Cortez.

TABLE 3

Operator’s Estimated and Actual Production

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operator's Estimated Production for

 

Operator's Actual Calendar 2021

 

 

Full Year Calendar 2021(1)

 

Production(2)

Stream/Royalty

 

Gold (oz)

 

Silver (oz)

 

Base Metals (lb)

 

Gold (oz)

 

Silver (oz)

 

Base Metals (lb)

Stream:

 

 

 

 

 

 

 

 

 

 

 

 

Andacollo(3)

 

N/A

 

 

 

 

 

28,300

 

 

 

 

Mount Milligan(4)

 

180,000 - 200,000

 

 

 

 

 

97,300

 

 

 

 

Copper

 

 

 

 

 

70 - 80 M

 

 

 

 

 

38.4 M

Pueblo Viejo(5)

 

470,000 - 510,000

 

N/A

 

 

 

381,000

 

N/A

 

 

Wassa(6)

 

145,000 - 155,000

 

 

 

 

 

116,800

 

 

 

 

Khoemacau(7)

 

 

 

N/A

 

 

 

 

 

N/A

 

 

Royalty:

 

 

 

 

 

 

 

 

 

 

 

 

Cortez(8)

 

350,000 - 375,000

 

 

 

 

 

248,000

 

 

 

 

Peñasquito(9)

 

660,000

 

30 Million

 

 

 

520,000

 

23.6 M

 

 

Lead

 

 

 

 

 

190 M

 

 

 

 

 

138 M

Zinc

 

 

 

 

 

475 M

 

 

 

 

 

325 M

1

 

Production estimates received from the operators are for calendar 2021. There can be no assurance that production estimates received from the operators will be achieved. Please also refer to the cautionary language regarding forward-looking statements above, as well as the Risk Factors identified in Part I, Item 1A, of the Company’s Fiscal 2021 Form 10-K for information regarding factors that could affect actual results.

2

 

Actual production figures shown are from the operators and cover the period January 1, 2021 through September 30, 2021, unless otherwise noted in footnotes to this table.

3

 

Estimated production for Andacollo is not available. The actual production figure shown for Andacollo is contained gold in concentrate.

4

 

The estimated production figures shown for Mount Milligan are payable gold and copper in concentrate.

5

 

The estimated and actual production figures shown for Pueblo Viejo are payable gold in doré and represent the 60% interest in Pueblo Viejo held by Barrick Gold Corporation (“Barrick”). Barrick did not provide estimated or actual silver production.

6

 

The estimated and actual production figures shown for Wassa are payable gold in doré.

7

 

The estimated and actual production figures for Khoemacau are not available through the ramp-up period.

8

 

Production from Cortez subject to Royal Gold’s royalty interests.

9

 

The estimated and actual gold production figures shown for Peñasquito are payable gold and silver in concentrate and doré. The estimated and actual lead and zinc production figures shown are payable lead and zinc in concentrate.

 

TABLE 4

Stream Summary

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Three Months Ended

 

 

As of

 

As of

 

 

 

September 30, 2021

 

September 30, 2020

 

 

September 30, 2021

 

June 30, 2021

Gold Stream

 

 

Purchases (oz)

 

Sales (oz)

 

Purchases (oz)

 

Sales (oz)

 

 

Inventory (oz)

 

Inventory (oz)

Mount Milligan

 

 

10,800

 

19,300

 

19,600

 

11,800

 

 

2,900

 

11,400

Pueblo Viejo

 

 

9,200

 

9,800

 

9,400

 

11,100

 

 

9,200

 

9,800

Andacollo

 

 

6,400

 

6,500

 

13,700

 

12,200

 

 

2,200

 

2,400

Wassa

 

 

4,300

 

4,500

 

4,000

 

4,900

 

 

2,200

 

2,300

Other

 

 

7,500

 

6,300

 

4,400

 

4,000

 

 

2,500

 

1,300

Total

 

 

38,200

 

46,400

 

51,100

 

44,000

 

 

19,000

 

27,200

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Three Months Ended

 

 

As of

 

As of

 

 

 

September 30, 2021

 

September 30, 2020

 

 

September 30, 2021

 

June 30, 2021

Silver Stream

 

 

Purchases (oz)

 

Sales (oz)

 

Purchases (oz)

 

Sales (oz)

 

 

Inventory (oz)

 

Inventory (oz)

Pueblo Viejo

 

 

396,500

 

386,500

 

408,600

 

451,200

 

 

396,500

 

386,500

Khoemacau

 

 

105,800

 

4,500

 

 

 

 

101,300

 

Other

 

 

109,700

 

165,400

 

52,700

 

23,200

 

 

43,100

 

98,900

Total

 

 

612,000

 

556,400

 

461,300

 

474,400

 

 

540,900

 

485,400

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Three Months Ended

 

 

As of

 

As of

 

 

 

September 30, 2021

 

September 30, 2020

 

 

September 30, 2021

 

June 30, 2021

Copper Stream

 

 

Purchases (Mlb)

 

Sales (Mlb)

 

Purchases (Mlb)

 

Sales (Mlb)

 

 

Inventory (Mlb)

 

Inventory (Mlb)

Mount Milligan

 

 

2.6

 

4.4

 

5.8

 

4.1

 

 

 

1.7

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

ROYAL GOLD, INC.

Consolidated Balance Sheets

(Unaudited, in thousands except share data)

 

 

 

 

 

 

 

 

 

 

 

September 30, 2021

 

June 30, 2021

ASSETS

 

 

 

 

 

 

 

 

Cash and equivalents

 

 

$

160,208

 

 

$

225,916

Royalty receivables

 

 

 

52,959

 

 

 

47,242

Income tax receivable

 

 

 

4,081

 

 

 

4,520

Stream inventory

 

 

 

12,222

 

 

 

17,684

Prepaid expenses and other

 

 

 

2,613

 

 

 

1,773

Total current assets

 

 

 

232,083

 

 

 

297,135

Stream and royalty interests, net

 

 

 

2,476,630

 

 

 

2,262,158

Other assets

 

 

 

96,964

 

 

 

92,312

Total assets

 

 

$

2,805,677

 

 

$

2,651,605

LIABILITIES

 

 

 

 

 

 

 

 

Accounts payable

 

 

$

5,471

 

 

$

6,398

Dividends payable

 

 

 

19,690

 

 

 

19,681

Income tax payable

 

 

 

23,933

 

 

 

14,479

Other current liabilities

 

 

 

11,170

 

 

 

11,525

Total current liabilities

 

 

 

60,264

 

 

 

52,083

Debt

 

 

 

95,403

 

 

 

Deferred tax liabilities

 

 

 

87,687

 

 

 

88,000

Uncertain tax positions

 

 

 

890

 

 

 

910

Other liabilities

 

 

 

6,920

 

 

 

7,197

Total liabilities

 

 

 

251,164

 

 

 

148,190

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 65,563,802 and 65,551,061 shares outstanding, respectively

 

 

 

656

 

 

 

656

Additional paid-in capital

 

 

 

2,204,457

 

 

 

2,203,863

Accumulated earnings

 

 

 

336,734

 

 

 

286,249

Total Royal Gold stockholders’ equity

 

 

 

2,541,847

 

 

 

2,490,768

Non-controlling interests

 

 

 

12,666

 

 

 

12,647

Total equity

 

 

 

2,554,513

 

 

 

2,503,415

Total liabilities and equity

 

 

$

2,805,677

 

 

$

2,651,605

ROYAL GOLD, INC.

Consolidated Statements of Operations and Comprehensive Income

(Unaudited, in thousands except for per share data)

 

 

 

 

 

 

 

 

 

 

 

For The Three Months Ended

 

 

 

September 30, 2021

 

 

 

September 30, 2020

 

Revenue

 

 

$

174,431

 

 

 

$

146,880

 

Costs and expenses

 

 

 

 

 

 

 

 

Cost of sales (excludes depreciation, depletion and amortization)

 

 

 

27,230

 

 

 

 

21,902

 

General and administrative

 

 

 

7,129

 

 

 

 

7,454

 

Production taxes

 

 

 

2,054

 

 

 

 

1,355

 

Exploration costs

 

 

 

 

 

 

 

563

 

Depreciation, depletion and amortization

 

 

 

50,611

 

 

 

 

46,300

 

Total costs and expenses

 

 

 

87,024

 

 

 

 

77,574

 

Gain on sale of Peak Gold JV interest

 

 

 

 

 

 

 

33,906

 

Operating income

 

 

 

87,407

 

 

 

 

103,212

 

Fair value changes in equity securities

 

 

 

176

 

 

 

 

2,539

 

Interest and other income

 

 

 

819

 

 

 

 

421

 

Interest and other expense

 

 

 

(1,908

)

 

 

 

(1,875

)

Income before income taxes

 

 

 

86,494

 

 

 

 

104,297

 

Income tax (expense) benefit

 

 

 

(16,028

)

 

 

 

2,377

 

Net income and comprehensive income

 

 

 

70,466

 

 

 

 

106,674

 

Net (income) loss and comprehensive (income) loss attributable to non-controlling interests

 

 

 

(290

)

 

 

 

265

 

Net income and comprehensive income attributable to Royal Gold common stockholders

 

 

$

70,176

 

 

 

$

106,939

 

Net income per share attributable to Royal Gold common stockholders:

 

 

 

 

 

 

 

 

Basic earnings per share

 

 

$

1.07

 

 

 

$

1.63

 

Basic weighted average shares outstanding

 

 

 

65,556,608

 

 

 

 

65,537,714

 

Diluted earnings per share

 

 

$

1.07

 

 

 

$

1.63

 

Diluted weighted average shares outstanding

 

 

 

65,627,845

 

 

 

 

65,632,689

 

Cash dividends declared per common share

 

 

$

0.30

 

 

 

$

0.28

 

ROYAL GOLD, INC.

Consolidated Statements of Cash Flows

(Unaudited, in thousands)

 

 

 

 

 

 

 

 

 

Three Months Ended

 

 

September 30, 2021

 

September 30, 2020

Cash flows from operating activities:

 

 

 

 

 

 

Net income and comprehensive income

 

$

70,466

 

 

$

106,674

 

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

 

 

 

 

 

 

Depreciation, depletion and amortization

 

 

50,611

 

 

 

46,300

 

Gain on sale of Peak Gold JV interest

 

 

 

 

 

(33,906

)

Non-cash employee stock compensation expense

 

 

1,503

 

 

 

1,493

 

Fair value changes in equity securities

 

 

(176

)

 

 

(2,539

)

Deferred tax benefit

 

 

(396

)

 

 

(10,545

)

Other

 

 

845

 

 

 

111

 

Changes in assets and liabilities:

 

 

 

 

 

 

Royalty receivables

 

 

(5,718

)

 

 

(5,884

)

Stream inventory

 

 

5,463

 

 

 

(5,488

)

Income tax receivable

 

 

439

 

 

 

(1,864

)

Prepaid expenses and other assets

 

 

(1,026

)

 

 

260

 

Accounts payable

 

 

(927

)

 

 

(235

)

Income tax payable

 

 

9,454

 

 

 

12,408

 

Uncertain tax positions

 

 

(20

)

 

 

(12,196

)

Other liabilities

 

 

(633

)

 

 

(437

)

Net cash provided by operating activities

 

$

129,885

 

 

$

94,152

 

Cash flows from investing activities:

 

 

 

 

 

 

Acquisition of stream and royalty interests

 

 

(265,000

)

 

 

(11,304

)

Khoemacau subordinated debt facility

 

 

(7,000

)

 

 

 

Proceeds from sale of Peak Gold JV interest

 

 

 

 

 

49,154

 

Proceeds from sale of equity securities

 

 

 

 

 

12,146

 

Other

 

 

(733

)

 

 

(339

)

Net (used in) provided by investing activities

 

$

(272,733

)

 

$

49,657

 

Cash flows from financing activities:

 

 

 

 

 

 

Repayment of debt

 

 

 

 

 

(30,000

)

Borrowings from revolving credit facility

 

 

100,000

 

 

 

 

Net payments from issuance of common stock

 

 

(909

)

 

 

(1,389

)

Common stock dividends

 

 

(19,682

)

 

 

(18,365

)

Other

 

 

(2,269

)

 

 

(67

)

Net cash provided by (used in) financing activities

 

$

77,140

 

 

$

(49,821

)

Net (decrease) increase in cash and equivalents

 

 

(65,708

)

 

 

93,988

 

Cash and equivalents at beginning of period

 

 

225,916

 

 

 

319,128

 

Cash and equivalents at end of period

 

$

160,208

 

 

$

413,116

 

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 report or elsewhere include the following:

  1. 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. 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.
  2. 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.
  3. 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.
  4. 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.
  5. 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, net cash, and net cash to TTM adjusted EBITDA:

 

 

 

 

 

 

 

 

 

Three Months Ended

 

 

September 30,

(amounts in thousands)

 

2021

 

2020

Net income and comprehensive income

 

$

70,466

 

 

$

106,674

 

Depreciation, depletion and amortization

 

 

50,611

 

 

 

46,300

 

Non-cash employee stock compensation

 

 

1,503

 

 

 

1,493

 

Gain on sale of Peak Gold JV interest

 

 

 

 

 

(33,906

)

Fair value changes in equity securities

 

 

(176

)

 

 

(2,539

)

Interest and other, net

 

 

1,089

 

 

 

1,454

 

Income tax expense

 

 

16,028

 

 

 

(2,377

)

Non-controlling interests in operating income of consolidated subsidiaries

 

 

(290

)

 

 

265

 

Adjusted EBITDA

 

$

139,231

 

 

$

117,364

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

 

September 30,

 

June 30,

 

March 31,

 

December 31,

(amounts in thousands)

 

2021

 

2021

 

2021

 

2020

Net income and comprehensive income

 

$

70,466

 

 

$

81,919

 

 

$

54,193

 

 

$

59,988

 

Depreciation, depletion and amortization

 

 

50,611

 

 

 

48,028

 

 

 

41,296

 

 

 

47,945

 

Non-cash employee stock compensation

 

 

1,503

 

 

 

1,494

 

 

 

1,344

 

 

 

1,398

 

Gain on sale of Peak Gold JV interest

 

 

 

 

 

 

 

 

 

 

 

 

Fair value changes in equity securities

 

 

(176

)

 

 

(1,957

)

 

 

(1,902

)

 

 

382

 

Interest and other, net

 

 

1,089

 

 

 

469

 

 

 

1,087

 

 

 

965

 

Income tax expense

 

 

16,028

 

 

 

5,536

 

 

 

17,679

 

 

 

16,031

 

Non-controlling interests in operating income of consolidated subsidiaries

 

 

(290

)

 

 

(242

)

 

 

(167

)

 

 

(99

)

Adjusted EBITDA

 

$

139,231

 

 

$

135,247

 

 

$

113,530

 

 

$

126,610

 

 

 

 

 

 

 

 

 

 

 

 

 

 

TTM adjusted EBITDA

 

$

514,618

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Debt

 

$

95,403

 

 

 

 

 

 

 

 

 

 

Debt issuance costs

 

 

4,597

 

 

 

 

 

 

 

 

 

 

Cash and equivalents

 

 

(160,208

)

 

 

 

 

 

 

 

 

 

Net (cash)

 

$

(60,208

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

TTM adjusted EBITDA

 

$

514,618

 

 

 

 

 

 

 

 

 

 

Net cash to TTM adjusted EBITDA

 

 

(0.12)x

 

 

 

 

 

 

 

 

 

 

Cash G&A:

 

 

 

 

 

 

 

 

 

Three Months Ended

 

 

September 30,

(amounts in thousands)

 

2021

 

2020

General and administrative expense

 

$

7,129

 

 

$

7,454

 

Non-cash employee stock compensation

 

 

(1,503

)

 

 

(1,493

)

Cash G&A

 

$

5,626

 

 

$

5,961

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

 

September 30,

 

June 30,

 

March 31,

 

December 31,

(amounts in thousands)

 

2021

 

2021

 

2021

 

2020

General and administrative expense

 

$

7,129

 

 

$

7,212

 

 

$

6,932

 

 

$

6,789

 

Non-cash employee stock compensation

 

 

(1,503

)

 

 

(1,494

)

 

 

(1,344

)

 

 

(1,398

)

Cash G&A

 

$

5,626

 

 

$

5,718

 

 

$

5,588

 

 

$

5,391

 

 

 

 

 

 

 

 

 

 

 

 

 

 

TTM cash G&A

 

$

22,323

 

 

 

 

 

 

 

 

 

 

Adjusted net income and adjusted net income per share:

 

 

 

 

 

 

 

 

 

Three Months Ended

 

 

September 30,

(amounts in thousands, except per share data)

 

2021

 

 

2020

 

Net income and comprehensive income attributable to Royal Gold common stockholders

 

$

70,176

 

 

$

106,939

 

Fair value changes in equity securities

 

 

(176

)

 

 

(2,539

)

Gain on sale of Peak Gold JV interest

 

 

 

 

 

(33,906

)

Discrete tax benefits

 

 

 

 

 

(24,515

)

Tax effect of adjustments

 

 

47

 

 

 

7,809

 

Adjusted net income and comprehensive income attributable to Royal Gold common stockholders

 

 

70,047

 

 

 

53,788

 

 

 

 

 

 

 

 

Net income attributable to Royal Gold common stockholders per diluted share

 

$

1.07

 

 

$

1.63

 

Fair value changes in equity securities

 

 

 

 

 

(0.04

)

Gain on sale of Peak Gold JV interest

 

 

 

 

 

(0.52

)

Discrete tax benefits

 

 

 

 

 

(0.37

)

Tax effect of adjustments

 

 

 

 

 

0.12

 

Adjusted net income attributable to Royal Gold common stockholders per diluted share

 

$

1.07

 

 

$

0.82

 

Free cash flow:

 

 

 

 

 

 

 

 

 

Three Months Ended

 

 

September 30,

(amounts in thousands)

 

2021

 

 

2020

 

Net cash provided by operating activities

 

$

129,885

 

 

$

94,152

 

Acquisition of stream and royalty interests

 

 

(265,000

)

 

 

(11,304

)

Free cash flow

 

$

(135,115

)

 

$

82,848

 

 

 

 

 

 

 

 

Net cash (used in) provided by investing activities

 

$

(272,733

)

 

$

49,657

 

Net cash provided by (used in) financing activities

 

$

77,140

 

 

$

(49,821

)

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 report and elsewhere include the following:

  1. 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 gold price for that same period.
  2. 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.
  3. 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.
  4. 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.
  5. Operating margin is calculated by the Company as operating income for a period divided by revenue for that same period.

 

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