Royal Gold, Inc. (NASDAQ: RGLD) (together with its
subsidiaries, “Royal Gold,” the “Company,” “we,” “us,” or “our”)
reports net income of $96.2 million, or $1.46 per share, for the
quarter ended September 30, 2024, ("third quarter") on record
revenue of $193.8 million and operating cash flow of $136.7
million. Adjusted net income1 was a record $96.6 million, or $1.47
per share.
Third Quarter 2024 Highlights:
- Record revenue of $193.8 million, a 40% increase
over the prior year period
- Operating cash flow of $136.7 million and earnings of
$96.2 million; 39% and 95% increases, respectively, over
the prior year period
- Record adjusted earnings of $96.6 million
- Revenue split: 76% gold, 12% silver, 9%
copper
- Sales volume of 78,400 GEOs2
- Sustained high adjusted EBITDA margin1 of
81%
- Repaid $50 million of debt, reducing total debt to
$0
- Total available liquidity increased to approximately $1.1
billion
- Paid quarterly dividend of $0.40 per share, a 7%
increase over the prior year period
- First royalty revenue recognized from the
newly-producing Côté Gold and Manh Choh mines
“The third quarter of 2024 was another excellent quarter for
Royal Gold, and our results demonstrate the leverage our business
provides to a strong and rising gold price,” commented Bill
Heissenbuttel, President and CEO of Royal Gold. “Solid portfolio
performance underpinned our exposure to record gold prices during
the quarter, and while the gold price increased 28% from the prior
year, over the same period we recognized much higher increases of
40% to revenue and 46% to adjusted EBITDA. Our low and stable
G&A expense insulates us from direct exposure to inflationary
cost pressures and we maintained our very healthy margins with full
exposure to the rising gold price over the quarter."
"During the quarter we also saw new revenue contributions from
the Manh Choh and Côté Gold mines and we completely repaid our
outstanding borrowings on our credit facility," continued Mr.
Heissenbuttel. "Our strategy is to provide our shareholders with
full exposure to portfolio growth, and we have avoided diluting our
shareholders' exposure to that growth by being disciplined with
respect to our use of short-term and flexible debt financing."
1
Adjusted net income, adjusted net income
per share and adjusted EBITDA margin are non-GAAP financial
measures. See Schedule A of this press release for additional
information, including a detailed description of adjustments to net
income.
2
See Schedule A of this press release for
additional information about gold equivalent ounces, or GEOs.
Recent Portfolio Developments
Principal Property Updates
Notable recent updates as reported by the operators of our
Principal Properties include:
Mount Milligan Guidance Maintained with Work Continuing on
Site-Wide Optimization and Preliminary Economic Assessment
On October 31, 2024, Centerra Gold Inc. ("Centerra") reported
that 2024 production guidance at the Mount Milligan mine in British
Columbia remains unchanged at 180,000 to 200,000 ounces of gold and
55 to 65 million pounds of copper, with gold production trending
towards the lower end of the range.
Centerra also reported that work continues on the site-wide
optimization program, and notable achievements in the first nine
months of 2024 include an improved safety record, increased
availability and utilization of the haul fleet, and consistent ore
supply which has led to increased mill throughput per operating
day. In addition, Centerra is progressing work on a preliminary
economic assessment (“PEA”) to evaluate the substantial mineral
resources at Mount Milligan with a goal to unlock additional value
beyond its current 2035 mine life. Centerra expects the PEA to be
completed towards the end of the first half of 2025.
Increased Water Availability at Andacollo
On October 24, 2024, Teck Resources Limited ("Teck") reported
that mill throughput at the Andacollo mine in Chile improved in the
third quarter driven by increased water availability. According to
Teck, lower tonnes were milled at Andacollo earlier in the year due
to water restrictions caused by extreme drought conditions.
Improved Mining and Milling Volumes and Continued Progress on
the Expansion at Khoemacau
On October 24, 2024, MMG Limited (“MMG”) provided an update on
operations at the Khoemacau mine in
Botswana. MMG reported improved mining and milling volumes and
higher ore grades at Zone 5 during the third quarter compared to
the previous quarter. According to MMG, operations were enhanced
due to the gradual onboarding of skilled labor and increased
availability of equipment, and the mining sequence allowed access
to higher-grade areas. Improved controls on dilution also supported
the increase in ore mined grades. MMG also reported that
underground development advance increased by 25% during the
quarter, which MMG expects will lead to greater mining volumes,
access to higher-grade mining areas, and will increase mining
flexibility in the near and medium term.
MMG also reported that it expects production at Zone 5 to
further ramp up over the next year, and that it is committed to
accessing the higher-grade areas to achieve an annual production of
60,000 tonnes of copper in concentrate by 2026. This will be
facilitated by ongoing development efforts to increase mining
fronts, operational flexibility and access to higher-grade areas.
These efforts will be further enhanced by constructing a paste fill
plant to increase extraction rates and completion of the
installation of primary vent fans.
MMG plans to expand total production capacity at
Khoemacau to 130,000 tonnes of copper
in concentrate per year by building a new 4.5 million tonne per
year process plant, increasing Zone 5 output, and developing
additional deposits. MMG expects to begin the expansion feasibility
study by the end of 2024, begin construction in 2026, produce first
concentrate in 2028, and reach full capacity by 2029. Any expanded
production from the Zone 5 and Mango NE deposits falls within the
area of interest covered by Royal Gold’s silver stream.
Plant Optimization Continuing at Pueblo Viejo
On October 16, 2024, Barrick Gold Corporation ("Barrick") issued
production results for the third quarter at Pueblo Viejo in the
Dominican Republic. According to Barrick, Pueblo Viejo delivered a
23% improvement in gold production in the third quarter compared to
the second quarter due to continued plant optimization.
New Collective Bargain Agreement and Transition to Higher
Gold Grade Ore at Peñasquito
On October 18, 2024, Newmont Corporation ("Newmont") reported
that it had agreed on a new Collective Bargain Agreement (CBA) at
Peñasquito in Mexico for 2024-2026 with the National Union of
Mining, Metallurgical, Steel, and Similar Workers of Mexico.
According to Newmont, this CBA provides a solid foundation for
continuing operations at Peñasquito.
On October 23, 2024, Newmont reported that it delivered steady
gold, silver, lead and zinc production in the third quarter from
the Chile Colorado pit and commenced mining ore in the higher gold
grade Peñasco pit, ahead of plan due to efficient stripping.
Newmont expects this will result in an increase in gold production
in the fourth quarter and into 2025.
Other Property Updates
Notable recent updates as reported by the operators of other
select portfolio assets include:
Producing Properties
Bellevue (2% NSR royalty): On October
21, 2024, Bellevue Gold Limited (“Bellevue”) reported that the
Bellevue Gold mine in Western Australia is on track to meet fiscal
year 2025 gold production of 165,000 to 180,000 ounces, with
production weighted to the second half of the fiscal year and
reaching a rate of 200,000 ounces per year by the quarter ended
June 30, 2025. Bellevue further reported that access to the sixth
mining area is complete with the establishment of the Tribune
Portal. The Tribune Portal provides an additional mining front and
haulage decline as well as the jump-off point for the Southern
Belle decline, which is a key platform for exploration and mine
life extension.
Côté Gold (1% NSR royalty): IAMGOLD
Corporation ("IAMGOLD") disclosed on October 15, 2024, that ramp-up
of the processing plant at the Côté Gold mine in Ontario continues
and is on track to achieve 90% of the design throughput rate by the
end of 2024. IAMGOLD expects total gold production in 2024 to be at
the lower end of the 220,000 to 290,000 ounce guidance range.
King of the Hills (1.5% NSR royalty):
On October 22, 2024, Vault Minerals Limited ("Vault"), previously
Red 5 Mining Limited, reported reserves and resources for the King
of the Hills ("KOTH") mine in Western Australia. According to
Vault, gold contained in mineral resources and reserves at KOTH was
4.1 million ounces and 2.1 million ounces, respectively, as of June
30, 2024.
Mara Rosa (1.0% NSR and 1.75% NSR
royalties): On October 23, 2024, Hochschild Mining PLC
(“Hochschild”) reported gold production from the Mara Rosa mine in
Brazil of approximately 23,750 ounces in the third quarter.
According to Hochschild, Mara Rosa steadily increased output
throughout the third quarter and the plant operated consistently at
full capacity in September. Hochschild further reported that 3,011
meters of resource drilling was completed below the Posse pit, and
will continue in the fourth quarter.
Manh Choh (3% NSR royalty and 28% NSR
royalty on silver): On November 5, 2024, Kinross (70% owner and
operator) reported the first quarter of production at the Manh Choh
Project in Alaska. First gold from Manh Choh was poured at the Fort
Knox mill on July 8, 2024, and Kinross disclosed production of
approximately 98,600 GEOs in the third quarter from the processing
of 379,786 tonnes of ore at a grade of 9.13 grams per tonne.
Rainy River (6.5% gold stream, 60% silver
stream): New Gold Inc. ("New Gold") reported on October 30,
2024, that the first development ore was mined from the Underground
Main zone in late September, ahead of schedule, and underground
mining at Intrepid continues to perform well. New Gold also
reported that it is evaluating the potential for further open pit
pushbacks and/or satellite pits, exploration drilling continues to
advance on underground targets, and an updated NI 43-101 technical
report is expected in the first quarter of 2025. New Gold further
reported that gold production from the Rainy River mine in Ontario
for 2024 is expected to be lower than previously planned and in the
range of 230,000 to 240,000 ounces.
Voisey's Bay (2.7% net value royalty):
On October 24, 2024, Vale S.A. ("Vale") reported that the second
underground mine of the Voisey's Bay Mine Extension ("VBME")
project in Newfoundland and Labrador, Canada, had achieved
mechanical completion. According to Vale, development ore
extraction at the Eastern Deeps deposit has started and the mine is
continuing its scheduled production ramp up. Vale is targeting
annual production from VBME of 45,000 tonnes of nickel and 20,000
tonnes of copper at full production levels.
Wassa (10.5% gold stream): On August
27, 2024, Chifeng Gold ("Chifeng") completed an Independent
Competent Person's Report ("ICPR") for the Wassa Gold Mine in
Ghana. According to the ICPR, open pit and underground reserves are
to be mined through 2028, and the mining of potentially economic
material in the Southern Extension could add multi-decades beyond
the reserve life.
Development and Evaluation
Properties
Back River (equivalent ~3.3% GSR royalty
on the Goose Project): On September 12, 2024, B2Gold Corp.
("B2Gold") provided an update on construction status at the Goose
Project in the Back River Gold District in Nunavut, Canada.
According to B2Gold, development is on track for the first gold
pour in the second quarter of 2025 with a ramp up to commercial
production in the third quarter of 2025. B2Gold estimates that gold
production in 2025 will be between 120,000 and 150,000 ounces, and
the average annual production from 2026 to 2030 will be
approximately 310,000 ounces per year. Royal Gold's royalty rate on
the Goose Project will increase to the approximate equivalent 3.3%
GSR royalty rate as certain production thresholds are met.
Great Bear (2% NSR royalty): On
September 10, 2024, Kinross Gold Corporation (“Kinross”) released
the results of a Preliminary Economic Assessment ("PEA") on the
Great Bear Project in Ontario, which highlighted an initial mine
life of approximately 12 years, and gold production of over 500,000
ounces per year in the first 8 years. Kinross also reported that
additional deep drilling from surface demonstrates the continuation
of mineralization at depth and the upside potential for further
resource and mine life additions in the future. Kinross disclosed
that exploration, permitting, and engineering work streams are
continuing and is targeting first production in mid-2029.
Third Quarter 2024 Overview
For the third quarter, we recorded net income and comprehensive
income of $96.2 million, or $1.46 per basic and diluted share, as
compared to net income of $49.3 million, or $0.75 per basic and
diluted share, for the three months ended September 30, 2023. The
increase in net income was primarily attributable to higher revenue
and lower interest expense, as discussed below.
For the third quarter, we recognized record total revenue of
$193.8 million, comprised of stream revenue of $133.1 million and
royalty revenue of $60.8 million at an average gold price of $2,474
per ounce, an average silver price of $29.43 per ounce and an
average copper price of $4.18 per pound. This compares to total
revenue of $138.6 million for the three months ended September 30,
2023, comprised of stream revenue of $99.0 million and royalty
revenue of $39.6 million, at an average gold price of $1,928 per
ounce, an average silver price of $23.57 per ounce and an average
copper price of $3.79 per pound.
The increase in our total revenue resulted primarily from higher
average gold, silver and copper prices compared to the prior
period. Higher gold sales from Mount Milligan, higher gold and
silver sales from Pueblo Viejo, higher gold, silver, zinc and lead
production from Peñasquito, and new revenue of $12.6 million from
non-principal royalties also contributed to the increase. These
increases were partially offset by lower gold sales from Andacollo,
lower production from the Cortez Legacy Zone and lower silver sales
from Khoemacau when compared to the
prior year period.
Cost of sales, which excludes depreciation, depletion and
amortization ("DD&A"), increased to $27.2 million for the third
quarter, from $21.4 million for the three months ended September
30, 2023. The increase, when compared to the prior year period, was
primarily due to higher gold, silver and copper prices, higher gold
sales from Mount Milligan and higher silver sales from Pueblo
Viejo. The increase was partially offset by lower gold sales from
Andacollo and lower silver sales from Khoemacau compared to the prior year period. Cost of
sales is specific to our stream agreements and, except for Mount
Milligan, is the result of our purchase of metal for a cash payment
that is a set contractual percentage of the spot price for that
metal near the date of metal delivery. For Mount Milligan, the cash
payments under the existing stream agreement are the lesser of $435
per ounce or the prevailing market price of gold when purchased,
and 15% of the spot price for copper near the date of metal
delivery. Separately, and in addition to the cash payments under
the existing stream agreement, the Mount Milligan Cost Support
Agreement (detailed in Note 5 of our notes to consolidated
financial statements in our Quarterly Report on Form 10-Q) provides
for cash payments on gold and copper deliveries that are expected
to begin after certain thresholds are met, or earlier, if metal
prices are below certain thresholds and if requested by
Centerra.
General and administrative costs increased to $10.1 million for
the third quarter, from $9.9 million for the three months ended
September 30, 2023. The increase was primarily due to higher
non-cash stock compensation expense compared to the prior year
period.
DD&A decreased to $36.2 million for the third quarter, from
$40.1 million for the three months ended September 30, 2023. The
decrease was primarily due to lower stream depletion rates as a
result of proven and probable mineral reserve increases by our
operators when compared to the prior year period, lower silver
sales from Khoemacau, lower gold sales
from Andacollo and lower gold production at Cortez compared to the
prior year period. The decrease was partially offset by higher gold
sales from Mount Milligan and higher gold and silver sales from
Pueblo Viejo.
Interest and other expense decreased to $1.2 million for the
third quarter, from $7.3 million for the three months ended
September 30, 2023. The decrease was primarily due to lower
interest expense as a result of lower average amounts outstanding
under our revolving credit facility compared to the prior year
period. For the three months ended September 30, 2024, amounts
outstanding under our revolving credit facility averaged $14
million at an average all-in borrowing rate of 6.5% compared to
average amounts outstanding of $380 million at an average all-in
borrowing rate of 6.7% for the prior year period.
For the third quarter, we recorded income tax expense of $21.5
million, compared to $10.8 million for the three months ended
September 30, 2023. The income tax expense resulted in an effective
tax rate of 18.3% in the current period, compared with 17.8% for
the three months ended September 30, 2023. The higher income tax
expense for the third quarter was primarily attributable to higher
income before income taxes compared to the prior year period.
Net cash provided by operating activities totaled $136.7 million
for the third quarter, compared to $98.1 million for the three
months ended September 30, 2023. The increase, when compared to the
prior year period, was primarily due to higher stream and royalty
revenue.
Net cash used in investing activities totaled $3.4 million for
the third quarter, compared to approximately $0 for the three
months ended September 30, 2023. The change from the comparable
prior year period was primarily due to payment in the third quarter
to a subsidiary of Ero Copper Corp. ("Ero") of the final $3.2
million outstanding under the commitment to support regional
exploration at the Xavantina mine.
Net cash used in financing activities totaled $79.6 million for
the third quarter, compared to $101.4 million for the three months
ended September 30, 2023. The decrease, when compared to the prior
year period, was primarily due to the repayment of outstanding
borrowings on the revolving credit facility of $50 million in the
third quarter, compared to $75 million in the prior year
quarter.
Other Corporate Updates
Outstanding Debt Repaid and Total Available Liquidity
Increased to Approximately $1.1 Billion at the end of the Third
Quarter
During the third quarter, we repaid $50 million of outstanding
borrowings on the $1 billion revolving credit facility, resulting
in the credit facility being fully undrawn and available as of
September 30, 2024. Total liquidity at the end of the third quarter
was approximately $1.1 billion, which consisted of $116 million of
working capital and $1 billion undrawn and available under the
revolving credit facility.
Outlook for 2024
We are currently forecasting that 2024 metal sales will be
within the ranges previously provided (shown in the table below),
with the exception of silver. Silver sales are expected to be
modestly below the low end of the guidance range primarily due to
lower sales from Pueblo Viejo. Gold sales, which are the most
important contributor to our results, are forecast to be at or
below the midpoint of the guidance range.
We expect that DD&A expense and effective tax rate for 2024
will be within the previously-provided guidance ranges.
2024 Guidance Ranges
Total Sales:
Gold
215,000 - 230,000 oz
Silver
3.2 - 3.8 M oz
Copper
14.0 - 16.0 M lb
Other Metals
$17.0 - 20.0
DD&A
$141 - 157 M
Effective Tax Rate
17 - 22%
Property Highlights
A breakdown of revenue for the Company’s stream and royalty
portfolio can be found on Table 1 for the three and nine month
periods ended September 30, 2024 and September 30, 2023. Table 2
shows stream metal sales and metal sales attributable to the
Company’s royalty interests for the Company’s principal stream and
royalty properties. Table 3 shows Royal Gold's 2024 sales volume
guidance and year to date sales volume achieved. Table 4 shows
stream segment purchases and sales for the quarters ended September
30, 2024 and September 30, 2023 and inventories at September 30,
2024 and December 31, 2023. Highlights at certain of the Company’s
principal producing and development properties during the quarter
ended September 30, 2024, compared to the quarter ended September
30, 2023, are detailed in the Quarterly Report on Form 10-Q.
CORPORATE PROFILE
Royal Gold is a precious metals stream and royalty company
engaged in the acquisition and management of precious metal
streams, royalties and similar production-based interests. As of
September 30, 2024, the Company owned interests on 175 properties
on five continents, including interests on 40 producing mines and
19 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.
Third Quarter 2024 Call
Information:
Dial-In
833-470-1428 (U.S.); toll free
Numbers:
833-950-0062 (Canada); toll free
929-526-1599 (International)
Access Code:
506691
Webcast URL:
www.royalgold.com under Investors, Events
& Presentations
Note: Management’s conference call reviewing the third
quarter results will be held on Thursday, November 7, 2024, at 1:00
pm Eastern Time (11:00 am Mountain Time). The call will be webcast
and archived on the Company’s website for a limited time.
Additional Investor Information: Royal Gold routinely
posts important information, including information about upcoming
investor presentations and press releases, on its website under the
Investor Resources tab. Investors and other interested parties are
encouraged to enroll at www.royalgold.com to receive automatic
email alerts for new postings.
Forward-Looking Statements: This press release includes
“forward-looking statements” within the meaning of U.S. federal
securities laws. Forward-looking statements are any statements
other than statements of historical fact. Forward-looking
statements are not guarantees of future performance, and actual
results may differ materially from these statements.
Forward-looking statements are often identified by words like
“will,” “may,” “could,” “should,” “would,” “believe,” “estimate,”
“expect,” “anticipate,” “plan,” “forecast,” “potential,” “intend,”
“continue,” “project,” or negatives of these words or similar
expressions. Forward-looking statements include, among others,
statements regarding the following: our expected financial
performance and outlook, including our 2024 guidance; operators’
expected operating and financial performance and other anticipated
developments relating to their properties and operations, including
production, deliveries, estimates of mineral resources and mineral
reserves, environmental and feasibility studies, technical reports,
mine plans, capital requirements, liquidity and capital
expenditures; anticipated liquidity and capital resources; and the
receipt and timing of royalty payments and metal deliveries,
including deferred amounts at Pueblo Viejo.
Factors that could cause actual results to differ materially
from these forward-looking statements include, among others, the
following: changes in the price of gold, silver, copper or other
metals; operating activities or financial performance of properties
on which we hold stream or royalty interests, including variations
between actual and forecasted performance, operators’ ability to
complete projects on schedule and as planned, operators’ changes to
mine plans and mineral reserves and mineral resources (including
updated mineral reserve and mineral resource information),
liquidity needs, mining and environmental hazards, labor disputes,
distribution and supply chain disruptions, permitting and licensing
issues, other adverse government or court actions, or operational
disruptions; changes of control of our properties or operators;
contractual issues involving our stream or royalty agreements; the
timing of deliveries of metals from operators and our subsequent
sales of metal; risks associated with doing business in foreign
countries; increased competition for stream and royalty interests;
environmental risks, including those caused by climate change;
potential cyber-attacks, including ransomware; our ability to
identify, finance, value, and complete acquisitions or other
transactions; adverse economic and market conditions; impact of
health epidemics and pandemics; changes in laws or regulations
governing us, operators or operating properties; changes in
management and key employees; and other factors described in our
reports filed with the Securities and Exchange Commission,
including Item 1A. Risk Factors of our most recent Annual Report on
Form 10-K and Quarterly Reports on Form 10-Q. Most of these factors
are beyond our ability to predict or control. Other unpredictable
or unknown factors not discussed in this release could also have
material adverse effects on forward-looking statements.
Forward-looking statements speak only as of the date on which
they are made. We disclaim any obligation to update any
forward-looking statements, except as required by law. Readers are
cautioned not to put undue reliance on forward-looking
statements.
Statement Regarding Third-Party Information: Certain
information provided in this press release, including production
estimates, has been provided to us by the operators of the relevant
properties or is publicly available information filed by these
operators with applicable securities regulatory bodies, including
the Securities and Exchange Commission. Royal Gold has not
verified, and is not in a position to verify, and expressly
disclaims any responsibility for the accuracy, completeness or
fairness of any such third-party information and refers the reader
to the public reports filed by the operators for information
regarding those properties.
TABLE 1
Revenue by Stream and Royalty Interests
for the Three and Nine Months ended September 30, 2024 and
September 30, 2023
(In thousands)
Three Months Ended
September 30,
Nine Months Ended
September 30,
Stream/Royalty
Metal(s)
Current Stream/Royalty
Interest1
2024
2023
2024
2023
Stream:
Canada
Mount Milligan
Gold, copper
35% of payable gold and 18.75% of payable
copper
$
56,570
$
33,876
$
143,704
$
121,739
Rainy River
Gold, silver
6.5% of gold produced and 60% of silver
produced
9,802
8,701
30,033
28,667
Latin America
Pueblo Viejo
Gold, silver
7.5% of Barrick's interest in payable gold
and 75% of Barrick's interest in payable silver
$
26,585
$
16,688
$
64,147
$
62,586
Andacollo
Gold
100% of payable gold
9,652
14,644
31,949
35,401
Xavantina
Gold
25% of gold produced
10,470
6,976
29,228
17,195
Africa
Khoemacau
Silver
100% of payable silver
$
7,996
$
9,047
$
24,148
$
27,082
Wassa
Gold
10.5% of payable gold
11,977
8,296
35,322
24,576
Bogoso and Prestea
Gold
5.5% of payable gold
—
750
—
2,736
Total stream revenue
$
133,052
$
98,978
$
358,531
$
319,982
Royalty:
Canada
Voisey's Bay
Copper, nickel, cobalt
2.7% NVR
$
1,598
$
1,267
$
4,051
$
3,317
Red Chris
Gold, copper
1.0% NSR
—
—
2,617
3,170
Côté Gold
Gold
1.0 NSR
1,537
—
1,537
—
LaRonde Zone 5
Gold
2.0% NSR
911
629
2,432
1,870
Canadian Malartic
Gold
1.0%-1.5% sliding-scale NSR
233
301
314
1,334
Williams
Gold
0.97% NSR
578
531
1,417
(1,229
)
Other-Canada
Various
Various
412
363
1,067
1,123
United States
Cortez
Legacy Zone
Gold
Approx. 9.4% GSR Equivalent
$
13,047
$
19,668
$
41,610
$
57,062
CC Zone
Gold
Approx. 0.45%-2.2% GSR Equivalent
2,739
2,948
7,713
9,674
Robinson
Gold, copper
3.0% NSR
5,326
1,333
10,873
5,490
Manh Choh
Gold, silver
3.0% NSR, 28% NSR (silver)
7,124
—
7,124
—
Marigold
Gold
2.0% NSR
2,244
739
4,954
2,517
Leeville
Gold
1.8% NSR
2,001
1,388
5,622
3,542
Wharf
Gold
0.0%-2.0% sliding-scale GSR
782
869
1,973
2,461
Goldstrike
Gold
0.9% NSR
377
447
1,348
1,079
Other-United States
Various
Various
491
844
2,267
3,258
Latin America
Peñasquito
Gold, silver, lead, zinc
2.0% NSR
$
9,356
—
$
29,863
$
13,538
Dolores
Gold, silver
3.25% NSR (gold), 2.0% NSR (silver)
1,497
1,964
4,646
5,875
El Limon
Gold
3.0% NSR
1,337
1,627
4,724
4,122
Mara Rosa
Gold, silver
2.75% NSR
1,695
—
2,433
—
Other-Latin America
Various
Various
24
—
221
456
Australia
South Laverton
Gold
1.5% NSR, 4.0% NPI
$
2,139
$
1,647
$
6,291
$
5,277
King of the Hills
Gold
1.5% NSR
1,311
1,161
3,996
3,106
Bellevue
Gold
2.0% NSR
2,028
—
3,816
—
Gwalia
Gold
1.5% NSR
1,077
833
2,891
2,682
Celtic/Wonder North
Gold, silver
1.5% NSR
213
—
392
—
Other-Australia
Various
Various
708
1,054
2,112
2,810
Europe
Las Cruces
Copper
1.5% NSR (copper)
$
—
$
26
$
—
$
535
Total royalty revenue
$
60,785
$
39,639
$
158,304
$
133,069
Total revenue
$
193,837
$
138,617
$
516,835
$
453,051
1
Refer to Part I, Item 2, of the Company’s
Annual Report on Form 10-K for a full description of the Company’s
stream and royalty interests.
TABLE 2
Stream Metal and Royalty Sales for
Principal Properties
Reported Production For The
Quarter Ended2
Property
Operator
Current Stream/ Royalty
Interest1
Metal(s)
Sep. 30, 2024
Jun. 30, 2024
Mar. 31, 2024
Dec. 31, 2023
Sep. 30, 2023
Stream:
Mount Milligan
Centerra
35% of payable gold
Gold
17,600
oz
16,100
oz
12,500
oz
14,000
oz
11,300
oz
18.75% of payable copper
Copper
3.1
Mlb
3.4
Mlb
2.5
Mlb
2.4
Mlb
3.2
Mlb
Pueblo Viejo
Barrick (60%)
7.5% of Barrick's interest in payable
gold
Gold
7,000
oz
5,800
oz
6,200
oz
5,000
oz
6,800
oz
75% of Barrick's interest in payable
silver3
Silver
332,700
oz
218,200
oz
223,000
oz
171,100
oz
150,700
oz
Andacollo
Teck
100% of payable gold
Gold
4,000
oz
4,500
oz
5,700
oz
7,000
oz
7,500
oz
Khoemacau
MMG
100% of payable silver
Silver
275,200
oz
295,500
oz
332,000
oz
323,800
oz
386,100
oz
Royalty:
Cortez
Nevada Gold Mines LLC
9.4% GSR on Legacy Zone4
Gold
45,300
oz
42,600
oz
68,700
oz
111,900
oz
98,800
oz
0.45%-2.2% GSR on CC Zone4
Gold
116,500
oz
119,800
oz
124,900
oz
156,600
oz
120,000
oz
Peñasquito
Newmont Corporation
2.0% NSR
Gold
55,700
oz
64,200
oz
44,000
oz
25,900
oz
-
oz
Silver
5.6
Moz
8.0
Moz
9.8
Moz
4.6
Moz
-
Moz
Lead
36.4
Mlb
42.9
Mlb
64.9
Mlb
34.9
Mlb
-
Mlb
Zinc
133.6
Mlb
113.3
Mlb
134.8
Mlb
33.5
Mlb
-
Mlb
1
Refer to Part I, Item 2, of the Company’s
Annual Report on Form 10-K for a full description of the Company’s
stream and royalty interests.
2
Reported production relates to the amount
of stream metal sales and the metal sales attributable to the
Company’s royalty interests for the stated periods and may differ
from the operators’ public reporting.
3
The Pueblo Viejo silver stream is
determined based on a fixed metallurgical recovery of 70% of silver
in mill feed.
4
Approximate blended royalty rates as
described in the press release “Royal Gold Announces Acquisition of
Additional Royalty Interests on the World-Class Cortez Gold Complex
in Nevada and Outlines Simplified Approach to Describing Royal
Gold’s Multiple Royalty Interests at Cortez” issued January 5,
2023.
TABLE 3
2024 Sales Volume Guidance and Year to
Date Sales Volume Achieved
2024 Guidance
Metal Sales by Segment for the
Nine Months Ended September 30, 2024
Stream Sales1
Royalty Sales2
Total Sales
Gold
(oz)
215,000 - 230,000
118,000
51,183
169,183
Silver
(M oz)
3.2-3.8
1.9
0.5
2.4
Copper
(M lb)
14.0 - 16.0
9.0
2.9
11.9
Other Metals
(M)
$17.0 - $20.0
N/A
$15.7
$15.7
1 Stream Sales represents physical metal
sold.
2 Royalty Sales represents royalty revenue
divided by the average metal price for the period.
TABLE 4
Stream Segment Summary
Three Months Ended
September 30, 2024
Three Months Ended
September 30, 2023
As of September 30,
2024
As of December 31,
2023
Gold Stream
Purchases (oz)
Sales (oz)
Purchases (oz)
Sales (oz)
Inventory (oz)
Inventory (oz)
Mount Milligan
22,100
17,600
13,000
11,300
5,000
4,000
Pueblo Viejo
6,000
7,000
5,000
6,800
6,000
6,200
Andacollo
5,200
4,000
9,300
7,500
2,500
800
Other
12,400
12,100
11,700
11,900
3,500
4,200
Total
45,700
40,700
39,000
37,500
17,000
15,200
Silver Stream
Purchases (oz)
Sales (oz)
Purchases (oz)
Sales (oz)
Inventory (oz)
Inventory (oz)
Pueblo Viejo1
89,600
332,700
171,100
150,700
89,600
223,000
Khoemacau
288,200
275,200
315,000
386,100
101,000
135,300
Other
78,900
80,300
65,800
76,900
28,500
24,800
Total
456,700
688,200
551,900
613,700
219,100
383,100
Copper Stream
Purchases (Mlb)
Sales (Mlb)
Purchases (Mlb)
Sales (Mlb)
Inventory (Mlb)
Inventory (Mlb)
Mount Milligan
3.9
3.1
2.4
3.2
0.8
—
Nine Months Ended
September 30, 2024
Nine Months Ended
September 30, 2023
Gold Stream
Purchases (oz)
Sales (oz)
Purchases (oz)
Sales (oz)
Mount Milligan
47,100
46,200
44,200
44,000
Pueblo Viejo
18,700
18,900
19,200
22,100
Andacollo
15,900
14,100
18,300
18,500
Other
38,100
38,800
35,900
35,400
Total
119,800
118,000
117,600
120,000
Silver Stream
Purchases (oz)
Sales (oz)
Purchases (oz)
Sales (oz)
Khoemacau
868,400
902,700
1,141,200
1,163,100
Pueblo Viejo1
640,500
773,900
684,100
850,800
Other
243,500
239,800
205,800
208,800
Total
1,752,400
1,916,400
2,031,100
2,222,700
Copper Stream
Purchases (Mlb)
Sales (Mlb)
Purchases (Mlb)
Sales (Mlb)
Mount Milligan
9.8
9.0
8.4
9.4
1
Silver stream purchases do not include
115,600 ounces of silver permitted to be deferred in the three
month period ending September 30, 2024, and 381,700 ounces of
silver permitted to be deferred in the nine month period ending
September 30, 2024, based on the terms of the Pueblo Viejo stream
agreement. Total deferred deliveries were approximately 1.2 million
ounces at September 30, 2024, and the timing for the delivery of
the entire deferred amount is uncertain.
ROYAL GOLD, INC.
Consolidated Balance Sheets
(Unaudited, in thousands except share
data)
September 30, 2024
December 31, 2023
ASSETS
Cash and equivalents
$
127,882
$
104,167
Royalty receivables
50,118
48,884
Income tax receivable
10,190
2,676
Stream inventory
11,620
9,788
Prepaid expenses and other
2,295
1,911
Total current assets
202,105
167,426
Stream and royalty interests, net
3,021,324
3,075,574
Other assets
78,196
118,057
Total assets
$
3,301,625
$
3,361,057
LIABILITIES
Accounts payable
$
13,245
$
11,441
Dividends payable
26,320
26,292
Income tax payable
30,386
15,557
Other current liabilities
16,372
19,132
Total current liabilities
86,323
72,422
Debt
—
245,967
Deferred tax liabilities
132,857
134,299
Mount Milligan deferred liability
25,000
—
Other liabilities
6,517
7,728
Total liabilities
250,697
460,416
Commitments and contingencies
EQUITY
Preferred stock, $.01 par value,
10,000,000 shares authorized; and 0 shares issued
—
—
Common stock, $.01 par value, 200,000,000
shares authorized; and 65,689,357 and 65,631,760 shares
outstanding, respectively
657
656
Additional paid-in capital
2,225,788
2,221,039
Accumulated earnings
812,192
666,522
Total Royal Gold stockholders’ equity
3,038,637
2,888,217
Non-controlling interests
12,291
12,424
Total equity
3,050,928
2,900,641
Total liabilities and equity
$
3,301,625
$
3,361,057
ROYAL GOLD, INC.
Consolidated Statements of Operations
and Comprehensive Income
(Unaudited, in thousands except share
data)
Three Months Ended
Nine Months Ended
September 30, 2024
September 30, 2023
September 30, 2024
September 30, 2023
Revenue
$
193,837
$
138,617
$
516,835
$
453,051
Costs and expenses
Cost of sales (excludes depreciation,
depletion and amortization)
27,192
21,351
73,116
69,738
General and administrative
10,102
9,927
32,025
30,020
Production taxes
1,520
1,671
4,550
4,934
Depreciation, depletion and
amortization
36,177
40,106
110,689
124,847
Total costs and expenses
74,991
73,055
220,380
229,539
Operating income
118,846
65,562
296,455
223,512
Fair value changes in equity
securities
(425
)
(462
)
(42
)
(171
)
Interest and other income
626
2,436
4,410
7,348
Interest and other expense
(1,207
)
(7,285
)
(8,330
)
(24,867
)
Income before income taxes
117,840
60,251
292,493
205,822
Income tax expense
(21,510
)
(10,752
)
(67,535
)
(28,652
)
Net income and comprehensive income
96,330
49,499
224,958
177,170
Net income and comprehensive income
attributable to non-controlling interests
(88
)
(162
)
(343
)
(509
)
Net income and comprehensive income
attributable to Royal Gold common stockholders
$
96,242
$
49,337
$
224,615
$
176,661
Net income per share attributable to Royal
Gold common stockholders:
Basic earnings per share
$
1.46
$
0.75
$
3.41
$
2.69
Basic weighted average shares
outstanding
65,670,381
65,619,406
65,652,934
65,606,681
Diluted earnings per share
$
1.46
$
0.75
$
3.41
$
2.68
Diluted weighted average shares
outstanding
65,795,014
65,757,076
65,767,668
65,743,114
Cash dividends declared per common
share
$
0.40
$
0.375
$
1.20
$
1.125
ROYAL GOLD, INC.
Consolidated Statements of Cash
Flows
(Unaudited, in thousands)
Three Months Ended
Nine Months Ended
September 30, 2024
September 30, 2023
September 30, 2024
September 30, 2023
Cash flows from operating activities:
Net income and comprehensive income
$
96,331
$
49,499
$
224,958
$
177,170
Adjustments to reconcile net income and
comprehensive income to net cash provided by operating
activities:
Depreciation, depletion and
amortization
36,177
40,106
110,689
124,847
Non-cash employee stock compensation
expense
2,977
2,763
9,313
7,342
Fair value changes in equity
securities
425
462
42
171
Deferred tax benefit
1,489
1,128
4,908
(6,011
)
Other
233
147
717
592
Changes in assets and liabilities:
Royalty receivables
(9,780
)
1,730
(1,234
)
14,678
Stream inventory
(716
)
807
(1,832
)
2,805
Income tax receivable
(4,552
)
(4,646
)
(7,513
)
(11,182
)
Prepaid expenses and other assets
710
(726
)
11,240
(3,367
)
Accounts payable
18
74
1,804
1,940
Income tax payable
12,283
6,890
14,830
6,428
Mount Milligan deferred liability
—
—
25,000
—
Other liabilities
1,056
(112
)
(4,472
)
(709
)
Net cash provided by operating
activities
$
136,651
$
98,122
$
388,450
$
314,704
Cash flows from investing activities:
Acquisition of stream and royalty
interests
(3,427
)
(8
)
(55,683
)
(2,678
)
Proceeds from Khoemacau debt facility
—
—
25,000
—
Other
(6
)
2
(91
)
(149
)
Net cash used in investing activities
$
(3,433
)
$
(6
)
$
(30,774
)
$
(2,827
)
Cash flows from financing activities:
Repayment of debt
(50,000
)
(75,000
)
(250,000
)
(250,000
)
Net payments from issuance of common
stock
(3,132
)
(1,626
)
(4,564
)
(1,373
)
Common stock dividends
(26,314
)
(24,647
)
(78,917
)
(73,918
)
Other
(122
)
(99
)
(480
)
(2,271
)
Net cash used in financing activities
$
(79,568
)
$
(101,372
)
$
(333,961
)
$
(327,562
)
Net increase (decrease) in cash and
equivalents
53,650
(3,256
)
23,715
(15,685
)
Cash and equivalents at beginning of
period
$
74,232
$
106,157
104,167
118,586
Cash and equivalents at end of period
$
127,882
$
102,901
$
127,882
$
102,901
Schedule A – Non-GAAP Financial Measures and
Certain Other Measures
Overview of non-GAAP financial measures:
Non-GAAP financial measures are intended to provide additional
information only and do not have any standard meaning prescribed by
U.S. generally accepted accounting principles (“GAAP”). These
measures should not be considered in isolation or as a substitute
for measures prepared in accordance with GAAP. In addition, because
the presentation of these non-GAAP financial measures varies among
companies, these non-GAAP financial measures may not be comparable
to similarly titled measures used by other companies.
We have provided below reconciliations of our non-GAAP financial
measures to the comparable GAAP measures. We believe these non-GAAP
financial measures provide useful information to investors for
analysis of our business. We use these non-GAAP financial measures
to compare period-over-period performance on a consistent basis and
when planning and forecasting for future periods. We believe these
non-GAAP financial measures are used by professional research
analysts and others in the valuation, comparison and investment
recommendations of companies in our industry. Many investors use
the published research reports of these professional research
analysts and others in making investment decisions. The adjustments
made to calculate our non-GAAP financial measures are subjective
and involve significant management judgement. Non-GAAP financial
measures used by management in this release or elsewhere include
the following:
- Adjusted earnings before interest, taxes, depreciation,
depletion and amortization, or adjusted EBITDA, is a non-GAAP
financial measure that is calculated by the Company as net income
adjusted for certain items that impact the comparability of results
from period to period, as set forth in the reconciliation below.
The net income and adjusted EBITDA margins represent net income or
adjusted EBITDA divided by total revenue. We consider adjusted
EBITDA to be useful because the measure reflects our operating
performance before the effects of certain non-cash items and other
items that we believe are not indicative of our core
operations.
- Net debt (or net cash) is a non-GAAP financial measure that is
calculated by the Company as debt (excluding debt issuance costs)
as of a date minus cash and equivalents for that same date. Net
debt (or net cash) to trailing twelve months (TTM) adjusted EBITDA
is a non-GAAP financial measure that is calculated by the Company
as net debt (or net cash) as of a date divided by the TTM adjusted
EBITDA (as defined above) ending on that date. We believe that
these measures are important to monitor leverage and evaluate the
balance sheet. Cash and equivalents are subtracted from the GAAP
measure because they could be used to reduce our debt obligations.
A limitation associated with using net debt (or net cash) is that
it subtracts cash and equivalents and therefore may imply that
there is less Company debt than the most comparable GAAP measure
indicates. We believe that investors may find these measures useful
to monitor leverage and evaluate the balance sheet.
- Adjusted net income and adjusted net income per share are
non-GAAP financial measures that are calculated by the Company as
net income and net income per share adjusted for certain items that
impact the comparability of results from period to period, as set
forth in the reconciliations below. We consider these non-GAAP
financial measures to be useful because they allow for
period-to-period comparisons of our operating results excluding
items that we believe are not indicative of our fundamental ongoing
operations. The tax effect of adjustments is computed by applying
the statutory tax rate in the applicable jurisdictions to the
income or expense items that are adjusted in the period presented.
If a valuation allowance exists, the rate applied is zero.
- Free cash flow is a non-GAAP financial measure that is
calculated by the Company as net cash provided by operating
activities for a period minus acquisition of stream and royalty
interests for that same period. We believe that free cash flow
represents an additional way of viewing liquidity as it is adjusted
for contractual investments made during such period. Free cash flow
does not represent the residual cash flow available for
discretionary expenditures. We believe it is important to view free
cash flow as a complement to our consolidated statements of cash
flows.
- Cash general and administrative expense, or cash G&A, is a
non-GAAP financial measure that is calculated by the Company as
general and administrative expenses for a period minus non-cash
employee stock compensation expense for the same period. We believe
that cash G&A is useful as an indicator of overhead efficiency
without regard to non-cash expenses associated with employee stock
compensation.
Reconciliation of non-GAAP financial
measures to U.S. GAAP measures
Adjusted EBITDA, Adjusted EBITDA
margin, net debt, and net debt to TTM adjusted EBITDA:
Three Months Ended
September 30,
Nine Months Ended
September 30,
(amounts in thousands)
2024
2023
2024
2023
Net income and comprehensive income
96,330
$
49,499
$
224,958
$
177,170
Depreciation, depletion and
amortization
36,177
40,106
110,689
124,847
Non-cash employee stock compensation
2,977
2,763
9,313
7,342
Fair value changes in equity
securities
425
462
42
171
Other non-recurring adjustments
—
—
—
2,440
Interest and other, net
581
4,849
3,920
17,519
Income tax expense
21,510
10,752
67,535
28,652
Non-controlling interests in operating
income of consolidated subsidiaries
(88
)
(162
)
(343
)
(509
)
Adjusted EBITDA
$
157,912
$
108,269
$
416,114
$
357,632
Net income margin
50
%
36
%
44
%
39
%
Adjusted EBITDA margin
81
%
78
%
81
%
79
%
Three Months Ended
September 30,
June 30,
March 31,
December 31,
(amounts in thousands)
2024
2024
2024
2023
Net income and comprehensive income
$
96,330
$
81,320
$
47,309
$
62,963
Depreciation, depletion and
amortization
36,177
35,747
38,765
40,090
Non-cash employee stock compensation
2,977
3,348
2,988
2,354
Fair value changes in equity
securities
425
63
(447
)
(25
)
Interest and other, net
581
1,709
1,630
3,396
Income tax expense
21,510
18,991
27,033
13,356
Non-controlling interests in operating
income of consolidated subsidiaries
(88
)
(112
)
(143
)
(183
)
Adjusted EBITDA
$
157,912
$
141,066
$
117,135
$
121,951
Net income margin
50
%
47
%
32
%
41
%
Adjusted EBITDA margin
81
%
81
%
79
%
80
%
TTM adjusted EBITDA
$
538,064
Debt
$
—
Cash and equivalents
(127,882
)
Net debt / (cash)
$
(127,882
)
Net debt / (cash) to TTM adjusted
EBITDA
(0.24)x
Cash G&A:
Three Months Ended
September 30,
Nine Months Ended
September 30,
(amounts in thousands)
2024
2023
2024
2023
General and administrative expense
$
10,102
$
9,927
$
32,025
$
30,020
Non-cash employee stock compensation
(2,977
)
(2,763
)
(9,313
)
(7,342
)
Cash G&A
$
7,125
$
7,164
$
22,712
$
22,678
Three Months Ended
September 30,
June 30,
March 31,
December 31,
(amounts in thousands)
2024
2024
2024
2023
General and administrative expense
$
10,102
$
10,511
$
11,412
$
9,741
Non-cash employee stock compensation
(2,977
)
(3,348
)
(2,988
)
(2,354
)
Cash G&A
$
7,125
$
7,163
$
8,424
$
7,387
TTM cash G&A
$
30,099
Adjusted net income and adjusted net
income per share:
Three Months Ended
September 30,
Nine Months Ended
September 30,
(amounts in thousands, except per share
data)
2024
2023
2024
2023
Net income and comprehensive income
attributable to Royal Gold common stockholders
$
96,242
$
49,337
$
224,615
$
176,661
Fair value changes in equity
securities
425
462
42
171
Other non-recurring adjustments
—
—
—
2,440
Discrete tax expense related to Mount
Milligan Cost Support Agreement
—
—
13,008
—
Other discrete tax expense (benefit)
—
—
1,279
(8,462
)
Tax effect of adjustments
(113
)
(122
)
(11
)
(692
)
Adjusted net income and comprehensive
income attributable to Royal Gold common stockholders
$
96,554
$
49,677
$
238,933
$
170,118
Net income attributable to Royal Gold
common stockholders per diluted share
$
1.46
$
0.75
$
3.41
$
2.68
Fair value changes in equity
securities
0.01
0.01
—
—
Other non-recurring adjustments
—
—
—
0.04
Discrete tax expense related to Mount
Milligan Cost Support Agreement
—
—
0.20
—
Other discrete tax expense (benefit)
—
—
0.02
(0.13
)
Tax effect of adjustments
$
—
$
—
$
—
$
(0.01
)
Adjusted net income attributable to Royal
Gold common stockholders per diluted share
$
1.47
$
0.76
$
3.63
$
2.58
Free cash flow:
Three Months Ended
September 30,
Nine Months Ended
September 30,
(amounts in thousands)
2024
2023
2024
2023
Net cash provided by operating
activities
$
136,651
$
98,122
$
388,450
$
314,704
Acquisition of stream and royalty
interests
(3,427
)
(8
)
(55,683
)
(2,678
)
Free cash flow
$
133,224
$
98,114
$
332,767
$
312,026
Net cash used in investing activities
$
(3,433
)
$
(6
)
$
(30,774
)
$
(2,827
)
Net cash used in financing activities
$
(79,568
)
$
(101,372
)
$
(333,961
)
$
(327,562
)
Other measures
We use certain other measures in managing and evaluating our
business. We believe these measures may provide useful information
to investors for analysis of our business. We use these measures to
compare period-over-period performance and liquidity on a
consistent basis and when planning and forecasting for future
periods. We believe these measures are used by professional
research analysts and others in the valuation, comparison, and
investment recommendations of companies in our industry. Many
investors use the published research reports of these professional
research analysts and others in making investment decisions. Other
measures used by management in this release and elsewhere include
the following:
- Gold equivalent ounces, or GEOs, is calculated by the Company
as revenue (in total or by reportable segment) for a period divided
by the average LBMA PM fixing price for gold for that same
period.
- Depreciation, depletion, and amortization, or DD&A, per GEO
is calculated by the Company as depreciation, depletion, and
amortization for a period divided by GEOs (as defined above) for
that same period.
- Working capital is calculated by the Company as current assets
as of a date minus current liabilities as of that same date.
Liquidity is calculated by the Company as working capital plus
available capacity under the Company’s revolving credit
facility.
- Dividend payout ratio is calculated by the Company as dividends
paid during a period divided by net cash provided by operating
activities for that same period.
- Operating margin is calculated by the Company as operating
income for a period divided by revenue for that same period.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20241106120801/en/
Alistair Baker Senior Vice President, Investor Relations and
Business Development (303) 573-1660
Royal Gold (NASDAQ:RGLD)
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