Royal Gold, Inc. (NASDAQ: RGLD) (together with its
subsidiaries, “Royal Gold” or the “Company,” “we” or “our”) reports
net income of $28.8 million, or $0.44 per share, on revenue of
$109.8 million in its fiscal third quarter ended March 31, 2019
(“third quarter”).
Third Quarter Key Metrics Compared to Prior Year
Quarter:
- Revenue of $109.8 million, a decrease
of 5.3%
- Operating cash flow of $77.4 million, a
decrease of 25.9%1
- Volume of 84,200 GEOs2, a decrease
of 3.6%
- Dividends paid of $17.4 million, an
increase of 6.1%
- Average price of $1,304 per gold ounce,
a decrease of 1.9%
“We delivered another solid quarter with several positive
developments in our portfolio,” commented Tony Jensen, President
and CEO. “Most notably, we were pleased that amendments were
granted to the Mount Milligan environmental assessment certificate
that should relieve water supply constraints on mill operations,
which Centerra expects to return to full capacity starting mid-May.
We were also pleased to see that improvements at Rainy River
continued, with mill availability increasing to 89% and gold
recovery at 90% for the quarter.
“In February, we announced an agreement to acquire a silver
stream on the Khoemacau Copper Project in Botswana. This is a
high-quality and long-life development project that will fit nicely
into our portfolio and add another component of growth to our
portfolio over the next several years. We expect to fund this
acquisition from cash flow or the currently undrawn $1 billion
revolving credit facility, which will leave us well positioned with
a strong balance sheet as we evaluate more opportunities in what is
currently an active business development environment.”
__________________
1 Operating cash flow for the fiscal third quarter ended March
31, 2018 included a one-time cash refund of a $20.8 million tax
receivable from the Servicio de Impuestos Internos, the Chilean tax
authority.
2 Gold Equivalent Ounces (“GEOs”) are calculated as revenue
divided by the average gold price for the same period. GEOs, net of
stream payments, were 69,600 in the third quarter, compared to
71,200 in the prior year third quarter.
Recent Developments
Agreement to Acquire Silver Stream on Khoemacau Copper
Project
On February 25, 2019, Royal Gold, through its wholly owned
subsidiary RGLD Gold AG, announced the acquisition of a silver
stream on the Khoemacau Copper Project (“Khoemacau”) in Botswana
with Khoemacau Copper Mining (Pty.) Limited (“KCM”), a wholly owned
subsidiary of Cupric Canyon Capital LP (together with all its
subsidiaries including KCM, “Cupric”), a private company owned by
management and funds advised by Global Natural Resource Investments
(“GNRI”).
Khoemacau is an advanced stage copper-silver project. Cupric has
assembled an experienced board, executive team and project team to
develop Khoemacau, and has obtained all permits and approvals
required for construction to proceed. Cupric envisions a 21 year
mine life, averaging payable production of approximately 62,000
tonnes of copper and 1.9 million ounces of silver per year. Silver
represents approximately 7% of the mine’s anticipated revenues at
current metal prices.
Royal Gold will make an advance payment of $212 million for 80%
of the silver produced from Khoemacau until certain delivery
thresholds are met (the “Silver Stream”), and at Cupric’s option,
up to an additional $53 million for up to the remaining 20% of the
silver produced (the “Option Stream”). Royal Gold will pay 20% of
the spot silver price for each ounce delivered. Royal Gold will
also make available up to $25 million of subordinated debt towards
the end of project development to fund potential cost overruns,
subject to various conditions (the “Overrun Facility”). Cupric’s
development plans indicate that Royal Gold could expect average
annual silver deliveries of 1.5 million ounces at a stream rate of
80%, or 1.9 million ounces based on a stream rate of 100% if Cupric
exercises the entire Option Stream. Initial deliveries are expected
to start in the first half of 2021.
Before accounting for the Silver Stream and Option Stream,
Cupric forecasts life of mine by-product C1 plus sustaining capital
costs of approximately $1.71 per pound of copper on a by-product
basis at a silver price of $16.00 per ounce, placing the operation
at approximately the 50th percentile on the global copper cost
curve.
Mount Milligan
On February 27, 2019, Centerra Gold Inc. (“Centerra”) announced
that it received an amendment to the Mount Milligan environmental
assessment certificate that permits access to additional sources of
surface water and groundwater. According to Centerra, Mount
Milligan will be permitted to use water at set rates from Philip
Lake 1, Rainbow Creek and Meadows Creek until November 30, 2021, as
well as water from groundwater sources within a six kilometer
radius of the mine for the life of mine. Mount Milligan reported
that it has upgraded its water pumping infrastructure and commenced
accessing water from the newly permitted sources at the beginning
of April, 2019. Mill throughput was limited to 32,000 tonnes per
operating day in the first calendar quarter of 2019, and has
increased slowly as water levels increased in the tailings
facility. Centerra expects mill throughput to be at full capacity
of 55,000 tonnes per day starting mid-May as additional water is
captured during the pending spring melt, and to remain at that
level throughout the remainder of 2019.
With respect to the long-term water supply plan, Centerra
continues to work with relevant stakeholders to identify and
evaluate water sources for the remainder of the mine life. Centerra
expects formal applications and government review to commence later
this calendar year. Centerra also expects that the long-term
source, or sources, should be available after November 2021, for
the entire mine life.
For the full calendar year, Centerra continues to expect Mount
Milligan’s payable gold production to range from 155,000 to 175,000
ounces, and payable copper production to range from 65 to 75
million pounds.
Rainy River
Improved operating performance at the Rainy River mine, owned
and operated by New Gold Inc. (“New Gold”), continued during the
quarter. Quarterly gold production was approximately 62,000 ounces,
with full calendar year production guidance of 245,000 to 270,000
ounces. Although ice buildup in the crushed ore stockpile caused
mill throughput to track below the annual target of 22,000 to
24,000 tonnes per day, New Gold reported average mill throughput
returned to target levels at the end of the quarter. Mill
availability has been improving and reached a record 89% for the
quarter, with 95% achieved in March, despite planned downtime to
complete repairs. Gold recovery also improved, with an average 90%
for the quarter. New Gold expects recovery to continue to improve,
and average 90 to 92% for the calendar year.
New Gold is undertaking an optimization study for Rainy River
during calendar 2019 with the objective of increasing cash flow
generation by focusing on medium and high grade ore. Potential
scenarios for underground development are also being evaluated.
This work is to be completed with an updated mine plan in the
fourth quarter of this calendar year.
Subsequent to the end of the quarter, on May 1, 2019, New Gold
announced that a buildup of excess water in the tailings facility
from snowmelt caused a temporary suspension of milling operations
at Rainy River on April 24. Mining and crushing operations are
continuing and ore is being stockpiled during the suspension. New
Gold is managing the excess water and expects full mill operations
to resume within five days of the announcement of the suspension
depending on precipitation levels over the same period.
Peñasquito
Subsequent to the end of the quarter, on April 29, 2019, Newmont
Goldcorp reported a temporary suspension of operations at
Peñasquito due to a blockade by a trucking contractor and certain
community leaders. Newmont Goldcorp reported that it is pursuing
legal avenues and is working with government authorities to resolve
the situation, but did not indicate what effect this suspension is
expected to have on calendar 2019 production.
Third Quarter 2019 Overview
Third quarter revenue was $109.8 million compared to $116.0
million in the prior year quarter, with stream revenue totaling
$77.8 million and royalty revenue totaling $32.0 million. The
decrease in total revenue for the third quarter compared to the
prior year quarter was due to lower average gold, silver and copper
prices, as well as lower stream revenue primarily attributable to a
decrease in gold and copper sales at Mount Milligan. The lower
stream sales at Mount Milligan were partially offset by higher gold
and silver sales at Pueblo Viejo and higher gold sales at Andacollo
due to timing of deliveries.
Third quarter cost of sales was approximately
$19.1 million, compared to $21.3 million in the prior
year quarter. The decrease was primarily due to decreased gold and
copper sales from Mount Milligan. 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.
General and administrative expenses decreased to
$6.8 million in the third quarter from $8.1 million
during the prior year quarter. The decrease during the current
period was primarily due to lower legal costs resulting from
settlement of the Voisey’s Bay royalty calculation dispute.
On July 1, 2018, the Company adopted new Accounting Standards
Update guidance which impacts how changes in fair value of equity
securities are recognized at each reporting period. As a result,
for the three months ended March 31, 2019, the Company recognized a
gain of $1.8 million on changes in fair value of equity securities
related to the holdings in Contango ORE, Inc. and Rubicon Minerals
Corporation. The new guidance will increase earnings volatility at
each reporting period.
The Company recognized a third quarter income tax expense of
$9.4 million, compared to a benefit of $45.9 million during
the prior year quarter, which resulted in an effective tax rate for
the third quarter of 24.7% compared to 22.9% for the prior year
quarter. The increase in the effective tax rate was primarily
related to lower discrete benefits recorded in the current quarter
as compared to the prior year quarter, which included a tax benefit
related to impairment charges.
As of March 31, 2019, the Company had current assets of
$265.4 million compared to current liabilities of
$49.3 million, resulting in working capital of
$216.1 million. This compares to current assets of
$125.8 million and current liabilities of $51.4 million
at June 30, 2018, resulting in working capital of $74.4
million.
During the third quarter, liquidity needs were met from
$90.7 million in net revenue and available cash resources. As
of March 31, 2019, the Company had no amounts outstanding
and the full $1 billion available under its revolving credit
facility. Working capital, combined with the Company’s undrawn
revolving credit facility, resulted in approximately $1.2 billion
of total liquidity as of March 31, 2019.
In June 2012, the Company completed an offering of $370 million
aggregate principal amount of 2.875% convertible senior notes due
2019 (“2019 Notes”). The 2019 Notes mature on June 15, 2019, and
the Company will settle the principal amount of each 2019 Note in
cash and settle any excess conversion value in shares, plus cash in
lieu of fractional shares.
Third quarter cash flow from operations was $77.4 million,
compared to $104.6 million in the prior year quarter. The decrease
over the prior year quarter was primarily due to lower proceeds
received in the current quarter of $7.0 million from stream and
royalty interests, net of production taxes and cost of sales, and
the receipt of an income tax receivable from a foreign taxing
authority of $20.8 million in the prior year quarter.
Property Highlights
A summary of third quarter and historical production reported by
operators of the Company’s principal stream and royalty properties
can be found on Tables 1 and 2. Calendar year 2019 operator
production estimates for these properties compared to actual
production at those properties through March 31, 2019 can be found
on Table 3. Results of the streaming business for the third
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 third 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
March 31, 2019, the Company owns interests on 191 properties on
five continents, including interests on 43 producing mines and 17
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.
Note: Management’s conference call reviewing the third
quarter results will be held on Thursday, May 2, 2019, 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.
Third Quarter Earnings Call
Information:
Dial-In Numbers: 855-209-8260 (U.S.); toll free 855-669-9657
(Canada); toll free 412-542-4106 (International) Conference Title:
Royal Gold Webcast URL:
www.royalgold.com under
Investors, Events & Presentations
Cautionary “Safe Harbor” Statement Under the Private
Securities Litigation Reform Act of 1995: With the exception of
historical matters, the matters discussed in this press release are
forward-looking statements that involve risks and uncertainties
that could cause actual results to differ materially from
projections or estimates contained herein. Such forward-looking
statements include statements about solid quarterly results and
positive portfolio developments; the Khoemacau Copper Project,
including the new silver stream fitting into the Company’s
portfolio and adding growth, funding for advance payments, being
well-positioned to evaluate opportunities in an active business
development environment, mine life, average annual payable copper
and silver production, silver contribution to mine revenue,
expected initial and annual silver deliveries and life of mine cash
and capital costs; Mount Milligan, including permit amendments
allowing near- and long-term access to additional surface and
groundwater, expectations for mill operations returning to full
capacity and average mill throughput through 2019, work to secure
water sources for the life of the mine and expected gold and copper
production through 2019; Rainy River, including continued operating
improvements, expectations for improved recoveries at expected
rates, and results of studies to increase cash flow generation,
evaluations of underground development, completing an updated mine
plan and expectations to resume full mill operations after
suspension; effect of production suspension at Peñasquito; the Peak
Gold Project, including efforts to identify options with respect to
the Company’s interests; potential future earnings volatility
caused by accounting guidance on recognition of changes in equity
securities fair value; changes in taxes and tax rates; expectations
to settle the Company’s 2019 Notes primarily in cash from the
revolving credit facility; and operators’ estimated and actual
production for calendar year 2019 and future years, and their
estimates of reserves and mineralized material. Net gold and metal
reserves attributable to Royal Gold’s stream, royalty and other
interests are subject to certain assumptions and, like reserves, do
not reflect actual ounces that will be produced. Like any stream,
royalty or similar interest on a non-producing or
not-yet-in-development project, our interests on development
projects are subject to certain risks, such as the ability of the
operators to bring the projects into production and operate in
accordance with their feasibility studies or other technical
studies and mine plans, and the ability of Royal Gold to make
accurate assumptions regarding valuation and timing and amount of
payments. In addition, many of our interests are subject to risks
associated with conducting business in a foreign country, including
application of foreign laws to contract and other disputes, foreign
environmental laws and enforcement and uncertain political and
economic environments. Factors that could cause actual results to
differ materially from projections include, among others: precious
metals, copper and nickel prices; performance of and production at
the Company's stream and royalty properties; the ability of
operators to finance project construction to completion and bring
projects into production as expected, including development stage
mining properties, mine and mill expansion projects and other
development and construction projects; operators’ delays in
securing or inability to secure or maintain necessary governmental
permits; decisions and activities of the operators of the Company's
stream and royalty properties; unanticipated grade, environmental,
geological, seismic, metallurgical, processing, liquidity or other
problems the operators of the Company’s stream and royalty
properties may encounter; operators’ inability to access sufficient
raw materials, water or power; changes in operators’ project
parameters as plans continue to be refined; changes in estimates of
reserves and mineralization by the operators of the Company’s
stream and royalty properties; contests to the Company’s stream and
royalty interests and title and other defects in the properties
where the Company holds stream and royalty interests; errors or
disputes in calculating stream deliveries and royalty payments, or
deliveries or payments not made in accordance with stream and
royalty agreements; economic and market conditions; changes in laws
governing the Company and its stream and royalty interests or the
operators of the properties subject to such interests, and other
subsequent events; as well as other factors described in the
Company's Annual Report on Form 10-K, Quarterly Reports on Form
10-Q, and other filings with the Securities and Exchange
Commission. Most of these factors are beyond the Company’s ability
to predict or control. The Company disclaims any obligation to
update any forward-looking statement made herein. Readers are
cautioned not to put undue reliance on forward-looking
statements.
Statement Regarding Third-Party Information: Certain
information provided in this press release, including production
estimates for calendar 2019, 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
Copper Project mine life, average annual payable copper and silver
production, silver contribution to mine revenue, cost information
and initial deliveries of silver under the streaming agreement 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
Third Quarter Fiscal 2019
Revenue and Operators’ Reported
Production for Principal Stream and Royalty Interests
(In thousands, except reported
production in oz. and lbs.)
Three Months Ended Three Months Ended March
31, 2019 March 31, 2018 Reported Reported
Stream/Royalty Metal(s) Revenue
Production(1) Revenue
Production(1) Stream: Mount Milligan $ 26,938
$ 47,807 Gold 15,200 oz. 25,800 oz. Copper 2.6 Mlbs. 4.3 Mlbs.
Pueblo Viejo $ 20,787 $ 15,734 Gold 10,400 oz. 8,500 oz. Silver
469,000 oz. 260,800 oz. Andacollo Gold $ 15,638 12,000 oz. $ 7,186
5,400 oz. Wassa and Prestea Gold $ 7,328 5,600 oz. $ 8,350 6,300
oz. Other(2) $ 7,074 $ 3,902 Gold 5,000 oz. 2,800 oz. Silver
40,800 oz. 11,100 oz. Total stream revenue $ 77,765 $ 82,979
Royalty: Peñasquito $ 4,465 $ 6,452 Gold 37,300 oz.
91,200 oz. Silver 4.9 Moz. 5.0 Moz. Lead 34.5 Mlbs. 26.0 Mlbs. Zinc
72.8 Mlbs. 88.0 Mlbs. Cortez Gold $ 4,127 32,700 oz. $ 1,901 18,900
oz. Other(2) Various $ 23,421 N/A $ 24,651 N/A Total royalty
revenue $ 32,013 $ 33,004
Total Revenue $
109,778 $ 115,983
Nine
Months Ended Nine Months Ended March 31, 2019
March 31, 2018 Reported Reported
Stream/Royalty Metal(s) Revenue
Production(1) Revenue
Production(1) Stream: Mount Milligan $ 63,954
$ 101,390 Gold 38,500 oz. 57,100 oz. Copper 5.8 Mlbs. 8.7 Mlbs.
Pueblo Viejo $ 58,504 $ 67,492 Gold 28,500 oz. 35,900 oz. Silver
1.5 Moz. 1.3 Moz. Andacollo Gold $ 51,016 40,900 oz. $ 41,124
32,100 oz. Wassa and Prestea Gold $ 24,939 20,000 oz. $ 26,049
20,200 oz. Other(2) $ 17,067 $ 4,973 Gold 12,300 oz. 3,600 oz.
Silver 108,300 oz. 11,100 oz. Total
stream revenue $ 215,480 $ 241,028
Royalty:
Peñasquito $ 12,763 $ 20,439 Gold 141,000 oz. 296,200 oz. Silver
14.1 Moz. 15.9 Moz. Lead 100.4 Mlbs. 95.5 Mlbs. Zinc 220.1 Mlbs.
274.8 Mlbs. Cortez Gold $ 7,066 59,700 oz. $ 7,823 73,800 oz.
Other(2) Various $ 72,053 N/A $ 73,517 N/A Total royalty revenue $
91,882 $ 101,779
Total revenue $ 307,362
$ 342,807
TABLE 2
Operators’ Historical
Production
Reported
Production For The Quarter Ended1 Property
Operator Stream/Royalty Metal(s)
Mar. 31, 2019 Dec. 31, 2018
Sep. 30, 2018 Jun. 30, 2018 Mar. 31,
2018 Stream:
Mount Milligan Centerra 35% of payable
gold Gold 15,200 oz. 17,700 oz.
5,500 oz. 20,700 oz. 25,800
oz. 18.75% of payable copper
Copper 2.6 Mlbs. 2.4 Mlbs.
.8 Mlbs. 1.6 Mlbs. 4.3
Mlbs. Pueblo Viejo Barrick (60%) 7.5% of gold
produced up to 990,000 ounces; 3.75% thereafter Gold
10,400 oz. 8,900 oz. 9,200 oz.
13,200 oz. 8,500 oz.
75% of payable silver up to 50 million ounces; 37.5%
thereafter Silver 469,000 oz. 509,500
oz. 540,200 oz. 616,300 oz.
260,800 oz. Andacollo Teck 100% of gold
produced Gold 12,000 oz. 6,200
oz. 22,700 oz. 12,400 oz. 5,400
oz. Wassa and Prestea Golden Star 10.5% of
gold produced up to 240,000 ounces; 5.5% thereafter Gold
5,600 oz. 7,800 oz. 6,500
oz. 2,800 oz. 6,300 oz.
Royalty:
Peñasquito
Newmont Goldcorp 2.0% NSR
Gold
37,300 oz. 53,400 oz. 50,300
oz. 79,600 oz. 91,200 oz. Silver
4.9 Moz. 5.0 Moz. 4.2
Moz. 5.0 Moz. 5.0 Moz. Lead 34.5
Mlbs. 36.1 Mlbs. 29.9 Mlbs.
26.6 Mlbs. 26.0 Mlbs.
Zinc 72.8 Mlbs.
83.1 Mlbs. 64.2 Mlbs. 73.7 Mlbs.
88.0 Mlbs. Cortez Barrick GSR1, GSR2,
GSR3, NVR1 Gold 32,700 oz. 19,900
oz. 7,000 oz. 3,900 oz.
18,900 oz.
_____________________
FOOTNOTES
Tables 1 and 2
1
Reported production for stream interests relates to the Company’s
actual metal sales, and for royalty interests relates to the amount
of metal sales that are subject to the Company’s royalty interests
for the stated period as reported to the Company by operators of
the mines.
2
Individually, no stream or royalty included within the “Other”
category contributed greater than 5% of the Company’s total revenue
for either period, except Rainy River for the nine months ended
March 31, 2019. The “Other” category for streams is the Rainy River
gold and silver stream.
TABLE 3
Calendar 2019 Operator’s Production
Estimate vs Actual Production
Calendar 2019 Operator’s Production Calendar 2019
Operator’s Production Estimate(1)
Actual(2,3) Gold Silver Base
Metals Gold Silver Base Metals
Stream/Royalty (oz.) (oz.) (lbs.)
(oz.) (oz.) (lbs.) Stream: Andacollo(4)
62,000 13,200 Mount Milligan(5) 155,000 - 175,000 33,300 Copper 65
- 75 million 11.4 million Pueblo Viejo(6) 550,000 - 600,000 N/A
148,000 N/A Wassa and Prestea(7) 220,000 - 240,000 N/A
Royalty: Cortez GSR1 102,000 28,500 Cortez GSR2 98,000 4,100
Cortez GSR3 199,000 32,600 Cortez NVR1 168,200 30,700 Peñasquito(8)
370,000 - 400,000 N/A N/A N/A Lead 240 - 290 million N/A Zinc 390 -
450 million N/A
_________________
1
Production estimates received from the operators are for
calendar 2019. There can be no assurance that production estimates
received from the operators will be achieved. Please refer to the
cautionary language regarding forward-looking statements and the
statement regarding third party information contained in this press
release, as well as the Risk Factors identified in Part I, Item 1A,
of the Company’s Fiscal 2019 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, 2019 through March 31, 2019, except for Wassa
and Prestea, and Peñasquito, which are not available at the date of
this press release.
3
Actual production figures for Cortez are based on information
provided to the Company by Barrick, and actual production figures
for Andacollo, Mount Milligan and Pueblo Viejo are the publicly
reported figures of the operators of those properties.
4
The estimated and actual production figures shown for Andacollo are
contained gold in concentrate.
5
The estimated and actual production figures shown for Mount
Milligan are payable gold and copper in concentrate.
6
The estimated and actual production figures shown for Pueblo Viejo
are payable gold in doré and represent Barrick’s 60% interest gold
produced from Pueblo Viejo. The operator did not provide estimated
silver production.
7
The estimated gold production figures shown for Wassa and Prestea
are payable gold in doré.
8
The estimated gold production figures shown for Peñasquito are
payable gold in concentrate and doré. The estimated lead and zinc
production figures shown are payable lead and zinc from
concentrate. The operator did not provide estimated silver
production.
TABLE 4
Stream Summary
Three Months Ended Three Months Ended As
of As of March 31, 2019 March 31, 2018
March 31, 2019 June 30, 2018 Gold Stream
Purchases (oz.) Sales (oz.) Purchases (oz.)
Sales (oz.) Inventory (oz.) Inventory (oz.)
Mount Milligan 23,100 15,200 27,400 25,800 7,900 300 Pueblo Viejo
12,400 10,400 13,200 8,500 12,400 9,200 Andacollo 9,900 12,000
10,000 5,400 2,400 7,400 Wassa and Prestea 5,800 5,600 6,800 6,300
900 3,900 Rainy River 4,400 5,000 2,900 2,800 1,000 800 Total
55,600 48,200 60,300 48,800 24,600 21,600
Three Months
Ended Three Months Ended As of As of
March 31, 2019 March 31, 2018 March 31, 2019
June 30, 2018 Silver Stream Purchases (oz.)
Sales (oz.) Purchases (oz.) Sales (oz.)
Inventory (oz.) Inventory (oz.) Pueblo Viejo 553,000
469,000 616,300 260,800 553,000 540,200 Rainy River 35,700 40,800
41,800 11,100 36,600 32,300 Total 588,700 509,800 658,100 271,900
589,600 572,500
Three Months Ended Three Months
Ended As of As of March 31, 2019 March
31, 2018 March 31, 2019 June 30, 2018 Copper
Stream Purchases (Mlbs.) Sales (Mlbs.)
Purchases (Mlbs.) Sales (Mlbs.) Inventory
(Mlbs.) Inventory (Mlbs.) Mount Milligan 2.5 2.6 3.4 4.3
0.8 —
Nine Months Ended Nine Months Ended
As of As of March 31, 2019 March 31,
2018 March 31, 2019 June 30, 2018 Gold
Stream Purchases (oz.) Sales (oz.) Purchases
(oz.) Sales (oz.) Inventory (oz.) Inventory
(oz.) Mount Milligan 46,100 38,500 63,800 57,100 7,900 300
Andacollo 35,900 41,000 36,500 32,100 2,400 7,400 Pueblo Viejo
31,700 28,500 36,300 35,900 12,400 9,200 Wassa and Prestea 17,000
20,000 20,200 20,200 900 3,900 Rainy River 12,500 12,300 3,900
3,600 1,000 800 Total 143,200 140,300 160,700 148,900 24,600 21,600
Nine Months Ended Nine Months Ended As
of As of March 31, 2019 March 31, 2018
March 31, 2019 June 30, 2018 Silver Stream
Purchases (oz.) Sales (oz.) Purchases (oz.)
Sales (oz.) Inventory (oz.) Inventory (oz.)
Pueblo Viejo 1,531,400 1,518,700 1,346,500 1,267,000 553,000
540,200 Rainy River 112,600 108,300 53,700 11,100 36,600 32,300
Total 1,644,000 1,627,000 1,400,200 1,278,100 589,600 572,500
Nine Months Ended Nine Months Ended As
of As of March 31, 2019 March 31, 2018
March 31, 2019 June 30, 2018 Copper Stream
Purchases (Mlbs.) Sales (Mlbs.) Purchases
(Mlbs.) Sales (Mlbs.) Inventory (Mlbs.)
Inventory (Mlbs.) Mount Milligan 6.6 5.8 8.7 8.7 0.8 —
ROYAL GOLD, INC.
Consolidated Balance Sheets
(Unaudited, in thousands except share
data)
March 31, 2019 June 30, 2018
ASSETS Cash and equivalents $ 215,996 $ 88,750 Royalty
receivables 27,554 26,356 Income tax receivable 8,790 40 Stream
inventory 12,413 9,311 Prepaid expenses and other 602
1,350 Total current assets 265,355 125,807 Stream and royalty
interests, net 2,381,592 2,501,117 Other assets 52,438
55,092 Total assets $ 2,699,385 $ 2,682,016
LIABILITIES Accounts payable $ 5,005 $ 9,090 Dividends
payable 17,361 16,375 Income tax payable 16,251 18,253 Withholding
taxes payable 2,861 3,254 Other current liabilities 7,786
4,411 Total current liabilities 49,264 51,383 Debt 362,915
351,027 Deferred tax liabilities 90,321 91,147 Uncertain tax
positions 36,524 33,394 Other long-term liabilities —
13,796 Total liabilities 539,024 540,747 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 65,400,304 and
65,360,041 shares outstanding, respectively 654 654 Additional
paid-in capital 2,199,349 2,192,612 Accumulated other comprehensive
loss — (1,201) Accumulated losses (74,563) (89,898)
Total Royal Gold stockholders’ equity 2,125,440 2,102,167
Non-controlling interests 34,921 39,102 Total equity
2,160,361 2,141,269 Total liabilities and equity $
2,699,385 $ 2,682,016
ROYAL GOLD, INC.
Consolidated Statements of Operations
and Comprehensive Income
(Unaudited, in thousands except for per
share data)
For The Three Months Ended For The Nine Months
Ended March 31, March 31, March 31,
March 31, 2019 2018 2019 2018
Revenue $ 109,778 $ 115,983 $ 307,362 $ 342,807 Costs and
expenses Cost of sales 19,075 21,345 53,764 61,627 General and
administrative 6,798 8,100 24,147 24,555 Production taxes 1,006 423
3,206 1,568 Exploration costs 330 536 5,534 5,098 Depreciation,
depletion and amortization 39,368 39,679 120,726 121,380 Impairment
of royalty interests — 239,364 —
239,364 Total costs and expenses 66,577 309,447
207,377 453,592 Operating income (loss) 43,201
(193,464) 99,985 (110,785) Fair value changes in equity
securities 1,781 — (3,318) — Interest and other income 499 1,781
1,089 3,416 Interest and other expense (7,499)
(8,294) (22,786) (25,946) Income (loss) before income
taxes 37,982 (199,977) 74,970 (133,315) Income tax (expense)
benefit (9,388) 45,859 (11,355)
(10,044) Net income (loss) 28,594 (154,118) 63,615 (143,359) Net
loss attributable to non-controlling interests 178
468 3,753 3,573 Net income (loss) attributable to
Royal Gold common stockholders $ 28,772 $ (153,650) $ 67,368 $
(139,786) Net income (loss) $ 28,594 $ (154,118) $ 63,615 $
(143,359) Adjustments to comprehensive income (loss), net of tax
Unrealized change in market value of available-for-sale securities
— (666) — (858) Comprehensive income
(loss) 28,594 (154,784) 63,615 (144,217) Comprehensive loss
attributable to non-controlling interests 178 468
3,753 3,573 Comprehensive income (loss) attributable
to Royal Gold stockholders $ 28,772 $ (154,316) $ 67,368 $
(140,644) Net income (loss) per share available to Royal
Gold common stockholders: Basic earnings (loss) per share $
0.44 $ (2.35) $ 1.03 $ (2.14) Basic weighted average shares
outstanding 65,398,369 65,307,324 65,389,499
65,283,019 Diluted earnings (loss) per share $ 0.44 $ (2.35)
$ 1.03 $ (2.14) Diluted weighted average shares outstanding
65,515,234 65,307,324 65,494,902 65,283,019
Cash dividends declared per common share $ 0.265 $ 0.25 $ 0.78 $
0.74
ROYAL GOLD, INC.
Consolidated Statements of Cash
Flows
(Unaudited, in thousands)
For The Three Months Ended For The Nine Months
Ended March 31, March 31, March 31,
March 31, 2019 2018 2019 2018
Cash flows from operating activities: Net income (loss) $ 28,596 $
(154,120) $ 63,615 $ (143,359) Adjustments to reconcile net income
(loss) to net cash provided by operating activities:
Depreciation, depletion and amortization 39,368 39,680 120,726
121,380 Amortization of debt discount and issuance costs 4,018
3,787 11,882 11,200 Non-cash employee stock compensation expense
1,441 1,564 5,510 5,958 Fair value changes in equity securities
(1,781) — 3,318 — Deferred tax benefit (5,022) (60,541) (5,329)
(31,583) Impairment of royalty interests — 239,364 — 239,364 Other
— (41) — (199) Changes in assets and liabilities: Royalty
receivables (1,895) 1,490 (1,198) (909) Stream inventory (4,458)
(5,340) (3,102) (4,816) Income tax receivable 4,003 26,217 (8,750)
21,020 Prepaid expenses and other assets 169 3,552 2,474 3,224
Accounts payable 2,700 719 (4,326) (939) Income tax payable 5,512
(2,666) (2,002) 6,779 Withholding taxes payable 513 201 (393) 227
Uncertain tax positions 933 6,429 3,130 10,989 Other liabilities
3,344 4,280 (4,646) 13,473 Net cash
provided by operating activities $ 77,441 $ 104,575 $ 180,909 $
251,809 Cash flows from investing activities: Acquisition of
stream and royalty interests (1,000) (1,012) (1,055) (1,012)
Purchase of equity securities (4) — (3,573) — Other (70)
(1,157) (157) (1,251) Net cash used in
investing activities $ (1,074) $ (2,169) $ (4,785) $ (2,263)
Cash flows from financing activities: Repayment of revolving credit
facility — (75,000) — (175,000) Net payments from issuance of
common stock 235 39 (1,982) (3,502) Common stock dividends (17,360)
(16,364) (50,114) (47,755) Contributions from non-controlling
interest 420 — 3,210 — Other (202) 163 8
240 Net cash used in financing activities $ (16,907) $
(91,162) $ (48,878) $ (226,017) Net increase in cash and
equivalents 59,460 11,244 127,246 23,529 Cash and equivalents at
beginning of period 156,536 98,132 88,750
85,847 Cash and equivalents at end of period $ 215,996 $
109,376 $ 215,996 $ 109,376
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version on businesswire.com: https://www.businesswire.com/news/home/20190501005952/en/
Alistair BakerDirector, Business Development(720) 554-6995
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