Royal Gold, Inc. (NASDAQ:RGLD; TSX:RGL) (together with
its subsidiaries, “Royal Gold” or the “Company”) reports results
for its third fiscal quarter ended March 31, 2015 (“third
quarter”), including revenue of $74.1 million, up 28% from the same
period a year ago, and Adjusted EBITDA1 of $57.7 million, up 16%
from the prior year quarter. Streaming revenue was $29.7 million,
while royalty revenue was $44.4 million.
The Company reports net income attributable to Royal Gold
stockholders (“net income”) of $25.0 million, or $0.38 per basic
share for the third quarter, compared with net income of $20.1
million, or $0.31 per share from the same period a year ago. The
increase in our earnings per share was attributable to higher
stream revenue from Mount Milligan and a lower effective tax
rate.
Third Quarter Highlights Compared with the Year-Ago
Quarter:
- Record volume of 60,823 Gold Equivalent
Ounces (“GEO’s”), up 36%;
- Adjusted EBITDA of $57.7 million, up
16%;
- Operating cash flow of $65.9 million,
up 47%;
- Net income of $0.38 per share, up 23%;
and
- Higher revenue at Mount Milligan,
Cortez, Mulatos, and Robinson, amongst others.
The average gold price was $1,218 per ounce for the third
quarter, down 6% from $1,293 per ounce in the year ago quarter.
1 The Company defines Adjusted EBITDA, a non-GAAP financial
measure, as net income plus depreciation, depletion and
amortization, non-cash charges, income tax expense, interest and
other expense, and any impairment of mining assets, less
non-controlling interests in operating income of consolidated
subsidiaries, interest and other income, and any royalty portfolio
restructuring gains or losses (see Schedule A).
Tony Jensen, President and CEO, commented, “Our record volume
and robust cash flow reflect the quality of our portfolio. We
observed production gains from many properties in our third
quarter, which more than offset the lower gold price. Looking
forward to the remainder of calendar 2015, we anticipate
strengthening production at Peñasquito, the continued ramp-up at
Mount Milligan, and the startup of production at Phoenix as sources
of future volume growth.”
Adjusted EBITDA for the third quarter was $57.7 million ($0.89
per basic share), representing 78% of revenue, compared with
Adjusted EBITDA of $49.7 million ($0.76 per basic share), or 86% of
revenue, for the year ago quarter. Adjusted EBITDA, as a percentage
of revenue, was lower in the third quarter due to the inclusion of
ongoing stream payments to Mount Milligan of $435 per ounce of
gold, which are recorded as a cost of sales and totaled $10.5
million during the third quarter.
As of March 31, 2015, the Company had a working capital surplus
of $733.9 million. Current assets were $759.6 million compared to
current liabilities of $25.7 million, for a current ratio of 30 to
1.
The Company reported an effective tax rate of 4% for the third
quarter. The U.S. Dollar has appreciated significantly against the
Canadian Dollar, resulting in the recognition of unrealized foreign
currency gains upon re-measurement of certain of our deferred tax
liabilities during the period. We recorded tax benefits of $8.1
million during the third quarter related to these unrealized gains.
On a per share basis, these deferred tax benefits resulted in
additional earnings per share of $0.12 for the three months ended
March 31, 2015.
RECENT DEVELOPMENTS
Amendment to Revolving Credit Facility
On April 29, 2015, Royal Gold entered into Amendment No. 1 to
the Sixth Amended and Restated Revolving Credit Agreement whereby
Royal Gold increased the maximum availability from $450 million to
$650 million and eliminated the $150 million accordion feature.
There were no other changes to the Sixth Amended and Restated
Revolving Credit Agreement, including debt covenants, maturity
date, commitment fee and interest rates.
Mount Milligan Gold Stream
On April 16, 2015, Thompson Creek reported that the ramp-up at
Mount Milligan continues, with production of approximately 46,100
ounces of payable gold in the quarter ended March 31, 2015.
During the third quarter, Royal Gold, through a wholly-owned
subsidiary, purchased approximately 26,200 ounces of physical gold,
which came from a combination of provisional and final settlements
associated with shipments of concentrate from Mount Milligan. The
Company sold approximately 24,200 ounces of gold during the third
quarter at an average price of $1,226 per ounce, and had
approximately 6,800 ounces of gold in inventory as of March 31,
2015.
For the quarter ended March 31, 2015, average daily mill
throughput was 39,569 tonnes per day, improving to 50,000 to 54,000
tonnes per day during the last half of March. Thompson Creek
expects to achieve design throughput of approximately 60,000 tonnes
per day by calendar year-end.
Phoenix Gold Project Stream
On April 14, 2015, Rubicon Minerals (“Rubicon”) announced that
mill commissioning at the Phoenix Gold Project (“Phoenix”)
commenced ahead of schedule, and reiterated that Phoenix remains on
track for production in mid-2015. Rubicon also announced that it
completed 85% of the original underground development planned prior
to the start of production.
The Company’s final commitment payment of $12.8 million as part
of its Phoenix stream acquisition was made in February 2015.
Peñasquito
On April 9, 2015, Goldcorp reported that it integrated its
Concentrate Enrichment Process (“CEP”) and Pyrite Leach Process
into a single Metallurgical Enhancement Project (“MEP”). The MEP
entered the feasibility study phase, which Goldcorp expects to be
completed in early 2016. Goldcorp indicated that the study is
expected to form the basis of a new life-of-mine plan for
Peñasquito, and could extend the mine life by more than five years
through increased recoveries, the conversion of off-spec lead
concentrates to on-spec, the conversion of copper from penalties to
payables, and lower mining costs through minimization of
re-handling and simplified mining of complex ores.
Ilovitza Project Gold Stream
On January 12, 2015, Euromax Resources (“Euromax”) announced
that it closed a private placement with the European Bank for
Reconstruction and Development (“EBRD”).
During the third quarter, Royal Gold paid its first $7.5 million
deposit on the Ilovitza stream, which was conditioned upon Euromax
raising an additional $5 million in equity, which was satisfied by
the EBRD investment, and the satisfaction of certain other
conditions. As of March 31, 2015, the Company had a remaining
commitment, subject to certain conditions, of $167.5 million.
Euromax completed a prefeasibility study for the Ilovitza project
which estimates a 23 year mine life and a production startup in
calendar 2018.
PROPERTY HIGHLIGHTS
Highlights at certain of the Company’s principal producing and
development properties during the third quarter, compared with the
prior fiscal year quarter ended March 31, 2014 are listed below.
Production for our producing properties reflects the actual
production subject to our interests reported to us by the various
operators or from the operator’s publicly available
information.
Principal Producing
Properties
Andacollo – Payable gold production in concentrates
decreased 8% as a result of lower mill production over the last few
months. Harder ore and unplanned maintenance downtime in the
concentrator impacted copper concentrate shipments early in
calendar 2015, while a failure of the tailings thickener and
scheduled maintenance impacted mill production in the March
quarter, which may impact our June quarter. We are currently
expecting a stronger second half of the year at Andacollo.
Cortez – Production at Cortez increased 59% over the
prior year quarter as surface mining activity increased at the
Pipeline Complex, where our royalty applies, while no significant
mining activity occurred in these areas during the prior year
quarter. While Barrick expects production subject to our royalty
interests to be lower in calendar 2015, stripping of the Crossroads
Deposit is scheduled to begin in 2015 where reserves subject to our
interest total 3 million ounces.
Holt – Production decreased 8% as both ore milled and the
ore grade were lower. Zone 4 contributed 70% of the ore and Zone 6
contributed the remainder. Although lower than the December 2014
quarter, throughput of 1,200 tonnes per day was in line with the
calendar 2014 production rate. Mill recoveries were at their
expected 95% level for the current quarter.
Mount Milligan – Production increased 18% to 46,100
ounces of payable gold during the quarter. However, throughput and
production were impacted by frozen and plugged feeders and
unscheduled mechanical issues. Thompson Creek implemented action
plans to address the issues. Mill throughput averaged 39,569 tonnes
per day during the quarter, compared to 33,278 tonnes per day for
the prior year quarter. Throughput improved during the last half of
March 2015, achieving 50,000 to 54,000 tonnes per day.
Mulatos – Production attributable to our royalty interest
increased 24%, aided by the timing of the final settlement of gold
that was produced at the end of the fourth calendar quarter of
2014, but for which settlement with the refinery had not yet
occurred.
Peñasquito – Payable gold production subject to Royal
Gold’s royalty interest, which lags Goldcorp’s reported production
due to the timing of concentrate shipments, increased nearly 50%
over the prior year quarter to approximately 174,000 ounces, while
silver, lead and zinc production decreased by 16%, 13% and 8%,
respectively, over the prior year quarter. Goldcorp expects the
gold production for calendar 2015 to be weighted to the second half
of the calendar year as mining will move into the higher-grade
portions of the Peñasco pit beginning next quarter.
Robinson – Gold and copper production significantly
increased over the prior year quarter. The increase in production
is due to the planned mine sequence moving back to the higher-grade
Ruth pit, compared to production from the Liberty pit in the prior
year quarter.
Voisey’s Bay – Nickel production decreased 7%, as the
Voisey’s Bay mill experienced unplanned maintenance in January to
repair the SAG mill. The operation then returned to full
production. Copper production increased 8%.
Vale reports that the ramp-up of its new Long Harbour Processing
Plant is underway with the plant producing over 500 tonnes of
finished nickel in 1Q15. The plant is currently operating on a
blend of nickel matte from its Indonesian operations and Voisey’s
Bay concentrate and will process only Voisey’s Bay concentrate as
of the end of 2015. Anticipating this transition, the Company has
engaged in discussions with Vale concerning calculation of the
royalty once Voisey’s Bay nickel concentrates are processed at Long
Harbour. While the Company may continue to engage in these
discussions, there is no assurance that the Company and Vale will
reach agreement on the proper calculation under the terms of the
royalty agreement.
Historically, Vale has supplied the Company with Voisey’s Bay
nickel concentrate shipment data on a monthly basis, and copper
concentrate shipment data on a quarterly basis. This data has
allowed us to estimate our Voisey’s Bay quarterly royalty revenue
for financial reporting purposes. We did not receive all of this
data for the months relevant to the royalty payments due for the
December 2014 and March 2015 quarters. Consequently, our March 2015
quarterly revenue estimate is based on historic concentrate
shipment data, as well as an adjustment to our estimated December
2014 quarterly revenue based upon the actual royalty payment
received in February 2015. For future reporting periods, the
Company intends to recognize Voisey’s Bay royalty revenue on a cash
basis, or in the period in which actual payment information is
received from Vale. Accordingly, the revenue recognized for the
Voisey’s Bay royalty for the June 2015 quarter may only include
adjustments from the estimated March 2015 quarterly revenue.
Third quarter production and revenue for the Company’s principal
royalty and stream interests are shown in Tables 1 and 2,
historical production data is shown in Table 3, and a comparison of
operators’ 2015 production estimates to actual production is shown
in Table 4. For more detailed information about each of our
principal royalty and stream properties, please refer to the
Company’s most recent Annual Report on Form 10-K, our Quarterly
Reports on Form 10-Q and Current Reports on Form 8-K filed with the
SEC and available on the SEC’s website located at www.sec.gov, or
our website located at www.royalgold.com.
CORPORATE PROFILE
Royal Gold is a precious metals royalty and stream company
engaged in the acquisition and management of precious metal
royalties, streams, and similar production based interests. The
Company owns interests on 196 properties on six continents,
including interests on 38 producing mines and 23 development stage
projects. Royal Gold is publicly traded on the NASDAQ Global Select
Market under the symbol “RGLD,” and on the Toronto Stock Exchange
under the symbol “RGL.” The Company’s website is located at
www.royalgold.com.
Note: Management’s conference call reviewing the third
quarter results will be held Thursday, April 30, at 10:00 a.m.
Mountain Time (noon Eastern Time) and will be available by calling
(855) 209-8260 (North America) or (412) 542-4106 (international),
conference title “Royal Gold.” The call will be simultaneously
broadcast on the Company’s website at www.royalgold.com
under the “Presentations” section. A replay of this webcast will be
available on the Company’s website approximately two hours after
the call ends.
___________________________
Cautionary “Safe Harbor” Statement Under the Private
Securities Litigation Reform Act of 1995: With the exception of
historical matters, the matters discussed in this press release are
forward-looking statements that involve risks and uncertainties
that could cause actual results to differ materially from
projections or estimates contained herein. Such forward-looking
statements include statements about the Company’s ability to invest
in additional quality properties, operators’ expectations of
construction, ramp up, production, and mine life, resolution of
regulatory and legal proceedings (including with Vale regarding
Voisey’s Bay), and other developments at various mines. Factors
that could cause actual results to differ materially from the
projections include, among others, precious metals, copper and
nickel prices; performance of and production at the Company's
royalty and stream properties; the ability of the various operators
to bring projects into production as expected; delays in the
operators securing or their inability to secure necessary
governmental permits; decisions and activities of the operators of
the Company's royalty and stream properties; unanticipated grade,
geological, metallurgical, processing, liquidity or other problems
the operators of the mining properties may encounter; completion of
feasibility studies; 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 royalty and stream
properties; contests to the Company’s royalty and stream interests
and title and other defects to the Company’s royalty and stream
properties; errors or disputes in calculating royalty and stream
payments, or payments not made in accordance with royalty and
stream agreements; economic and market conditions; risks associated
with conducting business in foreign countries; changes in laws
governing the Company and its royalty and stream properties or the
operators of such properties; and other subsequent events; as well
as other factors described in the Company's Annual Report on Form
10-K, Quarterly Reports on Form 10-Q, and other filings with the
Securities and Exchange Commission. Most of these factors are
beyond the Company’s ability to predict or control. The Company
disclaims any obligation to update any forward-looking statement
made herein. Readers are cautioned not to put undue reliance on
forward-looking statements.
TABLE 1
Third Quarter Fiscal 2015
Revenue and Reported Production for
Principal Royalty and Stream Interests
Three Months Ended March 31, 2015 and
March 31, 2014
(In thousands, except reported
production in oz. and lbs.)
Three Months Ended Three Months Ended March 31,
2015 March 31, 2014
Reported Reported
Royalty/Stream
Metal(s)
Revenue
Production1
Revenue Production1
Stream:
Mount Milligan Gold
$ 29,718 24,200 oz. $
5,953 4,500 oz.
Royalty:
Andacollo
Gold $ 8,507 9,500
oz. $ 10,197 10,400 oz.
Peñasquito $ 7,253
$ 7,262
Gold 177,200 oz.
118,700 oz. Silver
6.0 Moz.
7.1 Moz. Lead 39.5
Mlbs. 45.3 Mlbs.
Zinc 82.6
Mlbs. 90.1 Mlbs.
Cortez Gold $ 5,025
65,200 oz. $ 3,021 41,100
oz. Holt Gold $ 3,208
16,700 oz. $ 3,848 17,600
oz. Mulatos Gold $ 2,538
42,500 oz. $ 2,162 34,400
oz. Voisey's Bay $ 1,919
$ 6,311
Nickel 17.2 Mlbs.
39.9 Mlbs.
Copper N/A
9.7 Mlbs. Robinson
$ 1,866
$ 1,010 Gold
10,800 oz.
3,900 oz. Copper
29.1 Mlbs.
10.7 Mlbs. Other Various
$ 14,076 N/A $
17,984 N/A
Total Revenue
$ 74,110
$ 57,748
TABLE 2
Third Quarter Fiscal 2015
Revenue and Reported Production for
Principal Royalty and Stream Interests
Nine Months Ended March 31, 2015 and
March 31, 2014
(In thousands, except reported
production in oz. and lbs.)
Nine Months Ended Nine Months Ended March 31,
2015 March 31, 2014
Reported Reported
Royalty/Stream
Metal(s)
Revenue
Production1
Revenue Production1
Stream:
Mount Milligan Gold
$ 66,693 53,900 oz. $
8,591 6,600 oz.
Royalty:
Andacollo
Gold $ 28,599 31,000
oz. $ 39,089 40,400 oz.
Peñasquito $ 19,936
$ 20,824
Gold 445,300 oz.
366,000 oz. Silver
17.6 Moz.
19.8 Moz. Lead
110.2 Mlbs. 132.2
Mlbs. Zinc 252.0
Mlbs. 233.8 Mlbs. Cortez
Gold $ 14,761 185,100
oz. $ 4,540 55,100 oz.
Voisey's Bay $ 13,645
$ 19,244
Nickel 53.8 Mlbs.
96.8 Mlbs.
Copper 44.0 Mlbs.
70.8 Mlbs. Holt
Gold $ 9,043 45,800 oz.
$ 10,452 47,500 oz. Mulatos
Gold $ 6,301 105,300
oz. $ 7,340 116,200 oz.
Robinson $ 5,600
$ 4,896
Gold 22,500 oz.
21,800 oz.
Copper 74.5 Mlbs.
50.5 Mlbs. Other
Various $ 39,861 N/A
$ 52,044 N/A
Total
Revenue $ 204,439
$ 167,020
TABLE 3
Historical Production
Reported Production For The Quarter Ended1
Property
2015
Operator
Metal(s) Mar. 31, 2015
Dec. 31, 2014 Sep. 30,
2014 Jun. 30, 2014 Mar.
31, 2014 Andacollo2 75% Teck
Gold 9,500 oz. 10,500
oz. 11,000 oz. 10,000
oz. 10,400 oz. Cortez3
GSR1 and GSR2,GSR3, NVR1
Barrick Gold 65,200
oz. 60,400 oz. 59,500
oz. 40,300 oz. 41,100
oz. Holt
0.00013 x quarterlyaverage gold price
St AndrewGoldfields
Gold 16,700 oz.
14,300 oz. 14,800 oz.
15,600 oz. 17,600 oz. Mount Milligan4
Gold stream -52.25% of payable gold
Thompson Creek Gold
24,200 oz. 14,300 oz.
15,300 oz. 14,400 oz.
4,500 oz. Mulatos5 1.0% - 5.0% NSR
Alamos Gold 42,500 oz.
34,500 oz. 28,400 oz.
33,600 oz. 34,400 oz.
Peñasquito 2.0% NSR Goldcorp
Gold 177,200 oz.
125,000 oz. 143,100 oz.
168,100 oz. 118,700 oz. Silver
6.0 Moz. 5.1 Moz.
6.5 Moz. 7.8 Moz.
7.1 Moz. Lead 39.5 Mlbs.
29.5 Mlbs. 41.3 Mlbs.
43.2 Mlbs. 45.3 Mlbs.
Zinc
82.6 Mlbs. 84.0 Mlbs.
85.4 Mlbs. 77.0 Mlbs.
90.1 Mlbs. Robinson 3.0% NSR KGHM
Gold 10,800
oz. 5,100 oz. 6,600 oz.
5,800 oz. 3,900 oz.
Copper 29.1 Mlbs. 19.3
Mlbs. 26.1 Mlbs. 19.1
Mlbs. 10.7 Mlbs. Voisey's Bay 2.7% NSR Vale
Nickel
17.2 Mlbs. 19.6 Mlbs.
17.1 Mlbs. 26.9 Mlbs.
39.9 Mlbs.
Copper NA
30.1 Mlbs. 22.0 Mlbs.
9.7 Mlbs. 9.7 Mlbs.
FOOTNOTES
Tables 1, 2 and 3
1 Reported production relates to the amount of metal sales
that are subject to our royalty and stream interests for the stated
period, as reported to us by operators of the mines. 2 The
royalty rate is 75% until 910,000 payable ounces of gold have been
produced – 50% thereafter. There have been approximately 248,000
cumulative payable ounces produced as of March 31, 2015. Gold is
produced as a by-product of copper. 3 Royalty percentages:
GSR1 and GSR2 – 0.40 to 5.0% (sliding-scale): GSR3 – 0.71%; NVR1 –
1.0140% excluding Crossroads and 0.6186% for Crossroads. 4
For our streaming interest at Mount Milligan, our revenue is a
product of the reported production, our 52.25% stream interest, an
applicable provisional percentage (for the first 12 shipments only)
and an average gold sale price for the period. 5 The
Company’s royalty is subject to a 2.0 million ounce cap on gold
production. There have been approximately 1.37 million ounces of
cumulative production as of March 31, 2015. NSR sliding-scale
schedule (price of gold per ounce – royalty rate): $0.00 to $299.99
– 1.0%; $300 to $324.99 – 1.50%; $325 to $349.99 – 2.0%; $350 to
$374.99 – 3.0%; $375 to $399.99 – 4.0%; $400 or higher – 5.0%.
TABLE 4
Calendar 2015 Operators’ Production
Estimate
Calendar 2015 Operator’s Production
Estimate1,2 Calendar 2015 Operator's Production
Actual3 Gold Silver
Base Metals Gold
Silver Base Metals
Royalty/Stream (oz.)
(oz.) (lbs.) (oz.)
(oz.) (lbs.) Andacollo4
52,200 - -
10,300 - - Cortez GSR1
104,100 - - 48,200
- - Cortez GSR2 27,900
- - 17,000 -
- Cortez GSR3 132,000 -
- 65,200 -
- Cortez NVR1 97,200 - -
48,300 - - Holt
64,000 - - 16,200
- - Mount Milligan5
220,000-240,000 - -
46,100 - - Mulatos6
150,000-170,000 - - N/A
- - Peñasquito7,8
700,000-750,000 24-26 million -
155,600 - - Lead
175-185 million
N/A Zinc
400-415 million
N/A
1 There can be no assurance that production estimates received from
our operators will be achieved. Please refer to our cautionary
language regarding forward-looking statements preceding Table 1
above, as well as the Risk Factors identified in Part I, Item 1A,
of our Fiscal 2014 10-K for information regarding factors that
could affect actual results. 2 The operators of our Voisey’s
Bay and Robinson royalty interests did not release public
production guidance for calendar 2015. 3 Actual production
figures for Andacollo and Cortez are based on information provided
to us by the operators, and actual production figures for Holt,
Mount Milligan, Mulatos and Peñasquito (gold) are the operators’
publicly reported figures. 4 The estimated production figure
shown for Andacollo is contained gold in concentrate. 5 The
estimated and actual production figures shown for Mount Milligan
are payable gold in concentrate. 6 Actual production was not
available from the operator as of the date of this press release.
7 The estimated gold and silver production figures reflect
payable gold and silver in concentrate and doré, while the
estimated lead and zinc production figures reflect payable metal in
concentrate. 8 The actual gold production figure for gold
reflects payable gold in concentrate and doré as reported by the
operator. The actual production for silver, lead and zinc were not
publicly available. The Company’s royalty interest at Peñasquito
includes gold, silver, lead and zinc.
ROYAL GOLD, INC.
Consolidated Balance Sheets
(Unaudited, in thousands except share
data)
March 31, June 30, 2015 2014
ASSETS Cash and
equivalents $ 715,228 $ 659,536 Royalty receivables 39,486 46,654
Income tax receivable - 21,947 Prepaid expenses and other
4,911 7,840 Total current assets 759,625
735,977 Royalty and stream interests, net 2,109,702
2,109,067 Available-for-sale securities 5,619 9,608 Other assets
35,081 36,892 Total assets $ 2,910,027
$ 2,891,544
LIABILITIES Accounts
payable 2,205 3,897 Dividends payable 14,342 13,678 Foreign
withholding taxes payable 198 2,199 Income tax payable 3,170 -
Other current liabilities 5,791 2,730
Total current liabilities 25,706 22,504 Debt 319,484 311,860
Deferred tax liabilities 135,666 169,865 Uncertain tax positions
15,461 13,725 Other long-term liabilities 694
1,033 Total liabilities 497,011 518,987
Commitments and contingencies
EQUITY
Preferred stock, $.01 par value,
authorized 10,000,000 sharesauthorized; and 0 shares issued
- -
Common stock, $.01 par value, 100,000,000
shares authorized; and65,029,065 and 64,578,401 shares outstanding,
respectively
650 646
Exchangeable shares, no par value,
1,806,649 shares issued, less1,802,167 and 1,426,792 redeemed
shares, respectively
197 16,718 Additional paid-in capital 2,168,675 2,147,650
Accumulated other comprehensive loss (4,149 ) (160 ) Accumulated
earnings 184,644 189,871 Total Royal
Gold stockholders’ equity 2,350,017 2,354,725 Non-controlling
interests 62,999 17,832 Total equity
2,413,016 2,372,557 Total liabilities
and equity $ 2,910,027 $ 2,891,544
ROYAL GOLD, INC.
Consolidated Statements of Operations and
Comprehensive Income
(Unaudited, in thousands except share
data)
For The Three Months Ended
For The Nine Months Ended March 31, March 31, March
31, March 31, 2015 2014 2015
2014 Revenue $ 74,110 $ 57,748 $ 204,439 $
167,020 Costs and expenses Cost of sales 10,542 1,940 23,452
2,875 General and administrative 5,545 3,866 21,197 15,093
Production taxes 935 1,723 4,356 5,110 Exploration Costs 155 - 155
- Depreciation, depletion and amortization 24,783 21,605 67,273
66,676 Impairment of royalty and stream interests -
- 28,339 - Total costs
and expenses 41,960 29,134
144,772 89,754 Operating income 32,150
28,614 59,667 77,266 Interest and other income 435 1,837 714
1,986 Interest and other expense (6,433 ) (5,990 )
(19,502 ) (17,580 ) Income before income taxes 26,152
24,461 40,879 61,672 Income tax expense (1,041 )
(3,980 ) (3,172 ) (15,133 ) Net income 25,111
20,481 37,707 46,539 Net income attributable to non-controlling
interests (97 ) (338 ) (559 ) (535 )
Net income attributable to Royal Gold common stockholders $ 25,014
$ 20,143 $ 37,148 $ 46,004 Net
income $ 25,111 $ 20,481 $ 37,707 $ 46,539 Adjustments to
comprehensive income, net of tax Unrealized change in market value
of available-for-sale securities (2,168 ) (127 )
(3,988 ) (2,415 ) Comprehensive income 22,943 20,354
33,719 44,124 Comprehensive income attributable to non-controlling
interests (97 ) (338 ) (559 ) (535 )
Comprehensive income attributable to Royal Gold stockholders $
22,846 $ 20,016 $ 33,160 $ 43,589
Net income per share available to Royal Gold common
stockholders: Basic earnings per share $ 0.38 $ 0.31
$ 0.57 $ 0.71 Basic weighted average shares
outstanding 65,033,547 64,963,605
64,999,331 64,895,464 Diluted earnings
per share $ 0.38 $ 0.31 $ 0.57 $ 0.71
Diluted weighted average shares outstanding 65,129,362
65,082,780 65,122,313
65,012,901 Cash dividends declared per common share $ 0.22
$ 0.21 $ 0.65 $ 0.62
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, 2015
2014 2015 2014
Cash flows from operating activities: Net income $ 25,111 $ 20,481
$ 37,707 $ 46,539 Adjustments to reconcile net income to net cash
provided by operating activities: Depreciation, depletion and
amortization 24,783 21,605 67,273 66,676 Non-cash employee stock
compensation expense 836 (470 ) 3,660 1,289 Gain on distribution to
non-controlling interest - (259 ) - (259 ) Amortization of debt
discount 2,611 2,418 7,624 7,138 Impairment of royalty and stream
interests - - 28,339 - Tax benefit of stock-based compensation
exercises - (112 ) (74 ) (320 ) Deferred tax benefit (17,096 )
(4,964 ) (34,199 ) (13,002 ) Changes in assets and liabilities:
Royalty receivables (2,172 ) 845 7,168 8,175 Prepaid expenses and
other assets 1,127 (672 ) 4,471 12,329 Accounts payable (560 )
1,005 (1,742 ) 194 Foreign withholding taxes payable (2 ) (1,425 )
(2,001 ) (11,533 ) Income taxes payable (receivable) 26,969 3,075
25,191 (4,551 ) Other liabilities 4,313 3,353
4,777 2,411 Net cash provided by
operating activities $ 65,920 $ 44,880 $ 148,194
$ 115,086 Cash flows from investing
activities: Acquisition of royalty and stream interests (21,607 )
(31,603 ) (60,341 ) (79,692 ) Tulsequah stream termination 10,000 -
10,000 - Other 446 281 (71 )
227 Net cash used in investing activities $ (11,161 )
$ (31,322 ) $ (50,412 ) $ (79,465 ) Cash flows from
financing activities: Net proceeds from issuance of common stock -
467 775 561 Common stock dividends (14,343 ) (13,674 ) (41,712 )
(39,706 ) Purchase of additional royalty interest from
non-controlling interest - (11,522 ) - (11,522 ) Debt issuance
costs - (1,284 ) - (1,284 ) Distribution to non-controlling
interests (316 ) (834 ) (1,227 ) (1,913 ) Tax expense of
stock-based compensation exercises - 112
74 320 Net cash used in
financing activities $ (14,659 ) $ (26,735 ) $ (42,090 ) $ (53,544
) Net increase (decrease) in cash and equivalents 40,100
(13,177 ) 55,692 (17,923 ) Cash
and equivalents at beginning of period 675,128
659,289 659,536 664,035 Cash and
equivalents at end of period $ 715,228 $ 646,112 $
715,228 $ 646,112
SCHEDULE A
Non-GAAP Financial Measures
The Company computes and discloses Adjusted EBITDA. Adjusted
EBITDA is a non-GAAP financial measure. Adjusted EBITDA is defined
by the Company as net income plus depreciation, depletion and
amortization, non-cash charges, income tax expense, interest and
other expense, and any impairment of mining assets, less
non-controlling interests in operating income of consolidated
subsidiaries, interest and other income, and any royalty portfolio
restructuring gains or losses. Other companies may define and
calculate this measure differently. Management believes that
Adjusted EBITDA is a useful measure of the performance of our
royalty and stream portfolio. Adjusted EBITDA identifies the cash
generated in a given period that will be available to fund the
Company's future operations, growth opportunities, shareholder
dividends and to service the Company's debt obligations. This
information differs from measures of performance determined in
accordance with U.S. generally accepted accounting principles
(“GAAP”) and should not be considered in isolation or as a
substitute for measures of performance determined in accordance
with U.S. GAAP. Below is a reconciliation of net income to Adjusted
EBITDA.
Royal Gold, Inc.
Adjusted EBITDA Reconciliation
For The Three Months Ended For The Nine Months Ended March
31, March 31, (Unaudited, in thousands) (Unaudited, in thousands)
2015 2014 2015 2014
Net income $ 25,111 $ 20,481 $ 37,707 $ 46,539 Depreciation,
depletion and amortization 24,783 21,605 67,273 66,676 Non-cash
employee stock compensation 836 (470 ) 3,660 1,289 Allowance for
uncollectible royalty receivables - - 2,997 - Impairment of royalty
and stream interests - - 28,339 - Interest and other income (435 )
(1,837 ) (714 ) (1,986 ) Interest and other expense 6,433 5,990
19,502 17,580 Income tax expense 1,041 3,980 3,172 15,133
Non-controlling interests in operating
income ofconsolidated subsidiaries
(97 ) (80 ) (559 ) (277 ) Adjusted
EBITDA $ 57,672 $ 49,669 $ 161,377 $ 144,954
Royal GoldKarli Anderson, 303-575-6517Vice President
Investor Relations
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