The Gold Report

The Gold Report Interview with David H. Smith (6/19/13) "Royal Gold Inc. [is an] established, well-managed company with good cash hoards. [Dividend-paying companies] like Royal Gold could make the bedrock holding of a portfolio because they can keep giving you some extra profit vitamins while you're waiting for the share prices to turn around. A lot of times the dividend can be more reflective of the company's viability than the current share price." More >

Elephant Analytics, Seeking Alpha (5/10/13) "Royal Gold Inc. received the good news recently that the Mount Milligan mine was on track for an August 2013 opening. . .the mine is expected to contribute a huge amount to the company's future cash flow and earnings. . .even with a gold price of $1,200/oz, Royal Gold's share of Mount Milligan will generate $100M in annual cash flow. . .the near completion of the mine is a major milestone, with cash flows that will significantly help Royal Gold continue to make deals for many years."

The Gold Report Interview with David Kanagy (5/6/13) "My sense is that there's more interest in greater participation by a greater number of players in the royalty and streaming space because there's opportunity and need for it. . .a few larger ones, including Royal Gold Inc., have been successful. They're tapping an opportunity with their expertise, as well as the capital they have available. I think royalties and streaming are going to play a greater part down the road." More >

Cosmos Chiu, CIBC World Markets (5/3/13) "Considering Royal Gold Inc.'s 2013 production outlook for its portfolio of principal royalty interests, we would characterize the group of assets as steady. . .the next sizeable leg up in growth will be supplied through Mt. Milligan, with initial production in Q3 CY/13. . . a new water source was identified for Penasquito that has the potential to supply sufficient water to ramp up the plant to full design capacity. Higher production from Penasquito is expected in H2/13 as mining transitions to higher grades."

Michael Peterson, MLV & Co (5/3/13) "Royal Gold Inc.'s strong balance sheet affords the company a competitive edge in the acquisition of new royalty interests. . .2P resource estimates for the Mt. Milligan project (2.1 Blb Cu and 6 Moz Au)are based on roughly 1,000 drill holes spanning 220,000m. These assessments confirm grade assumptions and also provide the operator with a comprehensive understanding the underlying resource base. The mining risk for this open-pit facility with a strip ratio of less than 1:1 is low."

Jeff Williams, Seeking Alpha (4/28/13) "One company worth considering is Royal Gold Inc. . .indications reveal that the company has very little risk from a debt point of view. . .it shows no risk of being highly leveraged, or in any financial distress. . .currently, analysts have an $85 price target on the stock with strong growth in earnings moving forward. . .if patience is exercised and the stock price begins to form a bottom and break to the upside, it could prove be an excellent opportunity."

The Gold Report Interview with Greg Orrell (4/24/13) "We own a couple of the big royalty companies in our portfolio [like] Royal Gold Inc. . .Royal [has] committed significant dollars to individual projects of late. . .however, with the diversification of [its] asset bases at this point, it should not be a problem. [Royal Gold is] positioned to grow revenues substantially over the next three years. Overall, I do like the royalty model." More >

The Gold Report Interview with Adrian Day (4/5/13) "When Royal Gold Inc. bought International Royalty Corp., it got the Voisey's Bay nickel royalty. . . If you're interested in seniors, look at Franco-Nevada and Royal Gold." More >

The Gold Report Interview with Peter Krauth (3/27/13) "Our portfolio has Royal Gold Inc. It is one of our favorites in the royalty space. About 68% of its revenues come from gold. Of its large inventory of assets, 39 are producing, 28 are development stage and almost 140 are exploration. . .we continue to hold Royal Gold as a free ride." More >

Frank Curzio, Small Stock Specialist (2/13/13) "There is huge growth potential ahead for Royal Gold Inc. . .the company has built a portfolio of nearly 200 production-, development-, and exploration-stage properties. Many of the its investments have come to fruition in just the past five years, and the results have been astronomical. . .looking at the numbers, I expect Royal Gold to nearly double its revenue (to $500M plus) by 2015."

The Gold Report Interview with Ralph Aldis (11/30/12) "You have to give the royalty companies some serious thought. They are insulated from capital cost increases, at least on the cost-structure side. . .Royal Gold Inc. has done very well." More >

Shane Nagle, National Bank Financial (11/14/12) "Royal Gold Inc. has increased its quarterly dividend to $0.20/share ($0.80 annually), up from $0.15/share ($0.60 annually) previously and in line with our forecasted increase of 30%. . .today's announced dividend increase reaffirms our investment thesis and is the 12th consecutive year of dividend increases for company shareholders."

Michael Jalonen, Merrill Lynch (11/14/12) "Royal Gold Inc. announced a 33% increase in its annual dividend to $0.80/share versus $0.60/share; the first dividend at the higher level will be payable Jan. 18, 2013, to shareholders of record as of close on Jan. 4, 2013. . .in our view, Royal Gold's strong financial position and strong cash flow permit the payment of this higher dividend while allowing it to pursue further potential royalty and streaming transactions. . .we see Royal Gold's revenue rising from $263M in fiscal 2012E to $575M by fiscal 2015E. Due to increasing revenues, we see Royal Gold's free cash flow growing 146% to $398M in 2015E (from $162M in 2012E)."

Patrick Chidley, HSBC Securities (11/6/12) "Royal Gold Inc. announced fiscal Q1 FY13 results (September quarter) with an earnings per share of $0.42 ($25M), based on record quarterly revenues of $77.9M, versus our $74M estimate. . .although a little short of our estimates, the results were close and signify a solid quarter with record revenues due to production ramp-ups at several assets."

Michael Peterson, MLV & Co (11/4/12) "Royal Gold reported earnings per share of $0.42 for Q1 FY13, ahead of our $0.36 estimate. The positive variance was the result of higher production-led revenues. . .attributable gold equivalent production increased 37% quarter over quarter and 14% year over year. . .we regard the increase in quarterly volumes as the beginning of a meaningful, multi-year trend, delivering growth of ~25% per year. . .we maintain our Buy rating."

The Gold Report Interview with Cosmos Chiu (11/2/12) "It's certainly been a good environment for royalty acquisitions. . .Royal Gold Inc. topped up its royalty at the Thompson Creek Metals Company Inc.'s Mt. Milligan project. . .the royalty that served as the first cornerstone for Royal Gold was the Cortez contract in Nevada. The asset, operated by Barrick, paid Royal Gold quite handsomely for a long time, up until about two years ago when it switched to mining Cortez Hills. The Cortez royalty created a very important cash-flow generator for Royal Gold for a long time so it could leverage cash flow into purchasing other interests.

Looking ahead, some of the bigger ones that Royal Gold has would be Peñasquito, which is a key Mexican mine for Goldcorp Inc., and Andacollo, a key mine for Teck Resources Ltd., which is looking into further expansions. . .Peñasquito is already in production. It's a staged approach to development, but it's already been in production for quite a while now. It has a mine life of more than 20 years." More >

The Gold Report Interview with Cosmos Chiu (11/2/12) "To analyze royalty companies well, you need to understand the underlying contracts and the underlying mines. We have an advantage because we cover most of these underlying mines that actually pay a royalty to companies like Royal Gold Inc. . . The royalty that served as the first cornerstone for Royal Gold was the Cortez contract in Nevada. The asset, operated by Barrick, paid Royal Gold quite handsomely for a long time, up until about two years ago when it switched to mining Cortez Hills. The Cortez royalty created a very important cash-flow generator for Royal Gold for a long time so it could leverage cash flow into purchasing other interests. Looking ahead, some of the bigger ones that Royal Gold has would be Peñasquito, which is a key Mexican mine for Goldcorp Inc., and the Andacollo, a key mine for Teck, which is looking into further expansions." More >

Shane Nagle, National Bank Financial (11/1/12) "Royal Gold Inc. reported a Q1 FY13 earnings per share of $0.42, in line with our estimate and consensus at $0.41. The beat is largely attributable to strong performance from key royalty interests. . .we estimate the company to have more than $1B of available liquidity to close multiple new royalty acquisitions in the coming months. . .we are anticipating a +30% increase (versus 36% last year) to the current annual dividend of $0.60/share, targeting a 1% dividend yield."

Tanya Jakusconek, Scotia Capital (11/1/12) "Royal Gold Inc.'s adjusted earnings per share came in at $0.42 versus our estimate of $0.40 and consensus of $0.41; the main difference was on the revenue line, primarily due to higher revenue from Peñasquito, Andacollo and Voisey's Bay. Revenue of $78M was up from $64M in Q1 FY12, while earnings increased to $25M from $22M in Q1 FY12. . .Q1 FY13 was a solid quarter for the company."

Brian MacArthur, UBS Securities (11/1/12) "Royal Gold Inc. reported record first quarter royalty revenue of $77.9M, up 20.8% YOY, and attributable net income of $24.8M, up 10% YOY. . .the company continued to generate a significant EBITDA margin during the quarter, 91%, and ended the quarter with $302M in cash and cash equivalents. The strong FQ1/13 results were driven by Andacollo, Penasquito and Voisey's Bay, all of which had YOY revenue increases. . .with pro-forma cash on hand of $774.5M, a $350M undrawn credit facility and strong operating cash flow, Royal Gold has over $1B available for additional royalty or stream acquisitions. . .it is well positioned to make future gold acquisitions."

Morning Coffee (10/12/12) "Royal Gold Inc. has agreed to sell 5.25M shares (up to 6M shares including underwriters' option) at price of $91/share to a syndicate of investment dealers to raise gross proceeds of $477.8M. . .the company intends to use the net proceeds from the offering to acquire additional royalty or similar interests and for general corporate purposes."

Shane Nagle, National Bank Financial (10/12/12) "Royal Gold Inc. has agreed to sell 5.25M shares priced at US$91, with an option to increase the offering to 6M shares. We expect there to be sufficient demand to pursue the larger offering, effectively providing the company gross proceeds of ~US$546M. . .with an unprecedented number of mining projects slated for development, the company has the potential to close multiple new royalty acquisitions in the coming months. . .allowing for greater revenue diversifications."

The Gold Report Interview with David Christensen (9/19/12) "The royalty sector is one of the stronger business models in the precious metals space, and Royal Gold Inc. [is one of] the two big players. They have historically been phenomenal companies in the portfolio. We are very long-term shareholders in those names." More >

Michael Peterson, MLV & Co (9/12/12) "Amid rising macroeconomic concerns, contracting micro productivity, and favorable sub-sector capital inflows, Royal Gold Inc. is well positioned to grow earnings and increase shareholder value. . .higher earnings and cash from operations, combined with favorable capital markets—namely, high equity capital prices and low borrowing costs—are likely to support accretive expansion of the company's royalty portfolio. . .Royal Gold's strong balance sheet may afford it a competitive edge in future acquisitions."

Michael Jalonen, Bank of America Merrill Lynch (8/31/12) "On Aug. 13, Royal Gold Inc. announced the closing of the acquisition of an additional 12.25% of the payable gold produced from the Mt. Milligan copper-gold project for $200M; this latest purchase brings the company's total stream interest in Mt. Milligan to 52.25%. . .the late-2013 startup of Mt. Milligan will have a very positive impact on Royal Gold's revenue and earnings per share. Over the fiscal 2012-2015 period, we estimate its revenues increasing by 70% to over $450M."

Michael Jalonen, Merrill Lynch (8/17/12) "Over the fiscal 2012–2015 period, we estimate Royal Gold Inc.'s revenues increasing by 70% to nearly $450M. This impressive expected growth is largely due to the start up of the Mt. Milligan gold stream (late 2013) and Pascua-Lama royalty (mid-2014)."

Patrick Chidley, HSBC Securities (8/10/12) "With its EPS up 25% on a 22% increase in royalty revenue, Royal Gold Inc. has demonstrated one of the reasons why its stock has performed so well in the past year. We expect growth in revenues to continue into FY/13 and to more than double over the next three years. . .we reiterate our Overweight rating."

Michael Peterson, MLV & Co (8/10/12) "Royal Gold Inc.'s performance in FY/12 was solid: The company successfully acquired three significant assets and grew revenues to record levels during the period. Royal continues to showcase its talent by sourcing, negotiating and managing a portfolio of world-class royalty assets run by reliable operators in areas of low geopolitical risk; the company offers investors a low-risk, diversified alternative to either direct ownership of the commodities or of mining companies."

Brian MacArthur, UBS Securities (8/9/12) "Royal Gold Inc.'s royalty portfolio has near-term growth prospects with the continued ramp up of Canadian Malartic and Holt. Longer-term, production will benefit from the development of Mt. Milligan, which is scheduled to start in late 2013, and Pascua-Lama, scheduled to start in mid-2014. . .we maintain our Buy rating."

Shane Nagle, National Bank Financial (8/9/12) "Royal Gold Inc. has a strong financial position: The company had a cash balance at quarter-end of US$375.5M with US$370M of 2.875% convertible notes outstanding (due 2019) and US$350M available on its revolving credit facility. . .the robust cash-flow growth and stable portfolio of royalty interests continue to offer attractive, risk-adjusted leverage to the gold price over the long term."

Cosmos Chiu, CIBC World Markets (6/21/12) "Royal Gold Inc. completed its offering of $370M aggregate principal amount of 2.875% convertible senior notes. . .with this financing, the company further strengthens its balance sheet for future royalty opportunities. . .with mining companies facing increasingly challenging financing conditions, we believe the royalty companies will gain favor as a source of funding. Royal Gold remains active on the acquisition front."

Shane Nagle, National Bank Financial (6/15/12) "Our research restriction is lifted following last night's pricing of Royal Gold Inc.'s announced US$325M convertible notes offering. The notes will pay interest semiannually of 2.875% per year, maturing on June 15, 2019. . .following the issuance of US$280M of equity in January 2012 and extension of the company's revolving credit facility (US$350M expiring 2017) in May, Royal Gold's balance sheet has improved significantly in recent months. . .with a stable revenue base and already impressive cash flow growth profile, we expect the company's proven management team to make additional accretive acquisitions given its current financial strength."

Patrick Chidley, HSBC Securities (6/11/12) "Royal Gold Inc. continues to be one of the top-performing gold stocks. . .we think this is reflective of both the continued strong gold price environment as well as solid progress on its planned rapid growth. . .the company's business model of acquiring and holding mining royalty streams has attracted attention. . .in addition to outperforming its benchmark, the U.S. market, Royal Gold has handily outperformed gold itself. . .the company's portfolio of (mainly) gold mining royalties and metals streams should continue to generate growing revenues in the next few years. Our rating remains Overweight."

Shane Nagle, National Bank Financial (6/7/12) "Royal Gold Inc. shares have appreciated approximately 22% since we upgraded our rating to Outperform on March 20, 2012. . .and has outperformed its senior royalty and producer peer group, as well as the gold price since over the same period, further supporting our thesis that it is one of the best investments for investors seeking leverage to the gold price. . .the company's diversified portfolio of royalty interests provides investors with leverage to gold prices through production from world-class mines operated by industry leaders."

Tanya Jakusconek, Scotia Capital (5/30/12) "Royal Gold Inc. has announced that it has amended its revolving credit facility to a maximum of $350M (from $225M) and has also extended the maturity date to May 30, 2017 (from February 2014). . .we are not surprised by this move as the company has been active on the acquisition front. Last week it purchased the Ruby Hill royalty for $38M."

Steve Sjuggerud, Stockhouse (5/24/12) "Conservative investors could buy Royal Gold Inc. You could possibly see a double within a year simply if sentiment goes from negative to positive on gold—Royal Gold is currently on both my recommended list and John Doody's." Stockhouse >

Cosmos Chiu, CIBC World Markets (5/24/12) "Royal Gold Inc. announced the acquisition of a 3% net smelter return royalty on the Ruby Hill gold mine (located in Nevada and operated by Barrick Gold Corp.) from International Minerals Corp. for total consideration of $38M. Initial royalty revenue. . .is expected to be received in the current (fiscal Q4/12) quarter. . .this represents close to $6M in annual royalty revenues to Royal Gold."

Shane Nagle, National Bank Financial (5/24/12) "Royal Gold Inc. announced the acquisition of a 3% net smelter return (NSR) royalty on the Ruby Hill gold mine from International Minerals Corp. for US$38M cash. . .the deal immediately increases revenue. . .reserves total 0.98 Moz at a grade of 0.058 oz/ton, while total resources (largely Indicated) stand at 2.44 Moz (grading 0.022 oz/ton)—highlighting the potential for future expansions at the mine. . .the company's ever-broadening portfolio of royalty interests, combined with robust, near-term cash flow growth continues to distinguish Royal Gold as an attractive investment within the gold space."

The Gold Report Interview with Frank Barbera (5/21/12) "A royalty company in the mining space [is] Royal Gold Inc. . .seems like a well-run company." More >

The Gold Report Interview with Paolo Lostritto (4/30/12) "Development mining companies that have run out of options will be looking to do a deal out of necessity. We believe there are more opportunities for activity involving royalty and streaming companies. This is a perfect environment for companies like Royal Gold Inc. It opens the door for them to get involved with development projects that may otherwise have been supported by the equity markets." More >

The Gold Report Interview with Matt Badiali (4/25/12) "Royalty companies are my favorite. I love them. The really big, safe ones are the best, [like] Royal Gold Inc. . .These companies have 50 to 80 royalty streams. If their royalty stream on one mine ends, it is just a dimple in their revenue stream. Most of these royalty companies could survive 10 losses with only a modest hit to their revenue. . .they have very diluted political and mine-specific risk." More >

Shane Nagle, National Bank Financial (3/21/12) "Historic outperformance versus operator peer group: Is it justified? And can it continue? Yes and yes. . .Royal Gold Inc.'s predetermined net smelter royalty and volumetric production payment contracts protect the company from significant cost inflation while maintaining revenue exposure to increasing gold prices and production/exploration upside from large-scale mining projects, largely independent of input cost fluctuations. . .we are moving to an Outperform rating."

Patrick Chidley, HSBC Securities (2/13/12) "Although the bottom line was slightly lower than our estimate, the December quarter was a solid result for Royal Gold Inc. The outlook for the remainder of FY12 and CY12 is positive, with growth in revenue on track: The company awaits news from the various operators of its underlying properties on reserve and resource growth this year, which could add further value for Royal Gold in the next few months."

Shane Nagle, National Bank Financial (2/3/12) "Royal Gold Inc.'s revenue of US$68.8M in the quarter has grown 22% year over year and 7% quarter over quarter, largely attributable to rising gold prices and higher production from Andacollo, Voisey's Bay and Penesquito and new production from both Holt and Canadian Malartic. The company is expecting continued cash-flow growth from projects currently in development. . .Royal Gold has outperformed its peers over the past 12 months, largely attributable to a rapidly increasing gold price and an improving production profile."

Michael Jalonen, Merrill Lynch (2/2/12) "Due to the start up of several new royalties, we see Royal Gold Inc.'s revenues nearly doubling over the fiscal 2010–2014 period. . . the company has nearly 40 producing royalties with another 20 in the development phase. As the bias of these new projects is to gold, the precious metals share of total revenue is forecast to grow from 77% in CY10 to 85% in CY13."

Tanya Jakusconek, Scotia Capital (2/2/12) "Royal Gold Inc.'s revenue of $68.8M was up from $56.3M in Q211/FY11, while earnings increased to $23.4M from $18.3M in Q211/FY11. . .highlights in key royalties include: Peñasquito, as supplemental ore feed to the high pressure grinding rolls will be completed in Q112 and Osisko, on track to achieve mill throughput of 55–60 Ktpd by Q212."