Royal Gold Inc Q4 2024 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Cosmos Chiu - CIBC World Markets - Analyst : Thanks Bill, Dan, Martin, Paul, and Alistair. Maybe my first question is on Cortez. Bill, I know you don't give out longer term guidance. However, the Cortez royalty is certainly very complex. There's different parts to it, legacy, royalties versus, well, the newer ones here. So I guess my question is, as you mentioned, Cortez is looking at midpoit 720,000-ish ounces this year, can grow to 1 million ounces by 2027 based on Crossroads, Goldrush. And Martin, thanks for giving us the 9.4%, 2.2%. My question is, how can we use that information potentially to help us refine our model in terms of what growth could come through at Cortez? Is it as simple as taking the 9.4% and the 2.2%, averaging out to 5.8% GSR? And say the growth, the additional analysis, will be subject to that kind of GSR? Or how can you help us out? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. FEBRUARY 13, 2025 / 5:00PM, RGLD.OQ - Q4 2024 Royal Gold Inc Earnings Call

Question: Cosmos Chiu - CIBC World Markets - Analyst : Okay. So I guess we'll find out a bit more, maybe come mid or late March when we get the 2025 guidance. We might see the full picture, but you will help us --

Question: Cosmos Chiu - CIBC World Markets - Analyst : Okay. And then maybe quickly on Pueblo Viejo. As we know, there's a 30-day shutdown impact in Q1 2025 for the thickener optimization, is that going to impact Q1 or Q2? And then my second part of my question is I seem to see that gold recoveries going to take a bit longer to optimize Barrick's silver recovery which should be by the end of 2025 versus optimization of gold recovery by the end of 2026. Can you maybe comment on that as well in terms of how they're able to optimize the silver recovery (inaudible)?

Question: Cosmos Chiu - CIBC World Markets - Analyst : Of course

Question: Cosmos Chiu - CIBC World Markets - Analyst : Great. Thanks, Martin. I guess that's what matters to you in terms of being able to really understand why the silver recovery goes up. That's the most important part to Royal Gold. I would imagine. Maybe one last question on Cactus, Bill, as you mentioned, this is a copper royalty. But Bill, as you mentioned, this is not an indication of you changing your strategy in terms for the company. So could you maybe comment on I saw that in the last quarter, your revenue mix was 76% gold, 12% silver, 9% copper, are you happy with that mix?

Question: Cosmos Chiu - CIBC World Markets - Analyst : Of course. One last question on Cactus. As you mentioned, I think the majority of the royalty is Cactus East and Cactus West, with a bit at Parks and Salyer. I don't know the asset as well, so I'm just trying to figure out how this comes around or comes together. But what can we expect when the pre-feasibility study is due to be released? And later on in 2025, I'm sure we're going to see some Parks and Salyer. But Cactus East and West going to be in there as well. Because, again, I'm just trying to refine my model here. If I was just taking the entire resource here, this could be worth a lot more than the $55 million that you paid for. So number one, I'm just trying to figure out the different components to it. What's going to be included in the pre-feas that's coming up? And how can we possibly evaluate?

Question: Cosmos Chiu - CIBC World Markets - Analyst : No, that's perfect. Thanks, Dan and Martin. We'll keep our eyes out for the pre-feas as well. But those are the questions I have. Thanks again for answering all my questions.

Question: Brian MacArthur - Raymond James - Analyst : Good morning. My question is really Cosmos' last question. But just to be clear, when you say the first payments that you think you're going to get on Cactus on year five, that is purely on the assumption of where the minings come from. There's not a checkerboard royalty, this is all one royalty. And the buyback of 0.5% is all the same royalty. There's not like multiple royalties, I don't see here that's part of the equation. This is just purely your assumptions about what the future mining plan will be when you say you won't get any royalties until year five. Is that correct?

Question: Brian MacArthur - Raymond James - Analyst : Great. I just want to make sure. Because I looked at your production profile or the same that you have on your page 7 now, basically, you just start and it turns out you'd start to get the big year of production is when when you'd start to kick the royalty. And the way you see things now, I realize, it can all change with the feasibility. Is that the right way to look at this? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. FEBRUARY 13, 2025 / 5:00PM, RGLD.OQ - Q4 2024 Royal Gold Inc Earnings Call

Question: Brian MacArthur - Raymond James - Analyst : Great. Thanks. It's just the same thing as (inaudible). I'm just trying to get the math to work on this thing. The second thing, can you remind me, I see deferred silver is up to 1.7 million ounces that PV now. I mean that's almost $1 a share, whatever. Effectively, what actually happens if they finally get the recoveries work? Can you just remind me how you start to recover those deferred ounces?

Question: Brian MacArthur - Raymond James - Analyst : Thanks, Bill. That's what I was trying to figure out. So that's very, very helpful. Thank you very much for taking my questions.

Question: Derick Ma - TD Securities - Analyst : Thank you. My question is on capital allocation and Royal Gold is debt-free now, generating $141 million operating cash flow in Q4, $1.2 billion available liquidity. Is there sufficient supply of potential deals in the market to deploy all the capital that you're generating in your view?

Question: Derick Ma - TD Securities - Analyst : This is maby a difficult follow-up, but at what point do you think you are over-capitalized then given your cash flows (inaudible)?

Question: Derick Ma - TD Securities - Analyst : Okay. That's fair. And one more question on Cactus. The area of interest, I don't think that includes their target at Main spring, but does it include the Northwest extension? Has it helped them now? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. FEBRUARY 13, 2025 / 5:00PM, RGLD.OQ - Q4 2024 Royal Gold Inc Earnings Call

Question: Derick Ma - TD Securities - Analyst : (inaudible) extension. (inaudible) exploration optionality. Northwest of Cactus and northwest extension, I believe, that's one of the exploration targets?

Question: Derick Ma - TD Securities - Analyst : Okay. Great. Thank you very much.

Question: Josh Wolfson - RBC Capital Markets - Analyst : Apologies in advance for the sticky nature this question, but just the comments earlier on the guidance and some of the discussion on flat year-over-year ranges, are you thinking about that more in terms of the individual metals? And I asked because there have been some significant

Question: Josh Wolfson - RBC Capital Markets - Analyst : Okay. So which would imply when you're saying sort of stable numbers, that would be up by individual metal?

Question: Josh Wolfson - RBC Capital Markets - Analyst : Great. Thank you.