Royal Gold Inc at Denver Gold Americas Explorer & Developer Forum (Virtual) Transcript

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

Question: Jackie Przybylowski - BMO Capital Markets Equity Research - Analyst : Bill, you've been the CEO at Royal Gold since January 2020, which has been an interesting period, albeit your first 18 months haven't been exactly what you expected they would have been given the COVID-19 pandemic was declared shortly after your appointment. How has this affected the company and your time as CEO so far? Is there anything you would have done differently do you think if there was no pandemic going on?

Question: Jackie Przybylowski - BMO Capital Markets Equity Research - Analyst : Let's hope there's some normal months in your future.

Question: Jackie Przybylowski - BMO Capital Markets Equity Research - Analyst : In all of our future. Growth is always an important topic for you, for your peers, for the whole industry really. You've made a few transactions recently. That includes stream on Ero Copper's NX Gold, and you've done royalties on IAMGOLD's C(tT project and the Newcrest Imperial Chris mine. So before those transactions, though, it has been pretty quiet for Royal Gold for quite some time. Have you recently changed the way you look at growth? Or have you changed your investment criteria or your approach? Or is this really just a coincidence that these transactions all sort of happened at the same time?

Question: Jackie Przybylowski - BMO Capital Markets Equity Research - Analyst : Did easing of any kind of COVID restrictions, travel restrictions, help that at all? Or is it really just...

Question: Jackie Przybylowski - BMO Capital Markets Equity Research - Analyst : That makes sense. It's #1 importance. Let's talk a little bit more about growth. And I wanted to dig into something you said on your last earnings call for you that would have been fiscal Q4. You've said you're seeing good potential transactions in around the $100 million to $500 million size range in terms of upfront capital. I know a lot of your peers were asked the same question on their recent earnings call. So the answer is that they give for a little smaller, more in the $100 million to $300 million size range. So I was just wondering, is that $100 million to $500 million range still REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. SEPTEMBER 13, 2021 / 3:50PM, RGLD.OQ - Royal Gold Inc at Denver Gold Americas Explorer & Developer Forum (Virtual) the case for what you're seeing? Do you think you're seeing things that are maybe bigger than your peers? Or is there any other reason maybe why the discrepancy?

Question: Jackie Przybylowski - BMO Capital Markets Equity Research - Analyst : In this environment where maybe debt is a little bit easier for mining companies, commodity prices have been a little bit higher, maybe there's more competition in the royalty streaming space. Is it more challenging or more difficult for you to identify opportunities and to get those at attractive prices?

Question: Jackie Przybylowski - BMO Capital Markets Equity Research - Analyst : In your last earnings, you noted that your available liquidity is somewhere around USD 1 billion. Can you maybe talk about what the largest transaction you'd be comfortable with, with that amount of liquidity? I'm sure you could potentially do something bigger. Is there any kind of concentration risk that you're trying to avoid? Or what would be the size that you kind of start worrying about the concentration risk?

Question: Jackie Przybylowski - BMO Capital Markets Equity Research - Analyst : Thanks. I think we've talked a lot about growth and new growth. We haven't really talked so much about the assets already in your portfolio. And I know often that's the market maybe overlooks what you already have in your portfolio. It's definitely worth talking about. Mount Milligan and Rainy River seem to be reaching a steady state. And the Khoemacau mine is -- project has just started production. It looks like that came in on time and almost on budget, which is a great achievement, especially during this difficult time. From an outsider's perspective, we don't know that much about Khoemacau, I'd say it's maybe more difficult, more higher risk for us to look at just because we're less familiar with the asset and with the operator and maybe also with the jurisdiction of Botswana. As somewhat a little closer to the project, can you maybe talk about the risks that you see or you saw with the project and what you did to mitigate those risks or that exposure to you during the construction?

Question: Jackie Przybylowski - BMO Capital Markets Equity Research - Analyst : Can you talk a little about the upside you see at Khoemacau from here? Could the mine grow either in mine life or in size or both? And is there a mechanism, I guess, formally or legally for you to participate in that?

Question: Jackie Przybylowski - BMO Capital Markets Equity Research - Analyst : Don't get too far ahead of ourselves, right?

Question: Jackie Przybylowski - BMO Capital Markets Equity Research - Analyst : Let's talk about capital returns a little bit. I know it's an important topic. And I think, I mean, from what I'm seeing, it's something that we're seeing some diversification in terms of the view companies are taking on the most appropriate ways to return capital. Royal Gold, you've got a steady progressive dividend and approach. Can you talk about why that's important for Royal Gold or why you've chosen that mechanism? Is there any kind of opportunity to maybe supplement your dividend with something more variable or steady and progressive going to be your approach going forward?

Question: Jackie Przybylowski - BMO Capital Markets Equity Research - Analyst : And is that something that's in the back of your mind always when you're looking at future growth opportunities or reasons -- opportunities to spend your cash? Does it affect the construction of your portfolio going forward?

Question: Jackie Przybylowski - BMO Capital Markets Equity Research - Analyst : I want to echo some of the comments that were made on your earnings call, and thank you for moving to change your [year end]. I know it seems like a silly thing because it's just a month of the year. But it makes my life -- it makes -- I think everybody who follows you life a lot easier to have a December year end. Can you maybe talk a little bit, I mean, about what the implications are for your business or for your news flow and things like that? Because I think it is really going to be helpful, I think, for next year for going forward.

Question: Jackie Przybylowski - BMO Capital Markets Equity Research - Analyst : And the guidance that you're able to give will be different as well, hopefully, a little bit more expensive.

Question: Jackie Przybylowski - BMO Capital Markets Equity Research - Analyst : That's great. It looks like we're out of time. Before we finish, I will say congratulations on a record fiscal year.

Question: Jackie Przybylowski - BMO Capital Markets Equity Research - Analyst : And it's definitely exciting as well. And thanks very much for joining me, Bill.