Royal Gold, Inc. Q3 FY2025 earnings call

Bill's Remarks

• Had strong results with new revenue and cash flow records. Benefited from stronger gold and silver prices. Earnings were $127 million or $1.92 per share, adjusted net income $136 million or $2.06 per share. Added First Quantum with a $1 billion gold stream transaction and completed Sandstorm Gold and Horizon Copper acquisition. Notable news in pre-existing portfolio like Mount Milligan mine life extension and Fourmile exploration update.

Martin's Portfolio Update

• Overall revenue record $252M with 72,900 GEOs. Royalty revenue up 41% to $86M. Stream segment revenue $166M up 25%. Highlights include Mount Milligan mine life extension, Cortez exploration updates, Kansanshi S3 expansion completion, and updates on various smaller assets.

Paul's Financial Update

• Revenue up 30% to $252M, record. Cash G&A <3% of revenue. DD&A expense decreased. Incurred $13M acquisition-related costs for Sandstorm and Horizon. Net income increased to $127M or $1.92 per share. Operating cash flow a record $174M. Discussed Sandstorm and Horizon's unaudited results and liquidity position with debt details.

Overall revenue for the third quarter was a record $252 million with volume of 72,900 GEOs. Royalty revenue was up about 41% from the prior year quarter to $86 million. Revenue from the stream segment was $166 million, up about 25% from last year. Gold remained the largest contributor to revenue for the quarter at about 78% of the total, followed by silver at 12% and copper at 7%.

Maintained 2025 guidance ranges for metal sales, DD&A, and effective tax rate. Excluded contributions/impacts from Kansanshi stream acquisition, Mount Milligan cost support agreement, and Sandstorm and Horizon acquisitions. Sandstorm and Horizon had unaudited results for the quarter.

Q: Could you talk more about the 5,000 ounces deferred in Kansanshi stream and when they might come in?

A: It's a timing issue, not a production shortfall. Ounces will come in as per production timelines.

Q: How comfortable are you with the $1.225 billion debt level?

A: Comfortable, and pro forma leverage will be comfortable with running trailing 12-month EBITDA. Not concerned as long as no further large acquisitions.

Q: Thoughts on converting 30% joint venture interest in Hamadan to traditional royalty?

A: Goal is to convert to traditional royalty, with value discussions and gold price considerations involved.

Q: Insights on Fourmile royalty being 1.6% equivalent?

A: It's a simple $1.6 billion royalty from Rio and Idaho acquisitions.

Q: Thoughts on dividend increase and share buybacks in 2026?

A: Board will decide dividend in November, share buybacks will be considered after messaging and valuation assessment.

Q: Accounting on Mount Milligan cost support agreement gold delivery?

A: Deferred support liability on balance sheet, no P&L impact, just balance sheet change.

Q: Still looking for transactions after big deals?

A: Still looking, but opportunities may be smaller scale, with focus on attractive investments.