DENVER--(BUSINESS WIRE)-- Royal Gold, Inc. (NASDAQ: RGLD) (together with its subsidiaries, “Royal Gold,” the “Company,” “we,” “us,” or “our”) reports net income of $63.9 million, or $0.97 per share, for the quarter ended March 31, 2023, (“first quarter”) on revenue of $170.4 million and operating cash flow of $108.7 million. Adjusted net income1 was $63.3 million, or $0.96 per share.

First Quarter 2023 Highlights:

Robust financial results with revenue of $170.4 million and operating cash flow of $108.7 million, up 5% and 7% compared to the prior year period
Revenue split: 71% gold, 14%copper, 12%silver
Production volume of 90,200 GEOs2, 4% higher than the prior year period
Repaid $75 million of debt, reducing total debt to $500 million and increasing total available liquidity to $634 million
Maintained adjusted EBITDA margin1 of 79%
Paid quarterly dividend of $0.375 per share, a 7% increase over the prior year period
Post Quarter Events:

Published second ESG Report, including climate scenario analysis
“Our first quarter provided a solid start to 2023,” commented Bill Heissenbuttel, President and CEO of Royal Gold. “Steady portfolio performance drove strong revenue and operating cash flow, which allowed us to repay $75 million of our outstanding revolving credit facility balance while enhancing our strong liquidity position.”

“We saw some positive developments from within the portfolio during the quarter,” continued Mr. Heissenbuttel, “including the receipt of first revenue from King of the Hills, the first full quarter of sustained production at nameplate capacity at Khoemacau, a significant increase in reserves and resources at Xavantina, increases in reserves at Pueblo Viejo and Cortez, and the extension of production through 2044 at Pueblo Viejo. Continued contributions from these and other portfolio assets, combined with the current strong metal price environment, provide us with the financial strength and liquidity to remain competitive in our pursuit of new business opportunities.”

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1 Adjusted net income, adjusted net income per share and adjusted EBITDA margin are non-GAAP financial measures. See Schedule A of this press release for additional information, including a detailed description of adjustments to net income.

2 See Schedule A of this press release for additional information about gold equivalent ounces, or GEOs.

Recent Portfolio Developments

Principal Property Updates

Khoemacau Achieves First Quarter of Operations at Nameplate Capacity

According to Khoemacau Copper Mining (Pty.) Limited (“KCM”), operations at the Khoemacau mine in Botswana continued at nameplate capacity through the first quarter after the target production rate of 3.65 million tonnes per year (10,000 tonnes per day) was achieved in December 2022. As projected in the mine plan, KCM expects payable silver production in 2023 to range between 1.5 and 1.7 million ounces, which is slightly below the life of mine (“LOM”) average due to lower silver grades in the upper portion of the Zone 5 deposit and the top-down mining sequence.

Mount Milligan Production for 2023 Expected to be Back-End Weighted

As disclosed on February 24, 2023, Centerra Gold Inc. (“Centerra”) expects 2023 production of between 160,000 and 170,000 ounces of gold and 60 to 70 million pounds of copper from the Mount Milligan mine in British Columbia. Centerra expects gold and copper production to be higher in the second half of the year with approximately 30% to 35% of concentrate sales expected to occur in the fourth quarter. According to Centerra, the lower production compared to 2022 is due to mine sequencing.

Centerra also reported that it continues to optimize the LOM plan for Mount Milligan and anticipates increases in both gold and copper production for 2024 and 2025 when compared to the annual figures included in the most recent Technical Report, dated November 7, 2022.

Pueblo Viejo Technical Report Extends Production Through 2044

On March 17, 2023, Barrick Gold Corporation (“Barrick”) issued an updated Technical Report on the Pueblo Viejo mine to support the previously disclosed Mineral Resources and Mineral Reserves estimates as of December 31, 2022. According to Barrick, mining of the open pit is expected to continue to 2041 and processing of ore is expected to continue to 2044, with LOM production from 2023 through 2044 of approximately 11.1 million ounces of gold and 49.9 million ounces of silver (Barrick’s 60% interest).

On May 3, 2023, Barrick provided an update on the plant expansion and mine life extension project at Pueblo Viejo in the Dominican Republic. With respect to the plant expansion, Barrick reported that the first ore has been processed through the crusher and it expects to substantially complete the commissioning of the new plant infrastructure and commence the ramp-up phase during the second quarter of 2023. With respect to the mine life extension, Barrick disclosed that technical and social studies for additional tailings storage capacity continued to advance, and a decision by the Government of the Dominican Republic on the Environmental and Social Impact Assessment for the proposed new Naranjo tailings storage facility (“TSF”) is expected during the first half of 2023. Barrick further reported that geotechnical drilling and site investigation are ongoing to support a feasibility study on the TSF, which is due for completion in the second quarter of 2024.

Silver stream deliveries were approximately 362,200 ounces for the first quarter, compared to approximately 274,500 ounces for the first quarter of 2022. During the current quarter there was a nominal increase of 5,700 ounces of deferred silver. The deferred ounces are the result of a mechanism in the stream agreement that allows for the deferral of deliveries in a period if Barrick’s share of silver production is insufficient to cover its stream delivery obligations. The stream agreement terms include a fixed 70% silver recovery rate. If actual recovery rates fall below the contractual 70% recovery rate, ounces may be deferred and delivered in future periods as silver recovery allows. As of March 31, 2023, approximately 518,400 ounces remain deferred. We expect that silver recoveries could remain highly variable until the plant expansion project is complete and is running at full production levels. We do not expect material deliveries of deferred silver ounces while the plant ramps up to full production levels during 2023, and timing for the delivery of the entire deferred amount is uncertain.

Barrick continues to expect gold production of 470,000 to 520,000 ounces in 2023 from its 60% interest in Pueblo Viejo. Royal Gold’s stream interests are applicable to production from Barrick’s interest at Pueblo Viejo.

Strong Production from the Legacy Zone Expected in 2023, Updated Reserves for the Legacy Zone, and Extension to the Goldrush Permitting Timeline at the Cortez Complex in Nevada

As disclosed by Barrick on November 18, 2022, total gold production from the Cortez Complex is expected to be approximately 1.0 million ounces in 2023, and then increase from approximately 900,000 ounces in 2024 to approximately 1.3 million ounces in 2027. Royal Gold owns multiple royalty interests at the Cortez Complex, which for purposes of simplified disclosure have been divided into the Legacy Zone, consisting of the Crossroads and Pipeline deposits, and Cortez Complex Zone (“CC Zone”), consisting of the remaining deposits in the Cortez Complex.

For 2023, gold production from the Legacy Zone is expected to range from 450,000 to 480,000 ounces with a midpoint of approximately 465,000 ounces. 2023 gold production for the CC Zone is expected to be approximately 535,000 ounces.

For the period 2023 through 2027, gold production from the Legacy Zone is expected to average approximately 360,000 ounces per year. Production during this period is expected to vary around this average, with lower production expected in 2024 and 2025 and higher production expected in 2026 and 2027. All other production from the Cortez Complex during this period is expected to be sourced from the CC Zone.

The gross royalty rate applicable to the Legacy Zone is approximately 9.4% and the gross royalty rate applicable to the CC Zone, other than Robertson and Goldrush SouthEast deposits, is approximately 1.6%.

At the Robertson project, Barrick expects first production in 2027 subject to the successful completion of feasibility and permitting activities, among other things. The gross royalty rate applicable to Robertson is approximately 0.45%.

Proven and probable mineral reserves for December 31, 2022, at the Cortez Complex include approximately 2.7 million ounces of gold for the Legacy Zone, which includes the Crossroads (47 million tonnes at 1.69 grams per tonne) and Pipeline deposits (7.6 million tonnes of ore at a gold grade of 0.63 grams per tonne), and assuming a gold price of $1,300 per ounce.

On May 3, 2023, Barrick reported that the timeline for the Record of Decision (“ROD”) on the Goldrush project, which is located within the CC Zone, has been extended from the first half of 2023 and is now expected in the second half of 2023. Barrick also reported that mine development and test stoping in the Redhill zone is continuing and a minor permit modification has been approved that will allow underground development to continue until the ROD on the Goldrush Plan of Operations is received. According to Barrick, the extension to the permitting timeline is not expected to have a significant impact on the 2023 outlook and the potential impact, if any, on the outlook from 2024 onwards is currently being reviewed.

Other Property Updates

Recent notable updates as reported by the operators of other select portfolio assets include:

Producing Properties

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