RGLD - Earnings call transcript Q4 2019

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Operator

Good day and welcome to the Royal Gold, Inc. Fiscal 2019 Full Year and Fourth Quarter Conference Call. All participants will be in listen-only mode. [Operator instructions] After today's presentation there will be an opportunity to ask questions. [Operator instructions] Please note today's event is being recorded. to Business conference Development. like Baker, to now of Director would turn over the Alistair I Please, ahead. go

Alistair Baker

Operations; Thank Financial you, XXXX Rocco. will Mark this discussion is are of call Chief Good webcast Corporate be RGLD; morning Executive Heissenbuttel, Counsel and President, Chief fourth being website. and a and Isto, welcome able quarter President, on to Tony fiscal Strategy; Officer; and replay and President President Officer our Breeze, year Jensen, today Vice live results. Development call access event RoyalGold This and you the to of our Vice and on Vice Bruce Secretary. Dan Vice President Bill of Kirchhoff, General Participating

Private quarter company's Act. discussion up and you is safe of press some open provide an filings our Tony comments. the with followed Mark Tony developments by recent lines This on on greater the wrap discussion with a falls We'll slide risks under current harbor the update this portfolio. overview detail and SEC. in give the update included the the financial Litigation for Bill will with operating an a of and the fiscal then session. The call year, will then and Securities Safe in the closing release in uncertainties presentation of Harbor Q&A is and statement the with in cautionary Reform presented our provision

I Tony. Now call the will turn to over

Tony Jensen

production development the for that the of pleased achieving in gold Royal operating several reflects We solid, for I XXXX a theme. activities Slide fiscal Fiscal same XXX,XXX and year thank strong was performance on steady, to will that the you fronts. I'm for begin year financial our overall operating The in XXXX and morning for volume in ounces. during was the year successful call. Good joining adopted report business successful X. Gold

million. the for were million million solid from full financial operating XX% generating coming and Our full for revenue gold or share. with $XXX $XXX year year was performance Earnings of the of per flow $X.XX $XX cash

strengthen the resolved facility quarter We and now favorable We valleys this Voisey's credit development the more calendar pleased XXXX. dispute raised of in is particularly at year by $X.X basis. We mine back the the currently terms balance use regarding to million advantage plans year. $XXX flow royalty positions a Bay year fiscal approximately take which during on per for XXth -- the extended asset and the cash business to quarter during available million contributing that We on life of through our the liquidity well us $XXX strong reduce to given first opportunities. our revenue, calculation dividend of world-class which share have to straight fiscal are sheet extend the have and

XX-year mine added will the high-quality expects portfolio operate in for project during life. begin third to we Capital quarter. production mid-XXXX our a And fiscal project the Canyon development The the developer Cupric project long-life and Khoemacau stream

remarks. further this may is construction have financing XX% underway. on selection. to which his silver will be well We in payable a Mark streamline project and has Cupric project from the provide of completed increased on at Cupric's XXX% a the progress project update

headwinds third successful in fourth and winter can at caused the couple a during faced quarter. XXXX. revenues As we quarters. a some prices XX% price copper price Metal blockade to lower in negative In Water the restrictions see of of Milligan X% caused much our the you on year. the is throughput at caused Mount and a at principal some fiscal pressure But during compared this also temporary the reductions a properties. Penasquito solid, gold down lower shut with steady fourth also operating

Although fiscal these display Gold is by and begun issues Mount I'm pleased year-over-year, its achieving community improved Milligan X% ongoing. value each of to macroeconomic the full back higher dialogue has silver targets. year-end. Penasquito insurance. is that is production is throughput in price about in recovery as

will to and activity as turn properties. I the our as at some discuss Now of the Khoemacau over call well producing at development Mark key

Mark Isto

briefly addition final that million I'd at which million Thanks, Tony. the came they Slide of $XX financing last equity, and month resource sponsor. Cupric million closed project the Starting the developments from recent GNRI of the X announced $XX of to like the mention Khoemacau. at project $XX from capital some with

sources now from $XXX of All experienced and In addition industry. can photos. mining other and investment has our providers available Cupric in total the project available advancing repayment project for development, capital. finance working million Cupric of financing actively the been you see as to has a debt

box the of the X.X% to progress groundbreaking almost The at of XXXX. project X bottom The well that June President Botswana the the project. of been spent has of capital the next cut XXX of has are the for portals the and the top for photo sources reported X Cupric on-site beginning water excavations workers photo shows mine since the one field, the hacker calendar there the and ceremony pipeline about photo shows shows on on XX.

contract is financing by the than a project. project pleased completed the work project just the advance with underground overall month on quality being the a last start to been floor mobilizing awarded the longer visit We currently project provided and of mining site Cupric's the are slightly support X-year by tempered and team, to the December. in Piniasco progress close was Although for anticipated, has who

of discuss recent operating of Going our key Slide some the to properties. developments like I'd at X to several

stream for has day the to usual per tons reported at Centerra production reflected between at the throughput capacity April water second later to in and return and in deliveries May. average Tony to newly increase to Mount quarter an with permitted X June. up months As spring in in operations per difference the throughput quarter time quickly of expect approximately mill the Centerra of XX,XXX Mount Milligan we started stream mentioned sources XX,XXX deliveries, milling allowed visible Milligan, water throughput access our over that mill will day ramped and received XXXX. the Due averaged in likely be tons full mill

may Centerra an cautioned in has year, weather are encountered conditions the While pleased hot less spring we Centerra are that Milligan was be and they've the new quarter finding sources XXXX licenses spring In we to water of the production within to available one has on exploration and first dry additional second reported groundwater applied site. need from engineering the persist this the results some kilometers from again draw to believe if conserve focus is and areas, reported these areas improvement, managed calendar sources a while Mount of and summer at capture maintained aquifer see by couple of of of that and in groundwater interesting note until melt. dry anticipated. ongoing, October. runoff water beginning Centerra not Centerra supplemental has a than has they in calendar this XXXX to the the weather half water resources that water also for

calendar Despite million ounces to and million the will gold guidance of dry XXX,XXX expects of previous XXXX copper XXX,XXX XX be XX pounds current the received. conditions, for to production Centerra of

continued improve Rainy to River; quarter. this operating to performance turning Now

Phase is calendar Phase and second as year. to fourth year X. to throughput lower of for Throughput XX% ore New with flow and Phase increase availability expects recovery and availability from the of New continuing gold for X. planned silver to may quarter. X per circuit averaged the mine in recovery complete are Milling XX,XXXx plan operations for Gold is and quarter study Gold X the for generation they reported XX,XXX quarter of June. grades Low-grade the targets a in at updated June quarter on day mining cash shift mined and day XX,XXX continued XX% while improved of an was planned mine as quarter times ongoing XX,XXX Gold and XX% half Phase during the optimizations. the the life of the ounces with reached calendar transition be for operation to quarter also achieve Work comprehensive depleted averaged to production of ounces the for per expected optimization the

of Gold full XXXX that XXX,XXX expects and guidance year ounces gold. New between XXX,XXX calendar of annual performance meet the previous will

a to process Mexican I'll with sponsored X, provide Penasquito in Penasquito the Wassa. after leaders Continuing XX at Operations Slide some and by June resumed comments started we blockade government. federal the on dialogue on

June Newmont ramp to operations Goldcorp back and concentrate are reported has up back that not normal. in inventories

see returned and the impacted quarter royalty as a to result levels. normal for pleased the Our of we're significantly has operation to revenue the blockade was

team program team. working the is first the Penasquito Goldcorp been of experts operations announced on-site have go potential the Newmont a through operations full the to that also of Goldcorp and with

between the the particular interface So the and a been defined area focus. far of as mail mine has

to program the incremental calendar to are seen pit the grade completed. We improvements business With stripping benefits that the expected steadily XXXX of forward expects of be will then is in Newmont in calendar XXXX, and the for the and look XXXX the plan mine should that production, we that Penasquito as identified. remainder this improve respect Piniasco of

of pounds million for forecast of words gold, XXX and is silver, XXX,XXX April million XXth ounces pounds ounces production on zinc. Goldcorp XX from calendar Newmont million of XXX lead XXXX of

to Now I'll Golden Star. turn

note our You'll quarter. that started break out this disclosure Wassa Prestea from to we've separately

mineralization of material Star statements. Wassa, at successor, in significant Prestea will quarter the reported Prestia. update quarter-end, the positive to south Starting be Brown identified in portfolio the a been made resource compared current down recent deposits. the Wasa with Wassa existing and the year-end more demonstrating at and asset Father resource exploration, has reserve relatively deposit Star results and completed plunge to announced Star As satellite at extensions Golden been to drilling Subsequent by have Golden to our Golden with the further has

of during Star well the Golden more the north reported quarter results confirmed viable Brown, At calendar drilling of resource for underground reported will as bodies determine Star on level. Brown. and drilling project to from as mineralization Prestea, Father for third the exploration delineation a XX has drill further mineral the paused this if and results results the high-grade drilling program calendar area also quarter exists Father third reserve. XX The mining to extension the initial the Golden model between At of definition attracted and extensions update drilling focus the underground and XXXX current

quarter stops hanging With in mining material to Panel impact the for on low-grade of Star. the this quarter unexpected operations respect was negative biggest At wall for Golden Wassa, the challenging was X. more the

the areas able and is grade. the development definition originally of the to Although drilling be planned future reserve be accelerate expect average increase below for near to to grade the investing the They and than Star manage be lower mined grade profile. will term to overall

be result, for been and a between of production is year guidance to during of in half As at XXXX first ounces. half the XXX,XXX marginally the than lower the reduced calendar Wassa year. second calendar The production to XXX,XXX full the has forecast

payment by XX% calendar time Golden Star steps half of ounces. And has of the At siders production previously XXXX announced our and a rate, With to our second operating Prestea the reduced XX,XXX to low respect the be is forecasting our today items opinion be affecting and causing good performance key will guidance and than better advance and in to the approximately we've to similar investment, half year mining review regards or taken our CSA to profile of first performance initial assessment. Wassa at immediate of up exploration issues range address Global Prestea. cost. excessive dilution in to operational XX,XXX original recovered identified identified will with and full that operational the higher

discuss turn our to now the call I'll to Bill results. over financial

Bill Heissenbuttel

and turn I'll to in our summary an with high cash financial I attention give start XG quarterly comparable revenue, will period XXXX. measures, level your quarter. X the fiscal be slide overview results flow. and results of Mark. Thanks, the of earnings a I'll comparing quarterly the for to

$XXX.X million are in the with although gold both and with prices $X.XX was Metal equivalent XX common had down unchanged, and this QX quarter which negative was the line and, million down in gold $XX.X XX%. share was earnings quarter. gold XXXX. a ounces, Revenue volume attributable effect was year quarter royal XX% XXX copper was of silver to line this shareholders prior relatively or a Net fiscal

due was Net As X, $XX.X net non-cash from reporting million to since cash revenue prior from income, Returning we while approximately year, to caused that, million taxes quarter, in royalty we mark temporary this XXXX, operations paid statement, have of Penasquito this total this million, change note was businesses basic from charge, to I we excluding primarily $XX.X investments recognize the to tax. million non-cash per was last July the charge. been consistent down shutdown period. year our our of $XX compared the period market and of share reporting every contribution or this the and $X.X quarter significantly stream the Cash to higher quarter. of income relative revenue equity $X.XX

a business, though lower X% royalty lower. streams our even relative Because sales Peñasquito, higher revenue revenue is stream has sales primarily a of This implications stream was our approximately segment higher With cost came XX%. for of revenue cost revenue our compared sales, of of specific from total to and XX% in our cost of from to resulted depreciation.

revenue should from per are expense more production. expense rose $XX.X have portfolio. return the to the and for newer to DD&A are Peñasquito depletion charge levels assets metal million D&A has that $X.X streams equivalent full ounce higher and expect to million. decreased more $XXX down per typical quarter royalty unit mix mature resumed typically the Similarly, We as now gold a

work The [ph] of subsequently activities. the on expense D&A support included to encourage and the prior approximately expense are representative D&A of $XXX for overhead. our We of permitting spending resolved XXX valid year more typical gold, quarter which recent peak share spending on our quarter our litigation, exploration levels been for at continued has

is low relatively While worth low expense, per our makes share share. this approximately account $X.XX a this

the to higher we mainly the we Peñasquito from I lower smaller last what shutdown full tax year is expected, guidance full received the jurisdictions than revenue than for which was call. rate tax was contribution due rate revenue year because from lower than provided rate the was quarterly effective of and a quarter Our forecast, [ph]. to XX.X% and tax the mostly Latos XX.X%, The lower XX% on XX%

in in With respect a respect sometimes we it held my concentrate inventory. on Mount This to approximately inventory, to the we June at call quarterly see GEOs is variability XXX [indiscernible]. with last settlement the to of and the due end was higher than Milligan XX and guidance bit dates,

As restrictions to previously, the expect March we the be September stream less, quarter. due the have Mount Milligan quarter production noted we volume during to

equivalent inventory to the quarter. approximately levels As such, be we anticipate stream on XX,XXX GEO's based segments our sales to between and forecast gold end XX XX,XXX deliveries XXX ounces, September at of the

anticipate to comments slide also and position expenses expect liquidity. increase with the our $X.X of of to in quarter. We the at finish our summary I million in my turn to financial X September $X.X share the and activities be now to million of our exploration peak a range and

that million, fund to $XXX repayment of the the believe credit a at We a million. million calendar of about funding and XXXX. XXXX, this which calendar project million were The quarter. strong of a of of with [ph] Comacaw capital with $XXX June finance available remains revolver. We provides combination which low the completed liquidity investment under acquisitions $XXX in million without calendar bonds, all The partially convertible help that in revolving project $XXX only the capacity working $XXX expect begin the on funding facility XXXX, of piece end basis cost us million. our We an of capital we as convertible on we'll our early dilution. commitment us million a and late XXXX, revolver in issued on in XXXX $XXX Our calendar capital provided development notes is in $XXX the toward which with end the our on The working equity cash the significant quarterly $XX approximately in of our we ended liquidity to remainder drew key total in million under-on installing of fund advances. near-term year, of leaves

cost Going We're appropriate, reasonable which when out the continue facility. that the accessing of flow the of our greatest focus company also possible. growing role forward, of current credit to cash on we comfortable amounts low is will extent to

the quarter, make modest continued facility appreciate a banks two the of certainly we and years support the costs. the of XXXX up extended our reduction We maturity that that achieved by in our During June commercial strong borrowing syndicate. to

I'll to now turn the call over back Tony.

Tony Jensen

portfolio strong several balance Thanks Bill. Gold Fiscal XXXX a strategic turned higher Bay transactions, I'll the on in steady have contributing year and [ph] Comacaw the financial to Royal conclude on required well year XX. performance dividends, to and team right another with very successfully added skills again opportunities. a future for we executed slide stronger portfolio. We continued was Voisey's on depth we Royal solid project Gold and positioned quality with for is finished in sheet, the access we the and revenue growth the liquidity place high capitalize to for objectives. and

Bill Heissenbuttel

concludes we'll if open some happy questions any. there now to a for line prepared are be remarks That our and

Operator

comes Tanya go Thank you. first ahead. [Operator Instructions] from of Scotiabank. Our question Please, Jakusconek

Tanya Jakusconek

Good morning, everybody.

Just could new questions taxes guidance for the year, if maybe some ask and I wanted depreciation levels. to fiscal on

Tony Jensen

on going Tanya. give we'll our I to develop, quarter. part after the fiscal that call. early to do so our chance see team of year just the the to like how We're next deal probably first with a quarterly that Yes,

Tanya Jakusconek

move at and gold out that the Okay, seeing there do opportunities for see point? in price, one you you're with Tony, you, the gold what

Tony Jensen:

there. heard to Tanya, us. in for him Breeze He's he'll leading I'd just have me comment Zug and Dan office, from, Yes, more show turn in be what all, our to ask who's like he team the to first it let of sees on that, so

Tanya Jakusconek

Dan. you thank Great,

Dan Breeze

coming looking but be set also now, and basis, those We're the very the on not right opportunities Tanya. very look been despite [ph] ongoing into are be things a price gold there's move, creative we're that date. as of us, robust well I proactive actually Hi, at and certainly races not opportunities to large say, for a seeing pretty many, to

us opportunities means environment now. busy. a healthy very Gold the is of stage well. feel pretty for to that right We early We're Royal about good So, as basket very review

Tanya Jakusconek

it you're in the range is previously the million financing $XXX of to million $XXX that that more that we about? is terms seeing, that side, talked opportunities In on

Dan Breeze

back that yet tiny, through we're come we're opportunities to Yes, goes seen smaller the still still earlier opportunities it and not again equity us, there but really is stage the seeing those also also for opportunities. are

pretty that across spectrum now, So, it's million $XXX a to level. the wide range to right up looking we're at $XXX the million

Tanya Jakusconek

great, Okay, thank much. so

Tony Jensen

the for question. Thanks

Operator

Next question comes ahead. go from today [indiscernible]. Please

Unidentified Analyst

guys, you do receive two royalty on Cortez, there JV, with just change given that up the lag Cortez crossroads Nevada morning revenue? Do then, questions the secondly what how me. is good when that the and ramping pipeline see of Penasquito, Hey, next or year QX, all? wondering for the to the One And will up new at over expect concentrate so? on at end you mine that between you production wrapped just

Tony Jensen

questions jump answer and of receipts received Yes, that question. question? in far following on, your as get payment quarter. basically some months on royalty there. each probably at during that's I'll end the out that the in Cortez we the as on the notification the Does they after quarter, quarter, ship We the shipments anything on Penasquito

Unidentified Analyst

one be could then? So month better a there delay

Tony Jensen

so we the for basically quarter get experience in after July. the second fourth we it quarter month the occurs quarter, Yes, one

Unidentified Analyst

Okay. Great.

Tony Jensen

with over they Nevada Mark weeks crossroads. see to out there, just units to it the the and focused shell methodically the loading that really the the a bit chance couple and of all very just bench of joint a was us. of I, on bringing in asked the to ago Cortez one is of and a bringing down as go had one pipeline there, our side of We [indiscernible] three project a colleagues four all center it rest equipment It's Croft, we're And similar Rusty on our to pleased of on to another maturing. regards barring west small had what and we're quite venture, out them, gratifying And down they're over equipment significant crossroads. question They're area. trucks asking ground. the Kerry, that you're surface over a Particularly the see to large sliver

portion our into difference. continue think think joint ounces light We don't and that at I how there, is is benefit ores to mill. see equipment and of echoes interests against But the now see we that Cortez that fraction much pad, there near produce the impact leach other big likely and crossroads. compete we any heap into the doesn't of mill venture that Cortez really coming the ores or on a stay it A does to there in of other is that a don't kind so through go Cortez crossroads the term. upsetting

to at we good new some feel we've saw relationships. continue that's and through is in now out that We'll the foster comes project we're swing So, and a new we crossroads new a team faces got there. we're it those as when full continually meeting

Unidentified Analyst

Do you XXXX, XXXX Crossroads back half or in significantly more still? that of about timeline more the contributing see

Dan Breeze

months, doing on just expect the let Crossroads a to be The this engineering new guide in better month we and mine they that's bit for team I'll the that of year. is review place in a until new early next a say, us get little told couple last understanding.

the don't homogeneity I good of far there, and did pretty this get is reasonable kind for prediction want think a we the the next from in of equipment but what they probably So, there, amount of to of deposit that out two. any ahead or have quarter the is guide too year I judging

Unidentified Analyst

Okay, great, thank you.

Operator

ahead. please FBR, question go Instructions] Adam of B. Graf comes [Operator Next Riley from

Adam Graf

to discussing, guys. I just good. finished so guys you Cortez, about think I'm ask I which Thanks also wanted

Tony Jensen

Great, Adam.

questions I we of that think operator concludes the have? roster

Operator

correct. is that Sir, Yes

Tony Jensen

months' to quarter. you We year about updating forward your continuing Thanks think on fiscal good. appreciate company we today joining us. discussing and solid and on very of much very what forward us you we Thank in the look that look Very for of is to time. for and a three joining interest XXXX, straightforward activities we'll into our much trend new pretty

Operator

attending This Sir. you We today's you, thank for presentation. Thank conference all is concluded. now

may and wonderful have You now disconnect a day.

Royal Gold (RGLD) 8 Aug 192019 Q4 Earnings call transcript