Royal Gold Announces Stellar Results for Q4 and Full Year 2023

DENVER, February 14, 2024 -- Royal Gold, Inc. (NASDAQ: RGLD), a major player in the precious metals sector, has released its operating and financial results for the fourth quarter and the entire year of 2023. The company has once again demonstrated its financial robustness and operational excellence, maintaining a strong performance amidst varying market conditions.

In Brief:

1. 2023 Results: Royal Gold reported $239.4M net income, $605.7M revenue, and $415.8M operating cash flow.
2. Dividend: Increased to $1.60/share for 2024, marking the 23rd year of growth.
3. Sales Volume: Reached 312,100 GEOs in 2023, slightly under guidance.
4. Key Developments: Extensions at Mount Milligan, Goldrush, and Pueblo Viejo highlight strategic progress.
5. Growth Projects: Anticipated revenue increases from Bellevue, King of the Hills, Côté Gold, and Manh Choh.
6. Financial Strength: Reduced debt by $325M; total liquidity now at $845M.
7. 2024 Forecast: Expects 47,000-52,000 GEOs sales in Q1, with full-year guidance pending.

In Detail:

Full Year 2023 Performance Highlights

• Net Income: Royal Gold reported a net income of $239.4 million, translating to $3.63 per share.
• Revenue: The company's revenue stood at $605.7 million.
• Operating Cash Flow: The operating cash flow was reported at $415.8 million.
• Adjusted Net Income: Adjusted net income was slightly lower at $232.9 million, or $3.53 per share.
• Sales Volume: The total sales volume was about 312,100 gold equivalent ounces (GEOs), just below the guidance range provided earlier.

Key Financial Metrics:

• Revenue Breakdown: 76% gold, 12% silver, 9% copper.
• Sustained high adjusted EBITDA margin of 79%.
• Debt reduction by $325 million, bringing it down to $250 million.
• Total available liquidity shot up to $845 million.
• A dividend of $1.50 per share was paid.

Fourth Quarter 2023 Highlights

• The dividend was increased for the 23rd consecutive year to $1.60 per share for 2024, marking a 7% increase over 2023.
• $75 million was repaid from the balance outstanding on the revolving credit facility.

Bill Heissenbuttel, President, and CEO of Royal Gold, emphasized the company's strong finish to 2023 and its focus on capital returns to shareholders. He also highlighted the expected revenue growth from new producers and developments transitioning to production, including Bellevue, King of the Hills, Goldrush, Mara Rosa, Côté Gold, and Manh Choh.

Notable Property Developments

Mount Milligan Mine:

• A significant agreement with Centerra Gold Inc. will extend the mine's life to 2035, with potential for further extensions.
• Production guidance for 2024 is set between 180,000 to 200,000 ounces of gold and 55 to 65 million pounds of copper.

Goldrush and Cortez:

• Barrick Gold Corporation announced the receipt of the Record of Decision (ROD) for the Goldrush mine, with production expected to ramp up in 2024.

Pueblo Viejo Plant Expansion:

• Barrick Gold Corporation has completed the plant expansion, with full throughput expected after the reconstruction of the ore stockpile feed conveyor in Q2 2024.
• Silver stream deliveries saw a variance, with about 854,000 ounces deferred as of December 31, 2023.

Andacollo Mine:

• Production for 2024 is expected to remain in line with 2023, amidst ongoing drought conditions affecting production.

Khoemacau Mine:

• A change in ownership was announced, with MMG Limited acquiring all issued share capital of Cuprous Capital Ltd.

Looking Ahead to 2024

Royal Gold is well-prepared for 2024, with a strong liquidity position and no significant additional financing commitments. The company is poised for growth, banking on its diversified portfolio and solid financial foundation.

For the First Quarter of 2024:

• Sales from the stream segment are projected to be between 47,000 to 52,000 GEOs.
• Detailed guidance on 2024 sales, depreciation, depletion, amortization expenses, and effective tax rate is expected early in the second quarter of 2024.

Royal Gold's enduring commitment to growth, efficiency, and shareholder returns positions it well for continued success in the precious metals sector.

Expansion and Exploration: A Forward-Looking Strategy

Royal Gold's strategy hinges not just on optimizing current assets but also on exploring new opportunities and extending the life of existing mines. The agreement with Centerra Gold Inc. to extend the life of the Mount Milligan mine till 2035 underlines this approach. Furthermore, the company's active involvement in exploration activities at various properties, including the Goldrush mine in Nevada and the Pueblo Viejo plant expansion in the Dominican Republic, showcases its commitment to growth and sustainability.

The anticipated increase in production from new and developing projects like Bellevue, King of the Hills, and Côté Gold illustrates Royal Gold's strategic planning in action. These projects are expected to contribute significantly to the company's revenue stream, enhancing its portfolio's diversity and potential for growth.

Technological and Operational Advancements

Royal Gold's focus on technological advancements and operational efficiencies is evident from its recent developments. The completion of the plant expansion at Pueblo Viejo, despite the challenges posed by the ore stockpile feed conveyor failure, is a testament to the company's resilience and commitment to operational excellence. The expected stabilization and optimization of the flotation circuit in Q1 2024 will further enhance the plant's throughput and production efficiency.

At the Andacollo mine, despite facing extreme drought conditions, Royal Gold and its partner, Teck Resources Limited, are implementing measures to mitigate the impact on production. This proactive approach to overcoming environmental challenges underlines the company's dedication to sustainable mining practices and its ability to adapt to changing conditions.

Financial Strength and Shareholder Returns

Royal Gold's financial results for Q4 and the full year of 2023 highlight the company's strong financial health and its ability to generate substantial cash flow. The reduction of debt by $325 million, coupled with an increase in total available liquidity to $845 million, positions the company favorably for future acquisitions and growth opportunities.

The consistent increase in dividends, with the latest being the 23rd consecutive year of dividend growth, reflects Royal Gold's commitment to returning value to its shareholders. This record of increasing dividends is unparalleled in the precious metals sector and demonstrates the company's robust financial management and optimistic outlook.

Conclusion

As Royal Gold looks forward to 2024, it does so with a solid foundation built on strong financial results, strategic acquisitions, and operational excellence. The company's forward-looking strategy, focused on growth, efficiency, and sustainability, coupled with its commitment to shareholder returns, positions it well to navigate the challenges and opportunities of the precious metals sector. With a promising outlook for its developing projects and a strategic approach to exploration and operational advancements, Royal Gold continues to solidify its status as a leader in the industry.