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ROYALTY FINANCING An Alternative to Debt and Equity Financing PDAC 04 March 10, 2004 Donald Baker, Vice President Cor

Royal Gold Business Plan. Dedicated to the royalty business plan and growth by:Acquiring existing precious metal royalties that are accretive to Royal GoldGenerating quality royalty interests through financing activities. Types of Royalties. Gross smelter returns net smelter returnsFixed rate,

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ROYALTY FINANCING An Alternative to Debt and Equity Financing PDAC 04 March 10, 2004 Donald Baker, Vice President Cor

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    2. Royal Gold Business Plan Dedicated to the royalty business plan and growth by: Acquiring existing precious metal royalties that are accretive to Royal Gold Generating quality royalty interests through financing activities

    3. Types of Royalties Gross smelter returns + net smelter returns Fixed rate, sliding-scale Net profits interest $ per ton; $ per ounce

    4. Royalty Finance Royal Gold purchases a royalty interest in a project Focus on feasibility to development stage projects $X to operator today Y% royalty to Royal Gold over the life of mine

    5. Royalty Finance Applications Feasibility studies Development/construction financing Debt/balance sheet restructuring Expansion/modernization of operations Reclamation bond and insurance financing Loan guarantees – completion sponsorship Exploration financing

    6. Financing Vehicle Characteristics Royalty Financing Advantages Shares risk No repayment obligation Project specific Flexible structure Non-dilutive to shareholders Product denominated Management retains 100% control Lower payments per annum

    7. Competing Financing Vehicles Royalty Equity Debt Joint venture

    8. Financing Vehicle Characteristics Equity Financing Advantages No cost burden to operations “Easiest” source of higher risk capital No repayment obligations Enhances liquidity

    9. Financing Vehicle Characteristics Debt Financing Advantages Finite life Non-dilutive to shareholders

    10. Financing Vehicle Characteristics Joint Venture Advantages Partner performs heavy lifting “Outsourced” operating and management capabilities Shares risk

    11. Project Example Open pit heap leach gold project ($350 Au) 1.4 million ounce reserve 100,000 ounce per year production profile 10 year mine life $200 per ounce cash cost $35 million capex $35 per ounce produced 10% of recoverable ounces

    12. Project Example Royalty finance $35 million 13% NSR Bank debt $35 million LIBOR + 3.5% Fees (1%-3.5%)

    13. Project Example $350 Au

    14. Project Example $350 Au

    15. NPV @ 10% Free Cash Flow

    16. NPV vs. Au Price

    17. Royalty Financing Summary Prudent non-recourse gearing Combines advantages of debt and equity Shifts risk to financing party More closely aligns interests Provides alternative/additional source of funds

    18. Royal Gold, Inc. 1660 Wynkoop Street, Suite 1000 Denver, Colorado 80202-1132 U.S.A. www.royalgold.com Telephone: (303) 573-1660 Fax: (303) 595-9385

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