Royal Gold, Inc. (RGLD) Bank of America Merrill Lynch Global Metals, Mining & Steel Conference Call May 16, 2012 4:45 pm ET Executives Stefan L. Wenger – Chief Financial Officer Analysts Michael Jalonen – Bank of America/Merrill Lynch Presentation Michael Jalonen – Bank of America/Merrill Lynch
We do pay a dividend, we’ve paid a dividend for 12 years and we’ve have actually increased that dividend 10 over the last 11 years. Our dividend is $0.60 of share and that’s double what it was just in 2008 and we want to continue that dividend growth going forward. We finally are looking at share price performance, as you would expect from a royalty model and a premium investment. We have outperformed the GLD over this last five year period and we’ve also outperformed an average of senior producers over that same period.Just looking ahead revenues, we’ve been growing revenues consistently and we expect that trend to continue. Keep in mind that we have a June fiscal year end, so the bar on the far right represents the first three quarters of our fiscal 2012, compared to just left about our fiscal 2011. For the nine month period, our revenue and our adjusted EBITDA were $203 million and $183 million respectively. That compares to a $157 million and a $138 million for the same period one year ago. Most of the revenue increase was attributable to price, as ramp ups in Andacollo and Peñasquito, among others were affected by throughput issues, which limited production growth attributable to our royalties. A quick snap indicates that the adjusted EBITDA percentage increase was greater than the revenue percentage year-over-year. And in part the fact reflects the fact that our cash operating cost are not impacted by many of the factors giving rise to an inflationary cost environment in the industry. I’ll come back to this issue a bit later. From a country and operator perspective, our top four countries for revenue were Chile, Canada, Mexico and the United States and our top four operators by revenue were Teck, Vale, Goldcorp and Barrick which represent diversity, quality and those operators are really key characteristics of our portfolio.
One last note, we are heavily focused in precious metals. For the nine months, we’ve recorded 74% of our revenue from precious metals including gold and silver. And as we look forward, we expect that percentage to increase significantly in Pascua-Lama and Mt. Milligan begin production.And whether it’s related to lower grades, higher strip ratios, rather import costs. We’ve seen cash cost increase in the industry and it’s really compressed unit cost, unit margins. Our business is a little different. As a royalty company, we have fixed cash cost if you will. And our margins for the past fiscal 2011 were 1,200 an ounce compared to the operators margins in calendar 2011 on the average of $900 an ounce. This represents the fact that we have 20 people on our company really our only costs are related to those 20 people and the cost of being a public company. And just to update you for our most recent nine months, our cash cost have come down to $85 an ounce for the most recent nine month period and $71 an ounce for the most recent three month period. Read the rest of this transcript for free on seekingalpha.com