ROYAL GOLD INC — Call Transcript 2026

is Royal Gold, which is one of the first gold royalty companies, and in fact it's been in business for over 40 years. As many of you know we continue to believe that a great way to get exposure to precious metals is through the royalty streaming companies, as they give you exposure to precious metals, but they mitigate some of the risks of the alternative investments. Today from the company we're very pleased to have Bill Heissenbuttel, who is President and CEO. I'm gonna turn it over to Bill to give a quick presentation on how the royalty model works why it's such a good business, and then we'll have a fireside chat. Bill? Great. Good afternoon, everybody. Thanks for your interest in Royal Gold and thanks to Raymond James and Brian for the invitation today. I will be making forward-looking statements. They're subject to risks and uncertainties. Actual results may differ materially. These risks are discussed in our 10-K filings with the SEC. For those of you who don't know our company, we are a royalty and streaming company. We're focused on precious metals, gold in particular. What this means is we are not an operator. We do not explore, we do not develop, we do not operate mining projects but we are instead a passive investor with an interest in metal production or revenue. We've been in the royalty and streaming business for over 30 years. We have a portfolio of 360 mineral properties, of which 80 produce revenue for us. We're gold-focused. 78% of last year's revenue came from gold, and over 50% of our revenue came from projects in Canada, the U.S. and Australia. Some of you may wonder why the royalty and streaming space is really the best way to invest in gold. On a risk basis, physical gold is the lowest risk out there. It's gold that's already been mined. It's already been processed. It's in physical sellable form. Beyond that, you really have our sector, and we generate revenue based on mine revenue. Unlike investing in operating companies, we don't have direct exposure to operating costs, capital costs, royalties and taxes, labor costs, fuel costs, and they all impact metal producers. That's why we also think we have a higher participation in the upside. We don't have to spend any capital to benefit from mine life extensions. We benefit from the upside in a very large portfolio of properties. Farther out on the scale, you've got junior mining companies. They may have a mine or two, maybe one in development. Then you have exploration companies, which are really at the high end of the risk profile. Given the nature of our business, it's a very high margin business. We had an adjusted EBITDA margin of 82% in 2025. It's a very efficient business. We have a market cap of $24 billion we only have 39 employees. We like to think of our business model, it's a more comprehensive way to invest in gold. That physical gold ounce, it is always going to be one ounce, you're not gonna receive dividends or interest on that investment. We have the potential for one ounce to become two ounces or three ounces as mines extend their lives and they find new reserves and resources, we pay a dividend. We like to say that this is a sector to consider when you're ready for that baby step beyond physical gold. Now I've tried to sell you on the sector let's talk about Royal Gold. We have the most diversified portfolio in our sector in terms of consensus AV estimates, that diversification really limits the risk associated with a single asset, the mining industry is full of examples of event risk, whether that's due to technical issues, political issues, environmental, social. The biggest mining companies in the world don't have anywhere near 80 revenue producers they have to allocate capital to develop the assets that they have in their portfolio. Royal Gold is the only precious metals company that has paid an increasing annual dividend for 25 straight years. We're the only precious metal company in the S&P High Yield Dividend Aristocrats Index. That's really both a reflection our high margin business, our success over decades in finding new investments, and it's also a reflection of the discipline associated with our capital allocation and returning capital to shareholders. That concludes my intro remarks. I'm looking forward to the conversation. Thanks, Bill. Maybe we'll start to flesh out the business model first a little bit more because when you look at it's quite an amazing model where you can continue to get, as you said, margins over 80% over year after year-over-year. One of the things people push back with now is with gold prices going higher, is it harder to continue to do deals like in the past, or does this business model only work at the bottom of the cycle? I think the industry works no matter what, where the price is. We always think there are new investments, it's typically balance sheet restructuring, it's project development or it's M&A. If the price is high, you're probably gonna have more project development opportunities. It may actually generate interest in the sector in terms of M&A. If the price goes down, now you may have balance sheet restructuring opportunities, where a company took on too much debt when the price was higher, it's come back down, and they need a liquidity event. It is a model for all cycles. Maybe just, you mentioned development projects, maybe talk a little bit about what you're seeing as opportunities out there in the market right now? I mean, right now I would say we have a few thing. We have gold development projects. Obviously, these projects are coming forward at the current price. Equity markets are open, which is good. We're not trying to finance the entire capital investment, so equity markets being open is very important to us. We also have families that own royalties that are looking at the price saying, "You know what? This is a really good time to get out. You know, I can secure generations of revenue for my family." We see that. The thing we're really excited about, i think are the copper projects that I hope you'll see over the next five to 10 years to the extent a copper project, zinc project, they have precious metal byproducts that can really create some very large investment opportunities for us. maybe just so we follow up on that, maybe it's worth discussing like arbitrage you can achieve by taking those precious metals out of potentially copper or zinc projects going forward. Yeah, I mean, if you think about a base metal company, I mean what do they trade at? 6x EBITDA, well, 10x EBITDA, whatever that is. We trade at a multiple of that. The precious metals that are a byproduct as long as you're not streaming away metal that they need for their all-in sustaining costs, the value we apply to it is much higher than what the base metal company sees or experiences. We just actually had a transaction in our sector where BHP streamed the silver out of its Antamina investment, and what they said was the value they got was actually equal to the entire joint venture interest that they had in this project that's gonna go on for decades. It's just the metals are worth more in our portfolio than they are in a base metal portfolio. I guess another topic before we get specifically, I mean, people say, the other thing you mentioned about here is it's a great business. There's 39 of you, and you generate lots of revenue. You did it last year, but why hasn't there been more consolidation in the industry? If you take the view that you maybe need one more person to buy somebody else or whatever the number is, doesn't it make sense to see more consolidation than we do? It makes sense. The issue you have in our sector is the bigger companies, they trade at higher valuation multiples. The mid-tier companies that are really would be the targets trade at lower multiples. Oftentimes when you talk to those mid-tier companies, what they will always say is, "Yes, I trade at this multiple now, but I'm one or two catalysts away from trading at that higher multiple. And then at that higher multiple, I want you to pay a takeover premium." That's where it doesn't make sense. What we did last year we had a situation where the CEO of the company just said, "Look, I think our shareholders are better off in a larger company. I'm willing to negotiate over my current valuation multiple." In the end, we were able to do an accretive transaction for both sets of shareholders. I guess the other thing that's happened now. I mentioned you've been around. You were one of the pioneers in the industry, but there's lots of other people starting to get into this industry, which I guess nothing like somebody copying your business to say it's a good business. What do you see out there? How are you competitive in the market right now? Because obviously there's more capital around chasing the same deals. I mean, you compete really two issues: value and structure. Value being, are you gonna pay the most for that particular asset? I would say we rarely win that end of the transaction. There's always somebody who's willing to pay more. Where we try to differentiate ourselves is the structuring. I often tell our business development team, "Don't sit on the opposite side of the table negotiating with the company. Imagine yourself on that side of the table. How do we structure this investment so that it works best for them?" The example I always give is you know a mining company has a project, but they also have a bond issue that's gonna mature in three, four years. Why not take the stream investment and have a lower stream payout over that period of time, allow them to have the liquidity to pay off the bond, and then take the stream obligation up? It's that there are no boxes that we have to tick when it comes to structuring these. I we say everything's a blank canvas and just use your imagination to structure good investments. Maybe if we explore that a little bit more I mean one of the things you've seen some people do is put step-downs or caps or collars. How do you think about that? Because I think when you start the process, the object's to try and pay for what you see and get everything else for free if I can put it that way. Yeah, I mean, the industry really has changed. Just to be clear, we really try not to do caps. I don't think we've ever done a cap. These are life of mine contracts. We want exposure to that mine over the full extent of its life. Now, step-downs are commonplace in our industry, and by that I mean your stream rate is, say it's at 10% until you get through the, what is known as the reserve, and then maybe it drops to 5%. The thought process there was, we want the operator to have an interest in continuing to extend the mine life. If you say to them, "You're gonna get half of this economic interest in gold or silver back," does that provide more incentive to explore and maybe expand? That's really the reason behind the step-downs is try to better align us with the operators, 'cause these are life of mine contracts. Just maybe not to get into too much of the details, but I think one of the things that comes up is you're taking these gold and silver, say, from the producer. Why don't they mine in another area? If you have a big royalty on a certain area and they don't How do you think about that when you try and structure stuff so that you are motivated again to do the same thing that's best for everybody? Yeah, it's probably it's one of the bigger challenges, I you know again, an example is sort of an underground mine where you may have a zone that is precious metals rich. We look at it and say, "Well, we want you to mine that as soon as possible." Maybe the operator says, "Well, the economics to me after the stream are I should mine in a different area." That's where you have to build in covenants that basically say you're not gonna disproportionately hurt our interest. You're going to mine this mine as though you own a 100% interest in all of the metal. I think you know so far that those covenants have worked. We haven't had an issue where people were changing the mine plan because they didn't like the economics to us. Unfortunately, in this sector too, you can't move your assets. We've seen some challenges where some companies have lost some assets for maybe governments changed a rule or something. Maybe we're entering that sphere now too. How do you think about jurisdictional risk when you structure your portfolio? What can you maybe do to, you can't totally get rid of it, but minimize it? No. I mean, when we're making investments in Turkey or Zambia or Ghana, I mean, the reality is we are taking political risk. You can't just look at the current administration you know the president, the Congress, whatever it is and you say, "Oh, they're mining-friendly. Now's the time to make the investment." Our investments take decades to develop. I guarantee you're going to have five or six regime changes within a country, and some of these people are not gonna like mining. What we try to do is identify countries where mining is important. It's important to the economy, it's important to employment, important to export earnings, and the more you can find that, the better off, you're gonna be. I think it was commenting you know Peru is on its 7th president in six years, i mean, in 10 years. I don't know what it is, it doesn't matter. Peru is a mining country you know the local politics are probably more important than what's going on in Lima at that time. The one event risk that we did have was in Panama it wasn't in our portfolio. It was a competitor's portfolio. If you look around and say, "Well, how did the Panamanian government allow this to happen?" Well there's no mining industry. There's no industry to destroy if you get in the way of one particular mining operation. That's really what we look for there. There's safety in numbers, we're looking for the numbers. Maybe when you start to try and do one of these deals, like, what sort of targeted IRRs do you start with? I imagine you adjust for regions and everything else. Maybe just to give people a general feel because there's lots of numbers thrown in the market about what the rate of returns are on deals. Yeah, it's funny. The only time anybody talks about returns on deals is on day one, which is exactly the wrong time to look at our investment because you may see a 10-year reserve life in our investment. You may calculate and say, "Well, that's a 3% return. That's a 4% return. That doesn't make any sense." Well, the reason we did it is because our geologist looked at the upside and said, "This isn't a 10-year mine life. This thing is gonna go for 20 years or 25 years." We have a demonstrated history of investing in assets that get better with time. We always say good mines get better. We talk about ultimate returns, and ultimate returns are often north of 10%, which you know in our business is very acceptable. It's a little bit hard. There isn't an initial hurdle rate. There isn't an initial IRR that we have to have. It's all about the upside. Maybe if I asked you, one of the questions we get from investors is, in a bullish gold market, we should just buy producers and not royalty companies because they don't have as much optionality. If I ask you that, what would your rebuttal be to that? If, if that's the way you want to invest in gold, go find the highest cost producer because that's where the greatest leverage is going to be. I just say understand that if the gold price turns around, leverage works the other way as well. And our leverage is different, and it's longer term, and maybe it's a little harder to identify. When the gold price goes up, what do operators do? They tend to increase the price they use to calculate reserves and resources. Now that 15-year mine life, because of those assumption changes, is now 20 years or 25 years. We have an interest in all of that. So it's a much more subtle leverage to the gold price. I mean, we have a portfolio of exploration properties. These companies are now... Some of them are able to raise equity, they're putting it in the ground. We don't have any value on our balance sheet for those investments, they are being advanced without us spending any money. That's leverage to gold price. It's just not the obvious one that's in EPS or cash flow per share. I guess the other thing that comes up is, they tend to trade at higher multiples than producers. Why do you think that is? Sorry, we. The royalty companies do and trade. Oh, yeah. Well, it's a very different business model. I mean, when I was talking you know you look at what's going on in the world right now. Do you think operating companies are a little worried about what the price of diesel is gonna be very shortly? We don't have that exposure. We don't have exposure to labor costs. I'm sure there are governments out there that are thinking of increasing royalty rates and taxes given where the metal prices are. We're not impacted by any of that. I'd say, yeah, we do trade at a premium, probably a premium that many generalists are not as comfortable with, but I think it's just a lower risk, high margin business that deserves a premium. The other thing I would say, I mean, we've been in this business for decades, it's always been this way. It's not as though you're buying into some blip in valuations. This sector has always traded at very high multiples. Maybe moving directly to some of your assets and stuff. I'll maybe just start, last year you did 2 big transactions, one of the things you've been very. You haven't done a lot of is issue shares. You did for a transaction last year. I mean, I think before this, you hadn't issued a single share since 2012, which in this sector is rare. Can you maybe talk about why that was done, why you used shares, why you did Kansanshi with debt? First of all, the senior management team at Sandstorm wanted shares. They wanted to participate. The transaction was accretive, we didn't mind issuing those shares. More importantly, when we announced Sandstorm, we knew the Kansanshi process was ongoing. There was a bidding process. We knew First Quantum, the operator, needed cash to address debt service obligations. If we had allocated a lot of cash to the Sandstorm transaction, we would not have had the cash available to do Kansanshi, we really wanted to do both of them. I think it would have helped the market understand why we did shares if we had announced Kansanshi first. That's not the way things work in our sector. It was really a function of this is what the target wants, but more importantly, we had to preserve liquidity for a transaction that then got announced less than a month later. I guess where we sit today now, you do have some debt on your balance sheet. Maybe you can talk about capital allocation. Again, the same issue, you wanna keep capacity available in case you... 'cause you never know when these deals are gonna come up. How you're looking at allocating capital now over the next year or so? Yeah, I mean, look, we're still open for business. We're looking for new investments. That's where I think we can add value. If we can buy an asset at a PNAV price that is below where we trade, that is going to enhance the value. As you say, it's a really lumpy business, there are years when we don't make an investment. With the debt on the balance sheet, to the extent we have that cash, we will repay the revolving credit. Currently, there's about $725 million outstanding, we think you know at the current metal prices, that would be paid off in about a year. That doesn't mean we're not looking for new investments, but that'll be the... that's sort of the second step for capital allocation. Then the dividend that I referred to is really the third leg to the stool. We're very proud of the 25 consecutive years. I will say you know when we increase it in a year, we're not looking at it saying, "Well, we can afford to pay this next year." We look at it and say, "If we increase it to this level, can we continue to increase it in years three, four, five, 10?" So there is a... You might look at our dividend increases and say, "Well, given where the metal price is, you could have done more." I say, "Well, we're trying to retain this record, and if you pay out a huge amount one year and you have to pull it back, that would not be a good outcome. Right ... for us. Basically at the end of the day. The other thing that people will bring up is you trade maybe at a little bit of a I mean, generally, the larger companies get much better liquidity and they get a premium in the market, but you may be trading at a discount, I would argue, at the moment versus your two big competitors. Why do you think that is at the moment? Well, a couple things. They are much bigger, so I'm sure there's a liquidity factor in there. We were so busy last year. I mean, we did almost $5 billion of investments. I can tell you that previously the highest investment year was about $1 billion, and that was in 2015. These years don't come around very much. And I just think there was so much going on in the portfolio, I think people had a hard time, and still have a hard time, getting their arms around what this company looks like on a consolidated basis. We only had 1 quarter of Kunsanshi. We only had 1 quarter of Sandstorm's assets. We'll get a full year this year. We have a couple other projects that I expect will come in this year. I think that's part of the, part of the discount. I think there is always with investors a show me element. You don't always get paid for what's coming. They wanna see it. That's what I hope happens this year is we put four quarters together with very boring, no noise, and we can demonstrate what the company can do. Maybe to address the other thing, when you did the Sandstorm transaction, we might just say some of the, some of it was a little more complicated than a standard royalty model. Can you talk about what you've done to clean that up and what you may have to do going forward and, and really put in perspective how big that really is in the overall portfolio now? I mean, Sandstorm was a complicated company. They had created this affiliate, Horizon Copper, to house a joint venture because they didn't want the joint venture on their balance sheet. We could have just bought Sandstorm and kept Horizon independent, but there were so many intercompany transactions, streams, loans that was taking a lot of time, we just, "Let's just collapse the whole thing. Let's get rid of all of that intercompany, all the intercompany relationship." What we were really left with, Sandstorm did make equity and debt investments in a number of companies, and we said that's not core to our business. Let's try to get rid of them. We've done a pretty good job. We sold the Versamat shares. It's a, another royalty company we that Sandstorm had owned about 25% of. We sold that in a block, and then we restructured another debt and equity investment in a smaller mining company by supporting a merger. We're really down to 2. We have a 24% interest in Entrée Resources, which has a joint venture in Mongolia, on the outer edges of Oyu Tolgoi. We think there's the possibility of there being a value event. They're working with the government of Mongolia on a couple of things, so we'll be a little bit patient, but it's the same concept. We don't wanna hold it. Let's try to sell it. We know people are interested. The other one is the Hod Maden joint venture. This is the joint venture that Sandstorm tried to get off of its balance sheet. We are gonna try to convert a joint venture interest, which has capital costs and operating cost exposure, into something that looks more traditional, more familiar in our portfolio. Those discussions are early stage, but it's really a priority for us this year. Maybe I'll stop. Are there any questions, in the audience? Just one second. Thanks. Sure. Given where the gold price currently is, can you talk about contracts that you have with mines which will come into operation if the price stays at these levels? In other words, how much sort of embedded production do you have if gold stays at the current price versus your current volume of production? I mean, I think the growth projects that we would talk about would be in production at $4,000 an ounce or $3,000 an ounce. I mean, one of them is Platreef in South Africa. That's a PGM mine, it really is not driven by the gold price. MARA in Argentina is basically a copper project that is owned by Glencore. That's not dependent on the gold price. If there are projects that move forward because the price is where it is, that's gravy. It's not even anything we're talking about in terms of growth. I'm sure there are projects that are right on the edge and make sense here, you can't. This mining industry, you don't just flip a switch and a mine can come on. There's you know exploration, study, permitting. It takes years. Even if you wanted to today bring a gold mine in at $5,000 an ounce, you really can't do it. It's going to take three, four, five+ years. Have you seen ones at, say, $3,000 earlier on last year that might now be progressing? They might be, but they're probably not very large in our portfolio. You don't have any out of the money contracts in terms of. No, I don't think so. I look at the evaluation and exploration as where we may see things blossom that we're not even talking about right now. The chance that they are of significant value to our company, it's a little unlikely. Maybe it's worth you know one of the other things that was done years ago was the Cortez stuff. It might be worth just talking about. There's a lot of chatter now about this new discovery, Four Mile. I think not everybody realizes you even have a royalty on it. That's... To your question, that's an example where you probably bought something and you thought you'd find something. We were very confident that there was upside at Cortez. Cortez is you know the backbone of Royal Gold. It was Through the nineties, it was 95% of our revenue. We've had decades of exposure to it. 3 years ago, we actually expanded our footprint to include the whole complex. We did not have all of Cortez. Those transactions in 2020 actually brought us exposure to Gold Rush, to Cortez Hills, and to Four Mile. I think we expected something like Four Mile, but not the grade, not the scale, and not in the time, since the acquisition. I thought this would play out over 5-10 years, and here we sit 3 years later, with one of the best discoveries in the industry recently. Does that help? Yeah. Yeah. Are there any other questions? We just got about a minute and a half left. Maybe just talk a little bit about concentration risk too, 'cause one of the things that used to be talked about was you know it's a chicken and egg thing. The best assets, you wanna have a lot of them, but if you have too much of them and something goes wrong, that's not so good either. Can you maybe talk about what the portfolio looks like now on a concentration risk basis? 'Cause it's changed substantially after all your work last year. Yeah, the rule number one in mining, something's gonna go wrong. Yeah. I promise you that. If you were to go back 10 years, Mount Milligan, our biggest asset, probably would've been 35% of our revenue and 30% of our net asset value. There were certain events that happened. One year, they ran out of water to run the mill, and they had to shut down, and our share price just really felt the impact of that. It's really been a strategic goal of ours to diversify the portfolio. Yeah, if something bad happens at Milligan, you're gonna see it, but it's not to the extent that it did then. If you look around our sector, every one of the major companies has some sort of concentration risk. You know, whether that's Salobo at Wheaton. You've got Cobre at Franco-Malartic at Oyu. I mean, everyone has it. That's why I made the point up there of having the most diversified portfolio. No asset other than Milligan represents more than 10% of our NAV, and that also helps with political risk. You say, "Oh, you're in Turkey, I'm nervous about Turkey." It's 4% of our NAV. Diversification, to me, is critical to having a quality portfolio. Well, that's a perfect segue into ending it. Thank you very much, Bill, for going through and going through the model and look forward to seeing the multiple catch up to everybody else. Thank you very much. Thanks very much. For anybody who's interested, there'll be a breakout in Cordoba Six.

Speaker 2: is Royal Gold, which is one of the first gold royalty companies, and in fact it's been in business for over 40 years. As many of you know we continue to believe that a great way to get exposure to precious metals is through the royalty streaming companies, as they give you exposure to precious metals, but they mitigate some of the risks of the alternative investments. Today from the company we're very pleased to have Bill Heissenbuttel, who is President and CEO. I'm gonna turn it over to Bill to give a quick presentation on how the royalty model works why it's such a good business, and then we'll have a fireside chat. Bill? is Royal Gold, which is one of the first gold royalty companies, and in fact it's been in business for over 40 years. is royal gold which is one of the first gold royalty companies and in fact it's been in business for over 40 years As many of you know we continue to believe that a great way to get exposure to precious metals is through the royalty streaming companies, as they give you exposure to precious metals, but they mitigate some of the risks of the alternative investments. as many of you know we continue to believe that a great way to get exposure to precious metals is through the royalty streaming companies as they give you exposure to precious metals but they mitigate some of the risks of the alternative investments Today from the company we're very pleased to have Bill Heissenbuttel, who is President and CEO. today from the company we're very pleased to have bill heissenbuttel who is president and ceo I'm gonna turn it over to Bill to give a quick presentation on how the royalty model works why it's such a good business, and then we'll have a fireside chat. i'm gonna turn it over to bill to give a quick presentation on how the royalty model works why it's such a good business and then we'll have a fireside chat Bill? bill

Speaker 1: Great. Good afternoon, everybody. Thanks for your interest in Royal Gold and thanks to Raymond James and Brian for the invitation today. I will be making forward-looking statements. They're subject to risks and uncertainties. Actual results may differ materially. These risks are discussed in our 10-K filings with the SEC. For those of you who don't know our company, we are a royalty and streaming company. We're focused on precious metals, gold in particular. What this means is we are not an operator. We do not explore, we do not develop, we do not operate mining projects but we are instead a passive investor with an interest in metal production or revenue. We've been in the royalty and streaming business for over 30 years. Great. great Good afternoon, everybody. good afternoon everybody Thanks for your interest in Royal Gold and thanks to Raymond James and Brian for the invitation today. thanks for your interest in royal gold and thanks to raymond james and brian for the invitation today I will be making forward-looking statements. i will be making forward-looking statements They're subject to risks and uncertainties. they're subject to risks and uncertainties Actual results may differ materially. actual results may differ materially These risks are discussed in our 10-K filings with the SEC. these risks are discussed in our 10-k filings with the sec For those of you who don't know our company, we are a royalty and streaming company. for those of you who don't know our company we are a royalty and streaming company We're focused on precious metals, gold in particular. we're focused on precious metals gold in particular What this means is we are not an operator. what this means is we are not an operator We do not explore, we do not develop, we do not operate mining projects but we are instead a passive investor with an interest in metal production or revenue. we do not explore we do not develop we do not operate mining projects but we are instead a passive investor with an interest in metal production or revenue We've been in the royalty and streaming business for over 30 years. we've been in the royalty and streaming business for over 30 years We have a portfolio of 360 mineral properties, of which 80 produce revenue for us. We're gold-focused. 78% of last year's revenue came from gold, and over 50% of our revenue came from projects in Canada, the U.S. and Australia. Some of you may wonder why the royalty and streaming space is really the best way to invest in gold. On a risk basis, physical gold is the lowest risk out there. It's gold that's already been mined. It's already been processed. It's in physical sellable form. Beyond that, you really have our sector, and we generate revenue based on mine revenue. We have a portfolio of 360 mineral properties, of which 80 produce revenue for us. we have a portfolio of 360 mineral properties of which 80 produce revenue for us We're gold-focused. 78% of last year's revenue came from gold, and over 50% of our revenue came from projects in Canada, the U.S. and Australia. we're gold-focused 78% of last year's revenue came from gold and over 50% of our revenue came from projects in canada the u.s and australia Some of you may wonder why the royalty and streaming space is really the best way to invest in gold. some of you may wonder why the royalty and streaming space is really the best way to invest in gold On a risk basis, physical gold is the lowest risk out there. on a risk basis physical gold is the lowest risk out there It's gold that's already been mined. it's gold that's already been mined It's already been processed. it's already been processed It's in physical sellable form. it's in physical sellable form Beyond that, you really have our sector, and we generate revenue based on mine revenue. beyond that you really have our sector and we generate revenue based on mine revenue Unlike investing in operating companies, we don't have direct exposure to operating costs, capital costs, royalties and taxes, labor costs, fuel costs, and they all impact metal producers. That's why we also think we have a higher participation in the upside. We don't have to spend any capital to benefit from mine life extensions. We benefit from the upside in a very large portfolio of properties. Farther out on the scale, you've got junior mining companies. They may have a mine or two, maybe one in development. Then you have exploration companies, which are really at the high end of the risk profile. Given the nature of our business, it's a very high margin business. Unlike investing in operating companies, we don't have direct exposure to operating costs, capital costs, royalties and taxes, labor costs, fuel costs, and they all impact metal producers. unlike investing in operating companies we don't have direct exposure to operating costs capital costs royalties and taxes labor costs fuel costs and they all impact metal producers That's why we also think we have a higher participation in the upside. that's why we also think we have a higher participation in the upside We don't have to spend any capital to benefit from mine life extensions. we don't have to spend any capital to benefit from mine life extensions We benefit from the upside in a very large portfolio of properties. we benefit from the upside in a very large portfolio of properties Farther out on the scale, you've got junior mining companies. farther out on the scale you've got junior mining companies They may have a mine or two, maybe one in development. they may have a mine or two maybe one in development Then you have exploration companies, which are really at the high end of the risk profile. then you have exploration companies which are really at the high end of the risk profile Given the nature of our business, it's a very high margin business. given the nature of our business it's a very high margin business We had an adjusted EBITDA margin of 82% in 2025. It's a very efficient business. We have a market cap of $24 billion we only have 39 employees. We like to think of our business model, it's a more comprehensive way to invest in gold. That physical gold ounce, it is always going to be one ounce, you're not gonna receive dividends or interest on that investment. We have the potential for one ounce to become two ounces or three ounces as mines extend their lives and they find new reserves and resources, we pay a dividend. We like to say that this is a sector to consider when you're ready for that baby step beyond physical gold. We had an adjusted EBITDA margin of 82% in 2025. we had an adjusted ebitda margin of 82% in 2025 It's a very efficient business. it's a very efficient business We have a market cap of $24 billion we only have 39 employees. we have a market cap of $24 billion we only have 39 employees We like to think of our business model, it's a more comprehensive way to invest in gold. we like to think of our business model it's a more comprehensive way to invest in gold That physical gold ounce, it is always going to be one ounce, you're not gonna receive dividends or interest on that investment. that physical gold ounce it is always going to be one ounce you're not gonna receive dividends or interest on that investment We have the potential for one ounce to become two ounces or three ounces as mines extend their lives and they find new reserves and resources, we pay a dividend. we have the potential for one ounce to become two ounces or three ounces as mines extend their lives and they find new reserves and resources we pay a dividend We like to say that this is a sector to consider when you're ready for that baby step beyond physical gold. we like to say that this is a sector to consider when you're ready for that baby step beyond physical gold Now I've tried to sell you on the sector let's talk about Royal Gold. We have the most diversified portfolio in our sector in terms of consensus AV estimates, that diversification really limits the risk associated with a single asset, the mining industry is full of examples of event risk, whether that's due to technical issues, political issues, environmental, social. The biggest mining companies in the world don't have anywhere near 80 revenue producers they have to allocate capital to develop the assets that they have in their portfolio. Royal Gold is the only precious metals company that has paid an increasing annual dividend for 25 straight years. Now I've tried to sell you on the sector let's talk about Royal Gold. now i've tried to sell you on the sector let's talk about royal gold We have the most diversified portfolio in our sector in terms of consensus AV estimates, that diversification really limits the risk associated with a single asset, the mining industry is full of examples of event risk, whether that's due to technical issues, political issues, environmental, social. we have the most diversified portfolio in our sector in terms of consensus av estimates that diversification really limits the risk associated with a single asset the mining industry is full of examples of event risk whether that's due to technical issues political issues environmental social The biggest mining companies in the world don't have anywhere near 80 revenue producers they have to allocate capital to develop the assets that they have in their portfolio. the biggest mining companies in the world don't have anywhere near 80 revenue producers they have to allocate capital to develop the assets that they have in their portfolio Royal Gold is the only precious metals company that has paid an increasing annual dividend for 25 straight years. royal gold is the only precious metals company that has paid an increasing annual dividend for 25 straight years We're the only precious metal company in the S&P High Yield Dividend Aristocrats Index. That's really both a reflection our high margin business, our success over decades in finding new investments, and it's also a reflection of the discipline associated with our capital allocation and returning capital to shareholders. That concludes my intro remarks. I'm looking forward to the conversation. We're the only precious metal company in the S&P High Yield Dividend Aristocrats Index. we're the only precious metal company in the s&p high yield dividend aristocrats index That's really both a reflection our high margin business, our success over decades in finding new investments, and it's also a reflection of the discipline associated with our capital allocation and returning capital to shareholders. that's really both a reflection our high margin business our success over decades in finding new investments and it's also a reflection of the discipline associated with our capital allocation and returning capital to shareholders That concludes my intro remarks. that concludes my intro remarks I'm looking forward to the conversation. i'm looking forward to the conversation

Speaker 2: Thanks, Bill. Maybe we'll start to flesh out the business model first a little bit more because when you look at it's quite an amazing model where you can continue to get, as you said, margins over 80% over year after year-over-year. One of the things people push back with now is with gold prices going higher, is it harder to continue to do deals like in the past, or does this business model only work at the bottom of the cycle? Thanks, Bill. thanks bill Maybe we'll start to flesh out the business model first a little bit more because when you look at it's quite an amazing model where you can continue to get, as you said, margins over 80% over year after year -over -year. maybe we'll start to flesh out the business model first a little bit more because when you look at it's quite an amazing model where you can continue to get as you said margins over 80% over year after year -over -year One of the things people push back with now is with gold prices going higher, is it harder to continue to do deals like in the past, or does this business model only work at the bottom of the cycle? one of the things people push back with now is with gold prices going higher is it harder to continue to do deals like in the past or does this business model only work at the bottom of the cycle

Speaker 1: I think the industry works no matter what, where the price is. We always think there are new investments, it's typically balance sheet restructuring, it's project development or it's M&A. If the price is high, you're probably gonna have more project development opportunities. It may actually generate interest in the sector in terms of M&A. If the price goes down, now you may have balance sheet restructuring opportunities, where a company took on too much debt when the price was higher, it's come back down, and they need a liquidity event. It is a model for all cycles. I think the industry works no matter what, where the price is. i think the industry works no matter what where the price is We always think there are new investments, it's typically balance sheet restructuring, it's project development or it's M&A. we always think there are new investments it's typically balance sheet restructuring it's project development or it's m&a If the price is high, you're probably gonna have more project development opportunities. if the price is high you're probably gonna have more project development opportunities It may actually generate interest in the sector in terms of M&A. it may actually generate interest in the sector in terms of m&a If the price goes down, now you may have balance sheet restructuring opportunities, where a company took on too much debt when the price was higher, it's come back down, and they need a liquidity event. if the price goes down now you may have balance sheet restructuring opportunities where a company took on too much debt when the price was higher it's come back down and they need a liquidity event It is a model for all cycles. it is a model for all cycles

Speaker 2: Maybe just, you mentioned development projects, maybe talk a little bit about what you're seeing as opportunities out there in the market right now? Maybe just, you mentioned development projects, maybe talk a little bit about what you're seeing as opportunities out there in the market right now? maybe just you mentioned development projects maybe talk a little bit about what you're seeing as opportunities out there in the market right now

Speaker 1: I mean, right now I would say we have a few thing. We have gold development projects. Obviously, these projects are coming forward at the current price. Equity markets are open, which is good. We're not trying to finance the entire capital investment, so equity markets being open is very important to us. We also have families that own royalties that are looking at the price saying, "You know what? This is a really good time to get out. You know, I can secure generations of revenue for my family." We see that. I mean, right now I would say we have a few thing. i mean right now i would say we have a few thing We have gold development projects. we have gold development projects Obviously, these projects are coming forward at the current price. obviously these projects are coming forward at the current price Equity markets are open, which is good. equity markets are open which is good We're not trying to finance the entire capital investment, so equity markets being open is very important to us. we're not trying to finance the entire capital investment so equity markets being open is very important to us We also have families that own royalties that are looking at the price saying, "You know what? we also have families that own royalties that are looking at the price saying "you know what This is a really good time to get out. this is a really good time to get out You know, I can secure generations of revenue for my family." We see that. you know i can secure generations of revenue for my family." we see that The thing we're really excited about, i think are the copper projects that I hope you'll see over the next five to 10 years to the extent a copper project, zinc project, they have precious metal byproducts that can really create some very large investment opportunities for us. The thing we're really excited about, i think are the copper projects that I hope you'll see over the next five to 10 years to the extent a copper project, zinc project, they have precious metal byproducts that can really create some very large investment opportunities for us. the thing we're really excited about, i think are the copper projects that i hope you'll see over the next five to 10 years to the extent a copper project zinc project they have precious metal byproducts that can really create some very large investment opportunities for us

Speaker 2: maybe just so we follow up on that, maybe it's worth discussing like arbitrage you can achieve by taking those precious metals out of potentially copper or zinc projects going forward. maybe just so we follow up on that, maybe it's worth discussing like arbitrage you can achieve by taking those precious metals out of potentially copper or zinc projects going forward. maybe just so we follow up on that maybe it's worth discussing like arbitrage you can achieve by taking those precious metals out of potentially copper or zinc projects going forward

Speaker 1: Yeah, I mean, if you think about a base metal company, I mean what do they trade at? 6x EBITDA, well, 10x EBITDA, whatever that is. We trade at a multiple of that. The precious metals that are a byproduct as long as you're not streaming away metal that they need for their all-in sustaining costs, the value we apply to it is much higher than what the base metal company sees or experiences. We just actually had a transaction in our sector where BHP streamed the silver out of its Antamina investment, and what they said was the value they got was actually equal to the entire joint venture interest that they had in this project that's gonna go on for decades. Yeah, I mean, if you think about a base metal company, I mean what do they trade at? 6x EBITDA, well, 10x EBITDA, whatever that is. yeah i mean if you think about a base metal company i mean what do they trade at 6x ebitda well 10x ebitda whatever that is We trade at a multiple of that. we trade at a multiple of that The precious metals that are a byproduct as long as you're not streaming away metal that they need for their all-in sustaining costs, the value we apply to it is much higher than what the base metal company sees or experiences. the precious metals that are a byproduct as long as you're not streaming away metal that they need for their all-in sustaining costs the value we apply to it is much higher than what the base metal company sees or experiences We just actually had a transaction in our sector where BHP streamed the silver out of its Antamina investment, and what they said was the value they got was actually equal to the entire joint venture interest that they had in this project that's gonna go on for decades. we just actually had a transaction in our sector where bhp streamed the silver out of its antamina investment and what they said was the value they got was actually equal to the entire joint venture interest that they had in this project that's gonna go on for decades It's just the metals are worth more in our portfolio than they are in a base metal portfolio. It's just the metals are worth more in our portfolio than they are in a base metal portfolio. it's just the metals are worth more in our portfolio than they are in a base metal portfolio

Speaker 2: I guess another topic before we get specifically, I mean, people say, the other thing you mentioned about here is it's a great business. There's 39 of you, and you generate lots of revenue. You did it last year, but why hasn't there been more consolidation in the industry? If you take the view that you maybe need one more person to buy somebody else or whatever the number is, doesn't it make sense to see more consolidation than we do? I guess another topic before we get specifically, I mean, people say, the other thing you mentioned about here is it's a great business. i guess another topic before we get specifically i mean people say the other thing you mentioned about here is it's a great business There's 39 of you, and you generate lots of revenue. there's 39 of you and you generate lots of revenue You did it last year, but why hasn't there been more consolidation in the industry? you did it last year but why hasn't there been more consolidation in the industry If you take the view that you maybe need one more person to buy somebody else or whatever the number is, doesn't it make sense to see more consolidation than we do? if you take the view that you maybe need one more person to buy somebody else or whatever the number is doesn't it make sense to see more consolidation than we do

Speaker 1: It makes sense. The issue you have in our sector is the bigger companies, they trade at higher valuation multiples. The mid-tier companies that are really would be the targets trade at lower multiples. Oftentimes when you talk to those mid-tier companies, what they will always say is, "Yes, I trade at this multiple now, but I'm one or two catalysts away from trading at that higher multiple. And then at that higher multiple, I want you to pay a takeover premium." That's where it doesn't make sense. What we did last year we had a situation where the CEO of the company just said, "Look, I think our shareholders are better off in a larger company. It makes sense. it makes sense The issue you have in our sector is the bigger companies, they trade at higher valuation multiples. the issue you have in our sector is the bigger companies they trade at higher valuation multiples The mid-tier companies that are really would be the targets trade at lower multiples. the mid-tier companies that are really would be the targets trade at lower multiples Oftentimes when you talk to those mid-tier companies, what they will always say is, "Yes, I trade at this multiple now, but I'm one or two catalysts away from trading at that higher multiple. oftentimes when you talk to those mid-tier companies what they will always say is "yes i trade at this multiple now but i'm one or two catalysts away from trading at that higher multiple And then at that higher multiple, I want you to pay a takeover premium." That's where it doesn't make sense. and then at that higher multiple i want you to pay a takeover premium." that's where it doesn't make sense What we did last year we had a situation where the CEO of the company just said, "Look, I think our shareholders are better off in a larger company. what we did last year we had a situation where the ceo of the company just said "look i think our shareholders are better off in a larger company I'm willing to negotiate over my current valuation multiple." In the end, we were able to do an accretive transaction for both sets of shareholders. I'm willing to negotiate over my current valuation multiple." In the end, we were able to do an accretive transaction for both sets of shareholders. i'm willing to negotiate over my current valuation multiple." in the end we were able to do an accretive transaction for both sets of shareholders

Speaker 2: I guess the other thing that's happened now. I mentioned you've been around. You were one of the pioneers in the industry, but there's lots of other people starting to get into this industry, which I guess nothing like somebody copying your business to say it's a good business. What do you see out there? How are you competitive in the market right now? Because obviously there's more capital around chasing the same deals. I guess the other thing that's happened now. i guess the other thing that's happened now I mentioned you've been around. i mentioned you've been around You were one of the pioneers in the industry, but there's lots of other people starting to get into this industry, which I guess nothing like somebody copying your business to say it's a good business. you were one of the pioneers in the industry but there's lots of other people starting to get into this industry which i guess nothing like somebody copying your business to say it's a good business What do you see out there? what do you see out there How are you competitive in the market right now? how are you competitive in the market right now Because obviously there's more capital around chasing the same deals. because obviously there's more capital around chasing the same deals

Speaker 1: I mean, you compete really two issues: value and structure. Value being, are you gonna pay the most for that particular asset? I would say we rarely win that end of the transaction. There's always somebody who's willing to pay more. Where we try to differentiate ourselves is the structuring. I often tell our business development team, "Don't sit on the opposite side of the table negotiating with the company. Imagine yourself on that side of the table. How do we structure this investment so that it works best for them?" The example I always give is you know a mining company has a project, but they also have a bond issue that's gonna mature in three, four years. I mean, you compete really two issues: value and structure. i mean you compete really two issues value and structure Value being, are you gonna pay the most for that particular asset? value being are you gonna pay the most for that particular asset I would say we rarely win that end of the transaction. i would say we rarely win that end of the transaction There's always somebody who's willing to pay more. there's always somebody who's willing to pay more Where we try to differentiate ourselves is the structuring. where we try to differentiate ourselves is the structuring I often tell our business development team, "Don't sit on the opposite side of the table negotiating with the company. i often tell our business development team "don't sit on the opposite side of the table negotiating with the company Imagine yourself on that side of the table. imagine yourself on that side of the table How do we structure this investment so that it works best for them?" The example I always give is you know a mining company has a project, but they also have a bond issue that's gonna mature in three, four years. how do we structure this investment so that it works best for them?" the example i always give is you know a mining company has a project but they also have a bond issue that's gonna mature in three four years Why not take the stream investment and have a lower stream payout over that period of time, allow them to have the liquidity to pay off the bond, and then take the stream obligation up? It's that there are no boxes that we have to tick when it comes to structuring these. I we say everything's a blank canvas and just use your imagination to structure good investments. Why not take the stream investment and have a lower stream payout over that period of time, allow them to have the liquidity to pay off the bond, and then take the stream obligation up? why not take the stream investment and have a lower stream payout over that period of time allow them to have the liquidity to pay off the bond and then take the stream obligation up It's that there are no boxes that we have to tick when it comes to structuring these. it's that there are no boxes that we have to tick when it comes to structuring these I we say everything's a blank canvas and just use your imagination to structure good investments. i we say everything's a blank canvas and just use your imagination to structure good investments

Speaker 2: Maybe if we explore that a little bit more I mean one of the things you've seen some people do is put step-downs or caps or collars. How do you think about that? Because I think when you start the process, the object's to try and pay for what you see and get everything else for free if I can put it that way. Maybe if we explore that a little bit more I mean one of the things you've seen some people do is put step-downs or caps or collars. maybe if we explore that a little bit more i mean one of the things you've seen some people do is put step-downs or caps or collars How do you think about that? how do you think about that Because I think when you start the process, the object's to try and pay for what you see and get everything else for free if I can put it that way. because i think when you start the process the object's to try and pay for what you see and get everything else for free if i can put it that way

Speaker 1: Yeah, I mean, the industry really has changed. Just to be clear, we really try not to do caps. I don't think we've ever done a cap. These are life of mine contracts. We want exposure to that mine over the full extent of its life. Now, step-downs are commonplace in our industry, and by that I mean your stream rate is, say it's at 10% until you get through the, what is known as the reserve, and then maybe it drops to 5%. The thought process there was, we want the operator to have an interest in continuing to extend the mine life. If you say to them, "You're gonna get half of this economic interest in gold or silver back," does that provide more incentive to explore and maybe expand? Yeah, I mean, the industry really has changed. yeah i mean the industry really has changed Just to be clear, we really try not to do caps. just to be clear we really try not to do caps I don't think we've ever done a cap. i don't think we've ever done a cap These are life of mine contracts. these are life of mine contracts We want exposure to that mine over the full extent of its life. we want exposure to that mine over the full extent of its life Now, step-downs are commonplace in our industry, and by that I mean your stream rate is, say it's at 10% until you get through the, what is known as the reserve, and then maybe it drops to 5%. now step-downs are commonplace in our industry and by that i mean your stream rate is say it's at 10% until you get through the what is known as the reserve and then maybe it drops to 5% The thought process there was, we want the operator to have an interest in continuing to extend the mine life. the thought process there was we want the operator to have an interest in continuing to extend the mine life If you say to them, "You're gonna get half of this economic interest in gold or silver back," does that provide more incentive to explore and maybe expand? if you say to them "you're gonna get half of this economic interest in gold or silver back," does that provide more incentive to explore and maybe expand That's really the reason behind the step-downs is try to better align us with the operators, 'cause these are life of mine contracts. That's really the reason behind the step-downs is try to better align us with the operators, 'cause these are life of mine contracts. that's really the reason behind the step-downs is try to better align us with the operators 'cause these are life of mine contracts

Speaker 2: Just maybe not to get into too much of the details, but I think one of the things that comes up is you're taking these gold and silver, say, from the producer. Why don't they mine in another area? If you have a big royalty on a certain area and they don't How do you think about that when you try and structure stuff so that you are motivated again to do the same thing that's best for everybody? Just maybe not to get into too much of the details, but I think one of the things that comes up is you're taking these gold and silver, say, from the producer. just maybe not to get into too much of the details but i think one of the things that comes up is you're taking these gold and silver say from the producer Why don't they mine in another area? why don't they mine in another area If you have a big royalty on a certain area and they don't How do you think about that when you try and structure stuff so that you are motivated again to do the same thing that's best for everybody? if you have a big royalty on a certain area and they don't how do you think about that when you try and structure stuff so that you are motivated again to do the same thing that's best for everybody

Speaker 1: Yeah, it's probably it's one of the bigger challenges, I you know again, an example is sort of an underground mine where you may have a zone that is precious metals rich. We look at it and say, "Well, we want you to mine that as soon as possible." Maybe the operator says, "Well, the economics to me after the stream are I should mine in a different area." That's where you have to build in covenants that basically say you're not gonna disproportionately hurt our interest. You're going to mine this mine as though you own a 100% interest in all of the metal. I think you know so far that those covenants have worked. Yeah, it's probably it's one of the bigger challenges, I you know again, an example is sort of an underground mine where you may have a zone that is precious metals rich. yeah it's probably it's one of the bigger challenges i you know again an example is sort of an underground mine where you may have a zone that is precious metals rich We look at it and say, "Well, we want you to mine that as soon as possible." Maybe the operator says, "Well, the economics to me after the stream are I should mine in a different area." That's where you have to build in covenants that basically say you're not gonna disproportionately hurt our interest. we look at it and say "well we want you to mine that as soon as possible." maybe the operator says "well the economics to me after the stream are i should mine in a different area." that's where you have to build in covenants that basically say you're not gonna disproportionately hurt our interest You're going to mine this mine as though you own a 100% interest in all of the metal. you're going to mine this mine as though you own a 100% interest in all of the metal I think you know so far that those covenants have worked. i think you know so far that those covenants have worked We haven't had an issue where people were changing the mine plan because they didn't like the economics to us. We haven't had an issue where people were changing the mine plan because they didn't like the economics to us. we haven't had an issue where people were changing the mine plan because they didn't like the economics to us

Speaker 2: Unfortunately, in this sector too, you can't move your assets. We've seen some challenges where some companies have lost some assets for maybe governments changed a rule or something. Maybe we're entering that sphere now too. How do you think about jurisdictional risk when you structure your portfolio? What can you maybe do to, you can't totally get rid of it, but minimize it? Unfortunately, in this sector too, you can't move your assets. unfortunately in this sector too you can't move your assets We've seen some challenges where some companies have lost some assets for maybe governments changed a rule or something. we've seen some challenges where some companies have lost some assets for maybe governments changed a rule or something Maybe we're entering that sphere now too. maybe we're entering that sphere now too How do you think about jurisdictional risk when you structure your portfolio? how do you think about jurisdictional risk when you structure your portfolio What can you maybe do to, you can't totally get rid of it, but minimize it? what can you maybe do to you can't totally get rid of it but minimize it

Speaker 1: No. I mean, when we're making investments in Turkey or Zambia or Ghana, I mean, the reality is we are taking political risk. You can't just look at the current administration you know the president, the Congress, whatever it is and you say, "Oh, they're mining-friendly. Now's the time to make the investment." Our investments take decades to develop. I guarantee you're going to have five or six regime changes within a country, and some of these people are not gonna like mining. What we try to do is identify countries where mining is important. It's important to the economy, it's important to employment, important to export earnings, and the more you can find that, the better off, you're gonna be. No. no I mean, when we're making investments in Turkey or Zambia or Ghana, I mean, the reality is we are taking political risk. i mean when we're making investments in turkey or zambia or ghana i mean the reality is we are taking political risk You can't just look at the current administration you know the president, the Congress, whatever it is and you say, "Oh, they're mining-friendly. you can't just look at the current administration you know the president the congress whatever it is and you say "oh they're mining-friendly Now's the time to make the investment." Our investments take decades to develop. now's the time to make the investment." our investments take decades to develop I guarantee you're going to have five or six regime changes within a country, and some of these people are not gonna like mining. i guarantee you're going to have five or six regime changes within a country and some of these people are not gonna like mining What we try to do is identify countries where mining is important. what we try to do is identify countries where mining is important It's important to the economy, it's important to employment, important to export earnings, and the more you can find that, the better off, you're gonna be. it's important to the economy it's important to employment important to export earnings and the more you can find that the better off you're gonna be I think it was commenting you know Peru is on its 7th president in six years, i mean, in 10 years. I don't know what it is, it doesn't matter. Peru is a mining country you know the local politics are probably more important than what's going on in Lima at that time. The one event risk that we did have was in Panama it wasn't in our portfolio. It was a competitor's portfolio. If you look around and say, "Well, how did the Panamanian government allow this to happen?" Well there's no mining industry. There's no industry to destroy if you get in the way of one particular mining operation. That's really what we look for there. There's safety in numbers, we're looking for the numbers. I think it was commenting you know Peru is on its 7th president in six years, i mean, in 10 years. i think it was commenting you know peru is on its 7th president in six years i mean in 10 years I don't know what it is, it doesn't matter. i don't know what it is it doesn't matter Peru is a mining country you know the local politics are probably more important than what's going on in Lima at that time. peru is a mining country you know the local politics are probably more important than what's going on in lima at that time The one event risk that we did have was in Panama it wasn't in our portfolio. the one event risk that we did have was in panama it wasn't in our portfolio It was a competitor's portfolio. it was a competitor's portfolio If you look around and say, "Well, how did the Panamanian government allow this to happen?" Well there's no mining industry. if you look around and say "well how did the panamanian government allow this to happen?" well there's no mining industry There's no industry to destroy if you get in the way of one particular mining operation. there's no industry to destroy if you get in the way of one particular mining operation That's really what we look for there. that's really what we look for there There's safety in numbers, we're looking for the numbers. there's safety in numbers we're looking for the numbers

Speaker 2: Maybe when you start to try and do one of these deals, like, what sort of targeted IRRs do you start with? I imagine you adjust for regions and everything else. Maybe just to give people a general feel because there's lots of numbers thrown in the market about what the rate of returns are on deals. Maybe when you start to try and do one of these deals, like, what sort of targeted IRRs do you start with? maybe when you start to try and do one of these deals like what sort of targeted irrs do you start with I imagine you adjust for regions and everything else. i imagine you adjust for regions and everything else Maybe just to give people a general feel because there's lots of numbers thrown in the market about what the rate of returns are on deals. maybe just to give people a general feel because there's lots of numbers thrown in the market about what the rate of returns are on deals

Speaker 1: Yeah, it's funny. The only time anybody talks about returns on deals is on day one, which is exactly the wrong time to look at our investment because you may see a 10-year reserve life in our investment. You may calculate and say, "Well, that's a 3% return. That's a 4% return. That doesn't make any sense." Well, the reason we did it is because our geologist looked at the upside and said, "This isn't a 10-year mine life. This thing is gonna go for 20 years or 25 years." We have a demonstrated history of investing in assets that get better with time. We always say good mines get better. We talk about ultimate returns, and ultimate returns are often north of 10%, which you know in our business is very acceptable. Yeah, it's funny. yeah it's funny The only time anybody talks about returns on deals is on day one, which is exactly the wrong time to look at our investment because you may see a 10-year reserve life in our investment. the only time anybody talks about returns on deals is on day one which is exactly the wrong time to look at our investment because you may see a 10-year reserve life in our investment You may calculate and say, "Well, that's a 3% return. you may calculate and say "well that's a 3% return That's a 4% return. that's a 4% return That doesn't make any sense." Well, the reason we did it is because our geologist looked at the upside and said, "This isn't a 10-year mine life. that doesn't make any sense." well the reason we did it is because our geologist looked at the upside and said "this isn't a 10-year mine life This thing is gonna go for 20 years or 25 years." We have a demonstrated history of investing in assets that get better with time. this thing is gonna go for 20 years or 25 years." we have a demonstrated history of investing in assets that get better with time We always say good mines get better. we always say good mines get better We talk about ultimate returns, and ultimate returns are often north of 10%, which you know in our business is very acceptable. we talk about ultimate returns and ultimate returns are often north of 10% which you know in our business is very acceptable It's a little bit hard. There isn't an initial hurdle rate. There isn't an initial IRR that we have to have. It's all about the upside. It's a little bit hard. it's a little bit hard There isn't an initial hurdle rate. there isn't an initial hurdle rate There isn't an initial IRR that we have to have. there isn't an initial irr that we have to have It's all about the upside. it's all about the upside

Speaker 2: Maybe if I asked you, one of the questions we get from investors is, in a bullish gold market, we should just buy producers and not royalty companies because they don't have as much optionality. If I ask you that, what would your rebuttal be to that? Maybe if I asked you, one of the questions we get from investors is, in a bullish gold market, we should just buy producers and not royalty companies because they don't have as much optionality. maybe if i asked you one of the questions we get from investors is in a bullish gold market we should just buy producers and not royalty companies because they don't have as much optionality If I ask you that, what would your rebuttal be to that? if i ask you that what would your rebuttal be to that

Speaker 1: If, if that's the way you want to invest in gold, go find the highest cost producer because that's where the greatest leverage is going to be. I just say understand that if the gold price turns around, leverage works the other way as well. And our leverage is different, and it's longer term, and maybe it's a little harder to identify. When the gold price goes up, what do operators do? They tend to increase the price they use to calculate reserves and resources. Now that 15-year mine life, because of those assumption changes, is now 20 years or 25 years. We have an interest in all of that. So it's a much more subtle leverage to the gold price. I mean, we have a portfolio of exploration properties. These companies are now... If, if that's the way you want to invest in gold, go find the highest cost producer because that's where the greatest leverage is going to be. if if that's the way you want to invest in gold go find the highest cost producer because that's where the greatest leverage is going to be I just say understand that if the gold price turns around, leverage works the other way as well. i just say understand that if the gold price turns around leverage works the other way as well And our leverage is different, and it's longer term, and maybe it's a little harder to identify. and our leverage is different and it's longer term and maybe it's a little harder to identify When the gold price goes up, what do operators do? when the gold price goes up what do operators do They tend to increase the price they use to calculate reserves and resources. they tend to increase the price they use to calculate reserves and resources Now that 15-year mine life, because of those assumption changes, is now 20 years or 25 years. now that 15-year mine life because of those assumption changes is now 20 years or 25 years We have an interest in all of that. we have an interest in all of that So it's a much more subtle leverage to the gold price. so it's a much more subtle leverage to the gold price I mean, we have a portfolio of exploration properties. i mean we have a portfolio of exploration properties These companies are now... these companies are now Some of them are able to raise equity, they're putting it in the ground. We don't have any value on our balance sheet for those investments, they are being advanced without us spending any money. That's leverage to gold price. It's just not the obvious one that's in EPS or cash flow per share. Some of them are able to raise equity, they're putting it in the ground. some of them are able to raise equity they're putting it in the ground We don't have any value on our balance sheet for those investments, they are being advanced without us spending any money. we don't have any value on our balance sheet for those investments they are being advanced without us spending any money That's leverage to gold price. that's leverage to gold price It's just not the obvious one that's in EPS or cash flow per share. it's just not the obvious one that's in eps or cash flow per share

Speaker 2: I guess the other thing that comes up is, they tend to trade at higher multiples than producers. Why do you think that is? I guess the other thing that comes up is, they tend to trade at higher multiples than producers. i guess the other thing that comes up is they tend to trade at higher multiples than producers Why do you think that is? why do you think that is

Speaker 1: Sorry, we. Sorry, we. sorry we

Speaker 2: The royalty companies do and trade. The royalty companies do and trade. the royalty companies do and trade

Speaker 1: Oh, yeah. Well, it's a very different business model. I mean, when I was talking you know you look at what's going on in the world right now. Do you think operating companies are a little worried about what the price of diesel is gonna be very shortly? We don't have that exposure. We don't have exposure to labor costs. I'm sure there are governments out there that are thinking of increasing royalty rates and taxes given where the metal prices are. We're not impacted by any of that. I'd say, yeah, we do trade at a premium, probably a premium that many generalists are not as comfortable with, but I think it's just a lower risk, high margin business that deserves a premium. Oh, yeah. oh yeah Well, it's a very different business model. well it's a very different business model I mean, when I was talking you know you look at what's going on in the world right now. i mean when i was talking you know you look at what's going on in the world right now Do you think operating companies are a little worried about what the price of diesel is gonna be very shortly? do you think operating companies are a little worried about what the price of diesel is gonna be very shortly We don't have that exposure. we don't have that exposure We don't have exposure to labor costs. we don't have exposure to labor costs I'm sure there are governments out there that are thinking of increasing royalty rates and taxes given where the metal prices are. i'm sure there are governments out there that are thinking of increasing royalty rates and taxes given where the metal prices are We're not impacted by any of that. we're not impacted by any of that I'd say, yeah, we do trade at a premium, probably a premium that many generalists are not as comfortable with, but I think it's just a lower risk, high margin business that deserves a premium. i'd say yeah we do trade at a premium probably a premium that many generalists are not as comfortable with but i think it's just a lower risk high margin business that deserves a premium The other thing I would say, I mean, we've been in this business for decades, it's always been this way. It's not as though you're buying into some blip in valuations. This sector has always traded at very high multiples. The other thing I would say, I mean, we've been in this business for decades, it's always been this way. the other thing i would say i mean we've been in this business for decades it's always been this way It's not as though you're buying into some blip in valuations. it's not as though you're buying into some blip in valuations This sector has always traded at very high multiples. this sector has always traded at very high multiples

Speaker 2: Maybe moving directly to some of your assets and stuff. I'll maybe just start, last year you did 2 big transactions, one of the things you've been very. You haven't done a lot of is issue shares. You did for a transaction last year. I mean, I think before this, you hadn't issued a single share since 2012, which in this sector is rare. Can you maybe talk about why that was done, why you used shares, why you did Kansanshi with debt? Maybe moving directly to some of your assets and stuff. maybe moving directly to some of your assets and stuff I'll maybe just start, last year you did 2 big transactions, one of the things you've been very. i'll maybe just start last year you did 2 big transactions one of the things you've been very You haven't done a lot of is issue shares. you haven't done a lot of is issue shares You did for a transaction last year. you did for a transaction last year I mean, I think before this, you hadn't issued a single share since 2012, which in this sector is rare. i mean i think before this you hadn't issued a single share since 2012 which in this sector is rare Can you maybe talk about why that was done, why you used shares, why you did Kansanshi with debt? can you maybe talk about why that was done why you used shares why you did kansanshi with debt

Speaker 1: First of all, the senior management team at Sandstorm wanted shares. They wanted to participate. The transaction was accretive, we didn't mind issuing those shares. More importantly, when we announced Sandstorm, we knew the Kansanshi process was ongoing. There was a bidding process. We knew First Quantum, the operator, needed cash to address debt service obligations. If we had allocated a lot of cash to the Sandstorm transaction, we would not have had the cash available to do Kansanshi, we really wanted to do both of them. I think it would have helped the market understand why we did shares if we had announced Kansanshi first. That's not the way things work in our sector. First of all, the senior management team at Sandstorm wanted shares. first of all the senior management team at sandstorm wanted shares They wanted to participate. they wanted to participate The transaction was accretive, we didn't mind issuing those shares. the transaction was accretive we didn't mind issuing those shares More importantly, when we announced Sandstorm, we knew the Kansanshi process was ongoing. more importantly when we announced sandstorm we knew the kansanshi process was ongoing There was a bidding process. there was a bidding process We knew First Quantum, the operator, needed cash to address debt service obligations. we knew first quantum the operator needed cash to address debt service obligations If we had allocated a lot of cash to the Sandstorm transaction, we would not have had the cash available to do Kansanshi, we really wanted to do both of them. if we had allocated a lot of cash to the sandstorm transaction we would not have had the cash available to do kansanshi we really wanted to do both of them I think it would have helped the market understand why we did shares if we had announced Kansanshi first. i think it would have helped the market understand why we did shares if we had announced kansanshi first That's not the way things work in our sector. that's not the way things work in our sector It was really a function of this is what the target wants, but more importantly, we had to preserve liquidity for a transaction that then got announced less than a month later. It was really a function of this is what the target wants, but more importantly, we had to preserve liquidity for a transaction that then got announced less than a month later. it was really a function of this is what the target wants but more importantly we had to preserve liquidity for a transaction that then got announced less than a month later

Speaker 2: I guess where we sit today now, you do have some debt on your balance sheet. Maybe you can talk about capital allocation. Again, the same issue, you wanna keep capacity available in case you... 'cause you never know when these deals are gonna come up. How you're looking at allocating capital now over the next year or so? I guess where we sit today now, you do have some debt on your balance sheet. i guess where we sit today now you do have some debt on your balance sheet Maybe you can talk about capital allocation. maybe you can talk about capital allocation Again, the same issue, you wanna keep capacity available in case you... 'cause you never know when these deals are gonna come up. again the same issue you wanna keep capacity available in case you 'cause you never know when these deals are gonna come up How you're looking at allocating capital now over the next year or so? how you're looking at allocating capital now over the next year or so

Speaker 1: Yeah, I mean, look, we're still open for business. We're looking for new investments. That's where I think we can add value. If we can buy an asset at a PNAV price that is below where we trade, that is going to enhance the value. As you say, it's a really lumpy business, there are years when we don't make an investment. With the debt on the balance sheet, to the extent we have that cash, we will repay the revolving credit. Currently, there's about $725 million outstanding, we think you know at the current metal prices, that would be paid off in about a year. That doesn't mean we're not looking for new investments, but that'll be the... Yeah, I mean, look, we're still open for business. yeah i mean look we're still open for business We're looking for new investments. we're looking for new investments That's where I think we can add value. that's where i think we can add value If we can buy an asset at a PNAV price that is below where we trade, that is going to enhance the value. if we can buy an asset at a pnav price that is below where we trade that is going to enhance the value As you say, it's a really lumpy business, there are years when we don't make an investment. as you say it's a really lumpy business there are years when we don't make an investment With the debt on the balance sheet, to the extent we have that cash, we will repay the revolving credit. with the debt on the balance sheet to the extent we have that cash we will repay the revolving credit Currently, there's about $725 million outstanding, we think you know at the current metal prices, that would be paid off in about a year. currently there's about $725 million outstanding we think you know at the current metal prices that would be paid off in about a year That doesn't mean we're not looking for new investments, but that'll be the... that doesn't mean we're not looking for new investments but that'll be the that's sort of the second step for capital allocation. Then the dividend that I referred to is really the third leg to the stool. We're very proud of the 25 consecutive years. I will say you know when we increase it in a year, we're not looking at it saying, "Well, we can afford to pay this next year." We look at it and say, "If we increase it to this level, can we continue to increase it in years three, four, five, 10?" So there is a... that's sort of the second step for capital allocation. that's sort of the second step for capital allocation Then the dividend that I referred to is really the third leg to the stool. then the dividend that i referred to is really the third leg to the stool We're very proud of the 25 consecutive years. we're very proud of the 25 consecutive years I will say you know when we increase it in a year, we're not looking at it saying, "Well, we can afford to pay this next year." We look at it and say, "If we increase it to this level, can we continue to increase it in years three, four, five, 10?" So there is a... i will say you know when we increase it in a year we're not looking at it saying "well we can afford to pay this next year." we look at it and say "if we increase it to this level can we continue to increase it in years three four five 10?" so there is a You might look at our dividend increases and say, "Well, given where the metal price is, you could have done more." I say, "Well, we're trying to retain this record, and if you pay out a huge amount one year and you have to pull it back, that would not be a good outcome. You might look at our dividend increases and say, "Well, given where the metal price is, you could have done more." I say, "Well, we're trying to retain this record, and if you pay out a huge amount one year and you have to pull it back, that would not be a good outcome. you might look at our dividend increases and say "well given where the metal price is you could have done more." i say "well we're trying to retain this record and if you pay out a huge amount one year and you have to pull it back that would not be a good outcome

Speaker 2: Right Right right

Speaker 1: ... for us. ... for us. for us

Speaker 2: Basically at the end of the day. The other thing that people will bring up is you trade maybe at a little bit of a I mean, generally, the larger companies get much better liquidity and they get a premium in the market, but you may be trading at a discount, I would argue, at the moment versus your two big competitors. Why do you think that is at the moment? Basically at the end of the day. basically at the end of the day The other thing that people will bring up is you trade maybe at a little bit of a I mean, generally, the larger companies get much better liquidity and they get a premium in the market, but you may be trading at a discount, I would argue, at the moment versus your two big competitors. the other thing that people will bring up is you trade maybe at a little bit of a i mean generally the larger companies get much better liquidity and they get a premium in the market but you may be trading at a discount i would argue at the moment versus your two big competitors Why do you think that is at the moment? why do you think that is at the moment

Speaker 1: Well, a couple things. They are much bigger, so I'm sure there's a liquidity factor in there. We were so busy last year. I mean, we did almost $5 billion of investments. I can tell you that previously the highest investment year was about $1 billion, and that was in 2015. These years don't come around very much. And I just think there was so much going on in the portfolio, I think people had a hard time, and still have a hard time, getting their arms around what this company looks like on a consolidated basis. We only had 1 quarter of Kunsanshi. We only had 1 quarter of Sandstorm's assets. We'll get a full year this year. We have a couple other projects that I expect will come in this year. Well, a couple things. well a couple things They are much bigger, so I'm sure there's a liquidity factor in there. they are much bigger so i'm sure there's a liquidity factor in there We were so busy last year. we were so busy last year I mean, we did almost $5 billion of investments. i mean we did almost $5 billion of investments I can tell you that previously the highest investment year was about $1 billion, and that was in 2015. i can tell you that previously the highest investment year was about $1 billion and that was in 2015 These years don't come around very much. these years don't come around very much And I just think there was so much going on in the portfolio, I think people had a hard time, and still have a hard time, getting their arms around what this company looks like on a consolidated basis. and i just think there was so much going on in the portfolio i think people had a hard time and still have a hard time getting their arms around what this company looks like on a consolidated basis We only had 1 quarter of Kunsanshi. we only had 1 quarter of kunsanshi We only had 1 quarter of Sandstorm's assets. we only had 1 quarter of sandstorm's assets We'll get a full year this year. we'll get a full year this year We have a couple other projects that I expect will come in this year. we have a couple other projects that i expect will come in this year I think that's part of the, part of the discount. I think there is always with investors a show me element. You don't always get paid for what's coming. They wanna see it. That's what I hope happens this year is we put four quarters together with very boring, no noise, and we can demonstrate what the company can do. I think that's part of the, part of the discount. i think that's part of the part of the discount I think there is always with investors a show me element. i think there is always with investors a show me element You don't always get paid for what's coming. you don't always get paid for what's coming They wanna see it. they wanna see it That's what I hope happens this year is we put four quarters together with very boring, no noise, and we can demonstrate what the company can do. that's what i hope happens this year is we put four quarters together with very boring no noise and we can demonstrate what the company can do

Speaker 2: Maybe to address the other thing, when you did the Sandstorm transaction, we might just say some of the, some of it was a little more complicated than a standard royalty model. Can you talk about what you've done to clean that up and what you may have to do going forward and, and really put in perspective how big that really is in the overall portfolio now? Maybe to address the other thing, when you did the Sandstorm transaction, we might just say some of the, some of it was a little more complicated than a standard royalty model. maybe to address the other thing when you did the sandstorm transaction we might just say some of the some of it was a little more complicated than a standard royalty model Can you talk about what you've done to clean that up and what you may have to do going forward and, and really put in perspective how big that really is in the overall portfolio now? can you talk about what you've done to clean that up and what you may have to do going forward and and really put in perspective how big that really is in the overall portfolio now

Speaker 1: I mean, Sandstorm was a complicated company. They had created this affiliate, Horizon Copper, to house a joint venture because they didn't want the joint venture on their balance sheet. We could have just bought Sandstorm and kept Horizon independent, but there were so many intercompany transactions, streams, loans that was taking a lot of time, we just, "Let's just collapse the whole thing. Let's get rid of all of that intercompany, all the intercompany relationship." What we were really left with, Sandstorm did make equity and debt investments in a number of companies, and we said that's not core to our business. Let's try to get rid of them. We've done a pretty good job. We sold the Versamat shares. I mean, Sandstorm was a complicated company. i mean sandstorm was a complicated company They had created this affiliate, Horizon Copper, to house a joint venture because they didn't want the joint venture on their balance sheet. they had created this affiliate horizon copper to house a joint venture because they didn't want the joint venture on their balance sheet We could have just bought Sandstorm and kept Horizon independent, but there were so many intercompany transactions, streams, loans that was taking a lot of time, we just, "Let's just collapse the whole thing. we could have just bought sandstorm and kept horizon independent but there were so many intercompany transactions streams loans that was taking a lot of time we just "let's just collapse the whole thing Let's get rid of all of that intercompany, all the intercompany relationship." What we were really left with, Sandstorm did make equity and debt investments in a number of companies, and we said that's not core to our business. let's get rid of all of that intercompany all the intercompany relationship." what we were really left with sandstorm did make equity and debt investments in a number of companies and we said that's not core to our business Let's try to get rid of them. let's try to get rid of them We've done a pretty good job. we've done a pretty good job We sold the Versamat shares. we sold the versamat shares It's a, another royalty company we that Sandstorm had owned about 25% of. We sold that in a block, and then we restructured another debt and equity investment in a smaller mining company by supporting a merger. We're really down to 2. We have a 24% interest in Entrée Resources, which has a joint venture in Mongolia, on the outer edges of Oyu Tolgoi. We think there's the possibility of there being a value event. They're working with the government of Mongolia on a couple of things, so we'll be a little bit patient, but it's the same concept. We don't wanna hold it. Let's try to sell it. We know people are interested. The other one is the Hod Maden joint venture. It's a, another royalty company we that Sandstorm had owned about 25% of. it's a another royalty company we that sandstorm had owned about 25% of We sold that in a block, and then we restructured another debt and equity investment in a smaller mining company by supporting a merger. we sold that in a block and then we restructured another debt and equity investment in a smaller mining company by supporting a merger We're really down to 2. we're really down to 2 We have a 24% interest in Entrée Resources, which has a joint venture in Mongolia, on the outer edges of Oyu Tolgoi. we have a 24% interest in entrée resources which has a joint venture in mongolia on the outer edges of oyu tolgoi We think there's the possibility of there being a value event. we think there's the possibility of there being a value event They're working with the government of Mongolia on a couple of things, so we'll be a little bit patient, but it's the same concept. they're working with the government of mongolia on a couple of things so we'll be a little bit patient but it's the same concept We don't wanna hold it. we don't wanna hold it Let's try to sell it. let's try to sell it We know people are interested. we know people are interested The other one is the Hod Maden joint venture. the other one is the hod maden joint venture This is the joint venture that Sandstorm tried to get off of its balance sheet. We are gonna try to convert a joint venture interest, which has capital costs and operating cost exposure, into something that looks more traditional, more familiar in our portfolio. Those discussions are early stage, but it's really a priority for us this year. This is the joint venture that Sandstorm tried to get off of its balance sheet. this is the joint venture that sandstorm tried to get off of its balance sheet We are gonna try to convert a joint venture interest, which has capital costs and operating cost exposure, into something that looks more traditional, more familiar in our portfolio. we are gonna try to convert a joint venture interest which has capital costs and operating cost exposure into something that looks more traditional more familiar in our portfolio Those discussions are early stage, but it's really a priority for us this year. those discussions are early stage but it's really a priority for us this year

Speaker 2: Maybe I'll stop. Are there any questions, in the audience? Maybe I'll stop. maybe i'll stop Are there any questions, in the audience? are there any questions in the audience

Speaker 1: Just one second. Thanks. Just one second. just one second Thanks. thanks

Speaker 2: Sure. Sure. sure

Speaker 3: Given where the gold price currently is, can you talk about contracts that you have with mines which will come into operation if the price stays at these levels? In other words, how much sort of embedded production do you have if gold stays at the current price versus your current volume of production? Given where the gold price currently is, can you talk about contracts that you have with mines which will come into operation if the price stays at these levels? given where the gold price currently is can you talk about contracts that you have with mines which will come into operation if the price stays at these levels In other words, how much sort of embedded production do you have if gold stays at the current price versus your current volume of production? in other words how much sort of embedded production do you have if gold stays at the current price versus your current volume of production

Speaker 1: I mean, I think the growth projects that we would talk about would be in production at $4,000 an ounce or $3,000 an ounce. I mean, one of them is Platreef in South Africa. That's a PGM mine, it really is not driven by the gold price. MARA in Argentina is basically a copper project that is owned by Glencore. That's not dependent on the gold price. If there are projects that move forward because the price is where it is, that's gravy. It's not even anything we're talking about in terms of growth. I'm sure there are projects that are right on the edge and make sense here, you can't. I mean, I think the growth projects that we would talk about would be in production at $4,000 an ounce or $3,000 an ounce. i mean i think the growth projects that we would talk about would be in production at $4,000 an ounce or $3,000 an ounce I mean, one of them is Platreef in South Africa. i mean one of them is platreef in south africa That's a PGM mine, it really is not driven by the gold price. that's a pgm mine it really is not driven by the gold price MARA in Argentina is basically a copper project that is owned by Glencore. mara in argentina is basically a copper project that is owned by glencore That's not dependent on the gold price. that's not dependent on the gold price If there are projects that move forward because the price is where it is, that's gravy. if there are projects that move forward because the price is where it is that's gravy It's not even anything we're talking about in terms of growth. it's not even anything we're talking about in terms of growth I'm sure there are projects that are right on the edge and make sense here, you can't. i'm sure there are projects that are right on the edge and make sense here you can't This mining industry, you don't just flip a switch and a mine can come on. There's you know exploration, study, permitting. It takes years. Even if you wanted to today bring a gold mine in at $5,000 an ounce, you really can't do it. It's going to take three, four, five+ years. This mining industry, you don't just flip a switch and a mine can come on. this mining industry you don't just flip a switch and a mine can come on There's you know exploration, study, permitting. there's you know exploration study permitting It takes years. it takes years Even if you wanted to today bring a gold mine in at $5,000 an ounce, you really can't do it. even if you wanted to today bring a gold mine in at $5,000 an ounce you really can't do it It's going to take three, four, five+ years. it's going to take three four five+ years

Speaker 3: Have you seen ones at, say, $3,000 earlier on last year that might now be progressing? Have you seen ones at, say, $3,000 earlier on last year that might now be progressing? have you seen ones at say $3,000 earlier on last year that might now be progressing

Speaker 1: They might be, but they're probably not very large in our portfolio. They might be, but they're probably not very large in our portfolio. they might be but they're probably not very large in our portfolio

Speaker 3: You don't have any out of the money contracts in terms of. You don't have any out of the money contracts in terms of. you don't have any out of the money contracts in terms of

Speaker 1: No, I don't think so. I look at the evaluation and exploration as where we may see things blossom that we're not even talking about right now. The chance that they are of significant value to our company, it's a little unlikely. No, I don't think so. no i don't think so I look at the evaluation and exploration as where we may see things blossom that we're not even talking about right now. i look at the evaluation and exploration as where we may see things blossom that we're not even talking about right now The chance that they are of significant value to our company, it's a little unlikely. the chance that they are of significant value to our company it's a little unlikely

Speaker 2: Maybe it's worth you know one of the other things that was done years ago was the Cortez stuff. It might be worth just talking about. There's a lot of chatter now about this new discovery, Four Mile. I think not everybody realizes you even have a royalty on it. That's... To your question, that's an example where you probably bought something and you thought you'd find something. Maybe it's worth you know one of the other things that was done years ago was the Cortez stuff. maybe it's worth you know one of the other things that was done years ago was the cortez stuff It might be worth just talking about. it might be worth just talking about There's a lot of chatter now about this new discovery, Four Mile. there's a lot of chatter now about this new discovery four mile I think not everybody realizes you even have a royalty on it. i think not everybody realizes you even have a royalty on it That's... that's To your question, that's an example where you probably bought something and you thought you'd find something. to your question that's an example where you probably bought something and you thought you'd find something

Speaker 1: We were very confident that there was upside at Cortez. Cortez is you know the backbone of Royal Gold. It was Through the nineties, it was 95% of our revenue. We've had decades of exposure to it. 3 years ago, we actually expanded our footprint to include the whole complex. We did not have all of Cortez. Those transactions in 2020 actually brought us exposure to Gold Rush, to Cortez Hills, and to Four Mile. I think we expected something like Four Mile, but not the grade, not the scale, and not in the time, since the acquisition. I thought this would play out over 5-10 years, and here we sit 3 years later, with one of the best discoveries in the industry recently. We were very confident that there was upside at Cortez. we were very confident that there was upside at cortez Cortez is you know the backbone of Royal Gold. cortez is you know the backbone of royal gold It was Through the nineties, it was 95% of our revenue. it was through the nineties it was 95% of our revenue We've had decades of exposure to it. 3 years ago, we actually expanded our footprint to include the whole complex. we've had decades of exposure to it 3 years ago we actually expanded our footprint to include the whole complex We did not have all of Cortez. we did not have all of cortez Those transactions in 2020 actually brought us exposure to Gold Rush, to Cortez Hills, and to Four Mile. those transactions in 2020 actually brought us exposure to gold rush to cortez hills and to four mile I think we expected something like Four Mile, but not the grade, not the scale, and not in the time, since the acquisition. i think we expected something like four mile but not the grade not the scale and not in the time since the acquisition I thought this would play out over 5-10 years, and here we sit 3 years later, with one of the best discoveries in the industry recently. i thought this would play out over 5-10 years and here we sit 3 years later with one of the best discoveries in the industry recently

Speaker 2: Does that help? Does that help? does that help

Speaker 3: Yeah. Yeah. yeah

Speaker 2: Yeah. Are there any other questions? We just got about a minute and a half left. Maybe just talk a little bit about concentration risk too, 'cause one of the things that used to be talked about was you know it's a chicken and egg thing. The best assets, you wanna have a lot of them, but if you have too much of them and something goes wrong, that's not so good either. Can you maybe talk about what the portfolio looks like now on a concentration risk basis? 'Cause it's changed substantially after all your work last year. Yeah. yeah Are there any other questions? are there any other questions We just got about a minute and a half left. we just got about a minute and a half left Maybe just talk a little bit about concentration risk too, 'cause one of the things that used to be talked about was you know it's a chicken and egg thing. maybe just talk a little bit about concentration risk too 'cause one of the things that used to be talked about was you know it's a chicken and egg thing The best assets, you wanna have a lot of them, but if you have too much of them and something goes wrong, that's not so good either. the best assets you wanna have a lot of them but if you have too much of them and something goes wrong that's not so good either Can you maybe talk about what the portfolio looks like now on a concentration risk basis? 'Cause it's changed substantially after all your work last year. can you maybe talk about what the portfolio looks like now on a concentration risk basis 'cause it's changed substantially after all your work last year

Speaker 1: Yeah, the rule number one in mining, something's gonna go wrong. Yeah, the rule number one in mining, something's gonna go wrong. yeah the rule number one in mining something's gonna go wrong

Speaker 2: Yeah. Yeah. yeah

Speaker 1: I promise you that. If you were to go back 10 years, Mount Milligan, our biggest asset, probably would've been 35% of our revenue and 30% of our net asset value. There were certain events that happened. One year, they ran out of water to run the mill, and they had to shut down, and our share price just really felt the impact of that. It's really been a strategic goal of ours to diversify the portfolio. Yeah, if something bad happens at Milligan, you're gonna see it, but it's not to the extent that it did then. If you look around our sector, every one of the major companies has some sort of concentration risk. You know, whether that's Salobo at Wheaton. You've got Cobre at Franco-Malartic at Oyu. I promise you that. i promise you that If you were to go back 10 years, Mount Milligan, our biggest asset, probably would've been 35% of our revenue and 30% of our net asset value. if you were to go back 10 years mount milligan our biggest asset probably would've been 35% of our revenue and 30% of our net asset value There were certain events that happened. there were certain events that happened One year, they ran out of water to run the mill, and they had to shut down, and our share price just really felt the impact of that. one year they ran out of water to run the mill and they had to shut down and our share price just really felt the impact of that It's really been a strategic goal of ours to diversify the portfolio. it's really been a strategic goal of ours to diversify the portfolio Yeah, if something bad happens at Milligan, you're gonna see it, but it's not to the extent that it did then. yeah if something bad happens at milligan you're gonna see it but it's not to the extent that it did then If you look around our sector, every one of the major companies has some sort of concentration risk. if you look around our sector every one of the major companies has some sort of concentration risk You know, whether that's Salobo at Wheaton. you know whether that's salobo at wheaton You've got Cobre at Franco-Malartic at Oyu. you've got cobre at franco-malartic at oyu I mean, everyone has it. That's why I made the point up there of having the most diversified portfolio. No asset other than Milligan represents more than 10% of our NAV, and that also helps with political risk. You say, "Oh, you're in Turkey, I'm nervous about Turkey." It's 4% of our NAV. Diversification, to me, is critical to having a quality portfolio. I mean, everyone has it. i mean everyone has it That's why I made the point up there of having the most diversified portfolio. that's why i made the point up there of having the most diversified portfolio No asset other than Milligan represents more than 10% of our NAV, and that also helps with political risk. no asset other than milligan represents more than 10% of our nav and that also helps with political risk You say, "Oh, you're in Turkey, I'm nervous about Turkey." It's 4% of our NAV. you say "oh you're in turkey i'm nervous about turkey." it's 4% of our nav Diversification, to me, is critical to having a quality portfolio. diversification to me is critical to having a quality portfolio

Speaker 2: Well, that's a perfect segue into ending it. Thank you very much, Bill, for going through and going through the model and look forward to seeing the multiple catch up to everybody else. Well, that's a perfect segue into ending it. well that's a perfect segue into ending it Thank you very much, Bill, for going through and going through the model and look forward to seeing the multiple catch up to everybody else. thank you very much bill for going through and going through the model and look forward to seeing the multiple catch up to everybody else

Speaker 1: Thank you very much. Thank you very much. thank you very much

Speaker 2: Thanks very much. For anybody who's interested, there'll be a breakout in Cordoba Six. Thanks very much. thanks very much For anybody who's interested, there'll be a breakout in Cordoba Six. for anybody who's interested there'll be a breakout in cordoba six