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A Precious Metals Royalty Company

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Title: A Precious Metals Royalty Company


1
  • A Precious Metals Royalty Company
  • Merrill Lynch 11th Annual Mining Conference
  • September 15, 2005

2
Safe Harbor
Some matters contained in this presentation are
forward-looking statements that involve risks and
uncertainties that could cause actual events to
differ materially from projections or estimates.
Such forward-looking statements include
statements regarding production estimates
provided by third party operators, the
sliding-scale features of our royalty structure
at the Pipeline Mining Complex and Bald Mountain,
and comments regarding cash flow, earnings,
revenues, timing, amounts of future production,
mineralization, and reserves. Factors that could
cause actual results to differ materially from
such projections include changes in precious
metals prices, various decisions and activities
of the operators of our royalty properties,
unanticipated grade, geological, metallurgical,
processing or other problems, changes in project
parameters as plans of the operators are refined,
the results of current or planned exploration
activities, economic and market conditions,
future financial needs or opportunities, and the
impact of future acquisitions. These and other
factors are discussed in more detail in the
Companys filings with the Securities and
Exchange Commission. The Company disclaims any
obligation to update any forward-looking
statements.
  • Cautionary Statement
  • under the
  • Private Securities Litigation Reform Act of 1995

3
Who We Are
  • Leading major precious metals royalty company
  • Royalties in some of the best mining districts in
    the world
  • Royalties on some of the best mines in the world
  • Rock solid financial strength
  • Top-notch management team

4
Market Profile
  • NASDAQ RGLD
  • TSX RGL
  • Shares outstanding 21.0M(fully diluted) 21.7M
  • Market cap (as of 09/09/05) 540M
  • Daily average trading volume (YTD) 265,000
  • Options traded on all major exchanges
  • Dividends 0.20/share
  • Ownership of officers and directors 21

5
Shareholders get the Royal Treatment
  • Shareholders come first
  • Sensitive to dilution
  • Provide dividend income
  • Offer an unhedged investment
  • Balance growth and returns

6
Royal Gold Strengths
  • People
  • Experienced, professional management
  • Performance
  • Continual increases in revenue, net income and
    free cash flow
  • Portfolio
  • High-quality deposits
  • Partners
  • Skilled operators and explorers
  • Potential
  • Exposure to growth and price appreciation

7
Value Creation Strategies
Attract and RetainStrong Management Team
Maximize Value ofExisting Assets
Pursue High RewardExploration Opportunities
Value Creation
Protect Margins andImprove Profitability
Undertake Quality Acquisitionsthat are both
Strategic Accretive
Maintain FinancialStrength Flexibility
8
Business ModelMinimum Inputs / Maximum Output
  • Low cost, high margin structure
  • Limited operating exposure
  • Sliding-scale royalties
  • Fixed rate royalties
  • Organic reserve growth
  • Unique way to own gold
  • Minimum Inputs
  • No direct management demands
  • Periodic financial and technical audits
  • No continuing investment

Royalty Business Model
  • Maximum Outputs
  • High margins
  • Strong cash flow
  • Reserve growth at no cost
  • Unhedged

9
Leverage Through Sliding-Scale Royalties
  • Sliding-scale features
  • Varying royalty payout determined by average gold
    price for the quarter
  • 350 gold price yields 11.90 per oz. in revenue
    vs. 450 gold price yield of 21.38 per oz.
  • Fixed floor of 0.40

10
Portfolio of High-Quality Assets
  • Focused in highly prospective mineral-rich
    districts
  • Tremendous upside potential
  • Experienced operators and business partners
  • Core assets in politically stable regions

11
Core Royalties
State of Nevada
Elko
BattleMountain
SJ Claims
Reno
Leeville
Pipeline Mining Complex
12
Highlights Producing Properties
  • Pipeline Mining Complex
  • Reserves 6.0M ozs
  • Additional mineralization 171M tons at 0.032
    opt
  • Production 860,000 ozs
  • Leeville North South
  • Reserves 2.6M ozs
  • Additional mineralization 1.4M tons at 0.458
    opt
  • Production 141,000 ozs (Leeville North start-up
    late CY2005)
  • Goldstrike Mine - SJ Claims
  • Reserves 9.7M ozs
  • Production 674,000 ozs

13
Highlights Producing Properties
  • Troy
  • Reserves 13.6M ozs of silver 113.0M lbs of
    copper
  • Additional mineralization 46.8M tons at 1.54
    opt Ag and 0.75 lb of Cu
  • Production 2.0M ozs of silver 17.0M lbs of
    copper
  • Martha
  • Reserves 4.5M oz silver
  • Additional mineralization 74,000 tons at 52.8
    opt
  • Production 1.7M oz
  • Bald Mountain
  • Reserves 440,000 oz
  • Additional mineralization 9M tons at 0.034 opt
  • Production 40,000 ozs

14
Non-Producing Royalties
15
The Road to Growth
  • Organic growth through reserve replacement and
    new discoveries
  • Exploration through strategic alliances
  • Acquisition of existing royalties
  • Creation of new royalties through financing
    opportunities

16
Organic Growth No Cost Growth
PIPELINE MINING COMPLEX Reserve Reconciliation
SJ CLAIMS - GOLDSTRIKE Reserve Reconciliation
9.7
9.1
10
8.0
7.1
8
6.0
6
4
2.8
2
Au Oz.(Millions)
(10.1)
(1.1)
-
(2)
(4)
(6)
(8)
(10)
(12)
01/1997
Consumed
Discovered
01/2005
11/2002
Consumed
Discovered
01/2005
17
Growth through Exploration
  • Company founded on exploration
  • Build strategic alliances
  • High quality, experienced explorers with land
    packages in highly prospective geologic terrains
  • Opportunity for royalty ownership and back-in
    rights
  • Win-win relationships with technically proficient
    junior companies

18
Growth by Acquisition
  • Royalties purchased from prospectors
  • Relationship building
  • Estate planning
  • Royalties held by other companies
  • Divesting non-core assets
  • Change in company focus

19
Growth through Royalty Creation
  • Royalty financing for
  • Development stage projects
  • Exploration projects
  • Financial restructuring
  • Reclamation bonding and insurance

20
Benefits of Royalty Financing for the Operator
  • Preservation of equity and control
  • No repayment obligations
  • Less restrictive
  • More flexible structure
  • Avoids hedging requirements

21
Royalty Evaluation Criteria
  • Quality of assets
  • Reputation of operators
  • Country risks
  • Timing of production
  • Upside potential
  • Magnitude of project

22
Strong Track Record
Fiscal Years
23
Strong Financial Position
  • Total Cash 48.8 M
  • Total Debt 0
  • Line of Credit 10M
  • Current Ratio 191
  • Free Cash Flow Margin 71
  • As of 6/30/05

24
A Growing Company with Growing Dividends
/Share
25
Comparison of Cumulative 5 Year Total Return
26
The Royal Gold Advantage
  • Experienced Management Team
  • Effective Business Model
  • A Clear Growth Plan
  • Growing Dividends
  • Shareholder Value

27
Royal Gold, Inc.
  • Its the People
  • Its the Performance
  • Its the Portfolio
  • Its the Partners
  • Its the Potential!

ROYAL GOLD, INC. 1660 Wynkoop Street, Suite
1000 Denver, Colorado 80202-1132 Telephone
(303) 573-1660 Fax (303) 595-9385 Email
info_at_royalgold.com Web Site www.royalgold.com
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