DENVER / Feb 14, 2024 / Business Wire / Royal Gold, Inc. (NASDAQ: RGLD) (together with its subsidiaries, “Royal Gold,” the “Company,” “we,” “us,” or “our”) reports net income of $239.4 million, or $3.63 per share, for the year ended December 31, 2023, on revenue of $605.7 million and operating cash flow of $415.8 million. Adjusted net income1 was $232.9 million, or $3.53 per share.
For the quarter ended December 31, 2023 (“fourth quarter”), we reported net income of $62.8 million, or $0.95 per share, on revenue of $152.7 million and operating cash flow of $101.1 million.
Sales volume for 2023 at metal prices used to provide GEO2 guidance was 315,600 GEOs3, slightly below the low end of the previously-issued guidance range of 320,000 to 345,000 GEOs, and in line with the range of expectations we provided with our third quarter 2023 results. At actual 2023 metal prices, sales volume was approximately 312,100 GEOs.
2023 Highlights:
- Solid financial results with revenue of $605.7 million, operating cash flow of $415.8 million and earnings of $239.4 million
- Revenue split: 76% gold, 12% silver, 9% copper
- Sales volume of 312,100 GEOs2,3
- Sustained high adjusted EBITDA margin1 of 79%
- Debt reduced by $325 million to $250 million
- Total available liquidity increased to $845 million
- Revolving credit facility maturity extended to June 28, 2028
- Paid $1.50 per share dividend
Fourth Quarter 2023 Highlights:
- Increased dividend for the 23rd consecutive year to $1.60 per share for 2024, a 7% increase over 2023
- Repaid $75 million of balance outstanding on revolving credit facility
“We finished 2023 on a strong note with solid financial results in the fourth quarter,” commented Bill Heissenbuttel, President and CEO of Royal Gold. “We took advantage of our strong cash flow during the year to repay debt and build our liquidity to be well-positioned for new acquisition opportunities that meet our investment criteria. We also kept our focus on increasing our return of capital to shareholders and we raised our dividend for the 23rd consecutive year, which remains an unparalleled record in the precious metals sector.”
“While we anticipate issuing 2024 guidance in April for our total portfolio, we are expecting to see continued revenue growth from our newest producers, Bellevue and King of the Hills, as those operations continue to ramp-up,” continued Mr. Heissenbuttel, “and we expect new revenue from several development projects as they transition to production, including Goldrush, Mara Rosa, Côté Gold and Manh Choh.”
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1 Adjusted net income, adjusted net income per share and adjusted EBITDA margin are non-GAAP financial measures. See Schedule A of this press release for additional information, including a detailed description of adjustments to net income. |
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2 See Schedule A of this press release for additional information about gold equivalent ounces, or GEOs. |
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3 2023 actual volume was approximately 315,600 GEOs at commodity prices used to set 2023 guidance of: $1,825/oz gold, $22.50/oz silver, $3.80/lb copper, $11.50/lb nickel, $0.90/lb lead, and $1.30/lb zinc. |
Recent Portfolio Developments
Principal Property Updates
Notable recent updates as reported by the operators of our Principal Properties include:
Agreement with Centerra that Provides for Mine Life Extension at Mount Milligan
On February 14, 2024, we announced an additional agreement with Centerra Gold Inc. (“Centerra”) with respect to the Mount Milligan mine in British Columbia that will allow an extension of the mine life to 2035 and provide the potential for a future mine life increase. As part of the announcement of the agreement, Centerra described a three-part strategy to further increase the Mount Milligan mine life that includes the completion of a Preliminary Economic Assessment in the first half of 2025 to evaluate mine life extension opportunities, further exploration drilling, and a site optimization program that began in the fourth quarter. Please refer to the press release titled “Royal Gold Announces Additional Agreement with Centerra that Provides for Mine Life Extension at Mount Milligan” for more detail.
Additionally, on February 14, 2024, Centerra provided 2024 production guidance for Mount Milligan of 180,000 to 200,000 ounces of gold and 55 to 65 million pounds of copper.
Record of Decision Received at Goldrush and Cortez 2024 Production Forecast Provided by Barrick
On December 11, 2023, Barrick Gold Corporation (“Barrick”) reported that the Record of Decision (“ROD”) approving the plan of operations for the new Goldrush mine in Nevada (part of the Cortez Complex) was issued by the US Bureau of Land Management, approximately 6 months later than Barrick’s initial expectation. Barrick anticipates production to ramp up in 2024 after commissioning of the initial project infrastructure, and has forecasted expected gold production from Goldrush of 130,000 ounces in 2024, growing to approximately 400,000 ounces per year by 2028 (100% basis).
Further, on February 14, 2024, Barrick reported that production at the Cortez Complex in 2024 is expected to be lower in 2024 relative to 2023 primarily due to changes in the Crossroads resource model that are expected to reduce oxide mill feed. Barrick expects this reduction to be partially offset by a higher contribution from Goldrush, although the delay in receiving the ROD during 2023 has pushed some production at Goldrush from 2024 into 2025. Barrick is expecting gold production at the Cortez Complex to be 620,000 to 680,000 ounces in 2024 (100% basis).
Update on Ramp-Up of Plant Expansion with Further Deferral of Silver Deliveries at Pueblo Viejo
On February 14, 2024, Barrick provided an update on the plant expansion and mine life extension project at Pueblo Viejo. According to Barrick, construction and commissioning activities for the plant expansion were substantially completed by the end of 2023. Reconstruction of the ore stockpile feed conveyor is underway after a failure reported in the fourth quarter, and Barrick now expects this reconstruction to be completed in the second quarter of 2024, which will allow the plant to reach full throughput. Barrick further reported that the focus during the first quarter of 2024 will be on the continued stability and optimization of the flotation circuit. With respect to the mine life extension project, Barrick reported that the technical and social studies for additional tailings storage capacity at the El Naranjo facility continued to advance as planned. Geotechnical drilling and site investigations are ongoing and continue to support the feasibility study, due for completion in the third quarter of 2024.
Silver stream deliveries were approximately 223,000 ounces for the fourth quarter compared to 337,900 ounces for the prior year quarter, and an additional 165,400 ounces of silver deliveries were deferred during the current period. As of December 31, 2023, approximately 854,000 ounces remain deferred, and the timing for the delivery of the entire deferred amount is uncertain. We expect that silver recoveries could remain highly variable and material deliveries of deferred silver ounces are not expected until the plant expansion is complete and is running at full production levels.
Barrick is expecting its share of gold production at Pueblo Viejo to be 420,000 to 490,000 ounces in 2024 (60% basis).
Production for 2024 Expected to Remain in Line with 2023 at Andacollo
On January 16, 2024, Teck Resources Limited (“Teck”) reported that the Andacollo mine in Chile continues to face extreme drought conditions, causing water restrictions which impact production, and Teck expects 2024 copper production to be similar to 2023. According to Teck, steps are being taken to mitigate these risks, with a solution likely to be in place in 2025. As a result, and with the benefit of higher grade ore, copper production is expected to increase between 2025 and 2027, compared to 2024. Gold and copper grades are relatively well correlated at Andacollo and gold production tends to track copper production.
Announcement of Change in Ownership of Khoemacau
On November 21, 2023, Khoemacau Copper Mining (“KCM”), the owner of the Khoemacau mine in Botswana, announced that the shareholders of its parent company, Cuprous Capital Ltd (“Cuprous”), had entered into a share purchase agreement with MMG Limited (“MMG”), whereby MMG will acquire all the issued share capital of Cuprous. MMG is a large and well-capitalized base metal mining company listed on the Stock Exchange of Hong Kong, with operations and projects in Australia, the Democratic Republic of the Congo, Peru and Canada. MMG has reported that the parties have agreed to work towards completion of the transaction in the first quarter of 2024.
During development of Khoemacau, Royal Gold made available a $25 million subordinated debt facility to KCM which is repayable at Royal Gold’s option upon the occurrence of certain events, including a change of control. Including capitalized interest, the amount owing under this facility was approximately $35.7 million as of December 31, 2023.
Other Property Updates
Notable recent updates as reported by the operators of other select portfolio assets include:
Producing Properties
Bellevue (2% NSR royalty): Bellevue Gold Limited (“Bellevue”) announced on January 29, 2024, that the processing plant achieved nameplate capacity of 1 million tonnes per year for December, and production ramp-up is progressing at the Bellevue Gold Project in Western Australia. With plant commissioning completed, Bellevue has provided gold production guidance of 75,000-85,000 ounces for the first six months of 2024.
King of the Hills (1.5% NSR royalty): On January 31, 2024, Red 5 Limited reported continued strong performance at the King of the Hills mine in Western Australia, with record crushing and milling performance in December resulting in annualized mill throughput exceeding the 5.5 million tonnes…
Read More:Royal Gold Reports Strong Fourth Quarter and Full Year 2023 Operating and Financial Results
2024-02-14 21:13:24