Royal Gold, Inc. (NASDAQ:RGLD) Q4 2019 Earnings Conference Call - Final Transcript

Aug 08, 2019 • 12:00 pm ET


Royal Gold, Inc. (NASDAQ:RGLD) Q4 2019 Earnings Conference Call - Final Transcript


Loading Event

Loading Transcript


Good day and welcome to the Royal Gold, Inc. Fiscal 2019 Full Year and Fourth Quarter Conference Call. All participants will be in listen-only mode. [Operator instructions]

I would now like to turn the conference over to Alistair Baker, Director of Business Development. Please go ahead.

Alistair Baker

Thank you, Rocco. Good morning, and welcome to our discussion of Royal Gold's fourth quarter and fiscal year 2019 results. This event is being webcast live and you will be able to access a replay of this call on our website. Participating on the call today are Tony Jensen, President and CEO; Bill Heissenbuttel, CFO and Vice President of Strategy; Mark Isto, Vice President of Operations; Dan Breeze, Vice President of Corporate Development of RGAG; and Bruce Kirchhoff, Vice President, General Counsel and Secretary.

This discussion falls under the safe harbor provision of the Private Securities Litigation Reform Act. The discussion of the Company's current risks and uncertainties is included in the safe harbor and cautionary statement on today's press release and slide presentation and is presented in greater detail in our filings with the SEC.

Tony will give you an overview of the fiscal year, followed by Mark with an update on recent developments in our operating portfolio. Bill will then provide a financial update on the quarter, and Tony will wrap up the call with some closing comments. We'll then open the lines for a Q&A session.

Now I will turn the call over to Tony.

Tony A. Jensen

Good morning, and thank you for joining the call. I will begin in Slide 4. Fiscal 2019 was a successful year for Royal Gold on several fronts. We adopted the theme solid, steady, successful for fiscal 2019, and I'm pleased to report that our financial, operating and business development activities during the year reflect that theme. The overall operating performance was strong, achieving production volume for the year of 335,000 gold equivalent ounces. Our financial performance was solid, generating revenue for the full year of $423 million, with 78% coming from gold, and operating cash flow of $253 million. Earnings for the full year were $94 million or $1.43 per share.

We used strong cash flow to strengthen the balance sheet and reduce debt by $150 million during the year. We extended our credit facility on more favorable terms and currently have approximately $900 million of liquidity available, which positions us well to take advantage of business development opportunities. We raised our dividend for the 19th straight year, which is now $1.06 per share on a calendar year basis. We resolved the dispute regarding the calculation of the royalty at Voisey's Bay during the fiscal quarter -- first fiscal quarter and are pleased to have this world-class asset back in contributing revenue, particularly given Valley's plans to extend the mine life through 2034.

And we added the high-quality and long-life Khoemacau development project to our stream portfolio during the third fiscal quarter. The project developer, Cupric Canyon Capital, expects the project will begin production in mid-2021 and