DENVER, April 30 /PRNewswire-FirstCall/ --
ROYAL GOLD
, INC.
(Nasdaq: RGLD; TSX: RGL), the leading precious metals royalty company, today
announced updated estimates for ore reserves and additional mineralization, in
addition to calendar 2008 production forecasts for its royalty portfolio.
Updated reserves, additional mineralization and production estimates, as of
December 31, 2007, are provided to the Company by the operators of its royalty
properties or have been obtained by
Royal Gold
through publicly available
information. Tables displaying this information are attached hereto.
At the end of calendar 2007, total precious metals reserves subject to the
Company's royalty interests include 49.5 million ounces of gold and
1.0 billion ounces of silver. This reflects a net gain of 7.3 million ounces
of gold and 420 million ounces of silver, representing a 17% increase in gold
reserves and a 71% increase in silver reserves over the prior calendar
year-end estimates.
Tony Jensen
, President and Chief Executive Officer, commented, "We are
pleased to report a significant increase in the total reserve base for our
royalty portfolio. This growth incorporates the addition of eight new
royalties and the on-going successes of our royalty operators in converting
additional mineralized material into reserves. It also reflects the continued
execution of our strategy to identify and acquire royalty properties with
significant upside potential that are managed by top-quality operators. Our
portfolio now includes 13 producing royalties and six development stage
royalties all of which are contributing to our substantial precious metal
reserve base."
Royalty Profiles
PRODUCING PROPERTIES
Goldstrike Mine (Nevada, U.S.)
Royal Gold
holds a 0.9% net smelter return ("NSR") royalty covering a
portion of the Betze-Post mine, known as the SJ Claims. The Betze-Post mine,
which is part of the larger open pit Goldstrike operation, is operated by
Barrick Gold Corporation. ("Barrick").
Barrick has advised the Company that it anticipates production of
approximately 792,000 ounces of gold in calendar 2008 from the SJ Claims that
are subject to the Company's royalty interest. The operator also reported
that it has updated its ore reserve estimate for the SJ Claims, as of
December 31, 2007, based on a gold price of $575 per ounce.
Leeville Mining Complex (Nevada, U.S.)
Royal Gold
holds a 1.8% NSR royalty covering a majority of the underground
Leeville Mining Complex. Leeville is operated by Newmont Mining Corporation
("Newmont").
Newmont has advised the Company that it anticipates production of
approximately 415,000 ounces of gold in calendar 2008 subject to the Company's
royalty interest. The operator also reported that it has updated its ore
reserve estimates for the Leeville Mining Complex, as of December 31, 2007,
based on a gold price of $575 per ounce.
Pipeline Mining Complex (Nevada, U.S.)
At the Pipeline Mining Complex,
Royal Gold
holds two sliding-scale gross
smelter return royalties ("GSR1" and "GSR2"), a fixed-rate gross smelter
return royalty ("GSR3"), and a net value royalty ("NVR1"). The GSR1 royalty
rate is currently 5.0% and covers a majority of the Pipeline and South
Pipeline deposits. The GSR2 royalty rate is currently 9.0% and covers the
Crossroads area and a portion of the Gap deposit. The GSR3 royalty rate is
fixed at 0.71% for the life of the mine and covers the same area as GSR1 and
GSR2 combined. The 0.39% NVR1 royalty, net of minority interest, covers
production from the GAS Claims, an area of interest of approximately
4,000 acres that includes the South Pipeline deposit and Crossroads area, but
excludes the Pipeline deposit. The Company is currently receiving royalty
revenue from all four royalties.
The Pipeline Mining Complex is a large open pit gold mining operation
which is operated by Barrick.
Barrick has advised the Company that it anticipates production of
approximately 367,000 ounces of gold in calendar 2008 subject to the Company's
royalty interests. The operator has reported that it has updated its ore
reserve estimates for the Pipeline Mining Complex, as of December 31, 2007,
based on a gold price of $575 per ounce.
Mulatos Mine (Sonora, Mexico)
Royal Gold
holds a sliding-scale NSR royalty at Mulatos, an open pit gold
mine operated by Alamos Gold Inc. ("Alamos"). The sliding-scale ranges from
0.30%, at an average quarterly gold price of $299.99 per ounce or less, up to
a maximum of 1.5% when the price of gold averages $400 per ounce or higher.
The royalty is capped at two million ounces of gold production. As of
March 31, 2008, the Company has received payment for approximately
180,000 cumulative ounces of gold since the royalty commenced in April 2006.
Alamos has advised the Company that it anticipates production of
approximately 120,000 ounces of gold for calendar 2008 subject to the
Company's royalty interest. The operator has reported that is has updated its
reserve estimates for Mulatos, as of December 31, 2007, based on a gold price
of $500 per ounce.
Bald Mountain Mine (Nevada, U.S.)
Royal Gold
holds a sliding-scale NSR royalty that covers a portion of the
Bald Mountain mine, an open pit gold mine operated by Barrick. Currently, the
Company's royalty rate is 1.75%.
Barrick has advised the Company that it anticipates production of
approximately 28,000 ounces of gold in calendar 2008 subject to the Company's
royalty interest. The operator also reported that it has updated its ore
reserve estimates for Bald Mountain, as of December 31, 2007, based on a gold
price of $575 per ounce.
Williams Mine (Ontario, Canada)
Royal Gold
holds a 0.72% NSR royalty on the Williams mine, an open pit and
underground gold mining operation operated by the Williams Operating
Corporation ("Williams"), a joint venture of Teck Cominco LTD (50%) and
Barrick Gold Corporation (50%). Williams has advised the Company that it
anticipates production of approximately 126,000 ounces of gold in calendar
2008 subject to the Company's royalty interest. The operator also reported
that it has updated its ore reserve estimates, as of December 31, 2007, at a
gold price of $575 per ounce.
El Chanate Mine (Sonora, Mexico)
Royal Gold
holds a 2.0% - 4.0% sliding-scale NSR royalty and a 10.0% net
profits interest ("NPI") royalty on the El Chanate mine, an open pit gold
operation operated by Capital Gold Corporation ("Capital Gold"). The
sliding-scale NSR royalty is currently at 4.0% and is capped at $17 million.
The NPI royalty is capped at $1.0 million. As of March 31, 2008,
approximately $700,000 has been applied to the $17.0 million cap on the NSR
royalty. No payments have yet been made on the NPI royalty.
Capital Gold has advised the Company that it anticipates production of
approximately 50,000 ounces of gold in calendar 2008 subject to the Company's
royalty interest. The operator has reported that it has updated its ore
reserve estimates, as of October 2007, at a gold price of $550 per ounce.
Taparko Mine (Burkina Faso, West Africa)
Royal Gold
holds two initial concurrent production payments, both
equivalent to GSR royalties, and two subsequent GSR royalties at the
Taparko-Bouroum project, an open pit gold operation. The project is operated
by High River Gold Mines Ltd. ("High River").
The first GSR-equivalent royalty ("TB-GSR1") is fixed at a rate of 15.0%.
The second GSR-equivalent royalty ("TB-GSR2") is a sliding-scale royalty
ranging from 0.0% to 10.0%, depending upon the price of gold. The TB-GSR2
royalty pays out at a rate of 4.3% when the average monthly gold price ranges
between $385 and $430 per ounce. Outside of this range, the royalty rate is
calculated by dividing the average monthly gold price by 100 for gold prices
above $430 per ounce, or by dividing the average monthly gold price by 90 for
gold prices below $385 per ounce (e.g., a $900 per ounce gold price results in
a rate of 900/100 = 9.0%). Both TB-GSR1 and TB-GSR2 continue until either
total production reaches 804,420 ounces of gold, or
Royal Gold
receives
payments totaling $35 million under TB-GSR1, whichever occurs first. As of
March 31, 2008, the Company has received payments totaling $2.9 million on
production of 23,000 ounces of gold.
The two subsequent royalties consist of a 2.0% GSR perpetual royalty
("TB-GSR3"), applicable to gold production from defined portions of the
Taparko-Bouroum project area, and a 0.75% GSR milling royalty ("TB-MR1"). The
TB-MR1 applies to ore that is mined outside of the defined area of the
Taparko-Bouroum project that is processed through the Taparko facilities, up
to a maximum of 1.1 million tons per year. Both the TB-GSR3 and TB-MR1
royalties commence once TB-GSR1 and TB-GSR2, described earlier, have ceased.
High River informed the Company that it anticipates production of
approximately 91,000 ounces of gold for calendar 2008 subject to the Company's
royalty interests. The operator also reported that it has updated its ore
reserve estimates for Taparko, as of December 31, 2007, based on a gold price
of $800 per ounce.
Robinson Mine (Nevada, U.S.)
Royal Gold
holds a 3.0% NSR royalty on the Robinson mine, an open pit
copper mine with significant gold credits. The mine is operated by Quadra
Mining Ltd. ("Quadra").
Quadra has advised the Company that it anticipates production of
approximately 100,000 ounces of gold and 130 million pounds of copper in
calendar year 2008 subject to the Company's royalty interest. The operator
also reported that it has updated its ore reserve estimates for the Robinson
mine, as of December 31, 2007, at a copper price of $2.50 per pound for
calendar 2008 through 2012 and $1.75 per pound for the remainder of the mine
life. Quadra does not use a gold price figure to define reserves because gold
is produced as a by-product of copper.
Don Mario Mine
(Chiquitos Province, Bolivia)
Royal Gold
holds a 3.0% NSR royalty on the Don Mario mine, an open pit and
underground mine operated by Orvana Minerals Corp. ("Orvana").
The operator at Don Mario has not provided the Company with a production
estimate for calendar 2008. However, on February 11, 2008, the operator
reported production of approximately 21,000 ounces of gold for their first
fiscal quarter ended December 31, 2007. The operator previously reported ore
reserve estimates for the Lower Mineralized Zone ("LMZ") of the Don Mario
mine, as of November 1, 2005, based on a gold price of $400 per ounce.
Royal
Gold
netted 2006 and 2007 annual production from the November 1, 2005 figures,
to determine the remaining LMZ ore as of the operator's fiscal year-end,
September 30, 2007, based upon reserve and production information from the
operator's press releases dated December 5, 2005 and November 29, 2007. The
operator previously reported ore reserve estimates for the Upper Mineralized
Zone ("UMZ") as of October 2006, using a $400 per ounce gold price and a $6.00
per ounce silver price. Amounts shown in the tables for the UMZ reflect the
operator's reserve estimates from October 2006.
El Limon Mine (Border of Chinandega and Leon Departments, Nicaragua)
Royal Gold
holds a 3.0% NSR royalty on the El Limon mine, an open pit and
underground gold mine operated by Central Sun Mining Inc. ("Central Sun").
Central Sun has advised the Company that it anticipates production of
approximately 43,000 ounces of gold in calendar 2008 subject to the Company's
royalty interest. The operator also reported that it has updated its ore
reserve estimates, as of December 31, 2007, at a gold price of $550 per ounce.
Martha Mine (Santa Cruz Province, Argentina)
The Company holds a 2.0% NSR royalty on the Martha underground silver mine
operated by Coeur d'Alene Mines Corporation ("Coeur").
Coeur has advised the Company that it anticipates production of
approximately 5 million ounces of silver in calendar 2008 subject to the
Company's royalty interest. The operator also reported that it has updated
its ore reserve estimates for the Martha mine, as of December 31, 2007, based
on a silver price of $11.00 per ounce.
Troy Mine (Montana, U.S.)
Royal Gold
holds a 7.0% GSR royalty that covers the Troy underground
copper and silver mine operated by Revett Minerals Inc. ("Revett"). This
7.0% GSR royalty extends until either cumulative production reaches
approximately 9.9 million ounces of silver and 84.7 million pounds of copper,
or
Royal Gold
receives $10.5 million in cumulative payments, whichever occurs
first. The Company expects the cumulative payment threshold to be met first
and, as of March 31, 2008, the Company has received approximately $7.1 million
in cumulative payments and accruals from the Troy mine attributable to
cumulative production of approximately 3.0 million ounces of silver and
26.0 million pounds of copper.
Royal Gold
also holds a perpetual GSR royalty that begins at 6.1% on any
production in excess of 11.0 million ounces of silver and 94.1 million pounds
of copper. This 6.1% GSR royalty steps down to a perpetual 2.0% GSR royalty
after cumulative production exceeds 12.7 million ounces of silver and
108.2 million pounds of copper.
Revett has advised the Company that it anticipates production of
approximately 1.4 million ounces of silver and 12.5 million pounds of copper
in calendar 2008 that are subject to the Company's royalties. Revett has also
informed the Company that its updated ore reserve estimates, as of December
31, 2007, are based on a $10.00 per ounce silver price and a $2.25 per pound
copper price.
DEVELOPMENT STAGE PROPERTIES
Penasquito Project (State of Zacatecas, Mexico)
Royal Gold
holds a 2.0% NSR royalty on all metals on the Penasquito
project under development by Goldcorp Inc. ("Goldcorp"). The Penasquito
project, composed of two main deposits called Penasco and Chile Colorado,
hosts one of the world's largest silver, gold and zinc reserves, while also
containing large lead reserves. According to the operator, production from
the oxide portion of the deposit is expected to commence in the second half of
calendar 2008.
Goldcorp has informed the Company that it anticipates production of
approximately 67,000 ounces of gold and 2.3 million ounces of silver in
calendar year 2008 subject to the Company's royalty interest. The operator
also reported that it has updated its ore reserve estimates, as of June 2007,
at a gold price of $525 per ounce, a silver price of $10.00 per ounce, a lead
price of $0.40 per pound, and a zinc price of $0.80 per pound.
Dolores (State of Chihuahua, Mexico)
Royal Gold
holds a 1.25% NSR on gold in addition to a 2.0% NSR on both
gold and silver production from the Dolores project which is under development
by Minefinders Corporation Ltd. ("Minefinders"). The operator estimates that
production will begin in the second quarter of calendar 2008. Once initial
production commences, the 1.25% NSR will provide immediate revenue to
Royal
Gold
. Revenue from the 2.0% NSR will begin after production reaches 75% of
design capacity for a continuous three-month period.
Minefinders has advised the Company that it anticipates production of
approximately 40,000 ounces of gold and 1.0 million ounces of silver in
calendar year 2008 subject to the Company's royalty interests. A 43-101
technical report dated March 25, 2008, was filed on SEDAR updating the ore
reserves for the project, at a gold price of $600 per ounce and a silver price
of $10.00 per ounce.
Benso (Western Region, Ghana)
Royal Gold
holds a 1.50% NSR royalty on the Benso project. The Benso gold
deposit is currently being developed as a source of high grade ore for the
Wassa processing plant. The operator of the property is Golden Star
Resources ("Golden Star").
Golden Star
has informed the Company that it anticipates production of
approximately 25,000 ounces of gold in calendar year 2008 subject to the
Company's royalty interest. The operator also reported that it has updated
its ore reserve estimates, as of April 27, 2007, at a gold price of $480 per
ounce.
Gold Hill (Nevada, U.S.)
Royal Gold
holds a 1.0% - 2.0% sliding-scale NSR royalty on the Gold Hill
deposit. The Gold Hill deposit, located just north of the Round Mountain gold
mine, is controlled by Round Mountain Gold Corporation ("RMGC"), a joint
venture between Kinross Gold Corporation, the operator, and Barrick. The
sliding-scale ranges from 2.0% when the gold price is above $350 per ounce and
slides to 1.0% when the price of gold falls to $350 per ounce or below. The
royalty is effectively capped at $10 million as RMGC has the right, at any
time, to purchase the royalty interest for $10 million less any royalty
payments paid prior to the purchase option being exercised. The royalty is
also subject to a minimum royalty payment of $100,000 per year.
Although RMGC's Gold Hill reserves are not separately detailed in their
publicly available financial reports, Barrick Gold Corporation stated in its
September 2006 Nevada Mine Tour presentation titled "Barrick in Nevada,"
posted on their web site, that as of December 31, 2005, there were 375,000
contained ounces in reserves that represent their 50% share of the project.
According to public information, production is expected to commence in
calendar 2011.
Marigold Mine (Nevada, U.S.)
Royal Gold
holds a 2.0% NSR royalty on the Marigold mine, a large scale,
multiple open pit operation, operated by Goldcorp. The 2.0% NSR royalty
interest burdens the majority of six sections of the mine, containing a number
of open pits, but does not cover the current mining in the Basalt/Antler area.
Based upon information from the operator,
Royal Gold
expects to begin
receiving royalty revenue in calendar 2011. The operator reported that it has
updated its ore reserve estimates, as of December 31, 2007, at a gold price of
$550 per ounce.
Pascua-Lama (Huasco Province, Argentina/San Juan Province, Chile)
Royal Gold
holds a 0.16% to 1.08% sliding-scale NSR royalty on the
Pascua-Lama project. Pascua-Lama is owned by Barrick. The NSR royalty is
applicable to all gold production from an area of interest in Chile.
Royal
Gold
also holds a 0.216% fixed-rate copper royalty which applies to all of the
copper reserves in Chile within the area of interest, but does not take effect
until after January 1, 2017.
Barrick has advised the Company that it updated its ore reserve estimates,
as of December 31, 2007, at a gold price of $575 per ounce. According to the
operator, the project is ready for construction, pending resolution of tax and
permitting issues.
Corporate Profile
Royal Gold
, Inc. is a precious metals royalty Company engaged in the
acquisition and management of precious metals royalty interests.
Royal Gold
is publicly traded on the NASDAQ Global Select Market under the symbol "RGLD,"
and on the Toronto Stock Exchange under the symbol "RGL." The Company's web
page is located at http://www.royalgold.com.
Cautionary "Safe Harbor" Statement Under the Private Securities Litigation
Reform Act of 1995: With the exception of historical matters, the matters
discussed in this press release are forward-looking statements that involve
risks and uncertainties that could cause actual results to differ materially
from projections or estimates contained herein. Such forward-looking
statements include statements regarding the on-going success of
Royal Gold's
royalty operators in converting additional mineralized material into reserves,
and the producing and development stage royalties in contributing to
Royal
Gold's
precious metal reserve base; the continued strategy to identify and
acquire royalty properties with significant upside potential that are managed
by top-quality operators; production estimates for calendar 2008 provided by
third-party operators; reserves and mineralization estimates provided by third
party operators, except in the case of the Don Mario mine where production was
deducted from the operator's earlier reserve statement, or obtained from
publicly available information; the sliding-scale features of our royalty
structure at certain of our properties; changes in production estimates or
commencement of production or construction from the operators of certain
properties; and the expectation of the royalty payment caps at the Troy and
Taparko mines to be met. Like any royalty on a non-producing or not yet in
development project, our royalties on development projects are subject to
certain risks, such as the ability of the operators to bring the projects into
production and operate in accordance with their feasibility studies and the
ability of
Royal Gold
to make accurate assumptions regarding valuation and
timing and amount of royalty payments. In addition, many of our royalty
interests are subject to risks associated with conducting business in a
foreign country, including application of foreign laws to contract and other
disputes, foreign environmental laws and enforcement and uncertain political
and economic environments. Factors that could cause actual results to differ
materially include, among others, changes in precious metals prices,
performance of and production at our royalty properties, decisions and
activities of the operators of our royalty properties, mine completion,
unanticipated grade, geological, metallurgical, processing or other problems
the operators of the mining properties may encounter, changes in project
parameters as plans continue to be refined, results of current or planned
exploration activities, continued diversification of our royalty base,
economic and market conditions, and future financial needs or opportunities,
and the impact of any future acquisitions, as well as other factors described
elsewhere in this press release and in our Annual Report on Form 10-K, and
other filings with the Securities and Exchange Commission. Most of these
factors relate to activities of the mine operators and are beyond the
Company's ability to predict or control. The Company disclaims any obligation
to update any forward-looking statement made herein. Readers are cautioned
not to put undue reliance on forward-looking statements.
TABLE 1
Royal Gold's Royalty Portfolio
Proven and Probable Gold Reserves(1,2)
For Producing Royalties
as of December 31, 2007(3)
PROVEN RESERVES
Gold
Avg. Gold Contained
Tons of Ore Grade Ozs(5)
PROPERTY ROYALTY(4) OPERATOR (millions) (oz/ton) (millions)
Goldstrike(6) 0.9% NSR Barrick - - -
(SJ Claims)
Leeville 1.8% NSR Newmont - - -
Mining
Complex(6)
Pipeline GSR1 0.40-5.0% GSR Barrick 4.47 0.092 0.410
(sliding-scale)
Pipeline GSR2 0.72-9.0% GSR Barrick 1.30 0.029 0.037
(sliding-scale)
Pipeline GSR3 0.71% GSR Barrick 5.77 0.078 0.448
Pipeline NVR1 0.39% NVR Barrick 3.71 0.054 0.201
Mulatos(8) 0.30-1.5% NSR Alamos 6.76 0.061 0.411
(sliding-scale)
Bald Mountain(6) 1.75-3.5% NSR Barrick - - -
(sliding-scale)
PROBABLE RESERVES
Gold
Tons of Avg. Gold Contained
Ore Grade Ozs(5)
PROPERTY (millions) (oz/ton) (millions)
Goldstrike(6) (SJ Claims) - - -
Leeville Mining Complex(6) - - -
Pipeline GSR1 27.70 0.045 1.239
Pipeline GSR2 10.62 0.022 0.236
Pipeline GSR3 38.32 0.038 1.475
Pipeline NVR1 33.53 0.035 1.186
Mulatos(8) 28.66 0.045 1.278
Bald Mountain(6) - - -
PROVEN + PROBABLE RESERVES
Gold
Tons of Avg. Gold Contained
Ore Grade Ozs(5)
PROPERTY (millions) (oz/ton) (millions)
Goldstrike(6) (SJ Claims) 52.49 0.133 6.960
Leeville Mining Complex(6) 5.06 0.427 2.161
Pipeline GSR1 32.18 0.051 1.6497
Pipeline GSR2 11.92 0.023 0.2747
Pipeline GSR3 44.09 0.044 1.9237
Pipeline NVR1 37.24 0.037 1.3877
Mulatos(8) 35.42 0.048 1.689
Bald Mountain(6) 31.46 0.028 0.889
TABLE 1 (cont.)
Royal Gold's Royalty Portfolio
Proven and Probable Gold Reserves(1,2)
for Producing Royalties
as of December 31, 2007(3)
PROVEN RESERVES
Gold
Avg. Gold Contained
Tons of Ore Grade Ozs(5)
PROPERTY ROYALTY(4) OPERATOR (millions) (oz/ton) (millions)
Williams 0.72% NSR Williams 7.24 0.073 0.528
Operating
Corporation
El Chanate 2.0-4.0% NSR Capital Gold 29.42 0.020 0.581
(sliding-scale)
El Chanate 10.0% NPI Capital Gold 29.42 0.020 0.581
Taparko(9) 15.0% GSR High River - - -
TB-GSR1
Taparko(9) 0.0-10.0% GSR High River - - -
TB-GSR2 (sliding-scale)
Taparko(9) 2.0% GSR High River - - -
TB-GSR3
Robinson 3.0% NSR Quadra 96.89 0.007 0.669
Don Mario 3.0% NSR(12) Orvana
LMZ - - -
UMZ 1.18 0.041 0.049
El Limon 3.0% NSR Central Sun 0.17 0.176 0.030
PROBABLE RESERVES
Gold
Avg. Gold Contained
Tons of Ore Grade Ozs(5)
PROPERTY (millions) (oz/ton) (millions)
Williams 2.69 0.119 0.319
El Chanate 14.07 0.018 0.251
El Chanate 14.07 0.018 0.251
Taparko(9) TB-GSR1 - - -
Taparko(9) TB-GSR2 - - -
Taparko(9) TB-GSR3 - - -
Robinson 17.51 0.006 0.103
Don Mario - - -
4.82 0.041 0.200
El Limon 1.35 0.138 0.187
PROVEN + PROBABLE RESERVES
Gold
Avg. Gold Contained
Tons of Ore Grade Ozs(5)
PROPERTY (millions) (oz/ton) (millions)
Williams 9.93 0.085 0.846
El Chanate 43.50 0.019 0.832
El Chanate 43.50 0.019 0.832
Taparko(9) TB-GSR1 3.70 0.082 0.303(10,11)
Taparko(9) TB-GSR2 3.70 0.082 0.303(10,11)
Taparko(9) TB-GSR3 6.06 0.082 0.497
Robinson 114.41 0.007 0.772
Don Mario 0.56 0.337 0.189(13)
6.01 0.041 0.249
El Limon 1.52 0.143 0.217
TABLE 1 (cont.)
Royal Gold's Royalty Portfolio
Proven and Probable Gold Reserves(1,2)
for Development Properties
as of December 31, 2007(3)
PROVEN RESERVES
Avg. Gold
Tons of Gold Contained
Ore Grade Ozs(5)
PROPERTY ROYALTY(4) OPERATOR (millions) (oz/ton) (millions)
Pascua-Lama(14) 0.16-1.08% NSR Barrick 35.71 0.053 1.900
(sliding-scale)
Penasquito(15) 2.0% NSR Goldcorp
Sulfide 470.57 0.017 7.855
Oxide 46.41 0.006 0.283
Benso 1.5% NSR Golden Star - - -
Dolores 3.25% NSR Minefinders 62.42 0.023 1.454
Gold Hill(6) 1.0-2.0% NSR Kinross - - -
(sliding-scale)
Marigold(6,17) 2.0% NSR Goldcorp/Barrick - - -
PROBABLE RESERVES
Avg. Gold Gold Contained
Tons of Ore Grade Ozs(5)
PROPERTY (millions) (oz/ton) (millions)
Pascua-Lama(14) 288.80 0.044 12.700
Penasquito(15)
Sulfide 419.09 0.011 4.546
Oxide 75.29 0.005 0.367
Benso 2.54 0.099 0.252
Dolores 47.04 0.021 0.990
Gold Hill(6) - - -
Marigold(6,17) - - -
PROVEN + PROBABLE RESERVES
Avg.Gold
Tons of Ore Grade Gold Contained
PROPERTY (millions) (oz/ton) Ozs(5)(millions)
Pascua-Lama(14) 324.52 0.045 14.600
Penasquito(15)
Sulfide 889.67 0.014 12.401
Oxide 121.69 0.005 0.650
Benso 2.54 0.099 0.252
Dolores 109.46 0.022 2.444
Gold Hill(6) - - 0.750(16)
Marigold(6,17) 44.59 0.019 0.867
TABLE 1 (cont.)
Royal Gold's Royalty Portfolio
Proven and Probable Silver Reserves(1,18)
for Producing Royalties
as of December 31, 2007(3)
PROVEN RESERVES
Silver
Tons of Avg. Silver Contained
Ore Grade Ozs(5)
PROPERTY ROYALTY(4) OPERATOR (millions) (oz/ton) (millions)
Martha 2.0% NSR Coeurd'Alene 0.06 52.95 2.924
Don Mario 3.0% NSR(12) Orvana 1.18 1.59 1.877
UMZ
Troy(9) 7.0% GSR Revett - - -
6.1% GSR - - -
2.0% GSR - - -
PROBABLE RESERVES
Silver
Avg. Silver Contained
Tons of Ore Grade Ozs(5)
PROPERTY (millions) (oz/ton) (millions)
Martha 0.10 54.55 5.369
Don Mario
4.82 1.30 6.276
Troy(9) - - -
- - -
- - -
PROVEN + PROBABLE RESERVES
Silver
Avg. Silver Contained
Tons of Ore Grade Ozs(5)
PROPERTY (millions) (oz/ton) (millions)
Martha 0.15 53.97 8.293
Don Mario
6.01 1.36 8.153
Troy(9) 2.01 1.18 2.379(19)
1.73 1.18 2.046
2.61 1.18 3.085
TABLE 1 (cont.)
Royal Gold's Royalty Portfolio
Proven and Probable Silver Reserves(1,18)
for Development Properties
as of December 31, 2007(3)
PROVEN RESERVES
Silver
Avg. Silver Contained
Tons of Ore Grade Ozs(5)
PROPERTY ROYALTY(4) OPERATOR (millions) (oz/ton) (millions)
Penasquito(15) 2.0% NSR Goldcorp 470.57 0.99 466.993
Sulfide 46.41 0.61 28.244
Oxide
Dolores 2.0% NSR Minefinders 62.42 1.18 73.415
PROBABLE RESERVES
Silver
Avg. Silver Contained
Tons of Ore Grade Ozs(5)
PROPERTY (millions) (oz/ton) (millions)
Penasquito(15)
Sulfide 419.09 0.79 332.561
Oxide 75.29 0.48 36.061
Dolores 47.041 1.13 53.230
PROVEN + PROBABLE RESERVES
Silver
Avg. Silver Contained
Tons of Ore Grade Ozs(5)
PROPERTY (millions) (oz/ton) (millions)
Penasquito(15)
Sulfide 889.67 0.90 799.554
Oxide 121.69 0.53 64.305
Dolores 109.46 1.16 126.645
TABLE 1 (cont.)
Royal Gold's Royalty Portfolio
Proven and Probable Base Metal Reserves(1)
for Producing Royalties
as of December 31, 2007(3)
COPPER(20)
PROVEN RESERVES
Copper
Avg. Copper Contained
Tons of Ore Grade lbs(5)
(millions) (% Cu) (millions)
PROPERTY ROYALTY(4) OPERATOR
Robinson 3.0% NSR Quadra 96.89 0.61 1,188
Don Mario 3.0% NSR(12) Orvana
UMZ 1.18 1.62 38
Troy(9) 7.0% Revett - - -
6.1% - - -
2.0% - - -
PROBABLE RESERVES
Copper
Tons of Avg. Copper Contained
Ore Grade lbs(5)
PROPERTY (millions) (% Cu) (millions)
Robinson 17.51 1.07 375
Don Mario
4.82 1.47 142
Troy(9) - - -
- - -
- - -
PROVEN + PROBABLE RESERVES
Copper
Avg. Copper Contained
Tons of Ore Grade lbs(5)
PROPERTY (millions) (% Cu) (millions)
Robinson 114.41 0.68 1,563
Don Mario
6.01 1.50 180
Troy(9) 1.94 0.54 21(19)
1.58 0.54 17
3.70 0.54 40
TABLE 1 (cont.)
Royal Gold's Royalty Portfolio
Proven and Probable Base Metal Reserves(1)
for Development Properties
as of December 31, 2007(3)
ZINC(21)
PROVEN RESERVES
Zinc
Avg. Zinc Contained
Tons of Ore Grade lbs(5)
PROPERTY ROYALTY(4) OPERATOR (millions) (% Zn) (millions)
Penasquito(15)
(sulfide) 2.0% NSR Goldcorp 470.57 0.78 7,363
PROBABLE RESERVES
Zinc
Avg. Zinc Contained
Tons of Ore Grade lbs(5)
PROPERTY (millions) (% Zn) (millions)
Penasquito(15) 419.09 0.65 5,445
(sulfide)
PROVEN + PROBABLE RESERVES
Zinc
Tons of Avg. Zinc Contained
Ore Grade lbs(5)
PROPERTY (millions) (% Zn) (millions)
Penasquito(15)
(sulfide) 889.67 0.72 12,809
LEAD(22)
PROVEN RESERVES
Lead
Avg.Lead Contained
Tons of Ore Grade lbs(5)
PROPERTY ROYALTY(4) OPERATOR (millions) (% Pb) (millions)
Penasquito(15)
(sulfide) 2.0% NSR Goldcorp 470.57 0.36 3,439
PROBABLE RESERVES
Lead
Avg. Lead Contained
Tons of Ore Grade lbs(5)
PROPERTY (millions) (% Pb) (millions)
Penasquito(15)
(sulfide) 419.09 0.29 2,447
PROVEN + PROBABLE RESERVES
Lead
Avg. Lead Contained
Tons of Ore Grade lbs(5)
PROPERTY (millions) (% Pb) (millions)
Penasquito(15)
(sulfide) 889.67 0.33 5,886
FOOTNOTES TO TABLE 1
(1) Set forth below are the definitions of proven and probable reserves
used by the U.S. Securities and Exchange Commission. Some of our
royalty operators are Canadian issuers. Their definitions of
"mineral reserve," "proven mineral reserve" and "probable mineral
reserve" conform to the Canadian Institute of Mining, Metallurgy and
Petroleum definitions of these terms as of the effective date of
estimation as required by National Instrument 43-101 of the Canadian
Securities Administrators. The Canadian definitions of "reserve,"
"proven (measured) reserves," and "probable (indicated) reserves" are
different than those used by the SEC as defined below.
"Reserve" is that part of a mineral deposit which could be
economically and legally extracted or produced at the time of the
reserve determination.
"Proven (Measured) Reserves" are reserves for which (a) quantity is
computed from dimensions revealed in outcrops, trenches, workings or
drill holes, and the grade is computed from the results of detailed
sampling, and (b) the sites for inspection, sampling and measurement
are spaced so closely and the geologic character is so well defined
that the size, shape, depth and mineral content of the reserves are
well established.
"Probable (Indicated) Reserves" are reserves for which the quantity
and grade are computed from information similar to that used for
proven (measured) reserves, but the sites for inspection, sampling
and measurement are farther apart or are otherwise less adequately
spaced. The degree of assurance of probable (indicated) reserves,
although lower than that for proven (measured) reserves, is high
enough to assume geological continuity between points of observation.
(2) Gold reserves were calculated by the operators at the following per
ounce prices: $800 - Taparko; $600 - Dolores; $575 - Pipeline Mining
Complex, Goldstrike, Bald Mountain, Leeville, Williams and
Pascua-Lama; $550 - El Chanate, El Limon and Marigold;
$525 - Penasquito; $500 - Mulatos; $480 - Benso; $400 - Don Mario.
Quadra does not use a gold price figure to define reserves as gold is
produced as a by-product of copper. No gold price is reported for
Gold Hill - see footnote 14.
(3) Reserves have been calculated by the operators as of December 31,
2007, with the exception of the following properties: Don Mario
(UMZ) - October 2006; Benso - April 2007; Penasquito - June 2007; and
El Chanate - October 2007. The reserves at the Don Mario mine for the
LMZ as of September 30, 2007, are based on publicly available reserve
and production information dated December 5, 2005 and November 29,
2007.
(4) See royalty definitions at end of release.
(5) "Contained ounces" or "contained pounds" do not take into account
losses in processing the ore. The amounts shown are 100% of the
reserves subject to our royalty interests.
(6) The operators at Goldstrike, Leeville, Bald Mountain, Gold Hill and
Marigold did not provide a breakdown of proven and probable reserves.
(7) GSR1, GSR2 and NVR1 reserves are a subset of the reserves covered by
GSR3.
(8) The Company's royalty is subject to a 2.0 million ounce cap on gold
production.
(9) Due to the royalty structure at the Taparko and Troy mines, reserves
cannot be broken down into proven and probable.
(10) TB-GSR1 and TB-GSR2 royalties are subject to the same reserve.
(11) The reserves at High River have been adjusted, based on the
operator's gold price assumption of $800 per ounce, to reflect the
$35 million cap on the TB-GSR1 royalty. Upon meeting this cap, both
the TB-GSR1 and TB-GSR2 royalties cease and the TB-GSR3 royalty
becomes effective. The TB-GSR3 reserves represent the remaining
reserves after subtracting the reserves associated with TB-GSR1 and
TB-GSR2.
(12) Don Mario reserves consist of a lower mineralized zone ("LMZ") and an
upper mineralized zone ("UMZ").
(13) Reserves represent the operator's reserve estimates as of November 1,
2005, net of 2006 and 2007 annual production as reported by the
operator.
(14) Reserves shown represent the area of interest in Chile to which the
royalty applies.
(15) Operator reported reserve estimates by deposit types. A sulfide
deposit is one in which the sulfide minerals predominate. An oxide
deposit is one in which the oxide minerals predominate.
(16) RMGC's Gold Hill reserves are not separately detailed in their
publicly available financial reports. However, Barrick Gold
Corporation stated in its September 2006 Nevada Mine Tour
presentation titled "Barrick in Nevada," posted on their web site,
that as of December 31, 2005, there were 375,000 contained ounces in
reserves that represent their 50% share of the project.
(17) The 2.0% NSR royalty interest burdens the majority of six sections of
land, containing a number of open pits, but does not cover the
current mining in the Basalt/Antler area.
(18) Silver reserves were calculated by the operators at $11.00 per ounce
for Martha; $10.00 per ounce for Penasquito; $10.00 per ounce for
Troy, Penasquito, and Dolores; and $6.00 per ounce for Don Mario.
(19) The reserves subject to the 7.0% GSR royalty have been adjusted
downward by Royal Gold due to the expectation of meeting the monetary
cap of $10.5 million in cumulative payments. Royal Gold used the
operator's December 31, 2007 silver and copper reserve prices of
$10.00 per ounce and $2.25 per pound, respectively, to calculate this
adjustment.
(20) Copper reserves were calculated by the operators at $2.50 per pound
for Robinson for calendar years 2008 through 2012 and $1.75 for
the remainder of the mine life; $2.25 per pound for Troy; and
$1.00 for Don Mario (UMZ).
(21) Zinc reserves were calculated by the operator at $0.80 per pound.
(22) Lead reserves were calculated by the operator at $0.40 per pound.
TABLE 2
Royal Gold's Royalty Portfolio
Gold Additional Mineralized Material(1)
For Producing Royalties
as of December 31, 2007
AVERAGE GOLD
ADDITIONAL GRADE
MINERALIZED TONS (ounces per
PROPERTY ROYALTY(2) OPERATOR MATERIAL (millions) ton)
Mulatos 0.30 - 1.5% NSR Alamos Measured(3) 19.07 0.040
(sliding-scale) Indicated(3) 87.13 0.033
Inferred(3) - -
Bald 1.75 - 3.5% NSR Barrick Measured &
Mountain (sliding-scale) Indicated(3) 70.01 0.026
Inferred(3) - -
Pipeline 0.40 - 5.0% GSR Barrick Measured(3,4) 2.89 0.025
GSR1 (sliding- scale) Indicated(3,4) 29.43 0.020
Inferred(3,4) 4.33 0.013
Pipeline 0.72 - 9.0% GSR Barrick Measured(3,4) 3.49 0.044
GSR2 (sliding-scale) Indicated(3,4) 24.70 0.039
Inferred(3,4) 0.94 0.019
Pipeline 0.71% GSR Barrick Measured(3,4) 6.38 0.035
GSR3 Indicated(3,4) 54.14 0.028
Inferred(3,4) 5.26 0.014
Pipeline 0.39% NVR Barrick Measured(3,4) 3.84 0.044
NVR1 Indicated(3,4) 28.67 0.037
Inferred(3,4) 3.38 0.012
Williams 0.72% NSR Williams Measured(3) 1.71 0.090
Operating Indicated(3) 2.37 0.154
Corporation Inferred(3) 6.21 0.127
El Chanate 2.0 - 4.0% NSR Capital Measured(3) 11.31 0.018
(sliding-scale) Gold Indicated(3) 32.85 0.020
Inferred(3) 6.15 0.021
El Chanate 10.0% NPI Capital Measured(3) 11.31 0.018
Gold Indicated(3) 32.85 0.020
Inferred(3) 6.15 0.021
Robinson 3.0% NSR Quadra Measured(3,5) 573.00 0.005
Indicated(3,5) 147.00 0.003
Inferred(3,5) 89.00 0.002
Goldstrike 0.9% NSR Barrick Measured(3) 2.76 0.055
(SJ Claims) Indicated(3) 4.06 0.050
Inferred(3) - -
TABLE 2
Royal Gold's Royalty Portfolio (cont.)
Gold Additional Mineralized Material(1)
For Producing Royalties
as of December 31, 2007
AVERAGE GOLD
ADDITIONAL GRADE
MINERALIZED TONS (ounces per
PROPERTY ROYALTY(2) OPERATOR MATERIAL (millions) ton)
Taparko 2% GSR High River Measured(3) - -
Indicated(3) 2.51 0.082
Inferred(3) 1.22 0.083
Leeville 1.8% NSR Newmont
Mining -(6) 0.64 0.446
Complex
El Limon 3.0% NSR Central Sun Measured(3) 0.03 0.136
Indicated(3) 0.39 0.147
Inferred(3) - -
Gold Additional Mineralized Material(1)
for Development Properties
as of December 31, 2007
AVERAGE GOLD
ADDITIONAL GRADE
MINERALIZED TONS (ounces per
PROPERTY ROYALTY(2) OPERATOR MATERIAL (millions) ton)
Penasquito(7) 2.0% NSR Goldcorp Measured(3) 109.24 0.008
(sulfide) Indicated(3) 591.71 0.006
Inferred(3) 1,299.61 0.007
Penasquito(7) 2.0% NSR Goldcorp Measured(3) 8.71 0.002
(oxide) Indicated(3) 38.25 0.003
Inferred(3) 45.19 0.004
Pascua-Lama 0.16-1.08% NSR Barrick Measured(3) 8.16 0.037
(sliding-scale) Indicated(3) 62.39 0.035
Inferred(3) 7.28 0.027
Dolores 3.25% NSR Minefinders Measured &
Indicated(3) 7.70 0.090
Inferred(3) 33.45 0.020
Benso 1.5% NSR Golden Star Measured(3) - -
Indicated(3) 0.45 0.072
Inferred(3) 0.67 0.099
TABLE 2 (cont.)
Royal Gold's Royalty Portfolio
Silver Additional Mineralized Material(1)
for Producing Royalties
as of December 31, 2007
ADDITIONAL AVERAGE SILVER
MINERALIZED TONS GRADE
PROPERTY ROYALTY(2) OPERATOR MATERIAL (millions) (ounces per ton)
Troy 2.0% GSR Revett Measured(3) 35.16 1.46
Indicated(3) 10.93 1.05
Inferred(3) - -
Martha 2.0% NSR Coeur d'Alene Measured(3) 0.039 46.33
Indicated(3) 0.053 29.78
Inferred(3) 0.072 27.53
Silver Additional Mineralized Material(1)
for Development Properties
as of December 31, 2007
ADDITIONAL AVERAGE SILVER
MINERALIZED TONS GRADE
PROPERTY ROYALTY(2) OPERATOR MATERIAL (millions) (ounces per ton)
Penasquito(7) 2.0% NSR Goldcorp Measured(3) 109.24 0.65
(sulfide) Indicated(3) 591.71 0.56
Inferred(3) 1,299.61 0.38
Penasquito(7) 2.0% NSR Goldcorp Measured(3) 8.71 0.20
(oxide) Indicated(3) 38.25 0.21
Inferred(3) 45.19 0.38
Dolores 2.0% NSR Minefinders Measured &
Indicated(3) 7.70 2.87
Inferred(3) 33.45 0.82
TABLE 2 (cont.)
Royal Gold's Royalty Portfolio
Base Metals Additional Mineralized Material(1)
for Producing Royalties
as of December 31, 2007
COPPER
ADDITIONAL AVERAGE COPPER
MINERALIZED TONS GRADE
PROPERTY ROYALTY(2) OPERATOR MATERIAL (millions) (% Cu)
Robinson 3.0% NSR Quadra Measured(3,5) 573.00 0.43
Indicated(3,5) 147.00 0.30
Inferred(3,5) 89.00 0.28
Troy 2.0% GSR Revett Measured(3) 35.16 0.72
Indicated(3) 10.93 0.46
Inferred(3) - -
Base Metals Additional Mineralized Material(1)
for Development Properties
as of December 31, 2007
ZINC
ADDITIONAL AVERAGE ZINC
MINERALIZED TONS GRADE
PROPERTY ROYALTY(2) OPERATOR MATERIAL (millions) (% Zn)
Penasquito(7) 2.0% NSR Goldcorp Measured(3) 109.24 0.67
(sulfide) Indicated(3) 591.71 0.55
Inferred(3) 1,299.61 0.50
LEAD
ADDITIONAL AVERAGE LEAD
MINERALIZED TONS GRADE
PROPERTY ROYALTY(2) OPERATOR MATERIAL (millions) (% Pb)
Penasquito(7) 2.0% NSR Goldcorp Measured(3) 109.24 0.24
(sulfide) Indicated(3) 591.71 0.20
Inferred(3) 1,299.61 0.08
FOOTNOTES TO TABLE 2
(1) Mineralized material is that part of a mineral system that has
potential economic significance but cannot be included in the proven
and probable ore reserve estimates until further drilling and
metallurgical work is completed, and until other economic and
technical feasibility factors based upon such work have been resolved.
The U.S. Securities and Exchange Commission does not recognize this
term. Investors are cautioned not to assume that any part or all of
the mineral deposits in these categories will ever be converted into
reserves.
(2) See royalty definitions at end of release.
(3) Some of our royalty operators are Canadian issuers. Their definitions
of "mineral resource," "measured mineral resource," "indicated mineral
resource" and "inferred mineral resource" conforms to the Canadian
Institute of Mining, Metallurgy and Petroleum definitions of those
terms as of the effective date of estimation, as required by National
Instrument 43-101 of the Canadian Securities Administrators. Mineral
resources which are not mineral reserves do not have economic
viability. Canadian issuers use the terms "mineral resources" and its
subcategories "measured," "indicated" and "inferred" mineral
resources. While such terms are recognized and required by Canadian
regulations, the U.S. Securities and Exchange Commission does not
recognize them. Investors are cautioned not to assume that any part
or all of the mineral deposits in these categories will ever be
converted into reserves.
(4) GSR1, GSR2 and NVR1 mineralized material are a subset of the
mineralized material covered by GSR3.
(5) Additional mineralized material does not include reserves, except at
Robinson at the request of the operator.
(6) The operator reported additional mineralization as non-reserve
material and did not provide a breakdown.
(7) Operator has reported estimates by deposit types. A sulfide deposit
is one in which the sulfide minerals predominate. An oxide deposit is
one in which the oxide minerals predominate.
NOTE: Additional mineralization is not shown for the Don Mario and
Marigold mines. At Don Mario, figures for the reported additional
mineralization for the LMZ have not been updated since the
operator's 2005 model, detailed in their December 5, 2005 press
release. Due to the age of the model, Royal Gold has not listed
these figures. For the UMZ at Don Mario, all additional
mineralization is covered in the design of the existing pit.
Figures for Marigold are not shown because the operator has not
reported additional mineralization pertaining to our royalty
interest.
TABLE 3
Royal Gold's Royalty Portfolio
Calendar Year 2008 Production Estimates(1)
ROYALTY OPERATOR METAL PRODUCTION(2)
Pipeline GSR1 Barrick Gold 316,000 oz
Pipeline GSR2 Barrick Gold 51,000 oz
Pipeline GSR3 Barrick Gold 367,000 oz
Pipeline NVR1 Barrick Gold 242,000 oz
Goldstrike (SJ Claims) Barrick Gold 792,000 oz
Leeville Mining Complex Newmont Gold 415,000 oz
Williams Williams Operating
Corporation Gold 126,000 oz
Robinson(3) Quadra Gold 100,000 oz
Robinson(3) Quadra Copper 130 million lbs.
Taparko TB-GSR1 High River Gold 91,000 oz
Taparko TB- GSR2 High River Gold 91,000 oz
Don Mario Orvana Gold -4
Penasquito Goldcorp Gold 67,000 oz
Penasquito Goldcorp Silver 2.3 million oz.
El Chanate Capital Gold Gold 50,000 oz
El Limon Central Sun Gold 43,000 oz
Dolores Minefinders Gold 40,000 oz
Dolores Minefinders Silver 1.0 million oz
Mulatos Alamos Gold 120,000 oz
Bald Mountain Barrick Gold 28,000 oz
Benso Golden Star Gold 25,000 oz
Martha(3) Coeur d'Alene Silver 5.0 million oz
Troy(5) Revett Copper 12.5 million lbs.
Troy(5) Revett Silver 1.4 million oz
FOOTNOTES TO TABLE 3
(1) The estimates and production reports are prepared by the operators of
the mining properties. Royal Gold does not participate in the
preparation or verification of the operator's estimates or production
reports and has not independently assessed or verified the accuracy
of such information. Please refer to our cautionary statement
regarding forward-looking statements and to the risk factors
identified in our Annual Report on Form 10-K and our other filings
with the Securities and Exchange Commission for information regarding
factors that could affect actual results.
(2) Production estimates were provided by the various operators and are in
ounces for gold and silver, and pounds for copper.
(3) Recovered metal is contained in concentrate and is subject to third
party treatment charges and recovery losses.
(4) The operator at Don Mario did not provide Royal Gold with a production
estimate for calendar 2008. In a press release dated February 11,
2008, the operator reported production of approximately 21,000 ounces
of gold for their first fiscal quarter ended December 31, 2007.
(5) Recovered metal is contained in concentrate and is subject to third
party recovery losses.
ROYALTY DEFINITIONS
The Company's royalty portfolio contains several different types of
royalties which are defined as follows:
Royalty -- the right to receive a percentage or other denomination of
mineral production from a resource extraction operation.
Gross Smelter Return ("GSR") Royalty -- a defined percentage of the gross
revenue from a resource extraction operation, less, if applicable, certain
contract-defined costs paid by or charged to the operator.
Net Smelter Return ("NSR") Royalty -- a defined percentage of the gross
revenue from a resource extraction operation, less a proportionate share of
incidental transportation, insurance, refining and smelting costs.
Net Value Royalty ("NVR") -- a defined percentage of the gross revenue
from a resource extraction operation, less certain contract-defined
transportation costs, milling costs and taxes.
Net Profits Interest Royalty ("NPI") -- a defined percentage of the gross
revenue from a resource extraction operation, after recovery of certain
contract-defined pre-production costs, and after deduction of certain
contract-defined mining, milling, processing, transportation, administrative,
marketing and other costs.
SOURCE
Royal Gold
, Inc.
Apr 30, 2008