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RG

ROYAL GOLD INC (RGLD)·Q4 2024 Earnings Summary

Executive Summary

  • Record quarter: Revenue $202.6M, diluted EPS $1.63, adjusted EBITDA margin 84%; royalty segment contribution rose sharply (+43% YoY) while streams grew +27% YoY .
  • Momentum vs prior periods: Revenue grew sequentially vs Q3 ($193.8M) and Q2 ($174.1M); margins expanded on lower DD&A/G&A and higher royalty mix .
  • 2024 guidance outcome: Gold at top of range, copper and “other metals” exceeded, silver slightly below; Q1 2025 stream segment sales guided to 40–45k GEOs, implying a softer seasonal start .
  • Capital returns and balance sheet: 2025 dividend raised 12.5% to $1.80; debt fully repaid with ~$1.2B liquidity, positioning for M&A/royalties; potential catalysts include Cortez ramp (Crossroads/Goldrush), Pueblo Viejo recovery projects, and Mount Milligan PEA mid-year .

What Went Well and What Went Wrong

  • What Went Well

    • Delivered record quarterly revenue, cash flow, and earnings; “Our business is designed to deliver leverage to gold” (CEO) .
    • Royalty segment strength: strong quarters at Peñasquito, Manh Choh, Bellevue, Robinson offset lower Cortez Legacy Zone; streams benefited from Mount Milligan, Rainy River, Pueblo Viejo and Wassa .
    • Margin expansion: DD&A per GEO fell to $444 and adjusted EBITDA margin reached ~84% on higher royalty mix and lower depletion rates .

  • What Went Wrong

    • Silver sales marginally below guidance due to lower recoveries at Pueblo Viejo; deferred silver deliveries reached ~1.67M oz at year-end, timing of catch-up uncertain .
    • Cortez Legacy Zone revenue declined YoY in Q4; mixed production trajectory across Cortez zones complicates modeling .
    • Expected softer start to 2025 (stream sales guidance 40–45k GEOs for Q1) with a planned 35-day PV thickener optimization impacting deliveries and sales timing .

Financial Results

Quarterly trend vs prior periods (oldest → newest):

MetricQ2 2024Q3 2024Q4 2024
Revenue ($USD Millions)$174.1 $193.8 $202.6
Diluted EPS ($)$1.23 $1.46 $1.63
Net Income ($USD Millions)$81.2 $96.2 $107.4
Operating Cash Flow ($USD Millions)$113.5 $136.7 $141.1
G&A ($USD Millions)$10.5 $10.1 $8.9
DD&A ($USD Millions)$35.7 $36.2 $33.7
Effective Tax Rate (%)18.9% 18.3% 19.5%
Adjusted EBITDA Margin (%)81% 81% 84%

YoY comparison:

MetricQ4 2023Q4 2024
Revenue ($USD Millions)$152.7 $202.6
Diluted EPS ($)$0.95 $1.63
Net Income ($USD Millions)$62.8 $107.4
G&A ($USD Millions)$9.7 $8.9
DD&A ($USD Millions)$40.1 $33.7
Effective Tax Rate (%)17.5% 19.5%

Average metal prices (Q4):

MetricQ4 2023Q4 2024
Gold ($/oz)$1,971 $2,663
Silver ($/oz)$23.20 $31.38
Copper ($/lb)$3.70 $4.17

Segment breakdown (Q4 YoY):

SegmentQ4 2023 ($USD Millions)Q4 2024 ($USD Millions)
Stream Revenue$98.3 $124.8
Royalty Revenue$54.4 $77.8
Total Revenue$152.7 $202.6

Selected principal property contributions (Q4 2024):

PropertyTypeQ4 2024 Revenue ($USD Thousands)
Mount Milligan (Stream)Gold/Copper$42,335
Pueblo Viejo (Stream)Gold/Silver$18,912
Rainy River (Stream)Gold/Silver$15,729
Andacollo (Stream)Gold$15,582
Wassa (Stream)Gold$13,215
Peñasquito (Royalty)Au/Ag/Pb/Zn$16,226
Cortez Legacy Zone (Royalty)Gold$16,573

KPIs and efficiency:

KPIQ2 2024Q3 2024Q4 2024
GEOs (000s)74.5 78.4 76.1
DD&A per GEO ($/GEO)$480 $462 $444
Net Income Margin (%)47% 50% 53%
Adjusted EBITDA ($USD Millions)$141.1 $157.9 $169.6

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Stream Segment Sales (GEOs)Q1 2025N/A40,000–45,000New quarterly guide; implies softer start
Annual DividendCY 2025$1.60/share$1.80/shareRaised 12.5%
Gold Sales (units)FY 2024215k–230k oz228.7k ozAchieved high end
Silver Sales (units)FY 20243.2–3.8M oz3.1M ozBelow range (PV recoveries)
Copper Sales (units)FY 202414.0–16.0M lb16.1M lbExceeded
Other Metals (revenue)FY 2024$17.0–$20.0M$22.7MExceeded
DD&A ExpenseFY 2024$141–$157M$144.4MIn range
Effective Tax RateFY 202417–22%19% ex-discrete; 22% incl. discreteIn range

Earnings Call Themes & Trends

TopicPrevious Mentions (Q2 2024)Previous Mentions (Q3 2024)Current Period (Q4 2024)Trend
Gold price leverage and marginsNear-record revenue; portfolio benefits from record gold price Record revenue; margins resilient, not exposed to inflation Records across revenue, OCF, earnings; EBITDA margin ~84% Strengthening with higher gold prices
Pueblo Viejo throughput/recoveryShift to recovery optimization 2H 2024 23% QoQ gold production improvement; optimization ongoing Throughput to 14Mtpa by 2028; gold recovery to 90% by end-2026; silver recovery project by Q4 2025; planned 35-day Q1’25 impact Recovery upgrades progressing; short-term downtime
Andacollo water constraintsDrought limiting processing; expected improvement in H2 Increased water availability; throughput improved H2 throughput at plan; 2025–27 copper guidance 45–55kt; drought remains risk Operational stabilization; risk remains
Peñasquito operationsHigher grades expected from Peñasco pit in Q4 New CBA; transition to higher-grade pit ahead of plan Very strong Q4 royalty contribution; continued pit transition Positive trajectory
Mount Milligan optimization/PEAPEA on track for H1’25 PEA advancing; optimization continues PEA expected mid-year; potential mine-life extension beyond 2035 a key catalyst Building toward life extension
SEC S-K 1300 disclosureNot coveredDetailed disclosure change explanation; asset handbook to carry reserves –Continued reliance on 8-Ks/website reserves; not central in Q4 call Structural disclosure shift maintained

Management Commentary

  • “Our business is designed to deliver leverage to gold, and our 2024 results demonstrate the direct relationship between a strong and rising gold price and Royal Gold's financial performance” — Bill Heissenbuttel, President & CEO .
  • “2024 was an excellent year… we recorded a stronger-than-anticipated fourth quarter and set records for revenue, operating cash flow and earnings” — Bill Heissenbuttel .
  • “Our cash G&A… decreased to nearly 3% this quarter… DD&A per GEO was $444… margins may increase with a higher concentration of royalty revenue” — Paul Libner, CFO .

Q&A Highlights

  • Cortez modeling complexity: Management cautioned against simple averaging of royalty rates; growth depends on where ounces originate (Crossroads vs Goldrush); fuller math to be provided with annual guidance –.
  • Pueblo Viejo deferred silver and recovery: Deferred deliveries unwind once silver recovery exceeds 52.5% recovery threshold; net value impacted by 30% cash payments and deferred cash-price balances, implying ~35–40% net of gross value to RGLD on catch-up ounces .
  • Cactus royalty timeline: First payments expected around year 5 due to initial mining sequence; two royalties are economically equivalent and cover the AOI without checkerboard effects –.
  • Deal pipeline/capital allocation: Robust pipeline, primarily $100–$300M transactions; open to syndication for larger deals; focus remains precious metals, with opportunistic base metals (e.g., Cactus) .
  • Rainy River plan: New mine plan noted; RGLD awaiting more detail from operator before adding color .

Estimates Context

  • Attempts to retrieve Wall Street consensus (S&P Global) for Q4 2024 EPS and revenue failed due to data access limits; as a result, we cannot provide a definitive beat/miss vs consensus for the quarter (S&P Global data unavailable at time of request). Estimates comparisons will be updated once access is restored.

Key Takeaways for Investors

  • Operational and financial leverage to gold is translating into record results; royalty-heavy mix and lower unit DD&A support margin resilience in high-price environments .
  • Near-term caution: Q1 2025 stream sales guidance of 40–45k GEOs and PV’s 35-day optimization imply softer quarterly sales; deliveries/sales timing lags should be factored into models .
  • Medium-term catalysts: Cortez ramp (Crossroads/Goldrush), PV throughput/recovery projects, Mount Milligan PEA (potential life extension), Back River first gold (Q2’25), and Xavantina cash-price step-up (no GEO impact) – .
  • Silver recovery at PV remains the key swing factor for silver sales and deferred delivery unwinds; model net value carefully (cash-price payments reduce gross value) .
  • Balance sheet optionality: $0 debt and ~$1.2B liquidity enable disciplined transaction activity without equity dilution risk; focus remains on high-quality assets in safe jurisdictions .
  • Property mix matters: Strong contributions from Peñasquito/Robinson/Bellevue/Manh Choh drove royalty outperformance; Cortez Legacy Zone variability warrants caution .
  • Dividend growth commitment persists (24 consecutive annual increases); income profile remains attractive within precious metals royalty/stream peer group .