Royal Gold, Inc. (RGLD) Earnings Call Transcript & Summary

Hello, and good afternoon, ladies and gentlemen. Welcome to today's virtual non-deal roadshow. My name is Adreanna Russell Martel, virtual event moderator here at Renmark Financial Communications. On behalf of our team, we want to thank everyone in Houston and surrounding areas for joining us today for the presentation of Royal Gold, Inc. trading on the NASDAQ under ticker symbol RGLD. Presenting today is Alistair Baker, VP, Investor Relations and Business Development. The presentation will last about 25 minutes following a formal question-and-answer session. Please submit your questions in the chat box on the top right-hand corner of your screen. With that, I will now hand it over to Alistair.

Thanks, Adreanna, and thanks very much to Renmark for the opportunity to present to you today. So good afternoon. Before I start, I just want to make you aware that I will be making forward-looking statements during this presentation. Risks and uncertainties could cause actual results to differ materially from these statements. These risks and uncertainties are discussed in our most recent Form 10-K filed with the SEC. So I'll start on Slide 3. And what I'm going to do in this presentation is give you the thesis, the investment thesis for Royal Gold, who we are and what we provide to investors. And one sentence really is, we provide precious metals exposure with consistent financial performance and a focus on per share metrics. And during the presentation, I'll be focused on trying to provide to you an explanation of our low-risk leverage to golds, our long history of successfully executing a very simple business strategy. The unique nature of our business model, our portfolio, which is broad and deep and has organic growth potential, and then finally, I'll touch on our valuation, which I think is pretty attractive relative to where it has been historically. So on Slide 4, this really gives you an overview of Royal Gold at a high level. We're a high-margin business that generates consistent cash flows from precious metals. We've been in the business since mid 1980s. So we've been on the NASDAQ for over 41 years. And in 2022, we had -- our revenue was contributed about 69% from our streams segment and about 31% from our royalty segment. Royalties tend to be higher margin investments for us, but both provide exposure to top line assets to the top line revenue from mining assets. In 2022, we had very strong operating and financial results. And if you convert our revenue to a gold equivalent basis, so you can compare us against other potential precious metals investments. We had volume about 335,000 gold equivalent ounces, and that was revenue of $603 million, operating cash flow of about $417 million and earnings per share of $3.63. We put out our Q2 results for 2023 a few weeks ago in early August, and it was not a solid quarter for us. We had $108 million of operating cash flow, $0.97 earnings per share, and we repaid $100 million of debt on our revolving credit facility. As we look at 2022, this slide just gives you a snapshot of some of the achievements we made during the year, 2022 was quite a busy year for us, and I'm going to mention some of these in a bit more detail later on. But we completed 3 transactions on 2 long-lived assets. We showed organic growth from the portfolio from several assets that have been with us for quite a long time. And then thirdly, we completed a bunch of strategic initiatives that we thought would be very beneficial for the company. All of these are -- if you take all of this and you sum it all together, they're all consistent with our long-term and long-held strategy of providing accretive growth in precious metals and returning capital to shareholders. So it's a very good year for us. Now on Slide 6, just to set the landscape a little bit and show you how we compare it to our peers. We sit in quite an interesting position, we're big enough to compete for the largest transactions. We have significant cash flow and we have access to capital that allows us to compete for the largest acquisitions out there, yet we're small enough on a market cap basis to show growth. So a small transaction for us can actually add meaningful value. And I wanted to keep that in mind as I talk about our portfolio and some of the opportunities we see ahead of ourselves today. So with the introduction complete, I'll now talk a little bit about the areas that I said I would. I'll start off with our low-risk leverage to gold. So in Slide 8 here. shows other gold investments and how we are positioned. Our model provides exposure to precious metals without many of the risks that come with investing in operating mining companies. So we provide exposure to gold and optionality while reducing downside risk, and that's through holding a diverse portfolio with no direct exposure to operating and capital costs. So that's a very important point when you think about inflation hitting margins. There are different ways you can hold the gold in a portfolio, and there are many different alternatives. If you want to be super conservative, the most conservative way is to hold the physical metal, but an ounce will always be an ounce, you'll never get any upside from it, and you certainly won't get a dividend before pulling that ounce. If you want to be more aggressive, you can hold operating mining company or even exploration companies, and you'll certainly get exposure to upside, but you will also get exposure to operating and capital cost risks. So we sit kind of in the middle there. And if -- on Slide 9 here, if you look at our long-term share price performance, our historic performance shows why we think we're a good alternative for conservative exposure to gold. On the left-hand side, you can see our beta of 1.9. So we have excellent leverage gold price. On the right-hand side, you can see our share price performance over the long term. This goes back to the beginning of the GDX index in 2006. And over that time period, we have beaten the gold price, we've beaten the index itself, but we've also beaten general market indices. And so we're very pleased with how our business has performed over the long term. Now I'll move on to a discussion of our history of execution, and we do have a long record of consistent and disciplined performance. Slide 11 here shows a 20-plus year history of capital allocation and growth, and that's really driven by the strategic objective of providing accretive growth to shareholders. Since 2000, we've seen significant revenue and cash flow growth. Those 3 aspects of this growth that I want to highlight. The first is that our business is high margin and it's scalable. So you can see our revenue growth has far exceeded the increase in our G&A expense. So we have a very scalable business. The second is our revenue growth is not dependent solely on metal prices. We have added volume during this period. While the gold price has risen over this time period, we have also added volume. So that's really improved our ability to grow revenue. And then thirdly and finally, we've financed our growth internally, and that's without a significant rise in our share count. We're one of the original members of the GDX Index, and we have the lowest share count in the index. We want to avoid shareholder dilution. And if we can fund our business with internal resources that provides for share growth to our shareholders, we think that's exactly what our shareholders are looking for when [indiscernible]. Now Slide 12 here just shows a snapshot of our liquidity. And we have to be patient in our business. We have to maintain a strong balance sheet and have liquidity on hand to easily finance opportunities as they arise. And our approach to funding growth within our company is to use cash on hand, operating cash flow and our revolving credit facility. And then equity is the least preferred option for us for funding or financing growth. We have a $1 billion revolving credit facility available to us, and that provides very cheap and flexible financing. Currently, at the end of June, we had $400 million of outstanding or debt drawn on that revolving credit facility. But we're paying this down as cash flow through the portfolio comes in. And we drew $200 million at the very end of 2022, we drew $200 million to fund a transaction that we announced very early this year. And we've repaid $175 million of that in the first 6 months of this year. So that really shows the cash flow generation potential of our portfolio. We started the year with a 0.96 net debt to trailing 12 months EBITDA ratio, and now we're at 0.61. So we have the ability to delever very, very quickly. Our total liquidity right now is about $702 million, and that includes working capital. And that's [indiscernible] liquidity for the business development environment that we find ourselves in today. Return of capital is a key strategic objective for us at Royal Gold, and it's one of the things that makes us very unique amongst other gold investments. As you can see on the slide, we paid a growing and sustainable dividend since 2000, and we've increased the dividend every single year. That's despite volatility in the gold price. In total, since we started paying a dividend, we've returned about $865 million to shareholders in the form of dividends. We're the only company in the GDX that has paid an increasing dividend since the GDX was formed. And we're the only precious metals company in the S&P High Yield Dividend Aristocrats Index. So that is a very important differentiator when you think about us versus our peers and the rest of the gold sector. We are often looking at new opportunities and due diligence is really a core competency of Royal Gold. And it's very important. We have good due diligence processes to ensure that we add the right assets to our portfolio. I'm obviously avoid the wrong ones. While we're always busy looking at opportunities, not all opportunities make it through our streams to completion. We have a very extensive process, and we're disciplined in the way that we deploy our capital. If we see risks that we don't like, they could be technical, they could be environmental or legal, social, you name it. If we find the risks of an identified that don't make -- have no plans to be addressed adequately, then we'll walk away from transactions. We feel no pressure to do transactions. And if we can't find the right opportunities, we're happy to let our portfolio generate revenue. we'll build our balance sheet and we'll wait, the experience has shown us that there's always something coming that we don't often see. Now our business model does not provide us direct and operating control the assets where we invest, but ESG and sustainability has always been a core part of our business. We invest for the long term. So ensuring the sustainability of our investments is a very important part of the due diligence when we look at new transactions. We also build language into our transaction documentation to ensure that operations are managed to the highest standards. And where it makes sense, we're always happy to look at alternatives or initiatives that our operators perhaps have around the mine sites where we're invested to improve, whether it be social or community or other issues. So we're always willing to chip in to our counterparties to improve the operating environment. Now we've worked a lot over the past several years to improve the transparency, our transparency around these processes. And we're very pleased to see that we've had material improvements in the perception and recognition of our practices. And I've got 2 shown on this slide, MSCI and Sustainalytics who are 2 influential rating providers in our sector, and we're top ranked by Sustainalytics and AA ranks by MSCI. Now in this next section, I'm just going to talk about our business model and the unique nature of the model. And the key to our business model really is optionality, and that's optionality to reserve and resource growth in the assets where we invest. And that's without further investment on the side of Royal Gold. So I have 2 examples shown on the slide here, PV and Wassa, and they're both investments we made in 2015. In both cases, total reserves and resources today are higher than at the time of the initial acquisition. And that's in addition to production that's allowed us to recover about 80% of our investment at PV and over 130% of our investment on Wassa. But the interesting thing here to note is that there are growth projects underway on both assets. At PV, there's an expansion in the final stages. It's being constructed to maintain gold production levels well into the 2040s. And at Wassa, there's a resource that's been outlines that could add an additional 11 years of my life beyond the existing reserve life. So in both of these cases, Royal Gold is not required to fund any capital or invest any further to get exposure to this upside. So this is growth that we do not have to pay for. And this exploration and production upside is very important when we look at new investment opportunities and is probably the most important feature of our business model. Now our business model is very efficient. And we have 31 employees in the company. And last year, as I said, we produced over $600 million of revenue. And today, our market cap is just shy of $7.5 billion. So on a per employee basis, we compare well to any company out there, whether it's in the precious metals sector or more generally in the general markets. And our low employee count really means that we have a fixed low cash G&A, and that obviously further contributes to our efficiency. In 2022, we have a 79% EBITDA margin and our cash G&A was 4% of our revenue. Our G&A is low and is posed to made a fixed cost, it's made up of fixed cost. So cost inflation should not be something that causes significant risk to our margins. And you can see that in more detail on this slide, on Slide 20. When you look at our cost structure versus the average metal producer, precious metal producer, and we are insulated from cost inflation compared to the average producer that producers are exposed to contemplation of various things and input costs. So labor, energy, consumables and other site costs. And a lot of those things, actually, those costs increase when commodity prices increase as well. Whereas our G&A costs are mostly steady in the rate of, as you can see on the right-hand side, the rate of salaries, services, office rents. So things that are not typically subject to short-term change. So our margins are a lot less exposed to inflation pressures, and we're not directly exposed to operating and capital costs. Now I'll spend a few minutes talking about our portfolio, which is broad and deep. And we do have quite a bit of organic growth potential from within the portfolio. And if you look at Slide 22, this shows our global portfolio, and our portfolio is weighted towards lower risk and mining-friendly jurisdiction. Our principal properties, the ones called out on the right-hand side of the slide. And those are the larger portfolio assets to provide the bulk of our revenue. But our revenue-producing assets are well diversified. And so that obviously provides some stability to cash flows. Our largest country exposures are to Canada, the U.S.A. Dominican Republic and Chile. So all of those are arguably mining-friendly jurisdictions. And we have revenue coming from 40 mines. So that revenue rent compares well to any mining company. And that revenue diversification reduces our exposure to single asset underperformance. And then finally, our underlying assets are about 50% precious metals, but then the remaining 50% would be for a mix of Côté Gold, and gold and copper assets. In our portfolio, if you break it down, our portfolio spans the various stages of mining project development. So we have 141 assets in the portfolio that are not producing today but are in various stages of either exploration, evaluation and development. And we would expect the potential for organic growth from any assets that advance through this pipeline to production. King of the Hill is a great example of this organic growth. This is the project was -- has been in our portfolio for well over 10 years and just started contributing revenue to us this year with a rethink by a management team of the geology and project concept. And to continue on this theme of organic growth, this slide, it shows some of the key catalysts that we see today for various assets within the portfolio. There's a potential for mine life extensions and production increases at some assets that are already producing, and those are the ones that are shown in blue. And importantly, some of the largest assets in the portfolio are the ones that have some exploration or production potential increases associated with them. If you move a little bit further down this slide and you look at the gold bars, those are where we see the potential for new revenue for development assets. So the next one being the Goldrush asset at Cortez, Barrick is expecting a record decision later this year. And then next year, we would expect to see CôTé, Mara Rosa and Manh Choh contributing revenue and then in Back River in 2025. The point here is, all this growth is free optionality to our shareholders. We have funded our investments at these assets, and we do not need to pay any more to get exposure to this growth. Now despite the fact that we've got good organic growth in the portfolio, we're always looking to add further to the portfolio. Slide 26 shows what we've done over the past couple of years. We've been very active. And this slide really summarizes what we've done. We've deployed $1.2 billion of capital on 6 large transactions on 5 assets. And all of those provide gold exposure with upside potential in safe jurisdictions. We funded these transactions using cash on hand and our revolving credit facility and we have not issued any shares so we have not diluted our shareholders exposure to these transactions. On Slide 27 summarizes the long-term potential of these acquisitions. I'll start with the left and talk about Cortez in Nevada. We completed 2 transactions on this asset last year. One was in early August, one was at the very end of the year. But Cortez, for those of you who are not aware of it or familiar with it, it's a world-class gold complex in a mining-friendly jurisdiction in Nevada in the U.S., is operated by Nevada Gold Mines, which is the joint venture between Barrick and Newmont, the 2 biggest gold producers in the world. We've had several royalty interest Cortez dating back decades, but these new transactions, they consolidate our royalty ownership and they give us exposure to the entire Cortez complex. Barrick is pushing forward on growth potential opportunities there. So Goldrush already mentioned that Fourmile as well and at Robertson. And this is a large land package with a tremendous amount of exploration potential. We're very pleased to be here. We think this is something that's going to add to the portfolio for decades. Moving along to Red Chris, second from the left in Northern British Columbia. This is an asset that's owned by Newcrest, which will soon be part of Newmont. And Newcrest has been advancing studies to transition the mine for me, an open pit operation to a large bulk tonnage underground operation, and that's slated to start from 2026. Newcrest has also been doing a lot of work on exploration and they've had tremendous success. They've identified a new resource called the East Ridge. And more recently, they've identified a 5th porphyry center where they think it is a 5th porphyry center called the Far East Ridge, all of that is within our royalty ground. And we're expecting to see a resource update from Newcrest, Newmont sometime towards the end of this year. And the pre-feasibility study for the underground excluding all of the new resources that they found, it was about 36 years. So we have high hopes for this asset as being a long-term producer within our portfolio as well. In Xavantina, Brazil, this is a small asset underground asset. We have a 25% gold stream here. Ero Copper as the operator and they continue doing exploration work to fill the mill and sustain gold production at 60,000 ounces a year. The Cote Gold project in Ontario is under construction. The construction at the end of last quarter was about 85% complete, and they're targeting commercial production in early 2024. And then on the far right-hand side of the slide, a little bit more longer date is Great Bear project in Ontario as well. This is owned by Kinross, and Kinross announced at the beginning of this year, a maiden 5-million ounce resource and they're doing further drilling in 2023 that they expect to add to that resource over the next couple of years. They're targeting first production from this asset in 2029. So if I was to say, there's a common theme with all of these transactions on this slide, it would be that they're very much consistent with our strategy, so they provide precious metals exposure. They also provide production and exploration upside and 3 of these 5 are actually recent revenue today. So I'll move on to valuation now. And on this slide, you can see our P/NAV and P-to-cash-flow multiples over the past 10 years. And if you look at where we trade versus our peers, the peers have shown a gray or the shaded area. We are trading at pretty attractive multiples relative to where we have been historically. Royal Gold performed very well. Our shares performed well in 2022, and we beat all of our large cap peers in terms of performance. So that really did reflect the strong company performance that we target it. However, if you look at the multiples, it appears that they're lagging. We're trading in the bottom half of the cash flow multiple. And I think that's because, we're not getting to benefit, the share price is not reflecting the quality of the cash flow that we're receiving from our diversified set of high-quality assets. The market does seem to be giving us credit slowly for some of these recent transactions. But I think the value of the long life assets and the optionality of these assets has not yet been reflected or recognized by the market in these multiples. So with that, I've come to the end of the presentation. Hopefully, I've given you a bit of a sense that we have a strong record. Our business is performing very well. We've added high-quality assets to the portfolio, but we also see some very good organic growth from within the portfolio. And then finally, our valuation is attractive. And we have ample liquidity to continue growing the business. So we do believe the Royal Gold is very well positioned today. And with that, Adreanna, I think we'd be happy to turn it over to you to field the Q&A session.

Thank you, Alistair. We'll now move on to the Q&A session. Your first question, if deals come up, are you still looking at opportunities?

We're always looking at opportunities. Absolutely. I think we are very much focused on doing new transactions. That is one of the main sources of growth for us is to acquire more and stream interest. So we're always looking, the market -- we have a very interesting business model. We're actually a provider of finance to the mining industry. And so we're very committed to the sector. And that's -- that means that commitment is in good times and in bad times. And we find that there's always opportunity regardless of the point in the cycle. So metal prices are high. We are looking at project development. So that needs capital. So we're there to provide that capital. Metal prices are low, then often what that means the balance sheets are stretched and operators need additional capital just for -- just keeping the lights on. So we're also there in that service stance. So we find that regardless of the point in the metal price cycle, there are opportunities ahead of us, and we're very keen to look at anything that comes in the door.

Thank you for your answer. Your next question, how many projects could you manage with the existing team?

So the great thing about our business, and I made the point that it's a scalable business is that, we are able to do transactions. And then once that transaction is complete, and it's simplistic to say this, but it's almost like another line on the spreadsheet. Once we have a new asset in the portfolio, it doesn't take that much work to monitor it to make sure that we're getting what we bargain for when we made the investments. Most of the work that we do is on the initial upfront due diligence. And so we can look at a number of different things at the same time. We don't find that we're constrained necessarily. Sometimes we're very busy but we're also able to manage that workflow. And once we get those new transactions into the company or into our portfolio, then they're relatively easy to manage. And that's why our employee count is so low at 31 employees. We haven't really grown it that much over the past several decades that we've been in the business. We have a plateau at kind of mid-20s to low 30 number of employees. And if we need additional resources, we will bring in consultants, and it's really on the technical side, we are doing due diligence. If we need to get certain technical expertise that we don't have in-house, or if we find that we're swamped and we need a little bit of extra help, we have a role at exit people that we've worked.

Your next question, are you contemplating acquiring smaller royalties and streaming companies trading at a deep discount to NAV?

We have found that generally, we get better results when we are very careful about picking and choosing single assets. Now that doesn't mean that we won't look at competitors. But generally, when you look at a smaller competitor, you're buying a portfolio of assets. In some cases, we may have already seen those assets and passed on them for whatever reason. So for us to buy and consolidate smaller companies, it generally isn't what we -- it's not our preferred way of doing business. Now, everything has a value. And if we see there's a valuation disconnect, we're very happy to look at consolidating. But we found that generally in our sector, companies trade at premium. So when you have to pay a premium to acquire a company that's already trading at a premium, there's not a lot left in it for us. So our preferred way to grow our business is asset by asset, where we pay fair price on day 1 and we don't have to recover that premium on a premium. But we do look at our competitors quite regularly and just keep an eye on what's going on from a valuation perspective so never say never.

Thank you, Alistair. Your next question, out of the exploration projects in the portfolio, which ones are the company most excited about?

I mentioned a couple, I think Red Chris is a very exciting project. I think that they are one -- is one that was not very well understood by the market. I think Newcrest has done a tremendous amount of work and identifying some of the upside there. And I think there's a lot more to come. So that's one to keep an eye on. I think the Great Bear is another one. It's a fairly early stage project with a tremendous land position. And that is probably something -- Kinross has talked about not being a mining complex, where you've got a large open pit, which is relatively low grade, but then you've got these higher-grade underground satellite operations around it. And so that's got tremendous potential. And as you think about what they've done, they've only really drilled 500 meters below surface and they haven't drilled any further because it's just too expensive to do that. What they're working on now is, we're working on establishing a [ decline ] into the ore body, and that will give them drill access to lower parts of the ore body. So we think that there's a lot of potential there as well. So that's very exciting. And then I guess the other one, which is really quite exciting is Cortez for us. Some would say it's a mature area, but we disagree, it is a very large area. It is producing today, it produces a lot of golds about 1 million ounces a year today, but there's tremendous exploration potential on that land package. So we think there are a number of things in our portfolio that will provide some very interesting growth catalysts. It's going to take some time for those to come out, but we're very happy to have those assets in the portfolio.

Your next question, what kind of production are you seeing from the Johnson Camp Mine? And how much mine life is left?

I don't know if I could answer that question. It's one of the smaller producers in our portfolio. And it tends to -- if I remember correctly, it tends to contribute to them not contributed. It's not a consistent producer. I can't answer that question, unfortunately. If you -- let me know how to get a hold of view, we will be happy to look into it and give you some more detail, just let Adreanna know how to get ahold of view.

Your next question, how much debt can you reasonably pay down given your current cash position?

Well, as I said, we drew $200 million on the revolver at the very end of December in 2022 at the end of June this year, we had already paid $175 million of that back. So our cash flow seems to be -- while in 2022 was just over $400 million. Last quarter, there was $108 million. So we've got G&A to pay, our dividend to pay. So it's somewhere in the range of -- if you assume $100 million of cash flow, our dividend on a quarterly basis will be, say it $25 million then the G&A subtract that, the rest will be left over for repayment of the debt if we need to. But we don't feel that this leverage level now, we don't feel any urgency to repay that. It's a very manageable level compared to our cash flow. So as I said, we're net debt to EBITDA, we're about 0.61x at the end of June. So we're very comfortable with our debt level. Our intention is to pay down that remaining revolver balance, but if we have a new transaction, it's sort of too good to pass off, rather do those pay down our debt. So it could see us pushing that out a little bit the repayment of that debt a little bit further, but we feel pretty comfortable with our financial position today.

Your next question, when do you expect to pay off the remaining credit facility?

So we haven't really given any recent guidance above this, but we did say earlier this year that we would expect, absent any new business development opportunities and maintaining status quo of metal prices sometime in the middle of 2024 would be what we would expect to pay that down to zero. And as I said in the last answer, in the first 6 months of this year, we paid down $175 million. So you can use that as a that as bit of a yardstick or a rough number for how quickly we can pay that back.

Your next question, would you look at hedging the copper revenue?

No hedging for us, I don't think it's something that our shareholders would like us to do. They want that exposure to metal prices. So that is an important part of our business. We have not hedged our copper. We like to have -- we don't have a huge amount of copper in the portfolio. It's about 15% -- rates of between 10% and 15% of our revenue. But it's a nice diversifier as well compared to gold and solar. So we like to have exposure to copper and copper has got great fundamentals. So by hedging it is not something that we've talked about doing.

Thank you for your answer. Your next question, based on history, what price to cash flow multiple do you think is reasonable?

Based on history, I think we generally would trade in the low 20s. Our peers tend to trade a little bit higher than that. So that is a very -- it seems like a high number, but that's where we have traded and our peers trade. So I think that's a reasonable number. And I think if you look at our cash flow multiple today, we're quite a bit south of that. And as I said, I think it's largely -- I think it's because the market has not yet given us credit for some of the acquisitions that we've made in the past couple of years. Things like Red Chris and the exploration potential there. I don't think the market has given us credit yet for it. But we will get to that credit. It will come but not yet.

Your next question, how leveraged are you to the gold price?

So our beta to the gold price is 1.9. So it's -- we got a nice beta to the gold price. I can't remember off the top of my head what our numbers were for revenue. But if you think about our revenue last year was $400 million and about 70%, 75% of that was gold. So you can approximate based on what the gold price was last year. We certainly have good leverage to the gold price. And the important thing to note here is, when the gold price goes up, our shareholders benefit from that margin because of our low cost. So it's -- were a bit different from the operating companies where you see the gold price go up, but also you see costs go up. So their margins actually stayed or historically when you've seen increases in the price of gold, you see margins stay constant, whereas actually ours had to do this because our base stays relatively flat.

Your next question, are there any assets going into production in 2024?

Yes. So I think I mentioned a few of them during the presentation. So Cote, which is in Northern Ontario, Mara Rosa in Brazil and Manh Choh in Alaska are the ones that we see today, and we'll go into production then shortly after that in the early part of the 2025 Back River in Canada.

Thank you. Your next question. Have you been in talks to be included in the TSX top 60?

We're not listed on the Toronto Stock Exchange. So no. We did have a listing a number of years ago before I joined the company. And I think we stopped with that listing probably about 8 years ago. And it was simply because we're a U.S. [indiscernible] company and our largest market where the liquidity is in the U.S. for us and trade on the NASDAQ. And we just -- we found that we weren't trading any shares in Toronto and is quite smaller and expensive to maintain listing on markets, a secondary market. So we just didn't think there was a real benefit to us. We didn't find that investors were trading us in Toronto. They were trading us in the U.S. So we got rid of the listing to save some money, to save some time. We only have 31 people in the company. So if we can eliminate kind of the lower margin, if you will, activities. We're happy to do that to make the company more efficient.

Your next question, has management expressed any desire to increase their positions?

Well, we are all owners in Royal Gold. And with a company our size, I would love to say that it's -- I'm a significant shareholder of Royal Gold, I'm not, but there's a significant part of my net worth. I think everybody on the management team would say the same thing. We do increase our positions over time, part of our compensation. It does come in the form of equity and performance share units and things like that. So we do participate in the growth of the company over time. So that is our biggest way of making sure we have exposure and skin in the game.

Perfect, you're down to your last 2 questions. Your next question, our viewer is asking, can we expect any specific set growth for the dividend in 2024?

So the way that we think about our dividend is a discretionary dividend. We meet at the end of the year in November with our Board to talk about the dividend. The board ultimately makes a decision on how to deal with the dividend. And as I showed in the slide, we have grown our dividend every single year since we started paying a dividend. One of our key strategic objectives is to pay a growing and sustainable dividend. So we don't target a payout ratio. We don't target a percent of growth from the prior year. But we will say, if we grow our dividend to some level, will we be able to grow it again next year and then the year after that. So we look down the track a few years into our portfolio, and we come up with a recommendation to the Board, which will then get discussed. And that will be the way we come up with our approach to the dividend and increases. So I can't promise there will be an increase this year. But if you look past -- if you look back, you can see that we have been consistent in increasing the dividend every year. And I think our last increase in 2022, we increased it by 7% over the prior year.

Thank you, Alistair. And your last question. A viewer is asking, how do you monitor the ESG practices of your portfolio of properties?

So there are a number of different things that we do. We have -- we do site visits to the properties themselves. So that's always a topic of conversation when we do site visits. We keep an eye on used media and other external sources of information. But then we also have information rights from many -- not all but many of our investments. So we -- if there's any material development at an asset that could include some ESG in fraction or issue, then we would -- we tend to receive that information from that operator as part of our agreements. We also -- we like to think we have good relationships with our operators. So we have good communication with those -- with most of the operators. And so if something happens or something is a risk, then we tend to hear about it in advance. And obviously, we'll do our best to help if there's anything we can do. We will do our best to help that operator [indiscernible] issues or it could be technical as well to be anything.

Thank you, Alistair. That concludes our presentation for today. Thank you to everyone who submitted their questions. If you didn't get a chance to submit your questions, you can send them over to your account manager here at Renmark. Now before we go, I'm going to hand it over to Alistair for final remarks.

Well, thanks very much, everyone. I certainly appreciate your time and attention and the questions. But there are any questions that I either didn't answer fully or anything that pops into your mind after the Q&A session finished, please just let Renmark know, and I'll be happy to have a conversation with you one-on-one. So we look forward to speaking to you again. Take care, and we'll talk to you soon.

Thank you, Alistair. Once again, this was Royal Gold, Inc. trading on NASDAQ under ticker symbol RGLD. Thank you to everyone in Houston and surrounding areas for joining. The playback for this virtual non-deal roadshow will be available on our website, 24 to 48 hours after the presentation under the VNDR Library tab. Thank you to everyone again. Stay tune for more presentations in your area, and we'll see you next time.