Royal Gold, Inc. ($RGLD)

Hello, and good morning, everyone. Welcome to today's virtual [indiscernible] roadshow. My name is Noelle Alexander Young, Virtual Event moderator here at Remark Financial Communications. On behalf of our team, we'd like to thank everyone in Dallas and surrounding areas. For joining us today for the presentation of Royal Gold trading on the NASDAQ under the ticker symbol GLD. Presenting today is Alistair Baker, Senior Vice President of Investor Relations and Business Development. The presentation will last approximately 25 minutes and will be followed by a Q&A session for which you can participate in by using the chat box in the top right-hand corner of your screen. That being said, I will now hand the floor over to Alistair.

Well, thanks very much, Noelle, for the introduction. Thanks for the invitation to present today. We've had lots of good news at Royal Gold over the past year or so, and it's also been a very interesting time for the gold market and the gold environment. So it's timely to give you an update. So I will make forward-looking statements during the course of this presentation. There are risks and uncertainties that could cause actual results to differ materially from these statements. All of these risks and uncertainties are discussed in our most recent Form 10-K filing with the SEC. So during the course of this presentation, I will give you the investment thesis for Royal Gold. We are a high-margin business. We generate consistent cash flows from precious metals, but we're not a mining company. This presentation will -- is divided into the sections that cover the key attributes of Royal Gold as we see them. And the first is gold exposure. We're very focused on gold. Precious metals is where we like to spend our time in gold in particular, is where we focus. Second is our model, which is high margin and return to capital to shareholders is very important. We have a consistent EBITDA margin over the last several years, it's in the '80s, and we've got a 25-year history of dividend growth. I'll talk about the portfolio, which is the most diversified amongst our peers in terms of assets, operations and jurisdictions, and that should provide consistency in financial performance. I'll talk about our business model, which has got limited operating risks. Our margins are steady, and we don't have a direct exposure to operating and capital cost risks. And I'll talk about our size. We're a large-cap company, but we are what we think is an ideal size for our sector. Small transactions to us can still be quite meaningful, yet we can compete for the largest transactions out there. And then finally, I'll talk about optionality within our portfolio. We don't have to pay for organic growth that comes to the surface and provides that optionality. So it's a very unique feature of our business and our business model. So I'll start before I get into the presentation [indiscernible] I'll just start making a comment with a comment on 2025. It was a transformative year for Royal Gold. We completed a number of transactions during the year that were really important to our business. The first would be the Sandstorm Horizon acquisition, which we closed in late October last year. This is a transaction that allowed us to add significant growth and diversification to the portfolio with 1 transaction. We did add a couple of other assets to the portfolio as well, nice certainly don't want to underplay their importance onstream on First Quantum's mine in Zambia is a significant gold stream. It provided immediate cash flow to us right after closing that transaction. And then the second was arena earlier-stage copper, gold, [indiscernible] project in Ecuador. And it provides us exposure to an emerging Tier 1 asset in an emerging jurisdiction. And not only did we see positive news on the transaction acquisition side, but we also saw some very positive news from within the portfolio as optionality surface throughout the year. We saw at Mount Milligan a significant extension to the mine life, which now been extended to the mid-2040s. And the formal project that Barrick is working on in Nevada and the [indiscernible] complex, some extremely exciting exploration results there, and that looks like that will be a stone of our portfolio in the next decade or so as it starts producing. We also -- we released our Q1 results last week. And you can see the benefits of all these transactions in those results. We had an excellent start to the year. We had record revenue, cash flow and earnings. And if you look at what we produced in the first quarter of this year versus a year ago, first quarter, significant increases in all of those, well over 100% increases in all of those metrics. So we added a lot of scale, diversification and growth to the business in 2025. But the important thing to note is we did not change our strategy. So with that, I will start into the meat of the presentation. I start talking about our gold focus, which is obviously a big part of our strategy. We've had 40 -- over 40 years of history. In our business and very much focused on gold. The company started in the mid-1980s and we were -- the summer we're approaching the 45th anniversary of our listing on the NASDAQ Exchange. And our strategy has been consistent throughout the entire period we've been listed. We are very focused on gold revenue from good assets in good jurisdictions. Our revenues -- it's been pretty consistent in terms of mix over time. And that metal mix has not changed. You see gold is really the focus of our business. And we aim to provide our shareholders gold exposure and then conservatively managed to the vehicle. And our historic share price performance shows why we think we are a good alternative for those shareholders who are looking for gold exposure in a conservative way. On the left-hand side, you can see our beta to the gold price of 1.6%. It provides excellent leverage. The gold price from the right-hand side, you can see our share price performance over time. We've beaten the -- over a long period of time, we've beaten the gold price, we've beaten the GDX index [indiscernible] in 2006. We've also beaten the S&P 500 index. So we are a good. We've certainly proven that over that period of time, we're a good long-term investment in a volatile commodity. I'm going to talk about our high margin and dividend growth history. Our business is very high margin. It's a unique business model. It's scalable as well as being high margin. And we've had an 80-plus percent EBITDA margin for the past several years in 2025, it was an 82% EBITDA margin. Our cash G&A was about 4% of revenue. Our costs are they're low and they're fixed. So cost inflation should not be something that gives or provides risk to our margins. Our business model is also very efficient. We have 39 employees in the company today. It's a pretty low headcount when you think about the size of our business, we're a $21 billion market cap business. So on a per employee basis, we compare very well to large companies in any business in any sector. And throughout this period, return of capital has been a very important strategic objective for us. And it's something that makes us unique when you look at other gold investments. We paid a growing and sustainable dividend since 2000, and we've increased the dividend every year since 2001, despite volatility in the gold price. And last year, in November, we announced the 25th consecutive annual increase to our dividend. We've now paid out well over $1 billion in dividends to our shareholders. We're the only company in the paid an increasing dividend since the index was formed in 2006. We're the only precious metals company in the S&P High Yield Dividend Aristocrats Index. So that is a very important differentiator. Now we have a highly diversified portfolio that underpins our financial performance. The portfolio is global. And it's weighted towards lower risk and more mining-friendly jurisdictions. And the portfolio spans the various stages of mining project development. We have over 360 assets in the portfolio, and over 80% of those are producing revenue today and about 30 are in development [indiscernible] 250 are in the earlier stages of either exploration or evaluation. And organic growth from within the portfolio comes as development and exploration stage assets move forward we move through the pipeline to revenue production. Now having a diversified portfolio is very important because it reduces single asset and counterparty risks. Our commodity focus is gold, as I said [indiscernible] the presentation. We have the highest gold revenue percentage of our large-cap peers, but we also have meaningful silver and copper revenue. But geographically, we're very diverse, but we have a North American focus. So that is the center of gravity of our operations. And in terms of the diversification within the portfolio on a NAV basis, net asset value basis, we have the most diversified asset portfolio in the sector. Eight of our 10 largest assets are producing revenue today, and there are expansion and extension projects underway at 5 of those assets. our operators are best-in-class. We have large, well-capitalized experienced companies operating the assets where we have interests in the last year or so, we've added First Quantum, [indiscernible] and Glencore and other Tier 1 operators to our counterparty mix. This portfolio diversification is very important. It reduces our exposure to single asset or operator or jurisdictional risk. That's important for generalist investors who don't necessarily want to spend the time looking at individual assets. So they can invest in us and have comfort that there's a broadly diversified portfolio. So if there's an asset underperformance of 1 asset, Hopefully, it's offset by overperformance at something else within the portfolio. I'm going to talk in the next section about the business model in a bit more detail and limited operating risk is the focus. There are many ways you can invest in gold. And our model, our business model provides gold exposure with reduced risk. This slide shows you the different ways you can invest in gold. We provide exposure to gold and optionality and a dividend while reducing downside risk through holding a diversified portfolio that doesn't have direct exposure to operating and capital cost risks you can be super conservative if you want to invest in gold and you can buy physical gold, but physical role won't provide you any upside announce you buy today will always be announced. And you won't get a dividend from it. [indiscernible] it will cost you to store that ounce you can be more aggressive and you can buy equities in mining companies or exploration companies. But with that, you'll also get exposure to operating cost risks. And you can actually see inflation in those costs, you can erode margins. There's a perception in the broader market that our business model doesn't provide great leverage to the gold price. And I think if you look at our financial results over the past couple of years during this period of higher gold prices, you'll see that that's absolutely incorrect. We have a business model that provides excellent leverage to the gold price. Now royalty streamer margins are are a little bit different from what an operating mining company margin looks like. We have very different cost structures. Our costs are low and they're fixed. So margins, as the gold price rises, our margins should expand. And that's what you've seen over the past couple of years. However, operating companies, their costs are subject to inflation. So their margins may not expand as quickly. And in fact, in some cases, you may actually see margins compress as costs rise. And if you look at the cost structure of us compared to an operating company, producers' costs are exposed to inflation in input costs. So labor, energy, consumables or anything that a site needs to continue operation often those are subject to inflation there. pressures. And often, those increase when commodity prices increase. So you can see the gold price rise, it may be in a bullish commodity price environment, which may actually increase the most at some of those operators. If you look at our G&A costs, and they're pretty steady. So things like salaries, services, office rents, they don't typically move in a short-term way. They're more stable over time. And so anything that impacts costs also impacts margins. We haven't seen it yet across the broader mining sector, but you will start to see, I think, in the next quarter or 2, you'll start to see pretty significant cost increases from the mining companies because. The Iran war is obviously pressuring energy prices. Those will flow through to operator costs, and that may start to compress margins. We're not exposed to that. We don't have any direct exposure to operating cost inflation. Now I'll shift gears a bit and talk about our size, which we think is pretty optimal for the size of the sector that we're in. We are -- we'd like to say that we're large enough to compete but we're small enough to show growth. And our businesses -- our sector is really -- is built on small transactions. Most transactions are less than $300 million in size and average size within our history of transactions across the sector is just over $100 million. We sit in a very interesting position. We're large enough to compete for the largest transactions. We have significant cash flow from the portfolio. We have access to low-cost capital. And so things like the Kansanshi transaction last year. That was a $1 billion transaction. We were able to compete against our largest peers. We've won that transaction. So we can compete for the largest transactions. Yes, we're also small enough to show growth. small transaction can add meaningful value to Royal Gold. So last year, when we did the Warintza transaction, it's a $200 million investment. And that is something we expect will show up when that mine starts producing. We expect that will produce some significant results that you'll actually be able to see in our financials. We're not aiming to be the biggest in our sector. We would prefer to be the best. And we think this Goldilocks position really does provide us a great platform to execute on our strategy, our growth and goals. I'll talk in the next section about embedded growth and optionality. And I'll start with a short discussion with capital allocation and our priorities. Our growth, to be successful and grow in our sector, you need to be good at allocating capital. And our strategy has remained simple and consistent really since day 1. It's the first place we want to reinvest our capital is in our business. We want to be able to invest in good assets using nondilutive financing. And second is we want to maintain a strong balance sheet and good access to liquidity. So we're always able to act on new transactions. And thirdly, we want to continue reducing returning capital to shareholders. And we have to be flexible as market conditions change, but our framework is to target. We target double-digit returns on new investments, so we can show per share growth to our shareholders. We target quick repayment of debt. We always have the liquidity on hand to be able to act on new transactions that may come in the door. And thirdly, we want to continue growing our dividend. Now we added a couple of new tools to our toolbox, if you will. Over the last quarter, we announced them last week with our Q1 results. We've added a new accordion feature to our revolving credit facility, a $600 million uncommitted feature, which will provide additional liquidity. If we go back to our syndicated lending banks and requested to use that facility. That's another $600 million is available to us. The second thing was the authorization by the Board of Directors of a $500 million share buyback program. This is intended to be used in those periods where there's a pretty severe valuation disconnect in our share price compared to peers. And so setting it up now, we don't have intentions to use it right away, but we want to set it up to be able to be able to act when we see those opportunities. They don't happen very often when they have and they often have to quickly. So we are now prepared for that circumstance. Now if we look at how we've done over the past 25 years, as shown on this slide here, how we've actually allocated our capital and how successful we've been. Since 2000, you can see our revenue and our operating cash flow growth have both been pretty -- growing incredibly. But there are 3 aspects of this growth that I just -- I would like to highlight and make sure that I [indiscernible] properly. The first is our G&A costs and expenses have not grown the same way that our revenue and cash flow and [indiscernible] have grown. Our revenue growth far exceeds our increase in G&A expense. So we don't need to add people when we add new assets. Our business is scalable, as I mentioned before. The second is our revenue growth is not dependent solely on metal prices that we've had, and we've enjoyed the gold price increase over the past few years. It's been a great tailwind to our business. But we're not relying on the gold price to help us deliver good financial results. We've also seen the opportunity to be able to add good volume to our portfolio. We see organic growth come up through the portfolio as well from those assets where we have invested. And the third thing is we financed most of our growth internally without a significant increase in the share count. We did issue shares last year for [indiscernible], almost 19 million shares, but that was the first time we had issued equity since 2012. And even with those new shares counted as part of our register we have the lowest share count in the GDX index. We really do want to provide -- we want to avoid per share or shareholder dilution. We want to be able to show per share growth to our shareholders. We think we've done a good job over the past 25 years of doing that as a slight shows. Now as we think about assets and the kinds of assets we want to invest in, we're always aiming for, obviously, a return. So we want to target double-digit IRRs, but we have to be patient for those returns to be evident in the marketplace. Exploration and production upside is very important when we look at new assets and new investment opportunities. And sometimes it takes time for those features or attributes of an investment to show up in and the investments that we make. We do a lot of due diligence on new opportunities. We take a bottoms-up technical fundamental approach to new assets. And oftentimes analysts who cover us and they write the research reports. They don't have the benefit of that same due diligence, that extensive due diligence that we do. And so sometimes when you see street announcements or announcements by the sell side on the transactions that we do, their returns are often fairly low. They're estimated returns because they don't have that benefit of understanding where the upside the assets that we're investing where those upsides may lead. And it may take -- in some cases, it may take years for that to become evident to the Street. And this slide really illustrates that point. As time has passed, expected returns have increased with production increases or mine life extensions of the different assets. And those are really driven reserve resource growth without us having to fund further investments. And a different way to show the same concept is this slide. It shows the same story in a slightly different way. As time passes, we recover our investment. That's the cash flow that we receive and any value that's added to the assets by the operators also accrues to our account, and that's reflected by the NAV portion of this -- the graph on this slide. You see that, that adds to the future value of our interests, which is obviously something that Street looks at very carefully. So if you combine the cash flow that we received to date plus the NAV of the future assets and compare that to what we've invested, hopefully, you'll see something that's -- there's a big difference there to the positive. All of that is really as a result of this. What I'd like to say is a multiplier effect that creates optionality. Any extension to mine life provides a double benefit to us. First of all, you've got an extended mine life provides more production, provides more revenue. So that's a benefit. But the second benefit is the longer mine life is that you're exposed over a longer period of time the gold price and volatility, and that volatility can be quite valuable. Operators are always looking to extend asset lives. They invest capital in their minds and their extent they're looking to extend those as long as they possibly can to take advantage of that capital investments they've made, they're always looking to capture incremental revenue. And in 2025, we saw across our portfolio, about 2 million meters of exploration drilling was done across the portfolio, which is really astounding when you think about it. We benefit from this because we don't have to fund the capital or invest further to get exposure to any upside. So this is growth that we don't have to pay for. and this optionality is probably one of the most important features of our business model. Now as we talk about our pipeline and our portfolio, we see a lot of very positive catalysts ahead of us. And this slide summarizes some of these from new assets where we expect to see new production. We have a pretty significant organic growth pipeline catalysts to extend from now until the next -- through the next decade. We just saw first production at Back River last year. That line is ramping up. [indiscernible] started milling or in the fourth quarter of last year. that is ramping up as well. Robertson, the Cortez complex in Nevada, [indiscernible] is talking about first production in 2027. And then at [indiscernible]. We're expecting to see first reduction later this decade. And beyond the start of the decade, we expect to see first production from [indiscernible]. And this is a pretty attractive growth pipeline, but it does not include some of the growth assets, we're already receiving revenue. So things like the Milligan mine life extension or the expansion at [indiscernible] they're not included in this slide. We think we have 1 of the most organic growth pipelines in the industry, and that's reflected in the guidance gave our 5-year guidance or 5-year outlook that we gave at the end of March in -- during our Investor Day. So with all of that said, I'm going to end on this slide, just looking at our trading multiple. Our business is performing very well. We've got very strong cash flow. We got very good organic growth within the portfolio. We're executing on our priorities. But we still believe the share price is not reflecting what we think are the fundamentals our business. There was a strong gold price environment, and we have a much larger portfolio. But if you look at us on a multiple basis, whether that be NAV or cash flow, we're still lighting our peers. And we're working very hard to closing to close this gap. One of the things that we did at the end of March, we did an Investor Day where we talked about the assets in the portfolio and the development pipeline that we can see ahead of the company. We also provided our 5-year outlook for production, at that same Investor Day. And we're doing our best to make sure the market understands the scale and growth potential of the portfolio. So as I said, we've really strengthened Royal Gold's position. It's a strong gold price environment and a market that we think is going to be strong for the foreseeable future. We've added scale, diversification and growth. We have a very strong balance sheet. We have significant cash flow and the liquidity to continue growing. And our patient approach and commitment to a long-term strategy that we've had for many years. And hopefully, we'll start to get rewarded by the market sooner rather than later before taking that approach. So with that, I've come to the end of the formal part of the presentation. I'll be happy to pass it back to you for the Q&A session.

Thank you very much, Alistair, for the presentation. We'll now begin the Q&A. Your first question is some investors [indiscernible] royalty companies are entering a new growth cycle because miners increasingly need alternative financing. Does management believe competition among royalty streaming companies it compressed future returns despite strong demand from mine financing?

I think what -- I would agree with the stake that there is a lot more opportunity today we see I think our product is becoming a lot more mainstream. You're seeing a lot of the large mining companies in the world using royalty streaming finance way to to extract value from their assets. So we're getting involved in a lot more opportunities than we have in the past. I don't know if competition is necessarily driving down the terms. I think we're still seeing a healthy level of competition, but there seems to be fairly good [indiscernible] and our peers. When we look at the parts, we tend to see [indiscernible] returns are relatively stable over time in terms of what we were in for us to price. So I would say, yes, it's competitive, but we're also seeing a lot of opportunities and I think the competitive environment really hasn't changed much if not at all, for the past couple years.

Your next question [indiscernible] about lower gold production during the transition between mining phases until higher grades return in 2028. How significant could this temporary production dip into Royal Gold's revenue profile over the next 2 years. Well, I think the -- what's happening at Penasquito. Is there are 2 pits, the 10 [indiscernible], and they transition operations from 1 pit to the other. There are these stripping phases that may be occurring in 1 kit before they both or they can mine more ore and that fit so they focus on another pit, they do that back and forth on kind of shipment from 1 pit to the other. I think for us, we have a royalty that it's all metals. So there's gold, silver, let zinc produced or [indiscernible]. And so you may see that gold revenue may shrink, but what happens is and one of the pits that there's higher gold and the other pit, there's lower gold and higher base metals. So for us, as a royalty holder, you don't see that dramatic of a swing because we get exposure to all of the metals that are free there. So when they're mining, they're producing all the metals. It's just in different proportions as time go John mentioned, this is part of the mine plan. So we don't see that as being a major issue for us is just part of the operations of epi and we're very accustomed to seeing [indiscernible] Next he was wondering how much of the year-over-year Q1 revenue growth came from metal prices versus portfolio growth?

Portfolio growth would definitely be the biggest part of that because we've added so much in the portfolio. But obviously, the metal price environment has been helpful as well. If our revenue last order about 20% came from the new assets that we added from [indiscernible]. So metal price growth has really helped because we're getting higher metal prices on that portfolio as well. So it's really hard to separate the 2. But if you look at where we are in a GEO production level basis [indiscernible]. So that maybe gives you a sense of where we saw that growth. But it's really from both of those things is the volume within the portfolio, which has grown significantly, but it's also the metal price environment been strong as well.

Thank you for clarifying that, Alistair. Next question, several future growth projects, including [indiscernible] Robertson [indiscernible] still require substantial capital and execution by operators. Do any of these projects have a high execution risk today?

I think there's always execution risk of projects. I think the [indiscernible] is in production. It's got expansion potential ahead of it. So there's I would say that's a very derisked project because it's already in production, and it's -- as they operate more that understands the ore buying more and they take a lot of the risks out of the plan. The -- 2 years ago, it was on paper and now they're actually executing it. So I think that one is -- that's much more derisked than a greenfields project. I think [indiscernible], for example, is a project that is earlier stage and it is a greenfield project. So there is a lot more risk there as the operator executes on the development. I think in the case of [indiscernible], though, [indiscernible] is a major company, and they've got a very strong balance sheet. They've got the resources to be able to execute. We don't see any risks really that are out of the ordinary and of those projects, I mean, at different stages in the development cycle, you're going to have different risks but as time progresses, as development advances as rises tend to fall away a when you look at the counterparties that are operating these assets, they're all very well experienced. And in most cases, they've got very strong balance sheets as well. So we don't see that as being a significant risk to development of those projects.

I appreciate you clarifying that. Next, if you were asking, what is the plan for Hod Maden in mind in Turkey?

So when we -- I'll go back to the beginning of Sandstorm, when we announced that transaction, we said one for the benefit of those years, we don't know what [indiscernible], it's a development project in Turkey. It is very unusual in our ownership. The structure of the ownership is very unusual in our portfolio. We actually have a 30% direct equity interest in the joint venture company that's developing that asset. That's not something that we really like. We prefer to have a royalty or stream investments and not direct asset ownership trust. This came from Sandstorm. And when we acquire a sandstorm, when we announced the acquisition of Sandstorm last July, we were very clear that what we were going to do was try and restructure that [indiscernible]. So we convert it from a direct equity ownership to something that's more in line with our core business of a [indiscernible]. And it's something that we're working on in 2026. It's a high priority for us. We don't have any use to to really divulge at this point. But we are working on that restructuring. And as soon as we have something that's ready for us to announce the market will announce it.

Next, while certainly not complaining, has the dividend policy?

The rising metal price environment, obviously, is very helpful when we look forward in our portfolio to see what kind of cash flow to generate. And the dividend, we look at towards the end of the year, it's typically in November. We will go to the board with the recommendation for what we think the dividend should following year and a higher metal price better confidence in the future. So that's -- it's obviously part of that analysis. As you look forward and we say, what do we think it runs going to be from the portfolio where we think pricing is going to be? What do you think -- what do we think cash flow is going to be -- so we do an analysis of all of that metal prices or that's a big part of it. When we set our dividend, what we tend to do is we like to do so done over the last 25 years. I like to show consecutive increases to the dividend. So if we raise the dividend for the coming year, we want to have a pretty good idea that we're going to be able to continue raising from that point. So we're looking at multiple years into the portfolio. And a big part of that analysis is well prices. But obviously, with the gold price being where it is today, it's a great price certainly much better than it was 2 or 3 years ago. It just gives us additional confidence that we'll be able to continue raising the dividend. So this is the big factor in our analysis.

Next up, if you reset several key assets are expected to have production weighted towards the second half of the year. How much execution risk does that create for achieving 2026 guidance?

We don't think there's an undue risk in our -- in what we've set for for 2026. Last week, we announced with our Q1 results that we expect to be what we said would be with respect to 2026 guidance. The one thing that's actually a bit of a positive is our copper volumes were much higher than we expected in Q1 and that was simply because some of the assets in that portfolio and the copper side portfolio have done very, very well. So we don't expect there to be any risk beyond normal risks. But with a larger, more diversified portfolio, what we hope to see is if there is anything that doesn't go well at a particular asset will be made up by an asset that outperformed. So that's one of the advantages of having a large well diversified portfolio is you don't suffer from that single asset underperformance in the same way that you do when you've got a large asset the majority of your revenue.

Thank you, Alistair. Next, the question is, does the reestablished accordion feature under the revolver suggest you're seeing larger transaction opportunities in the market?

I would say it doesn't necessarily indicate that we see larger opportunities. I think what we have seen over the past several years is that opportunities are getting bigger generally. And so we just -- we wanted to be prepared. We have a $1.4 billion revolving credit facility today. And we thought it made sense to add more capacity to that in case we come across larger transactions. Until recently, the largest transaction that has been done in our sector, which is over $1 billion and $1.5 billion, I think would be the top end of that. But than we saw at the beginning of this year, there was a $4.4 billion transaction done, and that was a huge change in the quantum of transaction size. It doesn't mean that we're seeing those large opportunities all the time. It just means that opportunities are getting bigger. So we just thought it was sensible to make sure that we have that firepower at our disposal if we need it -- now we still need to go through a process with our banking syndicate to release those funds if we require them. But so far, the banking syndicate has been very supportive of our business in support of our efforts to grow our business, and we don't expect that, that will be an issue if we're deploying the capital in a transaction at the bank syndicate that does make sense. So that's why we have that accordion feature is just to be prepared in the case so we see something that may be attractive to add.

Next question. In the Q1 results, Royal Gold still had $97 million in marketable securities on the balance sheet after the sale of the Bear Creek equity and debt is the remaining $97 million made up of American Gold and Silver and [indiscernible] that Sandstorm once invested, are there other share [indiscernible]

Yes. So the majority of that position would be the [indiscernible] resources, blocker shares, which is about 25% mantra resources. And the remainder of the position that number would be much smaller equity positions in various different bits and pieces. We don't like to have equity positions on our balance sheet. We prefer if we can, to keep our balance sheet as clean as possible. We have to mark to market any changes in equity values from quarter-to-quarter. So we prefer to have limited equity holdings on our balance sheet. So we are -- and we have done over the past several months. We sold down a number of the noncore equity positions that we have -- we inherited through Sandstorm. The one exception, I think, would be entree resources, we -- it's still not a core position for us to own equity in a company like that. But because entree is joint venture partner at the [indiscernible] mine with Rio Tinto Entree and the government of Mongolia, there's there's a plan there to integrate assets and so an interest at alloy. And we think that the 25% that we own in Entree is a pretty strategic piece that will give us a seat at the table to hopefully be part of that whenever that does occur, we want to be part of it. And so we see that as being a it's noncore, but it's also important and strategically valuable. So for the time being, we're intending to keep that block.

Your next question, what are the main reasons for activating the share buyback program now?

So we haven't activated it. What we did was we received approval or authorization from the board to put it in place. So the reason we did that now is because it does take time to establish the share buyback. And if we see dislocations in our market value in the future, often, as I said in the formal portion of the presentation, we often see those occur very quickly. And in the past, when we've seen opportunities to do a buyback, they've occurred so quickly and they tend to correct themselves quickly as well. We just don't -- we haven't had time to put a buyback place. So what we decided to do was put a buyback in place, it's there, it's ready to use. If we need to, we don't see an immediate need to use it today. We're not intending to use it right away, but we expect there may be opportunities in the future, we'll want to use it, and we have it ready is at our disposal. We have time to get it set up today. We thought it was prudent to do it today while we have the ability to do it calmly. And who knows at this point whether we will actually use it, but it's a tool that we have at our disposal.

We're coming up on your last 2 questions here. The first one is, generally speaking, do you see the need for more consolidation in the royalty space? Or are we in a better environment in terms of saturation?

Well, I think at the top end I don't think consolidation is not -- is really necessary. I mean we've got -- we've existed in this sector for a long time with the same large competitors. So [indiscernible] been large competitors of ours for many years, including Triple Flag and OR royalties. So we've managed to -- each of us have been able to grow and continue growing and we see each other across various situations over the past several years. I don't think consolidated at the top end is really going to change the competitive dynamic. You've got a couple of large, well-capitalized companies. There will be competition regardless of whether it's 2 or 3 or 4, 5 I think where consolidation may make a little bit more sense as at the lower end of the spectrum where you've got companies that have much smaller market caps. They don't have significant cash flow in their portfolios. And for them to grow, it's that much more difficult because us as a large company, we will look at small opportunities, and we'll go down market and we'll buy things that we think are really attractive. So we're taking away some of their opportunities to grow I think it may make sense for some of the smaller companies to consolidate and to grow bigger, so they could actually be more competitive. But we haven't really seen much of that consolidation yet to date and who knows whether it will occur.

And your last question for today is, why should I invest in Royal Gold and not in one of the other royalty and streaming companies like [indiscernible] Precious Metals and Franco Nevada.

Well, I mean, obviously, it's a very personal judgment you have to make. I'm obviously very biased. I think we have a portfolio that is really -- it's very well diversified. It's more diversified than the portfolios of those companies is very focused as well. We don't have other metals like cobalt in our portfolio. We don't have oil and gas in the portfolio. We're very gold-focused I think one of the things that is the most attractive today as you look at our growth from the assets within the portfolio, we've got catalysts that extend for a number of years we expect to see added growth to the portfolio. And the final thing, which I ended the formal part of the presentation on was just the valuation of Royal Gold versus our large cap peers. You can see there's a real -- there's a disconnect there against how our large caps are valued, and we're actually valued at the same levels that our smaller cap peers are. And I think if you think about the scale of our business, how much cash we generate, think about the diversification within the portfolio and think of the growth of the portfolio, it doesn't make sense that we trade at relatively low valuations. We should be trading at a higher valuation. So I think when you if you want to step back and say, well, I want gold exposure, I want it in a conservative vehicle that's got lots of risk mitigants. Hopefully that point you to our interaction of Royal Gold. But then on top of that, you potentially have this valuation disconnect, which, if that corrects, then you may actually get an additional some additional appreciation in the share price. So we're doing our very best to make sure people understand that and make sure the market understands that we do have growth in the portfolio, and it's from very high-quality assets. Hopefully, that disconnect will disappear over time, but I think that may be the opportunity today.

Thank you very much, Alistair, for all of your responses today, and thank you to everyone who submitted questions. If you did not get a chance to submit your questions, you can reach out to the appropriate account manager here at Remark. That concludes our presentation for today. But before we go, I will turn [indiscernible] to Alistair for final remarks.

Well, thanks, Noella, and thanks, everybody, for attention to your attention today and your questions. If there's anything that I didn't answer quite right, please get a hold of Renmark and they'll ask me and perhaps we can have a conversation off-line to direct it. Thanks very much. I appreciate it, and I look forward to giving you an update next time.

Thank you, Alistair. And once again, this was Royal Gold trading on the NASDAQ under the ticker symbol RGLD. Thank you to everyone in Dallas and stunning areas for joining us today. The playback for this virtual [indiscernible] 8 hours after this presentation under the [indiscernible] tab. Please see tune for other presentations in your area and see you next time.