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

Hello, and good morning, everyone. Welcome to today's virtual non-deal roadshow. My name is Noella Alexander-Young, virtual event moderator here at Renmark Financial Communications. On behalf of our team, we'd like to thank everyone in San Francisco and surrounding areas for joining us today for the presentation of Royal Gold trading on the NASDAQ under the ticker symbol RGLD. 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 by using the chat box in the top right-hand corner of your screen. That being said, I will now hand over to Alistair.

Thanks very much, Noella. I appreciate the opportunity to present to you today. had a very busy time at Royal Gold over the past year. And I think it's still we haven't seen recognition in the market for a lot of what we've done. So I think it's very timely to give you an update today. So I will be making forward-looking statements during 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 this presentation, I'm going to give you the investment thesis for Royal Gold. We are a high-margin business. We generate consistent cash flows from precious metals. We are not a mining company. The presentation is divided into the various pieces that are really the key attributes of Royal Gold in our business model. So I'll start talking about our focus on precious metals, which really gold is where we focus most of our time. I'll talk about our high-margin business. We have a long -- also a longstanding commitment to dividend growth within that business. I'll talk about our portfolio, which is the most diversified amongst our peers in terms of assets, operators and jurisdictions. We'll talk about our business model, which has limited operating risks with steady margins and no direct exposure to capital and operating cost risks. Talk about our size. We think we're the optimal size for a relatively small sector we have enough scale to be able to compete for the largest transactions yet still show growth by doing the transactions that are kind of the bread and butter in our sector. And then finally, I'll talk about the optionality within our portfolio. And the fact that we don't need to pay to get additional organic growth from within the portfolio once we have assets inside the company. So 2025 for us was a pretty transformative year, I should say. We've completed a number of transactions, but the biggest was the Sandstorm and Horizon corporate transaction. we closed late in October. This allowed us to really change the face of our portfolio. We added significant growth and diversification to our portfolio with this corporate transaction. We also did a couple of other transactions that were the normal course for us, which is single asset transactions. We did a mine in Zambia, which provides immediate cash flow on a very high-quality, long-life asset. We also did a stream of royalty on the Horeca project in Ecuador. This is something that gives us exposure to an emerging Tier 1 operation in a new jurisdiction. And we didn't just do transactions last year to help us show growth. We saw some very interesting optionality that was surfaced from within the portfolio and 2 of those are Mount Milligan, we saw an extension of the mine life to 2045, which is a significant achievement for Centerra and for us as a holder of a gold and copper stream on that asset. And then we saw Barrick events, the 4-mile project in Nevada, which is by Barrick's account one of the best and most interesting gold discoveries that we've seen in the -- globally in the last few decades. So we have full exposure on the formal project. But we've also done a lot of things within the company, aside from adding those things to the portfolio. We released our first quarter results in May in early May. So just over a month ago, and we had record revenue cash flow and earnings, and our EBITDA on an adjusted basis was almost $400 million. So that was the first clean quarter we've had since we did all of those transactions last year that represents the full ability of the company to generate cash flow. We've also -- since October 20, we repaid $800 million of debt, which is really pretty incredible if you think about that just over a few short months. That shows the cash flow generation potential of our business. We also, last year, with all the work that we did, we -- and the changes to the portfolio, we increased the reserve life of our portfolio, the duration of our portfolio on average to about 18 years. So it's about a 25% increase over where we stood this time last year. That's significant. And that does not include resource growth or the potential that could come from additional or adds to reserves. We also -- we've done a number of transactions to clean up some of the things that were in the Sandstorm portfolio that the market didn't like and we were very clear when we announced the transaction that we're going to focus on those. So we did a lot of that raised some money that helped us to repay our debt. And so we feel much better about the simplicity of our portfolio. And then finally, we raised our dividend in November for the year in a row running that is unmatched in our sector. So we did a lot. We added scale, diversification growth to the portfolio, but we did not change our strategy, and I'll talk to that in the coming slides. So in this section of the presentation, I'll talk about our gold focus. And we are -- we've been around since the mid-1980s. We've got 45 years of history on the NASDAQ as a listed company. So we're one of the grandparents on the NASDAQ, if you will. But our strategy hasn't changed over that time, over that 45 years. It's been very consistent. We're very focused on gold revenue from good assets and good jurisdictions operated by the best counterparties. And as you can see on this slide, our revenue has grown consistently over the past several years, but the metal mix has not changed. So we aim to give our shareholders gold exposure in a conservatively managed vehicle. And you can see how we've performed over the long term when you look at our stock price against other metrics, so we compare ourselves again. And this hopefully shows you why we think we're a good alternative for those who are looking for conservative exposure to a very volatile commodity. On the left-hand side, you can see our beta to the gold price is 1.6%. So we do have a strong correlation or leverage to the gold price. On the right-hand side, you can see our share price performance over the long term. This goes back to when the GDX index was formed in 2006. And since that period, which is almost 20 years, we've beaten the gold price, we've beaten the GDX, and we've beaten the S&P 500. So this hopefully gives you the proof that we are a very good long-term investment in a volatile commodity. I'll talk in this next section about our margins and our dividend growth, and we do have a very high operating margin in Royal Gold. Our business model is unique. It's by virtue of what we do is a high-margin business, but it's also very scalable. We had, in 2025, our EBITDA margin was 82%, and our cash G&A was about 4% of total revenue. So our costs are low and they're fixed, which means that the cost inflation should not be something that has caused a significant risk to our margins. And our business model is very efficient. Our head count is low for the size of the company we are. We have 39 employees with Royal Gold today. Our market cap is almost $20 billion. So you can compare us to any company in any sector and we compare very well when you think about us on a per employee basis. Return of capital, as I said before in my opening comments is really is a very important thing for us. It's a key strategic objective and it's something that makes us unique when you think about other gold investments. We've paid a growing and sustainable dividend since 2000, and we've increased the dividend every year since 2001, despite ups and downs of the gold price. And you can see that on this slide. See the gold price in periods where it's come down. We have not cut or kept our dividend flat. We've actually raised. And we've raised our dividend for 25 years in a row, and we've paid out well over $1 billion in dividends to our shareholders. We're the only company in the GDX index that's paid an increasing dividend since the index was formed in 2006, and we're the only precious metals company in the S&P High-Yield Dividend Aristocrats Index. So that sets us apart from all of our peers and everybody else in the precious metals sector. Now we have a very diversified portfolio in Royal Gold. And you can see on this map, it's a global portfolio. It's weighted towards lower risk and mining-friendly jurisdictions. The portfolio, it spans various stages of project development. We have over 360 assets in the portfolio, 80 produce revenue today, 30 assets are in development. and then the remaining 250 million or 260 million would be at various stages of earlier exploration or evaluation. And organic growth comes to us from developments and exploration stage assets that advance through the pipeline to production. And the diversified portfolio, it reduces single asset and counterparty risks. Our commodity focus is gold, as you see on the left-hand side, and we have the highest gold revenue percentage of our large-cap peers. But we do also have significant silver and copper contributions from within the portfolio. Geographically, we are diverse, but we're very much a North American-focused company in terms of the revenue weighting on a quarterly basis. And we are diversified when you think about assets and operators. And on a net asset value basis on the left-hand side, we have the most diversified asset portfolio in our sector. And 8 of the top 10 assets that we identify as being the highest net asset value within the portfolio are in production today. They're producing revenue. But we also have expansion and extension projects underway at 5 of those. So 5 of those producing assets. So a very interesting portfolio mix. Our operators are best-in-class. And if you look at the names on this list, we've got large, well-capitalized and experienced companies on the other side of our contracts. And we've recently added First Quantum, Rio Tinto and Glencore. So we think that we've got a pretty world-class portfolio and operated by some of the best in the business. It's important when you think about the portfolio, the diversification of the business like ours because it reduces our exposure to single asset operator and jurisdiction risks. And that's important for generalist investors who really don't want to spend the time understanding the assets in our portfolio. We've got a diverse slate of portfolio or assets that contribute revenue. So if one of those does -- if it underperforms, hopefully, something will counteract that within the portfolio or if we do have underperformance of one asset, hopefully it doesn't impact the value of our business, which is really important when you think about our business model. Now our business model does have limited operating risk. And I want to talk about that and some of the advantages of the Royalty model. What we provide to our investors is gold exposure with reduced risk and there are many different ways you can invest in gold, but this slide shows how we are positioned. Our business is designed to provide exposure to gold and optionality to the mining projects that are in our portfolio and we provided a dividend to our shareholders while reducing the downside risk by holding a diverse portfolio that doesn't have direct exposure to operating and capital costs. There are many other ways you can invest in the gold sector. You can -- if you want to be very conservative, you can buy physical gold. But if you buy an ounce today, that ounce will never grow. It's always going to be an ounce. It won't give you any upside and it won't give you a dividend, and it's probably going to cost you to store that out. You can be more aggressive and you can buy equities and mining companies or exploration companies or single asset developers. But with those, you're also going to get exposure to operating and capital costs risks. And in today's environment, when people are talking about inflation, that is a real risk. There's a perception that our business doesn't provide good leverage to gold. But I think if you look at our financial results, that addresses that misperception. We have very good leverage to the gold price. And you can see on this slide how that works. I mean we have a very different cost structure, a very different cost structure than operating companies. Our costs are low, and they're fixed. So margins should expand as metal prices increase whereas operator costs are subject to inflation risks. So margins may not expand or expand as quickly if gold prices increase when costs also increase. And you can see that in this next slide where we look at the different cost structure between us and the average operator. Producers are exposed to inflation in the input costs that they use to run the assets or run the mines that they have in their portfolio. So things like labor, energy, costs for consumables, so they need to buy to run the assets that they operate. Many of those actually, they increase when you see a rising commodity price environment. So you may see the gold price increase, but you also get increases in steel price or oil or something like that, that actually will mean that margins don't expand because while our top line is increasing, your cost line is also increasing. If you look at our costs on the other hand is it's mostly G&A, which are -- they're mostly steady costs. So things like salaries, services, office rents, these things don't move in a short-term nature. And they're not subject to these wild swings in the short term. It's important because anything that impacts cost impacts margins. And in the first quarter of this year, you didn't see many mining companies talking about the impact of the higher energy prices as a result of the Iran War. Those had not shown up in the first quarter of this year, but I think we will likely start to see that in the next couple of quarters. We're going to see some cost inflation coming through on the operator side because energy has been very volatile, and you see that increase pretty significantly since the middle of March. Now we are a pretty well-sized company in our sector. And we were large enough to compete, but we're also small enough to show growth. And our sector is built on small transactions. So those transactions in the sector, if you look back over history, they would be smaller than $300 million. And the average transaction size is just over $100 million. We sit in a pretty interesting position because we're big enough, we have the cash flow, we have the scale to compete for the largest transactions. And you can see that last year, we did the stream with First Quantum, is a $1 billion transaction. We won that transaction. Yet, we're also small enough to be able to show growth. So small transactions for us can actually be meaningful when you look at the results of those small transactions. It's something like good example. We did that last year as well. $200 million transaction, and we think that is going to be something that actually shows up nicely in our results when that asset starts reducing. We're not aiming to be the biggest in our sector. That's not helpful. I don't -- we don't think it's -- we want to be the best in our sector. We're going to be able to get the best returns and have the highest valuation and we think this Goldilocks position that we're in, if you want to call it that, is a great platform to continue executing on our strategy of growth in gold. Now I'm going to talk a little bit now about growth and optionality. And I'll start with a discussion of capital allocation and capital allocation priorities. Our growth really does depend on our ability to successfully allocate capital. And the strategy remains simple and very consistent. First, we always look to reinvest in our business when we can, and we try to reinvest using nondilutive sources of financing. Second, we want to maintain a strong balance sheet and access to liquidity. We need to do that because opportunities come up quickly. We always want to make sure we're funded and can participate. And then thirdly, we're always looking to return capital to shareholders using our dividend. And so as I said before, the dividends growing in a sustainable way. We want that to continue into the future. And we have a framework that we announced when we did our Investor Day at the end of March, we have to be flexible when we think about these uses of capital on these allocations, the allocation mix for our capital. We have to be flexible because market conditions change all the time. But our framework is really to target double-digit returns on new investments and thereby provide per share growth to our shareholders. We want to repay debt quickly, keep a very strong balance sheet -- liquidity on hand. And we also want to continue growing the dividend. So that's the framework. Now we added 2 new tools, which we announced with our first quarter results just over a month ago, 2 new tools to help us allocate capital. And the first is -- we added a $600 million to the revolving credit facility, which should give us additional liquidity to be able to go out and target and execute on other transactions. And the second is our Board authorized a share buyback. And so that's not something we've had in place before, but we thought it was a prudent time to put it in place because if we see opportunities that are perhaps better value by buying our own stock versus what's in the market or what have you, then it makes sense to have that at our disposal. We didn't intend for either of those to be used in the near term, but we thought we would set them up when we have the time. We set them up. They're in our toolbox. And now we can use them if we see the right conditions for those to be used. So when we talk about capital allocation, it's really helpful to look at our record. And you can see on this slide, how have we done over the last 25 years. And you can see since 2000, our revenue and cash flow growth, they've been pretty significant. But there are several -- 3 aspects of this growth that I really want to highlight. First is our G&A has not grown at the same speed or the same rate as that growth in revenue and cash flow. We don't need to add new people. I mean you -- when we add new assets to the portfolio. Our business is very scalable, which is it goes to that point about it being high margin and also keeping costs down. It's a scalable business. We can add and grow without growing our G&A significantly. The second is our revenue growth is not dependent only on metal prices. Metal prices are important. They're a great tailwind when we've got it, but we've added volume to our portfolio. And we've seen organic growth as well from the portfolio. So that's an important consideration when you think about the optionality that when you buy a Royal Gold share, what are you getting? And then thirdly, we've financed our growth mostly from internal sources without a significant rise in our share count. We did issue 19 million shares last year from the Sandstorm transaction, but that was the first time we issued equity since 2012. And even with those new shares on the register, we have 84.5 million shares outstanding. We still have the lowest share count to the GDX, and we were around when the GDX was formed in 2006. So hopefully, that gives you a good sense of how we've been able to steward our share count carefully. We do want to avoid shareholder dilution and providing per share growth to our shareholders is one of our strategic objectives. Now when we look at the assets we've added to the portfolio, we aim for double-digit IRRs, as I said, when we're talking about the capital allocation framework, but we have to be patient. We're in a patient business. Exploration and production upside is very important when we look at new investment opportunities, but sometimes it takes time for the growth to show up in the assets that we invest in. We do extensive due diligence of new opportunities, and we take a bottoms-up fundamental approach to asset reviews. And sometimes when the Street, they put out their notes talking about the assets that we've acquired. They don't have the benefit of that work. streets -- the Street estimates, their returns on announcement may often undershoot pretty significantly. And it takes time for the upside to become visible. Now we'll see that upside when we do our due diligence, but we're often subject to confidentiality provisions and other things that make it difficult for us to talk about some of those upsides. We have to wait and be patient for the Street to see that. But over time, we've got a very good record of investing in assets where returns have grown significantly over time. And this slide, this does illustrate that point. So as time has passed on, expected returns have increased with production expansions and extensions. And that's all driven by reserve and resource growth without having to fund further capital or investing further to get exposure to that growth. And the next slide here shows the same concept but in a slightly different way. As time passes, we recover our investments and any value added to the asset by the operators also increases the future value of our interests. And so that's the top line on this slide. Hopefully, the top line is going to be a multiple of the bottom line, which is what we put into those assets to get those original exposures. So over time, what we're aiming for is a multiple of the investment that we put in. And the way this works is through a multiplier effect that really creates optionality. And the extension to mine life provides a double benefit to us. First of all, if a mine life is extended, it just means more volume is produced, which means more revenue to us. But it also means that you're exposing yourself to a volatile metal price over a longer time. So there's a tremendous amount of value in that additional exposure, that additional time that the operations are running. Operators are always looking to extend asset life. It makes sense. They've invested capital. They want to make a return on that capital. So they're always looking for that incremental revenue that they can grow their returns from and we saw last year in 2025, 2 million meters of drilling have been done at the assets within our portfolio. So that's an example of how operators are trying to push things forward. We get exposure to that. We don't have to fund capital or invest further to get any exposure to the subside. So this is growth that we don't have to pay for. And the optionality is really one of the most important features of our business model. And when we think about the -- our portfolio and the optionality that's embedded in it, this slide shows the key catalysts that we see in some of the new assets that we expect provide some growth to us over the next several years. We have a pretty significant organic growth pipeline, and there are catalysts we think, that are extending into the next decade. So we've got very near-term Back River continuing to ramp up. They started commercial production late last year. Platreef, exactly the same thing that's continuing to ramp up. That's the stage project development. So we would expect to see revenue growth from that over the next year. But then we've got brand new production from Robertson expected in 2027, new production from Hot Maden, Great Bear and Warheads later in the decade. And then beyond that, after the turn of the decade, we're expecting to see new revenue from the Mara project in Argentina, Fourmile in Nevada. So we feel very comfortable about the growth that's in our portfolio today. And this doesn't include some of the existing assets where you're seeing expansions. So I mentioned the Mount Milligan mine life extension, an additional 10 years of mine life there, which really adds to the value of what we own. But in assets like Comical, there's a doubling of the production levels there that should see our silver increase by about 35%. So that's growth that we didn't expect to see when we made those original investments. Is we have, we think, one of the best organic pipelines in the industry, and that's reflected in the 5-year outlook that we gave in March. Now I'll make a comment that this isn't -- this growth isn't it's not reliant on 1 or 2 big assets. It's a multitude of assets. So it's probably lower risk growth than perhaps those who can point to 1 or 2 things that are going to drive their production higher. So we feel very comfortable that this is a very good quality growth outlook. Now I'm going to end on this slide here, which is an opportunity. I think it's -- we are trading at pretty attractive multiples today. The business is performing very well. We've got strong cash flow, very good organic growth. We're executing on all the priorities that we set for ourselves and we told the market when we announced the Sandstorm transaction last year. But the share price still isn't reflecting all of that. It's not reflecting the growth of the portfolio. It's not reflecting the risk mitigation by having that large portfolio. Our net asset value and cash flow multiples are lagging relative to our peer group. Now I think the biggest reason for that is because we did a lot last year, and the market still hasn't quite recognized that. And when we released our first quarter results, that first 3 quarters, as I mentioned, that was in early May, which is really when the precious metals market was under a lot of pressure. I don't think the market has really paid attention yet to some of the benefits that we've added to the company. So we are working hard to close this gap. So how are we doing that? We gave long-term guidance when we did our Investor Day in March, when we did the Investor Day to daylight the value in the portfolio and make sure that people understand the assets that are in the portfolio. We did an asset handbook. It's available on our website. It's got a description of every single asset that underpins the value of the company. And we're just working hard to make sure that we're on the road, talking to investors all the time about the scale and the growth in the company and the potential of the portfolio. So in closing, I think we've done a very -- we've done a lot to really strengthen our position and strengthen our position for hopefully a sustained and continued strong gold market. We've added scale, diversification, growth to the portfolio. We've got a strong balance sheet, we have significant cash flow. And we are patient company. We're conservative in patients, and we think that our patient approach and our commitment to our long-term strategy is strategy has proven to work, should be rewarded by the market, but it will take some time for that to happen. So with that, Noella, I have come to the end of the prepared presentation. I'll be happy to turn it back to you for a Q&A session.

Thank you very much, Alistair, for the presentation. We'll now take some questions. The first question is, can you give an update on Mercedes and Cerro Moro Mines? There is possibility on future life of mine expansion on surface included in the royalties -- or will we cease to see ounces pulling from them in the near term?

Those are both relatively small assets in our portfolio. So I can't really offer too much in terms of detail because to be completely honest with you, I don't -- haven't focused on those that much. We've been more focused on the bigger value drivers for the portfolio. Mercedes and Cerro Moro are pretty small when it comes to the revenue potential and the growth potential -- the 1 thing we did do with the Sandstorm transactions, we restructured our investment at Mercedes. If you remember, that was owned by Bear Creek. Sandstorm had a number of equity and debt investments at Bear Creek, which we streamlined -- and we now have -- we had a stream of Mercedes. We now have a royalty, which we think puts the asset in a better position to be able to extend its production profile because it will be less of a burden on the asset. So I think that's really all I can offer at this point. Obviously, any asset that's in the portfolio regardless of whether it's big or small, it does have optionality associated with it. And I think those 2 assets are probably ones that will -- you'll likely see some additional growth for them over the longer term. But really to our accounts, they are relatively small, just given the size of the investment for us.

Your next question, if Seabridge finds the JV for KSM, taking into consideration the big CapEx it will require, are you willing to increase the royalty if a possibility arises, how probable do you see it?

Well, Seabridge is something we're cash on that we're very excited about. We have these options in our portfolio right now to -- for very low dollars to be able to receive NSR royalties. And I think if they're able to find a joint venture partner, then that unlocks the development of the asset. I think those options can be worth a tremendous amount. So we'll have to see. I mean we've heard a lot of speculation about a joint venture partner there, and we'll have to see what happens. But -- we are obviously quite pleased to have those in the portfolio and they could add some significant value. Now if there's an opportunity for us to make additional investments there, I think, would always be open to having a conversation with the operator to see what they need and see if it makes sense and lines up with our criteria. One of the best places for us to get new business opportunities as for people who we have relationships with. And because they're in our portfolio. We've got that relationship with Seabridge as a counterparty, then I think it would be natural for us to think about opportunities to create new business development opportunities at that asset. But I think there's a lot that needs to happen before I can say with any certainty, but certainly, we would try and have that conversation if it looked more funding, yes.

Appreciate you commenting on that. Next, he was asking, can you summarize in plain terms why the restructuring of preserves value for shareholders compared with keeping the priority equity position.

Yes, because our business model doesn't -- we don't get value by holding direct equity stakes and assets. The biggest value in our portfolio is holding that top line exposure. So if we own streams or royalties that gives us top line exposure. When you own direct stakes what you're getting is exposure to operating capital cost risks. And I think that's something that is valued differently in the marketplace. So when we announced the restructuring of the joint venture, really, it was -- it was in line with something we said when we announced the sandstone transaction almost 1 year ago today. When we said -- we think is a great project. There's no doubt. It's very high grade. It's -- simple project, very high returning projects. We like the exposure, but we didn't like the structure of the exposure. We didn't like that 30% joint venture interest because it just exposes us to risks on things that we don't want to have exposure to. So when we restructured the investment, what we did was we took that 30% direct ownership, reduced it to 15% and took back a royalty. And we now have other rights on the SSR royalties that were granted at the same time. And so that's more in line with our business model. So we would expect that over time as the asset moves through development and into production, we'll get a higher multiple on the royalty interest that we will on the direct ownership interests. So that was the reason why we did it. And as we talk to a lot of our largest institutional shareholders, I think they were quite pleased to see that. I think it would be consistent with our prior messaging if we got that direct interest down to or took back further royalties. But just given the deal dynamics and given the situation that we're dealing with at the time, we weren't able to make that go from 30% to 0 in 1 transaction. So we'll probably end up holding this 15% direct stake for a period of time, and we'll look for opportunities to reduce it as those opportunities come up.

Thank you for clarifying that. This next question also relates to Hod Madden. The question is, how do you think the cash flow payback for the new NSR Hod Maden compares with other recent royalty additions in the portfolio?

Well, I think it's -- the royalty is quite valuable. I think it will be a similar kind of payback in terms of the economics around the royalty, but it's not what's the word I'm looking for, it's not -- we would rather have the royalty that with that direct exposure to the asset. Just because, as I mentioned before, in the previous comments, is how the multiple will be applied to that royalty interest in the marketplace. We'd rather have that and no exposure to the costs. So if came to us today as a stand-alone entity, and it was an opportunity for us to invest either stream royalty. We'd be very interested in it because it is, like I said, it's a high-margin project. It's high grade, simple it's a very robust project. You will do a technical work that's been done, and it's an excellent project. So we would very seriously look at it. It just wasn't quite the right structure in our portfolio. So holding that royalty will give us the exposure that we want to this project. So hopefully, that answers the question.

That was a great answer. Thanks, Alistair. Your next question is several major growth projects such as Mara, Oyu Tolgoi, Fourmile and corn 5 are excluded from the current 5-year outlook. What probability weighting, does management internally assigned to each of these projects entering production on schedule.

Well, they're not in our 5-year outlook simply because the operators have said the -- they expect to see production beyond that 5-year outlook. And so what we've done is we've added those to what we say is the 5-year plus. And we think when you look at Mara, Glencore has done a lot to advance that project, and they came out in December with their Capital Markets Day and put parameters on production levels and timing. And they applied through the process or the taxability process in Argentina in August. And so that project is moving forward. We have very strong confidence that Glencore will execute that project on the time line that they talked about. Fourmile is a similar kind of thing. It's -- Barrick has -- they're spending $150-or-so million this year on exploration and studies, they're really pushing that project hard. And so that, again, is a very high-quality project, and I think they want to get that into production as soon as they possibly can just will help their returns. So whether that occurs beyond that 5-year outlook that we've already provided or maybe it starts producing a little bit earlier, I don't know. It will depend on a lot of work that Barrick still needs to get done. But we are very confident that those 2 projects will move forward. Oyu Tolgoi operated by Rio Tinto. Again, it's -- that's a very serious operator. They know how to operate mines. They know how to do things. So we think there's high probability that's going to come into the plan as well. The problem with longer-dated assets, though is that you're always subject to those risks that may cause time lines to shift a little bit. May have permitting delays or you may have something like that, that is very difficult to predict today. That's why we put those things in that beyond 5-year period because we think there is they're relatively early stage compared to some of the other things within our portfolio. So it probably makes sense that they are beyond that 5-year window.

Thank you for clarifying that, Alistair. Your next question, does management believe the industry is entering a period where royalty and streaming companies may earn lower returns on invested capital because of increased competition of our assets.

No, I don't think so. I mean we do track returns. Our -- the way that we bid on things and the way that our peers bid on things as well. And we don't see a big change. And we haven't seen a change in the level of competition either. You do see smaller royalty companies starting every so often, but those are usually so small that they don't necessarily hunt in the same grounds that we do. Our competitors have always been -- the big Franco and Wheaton have been there for a long period of time. We always compete against other sources of financing, so equity and debt. Those have been around for decades. And so it's -- the competitive landscape as far as we're concerned and where we're situated. I don't think it's really changed all that much. And we're not seeing that returns are changing either. I think sometimes, when you see Street estimates of returns, let's go back to a point I made during the presentation. The Street may look at returns, and they may give low returns they may estimate lower returns on new transactions. But it's -- it may not be indicative of what the ultimate return is going to be. And when we make an investment in something the Street may say, well, it's a 3% return, that's not very good. But we're certainly not investing for a 3% return. We would hope that we're going to get a multiple of that. So that's the kind of thing that on paper, it may look like returns are declining over time. But our view is that, that -- if we do transactions on the right assets that have the right amount of optionality, and they've got the good operators with financial resources to be able to develop that optionality, our return should grow over time. So we're not seeing a big change.

Thank you for that response. Next, was asking as copper becomes a larger contributor through consenting Mount Milligan and future development projects, how does management view the balance between precious metals exposure and base metals exposure over the next decade?

So just clarifying in case it's misunderstood, the Kansanshi stream is a gold stream on a copper asset. So it's -- we look at gold revenue there. We haven't done anything to change our metal focus with respect to that, except it is a copper asset that we're -- we've taken a stream on the gold byproduct production. We're not out looking for copper. We like copper, we understand it. by virtue of the fact that we are in a number of copper assets, we're taking the gold byproduct at Kansanshi, obviously, an is another good example of a large copper asset where we're taking the gold. We're not out looking, though, for new copper opportunities. We will look at copper and certain other base metals if they come to us and they're good opportunities. Cactus, for example, we bought a royalty there in like 2024. That's a copper development project in Arizona. It's population center. It's got good infrastructure. It's got a good management team. We the management team from prior business. And so a lot of things lined up and it was a good returning royalty for us. And so we did buy that $65 million. But it wasn't a huge allocation of capital. We just thought it was a nice opportunistic thing to add to the portfolio. That's the kind of thing that -- when we think about other metals that aren't precious. That's how we think about them is if they come to us and they they're attractive on their own merits. And yes, we'll certainly look at them. But we're not out there looking to diversify our exposure into other metals. Our focus is very much precious and gold is our preference.

Thank you for response. Your next question, has provided Royal Gold with an updated development time line since assuming operatorship of Hot Madden?

Well, we're on the -- we're a member of the joint venture by virtue of the fact that we have that 15% ownership. We are in discussions with Lidya and they are -- they have as you correctly mentioned, they've just taken over operatorship. It's been just a handful of weeks now. So they're getting themselves prepared and positioned to move the project forward. When we have something to talk about with respect to the development and time lines, we certainly will disclose that. I expect that Royal Gold will become the source of information for developments at simply because we're the only publicly traded company that's now a partner there. Lidya is a privately held entity and they probably won't be putting too much into the public domain. So I think what you need to do is just follow our quarterly results from this point forward, and we'll be making comments on the developments at a mode as they.

I appreciate you clarifying that. Next, -- do you expect to exercise the option to acquire half of the SSR royalty?

Well, I think we'll wait and see. I mean the option doesn't expire for a number of years. So we have some time to evaluate, I think, at this point, it's probably unlikely because the asset needs to be derisked. We need to see the asset get into production at that point that royalty is probably going to be worth a lot more. So I think I'll defer the answer to that question until we're getting closer to production at the asset. But certainly, we think there's a lot of value in that option, and we certainly are happy to have it.

Great. Looking forward to an update in the near future. The next question is looking towards 2030, which is more likely to drive shareholder value, additional acquisitions, organic growth from existing assets or commodity price appreciation.

That's a very good question. I think we -- I think we'll probably see all 3. And it's hard for me to handicap which is going to give us the best but they're all somewhat related because we're going to see -- if metal prices continue to do well, then what you'll see is more growth from the assets within the portfolio because operators of those assets will want to try and take advantage of higher metal prices. And if you see metal prices do well, it also means that the acquisition of the pipeline is probably going to be pretty solid for us as well because you're going to see other companies that need to raise financing for their own projects will likely be looking for us to help them. So I think you may see all of those contribute. I think if we couldn't do any more acquisitions, we do feel very comfortable. We've got a nice growing portfolio, and we've got lots of growth from within the portfolio. So we're not relying on acquisitions continue that growth. When we gave our guidance, I mean, we're -- obviously, that's based on what we have within the portfolio today. We've got a nice growth trajectory. So we're not expecting that acquisitions will be the source of growth -- we don't need acquisitions, but we're always looking for acquisitions because that's probably the best way for us to add value. If we take our cash flow and we're able to reinvest it in high-performing or high optionality assets, then we'll get a premium in the marketplace for what we've just invested -- that's how we think we'll get the maximum value from our cash flow. But it's really going to be a combination of those things. So you've got price, the optionality within the portfolio and new acquisitions.

Thank you for clarifying. Your next question, considering your assets as they stand today, what is the life of your overall portfolio?

So the life of the overall portfolio on reserves only, and we did -- there's a slide in our Investor Day is in the appendix to the investor presentation that I just walked through a few minutes ago. We have it's about 18 years of average duration in our portfolio. That's weighted by NAV. And over the last year, we've grown that by about 25%. But the important thing to note is -- if you look at the histogram of mine lives and the buckets of value. We've actually pushed the mine lives out to the right-hand side to a much longer duration assets. So plus your assets, which is really where that shift has occurred, which is a very good thing to have in our portfolio. It just means that we don't need to be panicked about adding to the portfolio because we have that -- those long life duration assets. So we'll be able to continue adding cash flow that we'll be able to harvest and reinvest in the business. So that's what we're really pleased to see that. additional growth in asset duration. Now I will make 1 point here is that when we provide that number, it's based on reserves only. We have not included resource conversion. So if you believe that resources will get converted into reserves and then obviously, that impacts mine life, you may see that go up even beyond 18 years. But we haven't done that analysis. We've only looked serves for that number.

I appreciate that response also. We're coming up to your last 2 questions for today. The first one is, are you considering a stock split?

Stock split. No. We have considered it in the past lightly. I think from the perspective of retail shareholders, perhaps it would be more attractive to have a stock that's got a much lower per share value to it. But the institutional shareholders who own us it doesn't impact how they think about things. And there are a lot of companies in the markets today that have share prices well over $100 or $200 and it doesn't seem to impact how people value those stocks. And I think in the old days, there used to be this perception that lower dollar value stocks had higher liquidity and there was a valuation impact or benefit to having that. I don't think that holds any more at any research would indicate that's the case. We don't get many people asking us about splitting the stock -- so it's not something that we have considered. If we see a valuation reason for doing it, if we thought that we could get additional value from doing it, then that would be a different story, but it doesn't look like that's the case.

Thank you for offering some clarity on that. And then your last question for today is, if were being built from scratch today, would management construct the portfolio differently than it exists today.

That's a really interesting question. I think the -- it would be very difficult to reconstruct Royal Gold today, if you start from scratch. And the reason is because -- we started at Cortez, which was a foundational asset. And you look at the biggest companies in our sector, they've all started with one big foundational asset. We got that asset as a result of a change in business strategy way, way back in the 1980s. And it was a very fortunate and very wise change in our business focus. And having that interest at Cortez was really the engine that gave us the ability to grow our cash flow consolidate further royalties, which allowed us to grow our cash flow further. And then we got involved in the streaming and finance business. And is that cash flow is really important. I think if we were to start the company today, be very difficult because the largest, most interesting assets are the ones that people really compete over. So it's unlikely that a brand-new Royal Gold would be able to compete for the largest and best kind of foundational asset that could be available. I think -- so it would be practically difficult. But I think when we think about our portfolio, we're quite pleased with it. I think we've got a very high-margin portfolio. It's very gold focused. As I just talked about, the duration is long. It's got a very -- it's diversified, it's got very good counterparties on the other side. So we don't see anything in our portfolio that we think is a detriment. We don't see anything that really holds us back. So we're very pleased with the portfolio as it is today. I think with the benefit of hindsight, there are certain things that maybe we could have bid more on and won them and have those in the portfolio. I think -- I mean that's a question that I think everybody in our sector can talk to is that they wish they had won certain things that maybe our competitor had won, but that would be the only thing I would say would be the thing that we would -- if we could rewind the clock, maybe we would just have been a little bit more aggressive on certain very high-quality assets that we saw our competitors win instead of us. So -- and apart from that, I think we feel pretty comfortable with where we stand today.

Excellent. Thank you very much, Alistair, for all of your insight today, and thank you to everyone who submitted questions. If you do not get a chance as in your question, you can reach out to the appropriate account manager here at Renmark -- that concludes our presentation for today. But before we go, I will turn back the floor to Alistair for final remarks.

Well, thanks, everyone. I appreciate your questions, some very good questions in there. And if I didn't answer anything right, please get back to Renmark and they'll let me know and be happy to take it up with you in person if there's anything you'd like to discuss further. So thanks very much. Hopefully, it's a good summer for everybody and look forward to connecting you again soon.

Thank you, Alistair. And once again, this was Royal Gold trading on the NASDAQ under the ticker symbol RGLD. Thank you to everyone in San Francisco and surrounding areas for joining us today. The playback for this virtual non-deal roadshow will be available on our website 24 to 48 hours after this presentation under the tab. Please stay tuned for other presentations in your area and soon next time.