Royal Gold Q2 2020 Earnings Report
Key Takeaways
Royal Gold reported a solid operating quarter with a 26.7% increase in revenue to $123.6 million and net income of $41.3 million, or $0.63 per share. The company strengthened its balance sheet by repaying $35.0 million on its revolving credit facility and raised its calendar year dividend. Positive developments were seen at the Khoemacau project, Mount Milligan, and Rainy River.
Revenue increased by 26.7% to $123.6 million.
Operating cash flow increased by 33.0% to $78.3 million.
Volume of gold equivalent ounces (GEOs) increased by 4.9% to 83,500.
Dividends paid increased by 6.1% to $17.4 million.
Royal Gold
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Royal Gold Revenue by Segment
Forward Guidance
Newmont expects a full year of operations at Peñasquito with higher grades, leading to significant production.
Positive Outlook
- Higher grades expected at Peñasquito.
- Full year of operations expected at Peñasquito.
- Mining rates expected to average in excess of 4,000 tonnes per day at Wassa.
- Wassa expected to deliver grades of 3.78 grams per tonne.
- Mill availability averaged 89% for the quarter and gold recovery averaged 91% at Rainy River
Challenges Ahead
- Impact of the strike on Royal Gold is expected to be reflected in the Company’s financial results beginning with the quarter ended June 30, 2020.
- Centerra expects a material reduction in the mineral reserves and mineralized material at Mount Milligan
- Excavation advance slower than planned at Khoemacau.
- There is impact of the strike on Royal Gold is expected to be reflected in the Company’s financial results beginning with the quarter ended June 30, 2020, as gold deliveries from Andacollo are generally received within six months of concentrate shipment.
- It is unclear at this point what impact, if any, the results of this work will have on the carrying value of Royal Gold’s stream interest at Mount Milligan.
Revenue & Expenses
Visualization of income flow from segment revenue to net income