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Sep 30, 2022
Royal Gold Q3 2022 Earnings Report
Royal Gold delivered solid operating and financial results, strengthened by strategic acquisitions and repayment of debt.
Key Takeaways
Royal Gold reported a net income of $45.8 million, or $0.70 per share, for Q3 2022, with revenue reaching $131.4 million and operating cash flow at $95.0 million. The company repaid $50 million of debt and completed the acquisition of royalties on the Cortez Complex and Great Bear Project.
Revenue reached $131.4 million, with operating cash flow of $95.0 million, and earnings of $45.8 million.
Adjusted EBITDA margin was maintained at 77%.
The company repaid $50 million of debt, with liquidity of approximately $667 million at the end of the period.
Royal Gold acquired royalty on the Cortez Complex in Nevada and the Great Bear Project in Ontario.
Royal Gold
Royal Gold
Forward Guidance
Royal Gold expects total sales for 2022 to be around the midpoint of the previously issued range of 315,000 to 340,000 GEOs. Gold sales are expected to be towards the high end of the previously issued guidance range of 220,000 to 240,000 ounces, and other metals sales are expected to be at the lower end of the previously issued guidance range of 95,000 to 100,000 GEOs.
Positive Outlook
- Gold sales are expected to be towards the high end of the previously issued guidance.
- Depreciation, depletion and amortization expense guidance for 2022 is reduced due to lower gold and copper depletion rates at Mount Milligan.
- Effective tax rate of 17% to 22% for 2022.
- First full quarter of royalty revenue is expected from the Cortez Complex Royalty in the fourth quarter of 2022.
- Remaining near term commitment is the potential payment of up to $6.8 million to a subsidiary of Ero Copper Corporation under the NX Gold stream.
Challenges Ahead
- Total sales for 2022 are expected to come in around the midpoint of the previously issued range.
- Other metals sales are expected to be at the lower end of the previously issued guidance range.
- 2022 guidance ranges provided do not include any contribution from Cortez Complex Royalty.
- Potential payment of up to $6.8 million to a subsidiary of Ero Copper Corporation for the achievement of success-based targets related to regional exploration and mineral resource targets under the NX Gold stream.
- Production estimates received from the operators are for calendar 2022. There can be no assurance that production estimates received from the operators will be achieved.