Royal Gold Inc John Tumazos Very Independent Research Virtual Conference

Good morning. We're so pleased to host Jason Hynes, the Senior Vice President of Royal Gold, who's going to tell us all about their progress and the various projects they've invested in. Jason, let's hear the good news.

Well, John, thanks for having us, and thanks for your support of the company over the many, many years you've been following us. As you said, I'm the SVP of Strategy and Business Development. I've been with Royal Gold for about 13 years. I've worked out of our headquarters in Denver, I've worked in our Swiss office, and I'm currently in our Vancouver office here, and it's a really good time. I need to give an update on Royal Gold, introduce the company, hopefully, to some new shareholders online today. Our portfolio is performing really well. It's being boosted by strong commodity prices, although maybe not today's strong commodity prices, but in general, if you zoom out enough. It doesn't really appear to be reflected in our valuation relative to peers in our industry and where we've traded historically. I'm happy to walk through today.

Please, John, interrupt me at any time with any questions you got. This presentation's probably a 20-30 minute presentation, but you jump in if you want me to clarify or go into any more detail on anything in particular. I'm just going to go to some forward-looking statements. I will be making forward-looking statements here today. Risks and uncertainties could cause actual results to differ materially from these statements. These risks and uncertainties are discussed in our most recent Form 10-K filed with the SEC. Please familiarize yourselves with this. I'm not sure if the audience is going to be very familiar with the industry and with Royal Gold, but maybe just as a general comment, we are not a mining company. We provide top-line precious metals exposure from a portfolio of royalties and stream interests on mines. These are run by well-known operators.

The business is high margin. It generates consistent cash flows from a large portfolio of producing mines, with many more development and exploration projects also in the pipeline. In this presentation, I'm just going to cover some key attributes of Royal Gold and also the business model. Our focus is precious metals, gold in particular. Close to 80% of our revenue is from gold. The balance is made up mostly of silver and copper. It's a very high-margin business. It's a predictable business. It allows us to maintain a longstanding commitment of dividend growth, 25 years straight. Our portfolio itself of producing development exploration assets is the most diversified in the sector by asset, by operator, by jurisdiction.

It is not just diversified revenue-producing assets, but it is diversified in our growth pipeline as well, which means we are not relying on one or two mines or one or two development projects to make our results today or make our results in the future. Jurisdictionally speaking, our exposure is skewed to Tier 1 geographies, with close to 70% of our revenue from North America. Just generally on the model, our operating cost exposure is limited, which means the margins are predictable, and we do not have very meaningful exposure to inflation, which I know is a topic of conversation these days.

Actually, you benefit from inflation because if costs rise and prices rise, your revenue royalties are automatically worth more, and on the streams, your down payment is fixed and the revenue upside is uncapped.

Yep, you are right. So we usually say that you benefit from inflation.

All right. Yeah, you're right. If the commodity prices are moving with inflation, as they generally will, you're absolutely correct on that, John. Our market cap sits around $20 billion today. In the first half of this year, we generated over $750 million in EBITDA, and we have ample liquidity to grow and return capital to shareholders, all at the same time. The portfolio has a lot of optionality in it. We do not have to invest for the organic growth that's embedded in our close to 400 assets, of which over 80 are in production. Just maybe a quick overview of 2025, which was a very transformative year for Royal Gold with both corporate and asset acquisitions. On the corporate side, we acquired Sandstorm and Horizon. Just under a year ago, we closed those acquisitions. Those added growth at both the production and development side of our portfolio.

They added diversification, and they added duration to our portfolio, meaning sort of the average reserve life that we have in our portfolio. On top of those corporate acquisitions, we did a couple of big asset acquisitions. We did a $1 billion gold stream acquisition from the Kansanshi Mine in Zambia, which is a copper mine operated by First Quantum. We made a $200 million commitment to the Warintza project in Ecuador, which is an emerging Tier 1 copper-gold asset expected to have a very long life. It's only been two full quarters that we've put out since we've closed those acquisitions, and those quarters had record revenue, record cash flow, record earnings. On the diversification side, which is something that was very important for our management team, is really creating that portfolio effect, is no asset was more than 13% of revenue.

I mentioned that we increased the duration, and what that means is the weighted portfolio reserve life of our portfolio, which was before those acquisitions was probably 14 years, is now more like 18 years. So close to 25% increase in our weighted average reserve life. We've already repaid most of the debt associated with these transactions. We've instituted and started executing on a share repurchase program, and we raised our dividend for the 25th consecutive year. To sum up 2025, we added scale, we diversified further, we added growth, and this was all on strategy. Maybe just keep all that in mind for when I get to the end of the presentation and talk a little bit about valuation and where we sit today.

I just want to spend a few minutes talking about Sandstorm and Horizon, the corporate acquisitions, which were really transformational and remained on strategy. Like I said, we've only had two reported quarters, but the short-term developments in the portfolio from these acquisitions have been very positive. Our strategy here in adding these companies to the portfolio was they had a very high-quality development asset pipeline, and this pipeline of assets has advanced faster than we had anticipated, and I'll talk a little bit more about some of the assets in there. But it wasn't just a development pipeline. They have a lot of high-quality producing assets that have contributed significant revenue and operating cash flow in the two quarters since we've closed it. One of the tasks we took upon ourselves after closing was to simplify some of the more complicated and non-core investments that came along.

Sandstorm and Horizon were sort of sister companies, with interests in common. We collapsed that intercompany arrangement and we unified those assets, and that was mainly the Antamina NPI royalty and the Hod Maden stream royalty and joint venture interests that were in that portfolio. We sold over $200 million of non-core equity positions. We also inherited some non-traditional investments in Hod Maden, a 30% joint venture interest is one of them, and we already converted half of this interest to royalties. By the way, that mine is now under construction and 25% or so complete. There were a bunch of smaller complex investments in the portfolio, and we converted some non-performing debt instruments at Bear Creek into royalty interests at Corani, which is now under construction by Highlander Silver.

There has been some really good, like I kind of alluded to this, there has been some really positive portfolio developments in some of these larger development assets that we acquired. I think these have happened faster than we anticipated, obviously boosted by strong copper and gold prices, which encourage operators and developers to move things forward as quickly as possible. Talk first about MARA, which stands for Minera Agua Rica Alumbrera, and a little bit of history here. Alumbrera was an old Glencore-Goldcorp-Yamana joint venture in Argentina, which operated for 20 years until 2018 when their reserves were exhausted. Proximal to Alumbrera is a deposit called Agua Rica, which is now a 1.2 billion ton undeveloped resource. The concept here was you put these two projects together, you have the Alumbrera large-scale processing infrastructure, and you use that to process the ore from the Agua Rica deposit.

Glencore has unified the ownership on this project 100% now, and Agua Rica is their next multi-decade leg of growth in their copper strategy. Royal Gold has a very in-the-money option on a 20% gold stream. This new Alumbrera-Agua Rica combined project is expected to produce 100,000 ounces a year of byproduct gold from the Agua Rica deposit, which is what our stream covers. Glencore has been accelerating the development on it. They got RIGI approval, which is basically Argentine large project sort of commitments to fiscal stability that the Argentine government is giving large projects. They actually received approval for that last week, and they actually started the restart of mining at Alumbrera ahead of schedule, which is going to de-risk the Agua Rica startup. The point here is there is a little bit of ore left at Alumbrera.