| MINING NEWS ARTICLES
February 5, 2009
Royal Gold posts $21.4 million net income
By ADELLA HARDING
Mining Quarterly Editor
Published: Thursday, February 5, 2009 2:31 PM CST
ELKO — Royal Gold Inc. today (Feb. 5) reported net income for the quarter ending Dec. 31 of $21.4 million, or 63 cents per basic share, on royalty revenue of $14.6 million.
The results are up from $4.6 million, or 11 cents per basic share, in the prior year on royalty revenue of $14.7 million because of one-time adjustments.
Without the adjustments, net income would have been $3 million, or 9 cents per basic share, for the fiscal year’s second quarter, for a $1.6 million drop in income.
Those adjustments included a $31.5 million gain for Royal Gold’s royalty adjustment on its Crossroads deposit royalty at Barrick Gold of North America’s Cortez Mine in Crescent Valley.
They also include a $3.3 million drop in revenue from royalties at Quadra Mining Ltd.’s Robinson Mine near Ely because of low copper prices. Cortez’s gold production also was down in the quarter, according to the earnings report.
“Royal Gold’s second-quarter earnings were significantly impacted by the negative provisional price adjustments at Robinson and the decreased production at Cortez. Excluding these issues, the majority of our portfolio performed well during the period,” President and Chief Executive Officer Tony Jensen said.
Copper prices averaged $1.79 per pound in the fourth calendar quarter of last year, a big drop from $3.49 per pound in the third quarter of 2008, Jensen said in an earnings teleconference.
“At the current copper price, there will be additional negative adjustments,” Chief Financial Officer Stefan Wenger said in the teleconference.
The company said royalty revenue got a boost from increased production at Newmont Mining Corp.’s Leeville underground mine north of Carlin and Barrick’s Goldstrike Mine, also north of Carlin, as well as initial production at the Benso Mine in Ghana.
Royal Gold also received $4 million in royalty revenue from the portfolio of royalties the Denver-based company acquired from Barrick Gold Corp. last year.
Jensen said the company was pleased with the contribution from the Barrick properties, and he said the companies continues to have strong cash flow and “robust balance sheet.” The cash balance is $55 million.
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