Royal Gold(US:RGLD)2021-02-04 21:10Financial Data and Key Metrics Changes - Total revenue for Q2 2021 was $158 million, representing a 28% increase compared to the prior year quarter, driven by higher average metal prices and strong contributions from the royalty segment [11][32] - Earnings for the quarter were $60 million or $0.91 per share, up 45% compared to the prior year quarter [14][38] - Operating cash flow increased by 28% to nearly $100 million [39] - The company maintained a net cash position of $182 million and total liquidity of over $1.2 billion at the end of the quarter [15][43] Business Line Data and Key Metrics Changes - The royalty segment contributed 32% of revenue, with significant contributions from the Peñasquito and smaller royalties [19] - The average price of gold, silver, and copper increased by 27%, 41%, and 22% respectively compared to the prior year quarter [33] - The revenue mix for the quarter was 76% from gold, 11% from copper, and 10% from silver [33] Market Data and Key Metrics Changes - The company reported record revenue driven by strong operating results across its portfolio, particularly from the royalty segment [11] - The Cortez revenue and Australian royalty portfolio revenue were both up over 100%, while Peñasquito and Marigold revenue increased over 50% [11] Company Strategy and Development Direction - The company remains focused on long-term returns when evaluating new investment opportunities, emphasizing patience in the current competitive market [49] - The company is committed to reducing debt and managing liquidity effectively, especially in light of potential COVID-19 impacts [44] Management's Comments on Operating Environment and Future Outlook - Management expressed caution regarding the operating environment amid potential COVID-19 impacts but remains optimistic about the company's strong financial position [44] - The company anticipates that the Khoemacau project will reach commercial production without requiring further funding beyond the expected $50 million [26] Other Important Information - The company raised its dividend for the 20th consecutive year to $1.20 per share, a 7% increase over the prior year payout [14] - The company completed its investment for the 80% base silver stream in the Khoemacau project, totaling $212 million [45] Q&A Session Summary Question: Additional funding needed for Khoemacau - Management confirmed that the additional $50 million needed for Khoemacau is primarily due to COVID-19 related costs [52][53] Question: Construction critical path items for Khoemacau - The critical path for Khoemacau includes mill refurbishment work, which has faced COVID-19 impacts [58] Question: Guidance for 2021 and operator performance - Management indicated that a clearer outlook for 2021 will be available in the next quarterly call, with Cortez exceeding its 2020 plan [60][61] Question: Potential impacts of US corporate tax changes - Management stated it is too early to determine the impact of potential tax changes under the new administration, expressing skepticism about significant changes occurring soon [62][63] Question: Khoemacau funding options - Management confirmed that while there are other potential funding sources, the outlined options are sufficient for the current funding gap [68] Question: Breakdown of other revenue sources - The largest contribution from other royalties came from the 4% NPI at Kurnalpi, generating $3.7 million [98]