Royal Gold Resolves Voisey’s Bay Royalty Dispute

Royal Gold, Inc. (NASDAQ: RGLD) (“Royal Gold” or the “Company”) announces that wholly-owned subsidiaries of the Company and Altius Minerals Corporation (“Altius”) entered into an agreement with Vale Canada Limited and certain of its subsidiaries (collectively, the “Parties”) to comprehensively settle their long-standing litigation related to calculation of the royalty on the sale of all concentrates produced from the Voisey’s Bay mine in Newfoundland and Labrador, Canada.

The Voisey’s Bay 3% net smelter return royalty is directly owned by the Labrador Nickel Royalty Limited Partnership (“LNRLP”), in which the Company’s wholly-owned indirect subsidiary is the general partner and 90% owner. The remaining 10% interest in LNRLP is owned by a subsidiary of Altius.

The Parties agreed to a new method for calculating the royalty in respect of concentrates processed at Vale’s Long Harbour Processing Plant (LHPP), which will be effective for all Voisey’s Bay mine production after April 1, 2018. The specific terms of the settlement are confidential, but Royal Gold expects the 3% royalty rate will apply to approximately 50% of the gross metal value in the concentrates at existing nickel, copper and cobalt prices. As those metal prices rise or fall, the percentage of gross metal value in the concentrates applicable to the royalty would correspondingly increase or decrease.

“We are very pleased to have found common ground with Vale to resolve our Voisey’s Bay royalty calculation concerns,” stated Tony Jensen, President and Chief Executive Officer of Royal Gold. “This settlement resolves all claims by agreeing on a prospective calculation and secures our participation in the underground mine life extension. The Voisey’s Bay royalty has only paid LNRLP approximately $1 million since the first calendar quarter of 2016, but we now expect a steady quarterly flow of revenue from this world class mine once again.”

The next LNRLP payment of approximately $2.2 million, relating to second calendar quarter production, is expected to be received in October. The third calendar quarter royalty payment, and the royalty payment for each quarter thereafter, is due 45 days after quarter end.

LHPP is designed to produce 50,000 tonnes of finished nickel annually. The plant is currently ramping up and is producing at an annualized rate of approximately 35,600 tonnes based on actual production of 8,900 tonnes in the second calendar quarter of 2018. In the next few years, Voisey’s Bay concentrate will provide 100% of the feed to LHPP but, over time, other sources of concentrate will be added to LHPP.