Royal Gold Provides Update on Its Fiscal 2020 Third Quarter and Further Update on Impacts of COVID-19

Royal Gold, Inc. (NASDAQ: RGLD) (together with its subsidiaries, “Royal Gold” or the “Company”) today announced that its wholly owned subsidiary, RGLD Gold AG, sold approximately 62,000 gold equivalent ounces comprised of approximately 50,000 gold ounces, 466,000 silver ounces and 1,900 tonnes of copper related to its streaming agreements during its fiscal 2020 third quarter ended March 31, 2020 (“third quarter”). Third quarter stream sales were in line with the previous guidance range of 60,000 to 65,000 gold equivalent ounces. The Company had approximately 27,000 gold equivalent ounces in inventory at the end of the third quarter consisting of 22,000 gold ounces and 436,000 silver ounces. Inventory at the end of the third quarter was lower than the previous guidance range of 30,000 to 35,000 gold equivalent ounces primarily due to timing of deliveries.

RGLD Gold AG’s average realized gold, silver and copper prices for the third quarter were $1,569 per ounce, $17.79 per ounce, and $5,493 per tonne ($2.49 per pound), respectively, compared to $1,482, $17.38, and $5,920 ($2.69), respectively, in the prior quarter ended December 31, 2019 (“second quarter”). Cost of sales was approximately $355 per gold equivalent ounce for the third quarter using the quarterly average silver-gold ratio of approximately 94 to 1 and copper-gold ratio of approximately 0.28 tonnes per ounce, compared to cost of sales of $349 per gold equivalent ounce in the second quarter. Cost of sales is specific to our streaming agreements and is the result of the Company’s purchase of gold, silver or copper for cash payments at a set contractual price, or a percentage of the prevailing market price of gold, silver or copper when purchased.

Impacts of COVID-19

Temporary Curtailments by Operators of Principal Producing Properties

Several of Royal Gold’s operating counterparties have recently announced temporary operational curtailments due to the ongoing COVID-19 pandemic. In addition to those detailed in the March 26, 2020 press release entitled “Royal Gold Provides Update on Mount Milligan and Issues Update on Impacts of COVID-19,” recent announced changes at Royal Gold’s principal producing properties are:

• Centerra Gold Inc. announced on April 1 that reductions of manpower and throughput to 50,000 tonnes per day at the Mount Milligan mine would occur for 14 days starting on April 6. Royal Gold holds the right to purchase 35% of the payable gold and 18.75% of the payable copper produced from Mount Milligan in return for a cash purchase price for gold equal to the lesser of $435 per ounce or the spot price for gold, and for a cash purchase price for copper equal to 15% of the spot price for copper, in each case at the time of delivery. Mount Milligan contributed approximately $30.6 million, or 24.8% of total revenue, to Royal Gold during the quarter ended December 31, 2019 when it operated at an average throughput of 51,624 tonnes per operating day. The financial impact of this reduction is not expected to be realized immediately as metal deliveries from Mount Milligan are generally received within six months of concentrate shipment.
• Newmont Corporation announced on April 1 that operations at the Peñasquito mine would ramp down due to a Mexican federal government decree to temporarily suspend all non-essential activities in Mexico until April 30. Royal Gold owns a 2.0% net smelter return royalty on production from the Peñasquito mine, which contributed approximately $7.6 million, or 6.1% of total revenue, to Royal Gold during the quarter ended December 31, 2019.
• New Gold Inc. announced on April 3 that a systematic ramp-up of operations had begun at the Rainy River mine following the completion of a voluntary 14 day suspension. Royal Gold owns the right to receive (i) 6.5% of the gold produced from Rainy River until 230,000 ounces have been delivered, and 3.25% of the gold thereafter, and (ii) 60% of the silver produced from Rainy River until 3,100,000 ounces have been delivered, and 30% thereafter, in return for payment of 25% of the spot price per ounce of gold and silver at the time of delivery. Rainy River contributed approximately $7.6 million, or 6.1% of total revenue, to Royal Gold during the quarter ended December 31, 2019.

There may be additional curtailments relating to COVID-19 at Royal Gold’s principal or other producing properties, and any curtailment could be extended. Operational curtailments at Royal Gold’s principal or other properties could have a material impact on Royal Gold revenues or financial condition in future periods.