Q4 2023 Royal Gold Inc Earnings Call

Operator: Hello, everyone, and welcome to the Royal Gold Inc. 2023 full year and fourth quarter conference call. My name is Emily, and I'll be facilitating your call today. After the presentation, there will be an opportunity for any questions, which you can ask by pressing start, followed by the number one on your telephone keypad. I'll now turn the call over to our host, Alistair Baker, Vice President of Investor Relations and Business Development. Please go ahead, Alistair.

Hello, everyone and welcome to the Royal Gold, Inc, 2023 storey and fourth quarter Conference call. My name is Emily and I'll be facilitating a quote today. After the presentation there will be the opportunity for any questions, which you can ask by pressing star followed by the number one on your telephone keypad.

Alistair: I'll now turn the call over to our host Mr. Baker, Vice President of Investor Relations and business development. Please go ahead Alistair thank.

Alistair Baker: Thank you, operator. Good morning and welcome to our discussion of Royal Gold's fourth quarter and full year 2023 results. This event is being webcast live, and you will be able to access a replay of this call on our website. Speaking on the call today are Bill Heissenbuttel, President and CEO, Martin Raffield, Vice President of Operations, and Paul Libner, CFO and Treasurer. Randy Shuffman, General Counsel, and Dan Brees, Vice President, Corporate Development, of RGAG, are also available for questions. During today's call, we will make forward-looking statements, including statements about our projections and expectations for the future. These statements are subject to risks and uncertainties that could cause actual results to differ materially from these statements. These risks and uncertainties are discussed in yesterday's press release and in our filings with the FCC. We will also refer to certain non-GAAP financial measures, including adjusted net income, adjusted net income per share, cash G&A, adjusted EBITDA, and net debt.

Alistair Baker: Thank you operator, good morning, and welcome to our discussion of Royal Gold's fourth quarter and full year 2023 of results.

Speaker Change: This is being webcast live and you will be able to access a replay of this call on our website.

Alistair Baker: Speaking on the call today are bill heightened bottle, President and CEO, Martin Raffield, Vice President of operations, Paul Lindner, CFO and treasurer.

Alistair Baker: Randy Schatzman General Counsel, and Dan Breeze, Vice President corporate development RG AG are also available for questions.

Alistair Baker: During today's call, we will make forward looking statements, including statements about our projections or expectations for the future.

Alistair Baker: Statements are subject to risks and uncertainties that could cause actual results to differ materially from these statements. These risks and uncertainties are discussed in yesterday's press release and our filings with the SEC. We will also refer to certain non-GAAP financial measures, including adjusted net income adjusted net income per share cash G&A adjusted.

Alistair Baker: EBITDA and net debt reconciliations of these measures to the most directly comparable GAAP measures are available in yesterday's press release, which can be found on our website.

Alistair Baker: Reconciliations of these measures to the most directly comparable GAAP measures are available in yesterday's press release, which can be found on our website. So we'll start with an overview of 2023 results, Martin will give some commentary on the portfolio, and Paul will wrap up a financial summary of the quarter. After the formal remarks, we'll open the lines for a Q&A session. Good morning, and thank you for joining the call.

Well, we'll start with an overview of 2023 results Martin will give some commentary on the portfolio and Paul will wrap up the financial summary of the quarter after.

Speaker Change: After the formal remarks, we'll open the lines for a Q&A session.

Good morning, and thank you for joining the call I'll begin on slide four.

William Holmes Heissenbuttel: I'll begin on slide four. During 2023, we delivered revenue of $606 million, operating cash flow of $416 million, and earnings of $239 million, or $3.63 per share. And after adjustments, earnings were $3.53 per share. Our Gold Equivalent Ounces, or GEOs, were slightly below our guidance range, as we indicated might occur during our third quarter conference call. And Martin will give you some more details a bit later. While inflation pressures have eased from their peak, operating companies are still seeing cost inflation and margin erosion. Without direct exposure to operating and capital costs, we are protected from inflation pressure and margin compression, and we maintained our strong adjusted EBITDA margin of 79%.

Speaker Change: During 2023, we delivered revenue of $606 million operating cash flow of $416 million and earnings of $239 million or $3 63 per share and after adjustments earnings were $3 53 per share.

Speaker Change: Our gold equivalent ounces or geo's were slightly below our guidance range as we indicated might occur during our third quarter conference call and Martin will give you some more details a bit later.

Speaker Change: While inflation pressures have eased from their peak operating companies are still seeing cost inflation and margin erosion.

Speaker Change: Without direct exposure to operating and capital costs, we are protected from inflation pressure and margin compression.

Speaker Change: And we maintained our strong adjusted EBITDA margin of 79%.

William Holmes Heissenbuttel: We paid approximately $100 million in dividends. In keeping with our commitment to return capital to shareholders, we raised our dividend again by 7%. This is the 23rd consecutive annual increase to our dividend, which is an unmatched record in the precious metals sector. We also maintained our focus on the balance sheet and repaid $325 million outstanding on a revolving credit facility during the year.

Speaker Change: We paid approximately $100 million in dividends and keeping with our commitment to return capital to shareholders and we raised our dividend again by 7%. This is the 20 <unk> consecutive annual increase to our dividend, which is an unmatched record in the precious metals sector.

Speaker Change: We also maintained our focus on the balance sheet and repaid $325 million outstanding on our revolving credit facility during the year.

William Holmes Heissenbuttel: After an active year of acquisitions in 2022, we started the year with a revolver balance of $575 million, and we quickly reduced that to $250 million, increasing our total available liquidity at the end of the year to about $845 million. This is in keeping with our capital allocation strategy to use non-dilutive financing to acquire high-quality assets, and we maintained our low share count during the year to ensure that shareholders have full exposure to our growth.

Speaker Change: After an active year of acquisitions in 2022, we started the year with a revolver balance of $575 million.

Speaker Change: And we've quickly reduce that to $250 million, increasing our total available liquidity at the end of the year to about $845 million.

Speaker Change: This is in keeping with our capital allocation strategy to use non dilutive financing to acquire high quality assets.

And we maintained our low share count during the year to ensure that shareholders have full exposure to our growth.

William Holmes Heissenbuttel: Finally, we announced an agreement yesterday with Sinterra to provide future cost support to the Mount Milligan mine that will allow an extension of the mine life to 2035 and potentially further into the future. The details are in our press release. But in summary, we will receive cash and gold consideration in the near and medium term, with a value of approximately $125 million at the current gold price, and a longer-term free cash flow interest in Milligan. In return, we'll make additional cash payments for gold and copper delivered with any support provided prior to approximately 2030, contingent upon gold and copper prices being below $1,600 per ounce and $3.50 per pound, respectively. These earlier payments are also subject to potential recovery against cost support payments made beyond 2030 when metal prices permit.

Speaker Change: Finally, we announced an agreement yesterday with Sentara to provide future cost support to the Mount Milligan mine that will allow an extension of the mine life to 2035.

Speaker Change: Potentially further into the future.

Speaker Change: The details are in our press release, but in summary, we will receive cash in gold consideration in the near and medium term.

Speaker Change: Value of approximately $125 million at the current gold price and <unk>.

Speaker Change: Longer term free cash flow interest in Mount Milligan.

Speaker Change: In return, we'll make additional cash payments for gold and copper delivered with any support provided prior to approximately 2030 contingent upon gold and copper prices being below $600 per ounce and $3 50 per pound respectively.

Speaker Change: Earlier payments are also subject to potential recovery against cost support payments made beyond 2030, when metal prices permit.

William Holmes Heissenbuttel: This is a good development for both Royal Gold and Sinterra as it should allow for further value to be realized through mine life extensions. Mount Milligan has a large resource base and exploration potential, and Sinterra's plans include completing a preliminary economic assessment in the first half of 2025 to evaluate resources and projects that could provide further mine life extensions, continuing exploration drilling around the mine, and completing a site optimization program to improve cast. Royal Gold will benefit from getting further exposure to metal prices over an extended mine life. And we are pleased to provide support to Sinterra as they evaluate this potential. I'll now turn the call over to Martin to provide some comments on the portfolio. Thanks, Bill.

Speaker Change: This is a good development for both Royal Gold Edison Terra as it should allow for further value to be realized through mine life extension.

Speaker Change: Mount Milligan has a large resource base and exploration potential and some terrorist plans include completing a preliminary economic assessment in the first half of 2025 to evaluate resources and projects that could provide further mine life extensions.

Speaker Change: Continuing exploration drilling around the mine and completing a site optimization program to improve cash flow.

Speaker Change: Royal Gold will benefit from getting further exposure to metal prices over an extended mine life and we are pleased to provide support to sentara as they review this potential.

Speaker Change: I will turn the call over to Martin to provide some comments on the portfolio.

Martin Raffield: Thanks, Joe turning to slide five I'll cover portfolio performance over the compared to the guidance that we gave in April 2023 overall.

Martin Raffield: Turning to slide five, I'll cover portfolio performance over the year compared to the guidance that we gave in April 2023. Overall, portfolio performance was solid for the year. However, as Bill mentioned, total sales of 315,600 GEOs was slightly below our 2023 guidance of 320,000 to 345,000 GEOs. This was due to underperformance at two of our principal properties, both of which we discussed on our last earnings call. The first was Penesquito, where there was an unexpected four-month labor strike, and the second was the slower-than-anticipated ramp-up of the plant expansion at Pueblo Viejo.

Martin Raffield: Overall portfolio performance was solid for the year. However, as Bill mentioned total sales of 315600 Geos was slightly below our 2023 guidance of 320000 to 345000 Geos.

Martin Raffield: This was due to underperformance at two of our principal properties both of which we have discussed on our last earnings call.

Martin Raffield: First with <unk>, where there was an unexpected four month labor strike and the second was the slower than anticipated ramp up of the plant expansion at Pueblo Viejo.

Martin Raffield: Our dDNA and tax rates were in line with guidance, and Paul will go into more detail on these items in his comments. Turning to slide six, I'll give some comments on fourth-quarter revenue. Overall revenue for the quarter was $153 million, with volume of 77,500 GEOs.

Martin Raffield: Our DD&A and tax rates were in line with guidance and Paul will go into more detail on these items in his comments.

Paul Libner: Turning to slide six I'll give some comments on fourth quarter revenue.

Paul Libner: Overall revenue for the quarter was $153 million with volume of 77500 Geos.

Martin Raffield: Our royalty segment contributed revenue of $54 million, in line with the prior year quarter. However, as a percentage of total revenue, the royalty segment was a larger contributor than in the recent past, at about 36% of total revenue. Revenue from our stream segment was lower compared to last year, at $98 million.

Our royalty segment contributed revenue of $54 million in line with the prior year quarter. However, as a percentage of total revenue. The royalty segment was the largest contributor.

Paul Libner: Recent past.

Paul Libner: 36% of total revenue.

Paul Libner: Revenue from our stream segment was lower compared to last year at $98 million lower contributions from Mount Milligan Pueblo Viejo were only partially offset by higher revenue from <unk> and rainy River.

Martin Raffield: Lower contributions from Mount Milligan and Pueblo Viejo were only partially offset by higher revenue from Andecoyo, Zavinchina, and Rainy River. I'll turn to slide 7 and give some comments on notable developments at a handful of operations. At Mount Milligan, as Bill mentioned, Sinterra reported an increase in the mine life to 2035, with the potential for work underway to increase this further. Sinterra also provided 2024 production guidance of 180,000 to 200,000 ounces of gold and 55 to 65 million pounds of copper. Sinterra expects this production to be evenly weighted throughout the year.

Paul Libner: I'll turn to slide seven and give some comments on notable developments at a handful of operations.

Paul Libner: At Mount Milligan as Bill mentioned <unk> reported an increase to the mine life to 2035 with the potential for work underway to increase this further.

Paul Libner: <unk> also provided 2024 production guidance of 190000 to 200000 ounces of gold and 55% to 65 million pounds of copper.

Paul Libner: <unk> expects this production to be evenly weighted throughout the year.

Martin Raffield: At Pueblo Viejo, Eric reported yesterday that construction and commissioning of the plant expansion were substantially complete at the end of December, and they had resolved the equipment issues they were dealing with in the second half of the year. They are working on rebuilding the crushed ore stockpile feed conveyor and are targeting completion of this work in the second quarter, which is required for the plant to reach full throughput. Our stream is based on Barrick's share of production of PV, and Barrick is guiding to gold production of 420,000 to 490,000 ounces in 2024. Approximately 165,000 ounces of silver were deferred during the quarter, and the total deferred amount was 854,000 ounces at the end of December.

Paul Libner: Equivalent of you I Hope art reported yesterday, the construction and commissioning of the plant expansion was substantially complete at the end of December and they have resolved the equipment issues that we're dealing with in the second half of the year.

Paul Libner: They are working on rebuilding the crushed ore stockpile feed conveyor and are targeting completion of this work in the second quarter, which is required for the plant to reach full throughput.

Paul Libner: A scream is based on barrick's share of production of PV and Barrick is guiding to gold production of 420000 to 490000 ounces in 2024.

Paul Libner: Approximately 165000 ounces of silver with a third during the quarter and the total deferred amount was 854000 ounces at the end of December.

Martin Raffield: In yesterday's report, Barrett commented that the focus for the first quarter will be the continued stability and optimization of the flotation circuit, which we expect should result in higher and more consistent silver recovery. This optimization work will likely take some time, and the recovery of our deferred silver ounces will depend on the outcome of this work. At Cortez, Barrick announced in mid-December that a record of decision was received for Gold Rush, and they expect to ramp up production from 130,000 ounces this year to about 400,000 ounces per year in 2028.

Paul Libner: In yesterday's report Barry commented that the focus for the first quarter will be the continued stability and optimization of the flotation circuit, which we expect should result in higher and more consistent silver recovery.

Paul Libner: This optimization work will likely take some time and the recovery of deferred silver ounces will depend on the outcome of this work.

Paul Libner: At Cortez Barrick announced in mid December the record of decision was received for gold rush and they expect to ramp up production from 130000 ounces. This year to about 400000 ounces per year in 2028.

Martin Raffield: They also announced 2024 guidance for Cortez yesterday of 620,000 to 680,000 ounces, which includes the contribution from Gold Rush. This guidance is significantly lower than the 2023 production at Cortez, and according to Barrick, it relates to grade reconciliation and resource model changes at Crossroads that will reduce oxide mill feed. Our overlapping royalty interests at Crossroads result in an effective gross royalty rate of approximately 9.4%, so the impact of lower production at Crossroads has a disproportionately larger impact on Royal Gold. We are reviewing Barrick's forecast and will detail the impact on Royal Gold when we issue our full year guidance. Turning to slide 8, at Andekoyo, Tech has reported that drought conditions are impacting production levels, and this is expected to continue while a solution is put in place in 2025. In the meantime, we're expecting production levels this year to remain in line with 2023 and then increase in 2025 through 2027 with the benefit of higher grades. At Comacao, operations are continuing at full production levels.

Paul Libner: They also announced 2024 guidance for Cortez yesterday of 620000 to 690000 ounces, which includes the contribution from gold Rush. This guidance is significantly lower than the 2023 production at Cortez and according to Barrick as it relates to grade reconciliation and resource model changes at crossroads.

Paul Libner: That will reduce oxide mill feed.

Paul Libner: Overlapping royalty interest at Crossroads result, in an effective gross royalty rate of approximately nine 4%. So the impact of lower production at crossroads has a disproportionately larger impact home Royal gold.

Paul Libner: We are reviewing barrick's forecast and we will detail the impact to Royal gold when we issue our full year guidance.

Paul Libner: Turning to slide eight sedan decoy aerotech as reported the drought conditions are impacting production levels and this is expected to continue while our solution is put in place in 2025.

Paul Libner: In the meantime, we're expecting production levels. This year to remain in line with 2023, and then increase in 2025 through 2027 with the benefit of higher grades.

But coating Macao operations are continuing at full production levels kind of Macau as a high quality operation and we are pleased that LNG are well capitalized and experienced operator will become the new owner after completing the acquisition, which is expected during the current quarter, we have spoken with Mg and at this point we don't.

Martin Raffield: Comacao is a high-quality operation, and we are pleased that MMG, a well-capitalized and experienced operator, will become the new owner after completing the acquisition, which is expected during the current quarter. We have spoken with MMG, and at this point, we don't expect any significant changes to the operating approach put in place by KCM. And finally, we are pleased to see continued progress towards full production at King of the Hills and Bellevue Mines in Western Australia. We expect to see first production from Cote Gold in Ontario and Mara Rosa in Brazil in the current quarter, and Mancho in Alaska in the second half of the year.

Paul Libner: We expect any significant changes to the operating approach put in place by Casey.

Paul Libner: And finally, we are pleased to see continued progress towards full production that king of the hills and Bellevue mines in Western Australia, We expect to see first production from Cotai gold.

Paul Libner: Ontario, and Mara Rosa in Brazil in the current quarter and man show in Alaska in the second half of the year.

Paul Libner: I'll now turn the call over to Paul for a review of our financial results. Thanks, Martin I'll now turn to slide nine and give an overview of the financial results for the quarter.

Paul Libner: I'll now turn the call over to Paul for a review of our financial results. Thanks, Martin. I'll now turn to slide 9 and give an overview of the financial results for the quarter. For this discussion, I'll be comparing the quarter end of December 31, 2023 to the prior quarter. Revenue was down 6% to $153 million for the quarter. As Martin mentioned in his remarks, lower contributions from Mt. Milligan, Pueblo Viejo, and Penosquito were the main drivers for this quarter's lower revenue. However, the lower contributions from these properties were partially offset by higher contributions from Cortez and Anacoil, as well as higher average metal prices. Gold and silver prices were significantly higher, up 14% and 10%, respectively, and the price of copper was up 2%.

Paul: For this discussion I'll be comparing the quarter ended December 31, 2023 to the prior year quarter.

Paul: Revenue was down 6% to $153 million for the quarter.

Paul: As Martin mentioned in his remarks, lower contributions from Mount Milligan <unk> and <unk> were the main drivers for this quarters lower revenue.

The lower contribution from these properties were partially offset by higher contributions from Cortez and <unk> as well as higher average metal prices golar.

Paul: Gold and silver prices were significantly higher up 14% and 10% respectively in the price of copper was up 2%.

Paul: Gold continues to be the dominant revenue source, making up 80% of our total revenue for the quarter.

Paul: Led by silver at 10% and copper at 8%.

Paul: At 80% Royal Gold has the highest gold revenue percentage compared to our major peers in the royalty and streaming sector.

Paul: Turning to slide 10, I'll provide a bit more detail on specific line items for the quarter, which was another straightforward and quiet quarter for Royal Gold.

Paul Libner: Gold continues to be the dominant revenue source, making up 80% of our total revenue for the quarter, followed by silver at 10% and copper at 8%. At 80%, Royal Gold has the highest gold revenue percentage compared to our major peers in the royalty and streaming sector. Turning to slide 10, I'll provide a bit more detail on specific line items for the quarter, which was another straightforward and quiet quarter for Royal Gold. G&A expense increased slightly to $9.7 million from $8.8 million in the prior year and was due to higher corporate costs and non-cast stock compensation expense.

Paul: G&A expense increased slightly to $9 7 million from $8 $8 million in the prior year and was due to higher corporate costs and noncash stock compensation expense.

Paul: Although we did see an increase over the prior year, our cash G&A costs remained low at about 5% of total revenue.

Paul: Our DD&A expense decreased to $40 million from $49 million in the prior year.

Paul: On a unit basis. This expense was $518 per geo for the quarter.

Paul: Compared to $521 per <unk> in the prior year.

A lower overall DD&A expense was due to a lower depletion rate at Pueblo Viejo, as well as decreased sales from Mount Milligan and <unk> when compared to the prior year.

Paul Libner: Although we did see an increase over the prior year, our cash G&A costs remained low at about 5% of total revenue. Additionally, our DDNA expense decreased to $40 million from $49 million in the prior year. On a unit basis, this expense was $518 per GEO for the quarter, compared to $521 per GEO in the prior year. The lower overall DDNA expense was due to a lower depletion rate at Pueblo, Vallejo, as well as decreased sales from Mount Milligan and Pueblo when compared to the prior year. For the full year, D&A of $529 per GEO was in line with our earlier guidance of $490 to $540 per GEO. Interest expense was $6 million for the quarter, in line with $6.1 million in the prior year. The all-in interest rate for outstanding borrowings under our credit facility was 6.6% at the end of the fourth quarter. Tax expense for the quarter was $13.4 million, resulting in an effective tax rate of 17.5%.

Paul: For the full year DD&A of $529 per Geo was in line with our earlier guidance range of 490 to $540 per Geo.

Paul: Interest expense was $6 million for the quarter in line with $6 1 million in the prior year.

Paul: The all in interest rate for outstanding borrowings under our credit facility was six 6% at the end of the fourth quarter.

Paul: Tax expense for the quarter was $13 4 million, resulting in an effective tax rate of 17, 5%.

Paul: This compares to a similar tax expense of $12 $6 million and an effective tax rate of 18, 2% in the prior year.

Paul: For the full year tax expense was $42 million and the effective tax rate was 14, 9%.

Paul: Our full year tax expense and effective tax rate benefited from a previously disclosed discrete tax events during the June quarter and related to the release of evaluation allowance on certain foreign deferred tax assets.

Paul: Excluding this discrete item the effective tax rate for the full year was 17, 9%, which was in line with our guidance range of 17% to 22%.

Paul: Net income for the quarter was up 11% over the prior year to $63 million or <unk> 95 per share.

Paul Libner: This compares to a similar tax expense of $12.6 million and an effective tax rate of 18.2% in the prior year. For the full year, tax absence was $42 million, and the effective tax rate was 14.9%. Our full-year tax expense and effective tax rate benefited from a previously disclosed discrete tax event during the June quarter related to the release of a valuation allowance on certain foreign deferred tax assets. Excluding this discrete item, the effective tax rate for the full year was 17.9%, which was in line with our guidance range of 17 to 22%. Net income for the quarter was up 11% over the prior year to $63 million, or $0.95 per share. The increase in net income was primarily attributable to lower cost of sales and DD&A expense, along with the $4 million impairment we recognized in the prior year on a non-principal Exploration Stage Royalty Entry. Each of these was partially offset by a decrease in our revenue, as I previously mentioned. However, our operating cash flow was strong again this quarter at $101 million and in line with the prior year.

Paul: The increase in net income was primarily attributable to the lower cost of sales and DD&A expense along with the $4 million impairment, we recognized in the prior year on a non principal exploration stage royalty interest.

Paul: Each of these were partially offset by a decrease in our revenue as I previously mentioned.

Paul: Our operating cash flow was strong again this quarter at $101 million and in line with the prior year.

Paul: We expect to provide full year guidance for 2020 for early in the second quarter. After most of our Counterparties have issued their own production guidance for the year. However.

Paul: However to help you prepare your March quarter estimates, we expect our stream segment sales to range between 47, and 52000 and CEO during the first quarter of 2024.

Paul: As with our prior practice. This is the only quarter during the year when we will give quarterly guidance and this quarterly guidance should not be viewed as indicative of the full year guidance, we intend to provide early in the second quarter.

Paul: I will now turn to slide 11, and provide a summary of our financial position at the end of the quarter.

Paul: During the quarter, we repaid $75 million on our revolving credit facility and reduce the amount drawn to $250 million.

Paul: As Bill mentioned, our strong cash flow during 2023 allow us to repay $325 million on our revolver balance during the year.

Paul Libner: We expect to provide full-year guidance for 2024 early in the second quarter after most of our counterparties have issued their own production guidance for the year. However, to help you prepare your March quarter estimates, we expect our stream segment sales to range between $47,000 and $52,000 GEL during the first quarter of 2024. As with our prior practice, this is the only quarter during the year when we will give quarterly guidance, and this quarterly guidance should not be viewed as indicative of the full-year guidance we intend to provide early in the second quarter. I will now turn to slide 11 and provide a summary of our financial position at the end of the quarter. During the quarter, we repaid $75 million on a revolving credit facility and reduced the amount drawn to $250 million.

Paul: With respect to leverage ratios. We ended 2022 with a one times net debt to EBITDA ratio and by the end of 2023. This ratio was down to 0.3 times.

Paul: This is a remarkable change in a short period and speaks to the cash flow generation of our portfolio.

Paul: It reinforces our overall capital allocation strategy, which also emphasizes our focus on the balance sheet.

Paul: Absent significant business development activity and as cash flow allows we expect to fully repay the remaining revolver balance by sometime early in the second half of 2024.

Paul: We ended the year at a very strong financial position with total available liquidity of approximately $845 million.

Paul: Made up of $750 million of Undrawn revolver capacity and $95 million of working capital.

Paul: Finally, I also mentioned that upon completion of the acquisition of <unk>, We expect repayment of our subordinated debt facility. We provided the KC M. As part of the overall development of the Kona Cal mine.

Paul Libner: As Bill mentioned, our strong cash flow during 2023 allowed us to repay $325 million on our revolver balance during the year. With respect to leverage ratios, we ended 2022 with a one times net debt to EBITDA ratio, and by the end of 2023, this ratio was down to 0.3 times. This is a remarkable change in a short period and speaks to the cash flow generation of our portfolio and reinforces our overall capital allocation strategy, which also emphasizes a focus on the balance. Absent significant business development activity, and as cash flow allows, we expect to fully repay the remaining revolver balance by sometime early in the second half of 2024. We ended the year in a very strong financial position with total available liquidity of approximately $845 million, made up of $ Finally, I'll also mention that upon completion of the acquisition of ComiCal by MMG, we expect repayment of the subordinated debt facility we provided to KCM as part of the overall development of the ComiCal mine. At the end of December, the total amount outstanding, including capitalized interest, was approximately $36 million.

Paul: At the end of December the total amount outstanding including capitalized interest was approximately $36 million.

Paul: That concludes my comments on our financial performance for the quarter and I'll now turn the call back to Bill for closing comments. Thanks.

Bill: Thanks, Paul 23 was another year of consistent and solid performance from Royal Gold, we maintain alignment with our strategic goals of keeping a disciplined focus on gold strengthening our balance sheet and increasing our capital return.

Bill: We had a very active year of adding assets to the portfolio in 2022 and during 2023, we took advantage of our strong cash flow to pay down the debt used to finance those transactions.

Paul: Well continue our long record of increasing our dividend.

Paul: Our balance sheet is in great shape, and we have excellent liquidity to compete and take advantage of business development opportunities that may present themselves.

Paul: We expect to provide full year guidance for 2020 for early in the second quarter, which will reflect the lower production at Cortez and smaller organic growth assets that we have previously discussed like King of the Hills Bellevue co pay my Rosa Manto.

Paul: We also expect to publish an asset handbook early in the second quarter and we plan to host an in person sessions to give a more fulsome update on the portfolio around the same time.

Speaker Change: Operator that concludes our prepared remarks I'll now open the lines for questions.

Speaker Change: Thank you if you would like to ask a question today. Please do so now by pressing star followed by the number one on your telephone keypad.

Speaker Change: Change your mind I would like to see you may from Nicky. Please press star and then K.

Speaker Change: Our first question comes from Jackie <unk> with BMO capital markets Jacky. Please go ahead.

Jackie: Yes, thanks, very much and thanks. Thanks for taking my question I know you've addressed this a little bit in your prepared remarks, but if you could give us a little bit more color on.

William Holmes Heissenbuttel: That concludes my comments on our financial performance for the quarter, and I'll turn the call back to Bill for closing comments. Thanks, Paul. 2023 was another year of consistent and solid performance from Royal Gold.

Speaker Change: What happened I guess.

Jackie: Nevada Goldmine that would be really helpful. Wherever you can maybe.

Jackie: Maybe tell us about I know they had.

William Holmes Heissenbuttel: We maintain alignment with our strategic goals of keeping a disciplined focus on gold, strengthening our balance sheet, and increasing our capital return. We had a very active year of adding assets to the portfolio in 2022. And during 2023, we took advantage of our strong cash flow to pay down the debt used to finance those transactions, as well as continue our long record of increasing our dividends.

Jackie: The answer to mentioned in their call yesterday that there were.

Jackie: Some issues with.

Jackie: Testing.

Jackie: Assessing greed can you can you maybe just give us a little bit more color on what's happening there.

Jackie: Hey, Jackie Thanks for the question when you refer to the Nevada Gold mines I assume you mean Cortez and in particular I'm sorry, yes.

Speaker Change: Yeah, Yeah, Okay, Yeah, that's fine.

Speaker Change: Hey.

Speaker Change: Just turn this over to Martin to give you a little background I'm not sure we know much more but.

Operator: Our balance sheet is in great shape, and we have excellent liquidity to compete and take advantage of business development opportunities that may present themselves. We expect to provide full-year guidance for 2024 early in the second quarter, which will reflect the lower production at Cortez and smaller organic growth assets that we have previously discussed, like King of the Hills, Bellevue, Cote, Mara Rosa, and Manchot. We also expect to publish an asset handbook early in the second quarter, and we plan to host an in-person session to give a more fulsome update on the portfolio around the same time. Operator, that concludes our prepared remarks. I'll now open the line for questions. Thank you. If you would like to ask a question today, please do so now by pressing start followed by the number one on your telephone. If you change your mind and would like to be removed from the queue, please press start and then delete. Our first question comes from Jackie Przybylowski with BMI Capital. Jackie, please go ahead.

Martin Raffield: Martin over to you.

Martin Raffield: Yes, Thanks Jackie.

Martin Raffield: Really don't know much more than what was said on the call yesterday.

Martin Raffield: Bristow.

Martin Raffield: No as I talked about the resource model change to the crossroads area, they talked about that indicating it would reduce the oxide mill feed in 2024.

Martin Raffield: And it was ascribed to cutting off the high grade ore in the pit.

Martin Raffield: He is a fairly recent point of understanding so not really much more than that.

Martin Raffield: In terms of how this impacts us would you be interested in understanding more about that Jackie.

Jackie: Yeah, absolutely. Thank you.

Jackie: So.

Jackie: <unk> overall in 2023 had a really strong year. They produced about 890000 ounces on a 100% basis.

Jackie: Out is that we received about 49000 geo's.

Jackie Przybylowski: Yeah, thanks very much. And thanks. Thanks for taking my question. I know you addressed this a little bit in your prepared remarks. But if you could give us a little bit more color on what happened, I guess, at Nevada gold mines, that would be really helpful, whatever you can maybe, maybe tell us about. I know they had sort of mentioned in their call yesterday that there were some issues with accessing grade.

Jackie: About 80% of that 49000, Geo's was sourced from our legacy zone with the high royalty rate of nine 4%.

Jackie: And that was really primarily driven in turn by the crossroads production.

Jackie: 2024 guidance for Barracuda.

Jackie: Now 626000 ounces again on 100% basis and this represents about a decrease of 27% from the 2023 production actual numbers to the midpoint of that 2020 for guidance.

William Holmes Heissenbuttel: Can you maybe just give us a little bit more color on what's happening there? Hey, Jackie, thanks for the question. When you refer to Nevada gold mines, do you mean Cortez in particular?

Jackie: And really with this impact to us.

Jackie: Is disproportionate because of nine points full gross royalty percentage under the crossroads area and the impact to that.

William Holmes Heissenbuttel: Sorry. Yeah. Yeah. Yeah. Okay. Yeah, that's fine.

Martin Raffield: If I may, I'll just turn this over to Martin to give you a little background. I'm not sure we know much more, but Martin will turn it over to you. Yeah, thanks, Jackie.

Jackie: Roads.

Now talking about.

Jackie: Due to our revenue mix at Cortez, the overall decrease from our 2023 production of.

Martin Raffield: We really don't know much more than what was said on the call yesterday with Mark Bristow. You know, they talked about a resource model change to the crossroads area and indicated that it would reduce the oxide mill feed in 2024. And it was ascribed to a fault cutting off the high-grade ore in the pit, which I think is a fairly recent point of understanding.

49000 is going to be in the region of 40% to 50%.

Jackie: We don't really provide any more detail about what's happening at crossroads at the moment, we don't know any more than the rest of the market, but we do hope to be able to provide some more detail on that when we get to watch when you 24 guidance.

Speaker Change: Okay, Great that was actually my next question when you put your guidance out in April that that will be reflected.

Martin Raffield: So not really much more than that. In terms of how this impacts us, would you be interested in understanding more about that, Jackie? Yeah, absolutely. Thank you. And so, you know, Cortez overall had a really strong year in 2023. They produced about 890,000 ounces on a 100% basis. Out of that, we received about 49,000 GEOs.

Speaker Change: In your guidance I guess, sorry for 2020, we're absolutely absolutely yes, okay. Okay. Thank you so much.

Speaker Change: Thanks Jackie.

Our next question comes from Cosmos <unk> with CIBC.

Cosmos: Please go ahead.

Cosmos: Hi, Thanks, So Paul.

Paul Martin and Alister.

Cosmos: Maybe my first question is on <unk>.

Cosmos: There are 2000, Twenty's cord guidance as well I know you haven't put it out yet just trying to figure out the thought process in your process in terms of how high you would come around in terms of putting your guidance together and of course, there's challenges like crossroads Cortez.

Martin Raffield: And about 80% of that 49,000 GEOs was sourced from our legacy zone with a high royalty rate of 9.4%, and that was really primarily driven, in turn, by the Crossroads production. So 2024 guidance for barracks is now 620 to 680,000 ounces, again, on a 100% basis, and this represents about a decrease of 27% from their 2023 production actual numbers to the midpoint of that 2024 guidance. And really, this impact to us is disproportionate because of our 9.4 gross royalty percentage over the Crossroads area and the impact to that Crossroads pit that they are now talking about. Due to our revenue mix at Cortez, the overall decrease from our 2023 production GEOs of 49,000 is going to be in the region of 40 to 50%. I can't really provide any more detail about what's happening at Crossroads at the moment. We don't know any more than the rest of the market, but we do hope to be able to provide some more detail on that when we get to our 2024 guidance. Okay, great. That was actually going to be my next question.

Cosmos: And as you mentioned.

'twenty 'twenty four will also benefit from startups or ramp ups at Belvieu King of the hills in <unk>.

Speaker Change: Number of new assets like Kotte Gold rush and so how do you how do you go about your process of putting guidance together and how do you kind of factor in any kind of a risk any kind of ramp up risk and startup Westgate and things like that.

Cosmos: Yes cosmos thanks for the question.

Cosmos: Process is very much bottom up.

Speaker Change: And Martin and his team I think.

Speaker Change: They meet numerous times to talk about individual assets now it kind of depends on on the asset itself and the contract because in some cases, we have excellent information rights, we may have a budget for the year.

Martin Raffield: When you put your guidance out in April, that will be reflected in your guidance, I guess, right, for 2024? Absolutely, yes. Okay, thank you so much. Thanks, Jackie. Our next question comes from Cosmos 2 with CIBC. Please go ahead.

Speaker Change: And in others, especially on the on the royalty side and on the solar royalty side.

Speaker Change: We don't really know all we can go.

Speaker Change: And that is what the operators are saying.

Speaker Change: Publicly.

Speaker Change: Just as an example, <unk> royalty, we don't really have any information right. So we wait to hear what newmont says about what's going to happen.

Cosmos: Hi, thanks, Bill, Paul, Martin, and Alistair. Maybe my first question is on your 2024 guidance as well. I know you haven't put it out yet. I'm just trying to figure out the thought process here and your process in terms of how you come around to think about putting your guidance together. You know, of course, there are challenges like Crossroads and Cortez.

Speaker Change: Attendants keto, so that's probably why it takes us a little bit longer than others. Because we have to we have to compile the guidance that was given by the operators I will tell you that we do make adjustments. That's one of the reasons, we don't give guidance on an asset by asset basis.

William Holmes Heissenbuttel: And as you mentioned, 2024 will also benefit from, you know, startups or ramp-ups at Bellevue, King of the Hills, and a number of new assets like Cote and Gold Rush. And so how do you go about your process of putting guidance together? And how do you, you know, kind of factor in any kind of risk, any kind of ramp-up risk and startup risk and things like that?

Speaker Change: Because we may get a number from an operator or a number from an operator in the public domain.

Speaker Change: And just say well based on our experience what we've seen at that mine historically, they may not achieve that recovery ratio that may not achieve that grade.

Speaker Change: That they expect so.

Speaker Change: That's kind of the process and Thats why it takes us another couple of months to put it put it together.

William Holmes Heissenbuttel: Yeah, Cosmos, thanks for the question. I mean, the process is very much bottom up. And Martin and his team, I think they meet numerous times to talk about individual assets. Now, it kind of depends on the asset itself and the contract, because in some cases, we have excellent information rights; we may have, you know, a budget for the year. And but in others, especially on the royalty side and the smaller royalty side, you know, we don't really know. All we can go on is what the operators are saying publicly. You know, just as an example, Penosquito is a royalty, but we don't really have any information, right? So we, you know, we wait to hear what Neumann says about what's going to happen at Penosquito. So that's probably why it takes us a little bit longer than others because we have to compile the guidance that is given by the operators.

Speaker Change: Yes, I guess you know.

Speaker Change: It's more directly would you say you were fairly conservative when you put this together.

Speaker Change: Yeah.

Speaker Change: I mean, we're I don't want to say, we're fairly we try to be fair based on what we expect.

Speaker Change: I don't.

Speaker Change: I don't want anybody to think that we sort of take the numbers and then.

Be more conservative on guidance, so that hopefully we can exceed guidance that's not how we do things we put out the numbers.

Speaker Change: That we think.

Speaker Change: Is achievable.

Speaker Change: Understood great.

Speaker Change: Maybe switching gears a little bit.

Speaker Change: Congratulations on getting additional deal.

Speaker Change: Kind of like the agreement with Antero.

Completed.

Speaker Change: From that perspective.

Hum.

Speaker Change: I have to read it quite a few times you have a press release yesterday, our new agreement with Sentara fairly complex.

William Holmes Heissenbuttel: I will tell you that we do make adjustments. It's one of the reasons we don't give guidance on an asset by asset basis because we may get a number from an operator or see a number from an operator in the public domain and just say, well, you know, based on our experience, what we've seen at that mine historically, they may not achieve that recovery rate, or they may not achieve that grade that they expect. So that's kind of the process, and that's why it takes us another couple of months to put it together. Yeah, I guess, you know, ask more directly: would you say you're fairly conservative when you put this together? I mean, we're, I don't want to say we're fairly concerned. We try to be fair based on what we expect. I don't, you know, I don't want anybody to think that we sort of take the numbers and then be more conservative on guidance so that, hopefully, we can exceed guidance. That's not how we do things.

Speaker Change: A lot of moving parts can you maybe talk about.

Speaker Change: How you came up with a structure the different kind of production hurdles that are that you've put in and would you would have been easier to kind of rewrite the origin of the agreement because I know this agreement here. In addition to the original agreement so maybe the thought process around that as well.

Speaker Change: Yeah.

Speaker Change: I will say I would agree with you in the first place you would think of going is to amend the existing agreement I will say, sometimes amending agreements creates complications and we just felt that.

Speaker Change: In order to avoid some some complications that we'd be better to leave that agreement completely untouched.

This is sort of a mine life extension project. This is a bolt on agreement that supports that mine life extension.

Speaker Change: And Thats.

William Holmes Heissenbuttel: We put out a number that, you know, that we think is achievable. Okay. Great. Maybe switching gears a little bit.

Speaker Change: That's the direction that the negotiations sort of took over over time.

Dan Breeze: As for the specific numbers I, just wonder if I might ask Dan breeze to sort of offer his.

Cosmos: Congratulations on getting an additional deal or, kind of like, the agreement with Sentara completed. From that perspective, I had to read it quite a few times, your press release yesterday, your new agreement with Sentara. Fairly complex, a lot of moving parts.

Dan Breeze: <unk> was sort of our lead negotiator on the on the transaction and maybe he can share some some thoughts with you.

Dan Breeze: Great Hi, Cosmos, Thanks for the question Hi, Dan.

William Holmes Heissenbuttel: Can you maybe talk about how you came up with that structure, you know, the different kinds of production hurdles that you've put in? And would you, would that have been easier to kind of rewrite the original agreement? Because I know this agreement here is in addition to the original agreement, so maybe the thought process around that as well. Yeah, I mean, I will say, I would agree with you. The first place you would think of going is to amend the existing agreement. I will say, sometimes amending agreements creates complications.

Dan Breeze: Maybe you can just talk a little bit about I think if your question if I understand your question, you're asking about how we.

Cosmos: We ended up with a structured generally speaking or do you want to get into the numbers.

Speaker Change: No I think in.

Speaker Change: Generally speaking how you came up with a structure and how it is the best structure for the.

The situation today.

Speaker Change: Sure.

Speaker Change: We had to consider.

Speaker Change: Our our interest here and what we thought was appropriate and acceptable for us.

William Holmes Heissenbuttel: And we just felt that in order to avoid some complications, it would be better to leave that agreement completely untouched. This is sort of a mine life extension project; this is a bolt-on agreement that supports that mine life extension. And that's the, you know, that's the direction that the negotiations sort of took over over time. As for the specific numbers, I just wonder if I might ask Dan Brees to sort of offer his thoughts. Stan was sort of our lead negotiator on the transaction, and maybe he can share some thoughts with you. Hi Cosmos, thanks for the question. Hi Dave.

Speaker Change: Shareholders, but also what's in Tara.

Speaker Change: Looking to do and ultimately we were aligned in that sense.

Speaker Change: Looking for ways to ultimate extend the mine life and that was really the key reason.

Speaker Change: A driver of the structure thinking about the long term thinking about a way where we could provide long term cost support and that as you heard since <unk> talked about this yesterday.

Speaker Change: And recall.

Speaker Change: That will allow them to make.

Speaker Change: Investments, if you will today and going forward over the next year year, and a half to hopefully realize what that longer term plan.

Dan Brees: Maybe we can talk a little bit about I think your question, if I understand your question, you're asking about how we ended up with this structure, generally speaking, or do you want to get into the numbers? No, I think, generally speaking, how you came up with this structure and how it is the best structure for the situation today. Sure. Well, obviously, we had to consider our own interests here. And what we thought was appropriate and acceptable for our shareholders, but also what Sinterra was looking to do, and ultimately, we were aligned in that, with Mike Jalonen, Jackie Przybylowski, Adam Graf, Alistair Baker, Tony Jensen, William Heissenbuttel, cost support, and that, as you heard Sentara talk about yesterday in their call, that will allow them to make investments, if you will, today and going So that was really the main driver, Cosmos.

Speaker Change: So that was really the main driver Cosmos and then looking at the shorter term.

Speaker Change: Between now and see.

Speaker Change: <unk> 30.

Speaker Change: What we tried to do there is consider.

Speaker Change: <unk> is focused on their reserve plan.

Speaker Change: And the numbers that they were working towards and not wanting to impact our economics over that time period, and so that's what we put into place.

Speaker Change: Structure that is unlikely to be drawn just given the triggers.

Speaker Change: Commodity prices below 6800 band.

Speaker Change: $3 50, a pound in copper.

Speaker Change: So well below where we are with good long term consensus prices.

Speaker Change: That structure just gives them the confidence.

Speaker Change: To move forward on that reserve plan. So I think those are the two main factors that fit into what we consider to fit into this new construction.

Speaker Change: Great. Thank you Dan.

Dan Brees: And then looking at the shorter term, between now and say, what we tried to do there is consider Centera's focus on their reserve plan and the numbers that they were working towards and not wanting to impact our economy over that time period. And so that's what we put into place, https://www.royalgoldinc.com Well below where we are with long-term consensus prices, but that structure just gives them the confidence to move forward on that reserve plan. So I think those are the two main factors that fit into, or we consider to fit into, this overall structure.

Speaker Change: That's perfectly answers my question and thanks, Bill as well thank you.

Speaker Change: Thanks Cosmos.

Speaker Change: So we take our next question as a reminder, if you would like to ask a question today. Please do so now by pressing star followed by the number one on your telephone keypad.

Speaker Change: Our next question comes from Lawson Winder with Bank of America.

Lawson Winder: Please go ahead.

Lawson Winder: Thank you very much operator, and Hello, gentlemen, good morning, and good afternoon.

Lawson Winder: Just had a couple of questions for you. So one was on the guidance for Q1. Thank you for providing that it's always helpful to have that in essence at the full year guidance.

Cosmos: Great. Thank you, Dan. That perfectly answers my question.

Lawson Winder: How did you guys think about.

William Holmes Heissenbuttel: And thanks, Bill, as well. Thank you. Thanks, Cotswolds.

And acquire for that.

Lawson Winder: In terms of production I don't know if you can provide in terms of deliveries I don't know if you can provide a range but.

Operator: Before we take our next question, as a reminder, if you would like to ask a question today, please do so now by pressing start, followed by the number 1 on your telephone call. Our next question comes from Lawson Winder with Banks America. Lawson, please go ahead.

Lawson Winder: Is is something kind of like 2024 divided by four kind of kind of the right way to think about that and then.

Speaker Change: Yes, that'd be the first question on the guidance.

Speaker Change: It wasn't so easy.

Lawson Winder: Thank you very much, operator, and hello, gentlemen, good morning, and good afternoon. I just had a couple of questions for you. One was about the guidance for Q1. Thank you for providing that. It's always helpful to have that and ask for your guidance. How did you guys think about ANDA-COIA for that?

Speaker Change: Is your question on the quarterly guidance that we just gave because that number we would pretty much know because <unk> was one of those assets were.

We received a gold about five or six months. After it's been shipped so we would have a pretty good idea of what that is.

Speaker Change: That's exactly what I'm asking if you could tell us the number that'd be great.

William Holmes Heissenbuttel: In terms of production, I don't know if you can provide, or in terms of deliveries, I don't know if you can provide a range, but it is something kind of like 2024 divided by four, which is the right way to think about that. And then, Yeah, that'd be the first question on the guidance. Hey, Lawson.

Speaker Change: We don't do asset by asset guidance I.

Speaker Change: And I don't think we've ever.

Speaker Change: Given exactly what a particular asset is.

Speaker Change: It's going to it's going to do in any quarter.

Speaker Change: So yes.

Speaker Change: So just just thinking about <unk> in particular like.

William Holmes Heissenbuttel: So is your question about the quarterly guidance that we just gave? Because that number we would pretty much know because Anacoia was one of those assets where we received the gold about five or six months after it was shipped. So we would have a pretty good idea of what that is. That's exactly what I'm asking. If you could tell us the number, that would be great.

Speaker Change: Accounting for the fact that they had those.

Speaker Change: Issues with with water in Q4.

Speaker Change: Okay.

Speaker Change: And you've disclosed down in your 10-Q, what the full year deliveries were.

Speaker Change: I guess the question is then what was Q4.

Speaker Change: Production I guess in terms of seasonality with Q4, much lower than Q1, two and three as a result of those are.

William Holmes Heissenbuttel: We don't do asset-by-asset guidance, and I don't think we're ever going to be able to do that, ever given exactly what a particular asset is, is going to do in any quarter. So, yeah, so just thinking about Anna Koya in particular, accounting for the fact that they had those issues with water in Q4, and you've disclosed down your 10-Q what the full-year deliveries were, I guess the question is, what was Q4 production, I guess, in terms of seasonality, was Q4 much lower than Q1, Q2, and Q3 as a result of those? you know, more in line. Just any sort of color in that direction would be helpful.

Speaker Change: More in line.

Just any sort of color in that direction would be helpful.

Speaker Change: Martin is there anything that you can.

Can think of.

Martin Raffield: We could provide right now.

Martin Raffield: Yeah.

Martin Raffield: Look at pack have have talks.

Martin Raffield: Most of them about the issues going into next year with the drought conditions and how that is potentially going to impact them.

Martin Raffield: I think we probably started to see some of those impacts towards the end of last year, but I've done.

Martin Raffield: I don't, Martin, is there anything that you can think of that we could provide right now? Um, look, Peck has talked, Thank you, Lawson, about the issues going into next year with the drought conditions and how that is potentially going to impact them. I think we probably started to see some of those impacts towards the end of last year, but I don't I don't have, I don't think I have the numbers, individual numbers, for the production we should be talking about at the moment.

Martin Raffield: I don't have.

Martin Raffield: I don't think numbers individual numbers.

Martin Raffield: For the production, we should be talking about at the moment.

Speaker Change: Okay No problem then.

Maybe I'll just leave the guidance. There then the other question I wanted to ask actually it was about.

Speaker Change:

Speaker Change: Cortez and the gold rush aspect of that so the gold rush you guys actually have.

Multiple.

Speaker Change: Uh huh.

Speaker Change: Multiple royalties and on one portion of gold rush, it's higher than the other and so what I wanted to understand is that gold rush ramped up sort of when based on the current mine plan with Royal Gold's start to get the benefit of that higher rate and is there a point, where there's an overlap in the royalty such that the two are additive.

Martin Raffield: Okay, no problem. And maybe I'll just leave the guidance there. Then the other question I wanted to ask was about, um, Cortez, and the Gold Rush aspect of that. So the Gold Rush, you guys actually have. I am, Yeah, the area of Gold Rush where we have a higher royalty rate is in the far southeast portion of it. Martin, do we have an estimate of timing as to when that might come in? It's far, far in the future. Yeah, that's what I thought. Okay, that's very helpful to know. Thank you both very much.

Speaker Change: Yes.

Speaker Change: The area of gold Rush, where we have a higher royalty rate I think is in the far southeast portion of it.

Speaker Change: Martin do we have an estimate of timing as to when that might come in.

Martin Raffield: It's far far in the future.

Martin Raffield: Yeah, that's what I thought.

Speaker Change: Okay. That's very helpful to know thank you both very much I appreciate that.

Tanya Jakusconek: I appreciate that. Thank you. Our next question comes from Tanya Jakusconek with Scotia. Please grab a hat. Great. Good morning, everyone. Thank you so much for taking my questions. I just wanted to come back to Crossroads.

Speaker Change: Thank you.

Our next question comes from Tanya <unk> with Scotiabank. Please go ahead.

Tanya: Great Greg Good morning, everyone. Thank you so much for taking my question.

Tanya: I just wanted to come back to crossroads.

Tanya Jakusconek: I was the one who asked Barrett on the call yesterday about Crossroads and what exactly had happened. And maybe my understanding, which may be different from yours, and you know, was that we have this fault that.... they thought was an area where they had high grade and did additional confirmation drilling. The fault seemed to have, you know, was there that they hadn't expected, and we lost this high-grade gold, but my understanding was that we also lost reserve resources from this area as well. Is that your understanding? So are you also expecting a decline in reserves and resources in this area? Martin, I'm going to hand that one to you. Thanks, Tanya. Yeah, yeah, look, I think, I think we would.

Once the one who asked barrick on the call yesterday.

Tanya: About crossroads.

Tanya: What exactly has happened and maybe my understanding which may be different from yours and you know was that we had this.

Speaker Change: All right.

Speaker Change: They thought was an area where they have high grade when they get additional confirmation drilling theme.

Speaker Change: <unk> was there that they hadn't expected.

Speaker Change: The high grade gold, but my understanding was that we also have loss reserve.

Speaker Change: From this area as well as accurate understanding so are you expecting for a decline in the reserves and resources in this area.

Speaker Change: Martin I'm going to hand that one to you.

Speaker Change: Yeah.

[laughter].

Martin Raffield: Thanks, Tanya, we don't I'm sorry, Mike.

Martin Raffield: Okay.

Martin Raffield: No.

Speaker Change: Yeah go ahead, yeah look.

Speaker Change: I think we would.

Martin Raffield: I expect some sort of change based on what has been said over the past couple of days, but I can't really give you any detail around that because we haven't seen the detail ourselves. Okay, so I guess from our perspective, just for the 2024 number, what very high-level guidance you've provided. It's safe to assume that 49,000 GEOs, that was the... If we achieve it in 2023, we can kind of remove maybe $20,000 off that number.

Speaker Change: Expect some sort of change based on what has been said over the past couple of days, but I can't really give you any detail around that because we haven't seen the detail ourselves yet.

Speaker Change: Okay. So I guess from our perspective, just for the 2024 number.

Speaker Change: Very high level guidance, you've provided it would be safe to assume that now 49000.

Speaker Change: That you achieved in 2023, we can kind of remove maybe 20000 off that number.

Speaker Change: 2024.

Martin Raffield: That's, yes, that's exactly right. Okay, and then we will wait. Would you know about these reserves and resources?

Speaker Change: So, yes, that's exactly right.

Speaker Change: Okay.

Speaker Change: Okay, and then we will rate would you know about these reserves and resources.

Tanya Jakusconek: when you report and when you give us guidance in April, and your new reserve. Congratulations. We are going to... All right, okay, maybe we can come back. We will try and get more detail on that. All right, thank you. And maybe I guess I'm just going to come back to the M&A environment yet again. As we mentioned, now you've paid off a lot of your debt. I'm just wondering what you are seeing out there, and sort of, size-wise, and how big you would be looking at in terms of potential transactions.

Speaker Change: When you report and when you give us guidance in April.

Speaker Change: And your new is there yes.

Speaker Change: Installation.

Speaker Change: Alright, Okay, maybe we are.

Speaker Change: We will try and give more detail around that.

Speaker Change: Okay, Alright, thank you and maybe I guess I'm, just going to come back to just the M&A environment, Yes again.

Speaker Change: Now you've paid off a lot of your debt.

Speaker Change: I'm just wondering.

Speaker Change: What you are seeing out there and sort of size wise and how big would you be looking at in terms of a potential transaction.

Speaker Change: Yeah.

Tanya Jakusconek: Yeah, Tanya, I'll hand that over to Dan to make a comment. Thank you. Sure, Bill. Hi Tanya.

Speaker Change: Danielle I'll hand that over to Dan to make a comment.

Dan Breeze: Thank you sure Bill Hi, Tanya alright, thanks for the questions on here.

Dan Brees: Look, I think it was, you know, we didn't announce a transaction last year. But looking back, I think it was one of our busier years, with the internal reviews that we do on opportunities. And I think what you saw in the market. Maybe what we're going to see here, at least in the near term, is probably representative of the state of the market right now, which is... Smaller lots, but smaller opportunities, across the board. And I think it's really being driven, Tanya, still by the high cost of debt right now and the equity markets, which maybe they're recovering a little bit now, but generally they've been less supportive of smaller companies, in particular those with single asset development project type risks.

Dan Breeze: Look I think.

Speaker Change: No we didnt announce a transaction last year.

Looking back I think it was one of our busier years.

Dan Breeze: With the internal reviews that we do on opportunities and I think what you saw in the market.

Dan Breeze: Maybe we're going to see you're at least in the near term is probably representative staying in the market right now which is.

Dan Breeze: Smaller lots to put smaller opportunities.

The board and I think it's really being driven still by <unk>.

Dan Breeze: High cost of debt right now and in the equity markets, which maybe the recovering a little bit now, but generally they've been less supportive of smaller companies in particular.

Dan Breeze: As with single asset development project type risks.

Dan Breeze: And so I think that's what's driven the smaller royalty financings that we've seen in the market in the last 12 months or so I think that's going to continue.

Dan Brees: So I think that's what's driving the smaller royalty financing that we've seen in the market in the last 12 months or so. And I think that's going to continue. But we do still see that we always move to the same range, $100 to $300 million. I think that still holds, but there are many more opportunities at the lower end. That's it, thanks everyone. Okay, and can I ask, you know, you already have... yep, that's a similar range of similar, sort of structure helping these smaller guys. Question for you, obviously, Newmont is looking to sell some of the assets. You know, and my understanding is that the data room is open, and people are looking, and have you seen or heard of any?

Dan Breeze: But we do still see that obviously, we've been seeing range of $100 million to $300 million I think that still holds but there are many.

Dan Breeze: Many more opportunities in the lower end.

Dan Breeze: Of that size range, it's busy and.

Dan Breeze: I think as I said, I think it's being driven by.

Dan Breeze: Types of capital just not be readily available right now.

Speaker Change: Okay. Thank you let me ask you.

Speaker Change: Alrighty.

Speaker Change: Yes.

Speaker Change: Thank you so similar range similar.

Speaker Change: So on a structure, helping these smaller guys.

Speaker Change: Question for you, obviously newmont with is looking to sell some of the asset.

Speaker Change: And my understanding is that the data room is open and people are not paying and have you.

Speaker Change: Seen or heard of any opportunities for you there.

Tanya Jakusconek: Thank you. Thank you. Thank you. Well, we're, yeah, I mean, they're pretty broad.

Speaker Change: Yes, I mean equity Brian go ahead.

William Holmes Heissenbuttel: Go ahead. Sorry, Bill. Bill, go ahead. No, I was just gonna say, look, we always point to these events as opportunities for stream financing. And to the extent we can be a good financing partner in that process, we are always happy to do it. The only caveat is that we said the same thing about Barrick and Randall, we said the same thing about Neumann and Goldcorp, and really didn't see much develop.

Brian: I'm sorry go ahead okay.

Brian: No I was just going to say look we always point to these events as opportunities for a stream financing and to the extent, we can be a good financing partner.

Brian: In that process, we are always happy to do it.

Brian: The only caveat being we said the same thing about Barrick and Randgold. We said the same thing about newmont and Goldcorp and really didn't see much develop.

William Holmes Heissenbuttel: So we, you know, certainly have our eyes and ears open. But I guess I wouldn't want you to say, yeah, there's going to be a lot of opportunity based on the disposal process. Would you, Bill, increase your exposure to Africa if there was an opportunity for a stream there? Sorry, which asset? Just in Africa, the continental Africa, take on that higher geopolitical risk? I'll be very country-specific.

Brian: So we certainly have our.

Brian: Our eyes and ears open.

Brian: But I guess I wouldn't want you to say, yes, there's going to be a lot of opportunity based on not the disposal process.

Brian: Mhm.

Did you increase.

Brian: It increased your exposure to Africa, if there was an opportunity for screen there.

Brian: Sorry, which asset.

Brian: Okay.

Brian: Just an advocate of constant at Continental Africa would you take that higher geopolitical risk.

Be very country specific we've had a very good experience in Botswana.

William Holmes Heissenbuttel: We've had a very good experience in Botswana. We haven't had a bad experience in Ghana, but again, eyes wide open. There, we've had a long-term reluctance to go to South Africa. So you know, I would say the number of countries in Africa where we would be comfortable is maybe a handful, and you might not need all the fingers on your hand to do it.

<unk>.

Brian: We haven't had a bad experience in Ghana, but again eyes wide open.

Brian: There we've had a long term reluctance in South Africa.

Brian: So I would say the number of countries in Africa, where we would be.

Comfortable as maybe a handful and you might not need all the fingers on your hand to do it.

Tanya Jakusconek: OK. Got it. All right. Thank you so much. I really appreciate it and really would hope for more clarity on Ross Rose, if you could, by a, Thanks, Tanya.

Brian: Mhm.

Brian: Okay.

Speaker Change: Got it alright.

Speaker Change: Alright. Thank you so much I really appreciate it and then really would have some more clarity on the grounds that he put by April.

Speaker Change: Yep. Thanks Tanya.

Operator: The next question comes from Brian McArthur with Raymond... Please go ahead, Brian. Good morning.

Speaker Change: Yeah.

Speaker Change: The next question comes from Brian Macarthur with Raymond James. Please go ahead, Brian.

Brian Macarthur: Good morning, most of my questions have been answered, but can I just ask for the Mount Milligan deal.

Brian McArthur: Most of my questions have been answered. But can I just ask for the Mount Milligan deal? How will this be accounted for, i.e., when you get the gold payments, and you get the free cash flow at the bottom? Is that going to be through revenue and be counted as GEOs, or is it going to be if I just want to think of it as other cash items coming through? Yeah, Brian, I'm going to I'm going to ask Paul to step in here and talk a little bit about the accounting. The only thing I the only caveat I will give you is that he's going to tell you that they're working on the finalization of the accounting. So bear with him a little bit.

Brian Macarthur: How this will be accounted for I E. When you get the gold.

Brian Macarthur: <unk> when you get the free cash flow at the bottom is that going to be.

Through revenue and be counted as <unk> or is it going to be.

Brian Macarthur: I just want to think of it is.

Brian Macarthur: Other cash items coming through.

Yeah, Brian I'm going to I'm going to ask Paul to step in here and talk a little bit about the accounting the only thing the only caveat I will give you as he's going to tell you that they're working on the finalization of the Catholic So bear with them alone Yeah I'm sure.

William Holmes Heissenbuttel: Yeah, I'm sure. Yeah. Hey, Brian, how are you?

Paul: Yeah, Hey, Brian how are you, yes in Hill's Ryan obviously need to qualify some of these statements with that fact that yeah, we're still evaluating the accounting treatment.

Paul Libner: Yeah, And Jill's right. You know, I obviously need to qualify some of these statements with the fact that, yeah, we're still evaluating the accounting treatment. But we do expect to complete that analysis here during our first quarter, and, you know, at which time we'll certainly give you more information in our next report. But, you know, as I sit here today, the consideration that we received, you know, obviously was cash as well as those deferred gold ounces. You know, I do anticipate bringing those on to the balance sheet, certainly as a receivable. And, you know, obviously, since that receivable is in the form of gold, a commodity, I do anticipate that we will have to mark to market that receivable through the P&L for each subsequent reporting period. You know, as far as when the time comes that we receive those ounces, obviously through that mark to marketing, if you will, over time, we'll take those ounces into inventory under our normal policy, and we'll sell them.

Paul: But we do expect to complete that analysis youre doing our first quarter anywhere at which time, we'll certainly give you more information within our next report but as.

Paul: As I sit here today, the consideration that we received you know obviously it was the cash as well as the deferred gold ounces.

Paul: I do anticipate bringing those onto the balance sheet certainly as as a receivable and you know obviously since that receivable is in the form of gold of commodity.

Paul: I do anticipate that we will have to mark to market that receivable through the P&L.

Paul: Each each subsequent reporting period.

Paul: As far as the when the time comes that we receive those ounces.

Paul: See you through that Mark to marketing if you will over time, we will take those ounces into inventory under our policy and we'll sell those.

Paul Libner: I can't say today with certainty that it would be revenue. I don't think it would be revenue. It could be some other form of, you know, an income, maybe not revenue, which equals GEO. So, again, more to come on that. But that would be where I would see things today, so can I maybe just ask, I mean, I can guess I can see that deferred gold maybe one way, but for the 20, I mean, the money you're going to get in up front, I mean, I guess where this goes is, obviously, with Cortez coming down, your growth rate in geo isn't going to be that high this year, I suspect, so you're going to Right, that'll just go straight to say, if I should think of it, that'll come in with, say, the 36 million from the subdebt coming back from ComiCal, right? It's just going to be cash in.

Paul: I can't say today with certainty that it would be revenue I don't think it would be revenue it could be other some other form of of a of an income maybe not revenue, which equals than <unk>, so, but again more to come on that but that would be where I would see things today.

Speaker Change: So can I, maybe just ask I mean, I can guess I can see the deferred Gould, maybe one way, but for the 20 I mean, the money youre going to get in upfront I mean.

Speaker Change: I guess, where that goes in is obviously with Cortez coming down your growth rate in geos isn't going to be that high this year I suspect so.

Speaker Change: So when are you going to count that $25 million as part of <unk>.

Speaker Change: <unk> growth this year because it is in a way I guess part of that stream.

Speaker Change: And it's not an insignificant amount of money.

Speaker Change: No.

Speaker Change: Wouldn't touch revenue.

Speaker Change: Right that'll just go straight to say if I should think about that will come in with say the $36 million from the sub debt coming back from common count right, it's just going to be cash and debt.

Brian McArthur: Correct. Exactly. Great. Sorry about that. That was the last question I really had about all this. Thank you. Thank you. Those are all the questions we have, so this concludes today's... Thank you everyone for your participation, and you may now disconnect your line.

Speaker Change: <unk> okay.

Speaker Change: Great sorry about that.

Speaker Change: That's great.

Last question I really had and all of us. Thank you.

Speaker Change: Thank you.

Speaker Change: Yes.

Speaker Change: These are all the questions. We have so this concludes today's call. Thank you everyone for your participation and you may now disconnect your lines.

Speaker Change: [music].