Q2 2026 Royal Gold Inc Earnings Call

August 6, 2026

Operator: Hello, everyone. Thank you for joining us. Welcome to the Royal Gold, Inc. 2026 Q2 Conference Call. After today's prepared remarks, we will host a question and answer session. If you would like to ask a question, please press star one to raise your hand. To withdraw your question, press star one again. I will now hand the conference over to Alistair Baker, Senior Vice President, Investor Relations and Business Development. Alistair, please go ahead.

Speaker #1: please press *1 to raise your hand. To withdraw your question, press *1 again. I will now hand the conference over to Alistair Baker, Senior Vice President, Investor Relations, and Business Development.

Speaker #1: Alistair, please go ahead.

Speaker #2: Thank you, operator. Good morning, and welcome to our discussion of ROYAL GOLD Q2 2026 results. This event is being webcast live and a replay of this call will be available on our website.

Alistair Baker: Thank you, operator. Good morning and welcome to our discussion of Royal Gold's Q2 2026 results. This event is being webcast live, and a replay of this call will be available on our website. Speaking on the call today are Bill Heissenbuttel, President and CEO, Paul Libner, Senior Vice President and CFO, and Martin Raffield, Senior Vice President of Operations. Other members of the management team 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 our filings with the SEC. We will also refer to certain non-GAAP financial measures, including adjusted net income, adjusted net income per share, adjusted EBITDA, and cash G&A.

Speaker #2: Speaking on the call today are Bill Heissenbuttel, President and CEO; Paul Libner, Senior Vice President and CFO; and Martin Raffield, Senior Vice President of Operations.

Speaker #2: Other members of the management team 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.

Speaker #2: 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 our filings with the SEC.

Speaker #2: We will also refer to certain non-GAAP financial measures, including adjusted net income, adjusted net income per share, adjusted EBITDA, and cash G&A. 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. Bill will start with an overview of the second quarter, Martin will provide portfolio commentary, and Paul will give a financial update. After the formal remarks, we will open the lines for a Q&A session. I will now turn the call over to Bill.

Speaker #2: Bill will start with an overview of the second quarter. Martin will provide portfolio commentary and Paul will give a financial update. After the formal remarks, we'll open the lines for a Q&A session.

Speaker #2: I'll now turn the call over to Bill.

Speaker #3: Good morning, and thank you for joining the call. I'll begin on slide 4. This is our second complete quarter of consolidated financial results after significantly growing our business in 2025, and our strong first half of 2026 clearly demonstrates the material change in the scale of our portfolio.

Bill Heissenbuttel: Good morning, and thank you for joining the call. I will begin on slide four. This is our second complete quarter of consolidated financial results after significantly growing our business in 2025. Our strong H1 2026 clearly demonstrates the material change in the scale of our portfolio. Revenue for the quarter was $451 million, operating cash flow was a record $335 million, and earnings were $236 million. These were increases of 115%, 119%, and 79%, respectively, over the same period last year. Our diversified portfolio produced revenue from a variety of properties, with no one asset contributing more than 13% of revenue and only two assets generating more than 10% of revenue. Reducing asset concentration risk was a key driver for our acquisitions in 2025, and we are pleased to see this reflected in our portfolio, which is now one of the most diversified in the sector.

Speaker #3: Revenue for the quarter was $451 million; operating cash flow was a record $335 million; and earnings were $236 million. These were increases of $115%, $119%, and $79% respectively, over the same period last year.

Speaker #3: Our diversified portfolio produced revenue from a variety of properties, with no one asset contributing more than 13% of revenue and only two assets generating more than 10% of revenue. Reducing asset concentration risk was a key driver for our acquisitions in 2025, and we are pleased to see this reflected in our portfolio, which is now one of the most diversified in the sector.

Speaker #3: After adjustments in net income was $218 million, or $2.56 per share, a 41% increase over last year. We remain a gold-focused business and gold-contributed 76% of total revenue for the quarter.

Bill Heissenbuttel: After adjustments, net income was $218 million or $2.56 per share, a 41% increase over last year. We remain a gold-focused business, and gold contributed 76% of total revenue for the quarter. Our adjusted EBITDA margin remained high at 83% for the quarter, reflecting our low and stable cash G&A. We paid dividends of $40 million to shareholders in the quarter at our annual rate of $1.90 per share, 6% higher than last year. We repaid $200 million on the revolver during the quarter, and we ended the quarter with total available liquidity of $1.2 billion. We are active on our share buyback program and repurchased and canceled 147,000 shares for a total cost of $30 million. As we discussed on our last quarterly call, we put the share buyback program in place as an additional capital allocation tool to be used with discretion.

Speaker #3: Our adjusted EBITDA margin remained high at 83% for the quarter, reflecting our low and stable cash G&A. We paid dividends of $40 million to shareholders in the quarter at our annual rate of $1.90 per share, which is 6% higher than last year.

Speaker #3: We repaid $200 million on the revolver during the quarter, and we ended the quarter with a total available liquidity of $1.2 billion. And we are active on our share buyback program and repurchase and canceled $147,000 shares for a total cost of $30 million.

Speaker #3: As we discussed on our last quarterly call, we put the share buyback program in place as an additional capital allocation tool to be used with discretion.

Speaker #3: We have multiple priorities for capital deployment, and our decision-making considers the business development pipeline, the balance sheet, our regular dividend, and our equity valuation.

Bill Heissenbuttel: We have multiple priorities for capital deployment, our decision-making considers the business development pipeline, the balance sheet, our regular dividend, and our equity valuation. During the quarter, we balanced the agreed further investment at Lorentz, paid $40 million in dividends, bought back shares, and made a meaningful reduction in debt, the latter of which preserves liquidity. Changes in market conditions and our outlook mean we must be flexible as we balance all opportunities for the accretive deployment of capital over the long term. In Q2, we thought the market did not reflect what we see as the value of our company, and we were active on the share buyback alongside our other priorities. Any further activity will be based on the short and long-term priorities of the company and not just valuation. During the quarter, we also made further progress on simplifying the Sandstorm portfolio.

Speaker #3: During the quarter, we balanced the agreed further investment that we're in, paid $40 million in dividends, bought back shares, and made a meaningful reduction in debt, the latter of which preserves liquidity.

Speaker #3: Changes in market conditions and our outlook mean we must be flexible as we balance all opportunities for the accretive deployment of capital over the long term.

Speaker #3: In the second quarter, we thought the market did not reflect what we see as the value of our company, and we are active on the share buyback alongside our other priorities.

Speaker #3: In any further activity, we'll be based on the short and long-term priorities of the company and not just valuation. During the quarter, we also made further progress on simplifying the Sandstorm portfolio.

Speaker #3: We announced the restructuring of our ownership in the Hod Modern Joint Venture, and after quarter-end, we reduced our equity interest from 30% to 15% and returned for additional royalty interest.

Bill Heissenbuttel: We announced the restructuring of our ownership in the Hod Maden joint venture, after quarter end, we reduced our equity interest from 30% to 15% in return for additional royalty interests. Hod Maden is a high-grade and high-margin project, and we are pleased to preserve the value of our position while bringing our overall interest more in line with our core royalty and streaming business. While the residual equity interest is not the ideal investment structure for our portfolio, the smaller interest materially reduces our exposure to operating and capital cost risks, and we may still look for opportunities to reduce this interest in the future. We also worked with Americas Gold and Silver to settle fixed delivery obligations related to the Relief Canyon mine.

Speaker #3: Hod Maden is a high-grade and high-margin project, and we are pleased to preserve the value of our position while bringing our overall interest more in line with our core royalty streaming business.

Speaker #3: While the residual equity interest is not the ideal investment structure for our portfolio, a smaller interest materially reduces our exposure to operating and capital cost risks.

Speaker #3: And we may still look for opportunities to reduce this interest in the future. We also worked with Americas Gold and Silver to settle fixed delivery obligations related to the Relief Canyon Mine.

Speaker #3: This was a complicated arrangement that was cumbersome to manage, and it eliminates a distraction for both sides without impacting our royalty or stream interests at Relief Canyon.

Bill Heissenbuttel: This was a complicated arrangement that was cumbersome to manage, it eliminates the distraction for both sides without impacting our royalty or streamed interests at Relief Canyon. With these transactions, we have significantly simplified aspects of the Sandstorm portfolio that were difficult for investors to understand. Over the past few months, we have streamlined the Horizon structure, divested non-core equity positions, restructured the Bear Creek investment, settled the Relief Canyon obligations, and made progress on restructuring the direct equity interest in Hod Maden. These steps were a strategic priority for us when we announced the Sandstorm and Horizon transaction, and I am pleased with how quickly we have been able to show progress. I'll now turn the call over to Martin to discuss portfolio performance in the quarter.

Speaker #3: With these transactions, we have significantly simplified aspects of the Sandstorm portfolio that were difficult for investors to understand. Over the past few months, we have streamlined the Horizon structure, divested non-core equity positions, restructured the Bear Creek investments, settled the Relief Canyon obligations, and made progress on restructuring the direct equity interest in Hod Maden.

Speaker #3: These steps were a strategic priority for us when we announced the Sandstorm and Horizon transactions, and I am pleased with how quickly we have been able to show progress.

Speaker #3: I'll now turn the call over to Martin to discuss portfolio performance in the quarter.

Speaker #4: Thanks, Bill. Turning to slide 5, we had another quarter of solid portfolio performance. Volume was $100,000 GEOs with revenue of $451 million. Growthy revenue was up by 83% from the prior million.

Martin Raffield: Thanks, Bill. Turning to slide five, we had another quarter of solid portfolio performance. Volume was 100,000 GEOs with revenue of $451 million. Royalty revenue was up by 83% from the prior year quarter to $140 million. We saw large revenue increases over the prior year from the Cortez Legacy Zone and Voisey's Bay, as well as strong contributions from our new Antamina, Caserones, Fundão, and Fruta Del Norte interests. Stream revenue was also up strongly from the prior year to $311 million, an increase of 133%. We saw materially higher revenue year-over-year from Andacollo, Pueblo Viejo, Rainy River, Khoemacau, Wassa, and Xavantina, slightly offset by lower revenue from Mount Milligan. We also saw a strong contribution from Kansanshi, as well as our new Greenstone, Bonikro, Cerro Moro, and Chapada streams.

Speaker #4: We saw large revenue increases over the prior year, from the quarter's legacies owned and voices bay, as well as strong contributions from our new Antonina Casarones Hyundai and Fruita Del Norte interests.

Speaker #4: Stream revenue was also up strongly from the prior year to a $311 million. An increase of $133%. We saw materially higher revenue year over year from Andacoyo, Pueblo Viejo, Rainy River, Comacal, Wasa, and Zavinchina, slightly offset by lower revenue from Mount Milligan.

Speaker #4: We also saw a strong contribution from Kinsanji, as well as our new Greenstone, Bonikro, Cerramorro, and Chapada streams. With respect to 2026 metal sales guidance, gold and silver are tracking well to the guidance ranges, and copper and other metals are trending to be around or above the top end of the ranges.

Martin Raffield: With respect to 2026 metal sales guidance, gold and silver are tracking well to the guidance ranges, and copper and other metals are trending to be around or above the top end of the ranges. We've seen strong copper-related revenue, largely due to lower than expected deductions on the Antamina NPI royalty and strong performance at other assets. Other metal sales have benefited from strong zinc production at Antamina and nickel production at Voisey's Bay. I'll now turn to slide six and give some high-level commentary on notable developments within the portfolio. At Mount Milligan, Centerra reported that gold and copper production is on track to meet full-year guidance.

Speaker #4: We've seen strong copper-related revenue, largely due to lower-than-expected deductions on the Antonina NPI royalty and strong performance at other assets. Other metal sales have benefited from strong zinc production in Antonina and nickel Bay.

Speaker #4: I'll now turn to slide 6 and give some high-level commentary on notable developments within the portfolio. At Mount Milligan, Centera reported that gold and copper production is on track to meet full-year guidance.

Speaker #4: At Rainy River, Core announced its plans after acquiring new gold late in the first quarter, including a more aggressive exploration program with a focus on near-mine drill testing and exploration of the large land package in the Rainy River district, which extends over 50 square kilometers.

Martin Raffield: At Rainy River, Coeur announced its plans after acquiring New Gold late in Q1, including a more aggressive exploration program with a focus on near mine drill testing and exploration of the large land package in the Rainy River district, which extends over 50 square kilometers. At Greenstone, Equinox reported that operations are continuing to ramp up, and 69% of the days in Q2 exceeded the mill nameplate capacity of 27,000 tons per day. Equinox expects this trend to continue, resulting in higher quarter-over-quarter production for the balance of the year. At Red Chris, the government of Canada announced a CAD 500 million Canadian investment in the Block Cave project. Newmont has received key regulatory approvals for the project from the province of British Columbia and is advancing towards board approval near the end of the year.

Speaker #4: At Greenstone, Equinox reported that operations are continuing to ramp up, and 69% of the days in the second quarter exceeded the mill nameplate capacity of 27,000 tons per day.

Speaker #4: Equinox expects this trend to continue resulting in higher quarter-over-quarter production for the balance of the year. At Redcriss, the Government of Canada announced a $500 million investment in the block cave project.

Speaker #4: Newmont has received key regulatory approvals for the project from the province of British Columbia, and is advancing towards board approval near the end of the year.

Speaker #4: At Casarones, work is underway by Lundine Mining to increase utilization of the cathode plant and grow copper production. 39,000 meters of drilling is planned this year on more than 10 exploration targets in the district.

Martin Raffield: At Caserones, work is underway by Lundin Mining to increase utilization of the cathode plant and grow copper production. 39,000 meters of drilling is planned this year on more than 10 exploration targets in the district. An initial resource at Angelica and the deep sulphide targets adjacent to the Caserones pit is expected in Q1 2027. At Fruta del Norte, Lundin Gold reported the discovery of two additional copper-gold porphyries, increasing the district total to seven, with a maiden resource for the Sandia porphyry expected in early 2027. At Kansanshi, First Quantum confirmed 2026 production guidance and reported that the S3 plant throughput was sustained above design capacity in Q2, driven by higher operating time, strong utilization, and improved milling rates. At Bonikro, Allied expects to extend the mine life from 2029 to 2036, with average annual gold production of 120,000 ounces per year.

Speaker #4: An initial resource at Angelica and the Deep Sulphide targets adjacent to the Casarones pit is expected in the first quarter of 2027. At Fruita Del Norte, Lundine Gold reported the discovery of two additional copper-gold porphyries, increasing the district total to seven.

Speaker #4: With a maiden resource for the Sandia porphyry expected in early 2027. At Kinsanji, first quantum confirmed 2026 production guidance and reported that the S3 plant throughput was sustained above design capacity in the second quarter, driven by higher operating time, strong utilization, and improved milling rates.

Speaker #4: At Bonicro, Allied expects to extend the mine life from 2029 to 2036, with average annual gold production of 120,000 ounces per year. Allied is also studying an increase in plant capacity to bring forward the processing of low-grade stockpiles beginning in late 2026 to early 2027.

Martin Raffield: Allied is also studying an increase in plant capacity to bring forward the processing of low-grade stockpiles, beginning in late 2026 to early 2027. At Platreef, Ivanhoe is now expecting commercial production from Phase 1 in Q4 2026. Shaft three commissioning was completed in June, and Ivanhoe expects this will support the Phase 1 ramp-up and the Phase 2 expansion. Construction of the Phase 2 concentrator is on schedule for completion in Q4 2027. We received the first delivery under our gold stream last week, and we are looking forward to increased deliveries as the mine ramps up towards commercial production. At Mara, Glencore reported yesterday that mining restarted ahead of schedule at Alumbrera and that Agua Rica feasibility engineering is underway with the environmental permitting submission expected in the coming weeks and regulatory approval expected shortly thereafter.

Speaker #4: At Platte Reef, Ivanhoe is now expecting commercial production from phase one in the fourth quarter of 2026. Shaft 3 commissioning was completed in June, and Ivanhoe expects this will support the phase one ramp-up and the phase two expansion.

Speaker #4: Construction of the phase two concentrator is on schedule for completion in the fourth quarter of 2027. We received the first delivery under our Gold Stream last week, and we are looking forward to increased deliveries as the mine ramps up towards commercial production.

Speaker #4: At Mara, Glencore reported yesterday that mining restarted ahead of schedule at Alumbrera, and that Agua Rica feasibility engineering is underway, with the environmental permitting submission expected in the coming weeks, and Riggy approval expected shortly thereafter.

Speaker #4: At Hod Modern, the transition of operatorship to Lydia is complete and construction is continuing while Lydia undertakes a review of the project schedule and execution plan.

Martin Raffield: At Hod Maden, the transition of operatorship to Lidya is complete, construction is continuing while Lidya undertakes a review of the project schedule and execution plan. Based on the work so far, project expenditures and commitments remain within the scope reflected in the technical report summary published by SSR Mining in January 2026. As of 30 June, overall project progress was approximately 25% when considering engineering at 74%, contracts and procurement at 44%, and construction at 8%. Cumulative expenditures were approximately $175 million. Lidya continues to target initial concentrate production in 2028, subject to completion of the schedule and execution plan review and timely execution of the remaining major construction and procurement packages. Finally, I'll note that recent severe winter weather in central and northern Chile has caused temporary operational issues at both Andacollo and Caserones.

Speaker #4: Based on the work so far, project expenditures and commitments remain within the scope reflected in the technical report summary published by SSR Mining in January 2026.

Speaker #4: As of June 30th, overall project progress was approximately 25%. When considering engineering at 74%, contracts and procurement at 44%, and construction at 8%. Cumulative expenditures were approximately $175 million.

Speaker #4: Lydia continues to target initial concentrate production in 2028, subject to completion of the schedule and execution plan review, and timely execution of the remaining major construction and procurement packages.

Speaker #4: Finally, I'll note that recent severe winter weather in central and northern Chile has caused temporary operational issues at both Andacoyo and Casarones. The weather system has passed, and neither operator has indicated a change to full-year guidance.

Martin Raffield: The weather system has passed, neither operator has indicated a change to full-year guidance. I'll now turn the call over to Paul.

Speaker #4: I'll now turn the call over to Paul.

Speaker #2: Thanks, Martin. I'll turn to slide 7 and give an overview of the financial results for the quarter. For the discussion of slides 7 and 8, I'll be comparing the quarter ended June 30, 2026, to the prior year quarter.

Paul Libner: Thanks, Martin. I'll turn to slide seven, give an overview of the financial results for the quarter. For the discussion of slides seven and eight, I'll be comparing the quarter end of 30 June 2026 to the prior year quarter. Revenue for the quarter was up strongly by 115% to $451 million. The large increase was driven by higher metal prices, new contributions from Kansanshi in the Sandstorm portfolio, higher volumes from Andacollo, Rainy River, and the Cortez Legacy Zone. Some of these increases were partially offset by lower sales from Mount Milligan. We also recognized a large revenue contribution from Relief Canyon in the Q2 when we sold 5,000 ounces of gold that led to the advanced delivery of stream ounces. The original delivery schedule was 1,275 ounces per quarter through the end of 2027.

Speaker #2: Revenue for the quarter was up strongly by 115% to $451 million. The large increase was driven by higher metal prices, new contributions from Kinsanji and the Sandstorm portfolio, and higher volumes from Andacoyo, Rainy River, and the Cortez Legacy Zone.

Speaker #2: Some of these increases were partially offset by lower sales from Mount Milligan. We also recognized a large revenue contribution from Relief Canyon in the second quarter.

Speaker #2: When we sold 5,000 ounces of gold related to the advanced delivery of stream ounces. The original delivery schedule was 1,275 ounces per quarter through the end of 2027.

Speaker #2: In terms of the impact on this year's guidance, we are receiving 1,175 more ounces this year than expected, and all the ounces were delivered in the first half of 2026 rather than being spread evenly across the year.

Paul Libner: In terms of the impact on this year's guidance, we are receiving 1,175 more ounces this year than expected, all the ounces were delivered in the H1 of 2026 rather than being spread evenly across the year. The incremental revenue this quarter from the sale of the advanced delivery was approximately $22 million. Metal price increases were significant, with gold up 37%, silver up 117%, and copper up 40%. Gold remains our dominant revenue driver at 76% of total revenue, with silver at 12% and copper at 8%. Turning to slide eight, I'll provide more detail on certain financial line items for the quarter. G&A expense was $13.4 million, which is approximately $3 million higher than the prior year. The increase in our G&A expense this period was mostly due to higher office and employee-related costs, which also includes non-cash stock compensation expense.

Speaker #2: The incremental revenue this quarter from the sale of the advanced delivery was approximately $22 million. Metal price increases were significant, with gold up 37%, silver up 117%, and copper up 40%.

Speaker #2: Gold remains our dominant revenue driver at $76% of total revenue, with silver at 12% and copper at 8%. Turning to slide 8, I'll provide more detail on certain financial line items for the quarter.

Speaker #2: G&A expense was $13.4 million, which is approximately $3 million higher than the prior year. The increase in our G&A expenses period was mostly due to higher office and employee-related costs, which also includes non-cash stock compensation expense.

Speaker #2: We continue to expect our total G&A expense for the year will finish near the high end of the $50 million to $60 million range we provided earlier on our February conference call.

Paul Libner: We continue to expect our total G&A expense for the year will finish near the high end of the $50 million to $60 million range we provided earlier on our February conference call. Our DD&A expense increased to $96 million from $31 million in the prior year. On a unit basis, this expense was $962 per GEO for the quarter, compared to $487 per GEO last year. The increase is mainly driven by higher carrying values at Kansanshi Gold Stream and the Sandstorm Horizon interest we acquired in 2025, partially offset by lower gold sales and depletion rates at Mount Milligan. Further, as we flagged in our preliminary financial information press release in July, approximately $12 million of the increase was due to the one-time sale of the gold ounces related to the Relief Canyon fixed delivery obligation settlement.

Speaker #2: Our DD&A expense increased to $96 million, from $31 million in the prior year. On a unit basis, this expense was $962 per GEO for the quarter, compared to $487 per GEO last year.

Speaker #2: The increase is mainly driven by higher carrying values at the Kinsanji Gold Stream and the Sandstorm Horizon interest we acquired in 2025, partially offset by lower gold sales and depletion rates at Mount Milligan.

Speaker #2: Further, as we flagged in our preliminary financial information press release in July, approximately $12 million of the increase was due to the one-time sale of the gold ounces related to the Relief Canyon fixed delivery obligation settlement.

Speaker #2: Our overall DD&A expense is in line with expectations, and we expect to finish the year within the guidance range of $339 to $379 million.

Paul Libner: Our overall DD&A expense is in line with expectations, and we expect to finish the year within the guidance range of $339 to $379 million. Fair value change in equity securities was $22 million for the quarter. Primarily due to the increase in the value of the Entrée Resources shares we acquired with the Sandstorm and Horizon acquisition. Interest and other expenses increased to $10 million from $1.5 million, primarily due to higher average amounts outstanding under the revolving credit facility in the current quarter. Tax expense for the quarter was $58 million, resulting in an effective tax rate of 19.7%. Before discrete items, our year-to-date effective tax rate is 19.9%, and we continue to expect that the rate for the full year will be within the guidance range of 17% to 22%.

Speaker #2: Fair value change in equity securities was $22 million for the quarter. Primarily due to the increase in the value of the entre of resources shares we acquired with the Sandstorm and Horizon acquisition.

Speaker #2: Interest in other expense increased to $10 million from $1.5 million primarily due to higher average amounts outstanding under the revolving credit facility in the current quarter.

Speaker #2: Tax expense for the quarter was $58 million. Resulting in an effective tax rate of 19.7%. Before discrete items, our year-to-date effective tax rate is 19.9%, and we continue to expect that the rate for the full year will be within the guidance range of 17% to 22%.

Speaker #2: Net income for the quarter was $236 million. Or $2.78 per share. Which compares to $132 million or $2.01 per share in the prior year.

Paul Libner: Net income for the quarter was $236 million, or $2.78 per share, which compares to $132 million, or $2.01 per share in the prior year. The increase in net income was largely due to higher revenue and fair value changes in our equity securities. These increases were partially offset by the higher cost of sales, DD&A, interest, and income tax expense. After adjusting for the fair value changes in equity securities, the gain on settlements of the Relief Canyon obligation, and the tax effect of these adjustments, adjusted net income was $218 million, or $2.56 per share. Finally, our operating cash flow this quarter was a record $335 million, up 119% from $153 million in the prior year. The increase was primarily due to higher stream and royalty revenue, partially offset by higher income tax payments, G&A costs, and interest payments.

Speaker #2: The increase in net income was largely due to higher revenue and fair value changes in our equity securities. These increases were partially offset by higher cost of sales, DD&A, interest, and income tax expense.

Speaker #2: After adjusting for the fair value changes in equity securities, the gain on settlements of the Relief Canyon obligation and the tax effect of these adjustments adjusted net income was $218 million or $2.56 per share.

Speaker #2: Finally, our operating cash flow this quarter was a record $335 million, up 119% from $153 million in the prior year. The increase was primarily due to higher stream and royalty revenue, partially offset by higher income tax payments, G&A costs, and interest payments.

Speaker #2: In summary, it was another very strong financial quarter that reflects the significant cash generation potential of the portfolio and the overall increase in the scale of our business.

Paul Libner: In summary, it was another very strong financial quarter that reflects the significant cash generation potential of the portfolio and the overall increase in the scale of our business. I will end on slide nine and summarize our financial position. Our increased cash flow has allowed us to quickly pay down debt, repurchase shares, and rebuild our liquidity. At the end of June, we had total available liquidity of $1.2 billion between the available amounts on the revolver and $244 million of working capital. After quarter end, we continued our focus on the balance sheet as we made a further $75 million repayment in July. We intend to make an additional $100 million repayment in mid-August. We continue to expect to fully repay the outstanding balance during Q4 based on current metal prices and absent further significant acquisitions.

Speaker #2: I will end on slide 9 and summarize our financial position. Our increased cash flow has allowed us to quickly pay down debt, repurchase shares, and rebuild our liquidity.

Speaker #2: At the end of June, we had total available liquidity of $1.2 billion, between the available amounts on the revolver and $244 million of working capital.

Speaker #2: After quarter-end, we continued our focus on the balance sheet as we made a further $75 million repayment in July. We intend to make an additional $100 million repayment in mid-August.

Speaker #2: We continue to expect to fully repay the outstanding balance during the fourth quarter, based on current metal prices and absent further significant acquisitions. In terms of additional liquidity, we expect Centerra to deliver the second tranche of gold as part of the deferred consideration for the Mount Milligan cost port agreement, sometime towards the end of the third quarter or beginning of the fourth quarter.

Paul Libner: In terms of additional liquidity, we expect Centerra to deliver the second tranche of gold as part of the deferred consideration for the Mount Milligan cost support agreement sometime towards the end of Q3 or beginning of Q4. Recall that the sale of these ounces will not be treated as revenue and will not be reflected in our calculation of GEOs. The cash received from the sale of these ounces will be reflected in our operating cash flow. With respect to financial commitments, at the end of June, we had $50 million of funding outstanding for the warrants acquisition. We expect to fund this amount in Q3 or Q4, subject to registration of security, which is underway. Our only other remaining commitment is our 15% share of Hod Maden project costs.

Speaker #2: Recall that the sale of these ounces will not be treated as revenue, and will not be reflected in our calculation of GEOs, and the cash received from the sale of these ounces will be reflected in our operating cash flow.

Speaker #2: With respect to financial commitments at the end of June, we had $50 million of funding outstanding for the warrants of acquisition. We expect to fund this amount in the third or fourth quarter subject to registration of security, which is underway.

Speaker #2: Our only other remaining commitment is our 15% share of Hod Maden project costs. As part of the ownership restructuring, we funded $70 million of project costs in the second quarter.

Paul Libner: As part of the ownership restructuring, we funded $70 million of project costs in Q2. Lidya is required to fund the next $397 million, after which both parties will fund their share of costs according to their ownership. Assuming no changes to the project timeline or scope and no debt financing, we expect we will start contributing our share of spending in mid-2027. That concludes my comments on our financial performance for the quarter. I will now turn the call back to Bill for closing comments.

Speaker #2: Lydia is required to fund the next $397 million after which both parties will fund their share of costs according to their ownership. Assuming no changes to the project timeline or scope, and no debt financing, we expect we will start contributing our share of spending in mid-2027.

Speaker #2: That concludes my comments on our financial performance for the quarter, and I will now turn the call back to Bill for closing comments.

Speaker #3: Thanks, Paul. As I said at the beginning of the call, this is our second full quarter of results after a year of transformational activity.

Bill Heissenbuttel: Thanks, Paul. As I said at the beginning of the call, this is our second full quarter of results after a year of transformational activity. Our financial results so far this year show the benefits of holding a large, diversified, and cash flowing portfolio. With the resolution of some of the more complicated Sandstorm interests complete and the transaction noise behind us, we have returned to delivering steady and predictable results. A year ago, there was concern that our 2025 transactions would cause dilution to near-term results. While it is only 2 quarters, our per share metrics in terms of GEO per share, adjusted EBITDA per share, operating cash flow per share, and EPS, all show the overall accretion of our 2025 transactions. Our business model should be simple for investors to understand and value.

Speaker #3: Our financial results so far this year show the benefits of holding a large diversified and cash flowing portfolio, and with the resolution of some of the more complicated Sandstorm interests complete, and the transaction noise behind us, we have returned to delivering steady and predictable results.

Speaker #3: A year ago, there was concern that our 2025 transactions would cause dilution to near-term results. While it is only two quarters, our per-share metrics in terms of GEO per share adjusted EBITDA per share operating cash flow per share, and EPS also the overall accretion of our 2025 transactions.

Speaker #3: Our business model should be simple for investors to understand and value. We have interest in some of the best assets in the mining business: Cortez, Four Mile, Kinsanji, Antemina, Red Crisp, , Great Bear, Mara, just to name a few.

Bill Heissenbuttel: We have interest in some of the best assets in the mining business, Cortez, Fourmile, Kansanshi, Antamina, Red Chris, Great Bear, Mara, just to name a few. I hope we will return to a premium valuation when the market has digested the results and values the cash flow and organic growth potential within the portfolio. Until such time, we will try to continue to show strong financial performance and use our increased cash flows to address multiple opportunities that may be present, ranging from new investments, further debt repayments, and potentially further share repurchases. Operator, that concludes our prepared remarks. I will now open the line for questions.

Speaker #3: And I hope we will return to a premium valuation when the market has digested the results and values the cash flow and organic growth potential within the portfolio.

Speaker #3: Until such time, we will try to continue to show strong financial performance and use our increased cash flows to address multiple opportunities that may be present, ranging from new investments further debt repayments and potentially further share repurchases.

Speaker #3: Operator, that concludes our prepared remarks. I'll now open the line for questions.

Speaker #1: We will now begin the question and answer session. If you would like to ask a question, please press star one to raise your hand.

Operator: We will now begin the question and answer session. If you would like to ask a question, please press star one to raise your hand. To withdraw your question, press star one again. We ask that you pick up your handset when asking a question to allow for optimum sound quality. If you are muted locally, please remember to unmute your device. Please stand by while we compile the Q&A roster. Your first question comes from the line of Brian MacArthur, Raymond James. Brian, your line is now open.

Speaker #1: To withdraw your question, press star one again. We ask that you pick up your handset when asking a question to allow for optimum sound quality.

Speaker #1: If you are muted locally, please remember to unmute your device. Please stand by while we compile the Q&A roster. Your first question comes from the line of Brian McArthur, Raymond James.

Speaker #1: Brian, your line is now open.

Speaker #3: Good morning. Just a few quick ones. You talked about cleaning up the portfolio from Sandstrom. You mentioned you still have the entree shares. What's the latest thinking with respect to them?

Brian MacArthur: Good morning. Just a few quick ones. You talked about cleaning up the portfolio from Sandstorm, and you mentioned you still have the Entrée shares. What's the latest thinking with respect to them?

Bill Heissenbuttel: Hey, Brian. Thanks for the question. We're going to be a little patient there. Rio and the government of Mongolia have been having ongoing discussions regarding some of the mining concessions. We just think if that were to get solved, maybe that might have a positive impact on the royalty share. Where it was with Versamex and some of the other ones, we were just, oh, well, let's just sell it. As of right now, we're going to just hold on for a little bit and see what happens.

Speaker #4: Hey, Brian. Thanks for the question. We're going to be a little patient there. Rio and the government of Mongolia have been having ongoing discussions regarding some of the mining concessions we just think if that were to get solved, maybe that might have a positive impact on the entree shares.

Speaker #4: So where it was with Versamet and some of the other ones, we were just like, "Well, let's just sell it." As of right now, we're going to just hold on for a little bit and see what happens.

Brian MacArthur: Great. Thanks. My second question, thank you for the Hod Maden update spending. I guess now they pay the next $397,000. You say there's $175,000 in, and you think you're going to make payments in mid-2027. The way you see it now, that's a fair bit of the capital will be spent by mid-2027. Is that back half payment, if it goes that way, pretty significant? That is to say, the majority of the rest of the capital you're thinking is going out in 2027 and very little in 2028, assuming nothing changes. Is that the way I should think about it? I'm just trying to figure out what that actual payment could be in 2027.

Speaker #3: Great. Thanks. My second question, thank you for the hot Madden update spending. So I guess now you sort of they paid an extra $397.

Speaker #3: You say there's $175 in, and you think you're going to pay make payments in mid-2027. The way you see it now, I mean, that's a fair bit of the capital will be spent by mid-2027.

Speaker #3: Is that back half payment if it goes that way pretty significant? That is to say the majority of the rest of the capital you're thinking is going out in '27 and very little in 2028, assuming nothing changes.

Speaker #3: Is that the way I think about it? I'm just trying to figure out what that actual payment could be in 2027.

Bill Heissenbuttel: Well, I might start with Martin. Is there anything on the construction timing we can add at this point? I don't quite know what we've talked about in the past. I imagine it's going to go in 2027 and 2028, anything you can add, Martin?

Speaker #4: Well, I might start with Martin. Is there anything on the construction timing we can add at this point? I don't quite know what we've talked about in the past.

Speaker #4: I imagine it's going to go from in 2027 and 2028, but anything you can add, Martin?

Martin Raffield: Lidya is still talking about first production of concentrate in 2028. I think the way to think about it, Brian, would that the remaining input from Royal Gold would probably be split over H2 2027 and H1 2028. That's a very rough view at the moment.

Speaker #5: I think that the so Lydia is still talking about first production of concentrate in 2028. So I think the way to think about it, Brian, would that the remaining input from Royal Gold would probably be split over the second half of 2027, and the first half of 2028.

Speaker #5: But that's a very rough view at the moment.

Brian MacArthur: Great, thank you. Just third question, you mentioned your second tranche under the support payments for Mount Milligan. Can you just remind me when you get the final ounces under that deal? What the trigger is for that and when you might receive it?

Speaker #3: Great. Thank you. And the third question, you mentioned your second tranche for under the support payments for Mount Milligan. Can you just remind me when you get the final ounces under that deal, what the trigger is for that and when you might receive it?

Bill Heissenbuttel: Oh, boy. Paul, I'm going to take a shot at it, if you can help me a little bit I would appreciate it. The total delivery was 50,000 ounces. I think there were three scheduled tranches based on Greenstone of 11,000 ounces. After the one we get in, say, next quarter or Q4, will there be another 11? I don't remember the trigger for it. The rest of it, I think, is longer term. It sort of goes out into the next decade. Paul, am I anywhere close?

Speaker #4: Oh, boy. Paul, I'm going to take a shot at, and if you can help me a little bit, I would appreciate it. So the total delivery was $50,000 ounces, I think there were three scheduled ounces based on Greenstone of $11,000 ounces.

Speaker #4: So after the one we get in, say, next quarter or the fourth quarter, will there be another 11? I don't remember the trigger for it.

Speaker #4: But then the rest of it, I think, is longer term. It sort of goes out into the next decade. Paul, am I anywhere close?

Speaker #2: That's correct, Bill. And Brian, just remember, it's based on a delivery—or, I'm sorry, threshold—excuse me, production thresholds at Greenstone. But Bill is correct.

Paul Libner: That's correct, Bill and Brian. Just remember, it's based on production thresholds at Greenstone. Bill is correct. The second tranche, 11,111 ounces, as I mentioned, we're anticipating that they're going to meet the next threshold required for that sometime in the late Q3 or possibly early Q4.

Speaker #2: The second tranche, $11,111 ounces, as I mentioned, we're anticipating that they're going to meet the next threshold required for that. Sometime in the late third quarter or possibly early fourth quarter.

Speaker #3: Great. Thanks very much, Francine, my questions.

Brian MacArthur: Great. Thanks very much for answering my questions.

Speaker #4: Thanks, Brian.

Bill Heissenbuttel: Thanks, Brian.

Operator: Your next question comes from the line of Cosmos Chiu with CIBC. Cosmos, your line is now open.

Speaker #1: Your next question comes from the line of Cosmos Q with CIBC. Cosmos, your line is now open.

Speaker #6: Thanks, Bill and team. Maybe my first question is on your guidance. You're tracking very well in the Other Metals category and also the Copper category.

Cosmos Chiu: Thanks, Bill and team. My first question is on your guidance. You're tracking very well in the other metals category and also the copper category. In the other metals, could you remind me what's included in that $29 million that you've generated so far in Q1 and Q2?

Speaker #6: So, maybe in the other metals, could you remind me what's included in that $29 million that you've generated so far in Q1 and Q2?

Bill Heissenbuttel: Yeah, Cosmos. Other's going to be things like lead, zinc, nickel, which it's going to come from Antamina on the zinc side, I believe. Voisey's Bay, copper, nickel, and there's one more. Paul, what's the other? Peñasquito, lead and zinc.

Speaker #4: Yeah. Cosmos, I mean, other is going to be things like lead, zinc, nickel, which is good. It's going to come from Antamine on the zinc side, I believe.

Speaker #4: Boise's Bay, copper, nickel, and oh, excuse me. There's one more. But Paul, what's the other oh, Penasquito, lead and zinc. Paul, is there anything else other than those three that really drive that?

Bill Heissenbuttel: Paul, is there anything else other than those three that really drive that?

Paul Libner: Those are the big highlights.

Speaker #2: No, those are the big highlights.

Paul Libner: Those are the big highlights.

Speaker #4: Okay.

Cosmos Chiu: Okay.

Bill Heissenbuttel: Okay.

Speaker #6: So I guess my question is, it's driven off of, I would imagine, higher sort of base metal prices. We've seen so far in the first half, is it a possibility that I take what has been generated in the first half and times two and then that will be sort of what the annualized number might be?

Cosmos Chiu: I guess my question is driven off of, I would imagine, higher base metal prices we've seen so far in H1. Is it a possibility that I take what has been generated in H1 and times two, and then that would be sort of what the annualized number might be? Because that would be much higher than what you had expected, at least for other metals, and significantly higher as well for copper. Is that one possibility if base metal prices stay at where they are today?

Speaker #6: Because that would be much higher than what you had expected, at least for other metals, and significantly higher as well for copper. Is that one possibility, that kind of base metal prices stay at where they are today?

Cosmos Chiu: Well, yeah, sure it's a possibility. The only caveat we have is, the Antamina NPI is new to us.

Speaker #4: Yeah, sure. It's a possibility. The only caveat we have is the Antamine NPI is new to us. And we've seen revenue of $26 million in the first six months of this year.

Bill Heissenbuttel: We've seen revenue of $26 million in H1 of this year. You go back to 2023 and 2024, Antamina paid somewhere between $16 million and $17 million of royalty revenue for the full year.

Speaker #4: If you go back to '23 and '24, Antamina paid somewhere between $16 and $17 million of royalty revenue for the full year. Now, we don't know of anything in the portfolio that would bring it down, and that's why we're uncomfortable changing guidance.

Bill Heissenbuttel: We don't know of anything in the portfolio that would bring it down, and that's why we're uncomfortable changing guidance. We don't have a lot of insight into Peñasquito. We don't have a lot of insight into Voisey's Bay. As I thought, well, look, it's a small piece of revenue. Let's get to the end of Q3, and then if we need to adjust it so people know where they're going to end up at the end of the year, then I'll feel a little bit better about talking about it then.

Speaker #4: But we don't have a lot of insight into Penasquito. We don't have a lot of insight into Boise's Bay. So the thought was, look, it's a small piece of revenue.

Speaker #4: Let's get to the end of the third quarter, and then, if we need to adjust it so people know where they're going to end up at the end of the year, we can talk.

Speaker #4: I'll feel a little bit better about talking about it then.

Cosmos Chiu: Bill, since you talk about being comfortable here, and it's a good news story, copper up and other metals up. Now copper makes up about 8% of your revenue, as Paul had mentioned earlier. It could potentially go higher. Is that a good mix, or does that make you uncomfortable? At what point could it make you uncomfortable in terms of cost?

Speaker #6: Yeah. And Bill, since you talk about being comfortable here, and it's a good news story, copper up and other metals up, but now copper mix up about 8% of your revenue as Paul had mentioned earlier.

Speaker #6: It could potentially go higher. Is that a good mix or is that does that make you uncomfortable? At what point could it make you uncomfortable in terms of cost?

Bill Heissenbuttel: I don't think we'd get uncomfortable.

Speaker #4: I don't think we can get uncomfortable. I mean, you look at—no, I mean, we're 76% gold, and I just can't see—I don't know what the copper price would have to go to, to suddenly say, well, that 76% is now substantially lower.

Cosmos Chiu: As an opportunity?

Cosmos Chiu: No, we're 76% gold, and I just can't see. I don't know what the copper price would have to go to suddenly say, Well, that 76% is now substantially lower. I don't worry about it.

Bill Heissenbuttel: No, we're 76% gold, and I just can't see. I don't know what the copper price would have to go to suddenly say, Well, that 76% is now substantially lower. I don't worry about it.

Speaker #4: I don't worry about it.

Speaker #6: Do you see this as an opportunity or not? You're still very much focused on precious metals.

Cosmos Chiu: Do you see it as an opportunity or no? You're still very much precious metals focused.

Bill Heissenbuttel: We're precious metals focused, as we've always said, if someone wants to call us up and show us something in another metals market that we can understand and we like the asset, yeah, we'll certainly consider an investment. Copper is not suddenly a strategic metal for us, where we're going out and looking for it.

Speaker #4: We're precious metals focused, but as we've always said, if someone wants to call us up and show us something in another metals market that we can understand, and we like the asset, yeah, we'll certainly consider an investment.

Speaker #4: But certainly, copper is not suddenly a strategic metal for us where we're going out looking for it.

Cosmos Chiu: Yep. Maybe going to Hod Maden a little bit, Bill. From where you're standing and from where your team is standing, how has the transition been in terms of the operatorship from SSR Mining to Lidya? Has it been okay?

Speaker #6: Yep. Maybe going to Hot Madena a little bit, Bill. From where you're standing and from where your team is standing, how has the transition been in terms of the operatorship from SSR mining to Lydia?

Speaker #6: Has it been okay?

Speaker #4: Yeah, I think it's been okay. But I'm going to turn that question over to Martin because he's really been in touch with the Lydia technical folks.

Bill Heissenbuttel: Yeah. I think it's been okay, I'm going to turn that question over to Martin because he's really been in touch with the Lidya technical folks. Martin, why don't you give Cosmos your thoughts?

Speaker #4: So, Martin, why don't you give Cosmos your thoughts?

Speaker #2: Yeah. So I think to answer your question, clearly, yes, we do believe the transition has gone well. At the mine site level, not really very much has changed.

Martin Raffield: Yeah. I think to answer your question, clearly, yes, we do believe the transition has gone well. At the mine site level, not really very much has changed. They've changed some senior leadership positions, but the work is still ongoing. They're still working on the main access tunnels, and they're ramping those up. They're working on the small adit tunnel, which is key for us because it gets access between the South Valley and the North Valley, where the tailings are stored. They're still working on the permanent camp infrastructure. They're working and almost complete on the water management infrastructure. Everything that we would've expected to continue work under SSR leadership is still going ahead and appears to be ramping up as we would expect. I think we're comfortable with that. We're comfortable with the sort of communications that we have with the Lidya team.

Speaker #2: They've changed some senior leadership positions, but the work is still ongoing. They're still working on the main access tunnels, and they are ramping those up.

Speaker #2: They're working on the Solitur tunnel, which is key for us because it provides access between the South Valley and the North Valley where the tailings are stored.

Speaker #2: They're still working on the permanent camp infrastructure. They're working and almost complete on the water management infrastructure. So everything that we would have expected to continue work under SSR leadership is still going ahead and appears to be ramping up as we would expect.

Speaker #2: So I think we're comfortable with that. We're comfortable with the sort of communications that we have with the Lydia team. We've got good relationships going there.

Martin Raffield: We've got good relationships going there, we've got clear insight into how the operation is progressing. Yes, overall, very comfortable with the handover.

Speaker #2: So we've got clear insight into how the operation is progressing. So yes, overall, very comfortable with the handover.

Speaker #6: Great. And as we talked about timelines at Hot Madena, you talked about potentially needing to make that mixed payment in mid-2027. Followed by production starting in sometime 2028.

Cosmos Chiu: Great. As we talked about timelines at Hod Maden, you talked about potentially needing to make that next payment in mid-2027, followed by production starting in sometime 2028. I guess my question is, Bill, as you mentioned, there could be potential for further optimization of the structure. You're still a 15% joint venture owner of the joint venture partnership. Ideally, if a transaction were to happen, a further transaction were to happen, would you want that to happen before you need to make that next contribution or before production starts? Is there different timelines that you look at?

Speaker #6: I guess my question is, Bill, as you mentioned, there could be potential for further optimization of the structure. You're still a 15% owner of the joint venture partnership.

Speaker #6: So ideally, if a transaction were to happen—a further transaction were to happen—would you want that to happen before you need to make that next contribution, or before production starts?

Speaker #6: Is there, kind of like, different timelines that you look at?

Bill Heissenbuttel: Not in that way.

Speaker #4: Not in that way. I wouldn't want to start setting deadlines threshold dates beyond which we don't want to go beyond it. I guess the message we're trying to say is, look, when we started the year, we were 30% holder, and we were very clear that's not strategic.

Cosmos Chiu: Okay.

Bill Heissenbuttel: I wouldn't want to start setting deadlines, threshold dates beyond which we don't want to go beyond it. I guess the message we're trying to say is, look, when we started the year, we were a 30% holder, and we were very clear that that's not strategic. We want to turn it into something else that looks more similar to what we do. With the change in ownership, we took a half step towards that road. The 15% is still non-core. If somebody's interested in buying it, we are more than happy to have that discussion. It's not the same priority. We're not out there hiring investment banks to run processes, and we may be looking for the opportune time to dispose of the rest of the 15%, but it's not tied to when we have to make the next payment.

Speaker #4: We want to turn it into something else that looks more similar to what we do. With the change in ownership, we took a half step.

Speaker #4: Down that towards that road. So the 15% is still non-core. If somebody is interested in buying it, we are more than happy to have a discussion.

Speaker #4: But it's not the same priority. We're not out there hiring investment banks to run processes. And we may be looking for the opportune time to dispose of the rest of the 15%.

Speaker #4: But it's not tied to when we have to make the next payment. It's not before the mine goes into production, which is—we're going to play it by ear more than what we were doing at the beginning of the year, which was, "This is a priority."

Bill Heissenbuttel: It's not before the mine goes into production, which is, we're going to play it by ear more than what we were doing at the beginning of the year, which was, This is a priority. Let's figure it out.

Speaker #4: Let's figure it out.

Speaker #6: Great. Thanks, Bill, Martin, and Paul for answering all my questions. That's all I have. Enjoy the rest of your summer, and we'll chat again later.

Cosmos Chiu: Great. Thanks, Bill, Martin, and Paul, for answering all my questions. That's all I have. Enjoy the rest of your summer, we'll chat again later.

Speaker #4: Thanks, Cosmos.

Bill Heissenbuttel: Thanks, Cosmos.

Speaker #1: A reminder: if you would like to ask a question, please press star one on your device. Your next question comes from the line of Daniel Major with UBS.

Operator: A reminder, if you would like to ask a question, please press star one on your device. Your next question comes from the line of Daniel Major with UBS. Daniel, your line is now open.

Speaker #1: Daniel, your line is now open.

Daniel Major: Hi, thanks very much for the questions. The first one, just on the buyback. You've obviously started buying back stock this quarter. How should we be thinking about the criteria for the buyback going forward, and how should we be modeling it? Is this very much dependent on where the shares are trading relative to the peers, where the shares are trading in absolute terms relative to the gold price, et cetera? Should we be thinking about it as a proportion of cash generation? How should we be thinking about the parameters to determine the run rate of that buyback?

Speaker #7: Hi, and thanks very much for the questions. Yeah, the first one is on the buyback. I see you've obviously started buying back stock this quarter.

Speaker #7: How should we be thinking about the criteria for the buyback going forward, and how should we be modeling it? I mean, is this very much dependent on where the shares are trading relative to peers, where the shares are trading in absolute terms relative to the gold price, etc.?

Speaker #7: Should we be thinking about it as a proportion of cash generation, or how should we be thinking about the parameters to determine the run rate of that buyback?

Speaker #4: Yeah, I would honestly try to talk you out of modeling it, because the decisions to buy shares back or not depend on a number of factors.

Bill Heissenbuttel: Honestly, I'd try to talk you out of modeling it. The decisions to buy shares back or not depends on a number of factors. As we talked about in May when we announced the program, NAV multiples and where we trade relative to the others, sure, that is the factor that sort of trips the rest of the decision-making. It doesn't mean we're going to do something. We're not going to talk about at a NAV multiple below this, we're going to buy back so many shares. We're going to look at all the priorities, and the way I view it is share buybacks are great, but that's sort of a short-term priority. We have to, as a management team, consider the long-term priorities of the company, and that involves new investments.

Speaker #4: And as we talked about in May when we announced the program, NAV multiples and where we trade relative to the others—sure, that is the factor that sort of trips the rest of the decision-making.

Speaker #4: But it doesn't mean we're going to do something. And so we're not going to talk about at a NAV multiple below this, we're going to buy back so many shares.

Speaker #4: That's—we're going to look at all the priorities. And the way I view it is, share buybacks are great, but that's sort of a short-term priority.

Speaker #4: We have to, as a management team, consider the long-term priorities of the company, and that involves new investments. Is it better to buy back shares now or make an investment in a mine that's going to produce revenue for us for 20 years?

Bill Heissenbuttel: Is it better to buy back shares now or make an investment in a mine that's going to produce revenue for us for 20 years? We don't go into this with, Oh, you should expect this amount to be bought back each quarter. That's just not the way we're going to approach the program. What we're going to do is come and tell you what we did, as we did with the announcement in July on the quarter-end results. I'm going to frustrate you a little bit there and not be able to give you a modeling number.

Speaker #4: And so we don't go into this with, oh, you should expect this amount to be bought back each quarter. That's just not the way we're going to approach the program.

Speaker #4: What we're going to do is come and tell you what we did, as we did with the announcement in July on the quarter-end results.

Speaker #4: So I'm going to frustrate you a little bit there and not be able to give you a modeling number.

Speaker #7: No worries. That's helpful color, thank you. The second question maybe follows on from Brian's question, just around the Hot Maden additional payments for the remaining capex.

Daniel Major: No worries. That's useful color. Thank you. The second question maybe follows on from Brian's question, just around the Hod Maden additional payments for the remaining CapEx. Can you remind us what your share of the residual CapEx will be due in H2 2027, 2028 based on the previous CapEx estimate, and how you think that CapEx number is trending under new ownership?

Speaker #7: Can you remind us what the what your share of the residual capex will be due in 2H2728 based on the previous capex estimate? And how you think that capex number is trending under new ownership?

Speaker #4: Yeah, well, I mean, let's just stick with the number that was in the technical report, and I'm going to round it here just to make the math easy.

Bill Heissenbuttel: Yeah. Well, let's just stick with the number that was in the technical report, and I'm going to round it here just to make the math easy, $900 million project. 15% of that is $135 million, and we've already invested $70. We only have $65 million to go to be invested over 2027, 2028. Compared to our overall cash flow, the remaining commitment here on the base CapEx is relatively small. That's why we look at it and go, "I'm not too worried about it." We've already invested more than half of what the commitment would be in the last month or two. Those are the numbers, and I don't have a trending CapEx number for you. I think we're pretty early, and I know Lidya's using the original budget to work towards.

Speaker #4: 900 million dollar project. And so 15% of that is 135 million dollars. And we've already invested 70. So we only have 65 million dollars to go.

Speaker #4: To be invested over $2,728. So, actually, I mean compared to our overall cash flow, the remaining commitment here on the base capex is relatively small.

Speaker #4: So, and that's why we kind of look at it and go, "Oh, not too worried about it. We've already invested more than half of what the commitment would be."

Speaker #4: In the last month or two. But that's—I mean, those are the numbers, and I don't have a trending capex number for you.

Speaker #4: I think we're pretty early, and I know Lydia is using the original budget to work towards.

Speaker #7: Okay, thank you. And then, yeah, last question. I mean, we've obviously seen some consolidation in the equity valuations across the space. How's the deal pipeline looking?

Daniel Major: Okay. Thank you. Yeah, the last question, we've obviously seen some consolidation in the equity valuations across the space. How's the deal pipeline looking? Are you seeing any opportunity set? How's the landscape changing?

Speaker #7: Yeah, are you seeing—yeah, are you seeing any opportunity set? How's the landscape changing?

Bill Heissenbuttel: In terms of asset acquisitions, new investments?

Speaker #4: In terms of asset acquisitions, are there any new investments?

Speaker #7: Yeah. Yeah, new investments.

Daniel Major: Yeah. New investments.

Bill Heissenbuttel: Yeah. Dan, I'll get Dan Breeze on the line here and let him give you some input.

Speaker #4: Yeah. Yeah, yeah. Dan, I'll get Dan Breeze on the line here and let him give you some conclusions.

Speaker #7: Sure.

Daniel Major: Sure.

Speaker #3: Yeah, yeah. Thanks, Bill. Hi, Daniel. Yeah, thanks for the question. We've been pretty busy I think that's the way we would describe things. It's pretty wide in terms of the opportunity sets and your question specifically.

Dan Breeze: Yeah. Thanks, Bill. Hi, Daniel. Yeah, thanks for the question. We've been pretty busy. I think that's the way we would describe things. It's pretty wide in terms of the opportunity sets. To your question specifically, we were wondering at the start of the year with the volatility of the market and the political risk situation, if that was going to slow down deal flow and sellers and whatnot. We haven't seen that at all. Now with gold finding a bit of a floor here, I hope that's a positive as well. We're kind of as busy as ever, and it's a good mix of things that we're looking at, new streams and royalties, and we're still finding third-party royalties out there, packages and standalone royalties. It's a really good mix for us right now. We're feeling pretty good about the pipeline.

Speaker #3: We were wondering, at the start of the year, with the volatility of the markets and the political risk situation, if that was going to slow down deal flow and sellers and whatnot.

Speaker #3: We haven't seen that at all. And now, with gold finding a bit of a floor here, I hope that's a positive as well. So, we're kind of as busy as ever.

Speaker #3: And it's a good mix of things that we're looking at, new streams and royalties and we're still finding third-party royalties out there. Packages and standalone royalties.

Speaker #3: So, it's a really good mix for us right now. We're feeling pretty good about the pipeline.

Speaker #7: Great, thanks. Maybe just one follow-up on that. I mean, we've been, I think as kind of a broader industry, awaiting the inflection point in FIDs of copper projects.

Daniel Major: Great. Thanks. Maybe just one follow-up on that. We've been, I think as a kind of broader industry, waiting for the inflection point in FIDs of copper projects. That hasn't really taken off yet, are you seeing any more opportunity there in terms of funding streams on more sizable base metal investments?

Speaker #7: That hasn't really taken off yet, but are you seeing any more opportunity there? And in terms of funding streams on more sizable base metal investments?

Speaker #5: Yeah, I think we are,

Dan Breeze: I think we are, Daniel. We're always in conversations with operators in assets like that. That's where our product works best is when you can kind of liberate precious byproducts out of a base metal asset. Of course, we've all seen the big deal this year with over Antamina, and I think that's piqued some interest of other large diversified. We'll see where things end up, but that's more of arbitrage opportunity maybe as opposed to development CapEx going into a new project. Those do exist out there from what we're seeing.

Speaker #3: Daniel. I mean, it's we're always in conversations with operators and assets like that. I mean, that's where our product works best is when you can kind of liberate precious byproducts that have a base metal asset.

Speaker #3: And of course, we've all seen the big dealer this year with over antimona. And I think that's piqued some interest of other large diversified.

Speaker #3: So we'll see where things end up. But that's more of a arbitrage opportunity as a maybe as opposed to development capex going into a new project.

Speaker #3: But those do exist out there from what we're seeing.

Speaker #7: Great. Thanks for questions.

Daniel Major: Great. Thanks for the questions.

Speaker #4: Thank you.

Bill Heissenbuttel: Thank you.

Operator: Our last question comes from the line of Tanya Jakusconek from Scotiabank. Tanya, your line is now open.

Speaker #1: Our last question comes from the line of Tanya Yakushkinek from Scotiabank. Tanya, your line is now open.

Tanya Jakusconek: Oh, great. Thank you so much for taking my question. Maybe Dan, if I could just finish up with you on the pipeline. From what I gathered, there's royalty opportunities, there's opportunities on streams from base metal companies on their metal production, and there's also opportunities as well mine builds. Because I understand

Speaker #8: Oh, great. Yeah, thank you so much for taking my question. Maybe, Dan, if you could just finish off on the pipeline. What I've gathered about these royalty opportunities is that they are opportunities on streams on base metal companies, on their metal production.

Speaker #8: And there are also opportunities as well on mine builds. Did I understand that correctly?

Bill Heissenbuttel: Tanya, you're breaking up.

Speaker #4: Tanya, you're breaking up.

Bill Heissenbuttel: Tanya.

Speaker #3: Tanya, go ahead.

Tanya Jakusconek: Go ahead. Hello?

Speaker #8: Hello?

Dan Breeze: Tanya, we're just kind of breaking up a little bit. Could you repeat that, please?

Speaker #3: Tanya, we're just kind of breaking up a little bit. Could you repeat that, please? I didn't quite hear all of that, if you don't mind.

Tanya Jakusconek: Yeah.

Dan Breeze: I didn't quite hear all that, if you don't mind.

Speaker #8: Yeah. So I just wanted to confirm with Dan that the opportunities that you are seeing for transactions are royalty opportunities also opportunities from base metal companies on precious metal streams and also on mine builds on gold producers.

Tanya Jakusconek: Yeah. I just wanted to confirm with Dan that the opportunities that you are seeing for transactions are royalty opportunities, also opportunities from base metal companies on precious metal streams, and also on mine builds on gold producers. Is that how I should be thinking about the opportunities?

Speaker #8: Is that how I should be thinking about the opportunities?

Speaker #3: Yeah, that's right, Tanya. And the bread and butter, which is still what we see right now, is skewed towards gold over development projects—primary gold assets, generally speaking.

Dan Breeze: Yeah. That's right, Tanya. The bread and butter, which is still what we see right now, is skewed towards gold over development projects, primary gold assets, generally speaking. As I mentioned, there are other opportunities out there with the base metal assets and third-party royalties and whatnot. That core that's always there is still the prominent deal opportunity for us.

Speaker #3: But as I mentioned, there are other opportunities out there with the base metal assets, and third-party royalties and whatnot. But that core that's always there is still the prominent deal opportunity for us.

Speaker #8: And one of your peers mentioned, Dan, that they've seen the size of opportunities increase. You would see between 300 and 500. Is that still your bread and butter of what you're seeing out there?

Tanya Jakusconek: One of your peers mentioned, Dan, that they've seen the size of opportunities increase. You were seeing between $300 and 500. Is that still your bread and butter of what you're seeing out there?

Speaker #3: Yeah, I think that's still the core, Tanya. I'd say 100 to 500 million. We're aware of a couple of larger opportunities out there. That would be above 500 million.

Dan Breeze: Yeah, I think that's still the core, Tanya. I'd say $100 to 500 million. We're aware of a couple of larger opportunities out there that would be above $500 million. The bulk of them are still in that category, $100 to 500.

Speaker #3: But the bulk of them are still in that category. 100 to 500.

Speaker #8: Okay. Thank you, Dan, for that. Just wanted to circle back if I could to Odd Madden. I know we're focusing on this asset and what has to be done in mid-2027 from your standpoint.

Tanya Jakusconek: Okay. Thank you, Dan, for that. Just wanted to circle back, if I could, to Hod Maden. I know we're focusing on this asset and what has to be done in mid-2027 from your standpoint. Can you remind me, is there a right of first refusal for you selling your 15% interest? Yeah. The joint venture has all the usual protections.

Speaker #8: Can you remind me, is there a right of first refusal if you are selling your 15% interest?

Speaker #4: Yeah, I mean, the joint venture has all the usual protections you would find in joint venture partners.

Bill Heissenbuttel: Yeah. The joint venture has all the usual protections.

Bill Heissenbuttel: you would find with a joint venture partner.

Bill Heissenbuttel: ...you would find with a joint venture partner.

Speaker #8: Okay. And then, Bill, do you also have the right for dilution? Should you not want to proceed?

Tanya Jakusconek: Okay. Bill, do you also have the right for dilution, should you not want to proceed?

Speaker #4: Yeah, it's a standard joint venture agreement.

Bill Heissenbuttel: It's a standard joint venture agreement.

Speaker #8: Okay, so that's another way you can do it. Okay, perfect. And if I can circle back just on your guidance again, it seems that the metals guidance, from what I understood, the reason that you are trending towards the upper end of the range and/or beyond is to do with the Antamena NPI, and obviously what capital is placed on that NPI.

Tanya Jakusconek: Okay, that's another way you can do it. Okay, perfect. If I can circle back just on your guidance again. It seems that the metals guidance, from what I understood, the reason that you are trending towards the upper end of the range, and or beyond, is to do with the Antamina NPI and obviously what capital is placed on that NPI. Is that correct?

Speaker #8: Is that correct?

Bill Heissenbuttel: That, to me, is the biggest variable in those numbers. The copper number and the other metals number. We've had Peñasquito for years, we've had Voisey's Bay for years.

Speaker #4: That, to me, is the biggest variable in those numbers: the copper number and the other metals number. I mean, we've had penicillin for years.

Speaker #4: We've had Boise Bay for years. They have variability too, but it's the Antimona NPI that I just—I look at the historical revenues and I look at this year, and I think there is just volatility in the number.

Bill Heissenbuttel: They have variability too, it's the Antamina NPI that I just look at the historical revenues and I look at what we've earned, I did so far this year, I think there is just volatility in the number. That's why we're a little uncomfortable sitting here today saying, We think we should change what we're telling you for the year-end. We're just not there. I think in early November when we report, we'll certainly be able to help you with what things might look like by year-end.

Speaker #4: That's why we're a little uncomfortable sitting here today, saying we think we should change what we're telling you for the year-end. We're just not there. I think in early November, when we report, we'll certainly be able to help you with what things might look like by year-end.

Speaker #8: Okay. Well, it seems like it's a champagne problem.

Tanya Jakusconek: Okay. Well, it seems like it's a champagne problem.

Speaker #1: Maybe just turning on to yeah. Maybe just turning on to just your guidance that you're in tracking guidance and it had been that the second half of the year was supposed to be stronger.

Bill Heissenbuttel: Yeah.

Bill Heissenbuttel: Yeah. Maybe just turning on to just your guidance that you're in tracking guidance, it had been that the H2 of the year was supposed to be stronger. As we look at Q3 and Q4, is there, between the two quarters, anything that stands out asset-wise where we have a stronger contribution in Q4?

Speaker #1: As we look at Q3 and Q4, is there anything between the two quarters that stands out asset-wise, where we have a stronger contribution in Q4?

Bill Heissenbuttel: Paul, I'm going to turn to you on this. I know we've only talked in terms of halves of years. We haven't talked quarter by quarter. Is there anything else we can add to it?

Speaker #4: Paul, I'm going to turn to you on this. I know we've only talked in terms of halves of years; we haven't talked quarter by quarter.

Speaker #4: Is there anything else we can add to it?

Paul Libner: No, there isn't, Tanya. You probably recall earlier where we talked about kind of the 48/52 split.

Speaker #3: No, there isn't, Tanya. I mean, you probably recall earlier where we talked about kind of the 48/52 split. Here today, I think that's still—looking at Q3 and Q4 as well.

Tanya Jakusconek: Yeah.

Paul Libner: From here today, I think that still is looking at Q3 and Q4 as well.

Speaker #8: Yeah, I was just wondering if there were certain assets in Q4 that you saw within the mine plans that are supposed to do better, to guide us.

Tanya Jakusconek: Yeah, I was just wondering if there were certain assets in Q4 that you saw within the mine plans that are supposed to do better to guide us.

Speaker #3: Yeah, and Martin, I would probably then look over to you. Is there anyone that you can recall from Q3 or Q4 that I may be forgetting here?

Paul Libner: Yeah, Martin, I would probably then look over to you then. Is there anyone that you can recall, Q3, Q4, that maybe I'm forgetting here?

Martin Raffield: No, Tanya. I think Q3 and Q4 at the moment are looking pretty well-balanced. Just remember that a lot of our production or our sales come from assets with a significant delay between the production to the deliveries to the sales. We're pretty comfortable with those Q3, Q4 numbers being balanced and with the numbers that Paul talked about earlier in terms of magnitude of comparison between H1 and H2.

Speaker #2: No, Tanya. I think Q3 and Q4 at the moment are looking pretty well balanced. Just remember that a lot of our production or our sales come from assets with a significant delay between the production to the deliveries to the sales.

Speaker #2: So we're pretty comfortable with those Q3 and Q4 numbers being balanced, and with the numbers that Paul talked about earlier in terms of magnitude of comparison between H1 and H2.

Speaker #8: Okay. Well, that's very helpful. Thank you for that. I really appreciate you taking all of my questions, and I'll see you all in Colorado Springs.

Tanya Jakusconek: Well, that's very helpful. Thank you for that. Really appreciate you taking all of my questions, and see you all in Colorado Springs.

Bill Heissenbuttel: Sounds good. Thanks, Tanya.

Speaker #4: Sounds good. Thanks, Tanya.

Speaker #3: Thanks, Tanya.

Paul Libner: Thanks, Tanya.

Operator: There are no further questions at this time. I will now turn the call back to Bill Heissenbuttel for closing remarks.

Speaker #1: There are no further questions at this time. I will now turn the call back to Bill Heissenbuttel for closing remarks.

Bill Heissenbuttel: Thanks everybody for taking the time to join us today. We certainly appreciate your interest. We look forward to updating you on our progress during our next quarterly call. Take care.

Speaker #4: Thanks, everybody, for taking the time to join us today. We certainly appreciate your interest, and we look forward to updating you on our progress during our next quarterly call.

Speaker #4: Take care.

Operator: This concludes today's call. Thank you for attending. You may now disconnect.

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