Royal Gold Announces First Quarter Fiscal 2008 Results



    
    - Year-over-year revenue increase of 29%

    - Free cash flow* (a non-GAAP financial measure) totals 79% of revenue

    - First quarter of revenue from Taparko royalty

    - Battle Mountain Gold Exploration transaction completed
    

    DENVER, Nov. 1 /CNW/ -- ROYAL GOLD, INC. (Nasdaq:   RGLD; TSX: RGL), the
leading publicly-traded precious metals royalty company, today announced first
quarter fiscal 2008 net income of $5.8 million, or $0.20 per basic share, on
royalty revenue of $12.8 million.  This compares to net income for the first
quarter of fiscal 2007 of $5.0 million, or $0.21 per basic share, on royalty
revenue of approximately $9.9 million.  The increase in earnings of 16% was
offset on a per share basis due to new capital issued to finance the Company's
substantial growth in reserves and royalty ounces over the last year.
    Higher revenues were largely derived from increased production at several
royalty properties including Pipeline, Robinson, Leeville and the SJ Claims,
and initial revenue from the Taparko mine.  Higher gold prices also
contributed to the increase in first quarter revenue.
    Free cash flow* for the quarter was approximately $10.1 million, totaling
79% of revenue.  This compares to free cash flow for the first quarter of
fiscal 2007 of approximately $8.0 million or 81% of revenues.

    
    *  The Company defines free cash flow, a non-GAAP financial measure, as
       operating income plus depreciation, depletion and amortization,
       non-cash charges and impairment of mining assets, if any, less
       minority interest in income from consolidated subsidiary
       (see, Schedule A).
    
    As of September 30, 2007, the Company had a working capital surplus of
approximately $93.7 million.  Current assets were $102.8 million (including
$90.8 million in cash), compared to current liabilities of $9.1 million
resulting in a current ratio of 11 to 1.
    "Our first quarter results reflect solid contributions from our core
producing royalty properties along with continued strength in the price of
gold," said Tony Jensen, President and CEO.  "During the quarter, we received
our first revenue from the Taparko mine and look forward to increasing
revenues from this property as the ramp up continues.  Also, we are pleased to
have recently completed the merger with Battle Mountain Gold Exploration. This
transaction adds significant strength to our near-term development pipeline
with the addition of the Dolores royalty.  As we continue to execute on our
growth strategy, we are confident that Royal Gold is well-positioned for
continued growth."
    
    REVIEW OF OPERATIONS
    Pipeline Mining Complex (Lander County, Nevada)
    
    At the Pipeline Mining Complex, Royal Gold holds two sliding-scale gross
smelter return royalties ("GSR1" and "GSR2"), a fixed-rate gross smelter
return royalty ("GSR3"), and a net value royalty ("NVR1").  The GSR1 royalty
covers a majority of the Pipeline and South Pipeline deposits and the GSR2
("Super") royalty covers the Crossroads area and a portion of the Gap deposit.
The GSR2 royalty pays out at a rate that is 80% higher than that of GSR1, at
all gold prices.  The GSR3 royalty rate is fixed at 0.71% for the life of the
mine and covers the same area as GSR1 and GSR2 combined.  The 0.39% NVR1
royalty, net of minority interest, covers production from the GAS Claims, an
area of interest of approximately 4,000 acres that includes the South Pipeline
deposit and Crossroads area, but excludes the Pipeline deposit.  Current
production from the Pipeline Mining Complex is subject to all four royalties.
    The Pipeline Mining Complex is owned by the Cortez Joint Venture, a joint
venture between Barrick Cortez Inc. (60%), a subsidiary of Barrick Gold
Corporation ("Barrick"), and Kennecott Explorations (Australia) Ltd. (40%), a
subsidiary of Rio Tinto, plc.
    For the first quarter of fiscal 2008, metal sales attributable to the
Company's royalties at the Pipeline Mining Complex were approximately 128,000
ounces of gold, providing approximately $5.7 million of royalty revenue to
Royal Gold (including approximately $233,500 of minority interest).  This
compares to metal sales of 125,365 ounces of gold, providing approximately
$4.7 million (including approximately $183,000 of minority interest) in
royalty revenue to Royal Gold, for the same quarter in fiscal 2007.
    For the first quarter of fiscal 2008, the average gold price was $681 per
ounce and Royal Gold's GSR1 royalty rate was 5.0% while its GSR2 royalty rate
was 9.0%.  This compares to an average gold price of $621 per ounce for the
first quarter of fiscal 2007 and a GSR1 royalty rate of 5.0 %.  There was no
production from GSR2 during the fiscal 2007 first quarter.
    
    Robinson (White Pine County, Nevada)
    
    Royal Gold holds a 3.0% net smelter return ("NSR") royalty on the
Robinson mine, an open pit copper mine with significant gold credits.  The
mine is operated by a subsidiary of Quadra Mining, Ltd.
    For the first fiscal quarter of 2008, metal sales attributable to the
Company's royalty at the Robinson mine were 32.5 million pounds of copper and
26,067 ounces of gold, providing approximately $3.6 million in royalty
revenue.  This compares with metal sales of 19.9 million pounds of copper and
10,159 ounces of gold, providing approximately $2.7 million in royalty revenue
for the same quarter of fiscal 2007.  At Robinson, revenues consist of
provisional payments for concentrates produced during the current period and
final settlements for prior production periods.  The prior year comparable
quarter included a revenue adjustment of approximately $800,000 associated
with the operator's final settlements.
    
    SJ Claims - Goldstrike Mine (Eureka County, Nevada)
    
    Royal Gold holds a 0.9% NSR royalty covering a portion of the Betze-Post
mine, known as the SJ Claims.  The Betze-Post mine, which is a part of the
larger Goldstrike operation, is an open pit mine operated by a subsidiary of
Barrick.
    During the first fiscal quarter of 2008, metal sales attributable to the
Company's royalty at the SJ Claims were 187,473 ounces of gold, providing
Royal Gold with approximately $1.2 million in royalty revenue.  This compares
with metal sales of 149,300 ounces of gold, providing approximately $823,000
in royalty revenue to Royal Gold in the same quarter of fiscal 2007.
    
    Troy Mine (Lincoln County, Montana)
    
    Royal Gold holds a 7.0% GSR royalty that covers the Troy underground mine
operated by a subsidiary of Revett Minerals, Inc. This 7.0% GSR royalty
extends until either cumulative production reaches approximately 9.9 million
ounces of silver and 84.6 million pounds of copper, or Royal Gold receives
$10.5 million in cumulative payments, whichever occurs first.  The Company
expects the cumulative payment threshold to be met first and, as of September
30, 2007, the Company has received approximately $6.1 million in cumulative
payments from the Troy mine.
    Royal Gold also holds a perpetual GSR royalty that begins at 6.1% on any
production in excess of 11.0 million ounces of silver and 94.1 million pounds
of copper.  This 6.1% GSR steps down to a perpetual 2.0% GSR royalty after
cumulative production exceeds 12.7 million ounces of silver and 108.2 million
pounds of copper.
    During the first fiscal quarter of 2008, metal sales attributable to the
Company's royalty at the Troy mine were approximately 182,000 ounces of silver
and 1.7 million pounds of copper, providing approximately $558,000 in royalty
revenue. This compares with 204,269 ounces of silver and 1.7 million pounds of
copper, providing approximately $570,000 in royalty revenue in the same
quarter of fiscal 2007.
    
    Leeville Mining Complex (Eureka County, Nevada)
    
    Royal Gold holds a 1.8% carried working interest, which calculates as an
NSR royalty, covering a majority of the underground Leeville Mining Complex
("Leeville").  Leeville is operated by a subsidiary of Newmont Mining
Corporation.
    During the first fiscal quarter of 2008, metal sales attributable to the
Company's royalty at the Leeville property were 61,915 ounces of gold,
providing royalty revenue to Royal Gold of approximately $842,000.  This
compares with metal sales of 19,254 ounces of gold, providing approximately
$212,000 in royalty revenue to Royal Gold for the same quarter in fiscal 2007.
The increase in metal sales for the first quarter of fiscal 2008 was largely
due to continuing ramp up by the operator at the mine.
    
    Bald Mountain (White Pine County, Nevada)
    
    Royal Gold holds a sliding-scale NSR royalty that covers a portion of the
Bald Mountain mine, operated by a subsidiary of Barrick.  For the first fiscal
quarter, the Company's royalty rate was 1.75%.
    During the first fiscal quarter of 2008, metal sales attributable to the
Company's royalty at the Bald Mountain mine were approximately 17,000 ounces
of gold, providing approximately $200,000 in royalty revenue.  This compares
with metal sales of 48,883 ounces of gold, providing approximately $532,000 in
royalty revenue for the same quarter of fiscal 2007.  Royalty revenue varies
from quarter-to-quarter at Bald Mountain depending on the mining location. The
decrease in royalty revenue this quarter is the result of lower ore tonnage
and a lower percentage of ore associated with Royal Gold's royalty interest
placed on the heap leach pad.
    
    Mulatos (Sonora, Mexico)
    
    Royal Gold holds a sliding-scale NSR royalty at Mulatos, an open pit,
heap leach gold mine, operated by a subsidiary of Alamos Gold, Inc.  The
sliding-scale ranges from 0.30%, at an average quarterly gold price of $299.99
per ounce or less, up to a maximum of 1.5% when the price of gold averages
$400 per ounce or higher. The royalty is capped at two million ounces of gold
production.  As of September 30, 2007, the Company has received payment for
approximately 149,000 cumulative ounces of gold since the royalty commenced in
April 2006.
    During the first fiscal quarter of 2008, estimated metal sales
attributable to the Company's royalty were approximately 22,000 ounces of
gold, providing about $223,000 in royalty revenue.  This compares with metal
sales of 19,643 ounces of gold, providing approximately $186,000 in royalty
revenue, for the same quarter of fiscal 2007.
    
    Martha (Santa Cruz Province, Argentina)
    
    The Company holds a 2.0% NSR royalty on the Martha silver mine operated
by a subsidiary of Coeur d'Alene Mines Corporation ("Coeur").
    During the first quarter of fiscal 2008, estimated metal sales
attributable to the Company's royalty at the Martha mine were approximately
672,000 ounces of silver resulting in royalty revenue of approximately
$170,000.  This compares with metal sales of approximately 776,000 ounces of
silver, providing about $181,000 in royalty revenue for the same quarter of
fiscal 2007.
    
    Taparko-Bouroum Project (Burkina Faso, West Africa)
    
    Royal Gold holds two initial concurrent production payments, both
equivalent to GSR royalties, and two subsequent GSR royalties at the
Taparko-Bouroum project, an open pit gold operation.  The project is operated
by a subsidiary of High River Gold Mines, Ltd. ("High River").
    The first GSR-equivalent royalty ("TB-GSR1") is fixed at a rate of 15.0%.
The second GSR-equivalent royalty ("TB-GSR2") is a sliding-scale royalty
ranging from 0.0% to 10.0%, depending upon the price of gold.  The TB-GSR2
royalty pays out at a rate of 4.3% when the average monthly gold price ranges
between $385 and $430 per ounce.  Outside of this range, the royalty rate is
calculated by dividing the average monthly gold price by 100 for gold prices
above $430 per ounce, or by dividing the average monthly gold price by 90 for
gold prices below $385 per ounce (e.g., a $750 per ounce gold price results in
a rate of 750/100 = 7.5%).  Both TB-GSR1 and TB-GSR2 continue until either
production reaches 804,420 ounces of gold, or Royal Gold receives payments
totaling $35 million under TB-GSR1, whichever occurs first.
    The two subsequent royalties consist of a 2.0% GSR perpetual royalty
("TB-GSR3"), applicable to gold production from defined portions of the
Taparko-Bouroum project area, and a 0.75% GSR milling royalty ("TB-MR1").  The
TB-MR1 royalty applies to ore that is mined outside of the defined area of the
Taparko-Bouroum project that is processed through the Taparko facilities, up
to a maximum of 1.1 million tons per year.  Both the TB-GSR3 and TB-MR1
royalties commence once TB-GSR1 and TB-GSR2, described earlier, have ceased.
    During the first quarter of fiscal 2008, metal sales attributable to the
Company's royalty at the Taparko mine were 2,866 ounces of gold resulting in
royalty revenue of approximately $435,000. This is the first quarter that the
Company has received royalty revenue from the Taparko project.  The mine will
continue to ramp up production over the next few months.
    
    OTHER DEVELOPMENTS
    Completion of the Battle Mountain Gold Exploration Transaction
    
    The Company's merger with Battle Mountain Gold Exploration closed on
October 24, 2007.  This transaction added the following producing properties
to Royal Gold's royalty portfolio:  Don Mario mine (Bolivia); Williams mine
(Ontario, Canada); El Limon mine (Nicaragua); and the Joe Mann mine (Quebec,
Canada).  The transaction also included a royalty on the Dolores project in
Mexico, which is estimated to begin commercial production in early calendar
2008.  All of these properties will be detailed in the Company's second
quarter fiscal 2008 financial report.
    
    Royalty Definitions
    
    The Company's royalty portfolio contains several different types of
royalties which are defined as follows:

    
    Gross Smelter Return ("GSR") Royalty -- a defined percentage of the gross
    revenue from a resource extraction operation, with no deduction for any
    costs paid by or charged to the operator.
    

    
    Net Smelter Return ("NSR") Royalty -- a defined percentage of the gross
    revenue from a resource extraction operation, less a proportionate share
    of incidental transportation, insurance, refining and smelting costs.
    

    
    Net Value Royalty ("NVR") -- a percentage of the gross revenue from a
    resource extraction operation, less certain contract-defined costs.
    

    
    Royalty -- the right to receive a percentage or other denomination of
    mineral production from a mining operation.
    
    Royal Gold is a precious metals royalty company engaged in the
acquisition and management of precious metals royalty interests.  Royal Gold
is publicly traded on the NASDAQ Global Select Market under the symbol "RGLD,"
and on the Toronto Stock Exchange under the symbol "RGL."  The Company's web
page is located at http://www.royalgold.com.
    Note: Management's conference call reviewing the first quarter of fiscal
2008 will be held today at 10:00 a.m. Mountain Time (noon Eastern Time) and
will available by calling (800) 603-2779 or (706) 634-7230.  The call will be
simultaneously broadcast on the Company's web site at http://www.royalgold.com
under the "Presentations" section.  A replay of this web cast will be
available on the Company's web site approximately two hours after the call
ends.
    Cautionary "Safe Harbor" Statement Under the Private Securities
Litigation Reform Act of 1995:  With the exception of historical matters, the
matters discussed in this press release are forward-looking statements that
involve risks and uncertainties that could cause actual results to differ
materially from projections or estimates contained herein.  Such
forward-looking statements include statements regarding the strength in the
gold price, growth strategy, commencement of production of development stage
projects, commencement of revenue from the Taparko project, and ramp up in
production at Leeville and Taparko.  Acquisitions of royalties and corporate
acquisitions, such as the acquisition of Battle Mountain Gold Exploration
Corp., are subject to certain risks, such the ability of Royal Gold to make
accurate assumptions regarding valuation, timing and amount of royalty
payments from acquired royalties, the ability of the operator to bring the
project into production and continue to operate as planned, and the ability of
Royal Gold to successfully complete the acquisitions.  In addition, acquired
royalty interests on certain projects are subject to risks associated with
conducting business in a foreign country, including application of foreign
laws to contract and other disputes, foreign environmental laws and
enforcement and uncertain political and economic environments.  Factors that
could cause actual results to differ materially from projections include,
among others, precious metals prices, decisions and activities of the
operators of our royalty properties, unanticipated grade, geological,
metallurgical, processing or other problems the operators of the mining
properties may encounter, changes in project parameters as plans continue to
be refined, results of current or planned exploration activities, management's
ability to increase our cash flow, revenues and margins, and economic and
market conditions, as well as other factors described elsewhere in this press
release and in our Annual Report on Form 10-K, and other filings with the
Securities and Exchange Commission.  Most of these factors are beyond the
Company's ability to predict or control.  The Company disclaims any obligation
to update any forward- looking statement made herein.  Readers are cautioned
not to put undue reliance on forward-looking statements.
    *Free Cash Flow:  The Company discloses information on free cash flow and
free cash flow as a percentage of revenues in its reporting.  The Company
defines free cash flow as operating income plus depreciation, depletion and
amortization, non-cash charges, and any impairment of mining assets less
minority interest in income of consolidated subsidiary.  While we believe free
cash flow is a useful measure of the Company's performance, we also want to
advise that this is not a measure recognized by generally accepted accounting
principles.  See Schedule A, attached to this press release.



    
                               ROYAL GOLD, INC.
                         Consolidated Balance Sheets
    

    
                                                 September 30,
                                                      2007        June 30,
                                                  (Unaudited)       2007
    Current assets
      Cash and equivalents                       $ 90,812,323   $ 82,841,861
      Royalty receivables                          11,135,438     12,470,451
      Deferred tax assets                             164,035        154,050
      Prepaid expenses and other                      753,894        216,857
    

    Total current assets                          102,865,690     95,683,219

    
    Royalty interests in mineral properties, net  213,872,250    215,839,441
    Restricted cash - compensating balance         15,750,000     15,750,000
    Inventory - restricted                         11,017,262     10,611,562
    Equity investment in Battle Mountain
    Gold Exploration                                8,549,259              -
    Note receivable - Battle Mountain Gold
    Exploration (Note 6)                           15,051,823     14,493,878
    Available for sale securities                   1,696,393      1,995,041
    Other assets                                    2,987,772      2,276,049
    

    Total assets                                 $371,790,449   $356,649,190

    
    Current liabilities
      Accounts payable                           $  3,396,145   $  2,342,330
      Income taxes payable                          3,186,591          5,064
      Dividends payable                             1,885,409      1,868,594
      Accrued compensation                            516,750        344,500
      Other                                           143,375        128,039
    

    Total current liabilities                       9,128,270      4,688,527

    
    Net deferred tax liabilities                    5,404,070      5,910,697
    Note payable                                   15,750,000     15,750,000
    Other long-term liabilities                        91,573         98,173
    Total liabilities                              30,373,913     26,447,397
    

    
    Commitments and contingencies
    Minority interest in subsidiary                11,304,899     11,120,797
    Stockholders' equity
      Common stock, $.01 par value, authorized
       40,000,000 shares; and issued 29,154,872 and
       28,892,980 shares, respectively                291,548        288,929
    

    
    Additional paid-in capital                    317,777,484    310,439,112
    Accumulated other comprehensive income            272,048        458,298
    Accumulated earnings                           12,867,429      8,991,529
    Less treasury stock, at cost (229,224 shares)  (1,096,872)    (1,096,872)
    Total stockholders' equity                    330,111,637    319,080,996
    Total liabilities and stockholders' equity   $371,790,449   $356,649,190
    



    
                               ROYAL GOLD, INC.
        Consolidated Statements of Operations and Comprehensive Income
                                 (Unaudited)
    

    
                                                 For The Three Months Ended
                                               September 30,    September 30,
                                                   2007             2006
    Royalty revenues                           $ 12,817,001   $   9,928,642
    

    
    Costs and expenses
      Costs of operations (exclusive of
       depreciation, depletion and
       amortization shown separately below)         864,366         667,659
      General and administrative                  1,556,948       1,133,656
       Exploration and business development         629,657         418,541
      Depreciation, depletion and amortization    2,402,083       1,074,912
    Total costs and expenses                      5,453,054       3,294,768
    

    Operating income                              7,363,947       6,633,874

    
    Interest and other income                     1,879,946         971,185
    Interest and other expense                     (373,856)        (66,314)
    Income before income taxes                    8,870,037       7,538,745
    

    
    Current tax expense                          (3,263,948)     (2,650,944)
    Deferred tax benefit                            414,655         243,346
    Minority interest in income of consolidated
     subsidiary                                    (220,140)       (171,010)
    Loss from equity investment                     (38,284)              -
    Net income                                 $  5,762,320   $   4,960,137
    

    
    Adjustments to comprehensive income
      Unrealized change in market value of
       available for sale securities,
       net of tax                                  (186,250)         77,745
    Comprehensive income                       $  5,576,070   $   5,037,882
    

    Basic earnings per share                   $       0.20   $        0.21

    Basic weighted average shares outstanding    28,729,541      23,587,416

    Diluted earnings per share                 $       0.20   $        0.21

    Diluted weighted average shares outstanding  28,861,324      23,822,846



    
                               ROYAL GOLD, INC.
                    Consolidated Statements of Cash Flows
                                 (Unaudited)
    

    
                                                For The Three Months Ended
                                               September 30,    September 30,
                                                    2007            2006
    Cash flows from operating activities
    

    
    Net income                                  $ 5,762,320   $   4,960,137
    Adjustments to reconcile net income to
     net cash provided by operating activities:
      Depreciation, depletion and amortization    2,402,083       1,074,912
      Deferred tax benefit                         (414,655)       (243,346)
      Non-cash employee stock compensation expense  538,621         412,839
      Loss on available for sale securities          10,440               -
      Note receivable - Battle Mountain Gold
       Exploration                                 (557,945)              -
      Tax benefit of stock-based compensation
       exercises                                    (60,143)              -
      Loss from equity investment                    38,284               -
    Changes in assets and liabilities:
      Royalty receivables                         1,335,013      (1,044,714)
      Prepaid expenses and other assets            (351,462)       (174,827)
      Accounts payable                            1,137,667         481,237
      Income taxes payable                        3,241,670       2,161,697
      Accrued liabilities and other current
       liabilities                                  187,586         200,857
      Other long-term liabilities                    (6,600)         (6,600)
    

    Net cash provided by operating activities   $13,262,879   $   7,822,192

    Cash flows from investing activities

    
      Capital expenditures for property and
       equipment                                $   (10,965)  $     (34,602)
      Equity investment in Battle Mountain Gold
       Exploration                               (2,242,099)              -
      Acquisition of royalty interests in mineral
       properties                                  (400,000)    (11,635,000)
      Deferred acquisition costs                   (826,331)              -
      Purchase of available for sale securities           -         (81,046)
    

    Net cash used in investing activities       $(3,479,395)  $ (11,750,648)

    
    Cash flows from financing activities:
      Tax benefit of stock-based compensation
       exercises                                $    60,143   $           -
      Debt issuance costs                            24,948               -
      Dividends paid                             (1,869,605)     (1,300,623)
      Equity offering costs                         (28,508)              -
    

    Net cash used in financing activities       $(1,813,022)  $  (1,300,623)

    
    Net increase (decrease) in cash and
     equivalents                                  7,970,462      (5,229,079)
    

    Cash and equivalents at beginning of period  82,841,861      78,449,383

    
    Cash and equivalents at end of period       $90,812,323   $  73,220,304
    Non-GAAP Financial Measures
    
    The Company computes and discloses free cash flow and free cash flow as a
percentage of revenues. Free cash flow is a non-GAAP financial measure.  Free
cash flow is defined by the Company as operating income plus depreciation,
depletion and amortization, non-cash charges, and any impairment of mining
assets, less minority interest in income of consolidated subsidiary.
Management believes that free cash flow and free cash flow as a percentage of
revenues are useful measures of performance of our royalty portfolio.  Free
cash flow identifies the cash generated in a given period that will be
available to fund the Company's future operations, growth opportunities, and
shareholder dividends.  Free cash flow, as defined, is most directly
comparable to operating income in the Statements of Operations.  Below is the
reconciliation to operating income:



    
                                                 For The Three Months Ended
                                               September 30,     September 30,
                                                   2007               2006
    Operating income                           $  7,363,947      $  6,633,874
    Depreciation, depletion and amortization      2,402,083         1,074,912
    Non-cash employee stock compensation expense    538,621           412,839
    Minority interest in income of consolidated
     subsidiary                                    (220,140)         (171,010)
    Free cash flow                             $ 10,084,511      $  7,950,615
    




For further information:

For further information: Karen Gross, Vice President and Corporate 
Secretary of Royal Gold, Inc., +1-303-573-1660 Web Site:
http://www.royalgold.com/

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ROYAL GOLD, INC.

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