Royal Gold Reports Fiscal Second Quarter 2009 Results



    
    - Free cash flow(1) of $11.5 million, representing 79% of revenues

    
    - Net income of $21.4 million, or $0.63 per basic share, driven by gain
on Cortez royalty restructuring
    

    - Newly acquired Barrick portfolio contributes $4.0 million in royalty
revenue

    
    DENVER, Feb. 5 /PRNewswire-FirstCall/ -- ROYAL GOLD, INC. (Nasdaq:   RGLD;
TSX: RGL), a leading precious metals royalty company, today announced  second
quarter fiscal  2009 net income of $21.4 million, or $0.63 per basic share, on
royalty revenue of $14.6 million.  This compares to net income for the second
quarter of fiscal 2008 of $4.6 million, or $0.11 per basic share, on royalty
revenue of $14.7 million.(2)  Net income for the six-month period ended
December 31, 2008, was $27.1 million, or $0.80 per basic share, on royalty
revenue of $30.7 million. This compares to net income of $10.1 million, or
$0.30 per basic share, for the six-month period ended December 31, 2007, on
royalty revenue of $27.2 million.
    

    
    Second quarter and six-month net income for fiscal 2009 include the
effects of a one-time gain of $31.5 million, or $0.60 per basic share after
taxes, resulting from the Company's restructuring of the royalties at the
Cortez Pipeline Mining Complex ("Cortez") on October 1, 2008, and a decrease
in revenue of $3.3 million, or $0.06 per basic share after taxes, due to
provisional pricing adjustments on the Robinson mine royalty resulting from
the significant decrease in copper prices during the quarter.  Excluding these
items, the Company's net income was $3.0 million for the second fiscal
quarter, or $0.09 cents per basic share.  For the six-month period, excluding
these items, net income was $8.8 million, or $0.26 per basic share.
    

    
    Royalty revenue for the second fiscal quarter was largely driven by
increased production at the Leeville and Goldstrike mines, initial production
at Benso, and $4.0 million in revenue from the Barrick royalty portfolio which
was acquired in October 2008.  This was offset by a significant decline in
royalty revenue at the Cortez and Robinson mines.
    

    
    Free cash flow for the current quarter was $11.5 million, representing
79% of revenues.  This compares to free cash flow for the second quarter of
fiscal 2008 of approximately $10.6 million, or 72% of revenues.  Free cash
flow for the six-month period ended December 31, 2008, was $24.8 million,
representing 81% of revenues.  This compares to free cash flow for the
six-month period ended December 31, 2007, of $20.3 million or 75% of revenues.
    

    
    As of December 31, 2008, the Company had a working capital surplus of
$51.1 million.  Current assets were $70.7 million (including $55.0 million in
cash and equivalents), compared to current liabilities of $19.6 million,
resulting in a current ratio of 4 to 1.
    

    
    Tony Jensen, President and CEO, commented, "Royal Gold's second quarter
earnings were significantly impacted by the negative provisional price
adjustments at Robinson and the decreased production at Cortez.  Excluding
these issues, the majority of our portfolio performed well during the period. 
In particular, we were pleased with the contribution from the producing
properties acquired in the Barrick transaction.  Royal Gold continues to be in
excellent financial health with strong cash flow and a robust balance sheet. 
We believe Royal Gold is well positioned for opportunities in the current
market environment and we will continue to demonstrate disciplined capital
investments."
    

    PROPERTY HIGHLIGHTS

    Cortez (Pipeline Mining Complex)
    
    At the Cortez property, royalty production for the second quarter was
approximately 65,000 ounces of gold resulting in revenue of $3.5 million
compared with 146,000 ounces and $6.2 million in revenue for the comparable
quarter.  A portion of the revenue reduction stems from the restructuring of
the GSR2 royalty, from a range of 0.72% to 9.0%, to match the current GSR1
sliding-scale royalty rate, which ranges from 0.40% to 5.0%, resulting in a
decrease of approximately $800,000 in royalty revenue for the period.  In
addition, production from the Cortez property decreased as a result of some
mining being conducted in the area known as GAP where a portion of the
production is not subject to the Company's royalty interests.
    

    Robinson
    
    As discussed in the Company's November 4, 2008 earnings release, revenues
at Robinson for the current quarter were negatively impacted by provisional
pricing adjustments of approximately $3.3 million due to the decrease in
copper prices during the second fiscal quarter.  Prior to the price
adjustments, the Company's revenue from the Robinson royalty for the period
ended December 31, 2008 was $2.0 million.  After the price adjustments, the
Company's revenue for the second fiscal quarter was negative in the amount of
$1.3 million.  Lower copper and gold sales for the second fiscal quarter,
compared with the previous two consecutive quarters, magnified the impact of
the provisional pricing adjustments. While the $1.3 million deficit for the
quarter does not require the Company to pay cash to the operator, this amount
will be deducted from future royalty payments.  The Company will be subject to
additional positive and negative price adjustments in future quarters
depending on the price of copper at the time of settlement.
    

    Dolores
    
    Production commenced at the mine in November 2008 and shipments to the
refiner began in early December.  Minefinders reported that crushing and
stacking rates averaged about 14,000 tonnes per day and expects commercial
production to be achieved in the second quarter of calendar 2009.  Once
commercial production is reached, Royal Gold's 2.0% NSR royalty on gold and
silver will take effect, which is in addition to the 1.25% NSR royalty on gold
which is currently providing revenue to the Company.
    

    Malartic
    
    In November 2008, Osisko announced the completion of a positive
feasibility study resulting in proven and probable reserves of 202 million
tons of ore, at a grade of 0.031 ounces per ton, containing 6.28 million
ounces of gold.  The reserves were calculated using a $775 gold price.  Osisko
estimates that during the first five years of operation, Malartic would
produce an average of 618,000 ounces of gold, at an average operating cash
cost of $313 per ounce after royalties and silver credits.  Royal Gold owns a
2.0% to 3.0% NSR sliding-scale royalty interest on a portion of this deposit
which is subject to a 50% buy down right.
    

    Troy
    
    In mid-November 2008, Revett reported that the drop in metal prices had
resulted in a significant deterioration in their cash position.  They also
stated that operations may be placed on care and maintenance if metal prices
remain at depressed levels, or if alternative financing or deferral of some of
its financial obligations cannot be obtained.  Revett plans to continue
operations until early February and thereafter as long as operations remain
profitable.
    

    Taparko
    
    High River reported that the Taparko mill was restarted on November 4,
2008 after a new gear box was installed in the mill drive train.  The mill was
shutdown for a period of time in January for additional maintenance in order
to improve mill performance.  Production for the months of November and
December totaled 10,200 ounces resulting in sales attributable to our royalty
of 7,505 ounces and royalty revenue of approximately $1.4 million for the
quarter.
    

    
    Pursuant to the Amended and Restated Funding Agreement dated February 22,
2006 (the "Funding Agreement") between Royal Gold, Inc. and Somita SA
("Somita"), a 90% owned subsidiary of High River and the operator of Taparko,
Somita is in breach of certain obligations under the Funding Agreement.  As
security for the Company's investment in Somita, two of High River's
subsidiaries have pledged their equity interests in Somita and High River
(West Africa) Ltd., the corporate parent of Somita.  In addition, Royal Gold
obtained as collateral a pledge of shares of certain equity investments in
public companies held by High River.  Royal Gold has not agreed to forbear
pursuing any of its remedies under the Funding Agreement or other agreements
with High River and its affiliates.
    

    
    Fiscal second quarter production and revenue for each of the Company's
active royalty interests are shown in Table 1.  For more detailed information
about each of our royalty properties, please refer to the Company's most
recent Amended Annual Report on Form 10-K/A, or our website located at
www.royalgold.com.
    

    OTHER DEVELOPMENTS

    Royalty Interest at Rock Creek
    
    In December 2008, Royal Gold converted holdings of 1.3 million shares of
Revett Minerals into a 1.0% NSR royalty on the Rock Creek deposit, located in
Montana.  Revett estimated, as of December 31, 2007, that the additional
mineralized material at Rock Creek consisted of 137 million tons, grading 1.67
ounces per ton silver and 0.74% copper, containing 229 million ounces of
silver and approximately 2.0 billion pounds of copper.
    

    About Royal Gold
    
    Royal Gold is a leading publicly-traded 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 www.royalgold.com.
    

    ROYALTY DEFINITIONS
    
    The Company's producing and development royalty portfolio contains
several different types of royalties which are defined as follows:
    

    
    Royalty - the right to receive a percentage or other denomination of
mineral production from a resource extraction operation.
    

    
    Gross Smelter Return ("GSR") Royalty - a defined percentage of the gross
revenue from a resource extraction operation, less, if applicable, certain
contract-defined 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 defined percentage of the gross revenue
from a resource extraction operation, less certain contract-defined
transportation costs, milling costs and taxes.
    

    
    Net Profits Interest ("NPI") Royalty - a defined percentage of the gross
revenue from a resource extraction operation, after recovery of certain
contract-defined, pre-production costs, and after deduction of certain
contract-defined mining, milling, processing, transportation, administrative,
marketing and other costs.
    

    
    Gross Proceeds Royalty ("GPR") - a royalty in which payments are made on
contained ounces rather than recovered ounces.
    

    
    Note: Management's conference call reviewing the second quarter fiscal
2009 results will be held today at 10:00 a.m. Mountain Time (noon Eastern
Time) and will available by calling (800) 603-2779 (North America) or (973)
200-3960 (international), access #82551240.  The call will be simultaneously
broadcast on the Company's web site at 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 performance of
Royal Gold's royalty portfolio, the Company's excellent financial health,
strong cash flow and robust balance sheet, that the Company is well-positioned
for opportunities in the current market environment and  will continue to make
disciplined capital investments,  price and revenue adjustments attributable
to production at Robinson, operators' expectations on the commencement,
re-commencement or ramp up of production, and operators' reserve or production
estimates.  Factors that could cause actual results to differ materially from
the projections include, among others, precious metals prices, performance of
and production at the Company's royalty properties, decisions and activities
of the operators of the Company's 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, economic and market conditions, liquidity and
production problems at Taparko, Troy and other royalty properties, the
Company's exercise of its rights under the Taparko Funding Agreement, buy down
rights at Malartic, litigation and governmental investigations or proceedings
arising out of or related to accounting and financial reporting matters, other
subsequent events, as well as other factors described elsewhere in this press
release and in the Company's 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.  Free cash flow
is a non-GAAP financial measure.  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 for a GAAP reconciliation.
    

    

    
    (1) 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).
    (2) Certain figures in this press release related to prior quarter
        information have been restated.  See our amended 10-K/A filed with the
        SEC on November 6, 2008.


    TABLE 1
    Royalty Production and Revenue - Second Quarter Fiscal 2009

    

    
                                                          QUARTER ENDED
                                                        DECEMBER 31, 2008
                                                           (Unaudited)
                                                       Royalty    Reported
                                                       Revenue  Production(1)
    PROPERTY      ROYALTY          OPERATOR   METAL  ($ Millions)
    

    
    Cortez        GSR1 and         Barrick    Gold       3.5     65,425 oz.
    (Pipeline     GSR2(2)
    Mining        (sliding-scale)
    Complex)      GSR3
                  NVR1
    

    
    Robinson(3)   3.0% NSR         Quadra     Gold      (1.3)    22,844 oz.
                                              Copper             29.2M lbs.
    

    
    Leeville      1.8% NSR         Newmont    Gold       2.0    138,669 oz.
    

    
    Goldstrike    0.9% NSR         Barrick    Gold       1.8    257,207 oz.
    (SJ Claims)
    

    
    Mulatos      1.0 - 5.0%        Alamos     Gold       1.5     38,741 oz.
                 NSR(4)
                 (sliding-scale)
    

    
    Taparko      TB-GSR1(5)        High River Gold       1.4      7,505 oz.
                 TB-GSR2(5)
    

    
    Siguiri      0.00 - 1.875%     AngloGold  Gold       1.2     81,431 oz.
                 NSR(6)            Ashanti
                 (sliding-scale)
    

    
    Balcooma     1.5% NSR          Kagara     Gold       0.6          -(8)
                                              Silver
                                              Copper
                                              Zinc
                                              Lead
    

    
    Troy         7.0% GSR(9)       Revett     Silver     0.6    343,010 oz.
                                              Copper              2.7M lbs.
    

    
    Twin Creeks  2.0% GSR          Newmont    Gold       0.5     31,536 oz.
    

    
    El Chanate   2.0 - 4.0%        Capital    Gold       0.5      9,376 oz.
                 NSR(10)           Gold
                 (sliding-scale)
                 10% NPI
    

    
    Don Mario    3.0% NSR          Orvana     Gold       0.4     17,653 oz.
    

    
    Benso        1.5% NSR          Golden     Gold       0.4     38,968 oz.
                                   Star
    

    
    Penasquito   2.0% NSR          Goldcorp   Gold       0.4     10,057 oz.
                                              Silver               0.9M oz.
    

    
    Wharf        0.30 - 1.5%       Goldcorp   Gold       0.3     17,903 oz.
                 NSR(11)
                 (sliding-scale)
    

    
    El Limon     3.0% NSR          Central    Gold       0.2      9,321 oz.
                                   Sun
                                   Mining
    

    
    Williams     0.72% NSR         Barrick /  Gold       0.2     37,792 oz.
                                   Teck
                                   Cominco
    

    
    Mt. Goode    1.5% NRS          Xstrata    Nickel     0.2      2.4M lbs.
    (Cosmos)
    

    
    Bald         1.75 - 3.5% NSR   Barrick    Gold       0.1              0
    Mountain     (sliding-scale)
    

    
    Allan        $0.36 - $1.44     Potash     Potash     0.1   225,582 tons
                 per ton (12)      Corp of
                 (sliding-scale)   Saskatchewan
    

    
    Martha       2.0% NSR          Coeur      Silver     0.1    415,645 oz.
                                   d'Alene
    

    
    Dolores      1.25% NSR(13)     Minefinders  Gold    0.02      2,440 oz.
                 2.0% NSR                       Silver                -
    

    
    El Toqui     1.0 - 3.0%        Breakwater   Gold    0.02          -(8)
                 NSR (14)          Resources    Zinc
                 (sliding-scale)


    

    
                                                          QUARTER ENDED
                                                        DECEMBER 31, 2007
                                                         (As Restated)
                                                       Royalty    Reported
                                                       Revenue  Production(1)
    PROPERTY      ROYALTY          OPERATOR   METAL  ($ Millions)
    

    
    Cortez        GSR1 and         Barrick    Gold      6.2      146,066 oz.
    (Pipeline     GSR2(2)                               (As
    Mining        (sliding-scale)                       restated)
    Complex)      GSR3
                  NVR1
    

    
    Robinson(3)   3.0% NSR         Quadra     Gold      3.2      27,090 oz.
                                              Copper             28.9M lbs.
    

    
    Leeville      1.8% NSR         Newmont    Gold      1.3      86,217 oz.
    

    
    Goldstrike    0.9% NSR         Barrick    Gold      1.3     183,211 oz.
    (SJ Claims)
    

    
    Mulatos       1.0 - 5.0%       Alamos     Gold      0.4      30,324 oz.
                  NSR(4)
                  (sliding-scale)
    

    
    Taparko      TB-GSR1(5)        High River Gold      1.1       5,932 oz.
                 TB-GSR2(5)
    

    
    Siguiri      0.00 - 1.875%     AngloGold  Gold        -(7)        -(7)
                 NSR (6)           Ashanti
                 (sliding-scale)
    

    
    Balcooma     1.5% NSR          Kagara     Gold        -(7)        -(7)
                                              Silver
                                              Copper
                                              Zinc
                                              Lead
    

    
    Troy         7.0% GSR(9)       Revett     Silver    0.3     113,714 oz.
                                              Copper              1.0M lbs.
    

    
    Twin Creeks  2.0% GSR          Newmont    Gold        -(7)        -(7)
    

    
    El Chanate   2.0 - 4.0%        Capital    Gold        -(7)        -(7)
                 NSR (10)          Gold
                 (sliding-scale)
                 10% NPI
    

    
    Don Mario    3.0% NSR          Orvana     Gold      0.4      22,258 oz.
    

    
    Benso        1.5% NSR          Golden     Gold        -(7)        -(7)
                                   Star
    

    
    Penasquito   2.0% NSR          Goldcorp   Gold        -(7)        -(7)
                                              Silver
    

    
    Wharf        0.30 - 1.5%       Goldcorp   Gold        -(7)        -(7)
                 NSR (11)
                 (sliding-scale)
    

    
    El Limon     3.0% NSR          Central    Gold      0.1       7,175 oz.
                                   Sun
                                   Mining
    

    
    Williams     0.72% NSR         Barrick /  Gold      0.1      37,806 oz.
                                   Teck
                                   Cominco
    

    
    Mt. Goode    1.5% NRS          Xstrata    Nickel      -(7)        -(7)
    (Cosmos)
    

    
    Bald         1.75 - 3.5% NSR   Barrick    Gold      0.1      16,069 oz.
    Mountain     (sliding-scale)
    

    
    Allan        $0.36 - $1.44     Potash     Potash      -(7)        -(7)
                 per ton (12)      Corp of
                 (sliding-scale)   Saskatchewan
    

    
    Martha       2.0% NSR          Coeur       Silver   0.2     773,741 oz.
                                   d'Alene
    

    
    Dolores      1.25% NSR(13)     Minefinders Gold       -(7)        -(7)
                 2.0% NSR                      Silver
    

    
    El Toqui     1.0 - 3.0%        Breakwater  Gold       -(7)        -(7)
                 NSR (14)          Resources   Zinc
                 (sliding-scale)


    * Footnotes follow on page 9.

    FOOTNOTES
    TABLE 1

    

    
    (1) Reported production relates to the amount of metal sales that are
        subject to our royalty interests for the periods ended December 31,
        2008 and December 31, 2007, as reported to us by the operators of the
        mines.
    

    
    (2) Royalty percentages:  GSR1 and GSR2 - 0.40-5.0% (sliding-scale); GSR3
        - 0.71%; NVR1 - 0.39%.  As of October 1, 2008, the GSR2 royalty
        percentage was restructured to match the current GSR1 rate.
    

    
    (3) Revenues consist of provisional payments for concentrates produced
        during the current period and final settlements for prior production
        periods.  Figure reflected represents amount that will be offset
        against future royalty payments.
    

    
    (4) The Company's royalty is subject to a 2.0 million ounce cap on gold
        production.  There have been approximately 328,000 ounces of
        cumulative production, as of December 31, 2008.
    

    
    (5) Royalty percentages:  TB-GSR1 - 15.0%; TB-GSR2 - 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 $900 per ounce gold price results in a rate of
        900/100 = 9.0%). 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 have ceased.  Both TB-GSR1 and TB-GSR2 continue until either
        production reaches 804,420 ounces of gold, or payments totaling $35
        million under TB-GSR1 are received, whichever comes first.  As of
        December 31, 2008, Royal Gold has recognized $5.6 million in
        cumulative royalty revenue under TB-GSR1 which is attributable to
        cumulative production of 43,700 ounces of gold.
    

    
    (6) The royalty is capped on a dollar basis and approximately $10.8
        million remains to be paid as of December 31, 2008.  NSR sliding-scale
        schedule (price of gold per ounce - royalty rate as of 9/30/08): $0 to
        $478.10 - 0.00%; $478.11 to $546.41 - 0.625%; $546.42 to $580.57 -
        0.875%; $580.58 to $614.72 - 1.125%; $614.73 to $648.87 - 1.50%;
        $648.88 and above - 1.875%.  The sliding-scale schedule is adjusted
        based on the average of the United States, Australian and Canadian
        Consumer Price Indices on a quarterly basis.  The most current rate
        available is reflected herein.
    

    
    (7) Receipt of royalty revenue commenced in February 2008 for El Chanate;
        June 2008 for Penasquito; and October 2008 for Siguiri, Balcooma, Twin
        Creeks, Benso, Wharf, Mt. Goode, Allan, and El Toqui; and December
        2008 for Dolores.
    

    
    (8) Production information was not available at the time of this press
        release.
    

    
    (9) The 7.0% GSR royalty extends until either cumulative production
        reaches approximately 9.9 million ounces of silver and 84.7 million
        pounds of copper, or Royal Gold receives $10.5 million in cumulative
        payments, whichever occurs first.  As of December 31, 2008, the
        Company has recognized approximately $9.5 million in cumulative
        payments from the Troy mine attributable to cumulative production of
        approximately 3.8 million ounces of silver and 33.5 million pounds of
        copper.  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.
    

    
    (10) The sliding-scale NSR royalty is capped once payments of
         approximately $17 million have been received.  The 10.0% NPI royalty
         is capped at $1.0 million.  As of December 31, 2008, payments of $1.3
         million for the sliding-scale NSR royalty and $1.0 million for the
         NPI royalty have been recognized under the cap.  As of January 1,
         2009, Royal Gold will no longer receive revenue from the 10.0% NPI
         royalty.
    

    
    (11) NSR sliding-scale schedule (price of gold per ounce - royalty rate):
         $0.00 to under $350 - 0.0%; $350 to under $400 - 0.5%; $400 to under
         $500 - 1.0%; $500 or higher - 2.0%.
    

    
    (12) The royalty applies to 40% of production.  The royalty rate is $1.44
         per ton for the first 600,000 tons on which the royalty is paid,
         reducing to $0.72 per ton on 600,000 to 800,000 tons and to $0.36 per
         ton above 800,000 tons, at a price above $23 per ton.  A sliding-
         scale is applicable when the price of potash drops below $23 per ton.
         Given the current North American market price for potash, the
         complete sliding-scale schedule is not presented here.  In addition,
         there is a $0.25 per ton royalty payable on certain production up to
         600,000 tons.
    

    
    (13) Revenue only pertains to the 1.25% NSR royalty.
    

    
    (14) NSR sliding-scale schedule (price of zinc per pound - royalty rate):
         $0.50 to below $0.55 - 1.0%; $0.55 to below $0.60 - 2.0%; $0.60 or
         higher - 3.0%.  Gold is produced as a by-product of zinc. The royalty
         is currently held in trust by Barrick for Royal Gold pending receipt
         of necessary consents.


    ROYAL GOLD, INC.
    Consolidated Balance Sheets
    (In thousands except share data)

    

    
                                                     December 31,    June 30,
                                                        2008          2008
                                                     (Unaudited) (As Restated)
    Current assets
       Cash and equivalents                             $55,040     $192,035
       Royalty receivables                               14,833       16,317
       Income taxes receivable                                -        2,186
       Deferred tax assets                                  140          131
       Prepaid expenses and other                           709          308
    

    
    Total current assets                                 70,722      210,977
    

    
    Royalty interests in mineral properties, net        475,724      300,670
    Restricted cash - compensating balance               19,250       15,750
    Inventory - restricted                               11,654       11,170
    Other assets                                          5,277        7,283
    Total assets                                       $582,627     $545,850
    

    
    Current liabilities
      Accounts payable                                   $6,378       $4,753
      Income taxes payable                                8,610            -
      Dividends payable                                   2,736        2,384
      Other                                               1,827        1,797
    

    
    Total current liabilities                            19,551        8,934
    

    
    Net deferred tax liabilities                         23,631       26,034
    Term loan facility                                   19,250       15,750
    Other long-term liabilities                             490          504
    Total liabilities                                    62,922       51,222
    

    
    Commitments and contingencies
    Minority interest in subsidiary                      11,976       11,411
    Stockholders' equity
       Common stock, $0.01 par value, authorized            340          339
         100,000,000 shares; and issued 34,007,184 and
         33,926,495 shares, respectively
    Additional paid-in capital                          465,862      463,335
    Accumulated other comprehensive (loss) income            (7)          65
    Accumulated earnings                                 41,534       19,478
    

    
    Total stockholders' equity                          507,729      483,217
    

    
    Total liabilities and stockholders' equity         $582,627     $545,850


    ROYAL GOLD, INC.
    Consolidated Statements of Operations and Comprehensive Income
    (Unaudited, in thousands except share data)

    

    
                                                For The Three Months Ended
                                            December 31,        December 31,
                                                2008               2007
                                                               (As Restated)
    

    
    Royalty revenues                          $14,622            $14,710
    

    
    Costs and expenses
       Costs of operations (exclusive
        of depreciation, depletion and
        amortization shown separately
        below)                                    613                896
       General and administrative               2,122              1,968
       Exploration and business
        development                               963              1,851
       Depreciation, depletion and
        amortization                            8,537              3,606
    Total costs and expenses                   12,235              8,321
    

    
    Operating income                            2,387              6,389
    

    
    Gain on royalty restructuring              31,500                  -
    Interest and other income                     166              2,072
    Interest and other expense                   (357)              (789)
    Income before income taxes                 33,696              7,672
    

    
    Current tax expense                       (14,116)            (2,715)
    Deferred tax benefit                        2,118                486
    Minority interest in income of
     consolidated subsidiary                     (301)              (322)
    Loss from equity investment                     -               (511)
    Net income                                $21,397             $4,610
    

    
    Adjustments to comprehensive
     income
       Unrealized change in market
        value of available for sale
        securities, net of tax                    240                 13
    Comprehensive income                      $21,637             $4,623
    

    
    Net income                                $21,397             $4,610
    Preferred dividends                             -             (1,204)
    Net income available to common
     stockholders                             $21,397             $3,406
    

    
    Basic earnings per share                    $0.63              $0.11
    

    
    Basic weighted average shares
     outstanding                           33,961,206         29,777,468
    

    
    Diluted earnings per share                  $0.62              $0.11
    

    
    Diluted weighted average shares
     outstanding                           34,375,388         30,124,299


    ROYAL GOLD, INC.
    Consolidated Statements of Operations and Comprehensive Income
    (Unaudited, in thousands except share data)

    

    
                                                For The Six Months Ended
                                             December 31,      December 31,
                                                 2008             2007
                                                               (As Restated)
    

    
    Royalty revenues                           $30,701           $27,213
    

    
    Costs and expenses
       Costs of operations                       1,460             1,742
       General and administrative                3,793             3,527
       Exploration and business development      1,637             2,481
       Depreciation, depletion, and
        amortization                            12,960             6,008
    Total costs and expenses                    19,850            13,758
    

    
    Operating income                            10,851            13,455
    

    
    Gain on royalty restructuring               31,500                 -
    Interest and other income                    1,123             3,952
    Interest and other expense                    (664)           (1,163)
    Income before income taxes                  42,810            16,244
    

    
    Current tax expense                        (17,668)           (5,927)
    Deferred tax benefit                         2,541               923
    Minority interest in income of
     consolidated subsidiary                      (537)             (542)
    Loss from equity investment                      -              (550)
    Net income                                 $27,146           $10,148
    

    
    Adjustments to comprehensive income
       Unrealized loss in market value of
        available for sale securities,
         net of tax                                (72)             (173)
    Comprehensive income                       $27,074            $9,975
    

    
    Net income                                 $27,146           $10,148
    Preferred dividends                              -            (1,204)
    Net income available to common
     stockholders                              $27,146            $8,944
    

    
    Basic earnings per share                     $0.80             $0.30
    

    
    Basic weighted average shares
     outstanding                            33,943,851        29,253,504
    

    
    Diluted earnings per share                   $0.79             $0.30
    

    
    Diluted weighted average shares
     outstanding                            34,343,827        29,455,599


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

    

    
                                                   For The Six Months Ended
                                                   December 31,  December 31,
                                                      2008           2007
                                                                 (As Restated)
    Cash flows from operating activities
    

    
    Net income                                      $27,146         $10,148
    Adjustments to reconcile net income to net cash
      provided by operating activities:
    

    
         Depreciation, depletion and amortization    12,960           6,008
         Deferred tax benefit                        (2,541)           (923)
         Non-cash employee stock compensation
          expense                                     1,551           1,418
         Gain on royalty restructuring              (31,500)              -
         Loss on available for sale securities            -              48
         Note receivable - Battle Mountain Gold
          Exploration                                     -            (714)
         Tax benefit of stock-based compensation
          exercises                                    (253)           (114)
    Changes in assets and liabilities:
         Royalty receivables                          1,485           1,437
         Prepaid expenses and other assets             (208)         (2,318)
         Accounts payable                             2,207           2,367
         Income taxes payable (receivable)           11,372            (621)
         Other                                          (14)            371
    

    
    Net cash provided by operating activities       $22,205         $17,107
    

    
    Cash flows from investing activities
    

    
       Capital expenditures for property and
        equipment                                      $(15)           $(11)
       Acquisition of royalty interests in mineral
        properties                                 (186,110)         (2,300)
       Proceeds from royalty restructuring           31,500               -
       Restricted cash - compensating balance        (3,500)              -
       Deferred acquisition costs                       (62)            (56)
       Battle Mountain acquisition, net of cash
        acquired of $1,398,181                            -          (2,933)
    

    
    Net cash used in investing activities         $(158,187)        $(5,300)
    

    
    Cash flows from financing activities:
       Tax benefit of stock-based compensation
        exercises                                      $253            $114
       Debt issuance costs                             (721)              -
       Term loan facility                             3,500               -
       Common dividends paid                         (4,768)         (3,755)
       Gold loan payoff - Battle Mountain                 -          (6,852)
       Net proceeds from issuance of common stock       723             398
       Net proceeds from issuance of preferred stock      -         111,098
    

    
    Net cash (used in) provided by financing
     activities                                     $(1,013)       $101,003
    

    
    Net (decrease) increase in cash and
     equivalents                                   (136,995)        112,810
    

    
    Cash and equivalents at beginning of period     192,035          82,842
    

    
    Cash and equivalents at end of period           $55,040        $195,652
    

    
    Supplemental cash flow information:
      Non-cash financing activities:
    

    
        Battle Mountain acquisition (with common
         stock)                                          $-         $35,832


    SCHEDULE A

    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
                                             December 31,
    

    
                                      2008                 2007
                                                       (As restated)
    

    
    Operating income                $2,387               $6,389
    Depreciation, depletion and
     amortization                    8,537                3,606
    Non-Cash employee stock
     compensation                      915                  880
    Minority interest in income of
     consolidated subsidiary          (301)                (322)
    Free cash flow                 $11,538              $10,553
    


    
                                          For the Six Months
                                                Ended
                                             December 31,
    

    
                                      2008                2007
                                                      (As restated)
    

    
    Operating income               $10,851              $13,455
    Depreciation, depletion and
     amortization                   12,960                6,008
    Non-Cash employee stock
     compensation                    1,551                1,418
    Minority interest in income of
     consolidated subsidiary          (537)                (542)
    Free cash flow                 $24,825              $20,339




    Royal Gold, Inc.
    




For further information:

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

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ROYAL GOLD, INC.

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