Royal Gold Reports Fiscal Third Quarter 2009 Results



    
    - Record revenues of $20.8 million, an 11% increase over comparable
quarter

    - Free cash flow(1) of $17.5 million, representing 84% of revenues

    - Gold accounts for 89% of revenues

    - Transaction to acquire gold production from Teck Resources' Andacollo
mine

    
    DENVER, May 7 /PRNewswire-FirstCall/ -- ROYAL GOLD, INC. (Nasdaq:   RGLD;
TSX: RGL), a leading precious metals royalty company, today announced record
royalty revenue of $20.8 million for the third quarter of fiscal 2009 and net
income of $4.1 million, or $0.12 per basic share.  This compares to royalty
revenue of $18.7 million for the third quarter of fiscal 2008 and net income
of $6.9 million, or $0.11 per basic share.(2)

    For the nine-month period ended March 31, 2009, royalty revenue was $51.5
million and net income was $31.3 million, or $0.92 per basic share. Nine-month
net income included the effects of a one-time, pre-tax gain of $31.5 million,
or $0.60 per basic share after taxes, resulting from the Company's
restructuring of its GSR2, GSR3 and NVR1 royalties at the Cortez Pipeline
Mining Complex ("Cortez").  Excluding this one-time gain, the Company's net
income for the nine-month period was $10.8 million, or $0.32 per basic share. 
This compares to royalty revenue of $45.9 million and net income of $17.0
million, or $0.41 per basic share, for the nine-month period ended March 31,
2008.

    Increased royalty revenue for the third fiscal quarter was largely driven
by stronger production at Taparko and contributions from various properties
acquired in the Barrick transaction, partially offset by lower gold and copper
prices and decreased contributions from Cortez and Robinson.  Net income
decreased for the three month period ended March 31, 2009, due to an increase
in depreciation, depletion and amortization charges of $4.0 million which was
primarily attributable to increased production from Taparko and new production
from the Penasquito, Dolores and the Barrick royalties.

    Free cash flow for the current quarter was $17.5 million, representing
84% of revenues.  This compares to free cash flow for the third quarter of
fiscal 2008 of approximately $15.5 million, or 83% of revenues.  For the
nine-month period ended March 31, 2009, free cash flow was $42.3 million,
representing 82% of revenues compared to free cash flow for the nine-month
period ended March 31, 2008, of $35.9 million, or 78% of revenues.

    As of March 31, 2009, the Company had a working capital surplus of $61.7
million.  Current assets were $72.3 million (including $50.5 million in cash
and equivalents), compared to current liabilities of $10.6 million, resulting
in a current ratio of 7 to 1.

    Tony Jensen, President and CEO, commented, "We are pleased with the
strong quarterly performance driven by our broad and diversified royalty
portfolio which is now comprised of 27 producing properties. We continue to
execute on our strategic growth plan.  Our recent agreement with Teck on the
Andacollo mine further enhances our world-class gold royalty portfolio.  This
transaction maintains our focus on gold and we expect it to  be a core royalty
for years to come."

    
    (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 operating 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.
    PROPERTY HIGHLIGHTS

    Taparko
    
    Taparko sales for the quarter were approximately 23,000 ounces of gold
for which the Company recognized $5.1 million in royalty revenue.  During the
quarter, the mill availability was 68% as High River completed maintenance
focused on improving mill performance and reducing drive train vibrations.

    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.
    

    Cortez
    
    At the Cortez property, the Company recognized $3.8 million in revenue on
production of approximately 64,000 ounces, compared to revenue of $5.3 million
on production of approximately 117,000 ounces for the comparable prior year
quarter.  The production decrease was due mainly to lower grades being mined
during the current period. Barrick expects production to improve in the coming
quarters as higher grade material is mined.
    

    Robinson
    
    For the quarter, the Company recognized $1.8 million in revenue for the
Robinson mine, compared to $4.4 million for the comparable prior year quarter.
 This decrease in royalty revenue was due to lower copper prices, a decrease
in gold and copper sales, and negative final pricing adjustments of
approximately $210,000 during the current period.  The average spot price of
copper for the quarter was $1.56 per pound as compared to $3.52 per pound in
the third quarter of fiscal 2008.

    Fiscal third quarter production and revenue for the Company's principal
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 Annual Report on Form 10-K/A, filed with the SEC on November 5, 2008,
and our Quarterly Reports on Form 10-Q and Current Reports on Form 8-K, or our
website located at www.royalgold.com.
    

    OTHER DEVELOPMENTS

    Andacollo Transaction
    
    On April 6, 2009, the Company announced that it signed a definitive
agreement with a subsidiary of Teck Resources Limited ("Teck") to acquire an
interest in the gold production at the Andacollo mine in Chile.  The purchase
price, after adjustments pursuant to the definitive agreement, is $218 million
in cash and 1,204,136 shares of Royal Gold's Common Stock. Royal Gold will
receive 75% of the gold produced from the sulfide portion of the Andacollo
deposit until 910,000 payable ounces of gold have been sold, after which Royal
Gold will receive 50% of all future payable gold production.   Teck expects
initial production from the sulfide deposit to begin in late calendar 2009 and
reach commercial production in the first half of calendar 2010.

    Teck estimates the sulfide reserves to contain proven and probable
mineral reserves of approximately 393.5 million tonnes grading 0.13 grams of
gold per tonne. This equates to 1.6 million contained ounces of gold in the
sulfide reserves, which will be mined over 20 years of production. Over the
first 10 years of the mine life, Teck expects production will average 53,000
ounces of gold and 76,000 tonnes of copper in concentrate annually.  Royal
Gold's interest does not apply to the production of copper.

    The transaction is subject to completion of concentrate marketing for a
specified percentage of production from the Andacollo mine, the condition that
material governmental approvals are not withdrawn or challenged, satisfactory
completion of certain limited outstanding due diligence and other customary
closing conditions.  Closing is scheduled prior to the end of October 2009.
    

    Equity Offering
    
    In April 2009, Royal Gold sold 6,500,000 shares of common stock at a
price of $38.00 per share.  Proceeds to the Company from the offering, net of
commission and estimated expenses, were approximately $235 million.  The
proceeds from the offering will be used primarily to pay the cash component of
the Andacollo transaction.  The underwriters' over-allotment option for
975,000 additional shares of common stock is not expected to be exercised and
will expire on May 7, 2009.
    

    Battle Mountain Transaction
    
    On October 24, 2007, Royal Gold completed the acquisition of Battle
Mountain Gold Exploration Corp. ("Battle Mountain") pursuant to an Amended and
Restated Agreement and Plan of Merger ("Merger Agreement").  Pursuant to the
Merger Agreement, consideration of 37,418 shares of Royal Gold common stock
and approximately $100,000 in cash was held back from the Battle Mountain
stockholders subject to the settlement of certain Battle Mountain litigation. 
All of the parties have agreed, in principal, to settle the litigation.  Upon
settlement, each former Battle Mountain shareholder who made a cash election
will receive a payment of approximately $0.010897 per share of Battle Mountain
common stock, and each former Battle Mountain shareholder who made, or was
deemed to have made, a share election will receive approximately 0.000327154
shares of Royal Gold Common Stock for each share of Battle Mountain common
stock.
    

    About Royal Gold
    
    Royal Gold is a precious metals royalty company engaged in the
acquisition and management of precious metal royalty interests.  The Company
owns royalties on 117 properties on five continents, including royalties on 27
producing mines and 8 development stage projects. 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 website 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.

    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 third 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 #84855470.  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 website 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 Royal Gold's broad and
diversified royalty portfolio, the expectation of Royal Gold's strategic
growth plan, the Andacollo transaction's focus on gold and that the Andacollo
royalty will be a core royalty for years to come, Barrick's expectation of
improved production and higher grade material at Cortez, operators'
expectations on the commencement or ramp up of production, operator's reserve
or production estimates, operator's expectations of mine life and the
expectation of when the Andacollo transaction will close.  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 and other
royalty properties, the Company's exercise of its rights under the Taparko
Funding Agreement, buy down rights at Malartic, litigation, the closing of the
Andacollo transaction, the ability of the operator to bring the Andacollo
project into production as expected, and other subsequent events, as well as
other factors described 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
operating 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.
    


    

    TABLE 1

    
                              Third Quarter Fiscal 2009
              Royalty Production and Revenue for Principal Royalty Interests
    

    
                                                           QUARTER ENDED
                                                           MARCH 31, 2009
                                                            (Unaudited)
    

    
                                                       Royalty     Reported
                                                       Revenue    Production
    PROPERTY        ROYALTY       OPERATOR     METAL ($Millions)     (1)
    

    
    Taparko         TB-GSR1(2)     High River   Gold      5.1     22,963 oz.
                    TB-GSR2(2)
    

    
    Cortez          GSR1 and       Barrick      Gold      3.8     63,956 oz.
                    GSR2(3)
                    GSR3(3)
                    NVR1(3)
    

    
    Mulatos         1.0 - 5.0%     Alamos       Gold      1.9     41,871 oz.
                    NSR(5)
    

    
    Robinson(6)     3.0% NSR       Quadra       Gold      1.8     30,257 oz.
                                               Copper               34.5M lbs.
    

    Leeville        1.8% NSR       Newmont      Gold      1.7    106,767 oz.

    
    Siguiri         0.00 - 1.875%  AngloGold    Gold      1.3     79,836 oz.
                    NSR(7)          Ashanti
    

    Goldstrike      0.9% NSR       Barrick      Gold      1.1    136,733 oz.

    
    Penasquito      2.0% NSR       Goldcorp     Gold      0.4     12,027 oz.
     (oxide)                                   Silver               0.6M oz.
    

    
    Dolores         1.25% NSR(9)   Minefinders  Gold      0.2     14,169 oz.
                    2.0% NSR                   Silver                  -
    

    
    Other
     Royalty
     Properties(10) -              -          Various     3.5          -
    

    
    Total
     Royalty
     Revenue                                             20.8
    


    
                                                           QUARTER ENDED
                                                           MARCH 31, 2008
    

    
                                                       Royalty     Reported
                                                       Revenue    Production
    PROPERTY        ROYALTY       OPERATOR     METAL ($Millions)     (1)
    

    
    Taparko         TB-GSR1(2)     High River   Gold      3.1     14,224 oz.
                    TB-GSR2(2)
    

    
    Cortez          GSR1 and       Barrick      Gold      5.3(4) 116,749 oz.
                    GSR2(3)
                    GSR3(3)
                    NVR1(3)
    

    
    Mulatos         1.0 - 5.0%     Alamos       Gold      0.4     32,081 oz.
                    NSR(5)
    

    
    Robinson(6)     3.0% NSR       Quadra       Gold      4.4     32,313 oz.
                                               Copper               38.9M lbs.
    

    Leeville        1.8% NSR       Newmont      Gold      1.9    113,685 oz.

    
    Siguiri         0.00 - 1.875%  AngloGold    Gold        -(8)       -(8)
                    NSR(7)          Ashanti
    

    Goldstrike      0.9% NSR       Barrick      Gold      1.2    145,369 oz.

    
    Penasquito      2.0% NSR       Goldcorp     Gold        -(8)       -(8)
     (oxide)                                   Silver
    

    
    Dolores         1.25% NSR(9)   Minefinders  Gold        -(8)       -(8)
                    2.0% NSR       Silver
    

    
    Other
     Royalty
     Properties(10) -              -          Various     2.4          -
    

    
    Total
     Royalty                                             18.7
     Revenue                                        (As Restated)
    



    Footnotes follow on page 7.

    FOOTNOTES

    
    (1)  Reported production relates to the amount of metal sales that are
         subject to our royalty interests for the periods ended March 31, 2009
         and March 31, 2008, as reported to us by the operators of the mines.
    

    
    (2)  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
         March 31, 2009, Royal Gold has recognized approximately $8.8 million
         in royalty revenue under TB-GSR1 which is attributable to cumulative
         production of 67,000 ounces of gold.
    

    
    (3)  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.
    

    (4)  Royalty revenue has been restated for fiscal 2008.

    
    (5)  The Company's sliding-scale royalty is subject to a 2.0 million ounce
         cap on gold production.  There have been approximately 370,000 ounces
         of cumulative production, as of March 31, 2009.
    

    
    (6)  Revenues consist of provisional payments for concentrates produced
         during the current period and final settlements for prior production
         periods.
    

    
    (7)  The Company's royalty is capped once payments of approximately
         $12.0 million have been received.  As of March 31, 2009,
         approximately $9.3 million remains unrecognized under the cap.  NSR
         sliding-scale schedule (price of gold per ounce - royalty rate as of
         3/31/09): $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.
    

    
    (8)  Royalty revenue commenced in June 2008 for Penasquito; October 2008
         for Siguiri; and December 2008 for Dolores.
    

    
    (9)  Revenue only pertains to the 1.25% NSR royalty.  The 2.0% NSR royalty
         becomes effective once the mine reaches 75% of commercial production,
         which the operator expects to be reached during the second quarter of
         calendar 2009.
    

    
    (10) Royalties included in the "Other" category that were acquired in the
         Barrick transaction in October 2008 contributed aggregate royalty
         revenue of $967,000 in the three month period ended March 31, 2009,
         not including royalty revenue from Siguiri and Mulatos, which are
         shown in the table.  The remaining royalties in the "Other" category
         contributed aggregate royalty revenue of $2.6 million in the three
         month period ended March 31, 2009, compared to $2.4 million in the
         three month period ended March 31, 2008.  Of this royalty revenue,
         Benso contributed $627,000, El Chanate contributed $529,000 and Troy
         contributed $504,000 for the current period, compared to $0, $152,000
         and $747,000 for the prior period, respectively.
    



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

    
                                                       March 31,   June 30,
                                                         2009       2008
                                                               (As Restated)
    Current assets
       Cash and equivalents                             $50,538   $192,035
       Royalty receivables                               18,248     16,317
       Income taxes receivable                            2,038      2,186
       Deferred tax assets                                   91        131
       Prepaid expenses and other                         1,429        308
    

    Total current assets                                 72,344    210,977

    
    Royalty interests in mineral properties, net        466,282    300,670
    Restricted cash - compensating balance               19,250     15,750
    Inventory - restricted                               11,052     11,170
    Other assets                                          5,786      7,283
    Total assets                                       $574,714   $545,850
    

    
    Current liabilities
       Accounts payable                                  $5,702     $4,753
       Dividends payable                                  2,738      2,384
       Other                                              2,135      1,797
    

    Total current liabilities                            10,575      8,934

    
    Net deferred tax liabilities                         23,468     26,034
    Term loan facility                                   19,250     15,750
    Other long-term liabilities                             688        504
    Total liabilities                                    53,981     51,222
    

    
    Commitments and contingencies
    Minority interest in subsidiary                      11,416     11,411
    Stockholders' equity
       Common stock, $0.01 par value, authorized
         100,000,000 shares; and issued 33,958,082 and
         33,926,495 shares, respectively                    340        339
    Additional paid-in capital                          466,100    463,335
    Accumulated other comprehensive (loss) income           (32)        65
    Accumulated earnings                                 42,909     19,478
    

    Total stockholders' equity                          509,317    483,217

    Total liabilities and stockholders' equity         $574,714   $545,850



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

    
                                              For The Three Months Ended
                                            March 31,          March 31,
                                              2009               2008
                                                             (As Restated)
    

    Royalty revenues                         $20,797            $18,731

    
    Costs and expenses
       Costs of operations (exclusive of
        depreciation, depletion and
        amortization shown separately
        below)                                 1,154              1,006
       General and administrative              1,812              1,981
       Exploration and business
        development                              732                817
       Depreciation, depletion and
        amortization                           9,960              5,925
    Total costs and expenses                  13,658              9,729
    

    Operating income                           7,139              9,002

    
    Interest and other income                  1,075              1,715
    Interest and other expense                  (266)              (330)
    Income before income taxes                 7,948             10,387
    

    
    Income tax expense                        (2,534)            (3,358)
    Minority interest in income of
     consolidated subsidiary                  (1,272)              (140)
    Net income                                $4,142             $6,889
    

    
    Adjustments to comprehensive
     income
       Unrealized change in market value
        of available for sale securities,
        net of tax                               (24)              (109)
    Comprehensive income                      $4,118             $6,780
    

    
    Net income                                $4,142             $6,889
    Preferred dividends                            -             (3,584)
    Net income available to common
     stockholders                             $4,142             $3,305
    

    Basic earnings per share                   $0.12              $0.11

    
    Basic weighted average shares
     outstanding                          34,008,758         30,932,084
    

    Diluted earnings per share                 $0.12              $0.11

    
    Diluted weighted average shares
     outstanding                          34,447,169         31,213,663
    



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

    
                                                     For The Nine Months Ended
                                                      March 31,      March 31,
                                                        2009          2008
                                                                 (As Restated)
    

    Royalty revenues                                   $51,499      $45,944

    
    Costs and expenses
       Costs of operations (exclusive of
        depreciation, depletion and amortization
        shown separately below)                          2,615        2,748
       General and administrative                        5,604        5,509
       Exploration and business development              2,369        3,298
       Depreciation, depletion, and amortization        22,921       11,933
    Total costs and expenses                            33,509       23,488
    

    Operating income                                    17,990       22,456

    
    Gain on royalty restructuring                       31,500            -
    Interest and other income                            2,198        5,667
    Interest and other expense                            (929)      (1,492)
    Income before income taxes                          50,759       26,631
    

    
    Income tax expense                                 (17,660)      (8,362)
    Minority interest in income of consolidated
     subsidiary                                         (1,810)        (682)
    Loss from equity investment                              -         (550)
    Net income                                         $31,289      $17,037
    

    
    Adjustments to comprehensive income
       Unrealized loss in market value of available
        for sale securities, net of tax                    (97)        (282)
    Comprehensive income                               $31,192      $16,755
    

    
    Net income                                         $31,289      $17,037
    Preferred dividends                                      -       (4,788)
    Net income available to common stockholders        $31,289      $12,249
    

    Basic earnings per share                             $0.92        $0.41

    Basic weighted average shares outstanding       33,965,171   29,808,962

    Diluted earnings per share                           $0.91        $0.41

    Diluted weighted average shares outstanding     34,402,551   30,134,888



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

    
                                              For The Nine Months Ended
                                             March 31,        March 31,
                                               2009             2008
                                                            (As Restated)
    Cash flows from operating
     activities
    

    
    Net income                                $31,289          $17,037
    Adjustments to reconcile net income
     to net cash provided by operating
     activities:
       Depreciation, depletion and
        amortization                           22,921           11,933
       Deferred tax benefit                    (2,072)          (1,154)
       Non-cash employee stock
        compensation expense                    2,225            2,145
       Gain on royalty restructuring          (31,500)               -
       Loss on available for sale
        securities                                  -               49
       Note receivable - Battle Mountain
        Gold Exploration                            -             (713)
       Tax benefit of stock-based
        compensation exercises                   (289)            (515)
    Changes in assets and liabilities:
       Royalty receivables                     (1,931)            (695)
       Prepaid expenses and other assets         (857)          (2,199)
       Accounts payable                         1,457            2,921
       Income taxes receivable                    190               67
       Other                                      (28)            (171)
    

    
    Net cash provided by operating
     activities                               $21,405          $28,705
    

    
    Cash flows from investing
     activities
    

    
       Acquisition of royalty interests in
        mineral properties                   (186,110)         (15,939)
       Proceeds from royalty restructuring     31,500                -
       Restricted cash - compensating
        balance                                (3,500)               -
       Proceeds on sale of inventory -
        restricted                              1,016                -
       Deferred acquisition costs                (967)             (63)
       Battle Mountain acquisition, net of
        cash acquired of $1,398,181                 -           (2,933)
       Other                                      (97)             (12)
    

    
    Net cash used in investing
     activities                             $(158,158)        $(18,947)
    

    
    Cash flows from financing
     activities:
       Tax benefit of stock-based
        compensation exercises                   $289             $515
       Debt issuance costs                       (785)             (26)
       Term loan facility                       3,500                -
       Common dividends paid                   (7,504)          (5,869)
       Distribution to minority interest
        holder                                 (1,016)               -
       Preferred stock dividends paid               -           (2,802)
       Gold loan payoff - Battle Mountain           -           (6,852)
       Net proceeds from issuance of
        common stock                              772              675
       Net proceeds from issuance of
        preferred stock                             -          111,098
    

    
    Net cash (used in) provided by
     financing activities                     $(4,744)         $91,223
    

    
    Net (decrease) increase in cash and
     equivalents                             (141,497)         100,981
    

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

    
    Cash and equivalents at end of
     period                                   $50,538         $183,823
    

    
    Supplemental cash flow information:
      Non-cash financing activities:
        Conversion of preferred stock to
         common stock                              $-         $116,946
        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 operating 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
                                                       March 31,
                                                      (unaudited)
                                               2009               2008
                                                              (As restated)
    

    
    Operating income                          $7,139             $9,002
    Depreciation, depletion and amortization   9,960              5,925
    Non-Cash employee stock compensation         674                727
    Minority interest in operating income of
     consolidated subsidiary(1)                 (256)              (140)
    Free cash flow                           $17,517            $15,514
    


    
                                               For the Nine Months Ended
                                                       March 31,
                                                      (unaudited)
                                              2009               2008
                                                             (As restated)
    

    
    Operating income                         $17,990            $22,456
    Depreciation, depletion and amortization  22,921             11,933
    Non-Cash employee stock compensation       2,225              2,145
    Minority interest in operating income of
     consolidated subsidiary(1)                 (794)              (682)
    Free cash flow                           $42,342            $35,852
    

    
    (1)  Only the portion of minority interest included in operating income of
         Royal Gold was subtracted in the reconciliation of free cash flow to
         operating income.



    Royal Gold, Inc.
    




For further information:

For further information: Karen Gross, Vice President and Corporate
Secretary of Royal Gold, Inc., +1-303-575-6504 Web Site:
http://www.royalgold.com

Organization Profile

ROYAL GOLD, INC.

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