Vancouver – Royalties covering a global portfolio of gold mines generated record revenues of US$28.4 million for Royal Gold (RGL-T, RGLD-Q) in fiscal 2006, up 12% from revenues of US$25.3 million in fiscal 2005. The Denver-based company reported net income of US$11.4 million for the fiscal year, or US$0.50 per share, just below net income of US$11.5 million a year earlier.
Royal Gold’s core assets are two sliding-scale gross smelter return royalties and a fixed-rate gross smelter return royalty on the Pipeline mining complex in Nevada’s Lander County. Barrick Gold (ABX-T, ABX-N) operates and owns 60% of the complex, which produced 598,974 oz. gold in fiscal 2006 to generate US$16.8 million of royalty revenue to Royal Gold’s coffers.
Production from the Pipeline complex has fallen significantly since fiscal 2005, when 973,602 oz. generated royalty revenue of US$21.4 million. Higher gold prices helped to partially offset the drop in production.
Production during the latest quarter ended June 30 slipped to 75,574 oz. gold, which provided US$2.7 million of royalty revenue. This is well below production of 288,600 oz. gold and royalty revenue of US$6.4 million achieved in the same quarter of fiscal 2005.
Production also dropped at the Leeville project in Eureka County, Nevada in the latest quarter ended June 30. The Leeville property produced 13,120 oz. gold and provided royalty income of about US$144,000, down from 25,582 oz. and royalty income of US$252,000 in the comparable quarter a year earlier.
Contributions from the remaining royalties are modest, with the exception of a 0.9% net-smelter royalty (NSR) over the SJ claims, part of Barrick’s vast Goldstrike mine complex in Nevada. Production at the SJ claims topped 1 million oz. and generated US$4.8 million of revenue in fiscal 2006, well above the 531,342 oz. produced and US$2 million of royalty revenue reported in fiscal 2005.
Royal Gold’s other royalties cover mines in the western United States, Mexico, Argentina, and Burkina Faso.
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