Denver-based gold royalty company Royal Gold (RGL-T) saw its revenue climb buy 19% to $3.4 million during the three months ended Sept. 30.
On that revenue, the company earned US$1.4 million (or 8 per basic share), compared with year-ago earnings of just $372,299 (2 a share). The year-ago earnings included a non-cash charge totalling just more than $1 million.
The revenue boost reflects an increase in Royal’s sliding-scale royalty (up to 2.6% for the quarter) on production from the Pipeline mining complex in Nevada. The Pipeline complex supplies cash to Royal via four royalties — two sliding scale royalties, one fixed gross smelter royalty, and a net value return royalty.
The Pipeline complex is owned by Placer Dome (PDG-T) 60%) and Rio Tinto (RTP-N) subsidiary Kennecott Exploration (40%).
Royal’s quarterly share of production from the Pipeline slipped to 267,800 oz. from the year-ago 295,518 oz. The lower production is attributed to the termination of carbonaceous ore sales to Barrick Gold (ABX-T) during the quarter and lower grades at SouthPipeline. Royalty revenue was US$3.1 million, up from US$2.6 million.
Elsewhere in the silver state, the Bald Mountain mine saw increased production. Royal’s 1.75% royalty at Placer Dome‘s (PDG-T) Bald Mountain mine took in 53,000 oz. to Royal’s account, significantly higher than the year-ago 18,000 oz. The improvement is owing to Better recoveries thanks to changes in leaching techniques.
Royal also receives royalties from the Martha silver mine in Santa Cruz province, Argentina, where Coeur d’Alene Mines (CDE-N) just boosted resources by about a quarter.
Recent reverse-circulation drilling along strike and down dip from known mineralization upped resources to 33,000 tonnes grading 3,800 grams silver per tonne.
Coeur expects Martha to produce about 1.6 million oz. of silver in the second half of calendar 2002.
About 100 metres to the east, Coeur has turned up another zone of high-grade silver mineralization, the R-4 prospect, along the same structure that hosts the main Martha orebody.
Drilling continues.
Royal Gold shares shot up$3.35 or more than 12% to $30.94 on Thursday.
Be the first to comment on "Royal’s revenues rise"