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Royal Gold, Inc. (RGLD - Free Report) issued an update for first-quarter 2022 and provided stream and royalty sales guidance for the current year. During the quarter, RGLD Gold AG — the fully-owned subsidiary of Royal Gold — sold 56,500 gold equivalent ounces (GEOs), comprising 41,600 gold ounces, 489,200 silver ounces and 1,600 tons of copper related to its streaming agreements. Due to the timing of shipments, steam sales for the March-end quarter were slightly above the prior guidance range of 50,000-55,000 GEOs.
The average realized price of gold was $1,863 per ounce in the quarter, up 4% sequentially. The average realized price of silver stood at $23.38 per ounce, up from the previous quarter’s $23.35. Average realized copper prices were $10,063 per ton, up 3.7% quarter over quarter. The company ended the quarter with 15,800 gold-equivalent ounces in inventory, including 11,400 ounces of gold and 344,000 silver ounces.
During the three months ended Mar 31, 2022, the cost of sales came in at around $401 per gold equivalent ounce compared with the prior quarter’s tally of $407 per gold equivalent ounce. The cost of sales is based on the quarterly average silver-gold ratio of roughly 78 to 1 and the copper-gold ratio of around 0.19 tons per ounce.
Royal Gold expects a total GEO sales volume of between 315,000 and 340,000 GEOs for the current year. Gold sales volume is expected in the band of 220,000-240,000 ounces, while sales for other metals are estimated in the range of 95,000-100,000 GEOs. The company’s GEO guidance assumes a current-year average gold price of $1,800 per ounce, silver price of $22.50 per ounce and copper, nickel, lead, zinc prices of $4.25, $8.50, $0.95 and $1.25 per pound, respectively.
Khoemacau mine ramped up its mining operations to full production levels during fourth-quarter 2022. Khoemacau Copper Mining (KCM) Limited drew the remaining $26.5 million stream advance payment from Royal Gold in February 2022 and it was paid as of mid-March 2022. Therefore, Royal Gold’s interest in the payable silver from Khoemacau increased to 100% from the current rate of 90%. In 2019, Royal Gold entered into a silver mine life-purchase agreement with KCM to purchase and sell silver from high-quality long-life Khoemacau copper development project in Botswana.
Gold grades from Andacollo and Pueblo Viejo mines are expected to reduce in the current year owing to production sequencing and an increase in the processing of stockpiled ore. Peñasquito mine is likely to be impacted by lower production due to pit sequencing and the processing of harder ore.
Silver stream deliveries from the Pueblo Viejo mine were affected by the deferral of an additional 40,700 ounces in the fourth quarter due to temporary operational issues with the silver circuit. In the current year, there will be no material delivery of deferred silver ounces from the mine until the completion of the ongoing plant expansion project, the mine’s operator Barrick Gold Corporation (GOLD - Free Report) stated.
Barrick continues to advance with the process plant expansion and proposed tailings storage facility for extension of the mine life at the Pueblo Viejo mine. It expects that the project is likely to significantly increase throughput and enable the mine to maintain average annual gold production of approximately 800,000 ounces after 2022. The process plant is expected to be completed by the end of 2022.
Total gold production from the Cortez mine subject to Royal Gold’s royalty interests is expected to be approximately 280,000 ounces of gold for 2022, down from gold production of 368,100 ounces in 2021.
Royal Gold is a precious metals stream and royalty company engaged in the acquisition and management of precious metal streams, royalties and similar production-based interests. As of Mar 31, 2022, the company owned interests in 187 properties on five continents, including interests in 43 producing mines and 18 development-stage projects.
The company will benefit from higher metal prices this year. Silver and copper prices have been gaining on concerns about the escalating crisis over Ukraine against robust demand and supply disruptions. Copper demand is surging on increasing demand for electric vehicles and wind farms, solar panels and the power grid. Gold continues to be the most significant revenue driver for Royal Gold. Currently, gold prices are trading at around $1,968 per ounce as the Russia-Ukraine conflict fueled safe haven demand for the metal. Additionally, rising inflation and the Fed’s interest rate hikes are driving gold prices. These are likely to drive the company’s top-line results.
Price Performance
Royal Gold’s shares have gained 28% in the past year compared with the industry’s growth of 15.5%.
Image Source: Zacks Investment Research
Zacks Rank & Stocks to Consider
Royal Gold currently carries a Zacks Rank #3 (Hold).
Nutrien has an expected earnings growth rate of 108.7% for the current year. The Zacks Consensus Estimate for NTR's current-year earnings has been revised 37.4% upward over the last 60 days.
Nutrien has a trailing four-quarter earnings surprise of roughly 60.3%, on average. NTR has rallied around 98.3% in a year.
Commercial Metals has a projected earnings growth rate of 114.7% for the current fiscal year. The Zacks Consensus Estimate for CMC's current fiscal year earnings has been revised upward by 35.1% over the past 60 days.
Commercial Metals has a trailing four-quarter earnings surprise of roughly 15.9%, on average. CMC has gained around 47% in a year.
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Royal Gold (RGLD) Issues Update for Q1, '22 View
Royal Gold, Inc. (RGLD - Free Report) issued an update for first-quarter 2022 and provided stream and royalty sales guidance for the current year. During the quarter, RGLD Gold AG — the fully-owned subsidiary of Royal Gold — sold 56,500 gold equivalent ounces (GEOs), comprising 41,600 gold ounces, 489,200 silver ounces and 1,600 tons of copper related to its streaming agreements. Due to the timing of shipments, steam sales for the March-end quarter were slightly above the prior guidance range of 50,000-55,000 GEOs.
The average realized price of gold was $1,863 per ounce in the quarter, up 4% sequentially. The average realized price of silver stood at $23.38 per ounce, up from the previous quarter’s $23.35. Average realized copper prices were $10,063 per ton, up 3.7% quarter over quarter. The company ended the quarter with 15,800 gold-equivalent ounces in inventory, including 11,400 ounces of gold and 344,000 silver ounces.
During the three months ended Mar 31, 2022, the cost of sales came in at around $401 per gold equivalent ounce compared with the prior quarter’s tally of $407 per gold equivalent ounce. The cost of sales is based on the quarterly average silver-gold ratio of roughly 78 to 1 and the copper-gold ratio of around 0.19 tons per ounce.
Royal Gold expects a total GEO sales volume of between 315,000 and 340,000 GEOs for the current year. Gold sales volume is expected in the band of 220,000-240,000 ounces, while sales for other metals are estimated in the range of 95,000-100,000 GEOs. The company’s GEO guidance assumes a current-year average gold price of $1,800 per ounce, silver price of $22.50 per ounce and copper, nickel, lead, zinc prices of $4.25, $8.50, $0.95 and $1.25 per pound, respectively.
Khoemacau mine ramped up its mining operations to full production levels during fourth-quarter 2022. Khoemacau Copper Mining (KCM) Limited drew the remaining $26.5 million stream advance payment from Royal Gold in February 2022 and it was paid as of mid-March 2022. Therefore, Royal Gold’s interest in the payable silver from Khoemacau increased to 100% from the current rate of 90%. In 2019, Royal Gold entered into a silver mine life-purchase agreement with KCM to purchase and sell silver from high-quality long-life Khoemacau copper development project in Botswana.
Gold grades from Andacollo and Pueblo Viejo mines are expected to reduce in the current year owing to production sequencing and an increase in the processing of stockpiled ore. Peñasquito mine is likely to be impacted by lower production due to pit sequencing and the processing of harder ore.
Silver stream deliveries from the Pueblo Viejo mine were affected by the deferral of an additional 40,700 ounces in the fourth quarter due to temporary operational issues with the silver circuit. In the current year, there will be no material delivery of deferred silver ounces from the mine until the completion of the ongoing plant expansion project, the mine’s operator Barrick Gold Corporation (GOLD - Free Report) stated.
Barrick continues to advance with the process plant expansion and proposed tailings storage facility for extension of the mine life at the Pueblo Viejo mine. It expects that the project is likely to significantly increase throughput and enable the mine to maintain average annual gold production of approximately 800,000 ounces after 2022. The process plant is expected to be completed by the end of 2022.
Total gold production from the Cortez mine subject to Royal Gold’s royalty interests is expected to be approximately 280,000 ounces of gold for 2022, down from gold production of 368,100 ounces in 2021.
Royal Gold is a precious metals stream and royalty company engaged in the acquisition and management of precious metal streams, royalties and similar production-based interests. As of Mar 31, 2022, the company owned interests in 187 properties on five continents, including interests in 43 producing mines and 18 development-stage projects.
The company will benefit from higher metal prices this year. Silver and copper prices have been gaining on concerns about the escalating crisis over Ukraine against robust demand and supply disruptions. Copper demand is surging on increasing demand for electric vehicles and wind farms, solar panels and the power grid. Gold continues to be the most significant revenue driver for Royal Gold. Currently, gold prices are trading at around $1,968 per ounce as the Russia-Ukraine conflict fueled safe haven demand for the metal. Additionally, rising inflation and the Fed’s interest rate hikes are driving gold prices. These are likely to drive the company’s top-line results.
Price Performance
Royal Gold’s shares have gained 28% in the past year compared with the industry’s growth of 15.5%.
Image Source: Zacks Investment Research
Zacks Rank & Stocks to Consider
Royal Gold currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks worth considering in the basic materials space include Nutrien Ltd. (NTR - Free Report) and Commercial Metals Company (CMC - Free Report) , both flaunt a Zacks Rank #1 (Strong Buy), at present. You can see the complete list of today's Zacks #1 Rank stocks here.
Nutrien has an expected earnings growth rate of 108.7% for the current year. The Zacks Consensus Estimate for NTR's current-year earnings has been revised 37.4% upward over the last 60 days.
Nutrien has a trailing four-quarter earnings surprise of roughly 60.3%, on average. NTR has rallied around 98.3% in a year.
Commercial Metals has a projected earnings growth rate of 114.7% for the current fiscal year. The Zacks Consensus Estimate for CMC's current fiscal year earnings has been revised upward by 35.1% over the past 60 days.
Commercial Metals has a trailing four-quarter earnings surprise of roughly 15.9%, on average. CMC has gained around 47% in a year.