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Royal Gold (RGLD) Buys Additional Royalties to Boost Portfolio
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Royal Gold, Inc. (RGLD - Free Report) announced that its fully-owned subsidiary RG Royalties, LLC, acquired additional royalties from Idaho Royalty for $204.1 million.
The acquired two portions of the gross smelter return royalty cover a large area, which includes the Cortez mine operational area and the entirety of the Fourmile development project in Nevada. Royal Gold has strengthened its royalty position at the world-class Cortez Complex with this acquisition.
Except for the Fourmile development project, which is 100% owned and run by Barrick Gold Corporation (GOLD - Free Report) , the area within the Cortez Complex is owned and operated by Nevada Gold Mines LLC. Nevada Gold Mines is a joint venture between Barrick Gold Corporation and Newmont Corporation (NEM - Free Report) .
Among the portions of the Idaho Royalty that make up this acquisition, the Pipeline and Crossroads deposits are covered by a 0.24% gross royalty rate. Then again, the Cortez Hills, Goldrush, Fourmile, and Robertson deposits are covered by a 0.45% gross royalty rate.
Royal Gold paid $204.1 million in cash to certain holders who are Idaho Mining Corporation’s successors in interest. The company generated the cash consideration from available cash resources and a $200-million draw on the revolving credit facility.
The transaction and a $75-million repayment on the revolving credit facility on Dec 6, 2022, brings Royal Gold’s revolving credit facility outstanding balance to $575 million. The company currently has a remaining undrawn balance of $425 million. RGLD expects to repay the outstanding debt with cash flow in the second half of 2024.
All revenue generated from production from the areas covered by the Idaho Royalty after Dec 1, 2022, (the effective date of transaction) will be credited to Royal Gold.
The first revenue is likely to be derived in the fourth quarter of 2022. Royal Gold anticipates receiving payment for Idaho Royalty on a monthly basis, starting from the first quarter of 2023. The royalty is subject to a 21% federal income tax and a 5% Nevada Net Proceeds of Minerals Tax.
In 2023, Royal Gold anticipates Idaho Royalty to deliver 4,000 ounces. By 2028, that amount will likely increase to more than 5,000 ounces.
Royal Gold reported adjusted earnings per share of 70 cents in third-quarter 2022, missing the Zacks Consensus Estimate of 72 cents. The bottom line declined 34% year over year. The company generated revenues of $131 million, down 24.7% year over year. The top line missed the Zacks Consensus Estimate of $152 million. Stream revenues were $98.7 million and royalty revenues were $32.7 million in the September-end quarter. Stream and royalty revenues declined 14% and 44.2% year over year, respectively.
Price Performance
In the past year, shares of Royal Gold have gained 22.4% compared with the industry’s growth of 12.6%.
Image Source: Zacks Investment Research
Zacks Rank & Other Stock to Consider
Royal Gold currently carries a Zacks Rank #2 (Buy).
The Zacks Consensus Estimate for CalMaine Foods’ 2022 earnings per share is pegged at $14.08, suggesting 417.6% growth from the year-ago reported figure. Earnings estimates have moved 73.8% north in the past 60 days. CALM has a trailing four-quarter earnings surprise of 15.3%, on average. Its shares have gained 37.2% in the past year.
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Royal Gold (RGLD) Buys Additional Royalties to Boost Portfolio
Royal Gold, Inc. (RGLD - Free Report) announced that its fully-owned subsidiary RG Royalties, LLC, acquired additional royalties from Idaho Royalty for $204.1 million.
The acquired two portions of the gross smelter return royalty cover a large area, which includes the Cortez mine operational area and the entirety of the Fourmile development project in Nevada. Royal Gold has strengthened its royalty position at the world-class Cortez Complex with this acquisition.
Except for the Fourmile development project, which is 100% owned and run by Barrick Gold Corporation (GOLD - Free Report) , the area within the Cortez Complex is owned and operated by Nevada Gold Mines LLC. Nevada Gold Mines is a joint venture between Barrick Gold Corporation and Newmont Corporation (NEM - Free Report) .
Among the portions of the Idaho Royalty that make up this acquisition, the Pipeline and Crossroads deposits are covered by a 0.24% gross royalty rate. Then again, the Cortez Hills, Goldrush, Fourmile, and Robertson deposits are covered by a 0.45% gross royalty rate.
Royal Gold paid $204.1 million in cash to certain holders who are Idaho Mining Corporation’s successors in interest. The company generated the cash consideration from available cash resources and a $200-million draw on the revolving credit facility.
The transaction and a $75-million repayment on the revolving credit facility on Dec 6, 2022, brings Royal Gold’s revolving credit facility outstanding balance to $575 million. The company currently has a remaining undrawn balance of $425 million. RGLD expects to repay the outstanding debt with cash flow in the second half of 2024.
All revenue generated from production from the areas covered by the Idaho Royalty after Dec 1, 2022, (the effective date of transaction) will be credited to Royal Gold.
The first revenue is likely to be derived in the fourth quarter of 2022. Royal Gold anticipates receiving payment for Idaho Royalty on a monthly basis, starting from the first quarter of 2023. The royalty is subject to a 21% federal income tax and a 5% Nevada Net Proceeds of Minerals Tax.
In 2023, Royal Gold anticipates Idaho Royalty to deliver 4,000 ounces. By 2028, that amount will likely increase to more than 5,000 ounces.
Royal Gold reported adjusted earnings per share of 70 cents in third-quarter 2022, missing the Zacks Consensus Estimate of 72 cents. The bottom line declined 34% year over year. The company generated revenues of $131 million, down 24.7% year over year. The top line missed the Zacks Consensus Estimate of $152 million. Stream revenues were $98.7 million and royalty revenues were $32.7 million in the September-end quarter. Stream and royalty revenues declined 14% and 44.2% year over year, respectively.
Price Performance
In the past year, shares of Royal Gold have gained 22.4% compared with the industry’s growth of 12.6%.
Image Source: Zacks Investment Research
Zacks Rank & Other Stock to Consider
Royal Gold currently carries a Zacks Rank #2 (Buy).
Another better-ranked stock in the basic materials space is CalMaine Foods (CALM - Free Report) . CALM flaunts a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for CalMaine Foods’ 2022 earnings per share is pegged at $14.08, suggesting 417.6% growth from the year-ago reported figure. Earnings estimates have moved 73.8% north in the past 60 days. CALM has a trailing four-quarter earnings surprise of 15.3%, on average. Its shares have gained 37.2% in the past year.