A BMO Capital Markets report reviewed this Denver,
Colo.-based company's quarterly sales.
In an Oct. 9 research note, Andrew Kaip highlighted Royal Gold
Inc.'s (RGLD:NASDAQ; RGL:TSX) reported sales from its streaming
agreements. Gold sales and silver and copper deliveries during Q1 FY19 were
"higher than estimated."
Gold stream deliveries were 46,000 ounces (46 Koz) versus BMO's estimated
43.5 Koz, and gold inventory dropped to 20 Koz from 22 Koz. Silver and copper
stream deliveries were 544 Koz and 0.7 thousand tons (0.7 Kt), respectively,
compared to BMO's expectations of about 456 Koz silver and 0.5 Kt copper.
During the quarter ended Sept. 30, 2018, the company's streaming revenue
is estimated at $69.5 million, which would exceed BMO's $62.7 million
forecast. At the same time, costs were down, coming in at an estimated $16.4
million versus BMO's anticipated $19.8 million. "We expect a positive
revision to our estimates," Kaip indicated.
As for average metals prices, they were lower in Q1/19, quarter over
quarter. Gold was $1,221 per ounce ($1,221/oz) versus $1,314/oz one quarter
earlier. Silver was $15.25/oz compared to $16.55/oz. Copper was $5,800 per
ton, down from $6,847 per ton.
Cost of sales during the quarter were $288/oz of gold equivalent, down
from $349/oz in Q4/18.
Royal Gold is scheduled to release its Q1/19 results after the market
close on Oct. 31, with a conference call to follow at noon Eastern Standard
Time on Nov. 1.
BMO has an Outperform rating and a $98 per share target price on Royal
Gold, whose stock is trading currently at ~$77.93 per share.
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Disclosures from BMO Capital Markets, Royal Gold, Oct. 9, 2018
IMPORTANT DISCLOSURES
Analyst's Certification
I, Andrew Kaip, hereby certify that the views expressed in this report
accurately reflect my personal views about the subject securities or issuers.
I also certify that no part of my compensation was, is, or will be, directly
or indirectly, related to the specific recommendations or views expressed in
this report.
Analysts who prepared this report are compensated based upon (among
other factors) the overall profitability of BMO Capital Markets and their
affiliates, which includes the overall profitability of investment banking
services. Compensation for research is based on effectiveness in generating
new ideas and in communication of ideas to clients, performance of
recommendations, accuracy of earnings estimates, and service to clients.
Analysts employed by BMO Nesbitt Burns Inc. and/or BMO Capital Markets
Limited are not registered as research analysts with FINRA. These analysts
may not be associated persons of BMO Capital Markets Corp. and therefore may
not be subject to the FINRA Rule 2241 restrictions on communications with a
subject company, public appearances and trading securities held by a research
analyst account.
Company Specific Disclosures
Disclosure 5: BMO Capital Markets or an affiliate received compensation for
products or services other than investment banking services within the past
12 months from Royal Gold.
Disclosure 6C: Royal Gold is a client (or was a client) of BMO Nesbitt Burns
Inc., BMO Capital Markets Corp., BMO Capital Markets Limited or an affiliate
within the past 12 months: C) Non-Securities Related Services.
Disclosure 9B: BMO Capital Markets makes a market in Royal Gold in United
States.
For Important Disclosures on the stocks discussed in this report,
please click here.
