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Royal Gold (RGLD) Comes Up With Operational Update for Q4

Zacks Equity Research

Royal Gold, Inc. RGLD has provided an update on fourth-quarter fiscal 2017 (ended Jun 30, 2017). During the quarter, RGLD Gold AG, the fully-owned subsidiary of Royal Gold, sold around 52,000 ounces of gold, 374,000 ounces of silver and 1,165 metric tons of copper under streaming agreements. The company ended the quarter with 14,000 ounces of gold and 537,000 ounces of silver in its inventory.

Average realized prices of gold and silver were $1,259 and $17.32 per ounce sold respectively, compared with the prior-quarter figures of $1,216 and $17.35. Average realized copper prices were $5,681 per metric ton.

In the quarter, cost of sales was roughly $318 per gold equivalent ounce, down from prior-quarter figure of $356. The cost of sales of the company is specific to stream agreements and is based on the quarterly average silver-gold ratio of roughly 73 to 1. Royal Gold will release fiscal fourth-quarter results before the market opens on Aug 10.

In the fiscal fourth quarter, Royal Gold paid back the outstanding balance amount of $50 million on its revolving credit facility. As of Jun 30, 2017, the revolver had $250 million outstanding which translates into available revolver capacity of $750 million.

Royal Gold has outperformed the Zacks categorized Mining-Gold industry in the last three months. In the said timeframe, the company’s shares have gained around 4.9% against the 13.7% decline recorded by the industry.


 

Royal Gold generated record operating cash flows in the previous two quarters and also repaid about $45 million of debt. The company, in its third-quarter fiscal 2017 call, noted that there is no additional funding requirement and it will continue to strengthen its balance sheet on the back of cash flows from diverse stream and royalty portfolio from 38 operating properties.

The company is looking forward to its three new or expanding sources of revenues which will further provide revenue diversification and growth. The new projects are New Gold’s Rainy River mine, Barrick’s Cortez Crossroads mine, and Goldcorp’s Pyrite Leach Project at the Penasquito mine which are scheduled to be commissioned in 2017, 2018 and 2019, respectively.

Royal Gold, Inc. Price and Consensus

 

Royal Gold, Inc. Price and Consensus | Royal Gold, Inc. Quote

Royal Gold currently carries a Zacks Rank #2 (Buy).

Other Stocks to Consider

Some other top-ranked companies in the basic materials space include The Sherwin-Williams Company SHW, Ternium S.A. TX and Hitachi Chemical Company, Ltd. HCHMY. All three stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks Rank #1 stocks here.

Sherwin-Williams has expected long-term earnings growth rate of 11.4%.

Ternium S.A. has expected long-term earnings growth rate of 18.4%.

Hitachi Chemical has expected long-term earnings growth rate of 5%.

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