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Royal Gold (RGLD) Provides Updates on Operations for Q1

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Royal Gold (RGLD) Provides Updates on Operations for Q1

Royal Gold's (RGLD) fiscal first-quarter sales performance hurt by reduced sales at Mount Milligan due to lack of sufficient water sources.

Royal Gold, Inc. RGLD has provided an update on first-quarter fiscal 2019 (ended Sep 30, 2018) operations. During the quarter, RGLD Gold AG — the fully-owned subsidiary of Royal Gold — sold nearly 57,000 gold equivalent ounces consisting of roughly 48,000 gold ounces, 572,000 silver ounces and 380 tons of copper related to its streaming agreements. The company ended the reported quarter with 20,000 ounces of gold, 545,000 ounces of silver and 350 ton of copper.

Average realized prices of gold, silver and copper were $1,221 per ounce, $15.25 per ounce sold compared with the prior-quarter figures of $1,314 per ounce and $16.55 per ounce, respectively. Average realized copper prices were $5,800 per ton compared with $6,847 per ton in the prior-year quarter.

In the fiscal first quarter, cost of sales was roughly $288 per gold equivalent ounce, up from the prior-quarter figure of $349 per gold equivalent ounce. The cost of sales is based on the quarterly average silver-gold ratio of roughly 81 to 1 and copper-gold ratio of around 0.20 ton per ounce.

Royal Gold, Inc. Price


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

The fiscal first-quarter sales performance was impacted by reduced sales at Mount Milligan. This was mainly caused by the temporary shutdown of the mill processing facility in early calendar 2018 resulting from a lack of sufficient water sources.

Centerra — the operator of Mount Milligan mine — stated that it has received the approval for the use of short-term water sources through Nov 15, 2018. Centerra is looking for extending the date and adding certain temporary sources until 2020.

However, there remain concerns that the currently-approved sources will provide limited amount of water in the near term, and there will be no guarantee for the sufficiency and availability of additional water sources. Thus, Centerra is trying to reach a long-term water solution.

Royal Gold's shares have outperformed the industry it belongs to in the past year. Its shares have declined around 16% compared with the industry's fall of 24%.


Zacks Rank & Stocks to Consider

Currently, Royal Gold carries a Zacks Rank #4 (Sell).

A few better-ranked stocks in the same industry include CF Industries Holdings, Inc CF, Methanex Corporation MEOH and Ecolab Inc ECL. While CF Industries and Methanex sport a Zacks Rank #1 (Strong Buy), Ecolab carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

CF Industries has a long-term earnings growth rate of 6%. The stock has rallied around 59% in a year’s time.

Methanex has a long-term earnings growth rate of 15%. The company’s shares have surged around 63% in the past year.

Ecolab has a long-term earnings growth rate of 12.8%. Its shares have gained 17% in the past year.

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