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Royal Gold (RGLD) Provides Updates on Operations for Q2

Zacks Equity Research

Royal Gold, Inc. RGLD has provided an update on second-quarter fiscal 2019 (ended Dec 31, 2018) operations. During the quarter, RGLD Gold AG — the fully-owned subsidiary of Royal Gold — sold nearly 56,000 gold equivalent ounces consisting of roughly 44,000 gold ounces, 545,000 silver ounces and 1,100 tons of copper related to its streaming agreements. The company ended the reported quarter with 17,000 ounces of gold, 511,000 ounces of silver and 400 tons of copper.

Average realized prices of gold, silver and copper were $1,219 per ounce, $14.45 per ounce sold compared with the prior-quarter figure of $1,221 per ounce and $15.25 per ounce, respectively. Average realized copper prices were $6,092 per ton compared with $5,800 per ton in the prior-year quarter.

In the fiscal second quarter, cost of sales was roughly $327 per gold equivalent ounce, up from the prior-quarter figure of $288 per gold equivalent ounce. The cost of sales is based on the quarterly average silver-gold ratio of roughly 84 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 second-quarter sales performance was unfavorably impacted by reduced sales at Mount Milligan, which was mainly caused by rail transportation issues experienced in July 2018. Also due to the alteration in the provisional payment schedule at Pueblo Viejo, deliveries were lower in the first quarter. This also affected sales in the second quarter.

Going forward, Royal Gold expects to benefit from the progress in ramping up of new mines. Its focus on acquisitions and strong balance sheet also bodes well.

Royal Gold's shares have declined around 1% compared with the industry's fall of 13%.


Zacks Rank & Key Picks

Royal Gold carries a Zacks Rank #3 (Hold), currently.

Some better-ranked stocks in the same sector include Ingevity Corporation NGVT, CF Industries Holdings, Inc. CF and Quaker Chemical Corp. KWR. While Ingevity sports a Zacks Rank #1 (Strong Buy), CF Industries and Quaker Chemical carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Ingevity has a long-term earnings growth rate of 12%. The company’s shares have been up 18% during the past year.

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

Quaker Chemical has a long-term earnings growth rate of 11%. Its shares have rallied 24% in the past year.

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