Source: Streetwise Reports 11/07/2017
BMO Capital Markets reported the Q1/18 financial results of this streaming and royalty corporation.
A Nov. 1 BMO Capital Markets research report indicated that in Q1 FY18, Royal Gold Inc. (RGLD:NASDAQ; RGL:TSX) announced “headline earnings per share (EPS) of $0.44 on gold equivalent deliveries of 88 thousand ounces,” wrote analyst Andrew Kaip. “After adjusting for stock-based compensation, adjusted EPS of $0.48 came in above our estimate for $0.37 and consensus of $0.38.”
Kaip explained the reason for Royal Gold surpassing expectations: “The beat is related to lower depreciation, taxes, and general and administrative expenses offset by lower revenue on royalty sales.”
Total revenue in Q1 FY18 was $112.5 million, $78.8 million from streams and $33.7 million from royalties. Operating and free cash flow was “in line with our estimate,” noted Kaip. It was $71.6 million whereas BMO’s estimate was $72 million.
Costs of exploration at the company’s Peak Gold joint venture in Alaska were “slightly below our estimate” at $3.2 million versus $3.5 million, Kaip wrote.
Royal Gold had $88.4 million in cash and equivalents at the end of the quarter, indicated Kaip. It had “$800M available on its $1B revolving credit facility after repaying $50M during the quarter.”
In the report, following review of the company’s performance during the quarter, Kaip provided a brief update. Royal Gold recently added a stream to its portfolio, this one from New Gold’s Rainy River, which declared commercial production in October. Royal Gold’s interest from gold from the project is 6.5%, dropping to 3.25% after 230 Koz are achieved. For silver, it’s 60%, decreasing to 30% after 3.1 Moz are reached.
BMO Capital has an Outperform rating and $105 per share target price on Royal Gold, whose stock is currently trading at around $88.62 per share.
Want to read more Gold Report articles like this? Sign up for our free e-newsletter, and you’ll learn when new articles have been published. To see a list of recent articles and interviews with industry analysts and commentators, visit our Streetwise Interviews page.
1) Doresa Banning compiled this article for Streetwise Reports LLC and provides services to Streetwise reports as an independent contractor. She or members of her household own securities of the following companies mentioned in the article: None. She or members of her household are paid by the following companies mentioned in this article: None.
2) The following companies mentioned in this article are sponsors of Streetwise Reports: None. Streetwise Reports does not accept stock in exchange for its services. Click here for important disclosures about sponsor fees. The information provided above is for informational purposes only and is not a recommendation to buy or sell any security.
3) Comments and opinions expressed are those of the specific experts and not of Streetwise Reports or its officers.
4) The article does not constitute investment advice. Each …read more
Source:: The Gold Report