Entering text into the input field will update the search result below

Royal Gold's Q1: A Nice Jump In Cash Flows

May 07, 2020 10:00 AM ETRoyal Gold, Inc. (RGLD)9 Comments


  • Royal Gold recorded sales of 86,200 toz of gold equivalent in Q1 2020 (Royal Gold's financial Q3).
  • The revenues climbed to $136 million and operating cash flow almost to $100 million.
  • Although the impacts of the coronavirus should be more visible on Q2 results, Royal Gold should be less impacted than its main peers.
  • The share price grew very quickly. There is danger of a correction.

Royal Gold (NASDAQ:RGLD) is the first (however, only by several hours) of the royalty and streaming big-three to report the Q1 2020 (Royal Gold's Q3) financial results. As expected, the numbers are very good, especially due to the high gold prices and due to the fact that the coronavirus disrupted some operations in Royal Gold's portfolio only late in March, and there was not enough time to cause any serious damage.

In Q1, Royal Gold recorded sales of 86,200 toz of gold equivalent. It represents a 3.2% growth quarter over quarter and 2.4% growth in comparison to Q1 2019. The coronavirus-related production disruptions occurred at New Gold's (NGD) Rainy River mine in Q1. The mine was suspended from March 20, until April 2. More negative impacts will be seen on the Q2 results. While the Rainy River mine restarted operations on April 2, it takes some time to ramp up back to full production. Moreover, Since April 1, Centerra Gold's (CAGDF) Mount Milligan mine, where Royal Gold owns a stream on 35% of gold and 18.75% of copper production, has been operating at reduced throughput levels. And Newmont's (NEM) Penasquito mine has been completely idled since April 12. Royal Gold owns 2% NSR on this mine that produces approximately 385,000 toz gold, 265 million lb lead, and 420 million lb zinc per year.

Source: own processing, using data of Royal Gold

Not only Royal Gold's attributable production volumes but, more importantly, also, its realized gold price increased notably in Q1. While in Q4 2019, the realized gold price averaged $1,481/toz, in Q1, it improved by 6.9%, to $1,583/toz. As a result, the revenues grew to $136.4 million, or by 10.4% compared to Q4 2019, and by 24.2% compared to Q1 2019. Also, the operating cash flow experienced a notable improvement. It grew to $99.7 million, or by 27% in comparison to the previous quarter and by 28.8% in comparison to the same period of

This article was written by

Peter Arendas profile picture

Peter Arendas is an associate professor at the University of Economics in Bratislava. He has over 15 years of investing experience. Peter specializes in covering small and mid-cap companies in the resource sector with an in-depth insight into the precious and industrial metals royalty & streaming industry.

Peter is the leader of the investing group Learn more.

Analyst’s Disclosure: I am/we are long NGD. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

Recommended For You

Comments (9)

I had large positions in FNV and WPM and I sold down about 1/3 of each position and reallocated to RGLD for the reasons highlighted in this helpful article. Not only are FNV and WPM very expensive, FNV has significant investments in shale (~15% of revenue), which will prove to be disastrous and WPM has huge exposure (~40%) to silver, which while still attractive, is still, in part, an industrial metal, so may not get the same boost as gold. Watching FNV over the last few days, I am wondering if I made the right call, but I was up about 100% on both FNV and WPM in 18 months, so it was time to take some profit on those guys. Also, I suspect Q2 production numbers will be ugly for all 3 from the mine shut downs.
Peter Arendas profile picture
Yes, all three companies will be impacted, but Royal Gold should be least impacted.
Sorgenfrei profile picture
It`s time to take some money off the table from the highly valued R/S companies
and rotate into the smallcaps like $EMX, $ELYGF and $SROYF.
one of the best gold miners...
GoldenSamurai profile picture
Whydo you think so?
@rdent profile picture
Except it isn't a gold miner. ;)
Yeah rdent...you are right . Thanks for specifying. Samurai, i like RGLD right because it’s not a gold miner ( now Rdent is happy) and has some downside protection . I use to switch from junior true gold miners to Rgld after a rally to low the beta and viceversa after a sell off
Disagree with this article? Submit your own. To report a factual error in this article, . Your feedback matters to us!
To ensure this doesn’t happen in the future, please enable Javascript and cookies in your browser.
Is this happening to you frequently? Please report it on our feedback forum.
If you have an ad-blocker enabled you may be blocked from proceeding. Please disable your ad-blocker and refresh.