Royal Gold 4th-Quarter Profit Falls 5.1% on Income Tax Expense

   By Chelsea Stevenson 
 

Royal Gold Inc.'s (RGLD, RGL.T) fiscal fourth-quarter earnings fell 5.1% as the company booked higher interest and income tax expenses, though its costs slid and revenue edged up.

The owner of royalties on gold and other precious-metals mines had previously posted surging profits on higher commodity prices and increased production. A royalty is a right to receive a percentage of production from a mine. The company has benefited from higher gold prices, though it hadn't yet incurred operating and capital costs for the facilities.

The company said Thursday it plans to acquire through its subsidiary RGLD Gold AG an additional 12.25% of the payable gold produced from the Mt. Milligan copper-gold project, from a unit of Thompson Creek Metals Co. (TC, TCM.T). The transaction is expected to cost $200 million and cash payments equal to the lesser value of $435 or the prevailing market price for each payable ounce of gold from the British Columbia-based site. Combined with prior transactions, Royal Gold will be entitled to 52.25% of the Mt. Milligan gold.

For the quarter ended June 30, Royal Gold reported a profit of $20.6 million, or 34 cents a share, down from $21.7 million, or 39 cents a share, a year earlier. The latest quarter included an income tax expense of $13.4 million and a interest expense of $2.7 million, up from $10.3 million and $1.6 million, respectively. Royalty revenue edged up 1.3% to $60.1 million.

Analysts polled by Thomson Reuters expected per-share earnings of 44 cents on revenue of $69 million.

Operating margin rose to 61.7% from 58.1%.

Shares closed Wednesday at $78.79 and were inactive premarket. The stock is up 31% in the past three months.

Write to Chelsea Stevenson at [e-mail]

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