Analyst: Royal Gold’s ‘Q1 FY20 Sales Top Expectations’

Source: Streetwise Reports   10/09/2019

The details regarding those metals sales are provided in a BMO Capital Markets report.

In an Oct. 8 research note, BMO Capital Markets analyst Andrew Kaip reported that Royal Gold Inc.’s (RGLD:NASDAQ; RGL:TSX) Q1 FY20 revenue was higher than anticipated and costs, lower. Accordingly, “we expect positive revisions to Q1 FY20 earnings and cash flow,” he added.

Kaip highlighted the U.S. firm’s sales during the quarter, which amounted to about 60,000 ounces (60 Koz) of gold equivalent. The total was 13% higher than BMO’s estimate despite expectations for lower streaming sales resulting from production limitations at Mt. Milligan during calendar Q1/19.

The total gold equivalent ounces sold with respect to Royal Gold’s streaming agreements constituted 50 Koz gold, 510 Koz silver and 1,100 tons of copper.

Of the three metals, only gold sales were higher, thus primarily accounting for the beat. The reason for that was a drawdown and sellout of gold inventory, leaving the company with 18 Koz of the precious metal currently in inventory.

Royal Gold intends to release its Q1 FY20 results on Nov. 6, 2019, after the market closes and hold a conference call the following day at noon EST.

BMO has a Market Perform rating on Royal Gold. It is currently trading at around $129.88 per share.

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Disclosures from BMO Capital Markets, Royal Gold, October 8, 2019

IMPORTANT DISCLOSURES

Analyst’s Certification
I, Andrew Kaip, hereby certify that the views expressed in this report accurately reflect my personal views about the subject securities or issuers. I also certify that no part of our compensation was, is, or will be, directly or indirectly, related to the specific recommendations or views expressed in this report.

Analysts who prepared this report are compensated based upon (among other factors) the overall profitability of BMO Capital Markets and their affiliates, which includes the overall profitability of investment banking services. Compensation for research is based on effectiveness in generating new ideas and in communication of ideas to clients, performance of recommendations, accuracy of earnings estimates, and service to clients.

Analysts employed by BMO Nesbitt Burns Inc. and/or BMO Capital Markets Limited are not registered as research analysts with FINRA. These analysts may not be associated persons of BMO Capital Markets Corp. and therefore may not be subject to the FINRA Rule 2241 restrictions on communications with a subject company, public appearances and trading securities held by a research analyst account.

Company Specific Disclosures

Disclosure 5: BMO Capital Markets or an affiliate received compensation for products or services other than investment banking services within the past 12 months from Royal Gold.

Disclosure 6C: Royal Gold is a client (or was a client) of BMO Nesbitt Burns Inc., BMO Capital Markets Corp., BMO Capital Markets Limited or an affiliate within the past 12 months: C) Non-Securities Related Services.
Disclosure 9B: BMO Capital Markets makes a market in Royal Gold in United States.

For Important Disclosures on the stocks discussed in this report, please click here.

( Companies Mentioned: RGLD:NASDAQ; RGL:TSX,
)