Royal Gold (NASDAQ:RGLD) President and CEO Bill Heissenbuttel told investors the company is “extremely pleased” with its portfolio following a busy year of dealmaking that included the Sandstorm and Horizon transactions. In a conference fireside chat, Heissenbuttel said the combination brought together Royal Gold’s producing assets with Sandstorm’s development-heavy portfolio, increasing the company’s visible growth pipeline and furthering a long-running push to diversify by asset, geography, and mine life.
Portfolio reshaped by Sandstorm and Horizon
Heissenbuttel said the Sandstorm-Horizon transactions were a case of “strength and strength,” pairing Royal Gold’s producing base—he cited Mount Milligan, Pueblo Viejo, and Cortez—with Sandstorm’s development assets such as Platreef, MARA, and Hod Maden. He said the number of growth assets the company can point to has “more than doubled,” describing a current growth slate of roughly 10 properties including Red Chris and Great Bear.
On portfolio mix, Heissenbuttel said the company is indifferent to whether deals are structured as royalties or streams, arguing that opportunities dictate structure rather than a preset preference. He also said geographic additions last year—including South Africa, Turkey, and Zambia—were manageable within a diversified portfolio, noting Turkey represents about 4% of NAV.
Mine life and operational updates: Milligan, Pueblo Viejo, Kansanshi, and Cortez
Heissenbuttel highlighted several portfolio developments that extend duration and potential cash flow visibility. He cited a Mount Milligan life-of-mine extension to 2045 and said the asset now has “two decades of potential life” ahead. He also pointed to Barrick’s plans at Cortez, including Four Mile, which he said outlines 600,000 to 750,000 ounces over 25 years.
At Mount Milligan, Heissenbuttel said the recent focus has been more about grade than recovery, and that infill drilling has helped inform the mine plan after two years of guidance issues. He said investors are taking a “show-me approach” and want to see Centerra address short-term performance. He also argued the market may not fully appreciate the longer-run optionality, saying the tailings storage facility being built can accommodate more material than a 2045 mine plan implies, suggesting potential beyond that date.
At Pueblo Viejo, Heissenbuttel was candid that recent results have been “disappointing.” He said Barrick has worked to address recovery issues and that Royal Gold understands the weathered nature of the stockpile has contributed to performance challenges. He added the stockpile is expected to continue to be processed in the short term, and while he believes a solution is possible, he does not expect it to be near-term.
Discussing Kansanshi in Zambia, Heissenbuttel said the company starts with a 20-year mine plan and that its area of interest covers the entire mining license, which he described as roughly 250 square kilometers. He also cited potential upside tied to “laterite gold” concepts being explored at the site, arguing that Royal Gold’s contractual relationship could position it well if future opportunities emerge even if the current stream is geared to copper production.
On Cortez and Four Mile, Heissenbuttel said the main surprise was the speed of development. He noted that when Royal Gold made royalty acquisitions in 2022, the deals were criticized as expensive, but he said that critique would imply “Cortez is done,” which the company’s geologists did not agree with. While Royal Gold expected Four Mile, he said it arrived faster than anticipated. He added that Four Mile will likely be studied for the rest of the decade, with a long runway for potential benefits extending 25 to 30 years from around 2030.
Near-term growth drivers: full-year contributions and ramp-ups
Heissenbuttel pointed to a straightforward source of near-term growth: the company has not yet had a full-year revenue contribution from key additions. He said Kansanshi contributed only one quarter of revenue so far, and Sandstorm assets contributed about 70 days to Royal Gold’s portfolio in the reported period. A full-year contribution from those assets is expected to be a “primary source of growth” in fiscal 2026.
He also called out ramp-ups and early-stage contributions from key assets:
- Goose: A royalty that starts at 0.7% and escalates to 3.3% over a couple of years, with progress expected over time.
- Platreef: Began production in the fourth quarter of the prior year; Heissenbuttel said Royal Gold expects to start receiving deliveries sometime during the current year.
Hod Maden stake targeted for conversion to a “more normal” structure
Heissenbuttel said Hod Maden, in which Royal Gold holds a 30% equity stake, is not aligned with the company’s strategic focus. He emphasized that owning the joint venture is not an indication Royal Gold intends to pursue joint ventures as a standard investment form. Instead, he said a priority for the year is to sell the 30% interest and convert the exposure into a more typical royalty or stream, aiming to reduce cost overrun risk inherent in an equity development stake.
He said SSR has been focused on the technical study completed late in the prior year and subsequent discussions around an investment decision, adding that there was “not much to report” on progress beyond Royal Gold’s stated priority to restructure its position.
Deal market: higher price per GEO, more M&A-related financing opportunities
Asked about larger deal sizes, Heissenbuttel said the company has not set a minimum investment hurdle or targeted specific gold-equivalent ounce volumes. Instead, he attributed the shift in perceived deal-size brackets to higher metal prices, saying each GEO purchased costs more than it did two or three years ago. He said he does not believe billion-dollar transactions are now the norm, expecting most deals to remain below $500 million despite recent large transactions.
He said project development remains a constant source of opportunity in the market, but warned that higher prices can make marginal projects appear viable, underscoring the need for discipline.
He also said M&A has become a more visible driver of financing opportunities for the streaming and royalty industry, citing examples of transactions and divestitures that, in his view, now more clearly establish the industry as a source of M&A financing. He added that as larger companies adopt streaming structures, it can open doors for future conversations, contrasting the current environment with earlier periods when royalty and streaming firms were seen as “the lender of last resort.”
On consolidation among royalty and streaming peers, Heissenbuttel said Royal Gold is focused on integration work following the acquisition, noting the complexity of absorbing more than 200 additional properties and ensuring legal and administrative details—such as royalty registration—are in order. He said he does not see Royal Gold participating in further consolidation in the short term, while suggesting that consolidation among some competitors could modestly affect competitive dynamics because bidding processes often hinge on just a few active participants.
Heissenbuttel also expressed hope that permitting streamlining efforts in Canada and the U.S. could benefit Royal Gold’s portfolio, pointing to federal and provincial designations tied to assets including Red Chris, Mount Milligan, and Great Bear, and noting a royalty on the Cactus project in Arizona where copper is considered a critical mineral.
In closing, he highlighted several assets he views as potentially underappreciated in terms of organic growth, including Cortez, Xavantina, Wassa, and Mount Milligan. On Xavantina, he said Royal Gold’s team focused on exploration potential even when the mine plan at the time of investment ended in 2026; he noted that Ero later filed a technical report extending the mine plan to 2032. He also described Royal Gold’s role as an engaged partner, offering an example where a team member on site identified material that could be marketed, leading to the sale of gold concentrates that were not contemplated in the original transaction.
About Royal Gold (NASDAQ:RGLD)
Royal Gold, Inc, headquartered in Denver, Colorado, is a leading precious metals streaming and royalty company. Through its business model, Royal Gold provides upfront financing to mining operators in exchange for the right to purchase a percentage of future metal production at predetermined prices. This structure allows the company to participate in production upside while minimizing exposure to the operating and capital-intensive aspects of mine ownership.
The company’s portfolio encompasses interests in over 200 streams and royalties on projects across North America, South America, Europe, Africa and Australia.
