Royal Gold Inc (RGLD) 2009 Q4 法說會逐字稿

My name is Christie and I will be your conference operator today. At this time I would like to welcome everyone to the Royal Gold official 2009 conference call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks there will be a question and answer session. (Operator Instructions) Thank you.

Ms. Gross, you may begin your conference.

Thank you, operator, and hello, everyone. Welcome to our fourth quarter and fiscal year end conference call that is being webcast live. You will be able to access a replay of the call on our website at www.royalgold.com. Also on the website you will find our release detailing our financial results. As always, this discussion falls under the Safe Harbor provision of the Private Securities Litigation Reform Act. A discussion of the company's current risks and uncertainties is included in the Safe Harbor Statement in today's release and is presented in greater detail in our filings with the SEC.

Participating on the call today are Tony Jensen, President and Chief Executive Officer, Stefan Wenger, Chief Financial Officer and Treasurer, Bill Heissenbuttel, VP, Corporate Development, Bill Zisch, Vice President Operations, Bruce Kirchoff, Vice President and General Counsel, and Stan Dempsey, Chairman. A Q&A will follow our comments. We will also be discussing the company's free cash flow which is a nonGAAP financial measure. There is a free cash flow reconciliation in today's press release. With that I'll turn the call over to Tony.

Thank you for joining us today, and good morning, everybody. We are pleased to share with you today our record financial results for fiscal 2009 in the fourth quarter. While fiscal 2009 was a challenging year for many companies both domestically and globally, we leveraged our gold focused royalty business model to achieve our best results ever. Our strong performance is driven by our focus in execution on profitable long-term growth, steady performance from our expanding royalty portfolio, and a continuation of healthy precious metal prices. We not only recognized record revenue and cash flow, but also continue to execute on our strategic plan to expand and diversify our portfolio of precious metal assets, with the addition of old 70 new royalties of over 70 stage of our portfolio from producing to exploration assets.

We received new revenue from the Barrick properties acquired in October 2008 and we began to receive revenue from investments made over the past several years at Penasquito and Dolores. Fiscal 2009 has been a great year of growth in revenue and royalty assets for the company. In fiscal 2010 is shaping up to an exciting year as well. We anticipate continued ramp up of production from Dolores to full capacity over the next few months, we also look forward to initial concentrate production from the first sulfide processing line at Penasquito with commercial production in January 2010. And assuming we close the Andacollo transaction we expect that the ramp up to commercial production will occur in the second half of the fiscal year adding yet another important revenue stream. Now I will turn the call over to Stefan for the review of the financial highlights.

Thank you, Tony, and good morning everyone. For the full fiscal year we had record revenue of $73.8 million, an increase of 11% over the comparable fiscal year revenue of $66.3 million. Including two one time gains, net income was $38.3 million, or $1.09 per basic share, compared with $24 million or $0.62 per basic share for fiscal 2008. Free cash flow was a record at $61.7 million or 84%of revenues, compared with $52.9 million or 80% of revenues for the prior year. Revenue from gold was 84% versus 74% of total revenues in fiscal 2008. Working capital as of June 30 was $312.5 million. We ended the year with a cash balance of $295 million of which approximately $218 million will be used when we close the Andacollo transaction. And during the year we also increased our annual dividend to $0.32 per share. In October we expanded our credit facility from $80 million to $125 million.

Our healthy financial position allowed us to lock in favorable terms at a time when many companies were enable to access credit at any price let alone expand their limit. This expanded credit line enhances our liquidity position and provides the flexibility necessary to pursue our goals. In April we completed the sale of 6.5 million shares for net proceeds of $235 million. The successful completion of this financing will allow to us close the Andacollo transaction while maintaining strong liquidity thereafter. Last quarter I talked about how our DD&A costs had increased for the period compared with the prior year. That is true for the fiscal year as well.

In fiscal 2009 our DD&A costs increased to $36 million, or about $385 per royalty ounce, compared with $18 million or $227 per royalty ounce for fiscal 2008. The increased depletion cost per ounce is the result of lower production at Cortez and the strong revenues from our recent royalty acquisitions, which carry a higher cost per ounce than our more mature properties like Cortez and Robinson. For fiscal 2010 we will likely see total DD&A costs on a per ounce basis more in line with fiscal 2009 depletion, assuming steady production from our royalty assets. For our fourth quarter we had record quarterly revenue as well, $22.3 million, a 9% increase over revenue of $20.4 million for the comparable quarter. Net income was $7.1 million or $0.18 per share, compared with $7 million or $0.21 per share for the same period of fiscal 2008. We also had record free cash flow of $19.4 million or 87% of revenues compared with $17 million or 83% of revenues from the prior year period. With that I'll now turn the call back to Tony.

Thanks, Stefan. I'd like to reintroduce to you Bill Zisch, our Vice President of Operations, who has been with us for just over four months now, and we talked about Bill on our last conference call, but he was unfortunately traveling on company business out of the country and couldn't attend. So this is his first opportunity to speak to you. Bill has an important role of managing and monitoring our growing royalty portfolio which now consists of 118 properties on five continents. And we are eager to make his job an even bigger one as we expand our royalty portfolio further. Bill will now give you an update on some of our key royalty assets.

Thank you, Tony, and good morning all. It's truly been exciting and gratifying to join the Royal Gold team. I've been getting up to speed very quickly over the past few months and I'm eager for the challenges that lie ahead. One of the top priority properties when I became aboard with product of our annual reserve release which we put out this past May. This document contains estimates that we receive from the operators of our royalty properties for reserves and additional mineralization as of December 31, 2008. As well as their calendar 2009 production forecast. This year reserves to our royalty interest totaled 64.2 million ounces of gold and 1.2 billion ounces of silver, representing a 30% increase in gold reserves and a 16% increase in silver reserves over the prior year period. About one-third of this increase can be attributed to the ongoing successes of our royalty operators converting resources into reserves with the remaining 9.6 million ounces being added due to the Barrick transaction.

Now turning to operational highlights at our producing properties. Given the success we have had at growing our portfolio we now have 25 producing interests. Time does not permit me to address them all, so I will focus on the principal producers with noteworthy accomplishments or changes. The ramp up at Penasquito continues to progress well. In July Gold Corp declared that construction of the first sulfide process line was complete. They also reported that construction of the second sulfide process line is well underway and they are progressing towards planned completion in the third quarter of 2010. Goldcorp expects to see production and shipping of concentrates in the next six months with the expectation of commercial production in January 2010. Oxide production at Penasquito continues to outperform expectations with production up by 24% for the most recent quarter.

At the Dolores mine ramp up continues to go well. Commercial production was achieved on May 1st, last week Minefinders reported that second quarter gold production has increased 65% over the previous period with production totaling approximately 23,000 ounces. Silver production increased 49% to 420,000 ounces. Moving on to Cortez. Revenue for the year was less than expected as the operator produced more gold from areas not subject to our royalties. We anticipate that Cortez will focus on mill feed in the Cortez Hills deposit which is now subject to our royalties over the next several years. However, we also expect that concurrent [heap leach] production will continue at the pipeline complex where we do have royalty interests. Cortez represented about 22% of our revenues in fiscal 2009, down from 85% just four year ago. While this is due to reduced production at the mine, it also reflects that we have substantially grown our royalty portfolio beyond this single asset. It's also interesting to note that reserves subject to our royalty interests as of December 31, 2008, increased to 4.3 million ounces. So Cortez will couldn't to be a very important asset for years to come.

Robinson revenues were down due to lower gold copper prices, decreased gold and copper production and negative final pricing adjustments during the first half of our fiscal year. Copper prices have been rising steadily in calendar 2009 and so we are now experiencing some positive price adjustments. During the quarter Quadra reduced our annual guidance for copper production from 140 million pounds to 130 million pounds. They did not change their gold production guidance. It remains at 100,000 ounces. The reduction in estimated copper production is due to limited access to hypergene ore in the veteran pit which adversely affected capabilities during the quarter. The operator expects mining of the hypergene ore to continues in next quarter allowing continuation of the blending strategy. Having just returned from a trip to the Taparko operation in Burkina Faso, I can speak first half about the improvements in mill operation that have taken place.

Throughput for the second quarter was approximately 80% of original design capacity with just over 20,000 ounces of gold being poured. Mill availability was at planned levels of 92% in June and July. They are still seeing higher than normal vibrations in the pinion/girth gear interface and continue to work to resolve this. Nonetheless we are pleased with the substantial revenue we are receiving from this operation as milling of higher grade ore has partially compensated for the shortcomings of the milling circuit. At the Mulatos mine Alamos reported a very good second quarter with higher than planned reductions due to production improvements made in earlier quarters that include the additional of drum glomeration, the realization of more consistent crushing and the ongoing installation of inner lid liners. As a result of these improvements Alamos increased their 2009 annual production guidance from between 145,000 and 160,000 ounces, to between 160,000 and 170,000 ounces of gold. They also reported very positive exploration results and plan to continue exploration activities in preparation for a resource estimate to be completed by the end of calendar 2009.

I'd like to say a few words about the efficient operations of one of our smaller royalty properties, the El Chanate mine operated by capital gold. During the quarter a secondary crushing module was installed and is now operational. This addition was completed one month ahead of schedule and at budgeted cost. The secondary crusher will increase crushing capacity to 15,000 tons per day , a 40% increase which is critical to their expanded product plans which call for an increase from 55,000 ounces they expect to produce this year to an annual target of 70,000 ounces in the future. Three of our largest production and revenue contributors Goldstrike, Leeville and Siguiri, continue to operate and perform as expected. Now I'll turn the call back over to

Thanks, Bill. Turning to a few important developments during the quarter, on May 7th Barrick formally announced their decision to commence production at Pascua-Lama and provided the following key information about the project. Reserves totaled 17.8 million ounces of gold and 718 million ounces of silver. Estimated mine life is in excess of 25 years. Average annual production over the life of the mine is estimated to be 600,000 to 700,000 ounces of gold and 20 million to 25 million ounces of silver at a cash cost of $200 to $250 per ounce. And commissioning is expected in late 2012 or early 2013. At the current gold price we hold a 1.08% NSR royalty on this project which applies to all gold product that is mined within Chile. And we understand that about 80% of the gold will come from Chile. At existing gold prices this royalty would average about $7 million annually over the first five years of production.

I'd also like to mention that on July 23rd we received a favorable outcome on litigation related to our royalty on the Holt mine that we acquired from Barrick. Saint Andrew gold fields own the Holloway-Holt mining complex and they sought clarification on the royalty obligations on the Holt portion of the mine. The court ruled that Royal Gold is entitled to payment for the full amount of the sliding scale royalty defined in the royalty agreement. This royalty rate would be slightly over 12% at a $950 per ounce gold price. Saint Andrew has indicated that they would like to begin production at the Holt mine in the second half of calendar 2010. I should also mention that the ruling that the court made may be appealed within 30 days of the date of the decision.

At Andacollo we understand that construction is progressing according to plan for the new mill. However Teck announced yesterday that challenges to the previously drafted permits for the hypogene project water supply may result in delays to the start up of the project. Teck is working with the appropriate authorities to resolve the issue and has developed contingency plans for alternative water supply. We are working collaboratively with Teck on this issue and as such have agreed to extend the outside closing date of the transaction until January 29 to accommodate this potential delay. So in closing then, we are very pleased by the significant growth and diversification that Royal Gold has achieved during fiscal 2009, with the addition of the Barrick portfolio and the signing of the agreement with the subsidiary of Teck Resources on the Andacollo line.

Looking ahead, our fundamentals remain solid, with a strong balance sheet and cash flow and our expanded line of credit to help fund future acquisitions. This is a great time to be in the gold business. And we believe that Royal Gold is well-positioned to continue the growth and revenue diversification that we have achieved in fiscal 2009. Operator, with that, that concludes our prepared remarks and we'd be happy to entertain any questions if there were some. Are you there, operator?

(Operator Instructions) We'll pause for a moment to compile the Q&A roster. And your first question comes from Adam Schatzker, your line is now open.

It's Adam Schatzker at RBC. If I could just ask two questions, first on Andacollo, first I'm just trying to figure out with respect to timing. Can I assume the way the Teck press release is worded that it is expected either with the contingency plans or with the existing water supply that they would have everything sorted out by the end of January? And assuming that, how long after that time would everything be up and running?

Well, Adam, thanks for the question. I think a lot of that should probably be directed to Teck. Let me just say that from our standpoint we think there's every reason that the parties involved are going to find reasonable resolution to the issues. Teck has not stated definitively that the project would be delayed. We are still working the issue very actively. Our expansion of the time frame to close our transaction just really puts -- takes a little bit of the pressure away from them trying to do something by October 30. So these things are very dynamic and it's awful hard to predict and be precise exactly when the social issues will be resolved. But Teck is a good operator and they are very capable and I think there is a reasonable expectation they are going to be successful before January 29.

But with regard to the exact potential delay I think they even said in their press release that it really depends on the progress that's made. Now, the latter part of your question I believe related to the ramp-up period. And as far as I understand the construction is moving along as swiftly as ever. There's been no slow down in that area that I'm aware of. So from that standpoint we'd expect the construction to still be ready for commissioning somewhere around November, if indeed they have the social or the water issues squared away. So I would expect that any kind of slippage that we might have is a result of the water issue delay, that would be the type of slippage we'd have in the project in total. I wouldn't expect any more.

Okay. The second question is Cortez, you mentioned that production would be, is expected to be lower for a number of years. Can you perhaps help quantify what lower production is and how many years you might consider that occurring? I know it's a little hard in the position you're in, but anything would be helpful, I suppose.

I'll ask Bill Zisch to comment there.

Yes, Adam, as you said it is a little bit hard for us to ascertain exactly what that's going to be. We would be looking forward to guidance from Barrick on the operation. What we know is with the Cortez Hill operation coming on and having higher grade it only makes sense for them to produce from that asset. But at the same time they are going to have a need to fill out capacity in [owen] that would come back to the pipeline. I really couldn't say much more than that right now. I don't have the specifics, but that's kind of how we think it will play out.

I might just, this is Tony, I might just add a comment to that. As they focus over in Cortez Hills that's going to be the priority for the mill feed. And most of our production will probably come from the heap leach production. I think we will probably kind of play a swing role here over the next few years. I wouldn't expect production to be any higher than the guidance that Barrick has provided us with in this calendar year, and I would expect it to be somewhat sporadic, and so it's a little hard for us to answer it any more definitively than that.

I appreciate your answers. Thank you very much.

Adam, thanks for the question.

Your next question is from Victor Flores. Your line is now open.

Thank you. Good afternoon, Tony. I have a couple of questions. I guess starting with the Teck royalty purchase, I'm a bit, I don't know, I'm a bit confused. I mean, they've announced that they have some issues that might delay the project. I'm not quite sure why that would lead you to delay closing the transaction other than maybe you are leaving yourself some wiggle room in case things get worse.

Victor, we didn't really see any downside at all in delaying the transaction because our interests are absolutely aligned with Tech. They want to bring this property on as fast as possible and there's a good expectation that they would close before the outside date. But just moving the outside date does give us a little bit more room, does give Teck a little bit more room to resolve the issue and kind of takes that pressure point away. It's an artificial pressure point. In the meantime the cash stays in our accounts. The shares are not issued. And so again, we didn't see any downside here. In fact, we thought it was just a real prudent business thing to do.

Yes. I guess that makes sense. Thanks. Second question goes to Taparko and maybe Bill can comment since he was there, are you not concerned? It is sounds good to say that the production is up because they are milling higher grade ore, but that is potentially to the detriment of the ore body over the long term. Are you not concerned that because the mill isn't operating properly and I believe there's some cash flow pressures that they are high grading the deposit?

Bill, do you want to answer that one?

Yes. Thank for the question, Victor. Correct in that what they've done is they have compensated for some of the mill throughput issues by prioritizing some higher grade material. That will impact the long-term plan versus what it was, but I think it's actually the prudent thing to do from a cash flow standpoint. Taking a look at their plans, I don't think they have high-graded significantly and what it's done is bought them some time to get the mill operations back in order and we've seen actually a trend in the last couple of months of improved operations. And what they will do now is adjust back to their life of mine grades and stripping, and obviously there has to be some impact to change in profile and that will play out over the longer term.

I think it's also fair to say that we don't expect that they sterilized any mineralization through this process. They've just advanced one pit ahead of the other and that's where most of the grade is coming from. So I guess we would have done the same thing had we been operating the mine, Victor.

Okay. Fair enough. Second question on Taparko goes to I guess High River golds almost final sale to Severstal. I wonder whether evidence any approach or conversations with the Severstal people and whether they made any indication as to what they might be doing with this asset considering that you at a moments knows could exercise your security and they wouldn't own a mine.

Yes, Victor, we reached out to Severstal just when they became involved in the project, looking at Bill Heissenbuttel, I guess that was in November of last year, and, of course, they reached out to us at the same time. And we've had several at least two or three face-to-face meetings with them, and several conference calls. So we know them reasonably wells. We are supportive of their efforts and are hopeful that they will continue to have the success. We've seen a great deal of success in the operation over the last six months. I would like to emphasize our preferred alternative here is to get the deal that we bargained for originally. We are quite excited to see the project come up to its technical abilities. We always were confident in the reserve itself. Now we are seeing the technical side of the project come up to speed. So that would be our preferred alternative rather than exercising any security by any means, but it's nice to have that comfort there if we were to need it. So in summary I think we have pretty good relationship with Severstal.

Okay. Great. Thank you.

Thanks, Victor.

Your next question comes from Imaru Casanova, your line is now open.

Hi, how are you guys doing? Most of my questions have been answered. But just one more point to clarify on the Andacollo transaction. From what you've said I gather then that there isn't really anything that, I guess something could always happen, but you don't anticipate anything happening from now until January that could make you not want to complete the transaction. And, secondly is there clauses or ways in the agreement where you could get out of the transaction if something happened?

Good questions, Ima. Now we are really a bit on the sidelines here supporting Teck to the degree we can, but it's really their work that has to go forward to resolve the issues. And we have in our agreement a clause where we can go ahead and accept the risk of permitting and go ahead and close the transaction on January 29 if we wish to do that. But we put in this agreement like we do in just about all of our agreements, the standard clause that at closing permits have to be in good standing, and I think we have some kind of lack of challenge language in here as well. So if the situation on January 29 just does not look favorable and Royal Gold is not interested in accepting that level of risk we have those provisions where we don't have to move forward with the transaction.

Excellent. Thank you. That clarifies that. And then the second part on the Andacollo would just be, as soon as Andacollo reaches commercial production your royalty would kick in, correct?

No, we are on [els] one, the first production that is made there we come straight in. So even during the commissioning period if there is some gold production we would get credit for that.

Okay. Even during the precommercial part of the production there?

Yes, ma'am.

Excellent. And like I said most of the questions were answered. Now, and this is very minor, but if you could just, Bald Mountain has kind of dropped out of the picture in the last few quarters. What's the situation there with your royalty?

Bill?

Ima, at Bald Mountain it's a mining sequencing. They've moved out of our royalty areas and are producing out of some of the other pits and they will be going in and out and we expect that they will be coming back to our royalty areas in the future again. It's just a mine sequencing right now.

And you don't have any guidance as to when that may happen?

Not as of right now.

Okay.

Other than the annual production guidance that we've put out on them.

Thank you very much, guys.

Your next question comes from Mike Jalonen, your line is now open.

Tony, just asking about -- wondering about the royalty acquisition environment. You guys obviously did very well, the Andacollo transaction is obviously once the water issues gets resolved that's a great deal. And a lot of companies are in distress a mere few months ago, but now the environment is completely changed with the metal prices all running, company's doing financing, much better financial shape. Are you finding tunes as much you had from a few months ago, and the prices, how are they looking?

Mike, I think it's fair to say that we just came through a very, very unique environment that was quite beneficial for Royal Gold, as we were strong going into that environment, and we were able to look at a number of things during the last year that perhaps were somewhat unique and we are just absolutely pleased that we could enter into business with Teck. Having said that, we still haven't seen the deal flow drop. There is just different types of deal flow that I think have come through. We are looking at a number of different things, some that could be of the magnitude that we did with Teck but a lot of smaller things as well. So I think it's probably just a bit different type of transaction possibility now than what we came through in the last nine months.

Is there a different -- it sounds interesting. I guess you probably couldn't give examples because of thing you will be looking at maybe your competitors are listening.

No, that wouldn't be prudent for us, Mike.

Okay, well --

At any rate we still have Bill Heissenbuttel gainfully employed.

Maybe we will discuss over a beer or two at the upcoming conference season.

I think I have to move on to the next question. Thanks, Mike.

Your next question comes from Andy [Chopik], your line is now open.

Thank you. First question I want to ask is if you can give me a breakdown on the DD&A, totaled [$38.4 million]. What was the depletion, depreciation and amortization separately?

Andy, I am going to ask Stefan.

Andy, this is Stefan, I will take that question. I will give you a broadbrush, I am not going to go by property.

Broadbrush, I'm looking for the mix that comprised the total of $38.34 million.

Sure. We have very little depreciation, that's about $100,000. So the majority of that number is our property depletion. And I'm going to give it to you on a per ounce, it was $362 out of the total $386. So the lions share of those dollars. And the only other component in our DD&A is we're amortizing some noncompete agreements from the [Bald] Mountain acquisition, and that amortization is about $480,000 a quarter, so call it $2 million for the year out of that total number.

That's great. Okay.

Those agreements go for another year and just another about five quarters, Andy.

And do you expect the overall DD&A to remain about the same in fiscal 2010 here?

Yes, as we look ahead to 2010 you saw a very substantial increase from this year compared to last year.

Yes.

As we looked at 2010 we are not going to see the same type of increase. I see that moderating very much and having DD&A rates overall pretty consistent with what we saw 2009 as a whole.

Once again it will be comprised mostly of depletion.

Yes. That's correct, and the other component is that piece of noncompete agreement.

I have one other question that I did want to ask on Cortez, I noticed -- I'm just looking for that table right now, that the production for the year at Cortez was down about -- excuse me?

No, go ahead, Andy.

Yes. The production was -- reported production was down about 38.5%, down about 268 ounces. But royalty revenue on that production was only down about 25.5% to $16.3 million. What are the factors that would cause the royalty revenue to decrease proportionately less than the production?

Andy, that's a question that I would be happy to take. When we report that product we are reporting it for the property as a whole. And as you know we have four different royalty interests on that property.

Yes.

And the reason for the disproportionate decrease I would say is because of the different components of where that production came from within our four royalty portfolio.

So this is something that can basically change over the course of the year, it's very hard to forecast.

Yes. It's hard to forecast. We don't have, we don't have or give a break out of where that production is coming by royalty area. And I don't have additional details I can give you on that right now looking forward.

Given the current price of gold and the royalty interest that you have at Cortez, assuming that production continues to fall, is it likely that we will see royalty revenue associated with the Cortez continue to fall in the current fiscal year as well.

Well, I would say overall, yes. I think we have guidance of 330,000 some ounces from Barrick production which is slightly more, is that right? 346,000, which would be slightly more than what they've produced last year according to the numbers you see here at 268,000. So it should be in that range and I think it probably in future is will fall down a little bit before they pick it back up once they start the Cortez Hills piece.

Go ahead.

I was going to say one more piece that I should mention is when you compare fiscal 2009 to fiscal 2008 we had a change in the royalty rate on the GSR2 as well. And also in prior periods before that change when there was production coming heavier from the GSR2 area that would have an impact on the revenue. Going forward most of the production is going to be at the 5% rate so it should be a little more simple to calculate.

All right. Thank you.

Thanks, Andy.

Your next question comes from [John Doty], your line is now open.

Hi, guys, congratulations on a great year.

Thank you, John.

A couple of questions. Are you going to put out some kind of a general guidance for production in royalties for fiscal 2010.

We wouldn't put a fiscal year production out because we obtain it from the operators on a calendar year basis. And so that's why we come out in about April of each year with our reserves and the production guidance at that time, John.

Okay. Fine. And with $1.09 in EPS in this just finished fiscal year and if I divide DD&A by the number of shares, it looks like you've got an operating cash flow of about $2 a share, which leads me to my perennial every quarter question about the dividend. Any expectation that we can see a little bump up in that?

John, I guess I'd be disappointed if you didn't ask the question, but I know you just never like my answer. But the fact is that we aren't going to see a substantial increase in the dividend because we see a lot of growth opportunities out in front of us. We are proud of the dividend. We want to support a dividend. We are very proud that we've increased it continuously over the past, I think we've paid a dividend for for 10 years or so and increased it many of those years, the lion's share of those years. So we'd like to be able to continue to do that. I think that's a reasonable expectation. But a substantial increase is not something that we think is prudent, because we do see a lot of other good uses of capital, and we just don't want to be running back to the capital market all the time to finance new acquisitions.

Okay. You are not ruling out a token increase.

No, not at all.

Okay, great, thanks.

(Operator Instructions) And there are no further questions at this time.

Well, I think we'll wrap up the call then. I really appreciate everybody joining us today, and we look forward to your continuing interest and support of Royal Gold, and look forward to updating you on conference calls for the next quarter. Thanks, everybody.

This concludes today's conference call. You may now disconnect.