Good afternoon. My name is Tiffany, and I will be your conference operator today. At this time, I would like to welcome everyone to the Royal Gold fiscal 2014 first quarter conference call. (Operator Instructions) Karli Anderson, Vice President, Investor Relations, you may begin your conference.

Thank you, Tiffany. Good morning and welcome to our discussion of Royal Gold's first quarter fiscal 2014 results. This event is being webcast live and you will be able to access a replay of this call on our website. Participating on the call today are Tony Jensen, President and CEO; Stefan Wenger, CFO and Treasurer; Bill Heissenbuttel, Vice President, Corporate Development; Bill Zisch, Vice President Operations; Bruce Kirchhoff, Vice President, General Counsel and Corporate Secretary; and Stan Dempsey, Chairman. Tony will open with an overview of the quarter, followed by Stefan with the financial review, and then Bill Zisch will discuss the performance of our portfolio. After management completes their openings remarks, we'll open the line for Q&A session. This discussion falls under the Safe Harbor provision of the Private Securities Litigation Reform Act. A discussion of the company's current risk and uncertainties is included in the Safe Harbor statement in today's press release and is presented in greater detail in our filings with the SEC. Now I will turn the call over to Tony.

Good morning, and thank you for taking time to join us today. We're using a few slides to frame our discussion. And I'll begin on Slide 4. Overall, our financial and operational results were very much as expected. When compared to the prior year period, revenue was impacted by both volume and price. Production was about 10% lower, while gold price was 20% lower. When comparing to the June quarter, production volumes increased, but was offset by 6% lower gold prices. I'd like to point out just a couple of operational related items worth noting. Goldcorp previously signaled that Peñasquito production would be lower in the first half of calendar 2013 due to lower grades in the mine sequence and expected an increase in the second half of the year. Looking at the last three quarters, we have seen favorable volume trends and we would expect a strong December quarter from Peñasquito, as Goldcorp has maintained its guidance there. Andacollo had particularly strong production for the quarter. The mine has nearly met its full year operational guidance within the first three calendar quarters. We understand that Andacollo is now transitioning to Phase 3 of the pit, where lower grade ores are expected. Therefore, we anticipate our fiscal second quarter contribution from Andacollo will be lower than what we've experienced over the last year-and-a-half. However, this anticipated lower production is expected to be offset by improvements in other areas of the portfolio, including increased production at Peñasquito, initial shipments from Mt. Milligan, seasonally stronger sales at Voisey's Bay during the December quarter and a pick up in production at Cortez. Stefan Wenger and Bill Zisch will go into much more depth on operational and financial results in just a moment. On the development front, we made our final payment to Thompson…

Thank you, Tony, and good morning, everyone. Moving to Slide 7, you'll see the financial highlights for the period. In the first quarter of fiscal 2014, we generated revenue of $57 million compared with $78 million in the prior year quarter, which by the way was our strongest quarter ever, in terms of price and volume. Gold price was down 20% over the same period a year ago and was the primary driver for the lower revenue. Our net income was $15 million or $0.23 per share compared with $25 million or $0.42 per share a year ago, principally driven by the lower gold price. This impact was partially offset by higher royalty volume at Andacollo, Holt, Dolores and Wolverine. We paid cash dividends in the first quarter of $13 million, which is a payout ratio of 37% of our operating cash flow of $36 million. For the first quarter, income tax expense decreased to $4.8 million for an effective tax rate of 24% compared with $16.5 million or 39% in the prior year period. The decrease in our effective tax rate was primarily a result of the expected contribution from Mt. Milligan production to our fiscal 2014 earnings as well as a reduction of the accrual for uncertain tax positions during the first quarter. Our cash tax rate for the quarter was 31%. For the full fiscal year, based upon our current forecast, we continue to expect to report an effective tax rate of between 30% and 34%. This reflects the contribution of Mt. Milligan revenue at a lower tax rate than our U.S. tax rate. Adjusted EBITDA as a percentage of revenue is expected to move downward as Mt. Milligan shipments commenced to around 80% to 85% of revenue, as our payments of $435 per ounce will be…

Thank you, Stefan, and good morning, everyone. I will be talking through Slide 9. On a gold equivalent basis, gold volumes were down 9.5% over the September 2012 quarter and up 5.2% from the June 2013 quarter. I will focus my comments on variances from the June quarter. I'll start with comments on the producing cornerstone properties followed by our principal properties. Andacollo contributed 30% of our quarterly revenue. Volume increased 12% over the June quarter, due to increase in the throughput, which is partially offset by lower expected grades. The mine has produced about 91% of its calendar year guidance to date. Teck has mined close to its planned, since the inception of the Hypogene project in 2010, when Royal Gold began its association with Andacollo. Operations are now moving into Phase 3. While the initial phases of the pit, extracting material that was above the reserve grade for the deposit. The third and subsequent phases are likely to mine ore that is closer to the reserve average of about $0.12 grams per ton. To mitigate some of the impact from lower grades, Teck indicted it expects that further mill improvements will enhance throughput. Peñasquito contributed 12% of our quarterly revenue. Production volume increased 44% over the June quarter as its sulphide plant achieved average throughput of approximately 110,000 tons per day during the quarter with water availability as expected. Goldcorp narrowed its full year guidance to 370,000 to 390,000 ounces of gold as they continue to expect higher grade ore to be processed during the last quarter of the year. They also reported that progress on the Northern Well Field project continues on schedule. And they expect construction activities to commence in the fourth calendar quarter of 2013. Voisey's Bay contributed 13% of our quarterly revenue with the…

Thanks Bill and Stefan. Before I close let me briefly address our business development activities. We continue to view this as an attractive market for our financial products and are quite busy looking at new business opportunities. We are encouraged with the deal flow, but remain selective for investments that we have confidence that can perform successfully in this price environment and lower if necessary. In closing then, we are off to a solid start for our new fiscal year and the company is positioned for the point of strength when many in our industry are facing challenges. Simply said in four points, our balance sheet is robust with nearly $1 billion in liquidity; we have strong and large uncommitted cash flow; we have a very attractive growth profile embedded in the company that is just starting to surface at Mt. Milligan; and we are in a market environment that there is a demand for our investment dollar. Operator, with that we'll now open the line for question.

(Operator Instructions) Your first question comes from the line of Michael Peterson with MLV.

A couple of questions. Tony, I'd like to follow-up on your prepared comments for Pascua Lama. Given that you view this as a world-class resource, and given that I think it's fair to say that the operator is well motivated to raise capital, have you or would you consider an incremental investment in that project.

Obviously we aren't going to be able to comment in any kind of detail with any business development opportunity. But as in any investment that we look at, we'll look at the risk profile or a concentration of wealth in one particular asset. In all the other aspects that go into making a sound business judgment, so I'm not able to comment anything specific with regard to that asset, but we'll continue to evaluate as opportunities come to us.

More broadly, can you give us a sense -- again, I think you're summary, if you would disagree with the fact that you're very well-positioned at a time where from the negotiating perspective things are arguably in your favor. That said, we're going on nearly a year where you've been in that position. Can you give us any visibility on how you think about deploying that capital or if things are selective enough on your side that it may very well be you'll wait to see how things unfold? Can we expect anything in 2014 to persecute that advantage?

At that start of the comments, the same way I did the last question, I can't comment on specifics and I can't comment on timing either. That's largely out of our control, but let me just go back to what I was alluding to in my prepared comments. We do see a very good deal flow. This is a time where it's certainly been better than most of the years that I've been with Royal Gold. So there is a lots of momentum coming our way. I would be disappointed, let me it that way, if we weren't able to execute on some nice quality opportunities here within the next 12 months.

Your next question comes from the line of Cosmos Chiu with CIBC.

I got a few questions here, Tony and team. Maybe first off, maybe for Stefan here. I noticed on your G&A went up by quite a significant percentage quarter-over-quarter, is that just due to fiscal yearend sort of expenses or is it more related to corporate or business development type expenses?

I think our G&A went up about 5% quarter-over-quarter. I would classify that as just typical activity. As Tony mentioned, we continue to have business development activity and when we do that we do spend some dollars here. In addition to regular corporate activity, particularly in this quarter with respect to putting out our proxy, putting out our annual report and those kinds of items generally put into that G&A, I can't really say anything. There is nothing else specific that jumps out at me as abnormal in the quarter.

Hopefully, my associate heard that answer because he gave me a different percentage to ask this question for. And then maybe this is my question. So it's got a bit more me to it. Tony, I'm sure you've seen that the S&P decided to re-class the streaming deals as debt. The two other rating agencies have decided that they disagree with that. But in terms of streaming deals reclassified as debt, does that impact your business?

First of all, the vast majority of people that we are or have been doing business with don't have rated credit. So I still think there is plenty of deal flow. But we're disappointed with that decision by S&P. We disagree with it. We'd certainly like to understand more clearly what components of that classify it one way or the other. And I would also just say that all streaming agreements haven't been written the same. And there could very well be good mechanisms to be able to put together a set of terms that are consistent with S&Ps definition of non-debt. So we're going to continue to work those issues. I don't think it necessarily cuts off the opportunities for the larger companies that have rated that, but it's not helpful, Cosmos.

And then maybe turning to future commitments. Now, that you've made your last payment on Thompson Creek, the other commitment that you have remaining would be with the agreement with Chieftain. Is there any time limit on that agreement? Can you remind me, or is there some kind of a timeline in terms of completion or anything like that?

Cosmos, let me introduce Bill Heissenbuttel to speak to that question.

The only timing element in that particular transaction is in ability for us. You remember we made $10 million investment at the end of 2011 and there was a three-year window, which they had to satisfy the CPs for the rest of the money to the extent they weren't able to do that, which would be a little over year from now. We would have the opportunity to seek the $10 million back, but other than that there is no date by which we have to reach completion of the project et cetera, that's the only timing in the agreement.

But you are still pretty confident with what's going on at Chieftain, right, Bill?

Still like the project.

Maybe one last question on Pascua. Based on my calculation, and I've seen in your disclosure, Tony and Stefan, that the carrying value for the asset right now is about $400 million. And based on my calculation, I would think that $400 million would imply a gold price that might be higher than where spot prices are today. And given there's now added uncertainty in terms of timing coming from Barrick, I would have thought that could impact your carrying value, but as you've kind of can put it in your press release today, Tony and Stefan, you don't expect that to have an impact. So maybe if you can walk you through your thought process here, I think that might help me out.

We're U.S. reporting company and under U.S. GAAP there is a couple of levels of analysis with respect to any impairment that we follow and we update our impairment analysis each and every quarter with respect to Pascua-Lama, but the first step is based on undiscounted cash flow analysis. And if there was a triggering event based on that analysis, meaning that the undiscounted future cash flow would be less than your carrying value then you'd move to a second fair value step. I mean while we realize that at current gold prices and with the uncertainty on the project, there is certainly are items that we need to evaluate with respect to carrying value, and we're following that closely. Under our GAAP methodology, there is no indication of impairment. The reserve continues to be there at the project including the substantial resources as well, so we're right in line with that.

Your next question comes from the line of Shane Nagle with National Bank Financial.

Cosmos asked most of my questions, but maybe Bill or Tony, just maybe a quick comment on the Mt. Milligan concentrate. I've seen some reports, obviously, that the gold grades in the corner are a bit lower than what they were targeting initially. Obviously that happens with these projects ramp up, but maybe just a quick observation on how the gold recoveries are trending there?

It's just too early to even draw any conclusions with regard to that. We remain very confident in the gold recovery rate, that the test work as indicated. And I think we just have to wait for a little bit. Let them get that circuit optimized. We know that they'll focus on getting the flow right first and then start feeding in the concentration on how we would get the gold recovery up just a bit more, but no real concerns are pointing our way at this particular time.

And then maybe, Stefan, staying on Mt. Milligan, that the payables from the concentrate, the two to four months expected to trend to four months, is there anything particular in the agreement that you could share to model, for to make it easier for us to model the cash flow? I mean this initial shipment you get paid sooner, and then over the course of time, you just get paid once you take physical delivery? Is there anything in the agreement written to that effect?

For the first 12 shipments we get paid provisionally. We get paid at certain percentages of the provisional and that percentage of the provisional declines over the first year. And then ultimately, we get our deliveries based on final settlements that Thompson Creek achieves. We very specifically did that to manage our cash flow during the initial startup. With the comment to cash flow, our cash flow occurs ones they make gold deliveries to us. And that should happen within a period of days after they make their first shipment. We'll get a delivery of gold from Thompson Creek and then we would look to sell that gold into market, which would create the cash flow for our company and our shareholders.

So even the provisional payments are made in gold, not in dollars?

Yes. That's correct. All the Thompson Creek payments, if you will come to us is in gold.

And then maybe just one final question, just asking maybe the Pascua-Lama question another way. I know there's, I think approximately 9% NSRs out there outstanding, some in smaller private hands. Has any of those holders come to you expressing their frustration with the development timeline that Barrick has put forward or maybe looking to monetize those? Obviously they weren't looking to monetize these assets previously when Pascua was tracking on schedule, but maybe now there's more willing sellers in the marketplace? Any comment on that, Tony?

Shane, let me just confirm that. The total NSR in that property is 9.8% and those were the original owners of the claims and over time they morph them into an NSR. And we've gone around through many, many acquisitions and bought up to the extent of 5.23% of royalty. So we own the greater than the majority of it now. But beyond that relationship with those folks, I just don't think it would be appropriate to get into too much more detail at this time.

Your next question comes from line of Adam Graf with Cowen.

I had maybe a quick query about Cortez, Pipeline and Crossroads, and how you guys see the transition sort of away from Pipeline and how Crossroads is going to sort of come into production. Is it going to be a relatively seamless transition from Pipeline and then how long do you think that asset will last?

So we're very pleased to see that we now have a shifted mining equipment back from Cortez to the west in the Pipeline complex. And just for everybody else on the call, we don't have a royalty on the Cortez Hills deposit. So over the last, Bill, I would say maybe three or four years we've been quite lower in our Cortez royalty compared to prior years. With that shift the equipment comes back on the suite of deposits that we have royalty interest on. So we're pleased to see that transitions happening. I would expect having then the mine manager there for four years, I would expect that they would focus on the Pipeline pits, the gap and lay backs to those pits first, before they would come into the Crossroads deposit. As you remember Crossroads is about 600 feet deep on stripping and it's a bit lower grade then what you had experience in the pipeline. So I think that's going to be in the latter end of the mine life. All things considered, we'd expect it to be probably after the Pipeline pit. So we can't really comment on with confidence as far as the sequence of events that might happen there. We've been interrupted before on production from the Crossroads with the likes of Cortez Hills. So it just would be a bit of a stretch for me to anticipate that today.

No, expectation for sort of a total life of mine remaining there?

How much do we have for reserves? Can anybody help me out with that? If not, we'll get back to Adam with the amount of reserves there, the substantial amount of reserves still subject to our royalty interest. So this is going to be years at the Pipeline, Crossroads area. So [ph] Carly is just passing me the number, and I'm looking at probably the GSR2 or GSR3. And we're still multi million ounces there, about 4 million ounces that contained gold subject to our royalty interest. So it's still very, very healthy production profile for us in the future.

But there could be some gaps developing in there, between Pipeline gap and then before Crossroads gets going?

Look here is the situation with regard to the area. It's a perspective area and Barrick has got another new and exciting deposit called Gold Rush. And we don't know how they're going to process that? Would they bring that several kilometers, then I could guess that probably get closer to 15 kilometers back around to the Pipeline or would that displace some of the lower grade ores at Pipeline or Crossroads, I don't know. But those are the kinds of complexities, I just can't give you a lot of clarity on it, until Barrick comes out with their feasibility work on Gold Rush.

Your next question comes from the line of [ph] Bathiyar Sharapova with HSBC.

Tony, its Jim. I have two questions. One is a follow-up to Adam's question. I believe Barrick's guidance that you disclosed back in May, from all four royalties from Cortez were about, I would say 180,000 ounces and with nine months behind us that at this point is highly improbable. Do know what triggered such a drastic change in mine planning for this year? And do you have updated guidance maybe for 2013 from the property?

Their guidance was in the 50,000 to 60,000 ounce over a calendar 2013 and the shift that they had most recently was a lot of the material that we had expected to be produced was carbonaceous material that they would have stockpiled from previous Pipeline mining and that they would have sent that up to Goldstrike. Some of that material did not get shift, it's still stockpiled. We still anticipate that it will be mined. At the same time they did not return the equipment from the Cortez Hills deposit as quickly as they had originally estimated. So a lot of it is just sequencing and from Barrick standpoint, they're optimizing operations around Cortez, Goldstrike, flows through an autoclave feed and pipeline. So we're likely, as they settled down the mine plants to see some timing and sequencing changes, and that's what it is, it's just timing right now.

I believe you're talking about the NVR 1 royalty, but there is also GSR 1, 2, 3, that combined, I think were guided to 128,000 ounces, additional to 53,000?

About 64,000 each. Correct.

And that's obviously seems highly improbable this year, right?

I think they could still. If they accelerate their production in the fourth quarter, they could still get to that calendar number. You're right, you'd have to have a very strong quarter.

The other question was actually the follow-up on the Pascua-Lama here. Given that it's been delayed, potential to 2018 or beyond, and with the El Morro project also up in the air, is there more urgency on your part to maybe look at your production potential royalties, or assets that already in production to complement the cash flows that's going to be coming out of Thompson Creek near into mid-term?

We have a very strong growth profile built into the company and so we do have a luxury of looking a little bit further out. But having said that, we by far are much more excited about near-term or existing cash flowing assets, than we are something that takes three or four years to build. So we always have a preference for that.

There are no further questions in queue at this time. I'll turn the conference back over to our presenters.

Let me just comeback to Adam's question, a moment here and we have our Chairman, Stanley Dempsey, in the room as well and he gave me a high sign when Adam, he asked that question, could there be some other ores that are displaced in front of our Pipeline or Crossroads type production. And Stan negotiated a clause in there, that actually it has a bit of a penalty that Barrick would have to pay on an annual basis and they have paid that for some period of time. In the event they do put ores in front of us, but just wanted to provide a little bit more color on that, it's not a huge penalty, I think it's $400,000 to $500,000 a year. But nonetheless, there was that forethought for that particular asset. With that, we thank you very much for joining us. And we certainly appreciate your support and your interest in Royal Gold. And we look forward to updating you on our progress at the next call. Thank you very much.

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