Good day and welcome to the Royal Gold Fiscal 2014 Second Quarter Conference Call. All participants will be in listen-only mode. (Operator Instructions) Please note this event is being recorded. I would now like to turn the conference over to Karli Anderson, Vice President of Investor Relations. Please go ahead.

Thank you. Good morning and welcome to our discussion of Royal Gold’s second 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 opening remarks, we will open the line for a 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 risks 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. We have slides to go along with today’s discussion and I will begin on Slide 4. Our second quarter results were largely in line with expectations. On our last earnings call, I said that we expect lower production at Andacollo as Teck transitioned into Phase 3 of the pit. And that we estimated this lower production, it would be offset by initial revenue from Mt. Milligan, higher production at Peñasquito, stronger sales at Voisey’s Bay and additional production in our royalty area at Cortez. And the quarter played out largely as anticipated. We received our first delivery of gold from Mt. Milligan. Production at Peñasquito was up significantly over the September quarter and Barrick’s production increased within our royalty area at Cortez. The only notable difference from our expectations was reported sales at Voisey’s Bay, where higher cobalt and flat nickel sales contrasted with lower copper sales. Overall, volume was down about 3% from the September quarter while the price of gold was off about 4%. Compared to the year ago quarter, volume was down about 10% and gold price was down 26%. Our most important development during the quarter was our first delivery of gold from Mt. Milligan, which resulted in a $2.6 million revenue contribution. Having made our first investment at Mt. Milligan about 3.5 years ago, we are now beginning to see a return on that investment. We have been busy over the last months. We have acquired a new royalty at Barrick’s Goldrush deposit and expanded our royalty interest at Cortez. In addition, we have increased our capacity of our credit facility at more favorable rates. And Stefan will talk about our expanded facility here in just a few minutes. Slide 5 details our latest…

Thank you, Tony and good morning everyone. Moving on to Slide 11, I will briefly go over our second quarter financial highlights. In Q2 we generated revenue of $52.8 million compared with $79.9 million in the prior year quarter, which by the way was our strongest quarter ever in terms of average price and volume. The impact of lower gold prices and reduced production at Andacollo was partially offset by the first gold delivery from Mt. Milligan and by higher royalty volume at Peñasquito. Net income totaled $10.7 million or $0.16 per share compared with $27.2 million or $0.42 per share a year ago. Our adjusted EBITDA was $45.6 million or 86% of revenue as our Mt. Milligan shipments commenced. Long-term we expect that adjusted EBITDA will range from 80% to 85% of revenue as our payments of $435 per ounce to Thompson Creek will be reflected as cash costs. We paid cash dividends in the second quarter of $13.7 million, which is a payout ratio of 39% of our operating cash flow of $34.7 million. For the second quarter, income tax expense was $6.3 million or 37% compared with $16.3 million or 37% for the prior year period. Our effective tax rate for the six months ended December 31 was 30%. For the full fiscal year based upon Royal Gold’s current forecast, we continue to expect our effective tax rate to be between 30% and 34%. The tax rate will fluctuate within that range depending on the volume of production received from Mt. Milligan, which is taxed at a lower rate than the rest of our portfolio. DD&A for the quarter was $22.7 million or $548 per GEO. The rate per GEO was above our forecast for the full year of between $425 and $500 per GEO due to…

Thank you, Stefan and good morning everyone. On Slide 14, we provided a production and revenue waterfall comparing to December quarter to the September quarter. I will focus my comments on operational performance from our ten principal properties. On a GEO basis, gold volumes were down 11% year-over-year and down 3% from the preceding quarter. The principal properties that realized lower production versus the September quarter included Andacollo, Holt, Voisey’s Bay, Mulatos and Las Cruces. During the first three quarters of calendar 2013, Andacollo completed the initial phase of its hypogene project and realized a record gold production for the full year. However, the fourth quarter of calendar 2013 marked a shift to a lower grade phase of mining, which resulted in 29% lower gold production than the September quarter. 2014 production guidance is forthcoming, but with the shift to lower grade ore underway it is expected that the average grade of ore mined in calendar 2014 will be similar to the fourth calendar quarter of 2013. Within that lower 2014 grade profile gold production for the year at Andacollo is expected to be weighted towards the second half of the calendar year. After calendar 2014, we anticipate Andacollo will move into better grade ore. At Holt, production was delayed as scheduled hoist motor and hoist drive upgrades were completed during the quarter. Total revenue during the quarter was down about 30%, which includes 6% associated with the lower gold price and 24% due to a production volume. The Holt royalty is levered to the price of gold due to its sliding scale structure. For all of 2013 Holt met the upper end of St. Andrew Goldfields full year guidance with production totaling over 58,000 ounces. At Voisey’s Bay, nickel production in the December quarter was virtually the same as…

Thank you, Bill. Before closing, I would like to talk a bit more about Mt. Milligan on Slide 15. Thompson Creek reported that concentrate production through the end of December contained about 21,000 ounces of gold. Roughly 25% of that production or above 5,500 payable ounces ship before the end of 2013. And just yesterday, they announced another shipment of about 10,500 ounces. Thus we expect deliveries on the balance of the 2013 production here in the current quarter along with new production during the March quarter. We may even see a final settlement associated with the first shipment back in November. I have the opportunity to visit Mt. Milligan last week and was impressed with the new operating team in place. They are methodically working through issues that are common to startup activities. Overall, the ramp up appears to progressing well and within our expectations for their first few months of production. We have guided that in our experience the ramp up stage could take between 12 and 18 months for a project of this size, but we expect substantial Mt. Milligan contributions to begin during this March quarter and continue to grow along with the startup program. Moving to our final slide, we have begun 2014 with good momentum. We had a two new royalty interest to our portfolio in the first few weeks of the year, we started to receive deliveries from Mt. Milligan and we expanded our access to capital on improved terms. We have over $1 billion in liquidity to invest and only $57 million in future commitments. And in the current market environment, royalty and streaming transactions continue to be attractive sources of capital for the industry. And with that operator, we will turn the call over to questions if there are any. Thank you.

Thank you. At this time, we will begin the question-and-answer session. (Operator Instructions) And our first question will come from Andrew Quail of Goldman Sachs.

Good morning Tony, Stefan, Bill and Karli. Thank you very much for update this morning. I have got a few questions, first one is on depreciation, I know you did highlight what is going happen with regards to the third quarter I just want to sort of highlight what would you see or what trends would you see in Mt. Milligan obviously isn’t going to start off low and then sort of increase as you move through the ore body and would that offset any sort of I suppose higher charge from other properties.

Go ahead, Stefan.

Sure Andrew. This is Stefan, I will take the question. Mt. Milligan what goes through our depreciation there is our upfront deposit. And we will amortize that over the life of mine ounces and if you take see payable ounces to Royal Gold on Mt. Milligan our rate there is about $350 an ounce. So to the extent that Mt. Milligan production comes in stronger in the second half of year we will actually see our overall per GEO DD&A rate come down as well as that higher contribution from Mt. Milligan ensues. The same story for Andacollo, Andacollo has a very low DD&A rate. The stronger Andacollo is the lower our overall corporate rate as well. I mean this quarter that lower rate there at Andacollo did impact the overall rate as I noted.

What’s Andacollo per ounce?

It’s about $320 per ounce.

Thank you. Second question is on Mt. Milligan, it looks like it is going well and maybe this is a little bit early, but sort of do you guys I mean obviously with Thompson Creek are you guys looking at any sort of feasibility to sort of expand production especially sort of after maybe the first years when sort of production starts it sort of come off a little bit?

Andrew I think right now Mt. Milligan, our Thompson Creek I should say is completely focused just on getting the design capacity that was built into the plan. So that’s their complete focus. I think your point is well taken after a bit of time but I am sure any good operator will go in and continue to optimize and sort of look for bottlenecks, take them away. And look for inexpensive capital to increase throughput on a leverage basis. So that’s just the normal part of operations. And so I would expect that to happen. And then of course, we look forward to them conducting more exploration on the property once they to get a few years down the road we have always like the exploration targets in the area. And in all of that I think will come in due courses as the mine normally matures.

Thanks Tony. And last one, another one for you Tony, I think just on opportunities going forward, obviously you cashed up now and cash generation for the next few years looks very solid. Americas versus sort of other regions in the world is one question? And then obviously and two is can you comment on what’s a streaming versus royalties?

Sure. So we continue to see a level of deal flow that is consistent over the last two or three quarters. There is many folks that need capital, there is no surprise anybody on this call and we are continuing to look through and find areas where we think our quality and nature so that we can invest with confidence not only in this gold price environment but maybe even in lower gold price environments. And then if gold price goes up then we certainly have a good play on that leverage. So overall, we just continued to send the message that we are seeing a lot of things, but we are continuing to be patient looking for quality. With regard to royalties versus streams, in general I think you will see us move more and more toward streams. They seem to be a preferred product for our partners and they can be a little more efficient for us and our partners. So we are very fluent in royalties or streams. We are very happy to talk about the benefits, pros and cons of each. And as we look at the specific needs of our counterparties we will figure out which one makes sense for both parties. So (indiscernible), but I expect that we will do more streams and royalties in the future.

Thanks very much guys.

Thanks Andrew.

And the next question comes from Kevin Chiu of CIBC.

Hi, guys. This is actually Cosmos here.

Cosmos. Hello Cosmos.

Good congrats on getting your first payment from Mt. Milligan. I got a question around Mt. Milligan as well, as you have mentioned the payment here is based on 75% today and 25% based on final settlement, could you maybe walk me through in terms of how that works? And would you be expecting final settlement? And when the final settlement comes, is that based on the spot price at that date and would it be retroactive to the entire 100%?

Well, lots of questions in there. And let me try to peel out, look for Bill and Stefan to support me if I go wrong, but we generally expect final settlement to happen somewhere between three and four months after delivery.

Okay.

After it goes across the rail, so that’s why I said on my prepared remarks, we might even be able to get a final settlement from that November shipment if you add three or four months on to that, that would come close to our March quarter end. And so that could well happen. And so the provisional payment is 75% on the first four lots and then it drops down over time and eventually we move just to final settlement on the or we eventually moved the payment just on the final settlement. So we have always guided that just about on average over the first year we’ll receive about 75% of the production, but it’s the final settlement still laid by that three to four months. So your other piece of the question in there, if I remember all of the bits and components is it’s based – is a final settlement based on the price at that time. And we get paid ounces here.

Yes, it’s true.

So, it’s based on whatever production is finally determined with the smelter. And so we will get paid on the ultimate ounces that were returned unless the provisional payment that was made. That’s what the final settlement will be made up of.

Yes. It’s actually getting, you are right, it is a complicated question.

Very, very hard to explain over the telephone, so I hope I didn’t confuse more than help.

Yes. No, I think I got most of it. Maybe moving on to Cortez, Tony, from the beginning this has been a very important royalty for Royal Gold and I see that you have made further kind of investments into the property as of this past quarter, how should we look at it, because I know for a while it was Cortez, it was a key royalty, it would generate pretty much the substantial part of the royalty for Royal Gold. And then they have moved on to Cortez Hill and Royal Gold doesn’t really have the royalty on Cortez Hill, but how should we look at it in terms of timing, in terms of we have seen the royalty kind of come back on, increased a little bit in the last quarter, how should we look at it from now onwards? And it certainly seems like you are preparing for something a substantial leverage to Cortez itself?

Yes. Cosmos, I don’t anticipate that will return to our large production years that we had, I am looking at Stan Dempsey here who is certainly instrumental in creating that royalty. When I was operating there in the late 1990s, early 2000s, the mine was producing 1.3 million ounces of gold from the pipeline mining complex. And we had grades of about 0.3 ounces per ton. It was just a fabulous deposit. We don’t expect those kinds of grades as they move back from Cortez Hills into the pipeline mining complex, probably grades that are half of that or less. So I would anticipate and you can look at what that is just based on the reserve grades that we have made available to you in our disclosures, but the open pit at Cortez Hills is becoming very, very mature. I think there is one more stage that they are working on at Cortez Hills and a significant amount of the fleet has already moved back into the pipeline mining complex. So within a couple of years, I would imagine that most of the service fleet will be on the pipeline side. Now, there are a few different deposits there, Pipeline, South Pipeline, Gap and Crossroads. And we have nice royalty position on all of that except Gap and where we have a partial royalty position. So I suffer from the standpoint that having been the mine manager there for four years, I probably gave you more detail than you want, but we are very passionate about the area we just think this is the greatest place in the world to own royalties and we pick up anything that we could find in the area.

Yes. Any updates on Crossroads, I understand that for long time those encumbered was a pretty high royalty in the end paying back to Royal Gold, but that’s been restructured. And so I think the timing was about to get pushed up at that point in time, but any updates on Crossroads, because I know as you said, you have a pretty substantial royalty on that as well.

We do. And it’s – there is not an update, it’s more just a reiteration of kind of a generic statement that we have made in the past. Crosswords does have about 600 feet is striping on top of it. So in 2008, when we bought the entire royalty package from Barrick, part of our compensation was to reduce that GSR2 royalty that I introduced to you today from 9% down to 5% just to make that deposit more and more attractive to the operator. And so that certainly has helped, but it is the lower grade deposit in the area. And so naturally it will find its way at the end of the mine life as you consider all of the different deposits that are available to them today. So that one probably would come in after Pipeline, South Pipeline, are pretty well complete.

Yes.

But we’ll get pretty – we’ll give plenty of advanced notice on that, Cosmos, because it will take a year or two to strip the Cortez, sorry, the Crossroads deposit and that will be able to signal that really, really clearly to the market when they start moving equipment back in there for the stripping.

Yes, great, thank you. I just wanted to ask all my questions, I guess I won’t be calling you over the weekend, I am pretty sure you are going to be pretty busy on a Sunday afternoon. So I am pretty sure I know what team you guys are cheering for so.

Thank you, Cosmos. I don’t know if you saw the John Elway rang the bell this morning. So, we are really…

Okay.

Yes, we are really excited about what’s coming this week. Hopefully we will have the good result.

Cool, thank you.

Thanks, Cosmos.

And the next question will come from Alex Terentiew of Raymond James.

Hey, good morning guys. Just a couple of follow-up questions on Mt. Milligan, you note in your MD&A that you are getting – you guys talked about a lot here getting paid 75% of the gold and Thompson Creek is getting 90% right now. Is there lower payment just to help them in their working capital needs during startup? Is that the rationale for that?

Alex, that’s a good question. And no, it really wasn’t structured that way 3.5 years ago when we did the transaction. It was just a function of what made sense for the operator and what was the easiest thing to document. We realized when this production started that we would be very hungry for revenue and we wanted to see revenue immediately and of course, there is always a negotiation as to when the payment occurs, whether it’s on provisional final settlement. So that was just a negotiated term. We obviously like to get our money as early as possible. And the operator in all types of transactions will like to push that out as long as possible. So, we just took a look at that and made that payment rationale in our valuation that we put forward and it’s just negotiated item.

Okay, great. I’ll say 75% for 12 shipments, the first shipment was 5,500 tons, second shipment was 10,000 tons. Is that 12 shipments based on a standard amount of tons going out or basically I am trying to ask when do you expect that 13th shipment to happen so to start getting paid at 90% or did you actually say after the 75% you will go to 100% immediately, is that how it works?

Alex, this is – we are going to be at risk of losing you, but I am going to try. So our first four shipments, we get 75% based on our provisional and obviously the 25% then would be on the final.

Yes.

The next four shipments we get 50% of the payment on a provisional basis and 50% on final.

Okay.

The following four shipments we get 25% on provisional, 75% on final. And so if you were to and then we go 100% on final for the last – well for that point forward. So if you were to plot those out on a chart and then going back to Andrew’s question earlier, I think it was Andrew that was asking when do we expect to get payment from the final settlement and had three to four months on the each one of those provisional payments, you see that once we start getting into the 50% range, we start expecting to get the 25% final from the first four lots. And then as you get into the 25% range, we would expect to start getting the 50% final from the second four lots. So it is complex. Happy to have thoroughly walk you through that if there was – if I really confused you, but…

No, I think I…

Pretty simplistic once you understand, so that’s why we say just on average for the first year we would expect about 75% payment and then go the final settlement at that time and will be 100%, and of course we will have some catch up from the prior payments as well.

And Alex, I might just add, the first shipment was about 5,000 tons thereafter they are expecting about 10,000 tons shipments. So on a go forward basis that’s about the sizing.

Okay, that makes sense. Okay. So next question just on Wolverine actually, I know you guys disclosed number there a little bit more and obviously that one now is a little bit smaller part of your portfolio, but the mine kind of cut back on production a little bit mid or late last year. Can you give us an update there, have they ramped things back up, I know zinc prices have recovered a little bit, so just curious as to the status of that operation?

Bill was just on site two weeks ago, so perhaps you can just give us an estimate or update where they are.

Yes, look so they were about where they had been, you are right they had gone, originally they took back to 60% of capacity, now they are running at about 75% of capacity. They are running the plant on a three week on, one week off basis and running the mine on a four week basis. So that’s about what they are doing right now, I haven’t seen anything on the forecast from them. And I would expect that that’s about where they are going to operate. I don’t think the metal prices have changed enough to have them changing that as of right now.

Okay, alright great. Thank you.

Thanks Alex.

And the next question will come from (indiscernible) of HSBC.

Hi guys, just a couple of questions, one being Mt. Milligan I believe the plan to concentrate grades for 54 grams per ton for the first six years and 45 grams per ton over the life of mine. And we are seeing 33 grams per ton right now. Is this something we should get used to or the concentrate grades arte expected to come up a little bit?

So Bhatir this is probably to way really to tell and I won’t worry so much about that 33 grams per ton at this point. It’s a – at this time in the startup you have got a lot of unbalancing in the circuit, starts and stops and upset flotation tanks and things like that when the start and stops happen. So once you get into steady state I think we will get a much better feel for the overall recovery. And of course the overall recovery translates into year point about the grade of the gold and the coins. But we really don’t see any issues that we are concerned about right now. At the present time it’s a matter of focusing on the throughput and then continuing to balance to recover in the flotation circuit accordingly, but flotation circuit seems to be quite robust.

Okay, thank you. My other question is obviously on royalty acquisitions would – are you increasing your royalty and there you can acquire a new one. Does this sort of imply a bit of shift in your strategy of increasing your royalties at existing deposits, existing assets and partner so to speak versus going out and acquiring a brand new royalty that could make an impact down the road?

No. It doesn’t account for a shift Bhatir and I don’t think I have seen a royalty in the State of Nevada that I didn’t like. And so we will continue to pick those up when they are available. And we just look for those opportunities whenever they present themselves. But we can grow the company on smaller deals like that. We are going to have to continue to look for ways to provide financing, which really are material to our business going forward. And so we are very active in that side of the business as well.

Okay, thank you. That’s it for me.

Thanks (indiscernible).

And our next question comes from Garrett Nelson of BB&T Capital Markets. Garrett Nelson - BB&T Capital Markets: Hi. Thanks for taking my question. Has the Board given a thought to more sizeable dividend increase, a special dividend or share repurchases or does the company want to keep their strong liquidity position for opportunities that might present themselves?

Well, Garrett, we look at that at the board level at least once a year and we think about that quite seriously. And to-date what we have been able to do is provide more growth, more return to our shareholders via growth. And we still think this is a great opportunity for us to layer on additional pieces of business. And that’s the very reason why we did build the balance sheet, the way we built it. So that we were – would be strong in this particular position. I would say this though if we don’t find quality assets over a period of time, then there is all kinds of options open to us, because it’s a very, very efficient business model and it’s going to be a very powerful return, a yield return if we decided to turn it into that position, but I think that would signal that we just can’t find good quality assets out there to invest our money in. And we do think that there is a great opportunity in front of us now to continue to build the portfolio. So, in general, not at this time, but we always are looking at the best way is to provide return to our shareholders. Garrett Nelson - BB&T Capital Markets: Okay. And then I also wanted to confirm the number, did you say your future commitments totaled $59 million?

$57 million let me break that apart for you. $50 million is for on schedule commitments that (indiscernible) achieved in British Columbia, that’s British Columbia, isn’t, yes, okay, and the other is the $7 million that we all over the next seven years on our new acquisition in Nevada. We paid $1 million of the $8 million. Garrett Nelson - BB&T Capital Markets: Okay. The $50 million will that hit in the final two quarters of your fiscal 2014 or is that beyond?

So our business deal there is that we are required to put in the other $50 million until Chieftain Metals has a – all their permits in place, which I think they do. They have to have all the rest of the financing in place to build the project, which they don’t at this point and then they have to have a construction decision I think from their Board of Directors and that hasn’t to my knowledge occurred either. So the point – at this point, they are looking for additional financing to put the project forward as well as optimizing the project. So we haven’t – they haven’t met all the conditions for us to have to begin funding. So we can’t give you specific guidance when that might occur, but the point that we are making on that discussion item, prepared discussion item is that we have a powerful amount of liquidity available in front of us and very little requirements on our money at this point. Garrett Nelson - BB&T Capital Markets: Sure. Well, thanks very much.

Thank you, Garrett.

And next we have a question from John Tumazos of John Tumazos Very Independent Research.

I want to complement the company on being debt free, having surplus cash and doing deals. And I wanted to encourage you if necessary to omit the dividend in order to buy more royalties. There have been M&A transactions, where gold companies have been taken under rather than taking over and it’s a spectacular market to go out and acquire new streams, new royalties etcetera. And I don’t think at all you should be too worried about raising dividends and buying back stock. And I am thinking of Wits Gold being bought out for 150 million or 150 million or 170 million ounce resource in South Africa, High Desert gold getting bought out for 7 million in Nevada and a copper company and a gold company in production that were just bought out for the debt or less than $1 on the dollar with that so go out and go hunting.

John, thank you as always for your perspective and that’s very consistent with where we are at today as a management team. Thanks for the comments.

Thank you.

And the next question will be from Adam Graf of Cowen.

Hi, guys. This is a question maybe for Tony or Stefan, senior management in Barrick have recently talked about using $1,100 gold for their end of year 2013 reserve calculations and suggested that their mine plans might also change based on lower gold price assumptions and higher cutoff grades. And based on that, how do you guys look at your book values and do your impairment tests?

So, let me just speak generally Stefan for a moment to Adam’s question and then you can actually get into the details. But Adam, the first thing that I’d like to make a point of is that our quality of our book is very, very good. We have a slide in our presentation materials, our most recent presentation materials that talks about cash margins. And so we think we are very, very well positioned. Second, I think there will be more companies looking at the most economical way to bring these projects forward, not only forward, but also the ones that are in production to maximize the margin, that’s a clear sense of urgency that all of the operators have. And so the kind of movement that we saw at Peñasquito, where Goldcorp took a look at the economics at a lower gold price environment and reduced the mine life, reduced the reserves, but bump the near-term grade in the margin. That does the same thing for us. It really does bump our near-term production as well. So we can be – we can have a real benefit in the near-term from that kind of item. And then of course I am not particularly worried about those resources that have fallen off, because they are still there and they are the good option value if the gold price moves back a couple of $100. So, those are just some general comments, but we would expect more of that as the producers start to take a good close look at this and then of course we will look at our DD&A when the new reserves come out. We have very little if any of those in yet at the present time. But Stefan, maybe you could add just how we do our DD&A?

Yes, there is – Adam there is two components. So, to the extent that reserves are updated or changed as I noted, we will update our DD&A rates. And our DD&A rates are based just on what’s improvement in probable reserves at each of the properties, our carrying value divided by those proven and probable reserves that would be payable to us. So we could expect changes in our DD&A rates as we go forward and will update that in the third quarter. To the extent, we do look at our portfolio for impairment. We do it every quarter and will certainly do it to the extent their mine plan or reserve changes in third quarter. As Tony mentioned, we have a very high quality portfolio and carrying costs are relatively low. And when we look at an impairment calculation, we also get to consider future cash flows from many resources as well as the reserves. And we do that on an undiscounted basis. So from that perspective, I have a high confidence in our portfolio from an impairment perspective, but it is something that we watch closely and we will continue to monitor as we go forward.

And so I guess the greatest impact would be perhaps of a significant shortening the mine life that offset any benefit to near-term production, is that sort of what I am hearing?

I would think so, but I don’t know if we would get one without the other. I would expect that as they increase the quality of the resource or the reserve that should allow to see higher grades, of course, it might take a little bit time to mine through that new mine, but generally I think you are right on the mark.

And then generally because most of your assets were acquired many years ago the carrying, the book values are so low versus sort of current NAV that you are not so worried?

Adam, for our core portfolio, our cornerstone properties, we have very low carrying costs relative to the current market price. Certainly, we had other assets that were acquired at somewhat higher prices, but none that are significant really to our portfolio as a whole. We continue to monitor that each quarter.

And we just can’t give much more guidance on that at this time, Adam. We just have to see how those reserves play out, but it’s a prudent thing to be monitoring over the next three months.

Alright, thank you very much guys.

Thank you, Adam.

This concludes our question-and-answer session. I would like to turn the conference back over to Tony Jensen for any closing remarks.

Laura, thank you very much everybody for joining us today and we very much appreciate your interest and continued support of Royal Gold and we will look forward to updating you on any progress on our next conference call. Thanks very much.

The conference is now concluded. Thank you for attending today’s presentation. You may now disconnect.