Good day and welcome to the Royal Gold Fiscal 2016 First Quarter Conference Call webcast. All participants will be in listen-only mode. [Operator Instructions] After today’s presentation there will be an opportunity to ask questions. [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to Ms. Karli Anderson, Vice President of Investor Relations. Ms. Anderson, the floor is yours ma’am.

Thank you operator. Good morning and welcome to our discussion of Royal Gold’s first quarter fiscal 2016 results. This event is being webcast live and you’ll 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 and Operations; and Bruce Kirchhoff, Vice President, General Counsel and Secretary. Tony will open with an overview of the quarter, followed by Bill Heissenbuttel with the corporate development and operational update, and then Stefan Wenger will provide a financial update. After management completes their openings remarks, we’ll 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 the time to join us. In our last earnings call in August, we discussed our efforts to opportunistically invest in our business, weakening metal prices. Speaking to you just three months later we’ve now closed all of those transactions and successfully integrated $1.4 billion in new business. These new investments coupled with our existing portfolio are expected to result in industry-leading growth. I will begin on Slide 4.As traditional debt and equity became scarcer in our industry, we see the opportunity to grow and enhance our portfolio. Our first quarter results reflect those efforts. Revenue increased 7%, despite a 12% lower gold price and a build-up in gold inventory. As strong volume contributions from Mount Milligan and Peñasquito were combined with new business from Golden Star and Andacollo. We’ve closed the four new streaming transaction in the most active quarter in Royal Gold’s history, including Golden Star, Andacollo, Rainy River and Pueblo Viejo. All of those transactions have been funded with existing liquidity, which is consistent with our philosophy to maximize returns per share. We now have over $3 billion in royalty and streaming interests on the balance sheet, up roughly 50% from a year ago. Pro forma we estimate total precious metals reserves of 6.7 million net gold equivalent ounces inclusive of new business, resulting in a caring value of only $450 per ounce. This does not include any resource reserve conversion, which plays a key role in our investment thesis and provides optionality for our shareholders. Bill will speak to you in a moment about our operating results, which includes some of the new transaction, and Stefan will discuss our overall financial results later on the call including a discussion on how our earnings per share were impacted in the first…

Thanks, Tony. On Slide 8 we’ve summarized notable operating update, Mount Milligan, Peñasquito and Rubicon. At Mount Milligan, Thompson Creek reported September quarterly production of nearly 54,000 ounces of gold, a throughput of approximately 44,000 tons per day; this is about 74% of design capacity. Thompson Creek announced plans to install a second SAG discharge screen deck in October in an effort to enhance future throughput rates. Gold recoveries averaged 67%, slightly lower than the June quarter. We received deliveries of gold within five months of the shipment from Mount Milligan, so our volume from the project resembles their production from two quarters prior. At Peñasquito, Goldcorp reported that the mine remains on track for a record year, due to positive model reconciliation in the heart of the deposit. Goldcorp expects to exceed the production guidance of between 700,000 and 750,000 ounces in calendar year 2015, but caution that gold grades are expected to continue to moderate into the fourth calendar quarter as they move into a new phase of the ore body. Goldcorp also noted that the metallurgical enhancement project feasibility study remains on track for completion in early 2016. At the Phoenix Gold project, Rubicon Minerals reported that it was moving to suspend underground activities, while it enhances its geological model and develops a project implementation plan, which they expect to complete in the second calendar quarter of 2016. The mill is currently operating and Rubicon reported that it has a stockpile of approximately 11,000 tons of mineralized material at a grade of approximately 4 grams per ton that they expect to process in November 2015. We look forward to the results of the plan. Turning to Slide 9, we have provided a quarterly waterfall comparison of our key producing properties to the prior quarter and the same…

Thanks Bill. On to Slide 11, the September quarter was somewhat noisy, as we closed four streaming transaction, as well as the sale of the Andacollo royalty, while reporting record volume and maintain our dividend. I’ll walk you through the more salient points. First; revenue increased 7% over the year ago quarter, despite a 12% decrease in the gold price and 117% increase in gold inventory, driven by the second quarter a year ago of record volume. For the first time in Royal Gold’s history, stream revenue exceeded royalty revenue with streams contributing 51% compared with 49% from royalties. As in any business, as new production lines commence inventory builds, we held about 11,500 ounces of physical gold on our balance sheet at quarter end versus only 5,300 ounces at the end of the June quarter. In addition to the physical gold held at the end of September, we accrued 8,900 ounces of gold receivable associated with the Pueblo Viejo production for July and August. Combined with physical gold, total gold inventory was just over 20,000 ounces. As you know, we don’t record revenue until the gold have actually sold and prior to that point we hold as an asset value to cost. We currently expect to sell the 8,900 ounces related to July and August Pueblo Viejo production in the December quarter. And further we expect inventory to build significantly during the December quarter to around 25,000 ounces. As Tony discussed in his opening remarks, we sold our Andacollo royalty to Teck in the September quarter for gross proceeds of approximately $345 million. When we announced the transaction in July, we noted that the sale was taxable in the US and Chile. We incurred a one-time tax expense of $56 million or $0.86 per share related to the sale…

Thanks, Stefan. Now to wrap up on Slide 13 with a few closing thoughts. First, looking beyond the accounting and tax treatment related to the Andacollo royalty sale, we had a very solid quarter financially and operationally, and expanded our business significantly. The top line was impacted by gold inventory build, as our business expands, but that value is on the balance sheet and will be converted to cash according to our sales policy. Second; the stream at Pueblo Viejo will further enhance the quality of our portfolio beginning in the December quarter. Pueblo Viejo is one of the largest operating gold assets in the industry, with an all-in sustaining cost of less than $700 per ounce, and significant resource to reserve conversion potential. Stefan has outlined guidance regarding the expected sale – timing of our sale and we look forward to the magnitude of that contribution. Third; Mount Milligan is on target to beat its annual gold production guidance. The mine is one of the world's lowest-cost copper mines even at rates lower than designed throughput. We expect incremental production increases from the installation of an additional discharge screen. As production increases unit cost should continue to fall. Fourth; we expect to see incremental and new contributions from Golden Star and Rainy River in 2016 and 2017 as these projects now under construction commence production. And finally, we continue to seek opportunities to create value for our shareholders. But as you can see our recent investments fill the gold pipeline nicely. You can expect Royal Gold continue to be characteristically selective and opportunistic about investing our shareholders money. Operator, we will turn the call over to questions at this time.

[Operator Instructions] The first question we have comes from Garrett Nelson of BB&T Capital Markets. Please go ahead.

Hi, thank you. One of factors you cited for the quarterly drop in EBITDA was the $3.2 million of expiration expenses related to the Peak Gold JV, Stefan I think you said, you expect expiration cost to be lower this quarter and next, but then to be higher in the April to June quarter. Why is that and will that expiration expense be related to Peak Gold as well.

Garrett, thanks for the question. This is Tony. That gold joint venture relates to a project in Alaska, and so we are much more active in the summertime than we are in winter time. We’ve completed a couple of rounds of drilling during the course of this last summer and so some of those invoices are continuing to triple in here during the second fiscal quarter. And then it will pick up activity obviously as the weather abates there, but we still have some expectation doing some work through the winter time as well, but not to the [indiscernible] is what we’ve seen in this last quarter. We haven't yet defined our budget for the next summer activity, so I just want to hedge that response just a bit, so we’ll provide more guidance as we do have clarity on that budget.

Okay, and then you guided to $72.5 million of payments in the last three quarters of the fiscal year. In addition to the $60 million, you'll pay as part of the Golden Star deal could you remind us of what comprises the remaining $12.5 million and when those payments will be made?

Sure. You hit it right. The $60 million is the remaining Golden Star commitment. We also have about $7.5 million committed to the Euromax deal on Ilovitza. And then we’re budgeting that number about $5 million of additional funding to the Peak Gold joint venture throughout the fiscal year. As Tony mentioned, we haven't fully defined that budget, but that’s our expectation today.

Alright, great. Congrats on closing the four new deals.

Thanks for the questions Garrett.

Thanks Garrett.

[Operator Instructions] Next, Michael Jalonen of Bank of America.

Hi, Tony. I thought I crossed the River – Phoenix project. So now, I took a look at the press release, Rubicon put out, they talk about how much money they have to spend and my experience when company say new project implementation plans, it means a lot more money to kind of may be reinvent the mine and I don’t know how much money Rubicon will have by second quarter of next year that will cover it, but it may not be very much, so I was wondering what are the options here for them and I guess yourselves with, I guess $75 million investment, is that correct? And is there a write down coming on in this investment for Royal Gold?

First of all, we I don't have any idea exactly what the redefined implementation plan might say. We will stand by and see what that looks like, but it could be entirely, the existing mine plan could be entirely appropriate, we just don't know that at this time. So we don't expect any write down until we see some kind of catalyst for that. At the present time we expect the mine to produce as we felt it would in our due diligence activities. So that’s – you talked about the kind of capital they might need, I think that will only be known once we receive the results of the implementation plan. And we just emphasize that the service facilities are constructed and operating well and recovery is doing well on the project, the tailings is now in place. So I think the additional capital would largely be around the underground development that would be needed if there were some kind of different mine methodology that would be recommended out of this new plan. Those are the comments I would offer Mike in response to your question.

I guess – thanks for that. But I guess other than the stockpiles, you guys will receive I guess no production through till I guess whatever plan may come up with, is that correct?

That’s correct.

Okay. Well, hopefully it works so. Thanks.

Thanks for the question Mike.

Next we have John Doody with Gold Stock Analyst.

Hi, good morning or good afternoon now I guess. My question also revolves around Rubicon, and what kind of security you have as you usually take on regarding your streams?

So we do have security on the project, John, we stand behind up to $100 million, we’ve allowed to be put in front of us and then we’re next in line there, but there is only $50 million that are in front of us today. So we have a very standard approach to this project as we do another project with regard to the security we take, we thus have an inter creditor agreement with the debt that is in place. So I think we’re in a very good position on this particular asset.

So as I recall they can increase their – the debt on the site to $100 million, but it changes the terms between of the streams, is that right?

Yes it does. But I’m going to look to Bill and see if Bill can give you a little more color on that.

Yeah, our cash price goes down as they incremental add leverage above $50 million to $100 million. John, I can't remember exactly what the lowest is, but it’s 18% or 19% I think as far as – is where it could end up, if they already used the full $100 million.

So whatever the number is they're going to need for additional funds, if there are already funds needed could be handled by debt facility, certainly they wouldn't want to do it on a share sale, and would you be interested in increasing your stream the way that you did several times at Mount Milligan?

John I just would have to say, a standard response to that is we just have to look at the opportunity at the time. And see whether it made sense for us to do that. But we sure will be paying attention closely to the implementation plan.

Okay. And the last question, in the analysis that Royal did prior to doing the stream purchase, is there something that you missed that – and I'm sure you've seen reports by other analysts out in the street that indicated that there was some fallacy in that PDA and is there something that the Royal Gold analysis missed?

We ask that same question to ourselves and we’re not sure that we missed anything at this point. And we will have to just see how the more detailed engineering comes in and see if there's any material change in the geologic model, but at this point we don't – we have not identified anything in our due diligence, John, that we wish we had done differently.

Okay, great. Thank you.

Thanks for the questions.

Next we have Cosmos Chiu of CIBC.

Hi, it’s actually Kevin here. Most of my questions have been answered. I just have a quick question with regards to the debt balances. Just wondering how aggressively you guys plan to pay that down?

Stefan, can you take that.

Yeah sure, hi Kevin. So today we have – we have the $370 million convertible bonds that are due in June of 2019, and then we've also drawn $350 million on our revolver. Our policy really is to keep at least $100 million of cash on hand. We like to have that level of working capital just to be responsive to opportunities and needs of our business. So what you would expect is that as we generate cash flow and growing cash flow over the next several quarters, we would start to attack the revolver first, while maintaining that $100 million of liquidity.

Great. Okay. Thank you.

Thanks Kevin.

At this time, we have no further questions. We will go ahead and conclude today's question-and-answer session. I would now like to turn the conference back over to Mr. Tony Jensen, President and CEO for any closing remarks. Sir?

Well thank you once again for joining us today. We appreciate your interest in the company and continued support of Royal Gold. And we look forward to updating you as we progress through the quarter and certainly the next quarterly conference call. Thanks very much.

And we thank you sir and to the rest of the management team for your time also today. The conference call is now concluded. At this time you may disconnect your lines. Thank you. Take care and have a great day everyone.