Good afternoon and welcome to Royal Gold's Fiscal 2017 First Quarter Earnings Call. All participants will be in a 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 Karli Anderson, Vice President of Investor Relations. Please go ahead.

Thank you, Laura. Good morning and welcome to our discussion of Royal Gold's first quarter fiscal 2017 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; and Bruce Kirchhoff, Vice President, General Counsel and Secretary. Tony will open with an overview of the quarter and an operational update, followed by Stefan with a brief financial update. After management completes their opening 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 and cautionary statement in today's press release and slide presentation and is presented in greater detail on our filings with the SEC. Now, I will turn the call over to Tony.

Good morning and thank you for joining the call. Today, we’re pleased to report record financial performance. As transactions we completed over the last several quarters are now contributing to our quarterly results. To start the call I want to discuss two notable developments in the context of Royal Gold’s vision and strategy on Slide 4. First, I want to congratulate Centerra Gold for its successful acquisition of Thompson Creek Metals. Upon closing the Centerra Thompson Creek deal we amended our gold stream to gold copper stream. While we are generally non-interested in selling any of our gold interests. We knew this amendment was key to a successful transaction. One of our strategic goals is to invest at the troughs and copper was trading at near 20-year lows relative to gold at the time, which certainly made that decision easier. Long-term our revenue profile is still very much gold focused. Protecting our investment in Mount Milligan was our highest priority in 2016. We are happy to have closed this chapter successfully. The second development is our recent acquisition of a 3.75% royalty at Cortez Crossroads. This acquisition is consistent with our strategic goal to reinvest in long-lived properties. Cortez has been a company builder for Royal Gold. The mine is in its fifth decade of continuous operation and has contributed revenue to Royal Gold for the last 25 years. I'll discuss how this new acquisition complements our Cortez portfolio in a moment. Now turning to our quarterly results on Slide 5. We set records for revenue and EBITDA and essentially matched our prior volume record in the first fiscal quarter. Performance was driven by strong production and Pueblo Viejo, Mount Milligan and Andacollo as well as improved gold price which was up 19% over the prior year quarter. We completed…

Thank you, Tony. On Slide 11, I’ll summarize a few of our financial highlights. As Tony mentioned earlier, the September quarter was an excellent one for Royal Gold. First quarter revenue of a $118 million was up 59% from last year and set a new record. Our strong revenue was driven by over 88,000 GEOs, an increase of 35% over the previous year together with a robust price improvement that saw gold price increase to $1,335 per ounce an increase of over 19%. Our effective tax rate was 21% for the quarter generally in line with our tax rate for the most recent June quarter of 22%. DD&A was approximately $455 per GEO for the quarter on the low end of our guidance of DD&A per ounce between $450 and $500 for fiscal 2017. We ended the quarter with $470 million in total liquidity. This includes $165 million of working capital plus $305 million of revolver capacity. In addition to our $470 million of liquidity, we also had a significant amount of gold and silver stream inventory on the balance sheet that’s recorded a cost. The market value of that inventory is about $40 million. We advanced $20 million to Golden Star in early October and we are preparing to fund $75 million to New Gold for Rainy River in the next couple of weeks. That leaves just one remaining near-term commitment, which is the last $10 million advance for Wassa and Prestea, which we plan to fund in January 2017. We have now funded $1.1 billion in net investments over the last six quarters and during that period we only increased debt by $345 million without issuing equity. I'll now turn the call back over to Tony.

Thanks, Stefan. Turning to Slide 12, in closing, it was a solid and straightforward quarter. We're obviously pleased with the contributions our recent acquisitions have made to our record financial results. Our vision and strategy are unchanged. We will remain gold focus and opportunistic. We’ll look to deploy capital in long lived high quality assets. Our latest investment at Crossroads ticks those boxes. It's a Gold royalty and historical camp known for its longevity and was purchased at the right price. We are focused externally again and continue to look for opportunities that provide our shareholders exposure to quality assets with upside potential. Operator that concludes our prepared remarks. We’d be happy to entertain some questions.

Thank you. [Operator Instructions] And our first question will come from Josh Wolfson of Dundee Capital Markets.

Thanks. Tony, first question for you. When you look at the balance sheet which more or less is projected to improve substantially following the final New Gold payments and you look at that as you mentioned no material capital requirements. How are you looking to deploy excess cash and then I guess what sort of liquidity do you see being available for deals and in the event that the market softens and what point do you start to consider looking at increasing the dividend?

Yes, Josh. Thanks very much for the multiple questions. I hope that I’ll able to catch them all, but let me start with our current liquidity at about $470 million and we very much are looking for adding new pieces of business. So, the first after we get them funding our current activities that we committed to that Wassa and Prestea, and Rainy River. We'll turn our focus then to adding new pieces of business as well as paying down our credit facility. We have $345 million drawn on our credit facilities so there's plenty of opportunity for us to maintain a very strong balance sheet and continue to grow the Company, but that's where we look to. As you are likely aware, we usually look at our dividend policy in our November meeting of each year which is just coming up in a couple of weeks. And we've been able to pay a dividend ever since 2000 and grow at over every year since 2001 and we take a lot of pride in that. So I can't run that, but I can tell you that it is part of our strategic elements that we discussed with the board to pay a growing and sustainable dividend. So that's about all, but further I could comment on that until the Board has chance to consider a dividend.

Okay. And then I had another question for Stefan if I can sort of squeeze to in there. When it comes to New Gold projected receivables are you expecting to have any sort of delayed between production at the site level and revenues that you received?

Yes, Josh thanks for the question. As I think about New Gold, we will start to receive our first revenue from New Gold sort of mid late next year and I don't believe there will be any delay in our revenue recognition like there is on Mount Milligan. Mount Milligan shipping a concentrate I'm looking at Tony and Bill to confirm that New Gold can produce doré that should be a much faster clearing time for us, but we will develop more of a commentary on that as we get closer to production.

Yes. If you don’t mind I just add another comment there. I think we are on a monthly payment schedule from Rainy River, so our other projects – some of our other projects like Pueblo Viejo on a quarterly basis. So we should see more of that more regularly.

Okay. And then last one is in terms of the working capital outflows this quarter and last quarter. What was the source of that and I guess are you expecting a reversal in the coming quarters?

Sure. So you're looking at our cash flow statement we had a couple of things going on this quarter. As you know we built inventory and we also had an increase in royalty revenue. In our royalty revenue we collect those receipts after the quarter, so both royalty receivables and inventory which was about $9 million of working capital. And then we also had some tax payments in the period that amounted to about $10 million that also impacted that working capital. I don't see those going on in the future. I think we'll get to a point where we level out that inventory build. And particularly in the last quarter we saw higher inventory from Mount Milligan which were timing, but also continued growth in Pueblo Viejo steam that caused that inventory build. So I don't expect those same items to happen in the future.

Just to follow-on on that as well. Stefan mentioned in his prepared remarks that the inventory know in our international business is growing at about $40 million. Of course, that's not recognized, that's recognized the cost on the balance sheet so you don't see the true value of that in the current assets.

Got it. Okay. Thank you very much for answering these questions.

Thanks Josh. End of Q&A

[Operator Instructions]

Well, operator I’ll take that as a sign that it was a very clean and straightforward quarter and people are understanding our message clearly and I just like to thank everybody for joining us today. We very much are excited about our record performance and we look forward to reporting our next quarter to you in due course. Thank you very much.

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