Hello all, and thank you for joining us on today's Royal Gold 2025 Second Quarter Conference Call. My name is Drew, and I'll be the operator today. [Operator Instructions] With that, it's my pleasure to hand over to Alistair Baker, Senior Vice President, Investor Relations and Business Development, to begin. Please go ahead when you're ready.

Thank you, operator. Good morning, and welcome to our discussion of Royal Gold's Second Quarter 2025 results. This event is being webcast live, and a replay of this call will be available on our website. Speaking on the call today are Bill Heissenbuttel, President and CEO; Paul Libner, Senior Vice President and CFO; and Martin Raffield, Senior Vice President of Operations. Other members of the management team are also available for questions. During today's call, we will make forward-looking statements, including statements about our projections and expectations for the future. These statements are subject to risks and uncertainties that could cause actual results to differ materially from these statements. These risks and uncertainties are discussed in yesterday's press release and our filings with the SEC. We will also refer to certain non-GAAP financial measures, including adjusted net income, adjusted net income per share, adjusted EBITDA and cash G&A. Reconciliations of these measures to the most directly comparable GAAP measures are available in yesterday's press release, which can be found on our website. Bill will start with an overview of the quarter and recent events. Martin will give some commentary on the portfolio, and Paul will provide a financial update. After the formal remarks, we'll open the lines for a Q&A session. I will now turn the call over to Bill.

Good morning, and thank you for joining the call. I'll begin on Slide 5. Our second quarter was another excellent quarter for Royal Gold with new records for revenue, earnings and cash flow. Earnings for the quarter were $132 million or $2.01 per share. We recognized a couple of discrete tax items that Paul will describe in more detail. And after adjusting for these items, earnings were a strong $119 million or $1.81 per share. Gold remained the largest contributor to revenue for the quarter at about 78% of total and the strong gold price, combined with our low and stable cash G&A, increased our adjusted EBITDA margin to 84% for the quarter. We were debt-free at the end of the quarter, and we paid our quarterly dividend of $0.45 per share. We also achieved the full offset of the Pueblo Viejo advanced stream deposit during the quarter despite the recent silver recovery shortfalls. We made our investment in Pueblo Viejo in 2015, and we expect to see further revenue into the mid-2040s as Barrick continues to work on an extension to the mine life. On the strategic front, we have taken steps to position Royal Gold as a premier growth company with the Sandstorm Gold and Horizon Copper acquisitions. These transactions will significantly add to our scale, growth and diversification, and the portfolios are uniquely complementary when you consider how our producing heavy portfolio fits with the development-heavy Sandstorm and Horizon portfolios. We also think there will be additional benefits, including sector-leading asset diversification with no asset accounting for more than about 12% of NAV, simplification of the Sandstorm and Horizon relationship and elimination of a complex intercompany structure. Additional appeal to investors as a larger and more diversified company with the potential for increased investment from passive funds…

Thanks, Bill. Turning to Slide 6. I'll give some comments on second quarter revenue. Overall revenue was a record $210 million with volume of 63,900 GEOs. Royalty revenue was up by about 50% from the prior year quarter to $77 million. We saw another strong quarter from Peñasquito and Manh Choh with additional strong contributions from Bellevue and Wharf. Revenue from our stream segment was $133 million, up by about 8% from last year, with increased sales from Mount Milligan, Pueblo Viejo and Khoemacau, partially offset by lower sales from Xavantina, Wassa and Rainy River. I'll turn to Slide 7 and give some comments on notable developments within the portfolio. At Mount Milligan, Centerra reported yesterday that they had encountered lower-than-expected gold grades from areas they were mining in the second quarter. They have started an infill and grade control program to address this issue and reduce their 2025 gold production guidance to 145,000 to 165,000 ounces. There is no change to the previous copper production guidance of 50 million to 60 million pounds. Centerra expects production of both metals to be weighted towards the second half of the year. Centerra also reported that the pre- feasibility study for the Mine Life Extension Project remains on track for completion in the third quarter. We expect this will be a positive catalyst for Royal Gold and look forward to seeing the results. At Andacollo, Teck reported that the SAG mill successfully restarted in late June and production has now resumed to full rates after a mechanical issue caused a maintenance shutdown of the SAG mill in early June. Teck also reported that 2025 copper production guidance is unchanged from the previous range of 45,000 to 55,000 tonnes. Teck does not provide gold production guidance, but we expect the gold deliveries in…

Thanks, Martin. I will turn to Slide 8 and give an overview of the financial results for the quarter. For this discussion, I'll be comparing the quarter ended June 30, 2025, to the prior year quarter. Revenue for the quarter was up strongly by 20% to $210 million, which was another record for the company. Metal prices were a primary driver for the revenue increase with gold up 40%, silver up 17% and copper down slightly by 2% over the prior year. Gold remains our dominant revenue driver, making up 78% of our total revenue for the quarter, followed by silver at 11% and copper at 7%. Royal Gold has the highest gold revenue percentage when compared to our major peers in the royalty and streaming sector. Turning to Slide 9, I'll provide a bit more detail on certain financial line items for the quarter. G&A expense was $10.3 million and was in line with the prior year. Excluding noncash stock compensation expense, our cash G&A was less than 4% for the quarter. Our DD&A expense decreased to $31 million from $36 million in the prior year. The lower overall depletion expense was primarily due to lower depletion rates in our stream segment as well as lower gold sales from Xavantina during the quarter. These decreases were partially offset by higher production at Voisey's Bay and Manh Choh compared to the prior year. On a unit basis, this expense was $487 per GEO for the quarter compared to $480 per GEO in the prior year. Tax expense for the quarter was $10.5 million compared to $19 million in the prior year. The lower income tax expense in the current period included 2 discrete tax benefits. First, a $9 million benefit related to a withholding tax refund on a foreign royalty;…

Thanks, Paul. I want to finish with a brief update on the Sandstorm and Horizon transactions. Since the announcement on July 7, we have had constructive engagement with many investors and shareholders, and we believe there is widespread support for the transactions. Investors appreciate the logic of combining complementary portfolios to create a larger portfolio with growth, diversification and scale. And we believe that Royal Gold will have the size to attract more generalist investors who like the reduced single asset risk. We are feeling confident in our ability to close on the time line we put forward. We have received approval under the Canadian Competition Act and reviews under the Investment Canada Act and South Africa Competition Act are underway. We expect to file the preliminary proxy with the SEC shortly, and we remain confident that the required approvals will be obtained in order to close in the fourth quarter. Operator, that concludes our prepared remarks. I'll now open the line for questions.

[Operator Instructions] Our first question today comes from Fahad Tariq from Jefferies.

Could you maybe talk through the deleveraging goal pro forma after these transactions are complete? I think the revolver will be somewhere around $1.2 billion. Maybe just talk through how you're thinking about deleveraging going forward.

Yes. Thanks for the question. I think if you followed our history, you've seen us take advances under the revolving credit and then pay that off over time. That would still be the plan. I think Paul mentioned that if we didn't do anything on the business development front, that would -- we would expect it to take a couple of years. But we have to balance that with other investment opportunities that might come up. So the plan, as it always is, is to take excess cash flow each quarter and pay down the revolver. And at some point, we might get it back to 0.

Our next question comes from Lawson Winder from Bank of America.

Could I ask about Mount Milligan and their reduction in their 2025 gold production guidance? So Royal Gold has reiterated their volume production guidance range or volume sales guidance range for 2025 despite that. And so that's also in light of Andacollo underperforming and then Xavantina also underperforming year-to-date. Could you maybe walk us through what some of the assets are in the portfolio that are offsetting what you're seeing in weakness in those sort of key assets, allowing you to remain comfortable with the 2025 guidance range?

Yes. Lawson, thanks for the question. I think what I might do is turn it over to Martin and let him walk you through how we come up with our guidance ranges and maybe that will help answer the question. So over to you, Martin.

Yes. Thanks, Lawson. So we don't disclose our guidance based on individual operations. So I'm not really able to give much specific comment in terms of your question about which ones are going to be offsetting this. What I will say is that at the start of each year, we do carry out a rigorous risk-adjusted budgeting and guidance preparation process. We don't take the guidance ranges supplied by the operators and just use those and come up with our guidance. We receive monthly budget data from the stream partners. We forecast each asset based on historical performance and based on our specific knowledge of that operation. We build in timing adjustments between production deliveries and sales. And in the case of concentrate producing operations like Milligan and Andacollo, those can be up to 5 to 6 months where you include port transport, ocean shipping and smelting, et cetera. And that's a pretty inexact process, especially in the ocean shipping side because -- and you'll often see in our press releases that we referenced early or late deliveries compared to our expectation during the quarter. So some variability in there. For the royalty assets, we generally have lower information rights. And on those, we tend to rely on historic performance and public disclosures for our risk adjustment process. So as I said at the beginning, we don't just take the numbers provided by the operations. We put a lot of risk adjustment into those. Those come out with the numbers. And given that, we are comfortable with maintaining our 2025 guidance range at this stage in the year, even though those have been offset somewhat by Milligan underperformance in Xavantina guidance reduction.

Okay. That's great. That's a very clear explanation. Can I ask about Kansanshi as well? I'm sure you're very pleased to have gotten that asset. I mean it's a fabulous asset. So congratulations on achieving this deal. What I wanted to ask about, though, with respect to this deal is exposure to Africa. And Zambia relative to other African jurisdictions has proven to be one of the better quality jurisdictions in Africa. But without question, there's a lot of political volatility in the country. And you do have Khoemacau and Botswana, there's been a recent political change there with the new President. Where you are today, like assuming Kansanshi is in the portfolio, are you at a point now where you're maxed out on African exposure? Or are you still comfortable adding additional exposure in Africa?

Yes. Lawson, it's not so much a continent approach that we would take. We're very comfortable in the 3 countries where we have interest. So it's more of a country by country. And I certainly wouldn't want to sit here today and rule out further investments in a country where we have found that -- our investments have done well. I think Botswana, in particular, stands out a little bit. I wouldn't want to take Africa off the table because we have other investments. If we're comfortable with the country, we would consider additional investments. And I have to tell you, there's political uncertainty all over the world and even in countries that we tend to think of as stable. So -- and that's one of the reasons we really like the Sandstorm and Horizon transactions. The diversification in the portfolio, I think, is really helpful for us.

Okay. Well said on global political risk. If I could just ask one more question on capital allocation. the shares without question, have underperformed since you announced the Sandstorm transaction. I think there are some folks wondering whether or not there's any consideration for Royal Gold to implement the buyback as a result and fully acknowledge that you've been reluctant to do that historically, but just in light of the current situation, is there any consideration to that?

At this point, I don't think so. I think what we're going to do with excess cash flow at this point is pay down the debt that we are going to take on with these transactions. To the extent we can find business development opportunities, we'll look at those as well. But debt repayment, I think, is going to be a key focus before we ever get to consideration of a buyback.

[Operator Instructions] Our next question comes from Josh Wolfson from RBC.

Just a couple of quick ones. On the Sandstorm transaction, is there any more information you can provide on the timing of the circular filing and when the shareholder votes are scheduled?

Josh, I really can't. I'm sort of focused on our side of things, and I don't honestly have the timetable straight in my head, but we're going to shortly file the preliminary proxy with the SEC. And I think once we know whether we're going to get comments, whether we have to respond to comments, the timing of it then will play out once we have that. So there's nothing we see that makes us think the fourth quarter isn't a good target, but I don't think I can provide much more in the way of a detailed timetable at this point.

Okay. And then with this transaction, are there going to be any additional disclosures or documentation, I guess, specifically 43-101? I know historically, sometimes these transactions would require some disclosures on key assets either for the target companies or yourselves.

Josh, actually, let me -- Martin, do you have a view on what we might see in terms of 43-101 or similar technical reports?

Josh, are you asking whether we would be putting out 43-101s? Or are you talking about operator 43-101s that we expect?

It would be your filing of the 43-101s for your underlying stream-related operations or Sandstorm or Horizon filing any of these documents, if you're aware of that.

Yes. We're not planning on filing any documents for the -- or any 43-101 documents for these properties at the moment, no.

Okay. And then last question, just on -- related to some of the accounting that was commented on with the Mount Milligan ounces in the third or fourth quarter. Could you remind us what the -- I guess, what the booked value was of those ounces?

Josh, this is Paul. Thanks for the question.

Go ahead, Paul.

Sorry. can you hear me okay?

Yes, loud and clear.

Okay. Sorry. If you recall in the transaction back in 2024, we did receive some cash and also that free cash flow interest and then also the deferred gold ounces. The only thing that was booked at the time of the transaction was as part of this deferred support liability that we have on the balance sheet was that cash, the $25 million. So we have no basis in those ounces yet. So once we receive those ounces, again, that deferred liability will go up by the fair market value of those ounces received, and then we'll subsequently sell those ounces in the market within a few days afterwards of receipt. And then that deferred liability will go up by that -- the fair market value of those ounces received.

Okay. So just to clarify, your comments on the accounting impact is the difference of when you book that income in the third quarter versus the sale price in the fourth quarter, not related to what it stands on the book today. Okay.

Correct. Yes, more of a mark-to-market. I just wanted to make you aware of it. But more importantly, just as I said also in those prepared remarks is that, again, those ounces will not be part of our -- or they're not part of our 2025 sales guidance, and they're not going to be reflected in our GEO calculations.

With that, we have no further questions at this time. So I'll hand back over to Bill Heissenbuttel for some closing comments.

Well, thank you for taking the time to join us today. We certainly appreciate your interest. We look forward to updating you on our progress during our next quarterly call. Take care.

That concludes today's call. You may now disconnect your lines.