Hello, and good afternoon, everyone. Welcome to today's virtual non-deal roadshow. My name is Noella Alexander- Young, Virtual Event Moderator here at Renmark Financial Communications. On behalf of our team, we'd like to thank everyone in Houston and surrounding areas for joining us today for the presentation of Royal Gold, trading on the NASDAQ under the ticker symbol RGLD. Presenting today is Alistair Baker, Senior Vice President of Investor Relations and Business Development. The presentation will last approximately 25 minutes and will be followed by a Q&A session, through which you can participate using the chat box in the top right-hand corner of your screen. With that being said, I will now hand the floor over to Alistair.
Thanks very much, Noella, and thanks again to Renmark for hosting us today. A strong gold price environment is obviously great for our business, so it's good to give you an update on Royal Gold. Noella and I were just talking a moment ago about when was the last time I spoke to the Houston audience. It was about a year ago, and in that last year, the gold price is up $600 an ounce, so a pretty incredible move in the gold price. So I will, as I have done in the past, been making forward-looking statements during these presentations. I'd just like you to understand that there are risks and uncertainties associated with these statements that could cause actual results to differ. These risks and uncertainties are all explained in our most recent Form 10-K filing with the SEC.
So I will make, I'll provide you the investment thesis for Royal Gold during this presentation and, give you an explanation of what we provide to our investors, which is precious metals exposure with consistent financial performance and a focus on per-share metrics. Presentation is divided into sections. I'll talk about our low-risk leverage to the gold price first, then talk about our long history of executing on a very consistent business strategy. Thirdly, I'll talk about our business model, and then I'll talk about our portfolio and some of the organic growth potential within the portfolio. And then finally, I'll end on valuation, which, despite the strong gold price today, I don't think fully is reflected in the marketplace. So this slide provides a snapshot of Royal Gold, and we are a high-margin business that generates consistent cash flows and precious metals.
We've been in the business since the mid-1980s, and we've been listed on the NASDAQ exchange for over 40 years, so we have a long record and lots of experience in this business. In 2023, which is our last full year financials, we had revenue of $606 million, and our Stream segment contributed about 70% of that. Our Royalty segment was about 30%. Both are essentially vehicles that provide exposure and top-line production for mining assets. In 2023, we raised our dividend again for 2024 for the twenty-third consecutive year. It was a 7% increase over the prior year. Very long track record of dividend increases within Royal Gold. We released our Q2 results for this year in early August, so just over a month ago. We had very strong financial results.
We had revenue of $174 million, $81 million of earnings. 74% of our revenue came from gold, and about 56% of that revenue was generated in Canada, the U.S., and Australia. We ended the quarter with $50 million of debt, which we repaid very quickly after we published our results, and we now have a clean balance sheet with zero debt. This next slide just shows you how we're positioned compared to our peers. We sit in a very interesting position. We're large enough to compete for the largest transactions, we have significant cash flow, and we have access to low-cost capital. Yet we're also small enough to be able to show growth from doing relatively small-sized transactions. So small transaction for Royal Gold can add meaningful value.
For some of our larger peers, it's more difficult. That's an important differentiator for us as we think about our portfolio and some of the opportunities in the marketplace we see ahead of ourselves today. As I said, I'm gonna talk about our low-risk leverage to gold first, and this slide just shows you how we are positioned relative to other gold investments. Our model provides exposure to precious metals without many of the risks that come with operating mining companies. And we provide exposure to gold and optionality at projects while reducing our downside risk through holding a diversified portfolio that does not have direct exposure to operating and capital cost risks. That's very important when you think about margins and margin erosion.
We've seen a lot of margin erosion in the mining sector over the past several years because of inflation on input costs. We are not subject to that to the same degree. Now, there are different ways you can invest in gold. You can be-- If you want to be very conservative, you can buy the physical metal, but it will cost you to store that metal. It will also never grow. So an ounce that you buy today will always be an ounce, and it will never pay you a dividend. You can be more aggressive, and you can look out for more financial leverage to the gold price and buy an operating company or an exploring company. But with those, you're also getting exposure to operating and capital cost risks.
Now, our performance historically, which you can see on the right-hand side, this is our share price performance, shows why we think we're a very good alternative for those investors who are looking for conservative exposure to gold. On the left-hand side, you can see we've got a very strong beta to the gold price of one point eight, and on the right, you can see that our share price performance has beaten the gold price, has beaten the GDX index. It's also beaten most of the large market indices that everybody follows. And we have a very long history of execution in our business, and that is around consistent and disciplined performance. And this slide is one of my favorites because it shows a twenty-year history of our performance, specifically around capital allocation and growth.
It's all driven by the idea that we want to provide accretive growth to our shareholders. You can see on this graph that since 2000, we've had very strong growth in revenue and operating cash flow. There are three aspects of this growth that are worth highlighting. The first is our business is high margin and it's very scalable. So our revenue growth has far exceeded the cost or the growth in G&A expense. Secondly is our revenue is not solely dependent on metal prices. So we've been able to add volume over this time period, which allows us to obviously generate more revenue. We're not just waiting for the gold price to go up. Thirdly, we financed most of our growth internally without a significant rise in our share count.
The GDX index has been around since 2006. We're one of the original members of the index, and we have the lowest share count in the index. We want to avoid shareholder dilution, and if we can fund our business using internal resources, then that results in per share growth for our shareholders. Slide 11 shows our liquidity, and we have to be patient in our business. We need to maintain a strong balance sheet and have liquidity on hand at all times to be able to quickly and easily finance transactions when they arise, and often transactions come up quickly with very little warning, and our approach is to fund our transactions using cash on hand, operating cash flow, and a revolving credit facility, and equity is our least preferred way of financing our growth.
The waterfall on the left shows how we allocated our capital in 2023. We used our operating cash flow to repay our debt as well as pay our dividend. On the right-hand side, you can see our total liquidity at the end of the second quarter of this year was $961 million. That includes working capital. Since then, we've repaid $50 million of our revolving credit facility, as I mentioned, which leaves $1 billion available and outstanding on the facility. That is a lot of liquidity for the marketplace we find ourselves in today, so we're very comfortable with our financial position. Now, on the point about our credit facility, this is a pictorial that shows how we've used that over the past several years. It's a $1 billion revolving credit.
It provides very cheap and flexible financing to us. There are eight top-tier banks in that facility, so it's well-diversified, and the way we use it is we will draw on the facility when we have a use or an investment we want to make, and we'll repay that drawing by allocating our cash flow from subsequent quarters to repayment of that draw. 2022 was a big year for us when it came to acquisitions. We borrowed in the third and fourth quarter of that year, and we acquired long life assets. We acquired Royalties at Cortez and at Great Bear, and what we've done since is every quarter, when we've had cash flow come in, we've repaid that revolving credit facility balance.
That shows since 2022 we now have a balance of zero, and that shows you the cash flow generation potential of our portfolio. Some would say, well, there's a cost associated with using a revolving credit facility, especially over the past couple of years when interest rates have been higher. Yes, there is. There's a short-term interest expense, but when you think about how quickly we repaid the revolving credit facility balance, and then what we bought with the proceeds, we bought multi-decade assets. So there is certainly. It's a worthy trade-off, in our view, to pay a little bit of interest up front and have exposure to multi-decade assets without diluting our shareholders. Now, return of capital is a key strategic objective for Royal Gold, and it's one of the things that makes us very unique amongst precious metals investments.
We've paid a growing and sustainable dividend since 2000. We've increased the dividend every year since, and that's despite volatility in the gold price. We've now paid out almost $1 billion of dividends since we started paying dividends, and we're the only company in the GDX that has paid an increasing dividend every year since the index was formed in 2006, and we're the only precious metals company in the S&P High Yield Dividend Aristocrats Index, so that is a very unique attribute of Royal Gold and something that often attracts a generalist audience because it shows discipline. It also shows that we think of our shareholders first. Now, when we think about some of the attributes of the business, due diligence is a core competency at Royal Gold.
We have to do good due diligence to ensure that we add the right assets to the portfolio and avoid the wrong ones, and while we're always looking at opportunities, we're generally busy all the time looking at new things. Not all opportunities make it through our process, and our process is pretty extensive, and if we see risks that we don't like, we will walk away from transactions. We don't feel any pressure to do transactions and we'll be very disciplined. If we can't find the right opportunities, then we will collect revenue from the portfolio, we'll build our balance sheet, and we'll just wait because we know that the right opportunities will eventually surface, and 2023 is a very good case in point. You can see on this slide that we didn't do anything in 2023. We deployed no capital.
We were very busy in 2022, though. And so what we did in 2023, we didn't see the right opportunities, and we repaid our debt, we rebuilt our liquidity after a very active 2022. I'll talk a little bit about ESG, because our, our business model is unique in that we don't have direct operating control over assets. But ESG has always been a very important part of the way that we think about and the way that we analyze our business. We invest in opportunities for the long term, so ensuring the sustainability of those opportunities is very important, and it's a very, it is a big focus of the due diligence when we do our initial reviews of assets.
We will build language into our transactions to ensure or to motivate operators to operate to the highest standards, and we'll always look for opportunities to help our counterparties invest in programs around the assets where we invest. I've got two ratings agency results shown on this slide, MSCI and Sustainalytics. They're both very influential in our sector. We're top rated by Sustainalytics, and we're AA rated by MSCI. We've done a lot over the past several years to improve the transparency around our practices in this area, and that would be why you've seen our scores improve over the past several years. I'm gonna talk in this next section about our business model, and the key to our business model is really optionality, and that's to reserve and resource growth without having to make further investments.
I've got two examples shown on this slide, PV and Wassa. We made those investments in twenty fifteen, and in both cases today, total reserves and resources are higher than at the time when we made those initial investments. And that's on top of the production that's allowed us to recover over 85% of our investment at PV and over 140% of our investment at Wassa. And there are growth projects underway at both assets. At PV, there's an expansion that's being completed. It's in the final stages today, and at Wassa, there is a resource that could add another 11 years or so to the mine life on top of the existing reserve life. In both of these cases, we are not required to fund any further capital or invest any further to get exposure to these upsides.
This is growth that we don't have to pay for, and this is the optionality. The exploration and production upside and optionality is very important. That's the, it's the thing that gives our shareholders that excess return over time. Now, our business model is also very efficient, and we have 30 employees. Last year, we produced over $600 million in revenue. Our market cap today is just around $9 billion. On a per employee basis, we compare well to any company in any sector. Our low employee count means that our we have very low fixed cash G&A, which obviously creates or furthers our efficiency. We had an adjusted EBITDA margin in 2023 of 79%, and our cash G&A was about 5% of our revenue.
Our G&A is low and mostly made up of fixed costs, so inflation should not be something that is a risk to our margins. You can see that more clearly on this slide, where I've got our cost structure versus the average gold producer's cost structure. If you look at the gold producers, they're exposed to inflation in their input costs. Things like labor, energy, and site consumables, the costs that they need to pay to run their operations, those are often subject to inflation and increases when commodity prices increase, whereas our G&A costs are pretty steady. We think in terms of our costs are made up mostly of things like salaries and services, office rents, things that don't move in a short-term manner.
So, our margins are much less exposed to inflation pressures simply because we're not directly exposed to operating and capital costs. I'm gonna move on in this next section, just talk a bit about our portfolio. And it is a global portfolio. It's weighted towards lower risk and mining-friendly jurisdictions, and our principal properties are shown on the right-hand side. Those are the largest portfolio assets and provide the bulk of our revenue. But if you look at where we are across the world, we're in a number of established mining camps. About 50% of our revenue comes from Nevada, British Columbia, and Western Australia, and we have significant exposure to earlier stage projects in these regions. Historical mining areas often have excellent prospectivity, which is why there are mines there in the first place.
But they also have, because they have experience and there's a mining culture, there's often a supportive regulatory environment, and there's also access to skilled people and expertise. The saying is, the best place to find a mine is near a mine. So we feel we're very well situated with respect to where we are in those mining jurisdictions. Now, our portfolio is well-diversified, so that provides stability to our financial results. Our operators are best in class. They're large and well-capitalized and experienced for the most part, and about 37 assets are producing revenue to us today. So that portfolio breadth compares well to the very largest mining companies in the business. Our underlying assets are about, they're split in about 50% precious metals, and then 50% would be gold and copper or copper mines.
Our largest country exposures are to Canada, USA, the Dominican Republic, and Chile, which are all mining-friendly jurisdictions. So this diversification of the portfolio reduces our exposure to any single asset or operator or jurisdictional risk. As we look at our portfolio and where the assets are grouped, you can see that we have coverage of all the stages of mining project development. We have 141 assets today that are at various stages of either exploration, evaluation, or development. We would expect organic growth to occur as any of these assets move through that development pipeline to production. We have several good examples in the portfolio over the past several years, but a couple that have actually started producing very recently would be King of the Hills and Bellevue in Western Australia.
They have been in the portfolio for well over a decade and have recently started contributing revenue to us. Now, to continue on the theme of organic growth, this slide shows some of the key catalysts that we see within our portfolio from various assets. We have the potential for mine life extensions or production increases at some of the assets shown in blue. In the gold color, this would be some of the more recent contributors to our portfolios. We've had a number of catalysts that have surfaced some new revenue for us recently. We've seen first gold produced in the first quarter of this year from Mara Rosa in Brazil and Côté in Ontario. The Goldr ush project at Cortez is ramping up production today from about 130,000 ounces to over 400,000 ounces in 2028.
We saw the first gold poured at the Manh Choh project in Alaska on July eighth. We're expecting to see first gold production from the Back River project next year in the second quarter, and then a little bit further down the track would be Great Bear, when we see. We hope to see first production in twenty twenty-nine. All of the growth that I just mentioned is free optionality to our shareholders. It's all fully funded. We don't need to pay for any of this growth. So obviously, organic growth is very important to our business, but adding new transactions or adding new assets is also a big focus for us, and we have a team that's looking at opportunities all the time. We've been very active adding to our portfolio over the past several years.
This slide shows a snapshot of what we've done. Over the past three years, we've deployed about $1.2 billion on seven transactions over six assets that provide gold exposure to assets that have upside potential, and they're all in safe jurisdictions, so we have funded all of these using cash on hand and our revolving credit facility, so we have not diluted our shareholders' exposure to any of these assets by issuing equity, and I'll just show you this slide here. There's a lot on this slide, and it's a bit by design because I want to make sure that you understand that there's a lot in the assets that we bought recently, and there's a bit of a summary, but I'll just walk through these briefly. At Cortez in Nevada, we own. We did own several Royalty interests.
In fact, it was the founding asset of the company, but we expanded our Royalty position in 2022. It gives us exposure to the entire Cortez complex. This is a complex in Nevada, which is, it's a world-class mining destination, mining-friendly jurisdiction. It's operated by Barrick and Newmont, so two of the biggest companies in our sector. The Goldr ush mine, as I mentioned, is ramping up today, but there's also great potential at other projects like Fourm ile and Robertson. At the Red Chris mine in northern British Columbia, Newmont is advancing the transition of this mine from an open pit operation to a large bulk tonnage underground. Currently, expected mine life is at least 36 years, according to studies that Newcrest, the previous owner, had done.
That does not include additional resources that they have been able to add to the project through exploration over the past couple of years. The Xavantina mine in Brazil, operated by Ero Copper, has had tremendous exploration success. They're now sustaining, or they're targeting sustained gold production of 60,000 ounces a year. The Côté project in Ontario, I mentioned they poured their first gold in March. They're expecting commercial production in the current quarter. The Great Bear project in Ontario, Kinross gave a presentation yesterday. They've just released the results of a preliminary economic assessment. The project is expected to produce 500,000 ounces a year in the first 8 years of operation.
There's 6.6 million ounces of resources at the project, but Kinross is continuing an exploration program, and they're expecting to add to that resource number over time as they drill deeper and along strike. Then finally, our newest acquisition was the addition of additional royalty interest at the Back River project in Nunavut. We invested in the second quarter of this year, $51 million. We bought two Royalties, which together would equate to about a 1.1% gross smelter return Royalty on this project. This is, we already owned Royalties at this project, and now we got into that position. Construction is well underway at this asset. B2Gold is the operator.
They're targeting a 15-year mine life and total production of 3.3 million ounces, starting in the second quarter of next year. Like Great Bear, this has tremendous exploration potential, and they're also working on exploration in conjunction with the construction. There's a consistent theme here. These are all consistent with our strategy to provide exposure to precious metals and production and exploration upside in safe jurisdictions. I'm gonna end with a short comment on our valuation, and we are trading at pretty attractive multiples. Our business is performing very well. We've got a very strong cash flow. We've been very disciplined with the capital allocation. We've got good organic growth. But the share price does not feel like it's responding to that performance, and it certainly does not seem to be reflecting the strong gold price outlook.
Our cash flow multiple today is the bottom half of our peer group. So I think the value of our long-lived assets and the optionality that we have within the portfolio is not being recognized in the marketplace. It also feels like the market is just generally not pricing in higher long-term gold prices, which obviously will impact our revenue and hopefully create much stronger cash flow in the future if the gold price stays strong. So with that, I will turn it back to you, Noella. Hopefully, I've given a good overview of Royal Gold and how we're positioned today. I think we do believe our record is very strong. Our business is performing well. We've got high-quality assets with lots of good organic growth potential. We're trading in an attractive valuation.
We've got great liquidity and a strong balance sheet, so we're in a very good position today, and I'll turn it back to you, Noella, now, to start the Q&A session.
Thank you very much, Alistair, for the presentation. As you said, we'll now begin the Q&A. The first question is: Kinross released the PEA for Great Bear. Was it in line with your expectations?
Yes, it was. I think the... Our expectation is that it's going to take several years for the full potential of the project to be scoped out. They're drilling from surface, and they've got, they've had very good exploration success to about 1.6 kilometers below surface, and they want to drill further deeper because it's still open at depth. And so what Kinross is doing today is they're going to do a decline into the ore body. They're going through the permitting process now to actually construct a decline into the ore body to be able to drill from underground. And so, as they do that, and as they do more drilling, they will likely be able to add to that resource number that I quoted during the presentation.
I think, in terms of the scope of what they have outlined and the production levels, it's in line with what we were expecting. We're very pleased to see that because when we made our investment, it was much, much earlier in the life of the project, and there was a lot less information to look at, so we had to make some estimates based on our own experience. We're very happy to see that they are... Those estimates are being proven out by Kinross. So we're very pleased to see that. We don't think the story is complete yet. It's going to take several years for them to scope things out fully. And as they do more engineering and they do more design, they'll be able to refine those numbers.
There was a PEA, preliminary economic assessment, so the next step will be a pre-feasibility study, then they'll do a feasibility study, and it'll take several years to get all that work done, but we're very pleased.
Thank you for that response. Your next question is: How much capital have you deployed on deals in H1, 2024?
In 2024, it would be $51 million for the Back River project, the two Royalties that I mentioned in our presentation. While that may not seem like a huge amount, deals come in waves. They come in bunches, 2022 was a very busy year for us. It was well over $900 million in transactions. Then 2023 was quiet. 2024, we're busy looking at things. We just haven't been able to announce any other transactions. So $51 million may not seem like the activity level is high, but we still see very good activity, and we're pleased to do transactions of that size because they mean something for our company, given our size.
Thank you for your insight on that. Next question is: Do you plan on providing three-year guidance like some of the Royalty companies and miners have?
This is a question that we have received a lot of, or we've spent a lot of time thinking about this and talking to some of our larger shareholders about. I think some of our peers do give longer-term guidance, but if you look at some of that longer-term guidance, given our business model, some of that longer-term guidance that has been provided by peers has not been all that accurate. So we do not. We don't control the assets that we invest in. So life of mine plans that we see are often beyond 1 or 2 years, there may be a lot of uncertainty in those plans. In some cases, we don't see life of mine plans as well, so it's very difficult for us to give the market good information about the longer-term production levels within our portfolio.
What we do is we give one-year guidance. When we make a dividend increase, and we've done that every year for 23 years, we look forward, not just one year, but we look forward several years into our portfolio to make sure that if we raise our dividend today, we'll be able to raise it again next year, and then the year after that, and the year after that. We target a sustained or a growing and sustainable dividend, and so that should give the market confidence that we have confidence within our portfolio and the performance levels of our portfolio when you see a dividend increase. And we've been very successful in increasing the dividend every year since we've been paying a dividend.
So it's not the same as providing long-term guidance, but it should give comfort to those who are concerned or have questions about the long-term viability of our portfolio.
Thank you for your insight on that. The next question is: What metals constitute the others outside of gold, silver, and copper?
We have... It's, it's mostly Royalties, where we may have a royalty on all revenue from certain assets, and so we have some nickel, we have some lead and zinc, and we have some cobalt as well. So those would be the primary pieces of that other. The other is really, it's a small number for us, and it's not something that really drives our results, but it's nice to have a little bit of diversification. But we're not out there looking to grow that other portion.
Thank you for clarifying that, Alistair. Your next question is: Will Royal Gold be affected by the Global Minimum Tax?
No, we don't think so. We're a US-domiciled company, so we already have under. When tax reform occurred in the U.S. in 2017, there was a new regime put in place called the U.S. GILTI, and that is essentially a global minimum tax for U.S. companies. We don't use, like our Canadian peers, we don't use no or low tax jurisdictions for our Streaming business. We run our Streaming business out of Switzerland, where there is a real income tax. When the IRS looks at that income, they top us up to a minimum tax within the U.S. of 13% today, going to 16%, and that's the GILTI that does that.
The Global Minimum Tax is about 15% global tax, and so we are paying, and we have paid for several years, a number that's around that level, so we don't see any impact to us. Now, what it does do is it's a positive for us because it means that our competitors will have to factor that higher tax into the economics that they offer to any situation where we're competing, so it just levels the playing field for us. So we think the Global Minimum Tax is on balance, a positive for us.
Thank you, Alistair. Next review asked: Any change to the guidance for Peñasquito, as Newmont stated, an anticipated strong H2 production rate?
We have not made any changes to our guidance. Our last guidance was, we made our last comment about guidance in the second quarter when we released our second quarter in early August. Obviously, if Newmont is able to accelerate higher gold grade material in their mine plan, then that's good. We're very happy to see that. Peñasquito is only one of 37 producing assets within our portfolio, so obviously, we're happy to see any improvement in gold production. But I wouldn't be able to tell you whether it's gonna make a meaningful difference to Royal Gold on 2024 numbers.
Thank you, Alistair, for your response. The next question is: What percentage of your revenue is coming from gold currently?
So about 75%. I think it's, it was 74% last quarter.
Thank you, Alistair. Next is: Is there a preferred business segment between Stream and Royalties?
No, we see them as essentially the same thing. I mean, it's just really the devil's in the details. That is what we get paid to do is to try and resolve those details. Royalties can often be simpler. They can often be tied to land, so you don't need to worry about counterparty credit and other issues like that, whereas Streams are contracts, and we have to negotiate in contracts in a lot more detail. But they both provide the same thing in terms of the exposure that we get to mining assets. We don't really have a preference. Where we see most of the growth is probably in Streaming, because that's a more tax-efficient way for us to deploy large amounts of capital for financing.
But we have seen, on the other hand, we've seen a lot of growth in our Royalty business as we've been able to acquire third-party royalties over the past several years. And the last handful of transactions have been mostly those, so we're indifferent. We like both.
Thank you for your response. The next question is: How has your institutional ownership changed over the past year, given the substantial increase in gold prices?
Our institutional ownership is generally pretty stable. We tend to have we've got some very large institutional holders, and they tend to... If you see any movements in those, it's often just trimming or is a rebalancing within their own portfolios. We see them either buying or selling more, but they generally hold pretty consistent positions within Royal Gold. Our register is a little bit different from our Canadian peers, simply because we're a U.S.-domiciled company, so we have a lot more passive holdings as a result of being on U.S. indices. So, about half of our institutional holdings, which would probably be in the 80%-85% range, would be institutional, but half of that would be passive, whereas our Canadian peers would be much smaller.
I don't think the higher gold price has not necessarily affected our register yet, certainly at the top end. What we are seeing is that the higher gold price and the outlook for gold appears to be pretty positive. So we're seeing a lot more generalist interest. Now, is that converting into buying of the stock? I think it's a little early to say yet. I think a lot of generalists are getting up to speed on the gold sector, and they're trying to pick the opportunities that they'd like to play. We haven't seen a lot of new large investments from institutional holders in our stock, but we are seeing incremental interest as every time we go out marketing.
Thank you, Alistair, for your response. The next question for you is: With the Royalty space being stiffer competition, has Royal Gold needed to change or update its offerings outside of financing?
Outside of financing, no. I mean, we are. I mean, that is our business is finance. But within what we offer, we're always looking to tailor our product to the needs of counterparties. Yes, it is a competitive business, so if we can tailor things more closely to what our counterparties are looking for, that could be an edge. We're always looking to do that. Terms and contracts and whether it be commercial or other terms, we will always look to try and optimize those and make sure we are offering the best things that put us in a better competitive situation.
Thank you for your insight on that, Alistair. The next question is: Is a share buyback program a topic of discussion with management and directors?
It’s something that’s always discussed. Whenever we talk about return of capital, share buyback is always something that is one of the many things you can look at. The challenge we have in our sector is we tend to trade at a premium multiple. So using cash, which is valued at 1x , to buy something like our shares, which are generally trading at 1.5x or 2x , that’s dilutive. So it’s not something the precious metal sector we’ve seen a lot of. We have the lowest share count in the GDX. We don’t feel like we need to reduce our share count because we’ve issued so many shares, we need to reduce the share count to get it back in line with others.
So it's not something that really gets a lot of serious consideration. Plus, we're not in a position today where we've got a balance sheet that's got so much cash that we don't know what to do with it. We, as I said, just repaid our debt. We'll be building cash absent any new business development opportunities, but it's gonna take some time before we feel like we have too much for the business development environment, because we are quite busy. So we hope to be able to continue deploying cash, and we've never had a problem in the past. We've always... There have been periods when we've had more cash than some shareholders would like us to have, but we've always found opportunities to redeploy that cash into opportunities.
That's really where the biggest value comes from for our shareholders, is if we could redeploy our cash into our business, that is where you get that multiple increase from 1x to 1.5x to 2x in the share price. So that is where we're focused. If we have cash, that's what we wanna do, is reinvest it in the business.
Thank you for clarifying that. Your next question is: Has there been any significant pressure on management to widen the types of metal focus to enhance optionality?
No, we're very focused on precious metals. Royal Gold, gold obviously is in our name, so that is the focus. We do see good opportunities for us in gold. And when we think about precious metals, silver, platinum, and palladium would fall into that category as well. We will look at other things if there are very good opportunities, but we're not actively looking to diversify, and we're certainly not going to get into businesses we don't understand. So, some of the more esoteric metals or rare earth commodities, things like that, we just don't have the expertise, so that's not something of focus for us.
Thank you for clarifying. Next question: From a competition standpoint, point, is it a less saturated environment to bid on a smaller Royalty companies rather than focusing on individual assets?
Well, we do look at our smaller competitors. We keep track of what people are doing and valuations. The problem we've found is that the market often pays a premium valuation or provides a premium valuation to companies. And so if we're able to acquire assets at 1x their, that asset value, then that's a better way for us to deploy our capital, rather than paying a premium on top of a premium valuation for somebody else's portfolio. It's not to say that we have done it in the past and perhaps we'll do it again, but there has to be a value component. And right now, most of our smaller peers are trading at relatively high values, so it doesn't make sense from a financial perspective. We wanna get that additional return.
We're better off looking at assets and adding those one by one to the portfolio, rather than paying a premium on top of somebody else's premium valuation.
Thank you, Alistair. Next viewer asked: Are any of your assets coming to an end of their mine life?
There is one asset that we expect will stop producing soon, that's Dolores in Mexico. It's operated by Pan American Silver. It's a heap leach asset, so as they rinse the leach pads and they recover the final amounts of metal, that revenue will stop. But that's really the only one that is kind of in its very final stages.
Thank you, Alistair. A viewer said, "I noticed on the company website that there are four offices. Is that necessary? What is each of their purposes?
Sorry, can you repeat the four?
I'll repeat. I noticed on the company website that there are four offices. Is that necessary? What is each of their purposes?
Okay, so we do have four offices. Yeah, for a thirty-person company, yes, you would think, "Well, that's, that's very odd. It seems like you're, you're spread out for no particular reason." It's so Royal Gold started as a Denver-based company, with one office, and we were all, everybody was in Denver. But as our business has grown, we have added the office in Switzerland because of streaming. That's where we run our Streaming business, so we need to have a physical presence in Switzerland, and we have a handful of staff there. That's a very core part of our business. I'm based in the Toronto office.
The reason I'm here is because this is where all of the analysts who cover us are in Toronto, and there's also a very big mining community in Toronto, so this is a very good place to have an office. We also have an office in Vancouver for the same reason. Vancouver is a good location to be in because there's a lot of emerging opportunity in Vancouver. A lot of smaller junior companies have their offices in Vancouver. So we think that we're very well covered by having those offices. We cover many time zones, we've got good relationships in each of those places, and that from a business development perspective is helpful to us.
So it wasn't something I don't think several years ago was necessarily a strategic thrust, but the way that our business has evolved, we now have these offices, and we're quite pleased. And we think it's a competitive advantage because we don't need to travel. I don't need to travel to Vancouver because we have somebody there. Likewise, somebody from Denver doesn't need to go to Europe because we have somebody in Switzerland. So we can cover off relationships very efficiently by having those offices in different places.
Thank you for clarifying that, Alistair. Your next question is: Do you think that your Stream and Royalty mix is ideally situated?
Yeah, it is. You know, is there an ideal balance for it? Not necessarily. As I said before, Streams and Royalties are basically the same. They provide us economically the same thing. So, we're happy with the way things are. I mean, we don't target doing transactions in Streaming or in Royalties because we think the balance needs to shift. We'll take opportunities in either, and the balance will be what it is. There are pros to both, so we're quite happy with Royalties and Streams, but we don't target a specific mix.
Thank you, Alistair. We're coming up to your last two questions. The first one is: Where do you feel the bulk of new Stream/Royalty deals will be coming from, junior, intermediate, or senior producers?
What we're seeing today is that most of the opportunities are the smaller companies, so the junior to intermediate size of companies. Those are the companies that don't have... They may not have enough cash flow. They may have a very good project, but they may not have enough cash flow to fund it themselves. So that's where we're seeing most of the opportunity today. Larger companies have, generally, with metal prices where they are today, they have lots of cash flow. Balance sheets are generally in good shape, so companies are able to self-fund. The ones who are at the smaller end of the spectrum, they still have trouble accessing the equity markets and the debt markets, so we are a very good source of financing for them.
That is, most of what we're looking at today would be the smaller end of the spectrum.
Thank you, Alistair. And your last question is: What do you think needs to happen for your market cap to exceed $10 billion?
I think obviously, the share price needs to go up, but I think we feel very good that we are positioned well for when people start paying attention to gold again, and when I say people, I mean the market generally. You know, our business is doing very well, and our share price has not responded to the gold price. I think right now the market looks like many in the market are more focused on AI and tech and things like that, and the gold sector and the commodity sector generally has just been neglected. There will be something that will be a catalyst for change.
So, whether the bloom comes off the rose on the tech side and people start looking elsewhere, or maybe if people start looking at our sector and say, "You know, if the gold price stays at $2,500 an ounce or if it goes higher from here, there's tremendous value in this sector. There's tremendous value in Royal Gold." So I think there will be a tipping point at some point. I think maybe we just need to get past the first, you know, rate cut. Maybe that'll be very soon. Maybe we'll start seeing that interest come back to our sector once there's a bit more clarity on what's happening with the Fed. But all the other macro reasons for the gold price to do well are still there.
So you still have fiscal imbalances, you know, geopolitical risk. You've got central bank buying. You've got strong retail buying in Asia. Things like that are, we think, good tailwinds for the gold price, and they're probably all there for the longer term as well. So we're feeling very good about the gold price. I think it's just a question of when the market starts to think about opportunities to invest in gold. And there aren't very many opportunities. So if you're a U.S. investor and you're benchmarked against the U.S. indices, you have one Royalty and Streaming company of any size to choose from, and that's Royal Gold.
So if, even if there's a small fraction of the total dollars in the U.S. that starts to look at the gold sector, there aren't very many choices, and we will do very well if that flow of funds turns our way.
Excellent. Thank you very much, Alistair, for your insight today, and thank you to everyone who submitted questions. If you did not get a chance to submit your question, you can reach out to the appropriate account manager here at Renmark. That concludes our presentation for today, but before we go, I will turn back the floor to you, Alistair, for final remarks.
Thanks very much, everybody. I appreciate it. There were some good questions there. So if I didn't answer anybody's question to their satisfaction, just let Renmark know. I'd be happy to get in touch with you directly and have a conversation and clarify. So until we speak again, take care, and look forward to our next opportunity. Thanks very much.
Thank you, Alistair. Once again, this was Royal Gold, trading on the Nasdaq under the ticker symbol RGLD. Thank you to everyone in Houston and surrounding areas for joining us today. The playback for this virtual non-deal roadshow will be available on our website, 24 to 48 hours after this presentation under the VNDR Library tab. Please stay tuned for other presentations in your area, and see you next time.