Hello and good morning, ladies and gentlemen. 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 want to thank everyone in Chicago 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, Vice President of Investor Relations and Business Development. The presentation will last approximately 25 minutes and will be followed by a Q&A session for which you can participate using the chat box on the top right-hand corner of your screen. That being said, I will now hand the floor over to Alistair.
Thanks very much, Noella, and thanks very much for the opportunity to present to you today. Certainly is an interesting time for gold, and it's great to talk to you about Royal Gold with this strong backdrop of a very interesting gold price. During this presentation, I will be making forward-looking statements. There are risks and uncertainties that could cause actual results to differ materially from these statements. These risks and uncertainties are all discussed in our most recent Form 10-K, filed with the SEC. During this presentation, I'll give you an overview of the investment thesis for Royal Gold, which is what we provide to investors.
Simply put, it's precious metals exposure with consistent financial performance and a focus on per-share metrics. In this presentation, I hope to explain this by walking through a few things. First, I'll talk about our low-risk leverage to the gold price.
Secondly, our long history of executing successfully on a pretty simple business strategy. Thirdly, I'll talk about our business model and some of the unique features of that model. Then I'll talk about the organic growth within our portfolio, which is very well diversified. And then finally, I'll just make a few comments on valuation. So slide four here just shows Royal Gold at a high level. We are a high-margin business that generates consistent cash flows from precious metals. We've been in the business since the mid-1980s, and we've been on the NASDAQ for over 40 years, so a very long history of our business. In 2023, we produced revenue from two sources, two parts of our business. Our stream segment was about 69% of revenue, and our royalty segment was about 31%.
Royalties tend to be higher margin, but they both essentially provide the same thing, which is top-line exposure to mining assets. Last year, we paid $325 million in debt, and we increased our dividends in November of 2023 by 7%. That's a 23rd consecutive annual increase of our dividends. We released our results on February 14th, so just about a month ago, and our fourth quarter of 2023 was very good. We had $101 million of operating cash flow, $63 million of earnings, and we maintained our 79% EBITDA margin. In terms of revenue and where it came from, about 80% came from gold, 35% came from Canada, and 20% from the USA.
We also announced on the same day that we issued our earnings, we announced a new transaction on our largest stream asset, which is Mount Milligan in British Columbia.
We announced a new agreement that layers on top of the existing stream agreement, which remains intact. That new agreement allows us to provide cost support in the future to the Mount Milligan operation, in turn for receiving some near-term cash and gold consideration from the operator. What this does is it incentivizes the operator, Centerra Gold, to continue investing in exploration and other projects at the mine, with the idea that they will hopefully be able to extend the mine life. On the announcement of this transaction, the mine life was extended by two years, but there's a PEA, or Preliminary Economic Assessment, underway right now by Centerra to look at additional exploration as well as other optimization within the mine to try and extend the mine life even further.
With this transaction, we remain value neutral to about 2035, and any additional mine life that occurs should add value to our shareholders. So this is a good example of a win-win transaction that we can negotiate with an existing counterparty that allows us to support them in their desire to extend the mine life and thereby add value to Royal Gold's shareholders. Now, slide five here shows where we stand relative to our peers, and we sit in a very interesting position today. We are large enough to compete for the largest transactions in our sector. We have significant operating cash flow. We have access to low-cost capital. Yet, we're also small enough on a market cap basis to be able to show growth.
A small transaction within our sector can show growth to Royal Gold, whereas to our larger competitors, it may not be able to move the needle for them. I want you to keep that in mind as I talk about our portfolio and some of the opportunities that we see from within the portfolio as well as outside of the portfolio today. Now, I'll talk in this next section about our low-risk leverage to gold. This slide shows how we are positioned relative to other investments you can make in gold. Our model provides exposure to precious metals without many of the risks that come with investing in operating mining companies.
We provide exposure to gold and optionality of the mining assets that we invest in, and we also provide reduced downside risk by having a diversified portfolio that does not have direct exposure to operating capital costs. This is a very important feature when you think about inflation and margin erosion, which is something that our operating peers have seen a lot of over the past several years. There are other ways you can invest in gold. You can be very conservative, and you can buy physical gold. But an ounce of gold will always be an ounce. It will never provide you upside, and it will never pay a dividend. You can be more aggressive, and you can buy exploration companies or producing mining companies.
But with those, you're also getting exposure to commodity or you're getting exposure to operating and cost risks, which is something that you don't see in our portfolio. Slide eight here shows our historic performance and why we think we're a good alternative for those investors who are looking for conservative exposure to gold. On the left-hand side, you can see our beta to the gold price of almost 1.9. So that's excellent leverage to the commodity that we're tied to. On the right-hand side, you can see our share price performance. And this goes back to 2006 when the GDX index was formed. This is an important benchmark for us because the GDX does incorporate all of our peers in the precious metals sector.
You can see that we've outperformed the GDX and the gold price since 2006, and we've outperformed most of the general market indices as well, until very recently when you've seen some of the mega-caps in the technology sector do very well, dragging the S&P 500 to new highs. But excluding this relatively short period of recent history, we've performed extremely well relative to the general market indices as well. Now, I'll talk about our history of execution in this next section. We do have a long record of very consistent and disciplined performance. This slide shows our 20+ year history of capital allocation and growth, which is really driven by the core objective of providing accretive growth to our shareholders. Since 2000, you can see that our revenue and our operating cash flow have grown significantly.
But there are three aspects of this growth that I just want to highlight. The first is that our business is high-margin, and it's scalable. So our revenue growth far exceeds any growth in G&A expense, the cost to run this business. The second is our revenue growth is not dependent upon metal prices alone. The gold price has risen over this time period, but we have been able to add volume and add assets to our portfolio, and that has grown our revenue more than just riding on the higher gold price. And then thirdly, we have financed our growth internally without increasing our share count significantly. We're one of the original founding members of the GDX index, and we have the lowest share count in that index. We want to avoid shareholder dilution.
If we can fund our business and finance growth within our business by using internal resources, then that results in per-share growth that our shareholders can enjoy. Slide 11 here shows a snapshot of our liquidity. We have to be patient in our business. We need to maintain a strong balance sheet and have liquidity on hand to be able to act quickly on opportunities that we see coming across our desks. Our approach to funding growth, as I've said, is to use cash on hand and operating cash flow, so internal cash resources. We also have a revolving credit facility that we will use to help bridge the gap when we need additional financing. Equity is our least preferred method of financing our growth.
The waterfall on the left-hand side of this slide shows how we allocated our cash flow in 2023.
We used our operating cash flow to repay debt and to continue to pay our dividends. Our revolving credit facility is a billion-dollar facility in total. That does provide us cheap and flexible financing. At the end of December, we had $325 million or sorry $250 million outstanding on the revolving credit facility, and we have been paying that balance down as cash flow from the portfolio allows. We drew a lot on the facility in 2022 to complete a couple of transactions that I'll talk to in a few minutes. We've repaid in 2023, we've repaid $325 million of the drawings that we made in 2022. That really shows you the cash flow potential generation of our portfolio.
At the end of December, we had a total of liquidity of about $845 million, which included our undrawn revolver balance as well as $95 million of working capital.
So that's lots of liquidity for the market that we find ourselves in today. Now, return of capital is a key strategic objective for us at Royal Gold, and one of the attributes that makes us unique in the precious metals sector. We have paid a growing and sustainable dividend since 2000, and we've increased the dividend every year despite volatility in the gold price. In total, we've paid out over $900 million of dividends to shareholders. And we're the only company in the GDX index that's paid an increasing dividend every year since the index was formed in 2006. And we are the only precious metals company in the S&P High Yield Dividend Aristocrats Index. So if you're looking for one differentiator of Royal Gold against all other precious metals equities, the dividend is one of them.
Now, there are other differentiators too, but the dividend is one that's very important. When you look at the S&P High Yield Dividend Aristocrats Index, it's made up of 130 or so companies that are household names, so Nike, Coca-Cola, Pepsi. We stand shoulder to shoulder with those companies when it comes to our dividend track record. Now, another differentiating factor for Royal Gold against our peers is due diligence. We view this as a core competency of our company. Good due diligence is very important to make sure that we add the right assets to our portfolio and avoid the wrong assets. While we're always busy looking at new opportunities, not all opportunities make it through our due diligence process. Our process is pretty extensive, and we're very disciplined in the way that we deploy our capital.
So if we see risks at an asset, that are technical or environmental or social or what have you, if we see risks that we don't think can be mitigated effectively, then we will walk away from transactions. And we have done that many times. We don't feel pressured to do transactions. We're not compensated by doing a certain number of transactions in a certain period of time. So if we can't find the right opportunities, we're quite happy to collect our revenue, build our balance sheet, and wait for the right opportunities to present themselves. And 2023 is a good case in point. We were very busy in 2022, added a lot to the portfolio. But in 2023, we didn't see the right opportunities.
So we used the opportunity of our strong cash flow to repay debt, rebuild our balance sheet, and build up the liquidity that we have today. We're very well-positioned for anything that may come up tomorrow. Now, I'll talk about ESG very briefly. Our business model does not provide us direct operating control of the assets that we invest in, but ESG has always been a very important part of our business. We invest for the long term, so ensuring the sustainability of those investments is very important. The due diligence of new transactions is when we will make our assessment of ESG risks. We will build language into our transaction documentation to ensure that operations are managed to the highest standards.
We always look for opportunities to help our operators invest in ESG programs around the assets where we have investments.
We've done a lot over the past several years to improve the transparency of our disclosure of ESG practices, and we've seen improvements in our ratings as a result of that improved transparency. And I've got a couple shown here. Sustainalytics and MSCI, we're very well-ranked by both, and these are important and influential ratings providers in our sector. Now, I'll move on to our business model, which is very unique. And this slide shows the key to our model, which is optionality to reserve and resource growth without having to pay further to get exposure to that growth. There are two examples on this slide. I've got PV on the left, Wassa on the right. They're both stream investments.
We made both of these investments in 2015. And in both cases, today, total reserves and resources are higher than at the time that we made our original investments.
And that's in addition to the cash flow that's been provided from these investments. At PV, we've repaid 85% of our initial advance payment. At Wassa, we've recovered over 140% of our initial advance payment. There are growth projects underway at both of these assets. At PV, there's an expansion and a mine life extension project that's in the final stages that should extend the mine life to the mid-2040s. At Wassa, there's an additional resource that's been identified that could extend the mine life by another 11 years. We are not required in either of these cases to fund the capital or fund any further to get exposure to these upsides. This is growth that we don't have to pay for. This exploration and production growth is exactly what we're looking for.
We're looking for new investment opportunities because that's the optionality that we can pass along to you, our shareholders. That's a very important feature of our business model. Now, as we think about our business model, it's a very efficient business model. We have 30 employees. Last year, we produced over $600 million of revenue, and we have a market cap today of getting close to $7.5 billion. On a per-employee basis, we compare very well to other large companies, both within the mining sector and outside of the sector altogether. Our low employee count means that we have a very low fixed cash G&A, which obviously further contributes to our efficiency. Our EBITDA margin for 2023 was 79%, and our cash G&A was about 5% of revenue. Our G&A is low, and it's mostly made up of fixed costs.
So inflation in the short term should not be a significant risk to our margins. You can see this more clearly on this next slide here where I look at our cost structure relative to the average gold producer. We are relatively unexposed, or we have low exposure to inflation as a result of our cost structure. Producers are exposed to inflation in terms of the costs that they are required to pay to run their operations. Things like labor, energy, other consumable costs, often those will rise with commodity prices, and that builds inflation into the cost basis of operating companies. However, our G&A costs are relatively low and mostly steady. Things like salaries, services, office rents, they don't tend to move in short-term periods.
So our margins are a lot less exposed to inflation pressures simply because we don't have the same kind of cost structure. And that means that we can maintain our margins. So when you look at operating mining companies today and you hear people talking about margin erosion, it's because of inflation in their cost base, despite the fact that metal prices may be rising. You look at our cost base, it's pretty steady. And so we capture that increased margin. Now, I'll talk a bit about our portfolio in this next section and the organic growth potential from within the portfolio. And this slide shows our global portfolio, which you can see is pretty well represented in some of the more mining-friendly jurisdictions in the world.
Our principal properties are shown on the right. They're called out. They're the assets that provide the bulk of our revenue.
But our portfolio is quite well-diversified on many metrics, which provides stability. Our largest country exposures are to Canada and the USA, as I've already mentioned. But also, we have the Dominican Republic and Chile coming in behind those. These are all mining-friendly jurisdictions, arguably. And our revenue contribution comes from 37 mines today. So that portfolio breadth compares very well to any producing mining company, whether it's in the gold sector or in the base metal sector. And then finally, our underlying assets are about 50% pure precious metal assets, and the remainder would be from base metal or precious and base metal assets. So good diversity of revenue sources as well. Now, our portfolio on this slide, you can see it spans the various stages of mining project developments.
We have 141 assets that are not producing today that are in various stages of either exploration, evaluation, or development. We would expect there to be potential for organic growth from any asset that moves through this pipeline to production. A couple of good examples of assets that have done exactly that recently are King of the Hills and Bellevue Gold. They're assets that have been in our portfolio for well over a decade. They would have been at the earlier stage five years ago on this graph. But now, those assets have moved forward to production, and both of those have actually started creating and producing revenue to us. It's simply because new management teams have come into those assets, given a rethink of the project concepts, pushed them forward, and now they're producing revenue for us.
To continue on this theme of organic growth, this slide shows some of the key catalysts that we see in the portfolio today from various assets. There's a potential for mine life extension or production increases in some of those assets that are shown in the blue. And then in the gold, you can see some of the new assets we expect to start producing revenue to us. In 2024, we've already seen the first gold from the Mara Rosa project in Brazil. We're expecting first gold from Côté and Manh Choh later in the year. Gold Rush is a project within the Cortez Complex in Nevada that received a record of decision in December. That asset will continue to ramp up production during this year.
Then longer dated, in about a year's time, we expect to see first revenue from Back River and then towards the end of this decade, the Great Bear project. All of this growth that's shown on this slide is free optionality to our shareholders. All of it has been paid for. It's fully funded, and we do not need to make any more contributions to get exposure to this growth. Now, we always look to grow our portfolio through acquisitions. We don't just rely on organic growth to grow our business for us. We've been very active adding to the portfolio over the past couple of years. This slide summarizes what we've done in the last two years. We've deployed about $1.2 billion of capital on six large transactions and five assets.
All of these provide gold exposure to assets with upside potential in safe jurisdiction.
We funded these acquisitions without issuing any equity. We funded them with cash on hand and using our revolving credit facility. We did not dilute our shareholders by issuing shares to complete these transactions. This slide, slide 26, shows a brief summary of the long-term potential of these acquisitions. Starting on the left at Cortez in Nevada, we have always owned royalty interests at Cortez. That's where Royal Gold got its start as a royalty company. But we were able to expand our position at Cortez significantly in 2022 to give us exposure to the entire Cortez Complex. This is a world-class gold mining district, and it's in Nevada, so a very mining-friendly jurisdiction. It's operated by the two largest gold companies, Barrick and Newmont. Barrick is pushing forward on further work at Cortez to unlock the growth potential there.
Gold Rush, I've already mentioned, is ramping up. But Four Mile is another very interesting project that we have a royalty on, as well as Robertson, all within the Cortez Complex. We think this will be producing for decades to come. At Red Chris in Northern British Columbia, there are studies underway to move the transition of the mine from an open pit to a large bulk tonnage underground operation starting in about 2026. Newmont is the owner of this asset now after the acquisition of Newcrest was completed earlier this year or last year, sorry. Exploration success at this asset continues.
Newcrest was able to continue finding more resources as they pushed forward to the east. The current mine life here, excluding any of the newer resources that were discovered, is at least 36 years. So we're very pleased to have royalty exposure to this asset.
In Xavantina in Brazil, this is a small underground gold asset. Ero Copper is the operator, and they are working on continuing to find more resources and convert those to reserves and bring them into the mine plan. And they are now producing at a level which they think is sustainable, around 60,000 ounces a year. So a big increase in production since we originally got involved in this asset. The Côté Gold project in Ontario. Construction is almost complete. We're expecting to see first production by the end of this quarter. And finally, the Great Bear project in Northern Ontario, which is operated by Kinross. Kinross announced about a month ago an additional 1 million ounces of resources added to the maiden 5 million ounce resource, which was announced last year.
And they're expecting to add to this resource as they complete further exploration work.
This one is targeted for first production towards the end of this decade. So if you were to take all of these acquisitions and think about what's common, what's the one thing that unites all or brings these together? It's really they are consistent with our strategy, which is to provide precious metals exposure with two assets that have production and exploration upside in safe jurisdictions. Now, I'll end the formal part of the presentation on valuation. You can see on this slide where our valuation multiples are relative to where they have been over the past 10 years and relative to our peer range. Royal Gold is performing very well. We've got strong cash flow from the business. We've been allocating our capital in a very disciplined manner, and we have good organic growth.
However, if you look at where we trade on a multiples basis, I think we are lagging relative to our peers, particularly on cash flow. We seem to be trading towards the bottom half or the bottom end of the peer group. I don't believe the market fully appreciates the quality of the assets we have in the portfolio that produce the cash flow. Then if you separate the relative performance from our peers and just think about the gold price as well, we're trading today at a gold price or at a level that we haven't traded at for multiple years. The first time we ran through this gold price level, the gold price was about $1,400 an ounce.
So if you think about our share price today relative to a gold price that's well over $2,100 an ounce, think about where that same share price was the first time we got to this level. It's about a 50% increase in the gold price for a relatively flat share price. So I think there's a valuation disconnect there, which I don't fully understand, but I think it's an opportunity. So with that, I'll close. I think hopefully I've given you a good overview of Royal Gold. Our record is strong. Our business is performing very well. We have high-quality assets in a well-diversified portfolio, and we do see organic growth from several smaller assets within the portfolio.
And obviously, our valuation is pretty attractive in this gold price environment. And we do have liquidity to continue growing our business and further adding to the value of our business.
We do believe that Royal Gold is very well positioned today. Noella, I'll turn it back to you for Q&A.
Thank you very much, Alistair, for the presentation. As you said, we'll now take some questions. Your first question is, how do you anticipate the higher gold prices to affect the deal landscape in the near term?
Well, a higher gold price certainly moves projects forward. So I think it should improve the landscape in terms of the number of parties we're looking for financing. As people start looking at projects that maybe they had put on the shelf several years ago because metal prices were challenged, they start dusting those off and having another look at them with higher gold prices. So it does create an opportunity for us. And the fact that the equity markets have not opened up and debt markets are still somewhat out of reach for smaller single-asset developers, I think it puts us in a very good position. We do have good cash flow for the portfolio and good liquidity.
People look at us as a source of financing for the sector. So I think on balance, higher gold prices are good for us when it comes to new business opportunities.
Thank you for that response. Your next question is, what's the earnings beta to gold price, silver price, and copper price, and any other meaningful metals?
So we don't provide earnings leverage estimates to prices. But if you look in our 10-K, which we published about a month ago, you'll see there is, I don't remember offhand exactly what the numbers are, but I think on a revenue basis, a 10% change in the gold price would be about a 7.5% ± to our revenue. And it's smaller for silver and copper simply because they are smaller proportions of revenue to us. But I'd encourage you to have a look at that document for the exact numbers.
Thank you, Alistair. Next viewer asked, What projects in the portfolio are starting production in 2024?
So as I mentioned, Mara Rosa poured their first gold towards the end of February, so just over a month ago. That will continue to ramp up during the year. Côté Gold in Ontario, we should see first gold there by the end of this quarter, so within the next few weeks. That will continue to ramp up during the remainder of the year. And then Manh Choh in Alaska towards the second half of the year. And we've had a couple of other assets very recently start producing as well. We've had King of the Hills in Australia and Bellevue Gold in Australia. Both of those are continuing to ramp up during this year.
So we do see revenue growth from several smaller assets within the portfolio that have either started to produce gold very recently or are expected to produce gold in the coming quarters.
Thank you for your response. Next, the question is, Can Royal Gold keep up with the miners if we're going to $2,500 an ounce gold?
In terms of stock price, I think so, absolutely. I think we have very good leverage to the gold price. And so any increase in gold price should result in higher share prices for all of us. So I think we will do quite well in a rising price environment. I think the other thing you need to keep in mind, though, is that even though the top-line revenue may improve for all companies, margins are not necessarily going to improve the same way. So as I made the point during the presentation, operating companies have seen increased cost pressure as well. We are still in an inflationary environment. So it's possible that higher metal prices will not all companies will show the same margins, an expansion of margins, or consistency of margins as prices rise.
I just encourage you to keep that in the back of your mind as you look at alternatives.
Thank you, Alistair. Next question. You have partners in West and South Africa. Do you feel there is more opportunity in these areas for Royal Gold?
We do. We think Africa is an interesting place. It's a big continent with many different countries, and there's obviously a broad difference in the political risk, in jurisdictional risk, and safety of various of those countries. We're very comfortable in Ghana. We're very comfortable in Botswana. If there are new opportunities in those jurisdictions, we'd be happy to have a look. It doesn't mean, though, that we're going to be looking at all countries in Africa. There are certain places that we find political risk is high, and we're just not interested in going there. But certainly, in those two countries that I mentioned, we will have a look. We will also look at other jurisdictions where we don't have investments. If they're new to us, we will do our homework.
We may not find that they are suitable for us to invest in, but we'll certainly do our work to make sure that we look at things properly before we discard them.
Thank you for clarifying. Next viewer asked or said, "Great track record of paying down debt. What is the paydown plan for the remaining debt?
We do expect to repay our debt absent new business opportunities that may require us to fund new opportunities. Absent new business development opportunities and assuming consistent metal prices, we expect to pay down our debt by sometime early in the second half of this year as cash flow from the portfolio comes in. It's just a normal course activity for us. It's not unusual. If we have a quiet quarter where we deploy nothing for new business, we will take cash and just either repay debt if it's outstanding or just leave it on the balance sheet. Because, as I said during the presentation, we find that having liquidity available is very important because opportunities come up quickly sometimes. We can't anticipate where they're going to come from, when they're going to come up.
We want to make sure that we have liquidity on hand to be able to finance transactions if they do occur with little notice.
Thank you, Alistair. Next, do you think the market anticipates the dividend increases at this point?
Well, we have a very long history of increasing our dividends. So I think the market in November every year that they expect that we will probably continue to increase our dividend. We only do increase the dividend once a year. That's been our past practice. So I think it is once a year people look to the dividend and expect an increase. But it's a completely subjective decision that's made. It's based on a lot of rigor. But we don't tie our dividend to any kind of externality. So it's very difficult for the market to anticipate what a dividend change will be because it is within the hands of management to recommend to the board this is what we should do.
And that's based on how we look forward within the portfolio, what we expect the portfolio to produce, what we expect metal prices to do.
There's a whole series of analyses that go into it. But for the market, they probably don't have the same, they can't predict with the same certainty that perhaps you could if we said, "Well, we're going to peg our dividend to trailing 12-month cash flow," or something like that.
Thank you for that response. Next question for you is: Have any of the core asset partners guiding for higher production this year?
Certainly, Mount Milligan has much higher gold production expected than last year. Copper is about the same. But across the portfolio, you'd see some producers that we higher, some lower. An example of a lower would be Cortez. Barrick is expecting lower production at Cortez this year relative to last year. But as I said during the presentation, we have a diversified portfolio. So where one asset maybe you see an increase, another asset you may see a decrease, hopefully they offset each other. We have not given guidance yet for the year. We'll do that in April, and we'll give a better picture as to what we expect for the year when we release that guidance.
Thank you for clarifying. The next question for you is, do you have any important assets near the end of their mine life?
I wouldn't say any important assets. We do have several smaller assets that are more mature, and we're expecting them to wrap up operations, maybe not this year, but over the next several years. A good example of that would be Dolores in Mexico. That asset has basically come to the end of its life. It's a heap leach asset. We would expect them to continue producing gold as they rinse the leach pads. That may go on for a period of time. But I think you'll see Dolores is a smaller and smaller contributor to revenue over the next several quarters. And eventually, when it ceases operations, we'll cease altogether. But none of the material assets in our portfolio are declining in that sense.
Thank you, Alistair. Next, with ESG standards being a requirement, will future growth be limited to jurisdictions like North, Central, and South America?
No, we don't restrict our search to certain jurisdictions. We will always look at new places that we don't know. We'll look at those and do our own due diligence to get comfort. There are certain places we're not going to go. I should say that very clearly: Russia, China, Venezuela. Those are countries we're just not interested in taking on the jurisdictional risk. But we will look at other jurisdictions with open eyes and kind of a fresh perspective if we have the opportunity to invest in good assets in those jurisdictions. But ESG considerations are always very important.
So if there is no rule of law or if there's a risk of security for personnel who operate or work at these mine sites or if there are communities where there are real issues around mine sites, we look at those.
We look at those. We're very careful about investing in things like that. So ESG risks are something that we look at very carefully, and we will evaluate during our analysis of new opportunities.
Thank you for that response, Alistair. Speaking of ESG, a viewer asked, how much influence do you have on the ESG practices of operators in your portfolio?
Well, we don't have operating control, so we do have limited influence. But we do have good relationships with most of our operators. And most of our operators are pretty reasonable, very well-experienced operators. And if we see something that is concerning to us, we'll raise it with the operators, the counterparties, and have a discussion. And in many cases, it's something that the operator themselves has identified and is working to fix. So by the strength of our relationship, we can influence, but we don't have the ability to directly control. The way that we deal with this is by doing due diligence properly at the outset.
So if we see an opportunity that we think is really good, we do our due diligence of the opportunity. But we also look very carefully at the team that's running the asset.
We'll look at the technical aspects of the operation, but we'll also look at the way it's managed and the company that's managing or owns the asset. If we don't feel comfortable with the team or the approach that a company will take, we won't move forward with an investment. That's where we really do most of our work when it comes to ESG and reviewing opportunities. Now, we also do get monthly reports, in many cases, on the assets that we invest in. We review those. We will review ESG risks or events in those monthly reports. If we see something we don't like, we'll call the operator, and we'll ask him, "What's happening? What are your plans to fix it?" We do have influence.
Thank you for clarifying. The next question is, how long does it typically take for you to recoup your investment once a development project goes into production?
It really depends on the transaction details and the way it was negotiated. But I think typically between five and 10 years would be the time it would take for us to recoup our investment. Sometimes it's faster. If production increases or higher or metal prices do very, very well after the initial investment, we can see quicker recoveries. And conversely, if metal prices drop or if production levels don't reach the expected levels, then it could be longer. But I'd say a rule of thumb, somewhere between five and 10 years, would be reasonable to expect.
Thank you, Alistair. Next, are there any active plans to increase the base metal footprint of the business?
We don't have any active plans to do that. We will look at. So our revenue focus is really gold. That's how we want to grow this business. It's in our name. We're very precious metals focused. So we're out there looking for new gold opportunities. That said, if an interesting base metals opportunity comes across our desk, we will have a look at it. If it's a good resource, it's got a good potential for a good return for our shareholders, we will look at it. But it's not strategically something that we're trying to do. We're very happy looking at gold and keeping our focus on gold.
Thank you for your response. We're coming up on your last few questions. The first one is, what level of debt is the company comfortable with?
We're comfortable using debt, as you can see from the way that we financed our business. We have said if we see a very, very good opportunity, something that's an excellent addition to our portfolio, we would be comfortable getting up to, say, 3x debt to EBITDA if we had to acquire that opportunity. But we'd only do that if we saw the opportunity to get down to 2x EBITDA very quickly. So it really does depend on the opportunity. I think, generally speaking, most of our shareholders would like us to have no debt. In a commodity business, it's just the most conservative way to run the company. So we do see a bunch of shareholders saying that we'd be happier if you got down to 0 debt. So that's where we like to operate.
As you can see, based on our history, we will use our revolving credit facility to finance growth. Our cash flow, if it's based on history, we've been able to pay down outstanding balances of our revolving credit facility very quickly. Debt is something that we'll use strategically, but we'll also be careful with it. We don't want to overextend ourselves and find ourselves in a position where we're struggling. About three times would be the absolute top. Zero times is probably where we prefer to be.
Excellent. Thank you, Alistair. Your last question is, would Royal Gold consider structuring future deals with the recent one let me reread that question. Would the company consider structuring future deals like the recent one with Centerra?
Potentially. Anytime an operator comes to us with a proposal that could add value for Royal Gold, we will listen. So it's not something that we like to do. We don't like to renegotiate or change the terms of contracts that we've entered into. But we also recognize that we enter into lifetime contracts. And when you enter into a contract, things can change over time. And in the case of Mount Milligan, our first investment there was in 2010, so 14 years ago. And a lot has changed since then.
So it made sense for us to rethink that agreement and what we could do with Centerra to support them to invest further in the asset. In many other cases, there is no pressure on the asset itself. And so we haven't had operators coming to us to look at renegotiating or doing anything like that.
We'd prefer not to. But we will have an open mind. We won't restructure agreements for free. It's not in our business to transfer value away from our shareholders to somebody else's. So we'll be careful about it. We'll be considered. But in the case of Mount Milligan, it was a clear win-win. So I think in that scenario, we're quite pleased to have the conversation because we do think there will be upside. But it's not something that we expect to do with all of our operators.
Excellent. Well, thank you very much, Alistair, for your responses. 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.
Great. Well, thanks very much, everybody. I appreciate your time and attention. And if I didn't get to any questions that you wanted to ask or if I didn't answer any questions with the answers that you were expecting or if I was confusing with my answers, please let Renmark know, and I'd be happy to get back to you personally with any responses. So thanks very much, and look forward to talking to you again. Take care.
Once again, this was Royal Gold trading on the NASDAQ under the ticker symbol RGLD. Thank you to everyone in Chicago and surrounding areas for joining us today. The playback for this virtual non-deal roadshow will be available on our website 24-48 hours after this presentation under the VNDR Library tab. Please stay tuned for other presentations in your area and see you next time.