Good day, and thank you for standing by. Welcome to the Royal Gold Incorporated Investor Update conference call. At this time, all participants are in listen only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star one on your telephone. If you require any further assistance, please press star zero. I would like to hand the conference over to speaker today, Mr. Alistair Baker. Please go ahead.
Good morning, and welcome to Royal Gold's 2022 investor update. My name is Alistair Baker. I'm Vice President of Investor Relations and Business Development for Royal Gold, Inc. Next slide, please. We'll run through a program starting with opening comments from our CEO, then move into discussions of our ESG report, our portfolio, the business development environment, portfolio performance, and our financial position. Prepared remarks should run for a bit less than two hours, and then we'll open the floor to a Q&A session. We're doing this session from our multiple office locations, so I ask that you bear with us as we change speakers and pass the microphone around during the Q&A session. This event is being webcast live, and you'll be able to access the replay on our website shortly following this webcast. Next slide, please.
During the event, 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 the Risk Factors section of our Form 10-K and our other filings with the SEC. We will also refer to certain non-GAAP financial measures, including adjusted EBITDA, adjusted EBITDA margin, operating cash flow margin, cash G&A, net debt, and net cash.
Reconciliations of these non-GAAP financial measures to the most directly comparable GAAP measures are available as an appendix to the slide presentation and in our December quarter 2021 results press release, which can be found on our website. I'll now turn it over to our President and CEO, Bill Heissenbuttel, who will start off the event with an introduction and overview of Royal Gold.
My name is Bill Heissenbuttel, President and CEO of Royal Gold, and I would like to welcome you to our 2022 Investor Day. I appreciate the time you are taking to listen to our presentation and look forward to demonstrating the progress we have made since our Investor Day last year. The agenda for the meeting envisions a few opening statements from me on our company and our business model, our team, and our share performance and valuation. Randy and I will then walk you through a summary of our inaugural ESG report, which was released earlier this month. We will then turn to Alistair, Mark, Martin, and Matt to update you on some key portfolio properties. I'm very happy to introduce you to Martin, although some of you know him from his previous public company roles.
Dan will follow with an update on our business development efforts and the market we see for new investment opportunities. Finally, Jason and Paul will close the presentation part of the meeting with a discussion on the financial performance of our portfolio and our financial position. In addition to the individuals from senior management participating on the call today, I would like to thank everyone on our team who contributed to the presentation you will see today. We often speak of the efficiency of our business model, but efficiency is only possible if you have capable and talented people at each and every level of the organization, and I believe Royal Gold possesses such a team.
As I thought about making a presentation to a group that already knows our company, I decided to take a more strategic approach rather than reciting the set of numbers you see on this page. If we had been making this presentation many years ago, the numbers would change, but the commitment to a strategy would not. By that I mean we have remained committed to the royalty and streaming sector. We have remained committed to being a precious metals-focused company with gold at the core of our revenue. We have remained committed to a large, diverse portfolio of property interests that provide metal price optionality. We've remained committed to a strong balance sheet with sufficient liquidity available to meet any investment we expect to see in our market.
As I will cover a bit later in my comments, we have remained committed to a consistent strategy with respect to the return of capital to our shareholders. Since we've now adopted a December 31 fiscal year-end, our historical looking figures will be calendar year-based. Looking back five years, much of the revenue increase you will see was attributable to metal price increases, but 2021 was truly a standout year. Our GEOs rose 13% to 361,000, a record for the company during a 12-month period, led primarily by the outstanding contribution of our long-standing royalty portfolio. You typically expect some ups and downs in a portfolio, as diverse as ours, so you have to appreciate those time periods when positive performances are seen across so many assets.
Peñasquito's revenue in calendar 2021 was more than half our original acquisition cost. Cortez, Robinson, and Voisey's Bay all saw the highest annual revenue during this five-year period. As you would expect for a gold-focused portfolio, our revenue sensitivity is obviously heavily weighted to our primary metal. This is what I think existing investors expect of us, exposure to revenue and cash flows based primarily on gold. We are frequently asked about diversification, particularly diversification into green metals. I believe we have been consistent in saying we focus on precious metals, but we will entertain non-precious metal investments if we see unique project operator or return qualities in that investment. While not completely ruling out new markets such as lithium or rare earths, we will not make an investment without the proper understanding of the unique markets for those metals.
Of course, our strengths are not limited to revenue growth, but cash margins as well. While revenue has seen a 9% cumulative average growth rate over the last 10 years, the growth in operating cash flow is 12%. As a percentage of revenue, our cash G&A has fallen as revenue has increased. The leverage in operating cash flow and the falling G&A relative to rising revenue is exactly what should happen in a scalable business model like ours. As I will explain in a minute, our total costs don't have the same exposure to inflation as seen elsewhere in our industry. I actually believe our adjusted EBITDA margin is somewhat understated given the nature of our streaming business.
As you compare the costs that are deducted from revenue to arrive at adjusted EBITDA, you can see our largest cost is related to the purchase of metal under our streams. These costs are metal price dependent, not supply input dependent. Our cash G&A is subject to inflation. Our largest costs are related to salaries and benefits, and they will reflect cost of living adjustments. Our salaries are $30 per GEO versus an operating company's labor cost of over $200 per oz. If the cost of diesel, reagents, spares increase, we see no direct impact on our margins, and we also don't need to incur the costs associated with managing supply chain disruptions, COVID-related disruptions, or longer lead times. That is not to say we are completely immune to the impact of these items, because our operators must be able to manage each challenge.
That is why operator quality and depth is so important to our due diligence process. When I refer to an understatement of our adjusted EBITDA margin, I'm talking about our cost of sales. This figure is based on metal prices and is specific to each stream contract, with no reference to the impact of inflation on operating or capital costs of our operators. Since this cost is contractually dependent, a better way to view our business is by netting the stream revenue to arrive at what I believe to be a more accurate measure of margin. Our revenue less cost of sales totaled $555 million in 2021, versus cash overhead and production taxes of $23 million and $8 million respectively. The cost of sales will vary from period to period based on, one, metal price.
All but one of our contracts set the cash price as a percentage of spot metal prices. Two, revenue diversification. Cost of sales will increase on a relative basis if a higher contribution is received from Pueblo Viejo with a cash price of 30% of spot versus Andacollo at 15% of spot. Three, time. Some of our contracts have cash price increases over a contract time period. I hope the last three slides have reinforced, one, the benefits of our business model, very high margins with limited exposure to inflation. Two, demonstrated that our model is one that is built for the economic times we see these days. Royal Gold's footprint continues to be quite limited globally. We maintain our Denver office as the corporate headquarters.
We operate our streaming business through our Lucerne office, and we have a local presence in the mining centers of Toronto and Vancouver to stay close to current and prospective counterparties. Our U.S. and Canadian companies own our royalty assets and produce the passive income that is ultimately taxed at corporate rates in those countries. The streaming business is our active metal purchase and sales arm and is subject to both Swiss tax and also the global minimum tax currently levied by the U.S. At an overall tax rate of slightly more than 13%, we have no real exposure to changes in global tax rates that may raise minimum international tax rates to 15%. It bears mention that there are key differences in our two forms of investments. Royalties are, in many jurisdictions, interests in land that can survive bankruptcy proceedings.
For this reason, we focus less on the relative financial condition of each operator and focus more on maintaining and registering our interests on title. Streams, on the other hand, are contractual purchase and sale agreements that can be dismissed in a bankruptcy proceeding and therefore require greater financial due diligence on our counterparties and greater protections in our investment agreements. We expect streams to continue to be our major source of revenue, given that they tend to be more tax-friendly for the operators, and they tend to be larger in size. No matter how well a property may perform, our best asset will remain our people. I would like to welcome Martin Raffield, who you will hear later in our presentation. Martin joined us in January as VP, Operations.
I would also like to welcome Laura Gill, who assumed the role of Chief Compliance Officer and Corporate Secretary in February. I ask you to consider the longevity of this team. I've been with Royal Gold since 2006. Paul has been with us for 18 years, Randy for 12 years, Jason for nine years, Mark and Alistair for seven years. I believe that it's a testament to the people, the work environment, and the culture that we're able to attract and retain such talented individuals. Be assured, we used recent retirements and internal promotions to hire a new team of young talented professionals that you don't see listed here, but I hope will be giving this presentation in the years to come.
What our team has accomplished in the last year, closed three new acquisitions, managed the fiscal year-end change, adopted the new SK-1300 reporting guidelines, completed our inaugural ESG report, eliminated our uncertain tax positions, responded to numerous surveys and questionnaires from ESG rating agencies, resulting in an improvement in our scoring levels, introduced ESG factors into our executive compensation program, all while managing portfolio issues like solar recovery at Pueblo Viejo, a new owner at Wassa, a changing political environment in Chile, and COVID impacts at Khoemacau, all done by 30 people. Our board is largely independent with significant industry experience gained through careers with Barrick, Placer Dome , Teck, Goldcorp, Placer Dome, and Eldorado.
I believe our board is also represented by individuals with a background in all relative areas of our business, legal, finance and accounting, technical, business development, and they are equally adept at challenging our assumptions, providing guidance, but also lending support to our management team. We've refreshed our board composition with Fabiana Chubbs's 2020 appointment. We've refreshed our audit and finance committee with the passing of the chairmanship from Bill Hayes to Jamie Sokalsky, and we've expanded oversight to include CNG's responsibility for ESG matters. I'll end my remarks with a few final slides on our share price performance and valuation. We position ourselves as an alternative gold investment, but we can also be a core part of an investment portfolio.
Our gold beta demonstrates our leverage to the price of gold, which can be attributed to many things, including our high-margin business, our exposure to cost-free resource and reserve upside, and our dividend policy. However, we still maintain a positive correlation to the market as a whole. We are not entirely a counter-cyclical play, and we've actually outperformed some general market industries over the longer term period shown in this chart. But of course, it is in times of difficulty when investors look for the harbor in the storm. Whether it is the current Russia, Ukraine conflict, the dot-com bust, the global financial crisis, or the pandemic, investors may well look to gold and gold-related investments. In these times, we have found that we are one of the better performing investments relative to physical metal or a broad index of gold equities.
Despite being in one of those times of uncertainty, our shares continue to trade within a range for our sector. In fact, our cash flow premium has only recently risen from the very low range of historical trading multiples. While I'm sure there is a contribution from global uncertainty in our shares, I believe the strong performance of our portfolio has played a key role as well. I'll close with a review of our dividend history. No other precious metals company can match our 20+ years of continuously increasing our annual dividend, and no other precious metal company is in the S&P High Yield Dividend Aristocrats index. You will see that the current gold price is in the same range as it was 10 years ago, and yet our annual dividend has increased from a little over $0.40 a share to $1.40 per share.
Even as gold fell or traded sideways for most of the past decade, we made consistent improvements in the dividend rate. Other companies may tout higher payout ratios, more dynamic dividend schemes, and significant percentage increases in their dividend, but we will continue to build on our long-standing track record. That concludes my opening remarks, and Randy and I will now spend a bit of time on our ESG report. Royal Gold has long been focused on ESG issues in its investment process and its culture. Factors such as competition for water, local community relationships, tailings dam stability, acid rock drainage, and artisanal mining have all come up in past due diligence efforts during my time with the company. At the same time, I've seen our internal culture focus on the health and safety of our employees and the promotion of an inclusive working environment.
We were never very good when it came to talking about it. We fell behind. We had important policies subsumed in confidential employee handbooks. We had focused our charitable efforts on a narrow set of educational prog, and we kept our due diligence process to ourselves. A couple of years ago, that changed. We put our policies on our website. We answered all of the ESG questionnaires. We revealed details about our investment review process, and we focused our charitable giving on societal needs in our communities and the communities around the mines in which we invest. Instead of playing defense on our tax jurisdictions relative to our competition, we proudly touted that we are taxpayers in the whole of those jurisdictions. This month, we took another step with the publication of our first ESG report and the release of the company's vision, mission, and core value statement.
I am pleased Randy and I will have a chance to give you some background and highlights with respect to this report. From a vision, mission, and core values perspective, I took the approach that the vision is what we want to be, that the mission defines what we do, and the core values define how we do it. Our vision is to be the gold standard in everything we do as an employer, a partner, an investment, a member of the community. It's been part of our press release marketing for a couple of years, and it made sense to apply it to every aspect of the business. We may fall short at times, but I think it's an aspirational goal for everyone in our company. Our mission reflects the statement of our role as a provider of finance.
As we embarked on this process, we struggled with where we fit. Are we a mining company or a finance asset management company? Over time, it became clear we are the latter. The path taken has had far-reaching implications for our entire approach to ESG, which you will see later. Finally, the core values are most important to me. We need to act responsibly in all aspects of our business. We need to act like a long-term partner in our dealings, and we must do everything with unquestioned integrity. I think the establishment of this statement helped to then establish the foundational aspects of our ESG program. Royal Gold has endorsed the World Gold Council's Responsible Gold Mining Principles and the ICMM 10 principles for a number of years. Note the word I chose, endorse.
We cannot implement them because not all of the principles apply to a non-mining company. If anything, the principles are more of a due diligence checklist than a set of operating param. In addition, our competition has largely signed up to the UN Global Compact. Again, that did not seem completely appropriate because, let's be honest, we are not addressing sustainable development goals by funding the Wassa oil palm plantation. We're not addressing healthcare by financing the shipment of healthcare equipment to the Dominican Republic. Our operators are addressing those issues, and we are helping them achieve those goals. We looked elsewhere for more appropriate ESG principles with which we could align. We looked at the Equator Principles, the Principles for Responsible Banking, the Principles for Responsible Investment.
PRI appeared to be the most logical choice, but some of the core principles involve incorporation of ESG into investment decisions and actively engaging management on ESG issues. We've done that for years. That's actually a low bar for us. Plus, we don't get involved in voting proxies or supporting shareholder proposals. We got to a point where we sought outside advice to help us take a first look at our material risks. We received feedback from investors on five key ESG topics, and then expanded those topics into a broader list that span direct and indirect risks and risks over which we have no control or influence. Topics like employee retention, ethics and integrity, and risk management came to the top of importance, and risks like tailings dam, mercury, and artisanal mining did not appear.
I think this exercise supported our strategy of viewing our company as an asset manager rather than a mining company and helped lay the groundwork for what we now call our ESG pillars. With our material risks defined, we decided to incorporate the most appropriate Principles for Responsible Banking and Principles for Responsible Investment to create the four pillars of our ESG program. They cover governance and culture, our investment strategy, the stewardship of our existing assets, and the transparency with which we commit to reporting a wide spectrum of information on our performance and our portfolio's characteristics. While I could talk about the four pillars for quite some time and how they effectively organize our report, I'd like to draw your attention under transparency to the information we have provided on our portfolio.
We have been able to source publicly available information on various measures, emissions, energy intensity, water consumption, for many of our properties, and in most cases, properties that account for over 90% of our revenue. I think this level of transparency is on a different scale than seen in other reports from our peers, and it seemed appropriate for a company that is more akin to an investment house than a mining company. We have a ways to go. Our TCFD disclosure will continue to be built out over time, and we will try to incorporate feedback we get from our investors as we move the program forward. We view our initial report as the beginning of a journey, not the endpoint of an effort. With that, I will now turn the call over to Randy to give you a bit more detail on our four pillars.
Thanks, Bill. I'm pleased to have this opportunity to talk with you about our recent ESG report, and in particular, the four ESG pillars by which the report is organized. Beginning with the first pillar, governance and culture. As Bill noted, we consider ESG in everything we do. Our focus on sustainability begins with tone from the top and depends upon the efforts of our entire team, from the board to management to staff across our four offices. On our website, you'll find a full suite of policies intended to ensure that we maintain a strong internal culture of sustainability and extend that practice to our dealings with mine operators, shareholders, and other stakeholders, conducting our business according to the highest ethical standards. In order to be effective, our policies must be operationalized by our people.
Oversight for ESG governance begins at the board level, where five of our seven directors identify as skilled in matters of sustainability. Specific responsibility for ESG oversight is delegated to the compensation, nominating, and governance, or CNG committee of our board. Our senior management team, under the leadership of our CEO, meets regularly with the CNG committee and the broader board to consider ESG issues related to our strategy, our corporate culture, new acquisitions, and monitoring and engagement activities across our portfolio of interests. This ensures that issues are identified and reported among our business units and up the ladder where necessary, so that we can be prepared to take appropriate steps to adjust our strategy and enforce our rights in response to evolving circumstances. As set out in more detail within the report, we've been able to maintain a consistent culture through the long tenure of our workforce.
We've had very low employee turnover at the senior management and other levels, and those who have left the company over time have largely done so to retire after long service to Royal Gold. At the same time, we've added new members to our board and team, bringing diverse viewpoints and skills to the company, lending a broad range of views to our efforts. We've adapted our in-office practices to ensure employee safety in the face of the COVID-19 pandemic and in response to today's approach to work-life balance. We've also been able to provide meaningful opportunities for professional development to high potential members of our team, seeding the next generation of leadership. Further, in 2021, the CNG Committee began to consider ESG related performance measures as part of our short-term incentive compensation program, which creates greater alignment between management's performance and the interests of our shareholders.
As general counsel, I take a good deal of comfort from knowing that we maintain policies and practices that set high ethical standards and promote a safe and healthy work environment, both in our corporate offices and in the field. Our second ESG pillar focuses on our approach to consideration of new investments. As you've probably heard us say in other forums, the sustainability of our business depends in significant measure on our ability to identify and manage ESG risks that are inherent in our investments in mining operations. As we look to further expand our portfolio of stream and royalty interests, we want to ensure that our prospective operator partners are not only skilled miners, but also maintain effective prog for internal governance, community engagement, human rights, safety, and environmental management, among other areas.
As a passive investor, we do not take an active role in the management of our portfolio of mines, and generally, we have limited influence over the decisions of our operators. For this reason, we seek relationships with operators who share our focus on responsible and sustainable mineral development. As Bill mentioned, Royal Gold has long endorsed the International Council on Mining and Metals' Mining Principles, and we participated in the implementation of the World Gold Council's Responsible Gold Mining Principles, both of which promote ethical and sustainable resource development. We integrate these principles into Royal Gold's own business planning and operations as appropriate, and we encourage our operators to adhere to these or similar standards in their own conduct. For calendar year 2021, operators responsible for generating more than 93% of our revenue have endorsed one or more broadly recognized sustainability charters.
If you're interested in more information on these commitments, we've provided a detailed appendix in our ESG report. In our report, you'll also find a very detailed description of our approach to review of new business opportunities. Our diligence of prospective investments includes review of ESG topics in addition to financial, technical, legal, and other considerations. Each investment opportunity presents unique issues, and our review in the area of ESG is conducted by our internal technical team with the support of outside experts who lend depth as necessary in specific areas, including environmental management, permitting, tailings facility management, and community engagement, among others. If an ESG issue is flagged during review as a high risk to the success of an operation, we will not proceed with the opportunity unless that risk can be mitigated to an acceptable degree.
The results of our broad diligence review are compiled by our internal investment committee, and any recommendation made to our senior management and ultimately to our board is supported by relevant reporting to ensure that information important to our decision to execute or to pass on the investment is effectively communicated. Where possible, we structure our stream and royalty contracts to include contractual commitments from our operators to not only comply with applicable law, but to also meet relevant sustainability best practices and where appropriate, to mitigate ESG risks that have been identified in our review. If necessary, we'll consider enforcement of our contractual rights under those agreements in response to any serious event of non-compliance. Our engagement with mine operators extends beyond this initial due diligence and our investment activities into active monitoring of our interests and regular engagement with our operators over the life of our investments.
Effective stewardship of our portfolio of stream and royalty interests requires open communication with the operators. This is our third ESG pillar. Where possible, we maintain a broad suite of information rights under our investment agreements through which we receive a host of data related to the operations, including details on site safety, emissions, environmental compliance, and community relations. While travel has recently been impacted by the COVID-19 pandemic, we also attempt to visit key assets regularly, and we maintain ongoing communication with our operators, even when not at site. In addition, we supplement the information provided by our operators with a series of tools that can alert us to ESG controversies and site emissions and energy and water use, among other issues.
These resources provide insight into the operations that are subject to our interests, and can often help us identify trends and to work with our operators to better understand or even to address matters of concern. Internally, information gathered through our stewardship efforts is routed to our management level, asset assurance, and enterprise risk management committees, and where appropriate, to our CNG committee and to our board. While the contractual commitments I mentioned a moment ago are intended to ensure compliance by our operators with relevant ESG standards, we also believe in supporting and even catalyzing ESG efforts of our operators. In recent years, we've made a number of financial commitments in support of prog that contribute to capacity building and other sustainable development initiatives in the communities that surround the mines in which we invest. Our last ESG pillar is transparency.
We recognize that much of the information we develop and collect in our investment review and stewardship activities is of interest to a broad range of Royal Gold stakeholders. In this initial ESG report, we provide detail on greenhouse gas emissions and water and energy use across our portfolio, in addition to other topics. We also recognize the growing need among our stakeholders to understand how climate change might impact our business and how our activities could have a direct and indirect impact on climate. With this report, we take our first step to meeting the recommendations of the task force on climate-related financial disclosures in order to better understand and report on the physical impacts of climate change and the risks associated with the transition to a low carbon economy for our business.
In that regard, we've committed to conducting scenario analysis and providing further information on the results of that work in future reports. While we intend to update our ESG report annually and expect its contents to evolve over time, we hope you'll find this first report to be a meaningful and transparent look at key ESG issues inherent in our business. On a final note, we're quite gratified to see that MSCI and Sustainalytics both recognize our work in this area. Our ESG ratings from both firms have improved steadily over time, and we were recently recognized by Sustainalytics as a top-rated company in our industry. Thank you for your time, and I look forward to the question and answer portion of our program.
Thanks, Randy.
For those that may have joined late, my name is Alistair Baker, and I'm Vice President of Investor Relations and Business Development for Royal Gold Corporation. I'll start with some general comments on the portfolio and then hand over to Mark Isto, who will lead a more detailed discussion on specific assets. Royal Gold has a large and diverse portfolio of almost 200 properties. We group our portfolio according to where each of these assets fits in the life cycle of mining assets. We have 43 assets that are in production today. The producing assets are shown with dots on the map. As you can see on the map, the portfolio is weighted towards lower risk, stable and mining friendly jurisdictions, and is generally North and South America-focused with a smaller handful of assets in Australia and select African countries.
Our principal properties are the larger portfolio assets, and last year, these accounted for about 76% of our total revenue. Our operating counterparties include some of the largest mining companies in the world. In 2021, about 50% of our revenue came from the biggest, including Newmont, Barrick, Vale, and Teck. Our revenue is diversified across these counterparties, and if you group the various assets by operator, our largest counterparty by revenue in 2021 was Barrick. If you look at assets individually, Centerra Gold was the largest contributor and provided about 26% of our 2021 revenue for Mount Milligan. We have a high-quality portfolio, and we have interests in four of the top 15 global gold mines by production, which are Cortez and Peñasquito operated by Barrick, Agnico Eagle's Canadian Malartic Mine, and Newmont's Peñasquito Mine.
This is a nice statistic to underline the point about overall portfolio quality, but it's not meant to downplay the quality or contribution of other assets in our portfolio, some of which Mark, Martin, and Matt will talk about in a few more minutes. The diversification of our portfolio helps provide stability in revenue and cash flow. Geographically, our largest country exposures are to Canada, the Dominican Republic, Chile, and the U.S.A., all of which are jurisdictions where mining is well understood for its contribution to local economies. In terms of portfolio breadth, last year we had revenue contribution from 44 mines. This compares well to the largest mining companies, and this revenue diversification reduces our exposure to single asset underperformance. Finally, our underlying assets were approximately 75% precious metal producers.
While this is less important today, given strong base metal prices, we're not subject to base metal fundamentals for the viability of our revenue. Now, I've mentioned seven principal properties, but last year we had revenue from 37 other assets. While the individual contributions from many of these assets are relatively small, as a whole, they produced about 24% of our revenue last year. Some of these have been in the portfolio for a long time, like Robinson, Dolores, and Wharf, but they remain important contributors. Because some of these have been in the portfolio for many years, they also have lower overall carrying values and lower depletion rates, so they provide higher margins to us.
Outperformance from a small handful of these assets can lead to a disproportionate impact on our financials. Given our low share count, an unexpected contribution from a small royalty can often result in a significant per share impact on our reported numbers, and it's important to recognize the significance and contribution of smaller assets in a portfolio, such as ours. As a whole, our portfolio spans the stages of mining project development. We have 144 assets that are not producing and are in various stages of exploration, evaluation, and development. We would expect the potential for organic revenue growth from any assets that advance up through this triangle, through the pipeline to production.
While likely not all of these assets will advance, we're expecting revenue from a handful of these assets in the near term after being in the portfolio for a decade or more, and Matt will provide detail on some of these in his remarks. With that, I'll turn the presentation over to Mark.
Thanks, Alistair, for the portfolio overview. I'm Mark Isto, EVP and COO at Royal Gold. I'll pick up on slide 34 with the discussion of our recently disclosed 2022 guidance. We expect sales to range between 315,000 and 340,000 GEOs, with gold contributing about 70%. Our 2022 sales guidance is lower than 2021 actual volume. Keep in mind that our portfolio performance in 2021 was very strong. We anticipate lower production for 2022 from certain of our principal properties due to the following factors, which is based on information disclosed by the operators of these properties.
Lower forecast gold grade at Andacollo due to production sequencing, lower forecast gold grade at Pueblo Viejo due to an increase in the processing of stockpile ore, lower production guidance from Newmont on Peñasquito attributed to pit sequencing and harder ore in the Chile Colorado pit. In addition, we expect lower production in our royalty areas at Cortez, which is expected to be about 8,000 royalty oz lower this year due to production sequencing based on information provided by Nevada Gold Mines. We also anticipate several positive production contributions compared to 2021. Increased silver production from Khoemacau and full-year contributions from our newest portfolio assets, NX Gold and Red Chris. The DD&A rate is expected to range from $535-$585 per GEO, and the effective tax rate is expected to range from 17%-22%.
I'll turn to slide 35. One of our primary objectives today is to highlight the organic growth in our portfolio in the medium term. With our portfolio size, we have many assets that are interesting, and we feel many go unrecognized. We have identified 13 assets we see having catalysts for production growth in the near term or medium term. The first seven projects are currently contributing production but have compelling near-term growth catalysts. Khoemacau ramping up to full production. Pueblo Viejo increasing ore processing rate with an expansion project. Mount Milligan updating a technical report on the back of recent mineral resource additions. Rainy River initiating underground mining, driving mine life extension. Wassa advancing the southern extension project expected to add mine life. Red Chris transitioning from open pit to underground block caving, supporting a +30-year mine life.
NX Gold adding a second mining area to increase production. We'll also talk about six projects that are in various stages of construction or mine feasibility, where production commitments have been made by the respective operators and are expected to provide further growth in the near and medium term. King of the Hills, an Australian operation scheduled for first gold production in this quarter. Côté, a greenfield project under construction by IAMGOLD in Canada for production in 2023. In addition, four projects with advanced studies and older production commitments include Bellevue in Australia, Mara Rosa in Brazil, Manh Choh in Alaska, and Back River in Canada.
We'll finish by briefly highlighting other portfolio projects we expect could move into development over the next few years, including i-80 Gold's Ruby Hill and Granite Creek properties, both Nevada precious metal gold projects, and brownfield base metal production expansion at Las Cruces and Mount Goode, all of which we have royalty interests. Turning to slide 36, I'll spend the next few slides providing commentary and updates on KCM's Khoemacau project located in the Kalahari Copper Belt in northwest Botswana. KCM has established a new modern underground copper silver mine ramping up to full production, where we hold a 100% silver stream interest. Slide 37 provides an overview of the operation and our interests. We announced our silver stream in February 2019 and funded the development of the project on a quarterly basis with KCM's other funding partners.
Our funding obligation was completed in March of this year, which brought our stream interest to 100% of payable silver. At full production levels, we expect silver production to range between 1.8 oz-2 million oz per annum, with a production life greater than 20 years. Operation is currently ramping up production, which I'll touch on more in a moment. Our stream interest applies to the Zone 5 deposit, and as shown in the map, we have an area of interest that measures 20 km along the strike length of Zone 5 by 8 km wide. In addition to the Zone 5 ore body, our stream interests apply to the Mango Northeast deposit, also shown on the map, which has published mineral resources with a similar grade tenor to Zone 5.
Mineral resource holdings of KCM are significant and offer the opportunity to both expand mine life beyond the current 20 years and supports an increased production rate. We're looking forward to seeing the pre-feasibility study for the production expansion of the operation, which we'll discuss more in a moment. It's also worth noting KCM is looking at an option to install on-site solar power generation to supplement their grid power supply, potentially reducing the cost of energy and improving the operation's carbon footprint. Turning to slide 38, the processing of stockpiled ore from the mine development started in late June of last year, and we received our first silver delivery in August. I'd like to note the following about the production ramp-up activities to date. Ramp-up of the underground production currently sits at about 55% of the 10,000 ton per day rate during the month of March.
Underground production has shown a steady improvement trend over January through the March period, and KCM expects to reach full production by the fourth quarter of this year, barring any resurgence of COVID-related travel restrictions. Technical issues experienced during the December quarter last year regarding stope ore production have effectively been resolved. The ore body continuity and geotechnical conditions are performing as expected, and the plant is operating well and achieving copper and silver recoveries we anticipated from our due diligence reviews. Plant throughput has been tested at the design rate of 10,000 tons per day, and safety performance has been excellent, with no reported lost time incidents in 2021 and a total reportable incident frequency rate of 2.0 per 1 million man-hours for the same period.
Turning to slide 39, Colmaaco production plan is relatively unchanged from our 2019 presentation announcing the transaction. The 75 million ton life of mine production plan for Zone 5 is based on 34 million tons of reserves and 41 million tons of measured and indicated resources, grading 2% copper and 21 g per ton silver, supporting a mine life of +20 years at the design processing rate of 10,000 tons per day. Mineralization at Colmaaco is sediment-hosted and strata-bound, providing a high degree of continuity and consistency. This consistency in mineralization supports an operation with consistent tonnage and grade, generating a rather flat metal production profile for both copper and silver.
The long section on slide 40 does an excellent job at highlighting the great continuity of the Zone 5 ore body, which is modeled for a strike length of approximately 4,200 m and drill defined to a depth of 1,200 m. While the ore body has a typical mining width of about 10 m when considering a 1% copper cutoff grade, a halo of lower grade mineralization is also typically present, minimizing the potential impact from dilution. The deposit's characteristics, along with the ore body being divided into three independent mining area, supports a large, highly efficient and safe operation. This long section indicates the potential for the ore body to continue down dip below the 1,200-m depth with similar grades, is likely, providing a potential for extension of resources and reserves attributed to our stream interests.
Turning to slide 41, we discuss the potential for production expansion. Although KCM's focus is currently bringing the operation up to the 10,000 ton per day rate targeted, the team has a clear goal in expanding the operation. The property-wide mineral resource consists of Zone Five, with three smaller ore bodies with similar grade tenors, Zone 5 North, Zeta Northeast, and Mango Northeast. Of the three additional resources, Mango Northeast is within our area of interest, as previously mentioned. A preliminary feasibility study is being completed for expanding annual production from 3.65 million tons per annum to 8.15 million tons per annum through the addition of a second mill that would be located at Zone 5, processing 4.5 million tons per annum. The table on this slide presents the scope for the expanded production.
KCM has defined resources of 168 million tons of 2.09% copper with an average silver grade of 0.5 g per ton. This expansion contemplates Zone Five production increase in 23% to 4.5 million tons per annum to fully fill the second mill, which would positively impact our silver stream production profile. In summary, we've been very pleased with the Khoemacau development, and we look forward to seeing continued progress on the production ramp-up and results from the expansion plans. Slide 42 shows the Pueblo Viejo mine located in the Dominican Republic, which contributed 17% of our 2021 revenue. This operation is another great example of resource optionality within our portfolio with a production expansion project underway. Summary details of the operation, our interest, and the production expansion plans are provided on Slide 43.
We made our initial investment in 2015, at which point the operation was producing about 1 million oz of gold per year, with a declining production profile starting in 2021. Barrick has since defined an expansion project to maintain average annual gold production around 800,000 oz through the mid-2040s and bringing in an estimated 9 billion oz of measured and indicated resources to the mine plan on a 100% basis. The expansion project will increase the plant throughput from about 9 million tons per annum to 14 million tons per annum, roughly a 55% increase. Engineering work was reported as essentially complete at the end of 2021, along with 26% of the construction. The project is scheduled for completion by the end of 2022.
The plan for additional tailings storage remains a work in progress with close government and community consultation. Turning to Slide 44, Mount Milligan, our largest interest, contributed 26% of our revenue in calendar 2021 from the 35% gold stream and the 18.75% copper stream we hold. We see the issuance of an updated technical report defining a new life of mine plan expected in the current quarter to be a catalyst for mine life extension. Slide 45 provides a compilation of information driving an update of Centerra's 2020 technical report.
Centerra has done an excellent job improving the operation over the last two years, highlighted by an average mill throughput of greater than 57,000 tons per day in 2021 and achieving an average all-in sustaining cost for gold of $508 per oz and for copper of $1.94 per pound on a byproduct basis. Operational and cost improvements, along with approximately 40,000 m of exploration drilling in and around the existing pits, supported an increase to measured and indicated resources of 1.4 million oz of gold, a 100% increase over 2020, and 453 million pounds of copper, an 87% increase.
Centerra is also in the process of finalizing construction of the staged flotation reactor project, an enhancement of the clean flotation circuit, which is expected to improve both copper and gold recoveries. Finally, Centerra recently received an amendment to their environmental assessment certificate, which allows access to surface and groundwater supporting the long-term operation of the mine, eliminating a long-standing operational risk. Mount Milligan is a cornerstone asset for us, and we're looking forward to receiving the results of their updated technical report and revised life of mine plan update. I'll now pass the call over to Martin, our VP of Operations, who will discuss a set of producing and development projects in our portfolio.
Thank you very much, Mark. I will now move on to slide 46 to discuss the Rainy River mine, where New Gold recently issued a new technical report with an updated mineral reserve and life of mine plan, incorporating the conversion of an additional 569,000 gold oz in the underground mine zones. Turning to slide 47 for some additional detail. Rainy River is a producing open pit gold and silver mine located in Northwest Ontario. Pre-stripping operations commenced at the mine in 2016, and ore processing began in September 2017, with commercial production reached by mid-October 2017. Royal Gold's involvement started in 2015 to help fund development, and we have a 6.5% gold stream and a 60% silver stream interest.
Our first stream deliveries were received in 2017. From first production in 2017 to the end of 2021, the mine has processed 33.6 million tons of ore and produced 973,000 oz of gold and 1.5 million oz of silver. As of December 31, 2021, the total mineral reserve contains 2.8 million oz of gold and 7 million oz of silver. With the new life of mine plan, New Gold has extended the mine life by three years, and the mine now has a 10-year mine life, with open pit ore processing continuing until 2028 and underground production starting in 2022, ramping up to full production by 2025 and ending in 2031.
During the period up to 2028, when both open pit and underground mines are in operation, the plant will process at a rate of 27,000 tons per day. For the last three years of underground-only production, the front plant will run on a batch process to process the approximately 4,400 tons per day of underground ore mined. The operation is expected to produce approximately 310,000 gold equivalent oz per year from 2022 to 2027.
The diagram on the slide shows the location of the active open pit and underground operations in red and the large Royal Gold streaming area of interest in green, covering approximately 121 sq km around the current known mineralization. Rainy River contributed approximately 6% of our 2021 revenue, and we're pleased to see the recent annozment of the mine extension. Slide 48, we move to the Wassa Gold Mine in Ghana. Chifeng Gold announced the acquisition of Golden Star Resources in late 2021, and the transaction closed in January 2022. Chifeng Gold is a $4.5 billion multi-asset gold miner based in China and listed on the Shanghai Stock Exchange. They operate four mines in China and the Sepon mine in Laos and are experienced and well capitalized.
We have met with their management team on several occasions, both on conference calls and in person, and we are impressed with their approach to all areas of the business, from government and community relations, organizational development, environmental focus, exploration, and mine operations. Their approach is to deploy more capital at Wassa with the objective of accelerating the opportunities identified by Golden Star. Moving to slide 49. Wassa is one of our principal properties and another great example of optionality in our portfolio. We got involved in 2015 to help Golden Star fund the transition of Wassa from an open pit to an underground operation.
Since then, we've recovered about 109% of our initial investment, and in early 2021, Golden Star put out a PEA for a plan to mine the southern expansion area, which was expected to extend the mine life by about 11 years beyond the existing reserve. Chifeng have identified several opportunities to advance the operation in the short term, and they are focused on improving underground production with the investment in new equipment, reviewing other regional targets for open pit production, and are planning to invest more in exploration. They've done work to optimize the southern extension PEA, and they plan to complete the feasibility study by the end of 2022, a few months earlier than the original Golden Star target.
They have targeted 2022 production of 155,000 oz-170,000 oz of gold, and they plan to use some of the underutilized processing capacity to increase production to more than 200,000 oz in the 2023-2024 time frame. They will be reporting half year and annual results only, so information flow to the market will be less than that provided by Golden Star. Nonetheless, we are impressed with Chifeng's approach so far, and we look forward to seeing how they advance the potential at Wassa. Moving on slide 50 to discuss the King of the Hills mine owned by Red 5. The mine is in the Eastern Goldfields region of Western Australia. We acquired a 1.5% NSR royalty in 2010, and it's a great example of organic growth within our portfolio.
From 2010 to 2020, King of the Hills was a small revenue generator for us, with underground production being processed at the nearby Red 5 Darlot plant, which also processed ore from the Darlot underground mine. Turning to slide 51. In 2020, Red 5 paused underground operation from King of the Hills and focused on production of a new 4 million ton per year process plant, power plant and camp facility at the King of the Hills site. The new plant is currently in the final stages of construction. Open pit and underground mining and commissioning of the new crushing circuit have started, and they are targeting first gold production in the second quarter of this year.
The Darlot processing plant will shut down this year, and Darlot underground ore will be processed in the new plant, along with King of the Hills underground and open pit ore. The current resource is 4.1 million oz of gold, with a reserve of 65 million tons at 1.2 g per ton for 2.4 million oz of gold. There is further exploration potential as the deposit is open at depths and along strike, and Red 5 understands the geology and metallurgy well, given previous experience with open pit and underground mining. They have also identified several targets in fault zones close to the mine, and they hope to add additional complementary satellite open pits to feed the plant, which Red 5 believes has expansion potential up to 6 million tons per annum.
Red 5 is targeting a mine life of 16 years and production of 176,000 oz per year for the first six years of operation, and we would expect about 2,500 oz per year to our account at this production rate. Turning to slide 52. The Côté Gold Project is an open-pit mine located between Sudbury and Timmins in northern Ontario and is a joint venture between IAMGOLD and Sumitomo Metal Mining. IAMGOLD owns 70% of the joint venture and is the operator. We acquired a 1% NSR royalty on the Chester 3 claims at the Côté Gold project last June. The diagram on slide 53 shows the pit outline in black, the approximate area of the mineralization in red, and our royalty area on the deposit and on other areas to the east in green.
Our royalty covers about 70% of the current mineral reserve. The project is under construction now and is about 43% complete, with a target for commercial gold production in the second half of 2023. Approximately $590 million have been spent to the end of Q4 2021, with about $1 billion remaining to be spent. IAMGOLD expects a mill throughput rate of 36,000 tons per day, a head grade of 0.96 g per ton. 91.8% gold recovery, a total cash cost of $659 per oz, and an all-in sustaining cost of $802 per oz. Project is expected to produce about 489,000 oz per year in the first five years, and IAMGOLD indicates an 18-year mine life.
Proven and probable reserves total approximately 7.2 million oz. We see the potential for upside with all resource conversion within the pit, additional conversion of resources between the reserve pit and the resource shell, as well as potential increases to mill throughput from 36,000 tons-42,000 tons per day. Côté provided us with exposure to a large and long life project with interesting potential in a tier one jurisdiction. Moving on to Red Chris Gold and Copper Mine on slide 54. The Red Chris mine is 70% owned by Newcrest and 30% by Imperial Metals, with Newcrest as the operator. The mine is in northern British Columbia in the Golden Triangle area.
Slide 55 shows the location of the Red Chris current open pit and the main zones Newcrest have identified for the future underground block cave mine and our royalty area of interest covering 37 sq km around the resource, which includes all of the mineralization identified to date. The mine is currently producing, and Newcrest is transitioning the mine from the current open pit operation to a large bulk tonnage underground operation over the next five to six years. Newcrest is a global leader in block caving, and their involvement in this project attracted our interest. We acquired a 1% NSR royalty in August 2021, and in October, Newcrest issued a PFS that defined a 31-year block cave operation and a maiden reserve.
They characterized the PFS in stage one with several upside potentials that were not included in the study, including the potential for early mining of high-grade pods on the East Ridge zone, high-grade mineralization opportunities near the main zone, and mineralization from the East Zone. These areas are the focus of their current exploration program. Slide 56 shows a good progression of the exploration program and resource growth at Red Chris from June through December last year. In June, Newcrest stated dimensions of the East Ridge zone mineralization, 200 m high by 100 m long by 125 m wide. In December, Newcrest had grown that to 600 m high by 500 m long by 125 m wide and also identified a high-grade core.
It appears from exploration results released to date that the potential of the East Ridge zone is continuing to develop. Slide 57 shows an oblique schematic of the overall resource that gives a good sense of scale. The PFS is based on an initial reserve of 480 million tons containing 8.1 million oz of gold and 2.2 million tons of copper. As noted on the right side of the slide, there are several upsides to the deposit, all of which are located within our royalty area of interest. Newcrest continues to progress exploration at Red Chris and has a 100,000-meter drill program planned for 2022. They're also targeting completion of the block cave feasibility study for the second half of 2023 and production from the block cave by 2027.
We did a lot of technical due diligence before we acquired this royalty interest, and we are very pleased to see that Newcrest's progress and plans are validating our conclusions and investment thesis. We are receiving royalty revenue while Newcrest defines the multi-decade potential of this asset, and we expect Newcrest to continue to add to this world-class asset. I will now hand over to Matt Biddell, our principal geologist, who will continue the discussion of our assets.
Thanks, Martin. I'll be discussing a few of our projects where we are seeing resource expansion and exploration upside. The first project is an operating mine at a recently acquired gold stream on Ero Copper's NX Gold Mine in Mato Grosso State, Brazil, near the town of Nova Xavantina. We acquired a 25% gold stream on the mine, which has underground development on a series of Precambrian orogenic quartz veins. We were initially attracted to this investment opportunity because of the exploration potential on the 452 sq km land package. As you can see on the map, there are a series of sub-parallel shear zones, one of which hosts mineralization at the mine. Initial exploration work by NX Gold geologists only commenced in 2021, and they have identified other drill targets at Mata Verde and Cobra that show similar quartz veins with ore grade intercepts.
Because we saw excellent exploration upside potential on the overall land package and in a near mine setting, we worked with Ero Copper to increase our stream advance by up to $10 million for success-based exploration and resource conversion addition. Since our initial stream acquisition, NX Gold has annozd a 32% increase in M&I resources and a 25% increase in reserves, with extensions on the main Santo Antonio vein and maiden reserve on the Matina vein. The figure on the left is a plan view of the mine with the Santo Antonio vein on the left, the Brás vein in the middle, and the recently annozd resource on the Matina vein on the right.
The long section on the right is looking south, so the veins are actually reversed as you're looking at them, and you can see some of the recent exploration holes that extend mineralization at Santo Antonio down plunge that include the best hole drilled to date on the property, an SA 94A, that had 9.0 m at 22.66 g per ton gold. Intercepts at Matina are narrower than Santo Antonio, but the recently annozd reserve grade of 6.26 g per ton gold indicates the potential for this zone to become a new source of mill feed, and NX Gold envisions ramping up production to take advantage of their excess mill capacity. We're pleased with how quickly our vision of the exploration potential of the property has started to be realized.
I will now turn to slide 61 and discuss a developing exploration success story for us in Australia at the Bellevue Gold Mine. Bellevue is in Western Australia and is another orogenic shear zone quartz vein system hosted in Archean metavolcanic rocks. We acquired the 2% NSR as part of a royalty package acquisition in 2008. We have seen this project grow since Bellevue Gold acquired the property in 2016 and launched an aggressive exploration campaign with a maiden resource annozd in 2018 and a recently published reserve of 1 million oz at 6.1 g per ton gold. Also, you can see the neighboring Mount Goode Cosmos nickel project, which we have a royalty on and will be discussing later.
This shows a cross-section of the deposit, which is made up of a series of high-angle lodes, all of which are open at depth. The more recently discovered low-angle Viago lode occurs as a previously unrecognized linking structure. The historic underground mine workings have been dewatered along underground drill access. In 2022, Bellevue anticipates the start of additional infrastructure construction, with production commencing in mid-2023. This is a very attractive project being fast-tracked to production, and we anticipate our 2% NSR will contribute about 3,500 GEOs to our portfolio at full production. We'll now jump back to Brazil and discuss the exploration progress on the Mara Rosa project, where we have a 2.75% NSR royalty. This is a shear zone-hosted orogenic gold deposit that occurs in a Precambrian granite greenstone terrane in Goiás State, Brazil.
The deposit is approximately 15 m-30 m wide, dips at 45 degrees, and has been traced along strike for over 1.5 km. The project is at the feasibility stage, and we initially acquired a 1% NSR in 2010 as part of our portfolio acquisition. Subsequently, we added an additional 1.75% NSR directly from Amarillo Gold in 2018. Our bullish opinion of the project was borne out when Hochschild completed the acquisition of Amarillo Gold earlier this month. They have annozd their intention of putting the 80,000-oz-per-year mine with a 10-year mine life into production in mid-2024 and with construction commencing in the first half of this year.
We are pleased to see Hochschild come in to advance the project forward, and we expect our 2.75% NSR to generate approximately 2,500 GEOs for our production profile when it gets up to full capacity. We'll now jump up to Alaska to discuss the Manh Choh project that evolved out of a unique to us joint venture opportunity. This opening slide shows an aerial view of the project with the drill roads on the two deposits. As you can see, the relatively gentle topography and easy road access to the Alaska Highway 15 km away is also somewhat unique to Alaskan projects. Our excellent relationship with Tetlin Native Village and joint venture partners Contango Ore and Avalon Exploration allowed us to advance the project to the PEA stage.
Kinross recognized the exploration potential and the attractiveness of being able to direct ship ore to their Fort Knox mill. You can see the large land package that consists of the Tetlin lease in green and state claims in blue. Together, these properties total 3,488 sq km with a 3% NSR covering the lease and state claims, an additional 20% silver royalty on the Manh Choh project area. This is the single largest land position of any project in our portfolio. Kinross is currently working on a feasibility study based on our PEA that considered production of about 1 million oz of gold over a 4.5-year mine life starting in 2024. They will direct ship the ore to the Fort Knox mill, reducing the mine development infrastructure and eliminating a need for a tailing storage facility.
The Peak and North Peak deposits are near surface and amenable to open-pit mining with a 3.9-to-1 strip ratio. These are gold, silver, copper skarn deposits that occur in Paleozoic schists. The huge land position, larger than the state of Rhode Island, has exploration potential for additional skarn deposits as well as porphyry copper gold deposits. Reconnaissance scale exploration has been conducted on portions of the Tetlin lease as well as in the state claims. Contango ORE plans to continue the exploration on the state claims with an identified skarn target at the Hona Prospect and a porphyry target at Triple Z. We are excited with the handoff of our involvement in the exploration to both Kinross Gold and Contango ORE. We expect the royalty on Manh Choh to deliver 8,000 GEOs to our production profile when it reaches full production.
We'll now slide east on about the same latitude to Nunavut to discuss our Back River royalty. We hold two different royalties on Sabina Gold & Silver's Goose Lake and George Lake properties that make up the Back River project. The Goose property is the most advanced with 3.6 million oz of gold at 5.97 g per ton in reserves and 1.2 million oz of gold at 5.34 g per ton in indicated resources at George Lake. Mineralization occurs as quartz carbonate veining hosted in folded and faulted Archean iron formation.
Sabina has annozd a financing package that will allow them to start construction and produce the first gold pour in early 2025 from initial open pits and transition to underground development. They have an excellent exploration track record that has allowed them to unravel the complex structural geology and make additional discoveries, and we envision continued success as exploration efforts continue. Our royalty at Goose kicks in after the production of 400,000 oz, after which we expect this project to contribute about 6,000 GEOs to our production profile. Additionally, we have several other royalties of interest shown on slide 70. Each of these is being advanced by the operators, and while they are all relatively early stage, they are all bought and paid for and could provide some interesting organic growth for us in the longer term.
At Las Cruces, First Quantum is reviewing the potential to extend the mine life after depleting the oxide reserve on this volcanogenic massive sulfide deposit in the Iberian Pyrite Belt in southern Spain. The underground plan as scoped today would add an additional 15 years to the mine life. At Mount Goode Cosmos, next to Bellevue, which we just discussed, Western Areas has been having exploration success on the underground extensions to the open pit, with a new discovery of high-grade nickel on the AM6 deposit that is open to the south on our royalty ground. Also, with i-80 Gold's recent acquisition of both Ruby Hill and Granite Creek in Nevada, they have ramped up their exploration program.
At Ruby Hill, the last benches from the open pit had up to 1 oz per ton in blast holes, with underground deposits delineated at Blackjack, the 428 zone, and Ruby Deeps. In Granite Creek, they have recently taken an underground bolt sample for stope development testing and metallurgy. Permitting of expansion to the existing open pit is ongoing. Finally, I'll end on slide 71. We have our newest royalty transaction with the acquisition of a 0.5% NSR on Benchmark Metals' Lawyers Project in northern British Columbia. This occurs in Hazelton Group volcanic rocks similar to deposits to the west, such as Brucejack, Schaft Creek, and KSM in the Golden Triangle. This is an epithermal gold/silver trend that has been seeing historic production from narrow high-grade veins.
However, Benchmark has discovered a large open-pit, bulk mineable, low-sulfidation epithermal gold deposit with an initial indicated resource of 1.5 million oz gold at 1.19 g per ton of gold and 50.2 million oz silver at 38.7 g per ton silver, and 620,000 oz of gold and 18.1 million oz of silver in indicated resources. This royalty is adjacent to our 0.5% NSR royalty on the adjacent Shasta property, and the transaction includes a right of first offer on Thesis Gold's Ranch property for a total consideration of $8 million. We have been watching the emergence of this new epithermal gold district with interest and think this is a prospective area with excellent upside potential.
This adds to our existing portfolio of projects in British Columbia, including Red Chris, KSM, Berg, Schaft Creek, among others, and of course, our stream at Mount Milligan. In closing, we take a multi-pronged approach to project evaluation, and we always emphasize the exploration potential in our reviews. We have the in-house expertise to identify good geological potential, and upside is key in our decision-making process. While we tend to focus more on cash flowing assets, we are always interested in early-stage projects where we see long-term upside that gives us a low-cost entry into areas with exciting exploration potential. With that, I'll turn it over to Dan Breeze for the discussion of our business development activities.
Good morning. This is Dan Breeze, Vice President of Corporate Development, and I am based in our offices in Lucerne, Switzerland. I am pleased to provide an update on the current business development environment, as well as share the key aspects of how we approach this function. Royal Gold is a royalty and streaming company, and it is worth a short review of the differences between these financing products with this slide. Royalties provide the holder with the right to a percentage of revenue or metals produced from a project, typically after subtracting agreed costs like refining and transportation. Royalties are either on title that are attached to the land or contractual, which are negotiated as part of a contract. The funds generated from a new royalty are typically smaller and generally used to advance a project. Sometimes a right to provide construction financing is attached to the new royalty.
A stream provides an advanced cash payment in exchange for a percentage of metal production. A cash payment, which is typically a percentage of the prevailing spot price, is made for each unit of production delivered, where the counterparty can participate in long-term metal price volatility. The efficiencies of streaming for both the operator and Royal Gold allow for larger notional amounts for financing. For example, operators are typically able to achieve deferred revenue treatment for the advanced payment received. Therefore, streaming is more suitable for larger project development financing or in the case of producing assets for expansions or corporate needs like repayment of debt. Competition in our sector continues to be very dynamic. As shown on this slide, our competition comes from four primary sources, debt, equity, and our small and large peers. Typically, these sources are stronger or weaker at different times in a cycle.
A year ago, we were in a unique environment where these components were aligned in the same stronger direction. More recently, the equity markets have been less robust for smaller financings. This is positive for us as we see small royalty opportunities that may cover prospective land packages. Projects that source funds to advance are also beneficial to us as they will require construction financing like streaming. In addition, large equity raises have become more challenging, which reduces this form of competition for our streaming product. Debt continues to be available at attractive terms for higher quality assets and operators.
However, the upward interest rate cycle is underway, and this will potentially impact the attractiveness of terms available and overall demand for debt. The newer and smaller peers continue to push for growth and scale with aggressive pricing to match, while the larger peers are experiencing record cash generation that is building liquidity to fund transactions. The diagram at the bottom provides a conceptual scale of the current environment. The more intense competition is still focused within the smaller opportunity set on the left side. The smaller peer group competes among themselves and overlap with equity and debt, and in the case of medium-sized transactions, the larger peers. Although the competitive space for us is less crowded as shown on the right side of the scale, we continue to face well-capitalized peers in debt that has been attractively priced.
We are careful with how we allocate our resources, as it can take the same amount of time to assess a small opportunity as it does for a larger one. The existence of stream financing extends back almost two decades and has become a mainstream source of capital for the mining industry, with almost $22 billion invested over this period. As shown on the bar chart, streaming is lumpy and is a flexible form of financing that can be applied to various needs depending on the state of the mining cycle. The applications range from project development to strengthening our balance sheets to providing capital for supporting M&A, as shown in the pie chart. Currently, the majority of stream opportunities are for construction financing.
The one constant is that mining is a capital-intensive industry, and there's always a need for financing, which provides us with a near constant flow of opportunities. Our approach to acquisitions is best represented with one word, discipline. The bar chart on this slide shows Royal Gold's acquisition history over a 20-year period. Although we see a reasonably consistent flow of opportunities, our transaction frequency has been irregular, mainly because of our rigorous approach to diligence. Our strong liquidity and large, stable portfolio allow for us to be disciplined when we consider growth, as we can act quickly when we need to, but without having the pressure to complete transactions that do not fit our criteria. Investment decisions are the lifeblood of the company.
The decisions made by management and the board will have a lasting impact on Royal Gold as assets are added that we hope will contribute to the portfolio for decades, and as we establish relationships with our partners that can unlock future investment opportunities. The next two slides provide an overview of our business development process, which consists of identifying, evaluating, and executing on new opportunities. Ideally, we prefer to identify opportunities through relationships or our own initiatives that generate bilateral discussions. However, given that our form of financing is well established, we are seeing more opportunities, in particular larger ones, come to market in advisor-led processes where we are competing against our peers as well as other forms of capital. What do we want to invest in? Our investment criteria are clear and guided by the long-term nature of our investments.
The three core aspects are shown in the box on this slide. First, we have the three keys, starting with people. We carefully review the experience of the team, their financing and execution plan, and ability to capitalize on value-enhancing opportunities and manage the multitude of risks in this complex business. Project. We look at the asset not only from Royal Gold's perspective, but also through the eyes of the operator, its investors, and other stakeholders such as local communities and governments. Finally, place. Our evaluation of investable jurisdictions focuses first on ensuring that the project will be welcome in the community as long as the operator holds up its end of the bargain, respect for the rule of law to ensure a fair hearing should any disputes arise that directly or indirectly impact Royal Gold's rights, and general acceptance of foreign investment.
We also consider the fit of the investment within our existing portfolio and how it may impact our strategic goals. We consider various dynamics, including pro forma metal mix, asset concentration, and our ability to finance the investment in a way that is accretive to Royal Gold shareholders. Finally, we need to assess the executability of a potential transaction with the aim of finding alignment on commercial terms and structure such that both parties can achieve their goals. Throughout the evaluation and execution process, we continuously retest the investment against our criteria as we learn and apply new information. The process of evaluation and execution of a transaction involves professionals from a number of fields of expertise working together under tight timelines, active CEO involvement, and board input to draw on the experiences of our directors when beneficial.
Through diligence, we establish a view on how the asset will perform over its life while identifying risks and opportunities that could affect our investment. A key part of our diligence is assessing the intrinsic optionality of an asset, which is the potential for production and geologic upside, as we believe this is the key driver of our premium multiple. Due diligence is followed by financial evaluation, where we determine a fair value for the investment based on the risk-reward trade-offs identified in our diligence. We then look to structure the contract to protect Royal Gold's interests while meeting any unique requirements of our partner. These are significant investments that need appropriate protections, but the long-term nature of the agreements means we also need to show flexibility to allow the operator to run their business without too much restraint.
One of the attractive aspects of stream and royalty financing is that it can be executed efficiently in as little as two to three months at a very manageable expense. Finally, the contract needs to be managed over its life to ensure that it continues to work for all parties. I will conclude by sharing what a typical year looks like for our review process with this slide. We are generally aware of around 100 potential opportunities over a year that typically come from external queries and our internal ideas. Our technical team will first carry out a screening process or a more involved phase one review of the asset. The technical view will supersede any commercial view, regardless of how compelling the opportunity might be, and drives the decision-making for further work.
Many assets are not considered further after this initial stage, and those that are enter a more rigorous review process. The technical team may ultimately only support a handful of the original pool of opportunities. If our commercial view is still intact, we will proceed with a firm proposal that may include final conditions such as board approval. For 2021, this process yielded three transactions discussed previously by Martin and Matt, all of which met the investment criteria I just reviewed. Jason Hynes will now present the performance of our portfolio.
Thanks, Dan. My name is Jason Hynes. I'm Royal Gold's Vice President of Business Development and Strategy. I've been in the mining business for close to 20 years and with the company for over eight, with stretches in Denver, Switzerland, and now Vancouver. Dan gave a good overview of our business development process and investment criteria. When we acquire a new interest, shareholders are justifiably interested in estimating the potential rate of return in order to evaluate our investment decision from a financial perspective. What I'd like to do in this section is to take a look at our investment history and hopefully shed some light on how we think about financial outcomes during our evaluation process. We have a large portfolio that has built steadily over time, and each individual asset is at a different point in its investment maturity.
Some are recent acquisitions that have only recently started contributing revenue, and others have generated revenue that is multiples of the original investment over the period of our ownership. There are also a significant number of pre-development assets in our portfolio. Our investments are long-term in nature, and the optionality that's embedded within them can make it challenging to estimate returns when examined at a single point in time. This often results in analysts and investors underestimating the potential returns relative to our internal view. Investors need to forecast many variables over a long time horizon to evaluate a mining investment, and that approach is similar for a stream or a royalty. Putting metal prices aside for a moment, our investments take time to generate what we refer to as base case returns.
The time it takes to surface embedded optionality will vary as our partners invest in exploration and expansion at different rates based on factors that are unique to the asset, the commodity cycle, and their financial position. Our investments are structured such that they benefit when the operating mine does well, but they have less exposure to variables like operating capital costs, which weigh on operator returns when they are trending in the wrong direction. Also working in our favor is the fact that capital deployment decisions are at our discretion, and the quantum of what we pay and the percentage of production we receive are agreed upfront. Any future decision to invest above this pre-agreed amount is subject to the operator's needs and our evaluation of the incremental opportunity on a standalone basis. Royal Gold has a good track record of capital deployment.
Currently, 80% of our book value is tied to assets that are generating revenue and cash flow. While mining is a risky business, in Royal Gold's long history, only $365 million in impairments have been recognized on over $4.5 billion in investments. The majority of that aggregate impairment is associated with Pascua-Lama, where, while there's significant uncertainty on future development, there is still a world-class gold and silver endowment, and our large NSR royalty interest remains intact. The chart on the right shows cumulative life of company capital invested versus revenue received. As you can see, we are in the black on this metric, with years of well-defined, high quality production expected to come, and no doubt future optionality to be surfaced.
The factors that get us above the base returns that are forecast by the investment community, i.e., the surfacing of optionality, include resource to reserve upgrades and discovery of new resources, throughput expansions, which effectively accelerate revenues and unlock resources through economies of scale. Overlaying it all is metal price appreciation, both as a direct input into our revenue line and as a factor which can make lower grade resources economic for our partners to exploit. To capture these excess returns, we need to invest in assets that demonstrate these growth attributes, which is what makes the technical evaluation process so important. Looking at previous investments 5 and 10 years after the date of acquisition using data from S&P Capital IQ shows that on average, the resources contain 43% and 64% more oz respectively, and this doesn't take into account the depletion during those periods.
Let's take a look at reserve and resource growth in a bit more detail on two of our principal investments, both of which were made in 2015. At Barrick and Newmont's Pueblo Viejo mine, we've recovered over 2/3 of our $610 million upfront investment. While there's only been a small net increase in reserves after factoring for depletion, the growth opportunity can be measured in millions of potential oz to be brought into the mine plan if the ongoing expansion project is successful. At Wassa in Ghana, which is now owned by Chifeng, we've recovered over 100% of our initial $145 million investment. Here as well, there has been a small increase in net reserves.
Just like at PV, there is significant growth potential as the well-funded operator accelerates plans to tap into the multi-million oz resource. As a brief case study, Mulatos is one of the rare investments in which our exposure was capped and our interest has expired. This gives us the opportunity to calculate the IRR over the life of the investment. We bought it in 2005 when it had a base case 6.5-year mine life. We wish it wasn't capped, because when that cap was reached 14 years later, it still had a seven-year mine life. The base case return at acquisition was forecast at 8%. However, the IRR on the investment eventually reached 36%.
While the resource growth optionality was limited by the cap, this is a good example of what metal price optionality over long periods can do for our returns. While we don't provide forecasts for expected future returns, consensus asset NPVs allow us to compare the value of assets today versus when we acquired them. When you factor in the cash flow that has already been pulled out, all of our principal properties have already or are forecast to generate significant positive returns. For example, at Newmont's Peñasquito mine, we acquired the 2% NSR royalty in 2006 for $100 million. To date, it has generated over $300 million in cash flow to our account and has a remaining consensus NPV of $280 million.
On the far right, Comical may look underwhelming relative to the other assets in this chart, but we only acquired it three years ago, and the company has not yet turned its attention to exploration and expansion. The difference between the $265 million and the $305 million is most likely due to increases in the silver price over the past few years. As you can see, the longer an asset has been in our portfolio, the better these numbers look. As our partners invest in their operations, which surfaces value that benefits us all. To conclude, hopefully, this gives you a bit of insight into how we think about financial returns.
While I have provided a simple one-number IRR estimate of our investment performance, I hope to have conveyed an appreciation as to why this may not be the best metric to measure performance in a portfolio that continues to produce and evolve. As the mines in which we are invested eventually reach the end of their lives, we will be able to report this metric on an asset-by-asset basis. In the meantime, we will aggressively pursue acquisitions with growth potential in order to embed attractive returns and long-term optionality in our portfolio. I will now hand it over to our CFO, Paul Libner.
Thank you, Jason, and good morning, everyone. My name is Paul Libner, and I am the CFO and Treasurer of Royal Gold. It is again a pleasure to be speaking to you today about our financial position and how Royal Gold thinks about allocation of capital. Before I make a few comments on our current financial position, I want to again recognize the entire Royal Gold team for successfully completing the transition from a June 30 year-end to a December 31 year-end. Changing year-ends is no small task, especially for a publicly traded company, and I could not be more pleased with the effort and result. We think investors and analysts will all agree that the work was worth the effort, as you can now easily compare Royal Gold's performance with our peers and the rest of our industry.
This next slide provides an illustration of one of the core attributes that we'd like to speak to here at Royal Gold, and that attribute is our financial strength. We ended calendar 2021 in a very strong financial position, including cash of $144 million, zero debt, and a full $1 billion undrawn credit facility. Our credit facility has evolved over time, and it is a key strategic tool for financing our business. There are eight banks in our facility. They're all major lenders in the global mining industry, and no individual bank accounts for more than 18% of the total credit facility. The facility is very low cost, flexible, and allows us to draw or repay without penalty.
With our existing cash balances and $1 billion available in our credit facility, we believe our current liquidity is sufficient for the business opportunities we see today. This next slide highlights another core attribute of Royal Gold, which is our disciplined capital allocation strategy. We often get asked about our capital allocation strategy, and the consistent answer over the years is our capital allocation will prioritize first our balance sheet, second dividends, and third reinvestments into the business. Royal Gold offers a financing alternative in a cyclical business. Therefore, I need to ensure we maintain a strong balance sheet, so we have the ability to act quickly when we see new opportunities. We are comfortable using and taking on debt, say even up to 3x net debt to EBITDA, if we can see good reduction in our leverage over a reasonable period of, say, 12-18 months.
While we are comfortable taking on debt, we are also very disciplined in maintaining low debt levels. We have demonstrated this approach by steadily repaying any outstanding borrowings over shorter periods of time or as cash flows allow. With respect to our dividend, which is another core attribute of Royal Gold, you have often heard this management team say over the years that we view our dividend as a firm obligation. This statement remains very much true today as we continue to pay a growing, yet sustainable dividend. When we review our dividend every year, we look ahead and review sensitivity to cash flow forecasts as we consider the sustainability of the dividend. Finally, we are always looking to grow and reinvest in our business.
We aim to fund our growth by using cash on hand, our strong operating cash flows, and our credit facility, generally in that order too. We prefer to use debt to acquire cash flowing assets or near cash flowing assets and keep the growth for our shareholders. At the end of each day, I always want to ensure that we have sufficient capital on hand and available to help us manage the balance sheet, our dividend, and investment in further growth. This slide shows how we manage this prioritization and strategy during calendar 2021. Here at Royal Gold, we like to think and measure our performance in terms of per share metrics. As we measure ourselves and we are focused on growing per share metrics, our overall share count is then a key metric for the company. This slide highlights some interesting facts regarding the share count.
First, as one of the original members of the GDX, Royal Gold has the lowest share count among all index members. Second, and as illustrated by the bottom navy colored line, Royal Gold share count has increased less than 1% since 2015. In fact, Royal Gold has not issued equity since 2012. Finally, when compared to many of the large cap precious metal peers, including our direct stream and royalty competitors, we have maintained our share count since 2015, while others shown in the slide have grown counts by 10% or more over the same period of time. The one downside to a low share count, however, is that smaller increases in our reported expenses or other accounting charges can have a greater impact on our reported EPS.
An increase in pre-tax expenses of, say, $600,000 as an example, would decrease our EPS by nearly $0.01 per share. I view this as a worthy trade-off for limited shareholder dilution and as a continued challenge for all members of the Royal Gold team across the team. In an earlier slide, I provided an overview of our capital allocation strategy and prioritization. This slide illustrates how we've been able to grow and finance our growth accretively over the past 21 years, and all without any significant equity dilution. Since 2000, we have grown our revenue by over 60x , our operating cash flow by over 90x , but our G&A expenses have grown by just over 15x , and our share count under 4x . Said another way, there are three aspects of our growth over the past 21 years.
First, revenue growth has been driven by volume increases and not just metal prices. Second, the growth in our G&A expenses has been limited, which further illustrates the scalability and efficiency of our business model and the cost discipline approach we have here at Royal Gold. The third aspect of our growth has been that our equity dilution has been far outpaced by the growth in our revenue and operating cash flows, leaving our shareholders to benefit directly. This approach to liquidity and financing has proven itself over the long term as we have been able to increase our capital return to shareholders while continuing to grow our business. Couple this with our strong balance sheet and liquidity, I feel very good about our ability to compete and deliver results for our shareholders in today's environment.
With that, I will now turn the discussion back over to Bill for closing comments.
Mr. Bill Heissenbuttel, your line is open.
Well, we appreciate your attention through the formal presentation portion of our investor update. We hope we've provided some valuable insight into our business and why we are very excited for the future of Royal Gold. I'd like to open the session to Q&A, and I will ask the operator to open the floor to questions.
Thank you, sir. As a reminder, to ask a question, you will need to press star one on your telephone. To withdraw your question, press the pound key. Again, if you would like to ask the question, press star, then number one on your telephone keypad. Please stand by while we compile the Q&A roster. Your first question comes from the line of Tanya Jakusconek from BMO Capital Markets. Your line is open.
Thank you very much. Thank you very much for that detailed presentation. It was super informative and super helpful. I wanted to ask about Cortez, because it's a little tricky for us to model and you didn't go over that in quite as much detail in the presentation. Are you able to give us an update on what you're seeing in Cortez in terms of how your royalties are performing there? Thank you.
Yeah. Tanya Jakusconek, thanks very much for the question. I'll just state up front, we do have a lot of speakers from Royal Gold on the line, so if we bat a question around a couple of times, just bear with us. Mark, is there anything we can add to what we've seen from Cortez?
Yeah, sure. We can add some detail here. Yeah, we realize that, you know, our royalties make up only a portion of Cortez production, so there is pretty much no transparency publicly. We do get an updated production plan for every calendar year and an updated life of mine plan. We do try and report those every year. For this year, for the 2022 calendar year, Nevada Gold Mines informs us that we can expect production from our royalty areas to be about 280,000 oz of payable gold.
Just to reiterate what we've said in the past, to get the royalty oz reporting to us, you can multiply that by about an 8% NSR factor to determine what the oz reporting to our royalty is. As last year, we also reported a five-year period, 2022 through 2026, and I'll provide an update on that. The life of mine plan is showing 332,000 oz on average for that five-year period. Now that's down a bit from what we reported last year. I believe we reported about 415,000 oz of average production for that period. You know, we see several changes that have occurred.
One is that there was a pit instability in the Pipeline pit, and we know that had some impact on reserves and of course ultimately production in the life of mine plan. Probably the more important feature that we identified was that Cortez is always looking to optimize their production and the higher margin ore gets treated more preferentially. What we saw in the numbers is the cutoff grade for mill ore was increased quite substantially. This comes out of their publicly available technical reports. What happens is more of our Pipeline and Crossroads ore gets relegated to heap leaching, which has about a 19-point difference in recovery from what the mill would get.
Although reserves didn't necessarily change from that factor, production was impacted or the forecast of production. We do see, you know, every year there can be quite large swings in the production that gets reported to us. I guess I'd try to impart the most current view that we know. I hope that gives you enough detail to work with.
That's super helpful. Thank you, Mark.
Yep.
Your next question comes from the line of Adam Josephson from KeyBanc. Your line is open.
Hi. Thank you. Good morning, everyone. Thank you for all this information. Not sure whether to address this to Dan or Bill, but one question on the jurisdiction issue that you brought up on slide 77. Obviously you're already in Chile. There have been significant recent political changes in Chile and Peru, and obviously there are food and fuel riots erupting in some emerging markets now because of the food and energy crisis. I'm just wondering, in light of recent developments, how has your thinking evolved or changed with respect to jurisdictional risks by country or region, if at all?
Yeah. Adam, I'll take a shot at it. Looking at the jurisdiction, particularly when we're looking at a new jurisdiction, it takes a lot of work. To look at Botswana when we made the Khoemacau investment, we talked to everybody we knew that had some impact or some exposure to Botswana to make that investment. The thing about our investments is, obviously there are countries you just don't go to. Really since 2006, when I joined the company, that list hasn't really changed all that much. Our investments are so long-term, I mean, they're decades.
You know, we will see from time to time, we'll see countries that were once, you know, very favorable investment destinations suddenly turn into a place you might not go. What I found over the years, and I've been involved in the mining industry for about three decades, is mining operations tend to be able to work through a lot of these issues. We had a royalty in West Africa at Siguiri, and I think within a month of buying the asset, there was a coup and we called the mine and the mine said, "Don't worry, you know, there's a coup every few months," and nothing was ever interrupted. It doesn't change a lot.
I don't look at Peru and Chile and say, "There's no way we're going there," but the due diligence antennas are up a lot more. It could be that we may look at an investment that, I don't know, three, four years ago, we would've made that investment, but now we might not. I certainly am not to the point of ruling those countries out entirely. We're just more sensitive. We do a little more analysis on the risk projection.
No, I appreciate that. Can I ask one more question?
Sure.
Okay. One. On slide 74, Dan talked about, you know, rising interest rates and then, you know, with respect to equity financing, that the markets remain open but are a bit less robust. Can you just talk about your historical experience, what happened in rising rate environments? How much more difficult did that financing become? If we're in such an environment, what do you think the likely implications are? Then can you just elaborate on that comment about equity markets remaining open but appear to be less robust and what that might mean for you in the months or years to come?
Dan, do you wanna take the last part of that, about the current state of the market?
Sure.
I might think a little bit about the history that we've seen.
Yeah, absolutely. Absolutely, Adam, and it's a good question. I think what we're seeing is on the equity market side, we are seeing I think a market that is, despite the gold price being where it is today, I don't think the equity markets have been as wide as we've seen in the past. What that has meant for us is we've seen a number of smaller financings, royalty type financings, call it $10 million- $20 million to even $30 million in size. We don't always spend a lot of time on those, but they've come in our way, and we're looking at land packages to see if they make sense. I think in a better equity market, we may not see those kinds of opportunities. I think that's one point to highlight.
The companies, the firms and the assets that are getting equity financed, that's also good for us, as I mentioned, because we're not the whole capital picture ultimately in those projects as they move forward. We're looking for construction financing with larger streaming, for example. That's very helpful for us as well. I think it's a good market from both those points for us at the moment.
Thanks, Dan. Bill, did you wanna-
Yeah, just, I mean, kind of the history is like, when's the last time we were in a rising interest rate environment?
Yeah, 40 years ago.
Streaming didn't really exist at that point.
Yeah, yeah. Right.
I think we saw rates go up about 10 years ago or 11 years ago. But you know, I think our product has fundamentally changed. You go back to the global financial crisis in 2008, 2009. You know, before that period of time, you know, we were the lenders of last resort. You got the call when the debt and the equity markets weren't open. That's not the case anymore. We get calls all the time. We may lose opportunities to debt or equity, but we're seeing more opportunities than we did before then. All I can really say is we're kind of in uncharted waters with a rising interest rate environment. You know, it does make debt more expensive, and hopefully, that opens a few doors for us.
It never ceases to amaze me. We always seem to be dealing with something we really haven't seen at all for decades.
Yep. Now, thanks very much, Bill.
Thank you.
Your next question comes from the line of Adrian Day with Adrian Day Asset Management. Your line is open.
Yeah, thank you very much. I have to say, this was an excellent presentation, better than most of your peers, if I may say so. Gosh, I have lots of questions, but if I may, I'll just start with one. Two parts. On most of the streams and royalties that you're doing at the moment or, you know, in the last couple of years, are most of them prospects? Can you sort of quantify that? And then where they are prospects, where do you have an edge over some of your peers, do you think? And if you win, is there any more to it than just paying more than other people?
Adrian, thanks for the question. I might follow the same routine here. Dan, do you wanna take a shot at it? Then if I have something to add, I'll chime in.
Yeah, absolutely. Go. Hi, Adrian. It's Dan here. I think it's fair to say, Adrian, we've seen more processes. I think it's a function of our product becoming much more mainstream. I think a CFO would look at our product and debt and equity and other types of financing in the same sort of light. I think we're being brought into more processes. I think the probability to close a transaction has probably gone down for our sector to some degree, just because of all the competing sources of capital. I think the way that we try to compete there, of course, price is important, but we try to be different and more creative.
I think the NX Gold transaction that was talked about in the presentation is a good example of that, where we offered incremental financing to help that operator explore and to add oz. I think that they really appreciated that approach. We're looking at those kinds of ways to be more creative and really listen to the operator as a partner and see where we can be helpful. In that case, it was very helpful for them. Does that address your question?
Yeah, I think so. No, that's interesting. Thank you.
Yeah, Adrian, I might add something, and my team has heard me say this over and over again. You gotta build these. These should be partnerships, not transactions. These are life of mine contracts. You know, any operating company that signs one of these, you're kind of buying into the culture of the company a little bit. We have historically, I mean, we have paid for consultants to go to sites where they were having particular issues to help the operators address an issue. If we're not thinking along the lines of being on the same side of the table as opposed to across the table, we're not gonna win a lot of these things. But Dan's absolutely right.
I mean. You look at NX Gold, the environmental support that we, you know, for the community that we did there was unique and, I'm always pushing my team to think that way.
Okay. Thank you. May I ask another one?
Sure.
Okay, great. Great. When an operator comes to you and says, you know, "We need to change terms of our deal because, you know, it's just too onerous or the market's changed or whatever," what is your general approach to that? Do you ever have operators come to you and say, "Hey, listen, we wanna buy this royalty over. We want to buy it back." Would you entertain that at a good price?
We're not sellers of assets. Do we get the question all the time? You know, especially on the royalty side of things. You know, if you just look at our valuation, nobody can pay us what a particular royalty is worth if we're trading at a premium. It just, you know, if it's cash flowing in particular, they're just not gonna do it. Those conversations tend to be pretty short. The bigger streams, "Oh, it's not economic," we get that from time to time. We tend not to amend our agreements. If there is a fundamental issue, we're always willing to listen. A good example, Star wanted to sell Prestea to a private equity company.
In the course of that, because of where we were sitting economically and the importance of Wassa relative to Prestea, we were actually able to negotiate down the stream rate at Prestea, basically in the step down before the step down had been achieved, because it made more sense for that operation. We thought it was the best thing for those operations. We, you know, I certainly tend to be a little stingy about terms, but we're always willing to listen. If there's a good case to be made, we're obviously gonna consider it. Again, we're trying to be partners here.
Okay, thank you.
Thank you.
Again, if you would like to ask the question, press star then 1 on your telephone keypad. Next question comes from the line of Greg Barnes from TD Securities. Your line is open.
Thank you. I think you talked about this before, but can you talk about the deferred silver oz issue at Pueblo Viejo and how that evolved over the next several years with the extension that gets done?
Yeah. Greg, if I heard you correctly, you wanted to talk a little bit about the deferred silver at PV?
Yeah, that's right.
I think I'll turn that over to Mark. The only caveat I always see here is, you know, Barrick doesn't talk a lot about silver. It doesn't talk much, doesn't talk at all about silver. So there's always a limit as to what we can really say. So I just wanted to leave that with you before I turn it over to Mark.
Yeah.
Yeah, thanks, Bill. Yeah, it is a bit of a complex and sometimes difficult question to fully answer. In effect, you know, what's happening is we have a guaranteed silver recovery in our contract to 70%. You know, what happens is when the silver recovery dips below a certain level, they have to defer oz to us, and those ultimately get built up for delivery at a later time. Now, the real question I think here is, you know, why do these deferrals happen? They're for a host of reasons. Many of the reasons tend to be around. They're very gold-focused.
They're very focused on in the last 18 months, 24 months, on pushing tonnage through the plant to achieve the gold production, which is very understandable. What happens is that there are bottlenecks associated with the circuit that allows for the silver recovery. When that tonnage gets pushed, it ends up causing the operation to bypass the lime boil in some instances. They also had a number of mechanical issues that were played out over a period of about six months that caused a lot of problem.
Yeah, we've come to the conclusion, you know, from comments at the site, that as they finalize their construction this year for their expansion project, that these bottleneck activities or pieces in the circuit that we've seen impact silver recovery will get addressed through the expansion project. Until that's really done, we don't expect to really see silver oz, deferred silver oz coming back to us, and it's entirely possible to think that we'll see additional small deferrals on a quarterly basis. It's gonna, you know, not change very much for this calendar year. As we finish up the expansion, I think we'll start. We would expect to see deferred oz coming back to us.
Does that help you understand?
Yeah. I get what you mean. I just wonder how many deferred oz have built up to this point.
Oh, I think it's $459,000. Anybody else on our side of the phone if they have a more accurate number than that? I think that's the last one I recall.
Yeah, Greg, this is Paul Libner. Mark, you're right. It's 459,000 deferred oz as of December 31.
Okay. Just a secondary question. Have you considered doing a longer term, GEO guidance outlook like some of your peers are doing?
You mean longer term than the year we just did?
Yes.
We talked about it. We're relatively new to the guidance game and we gave it for the six-month fiscal period last year and then ended up having to change it halfway through a six-month period. You know, I get on my soapbox every time I get the question that we don't control these properties. There are things that go on at these properties that we don't know today that may impact us later. It's really difficult for us, particularly when we don't have the information right, for us to craft guidance that would be meaningful to you.
We get the question all the time, and I'm not gonna say one way or the other, but I'm sure come January of next year, we're gonna have a long internal discussion about should we go more than a year. I just wanna see how this year goes, and if we end up changing it quarter- to- quarter, I really don't know what the three-year or five-year guidance would be for you.
Okay. That's fair enough. Thanks, Bill.
Thank you.
Hi, Bill. It's Alistair speaking. I have one question that came in through the webcast and thought it'd be worth passing on. What is your estimate of management time spent on ESG, including answering the various surveys?
Yeah, well, you know, it's a timely question given the amount of time that members of our senior management and our whole company spent putting together the ESG report. Alistair, I honestly haven't thought through the question, so I'm gonna give you a percentage, and if you disagree with me, disagree with me. You know, I personally probably spent 30%-40% of my time over the last year on ESG issues, on the ESG report, and I don't get involved in the questionnaires and surveys. You know, I'm guessing it's gotta be north of 20% overall across the whole company.
Okay, thanks.
We have a follow-up question, sir. It comes from the line of Adam Josephson from KeyBanc. Your line is open.
Thanks everyone for taking my follow-ups. Yeah. Bill, just on the inflation slide eight, where you highlight just again, one of the attractions of your business model compared to the operators. Based on wherever we are in the cycle, the gold cycle, and based on what you're hearing from operators and you're reading about, how sticky do you think this inflation will be? Do you expect it to further intensify in the months and even years to come for that matter?
Oh, you want me to be an economist? You know. Yeah, I think the Fed is at least signaling that they're gonna be aggressive when it comes to fighting inflation. I think the Democrats know getting inflation under control is pretty integral to an upcoming election. You know, with that respect, yeah, I would expect the Fed to move relatively quickly. You know, at the same time, you have to go all the way back to Paul Volcker fighting inflation under Reagan.
Yeah
to see if that you know, has the economy fundamentally changed? Are we, you know, are the supply chain disruptions that we're seeing today, are they impacting inflation in a way that would not have impacted it in 1980? I just, I really don't know.
Yeah.
I think there are, you know, people younger than me that haven't seen this type of inflation. You know, I was still in school.
I just think it's a global phenomenon. It's clearly not just domestic, and it's in everything, labor, energy, et cetera, materials, you name it. There just seems to be a lot of potential stickiness to this, regardless of what the Fed does in the months to come. I just was wondering about it as it relates to the operators specifically, globally.
Yeah, you know, actually, I don't know, Mark. I'll let you think about it for a second because, you know, Mark and Martin have kind of clearly worked at sites and may have a bigger, better view than I might be able to provide you. I would think that probably we'll be dealing with higher input prices, higher payroll for some time, and I don't know the relative stickiness of those things going up versus coming down. I don't
Yeah.
Mark, Martin, anything you wanna add to that?
Well, I mean, yeah. I think obviously I don't know, but what we do see on the capital projects that we look at, you know, I think we're routinely seeing numbers that are 20% above what estimates were, you know, even last calendar year. I don't think we know if we're seeing that kind of rate in the operating costs, but certainly I think we're seeing, you know, +10% on particular things like labor, and, you know, some of the other.
Yeah
inputs. Yeah, I-
Yeah.
My sense is it's here. Labor will be here to stay. It's not gonna go down.
Yeah. No, thank you. Bill, just to follow up on what Greg was asking about. I suppose that some other companies do it just to highlight the growth opportunities they have and to say, "Look, even if we're, our GOs are gonna be down this year-
Yeah.
you know, look at five years out, how great it's gonna be." What do you think about that aspect of giving this long-term guidance that enables you to tell a nice sounding growth story versus what's happening to everyone this year, which is that, you know, for everyone, GEOs are gonna be down. For the producers, production's gonna be flat at best, likely. What do you think about that aspect of giving this long-term guidance that kind of takes away from what's happening this year? In other words, lessens attention on what the reality is this year, which is that GEOs are not going up and really they're going down across the board.
Yeah. I think, you know, I will say one of the things we're willing to do, and I think we have done in the past, is sort of highlight the individual assets. The, you know, a lot of the assets that we just talked about, you know, if you were to do a model, I think at $1,800 gold and $25 silver, that's sort of 25,000 GEOs. And the smaller projects that we talked about, like King of the Hills and Bellevue and Manh Choh and Côté, they don't all come in at the same time, but if you were sort of line them up and they're all in production in the same year, production, that's double the sort of 25,000. And we think we've always been willing to go asset by asset.
My issue, maybe I just take guidance too seriously. I want it to be right. For me to say, "I think, you know, it, we're here, and in three years or five years we're gonna be 10% up," I can't tell you that. I mean, yeah, we've got models. I've built models my whole career, and the only thing I can tell you is every model I've ever built was wrong. You get things wrong. I, again-
Right
You know, maybe I just take it more seriously than anybody else, but you know, just to throw out a number, I struggle with it.
Understood. Thanks so much, Bill.
Yeah. Thank you.
There are no further questions at this time. I would like to turn the conference back to Mr. Bill Heissenbuttel.
Well, thank you everyone for attending the investor update this morning. We look forward to speaking with you again, when we host our conference call to discuss our first quarter results on May fifth. Thanks again and goodbye.
This concludes today's conference call. Thank you for participating. You may now disconnect.