Hello and good afternoon, ladies and gentlemen. Welcome to today's virtual non-deal roadshow. My name is Noella Alexander- Young, virtual event moderator here at Renmark Financial Communications. On behalf of our team, we want to thank everyone in Atlanta and surrounding areas for joining us today for the presentation of Royal Gold Inc trading on the NASDAQ under the ticker symbol RGLD. Presenting today is Alistair Baker, Vice President of Investor Relations and Business Development. With that being said, I will now hand the floor over to Alistair.
Thanks, Noella, and thanks to Renmark for the opportunity to present today. Certainly an interesting time for gold, and it's great to be speaking with you with a backdrop of a strong gold price environment. So I will be making forward-looking statements during this presentation. There are risks and uncertainties that could cause actual results to differ materially from these statements. All of these risks and uncertainties are discussed in our most recent Form 10-K filing with the SEC. So during this presentation, I'm going to give you the investment thesis for Royal Gold and what we provide to investors, which is precious metals exposure with consistent financial performance and a focus on per-share metrics, and so the presentation will hopefully explain all of this.
During the presentation, I'll talk about our low-risk leverage to the gold price, our long history of executing on a fairly consistent and simple strategy, our unique business model, organic growth within the portfolio, which is very diverse. And then finally, I'll end on valuation, which I think is trading where Royal Gold is trading at pretty attractive levels compared to where we have done over the longer term. We are a high-margin business. It generates consistent cash flows from precious metals. We've been in the business since the mid-1980s. We've been listed on the NASDAQ for well over 40 years now. In 2022, we had our stream segment contribute about 69% of our revenue. Our royalty segment contributed about 31%, but both are basically the same thing. They provide top-line exposure to production from mining assets.
We released our third-quarter results early November, and we had a good quarter for the third quarter of this year. We had $98 million of operating cash flow, $50 million of earnings, and we had that consistent 78% EBITDA margin, which is something we like to see quarter after quarter. We had 78% of our revenue as well came from gold in the quarter, and 53% of our revenue came from Canada and the USA. On November 14th, a few weeks ago, we increased our dividend for 2024. This is the 23rd consecutive annual increase to our dividend. We increased the dividend by 7% over the 2023 level. Now, this slide is a little bit dated, so I'm not going to spend much time on it, but this just shows what we did in 2022, and it was a very busy year.
But the important thing to note is that all of the items on the slide are very consistent with our long-term strategy. We completed three transactions on two long-lived assets, showed organic growth from within the portfolio, and we also completed several strategic initiatives which are or were designed to improve the company going forward. So these are all consistent with everything you've come to expect from Royal Gold. To set the stage a little bit before I start with the rest of the presentation, I thought it would be interesting just to look at where we are relative to our peers. And Royal Gold sits in a very interesting competitive position. We're big enough to compete for the largest transactions in our sector, and we have significant cash flow and access to low-cost capital.
Yet we're also small enough to be able to show growth when we do small transactions. And a small transaction can actually move the needle for Royal Gold. For our larger competitors, it's much more difficult. So I want you to keep that in mind as I talk about our portfolio and some of the opportunities we see ahead of ourselves today. This slide here shows the different ways you can invest in gold and how Royal Gold is positioned. Our model is designed to provide exposure to precious metals without many of the risks that come with owning shares in operating or development mining companies. We provide upside exposure to the gold price as well as optionality from resource and production growth at assets.
But we also have a reduced downside risk because we have a broad portfolio that is diverse, and we don't have direct exposure to operating and capital costs. And that's very important when you think about inflation and what inflation has done to operating costs at mine sites. Now, there are other ways you can invest in gold. If you want to be super conservative, you can invest in the physical metal itself. But physical gold, if you buy an ounce today, it will always be an ounce. It will not give you upside, and that certainly won't pay you a dividend. You can be more aggressive, and you can buy equities in mining companies or development companies. But with that, you're getting exposure to gold for sure, but you're also getting exposure to operating costs and capital costs.
Slide nine shows our historic performance and why we think we're a good alternative for those investors who are looking for conservative exposure to gold. On the left-hand side, you can see that we have a beta of about 1.9 to the gold price, so we have excellent leverage to gold. Yet on the right-hand side, you can see over the long term, our share price performance has been very good. And over the long term, since the GDX index was formed, which is what this graph goes back to, we have beaten the gold price. We've beaten the GDX index itself, but we've also beaten the general market indices, so the S&P and the Dow. So very good share price performance over the long term. We have a long record of consistent and disciplined performance.
This slide shows our 20-plus year history of capital allocation and growth, which is driven by providing accretive growth to our shareholders. Since 2000, you can see that our revenue and our cash flow growth have both been significant. However, there are three aspects of this growth that I want to highlight on this slide. First is that our business is high margin and it's scalable. So revenue growth has far exceeded the increase in G&A expense over this period. Secondly, our revenue growth is not dependent on the gold price or metal prices in general. We have added volume to our portfolio over this period. And thirdly, we've financed our growth internally without a significant rise in our share count. We're one of the founding members of the GDX index, and we have the lowest share count of all of the companies in the GDX index.
We want to avoid shareholder dilution if we can, and if we can fund our business using internal resources, this helps us show per-share growth to our shareholders, which is really what we're in business to do. Now, this slide shows our liquidity, a snapshot at the end of the third quarter, and we have to be patient in our business. We have to maintain a strong balance sheet and have liquidity on hand to be able to finance transactions and opportunities as they arise, and sometimes these things come up quickly. Our approach to funding our growth, as I said before, is to use internal resources, so that's cash on hand, operating cash flow, and our revolving credit facility, and then equity is the least preferred way for us to fund or finance our growth.
We have a $1 billion revolving credit facility that's available to us, and that provides cheap and flexible financing. And as of September 30th, we had $325 million drawn and outstanding on this revolving credit facility, and we're paying this down as cash flow from the portfolio has surfaced. And at the end of December last year, we drew $200 million to fund a royalty transaction on the Cortez Complex, which I'll mention in a few more minutes. But we have repaid more than that amount in the first nine months of this year. We've repaid $250 million on a revolving credit facility since the beginning of this year. So that shows you the power of the cash flow generation potential of our portfolio. We ended September with a 0.46x trailing 12-month net debt to EBITDA ratio. So we're very comfortable with our balance sheet today.
We have total liquidity of about $770 million, and that includes working capital, so that's lots of liquidity for the market that we find ourselves in today. Now, as I said, return of capital and the way we think about shareholders is a key strategic objective for Royal Gold, and it's something that makes us unique amongst any precious metals investment you can look at. We've paid a growing and sustainable dividend since 2000, and we've increased the dividend every single year since, despite volatility in the gold price. We've paid out about $900 million in dividends since we started paying a dividend, and we're the only company in the GDX that's paid an increasing dividend every year since the GDX was formed, and we're the only precious metals company in the S&P High Yield Dividend Aristocrats Index.
That is a key differentiator for Royal Gold against all of our peers in the precious metals sector. Now, another differentiator that we like to think about is our due diligence core competency. Due diligence is very important. It ensures that we add the right assets to our portfolio, but it also ensures that we avoid the wrong assets. While we're always busy looking at opportunities, not all opportunities make it through our process. We do have a very comprehensive due diligence process, and we're very disciplined in the way that we deploy our capital. If we see risks that we don't like, if they're technical, they're environmental, social, whatever risk, if we see risks that we don't like during our due diligence, we are happy to walk away from projects or opportunities. We don't feel the pressure to do transactions.
Management is not compensated by doing a certain number of transactions over a certain defined time period, so if we need to, we'll be patient. We'll collect revenue from the portfolio. We'll build a balance sheet, and we'll wait, and we've often found that the right opportunities present themselves with very little notice, so you always want to be ready. Now, I'll talk for a moment about ESG because our business model does not provide us direct operating control of the assets that we invest in, but ESG is a fundamentally important part of our business. We invest for the long term, so ensuring the sustainability of the investments we add to the portfolio is very important. We have to look at that from a very rigorous due diligence perspective.
But we'll also build language into our transaction documentation where it makes sense to make sure that operations are managed to the highest possible standards. And if we can, we'll also look for opportunities to help finance initiatives around mine sites where our counterparties are doing work in communities, for example. We've done a lot of work over the past several years to improve the transparency of how we've dealt with this issue and how we talk about these processes in the public domain. And we're pleased to see that we have had material improvements in our rankings when it comes to ESG ratings. And so you can see on this slide here, I've got MSCI and Sustainalytics. They're two influential ratings providers in our sector, and we're top-ranked by Sustainalytics, and we're AA-ranked by MSCI.
The key to our model is optionality to reserve and resource growth, and that's without having to provide further investment. I've got two examples shown on this slide. I've got PV on the left, Wassa on the right. Both of these investments were made in 2015. But both of these investments today have total reserves and resources that are higher than at the time that we did the initial acquisitions. And that's in addition to the production that we've seen and that has allowed us to recover about 80% of our investment of PV and about 130% of our investment of Wassa. Now, that's remarkable in and of itself, but there are two projects underway. There's one underway at PV to expand the mine and extend the mine life to the mid-2040s.
At Wassa, there's a resource that's been identified that could add an additional 11 years of mine life beyond the reserves. In both cases here, we are not required to fund any capital or invest any further to get exposure to this upside. This is growth that we don't have to pay for. This optionality to expiration and production upside is very important when we look at new opportunities, and it's really the most important feature of our business model. Now, our business model is also very efficient, and we have 30 employees in the company. Last year, we produced about $600 million of revenue. We have a market cap of about $7.5 billion today. On a per-employee basis, Royal Gold compares well to any company, anywhere, any sector.
Our low employee cap really means that we have a low fixed cash G&A, which further contributes to our efficiency. We had last year in 2023 a 79% EBITDA margin, and our cash G&A was about 4% of revenue. Our G&A is low and made up mostly of fixed costs, so cost inflation should not be a significant risk to our margins, and you can see that further on this next slide here where I show the cost structure of Royal Gold compared to the cost structure of the average gold producer. Gold producers are exposed to inflation in their input costs, so the costs that they need to run their operations, so that's labor, energy, consumables, and other site costs, and a lot of those costs actually increase when commodity prices increase. Our G&A costs, on the other hand, are pretty steady.
They're mostly salaries, services, and office rates, and things that don't move in short-term increments. So our margins are a lot less exposed to inflation pressures simply because we're not directly exposed to the operating capital costs that our operating counterparties are. This slide shows our global portfolio, and you can see that it's weighted towards lower risk and mining-friendly jurisdictions. On the right-hand side, the principal properties are those large portfolio assets that can contribute the bulk of our revenue, which is about 70% of the six assets that are shown on this slide. Now, our portfolio is well-diversified, and that provides stability to our cash flows. Our largest country exposures are to Canada and the USA, followed by the Dominican Republic and Chile. So all of these are mining-friendly jurisdictions. And our revenue contribution comes from 38 operating mines today.
That portfolio breadth compares very well to any mining company. That revenue diversification reduces our exposure to single asset underperformance. Additionally, our underlying assets, the assets where we are invested, are approximately 50% pure precious metals assets, and then the remainder are copper-gold or base metals assets. Now, our portfolio spans the various stages of mining project development. We have 142 assets today that are not producing that are in various stages of either exploration, evaluation, or development. We would expect the potential for organic growth to occur as these assets move from the left to the right of this slide into production. King of the Hills is a great example of an asset that's been in our portfolio for a long time. It was in the exploration evaluation stage for many years.
That asset moved through the pipeline over the past 10 years, and it started producing revenue to us this year. That was simply because it was a new management team that came in and gave the asset a different or they gave it a rethink. They have been able to move the project forward and start producing. Today, we are now seeing revenue from something that was dormant for well over 10 years in the portfolio. To continue on this theme of organic growth, this slide shows some of the key catalysts that we see in the portfolio today from various assets. At the top in the light blue, you see assets where there is potential for mine life extensions and production increases. Those are already producing assets in our portfolio today.
But then lower down in the gold color, you can see potential new revenue from development assets. And one of them is actually called out as Goldrush. And I say here that we're expecting the Record of Decision to be granted by the end of this year. Well, on Monday, two days ago, Barrick actually received the Record of Decision. So that asset should be in production in 2024. Barrick is talking about that, providing 130,000 ounces to their account or 100% basis to the Nevada Gold Mines Joint Venture accounts in 2024, growing to 400,000 ounces in about 2028. So we're very pleased to see that new revenue should be coming from Goldrush to us next year. But then we also expect additional royalty revenue from Bellevue. They've very recently poured their first gold.
Then next year, looking at Côté, Mara Rosa, and Manh Choh, all projects that are coming online next year, and then Back River in the very first quarter of 2025. The important thing to note here is all of this growth is free optionality to our shareholders. All of these projects are fully funded from our perspective, and we do not need to pay any further for this growth. Now, in addition to organic growth, we're always focused on acquisitions as another form of growth to the company. We've been very active over the past couple of years adding to the portfolio. This slide really summarizes what we've done. We've deployed $1.2 billion of capital on six large transactions on five assets that all provide gold exposure to assets with good upside potential in safe jurisdictions.
We funded all of these using our internal cash resources and our revolving credit facility, and we haven't diluted shareholders by issuing any equity to fund these transactions. This slide here summarizes the long-term potential of these acquisitions. At Cortez in Nevada, we completed two transactions, and we increased our royalty coverage significantly at the Cortez Complex. The Cortez Complex is a world-class gold-producing area in a mining-friendly jurisdiction in Nevada, and it's operated by the two biggest gold companies in the world, Barrick and Newmont. We own several royalty interests at Cortez, and the new transactions just expand and increase our royalty exposure there and gives us exposure to the entire Cortez Complex.
As I said, Gold Rush is one of the projects that we are expecting to see new production from next year, but Barrick and Newmont are also working on additional projects for Fourmile and Robertson and more exploration within the district. We're very pleased to see how some of this is coming to bear a little faster than we expected. At Red Chris in northern British Columbia, Newmont has recently taken over Newcrest. Newcrest was the operator of this asset. Newcrest is working very hard to advance studies to transition this mine from an open pit to a large bulk tonnage underground operation starting around 2026. The exploration success continues here. Newcrest did a lot of work in the last couple of years, and they have now identified what they think is the fifth porphyry center here, and that is all within our royalty ground.
We're expecting to see a resource update at the end of this year, perhaps that we published early in 2024. But the current expected mine life from the resources that they've included, which does not include some of this recent exploration, is a 36-plus-year mine life. So that's not including additional resources that have been found over the past several quarters. At Xavantina in Brazil, Ero Copper is working very hard to fill the mill and sustain gold production at a 60,000-ounce-a-year level. And the Côté project in Ontario construction is over 92% complete, and they're targeting first production in early 2024. And then finally, Great Bear in Ontario, Kinross announced a 5-million-ounce maiden resource in early February this year, and they've been doing work, further exploration this year, that they're expecting to add to that 5 million ounces over the next couple of years.
Kinross is targeting first production from this asset in 2029. Now, all of these, if you look at all of these, they're very different assets, but they are very consistent with our strategy. They're all precious metals assets. They all provide further exposure to production and exploration upside, and three of these are actually producing revenue today. So they're actually starting their return to Royal Gold immediately. I believe we are trading at pretty attractive historic multiples. We did very well in 2022 from a share price performance perspective, and we beat all of our large cap peers, and that does reflect the strong company performance that we turned in in 2022. However, I think multiples are lagging, and we're trading currently at the bottom end of the range of cash flow multiple. It doesn't make sense to me.
It does not reflect the quality of the cash flow that our portfolio provides from this diverse set of assets that I described a few minutes ago. I think our valuation, it seems to be improving. It feels to be improving, but the market does not seem to be giving us full credit yet for the recent transactions we've done. The value of those assets and the optionality is not recognized, in my opinion, in the share price today and in the multiple CPC on this slide. With that, I'll close. Hopefully, I've given you a good overview of our record and how our business is performing, some of the high-quality assets that we've added, as well as some of the growth that we see from within the portfolio today. Then finally, obviously, the valuation attractiveness.
And then I guess the final thing is, liquidity-wise, we're in a great position to be funding business opportunities in the marketplace today. So we do believe that Royal Gold is very well positioned. With that, Noella, I will turn it back to you to start the Q&A session.
Thank you very much, Alistair, for the presentation. We'll now begin the Q&A. Your first question is, is there a future goal to shift focus to a more balanced allocation between gold and silver?
It's not a strategic focus for us to do that. I think we always describe that we're very precious metals focused. And when we think about gold and silver, we think about them in a very similar way. PGMs, we will consider as precious metals as well. That is our focus, is precious metals, and gold is our preference.
I think if you were to give us a number of opportunities to look at, gold-heavy, we'd look at those first. Base metals is not something we're looking to add to the portfolio, but we will consider good base metals opportunities if they come across our desks. But we're not going to get into other things that are outside of the metal mix I just described.
If inflation comes down next year, what do you expect to happen to precious metals prices?
Well, I think precious metals are driven by many different things. There's inflation, there's interest rates, there's geopolitical tensions, all sorts of different things influence precious metals pricing. I think the way that we think about the gold price is that it's probably got risk to the upside.
I think if you think that inflation is dropping, then it probably means that interest rates are going to drop, which means that the gold price should do well, and we've seen over the past few quarters that the gold price has held in very well despite the fact that actually interest rates have been rising to try and deal with higher inflation, and that's because you've had a little bit of change in the dynamic of the gold sector or the gold market, where you've had central banks, they've been doing significant buying, and they've actually created a bit of a floor for gold, I think, and when you start, if you're expecting in 2024 that interest rates will start to drop because inflation is also going to drop, you may actually see gold perform very well from a pretty high base today.
So we're feeling pretty good about the metal price environment that we're looking forward to.
When are you expecting the asset assessment report from Mount Milligan?
Asset assessment report. So Centerra has talked about doing some optimizations on site today to try and deal with some cost pressure. So they're talking about recovery enhancements and other things that they can do to control costs. I'm not aware that they're actually going to publish a specific report on that, but I think that will just get baked into their life of mine plan and their plan for 2024. I assume that's coming to a conclusion soon. They have also talked about the lower-grade resource potential there. And they're trying to evaluate how that may come into the mine plan and the strategic value of that resource.
But I'm not aware of them actually saying that they were going to issue a report. I think, generally speaking, most companies talk about reserves and their end-of-year reserve positions starting in about mid-February. So we may see quite a bit of news from Mount Milligan as well as other assets in our portfolio early in the new year as companies talk about their 2024 guidance and their end-of-year 2023 reserves and resources and any other material developments.
With all of the dividend increases you have had, is there a cap at which you will stop, or is the goal to continue to increase the dividend indefinitely?
So when we think about the dividend internally, what we say to ourselves is we want to grow and sustain the dividend. So the idea is that we will continue to grow the dividend. We don't have a cap.
We're not looking to get to a specific dividend number and end at that point. We look forward every year when we do raise the dividend, we look forward into the portfolio several years. And we try to make sure that if we raise the dividend today, we're going to give ourselves the ability to raise it in the future. And so that's an important consideration for us. We're not looking to cap it out. We're not looking to do anything different from what we've done. We've had a very consistent record of increasing the dividend every year, and we hope to continue to do that. Obviously, it depends on metal prices. It depends on portfolio performance. There are a lot of things that go into the considerations, but our intention is to continue to grow the dividend.
It was a solid year for the company.
The share price performed nicely relative to peers. What can investors expect to see for 2024?
I think consistency would be the way I would describe it. I can't anticipate necessarily the transactions that we may see in the marketplace in 2024, but I think you should think about us doing the same kinds of things in 2024 that we've done in previous years. So look for us to, if we do add assets, look for us to add assets in safe jurisdictions, precious metals focused with good upside. So those would be the things to look for. I think from within the portfolio, I've given you a sense of some of the organic growth that we see. So hopefully, we'll see an increase in some of our revenue from smaller assets within the portfolio.
None of those assets are going to move the needle necessarily individually, but when you add them together, I think we're expecting that 2024 should have some nice growth catalysts for Royal Gold from within the portfolio that we've already paid for. And then, as I said, the balance sheet is always a focus for us. So I think as cash flow comes into the portfolio, you should expect that absent new business opportunities, we will continue to pay that revolver down. And we said at our last quarterly conference call that we expect to repay the revolver absent new business opportunities and maintaining current metal prices, we would expect to repay the revolver fully by the end of next year.
How many of your projects have organic growth opportunities where you participate in the potential upside as opposed to royalties limited to a specific zone?
So most of our assets, or when I say assets, I mean streams, royalties, most of them do cover the entirety of the deposits where we have interests. There are a handful that don't. But whenever you see an opportunity present itself or some growth within an asset, Cortez is a great example. It doesn't matter where in the Cortez Complex Barrick is talking about exploration success or project development, we have royalty coverage over that. So the majority of our assets have that full exposure to additional growth.
Which institutions follow you?
Oh, boy. I think we have 11 covering analysts, and you can find that on our website under the investments tab. We have most of the big Canadian mining banks cover us. So we have RBC, TD, Scotia, CIBC, National, and BMO. But then we have a couple of US-based.
We have B of A, Raymond James, and we're looking for or expecting to see new research from Jefferies soon. Those would be the. I'm sure I've missed a couple in there as well, but we're well covered by the analyst community who follows the precious metal sector.
Which assets offset the less than favorable performance from Peñasquito and Pueblo Viejo this year?
I don't know if we necessarily had any assets that offset that. We had some weak performance from those two assets this year, absolutely. And that's why at the beginning of November, we said that we expect our gold equivalent ounce production to be slightly below or at the low end of the range that we provided earlier this year. And it was mainly because of those two assets. The ramp-up of the expansion of PV has been going slower than expected.
And then at Peñasquito, we had a strike. So there was zero revenue for several months from Peñasquito. Nothing in the portfolio really compensated for those. Those are two big assets from the portfolio. It's unfortunate news. The good news is that the ounces are still there. It's just a timing issue. So the ounces will get mined. They'll get processed in the future. So it's disappointing from a cash flow perspective, but we expect that we'll see those ounces in the future. But we didn't have anything that offset the losses from those two.
Do you see opportunity for smaller deals considering the juniors have struggled?
Absolutely. That is where we see most of the opportunities today. There's a real scarcity of capital in the mining sector at the moment. You don't see a lot of financings getting done.
The risk capital on the equity side is not there in a big way. Occasionally, you'll see windows open for short periods of time, but if you're a company who needs financing and you can't hit the window before it closes, then you're stuck. And we're finding a lot of those companies are coming to us as we're a consistent source of capital to the sector. We understand the sector. We can act quickly. So we are getting a lot of calls from people who are looking to finance projects. And a lot of those are smaller or earlier stage projects. It doesn't mean that we don't like them. It just means that there's a little bit more work that goes into understanding them if they're earlier stage and if they're smaller. We're quite happy doing small transactions.
We are of a size that we can add small transactions, and each one is like a base hit. So if you do enough of them, you drive home runs. So we're quite happy with the business development environment we find ourselves in today, and we're quite busy.
Kinross has been an outperformer this year. Do you see this due to the progress made at Great Bear?
I think that certainly helps. I think Great Bear. It was a great acquisition by Kinross, and they're doing a lot of very good work on it. It's their biggest and most important development project, and they're working hard to move it forward. I think the market initially, when they did the transaction, I think the market was they didn't know the asset that well.
So it wasn't a great recession, but I think what Kinross has managed to do is prove a lot of what they saw in their initial acquisition. And the market is now coming to see that as well. We're very happy to have exposure to this asset. We think it's a fantastic jurisdiction. It's in Red Lake, Ontario. It is a fantastic project. It's something that's exciting and new, and we haven't seen anything like this for quite a long time. And finally, Kinross is a very good and well-capitalized and experienced developer and operator. So for us, it checks all the boxes. We're very pleased to be a part of it and pleased to see how Kinross is moving it forward.
How has the precious metals royalty and streaming sector changed over the past 12-18 months?
How has it changed?
I don't know if it's changed that much, to be honest with you. I think there's still competition in the sector. We have a pretty healthy competitive environment, so everyone's got to keep the pencil sharp. We're all looking for similar things. We're all looking for good projects in good jurisdictions run by good companies. So that has not changed. Perhaps individual focus areas for each company. Maybe you've seen a little bit of divergence as certain competitors go into areas that are maybe from our perspective not attractive, or maybe they're looking at commodities that we wouldn't look at. But I don't think there's really been a big change necessarily in the royalty and streaming sector.
I think one thing that if I was to speak to all of our peers, I think we'd all agree that we just don't think the market really has been responding to us as a sector as we would have expected. I mean, the metals prices are very strong. We as a company are performing extremely well. Yet our share price doesn't seem to be reflecting that. So it's a bit disappointing, and it's not a Royal Gold issue. It seems to be across the board. So that is one thing I think that perhaps has changed is maybe it's investor sentiment has moved away from our sector and into other things. But we've got to be patient. It'll come back, and we're just positioning ourselves for when it does come back.
Is Mara Rosa still on track for its first production next quarter?
Yes.
Hochschild has said that they expect to see first production early in 2024. So yes, it is moving forward. And we're quite happy to see that it is a major focus for Hochschild. They're a relatively small company. It's a relatively small asset, but it's a big area of focus for them. They really want to get it right. It's the first project they've got in Brazil. So they're working hard to make sure it works. And everything we've seen so far indicates that they're doing a good job of that. Will Royal Gold be shifting away from any jurisdictions for deals going forward? I wouldn't say that we'll shift away from any jurisdictions.
I think there are certain jurisdictions that have become a little bit more suspect, if you like, or maybe that we look at with a little bit more carefully, perhaps, when we have done deals in the past. I'm thinking more about certain South American jurisdictions. Chile has always been a fantastic place to invest, but more recently, over the past several years, they've had a government that's been doing things to raise royalty rates and do things that could impact the mining industry in a negative way. So that has made us think twice about certain things in Chile. It doesn't mean that we don't continue to like it. It just means that we look at it a little bit more carefully. Similarly, with Peru, it has become more challenging to operate and develop mining projects in Peru.
So it's just rising up on our register of risks that community issues or social issues in Peru can cause serious problems for mining projects. We're not backing away from anything necessarily, but we've seen what's happened in the sector. Panama, there's been a big political situation in Panama that's affecting one of our competitors, and that is scary. We did not expect to see that. I don't think anybody expected to see that. So clearly, Panama is not on our list of countries to do business, but it wasn't. We weren't doing any business there in the first instance. But you just have to be careful. You have to look at political risk with a bit more of a long-term lens and try and anticipate. And so we have our own internal people.
We look at political risk ourselves, but we also will engage outside political risk consultants who often have insights that we don't have. And so those insights are very helpful. If we can avoid getting involved in a situation where we lose an investment, obviously, we'd rather pay upfront to learn that than suffer down the track.
What will you spend on ESG initiatives next year?
So we have a corporate budget of $1.5 million for ESG initiatives. And that's for it. It runs the gamut of things. So we do donations in the communities where we have offices. We have four offices in the world. We have Denver, Toronto, Vancouver, and Lucerne, Switzerland. And so we have community donations that we provide. We want to be a good corporate citizen where we have employees. We invest in scholarships for educating the next generation of mining professionals.
We have a few scholarships and support agreements in place in some of the universities in the US near Denver where we have connections. And then at the mine sites as well, depending on the operator, we will do certain things. We'll fund certain initiatives that are going on. They could be at a one-off basis. Look at Rainy River. In Ontario, we've supported some local community health initiatives. But then we'll also in Brazil, down in Xavantina, we'll also pay a per ounce, $5 per ounce to fund community initiatives. Any ounces delivered to us will pay $5 to a fund that Ero Copper uses to fund initiatives in their community. So it's a full gamut of things that we do. The total budget is $1.5 million for 2024.
Excellent. Thank you very much, Alistair, for your responses. And thank you to everyone who submitted questions.
If you do not get a chance to submit your question, you can reach out to the appropriate account manager here at Renmark. That concludes the presentation for today. But before we go, I will turn back the floor to you, Alistair, for final remarks.
Well, thank you, Noell. Thanks, everyone, for attending. If I didn't answer any questions, if I didn't understand the questions and you'd like to ask it again, or if you want to ask a different question, please reach out to Renmark. I'd be happy to speak to you directly. And if I don't hear from you, happy holidays. All the best for a happy, prosperous 2024. And I look forward to reconnecting in the new year. So thank you.
Once again, this was Royal Gold trading on the NASDAQ under the ticker symbol RGLD.
Thank you to everyone in Atlanta and surrounding areas for joining us today. Please stay tuned for other presentations in your area and see you next time.