This year, we've made a particular emphasis on the royalty and streaming companies. In a high inflationary environment, they don't suffer CapEx and OpEx inflation, but if inflation drives up the price of gold or silver or copper, they benefit. So we think that the large royalty streaming companies are a safer play than Newmont or Barrick or most of the producers. Alistair, please tell us everything that's going on at Royal Gold.
Thanks very much, John. Certainly appreciate the opportunity to be here today and to tell our story. Hopefully, next year you will do it in person, and we can do it in person. I'm going to just give an overview of Royal Gold, and John, I'm expecting you're going to jump in with questions as I go along, so please do so whenever you like. If there are questions from the audience, happy to take those as well at the time they're launched. I will be making forward-looking statements today, so that's the one thing that I have to tell you. Risks and uncertainties 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 file for the SEC.
So now that I've done that, I can move on to what we're going to talk about. So I'm going to talk about the investment thesis for Royal Gold and what we provide to our investors, which is precious metals exposure with consistent financial performance and a focus on per-share metrics. And there are five sections in this presentation. I'm going to talk about the low-risk leveraged gold, talk about our long history of executing on a very simple business strategy. I'll talk about our unique business model and the optionality and the efficiency inherent in that business model. I'll talk about our portfolio, which is broad and deep and has good organic growth potential from within. And I'll talk about valuation at the end and just talk about where we are relative to where we have been over the past decade or so.
This slide here shows Royal Gold at a high level. And to summarize in one sentence, we're a high-margin business that generates consistent cash flows from precious metals. We've been in the business since the mid-1980s. We've been on the NASDAQ exchange for over 41 years, so a very long history and track record. And when you think about our business, in 2022, we have two segments. We have streams that were about 69% of our revenue, and we have royalties, which were about 31%. But both provide the same thing, which is really top-line exposure to precious metals, assets, or mining assets. In 2022, we had very strong financial results and operating results as well. We had volume of about 335,000 GEOs, or gold-equivalent ounces.
That's simply a way of taking our revenue, divide by the average gold price for the period, and you come up with this number, GEOs. It just gives you a sense of how we compare to operating companies. Our revenue last year was over $600 million, $603 million, to be precise, $417 million of operating cash flow, and earnings per share of $3.63. Our most recent financial results we published in early August for the second quarter of this year. We have similarly strong financial results, $108 million of operating cash flow in the quarter, $0.97 of earnings, and we repaid $100 million of our revolving credit facility last quarter. We are going to be putting out our Q3 results in early November, actually on November 1st.
So for the course of this presentation, I'll refer to our June 30th financials because we don't have the new numbers out yet. So if I look at slide five here, and this is a bit of a historical slide. It's a bit dated now, but I just want to give this because it provides some context when I talk about our strategy and execution. 2022 was a pretty busy year for us, and we did a lot, but everything we did was pretty well-focused and very consistently focused with our long-held strategy, which is really around providing accretive growth to our shareholders in precious metals. So we completed three transactions on two long-lived assets, Great Bear and Cortez. We showed a lot of organic growth from within the portfolio, from several assets that advanced during the year.
And then we completed a number of strategic initiatives, which we think positioned the company that much more strongly. So again, this is all about just putting into context the way we think about our business and the way we think about executing on our strategy. And 2022 is a good example of a year that was successful in exactly that. So I'll move on to slide six here and just show you how we compare to our peers in this sector. We sit in a pretty interesting position. Royal Gold is big enough to compete for the largest transactions in the marketplace. We have significant cash flow, and we have access to low-cost capital. Yet we're also small enough to show growth.
A small transaction like a Khoemacau, which we did in 2019, can actually add meaningful value to our company, just given the size of the company based on market cap and operating cash flow. I wanted to keep that in mind as we talk further on about our portfolio and some of the opportunities that we see ahead of us today. I'll start the presentation by talking about our low-risk leveraged gold. John, you're very well versed in this. You understand exactly how we position ourselves. For those who don't, there are different ways you can invest in gold. Our model provides a lot of the exposure to precious metals without the risks that come with operating in development companies.
And we provide the upside exposure to gold and to properties while reducing our downside risk by having a diverse portfolio that does not have direct exposure to operating and capital costs. And this is very important in today's environment where you're talking about inflation and the way that inflation has impacted operator costs. Our business is insulated somewhat from that because we don't have that direct exposure. Now, there are different ways you can invest in gold. You can be super conservative, invest in the precious metal itself, but an ounce will always be an ounce. It will never pay you a dividend. You can be more aggressive, and there are lots of good operating and development companies out there to choose from. But unfortunately, with those, you're also getting exposure to operating and capital cost risks.
So we think that we're in the middle there as a nice baby step into the precious metal sector. And if you look at this next slide, slide nine, it just shows our historic performance. And over time, going back to the beginning of the GDX index in 2006, it shows why we think we're a good alternative for somebody who wants conservative exposure to gold. On the left-hand side of this slide, you can see our beta to gold is actually 1.9, so it's a pretty high beta. But on the right-hand side, you can see our share price performance over the past almost 20 years. And you can see that since the beginning of the GDX index, we've beaten the index, but we've also beaten the gold price. But more interesting, we've beaten the general market indices, so the Dow and the S&P 500.
So very interesting performance when you think about the metal that we're tied to. Now, I'll talk at this point about the history of execution. We have a long record of consistent and disciplined performance. And this slide here shows a 20-year history of our capital allocation and growth, the numbers behind those. And that's really driven by the strategy of providing accretive growth to shareholders. And since 2000, you can see our revenue and cash flow growth have both been significant. But there are three aspects of this growth that I just want to zero in on for a moment. The first is our business is high-margin and scalable. So our revenue growth has far exceeded the growth in G&A that we've seen over the past 20 years. The second is our revenue growth is not dependent only on the metal price.
Sure, the gold price has risen fairly consistently for the past 20 years, but we've added volume to our portfolio over that period of time, and then the third thing is that we've financed our growth internally, and that's without a significant rise in our share count, we're one of the original members of the GDX index, and we have the lowest share count in the entire GDX index, so we want to avoid shareholder dilution. If we can fund our business internally and using cash flow and a revolving credit facility, it means that we don't have to be issuing shares, and that provides per-share growth to our shareholders. I'll talk on this slide about our liquidity. We have to have strong liquidity in our business.
We're a patient investor, but we always need to have a strong balance sheet and access to liquidity because opportunities often come up very quickly out of left field, and so you want to make sure that you have the ability to execute on those transactions if they occur, so using our cash on hand and our operating cash flow and our revolving credit facility, those are the three things that we prefer to use, and then equity is the final source of funding, so we've got to make sure that we've got good liquidity on hand. We have a $1 billion revolving credit facility, and that provides cheap and flexible financing to us, and at the end of June, we had $400 million outstanding on that credit facility.
It's interesting to note, last year, we added a bit of leverage to the business because we did these transactions that I referred to a couple of slides ago. We actually drew $200 million on our revolving credit facility at the end of December last year. By the end of June of this year, we had paid down $175 million. So that we'd almost paid down the entire draw amount that we did to complete one of those transactions. That just shows you the cash flow generation potential of our portfolio. We started the year with almost a 1x debt-to-equity ratio, and now we're down to 0.61 at the end of June. We have lots of liquidity on hand today. We have about $700 million liquidity on hand, which we think positions us very well for the market that we see ahead of ourselves today.
Now, I'll move to return on capital and our dividend. And this is a key strategic objective for Royal Gold. It is one of the things that makes us unique, we think, among all of the gold investments you can look at. We have paid a growing and sustainable dividend, and that's the way we think about it, growing and sustainable. We've done that since 2000. And we've increased the dividend every year despite volatility in the gold price. We've paid out about $865 million in dividends since we started paying a dividend. And we're the only company in the GDX that has paid an increasing dividend every year since the index was formed. And this is a real differentiator. We're the only precious metals company in the S&P High Yield Dividend Aristocrats Index. That is something that sets us apart from the entire sector.
Now, another thing that we think sets us apart is our due diligence competency. We view due diligence, technical due diligence, as a core competency for Royal Gold. And due diligence is really important because it helps us identify the right assets, but also avoid the wrong assets. And we're always busy looking at opportunities. There's never a shortage, it feels like. But not all opportunities make it through to completion. And sometimes it could be because there are risks that we find in our due diligence we just don't think can be managed properly. And if we come up with risks that we don't like, if they're technical or legal or what have you, it could be social, environmental, whatever, if we find risks in transactions that we don't like that we uncover during our due diligence period, we'll walk away from transactions.
We don't feel any pressure to do transactions. We're happy to let the portfolio continue to produce. We'll build our balance sheet further, and we'll wait, and we'll be patient because we know history has shown us there's always something else coming. Sometimes you just can't quite see it from where you sit. I'll make a brief comment about ESG, and we don't have operating control of the assets we invest in. Our business model is unique in that respect, but ESG is definitely a core part of the way that we think about risk in our business, and it always has been. We invest for the long term in the assets that we're invested in, so ensuring that assets are sustainable, that's a very important part of our due diligence process.
We also do things like if we're writing a contract or if we're financing a new build or a development or something like that, we'll build language into our transaction documentation that requires that operators operate at the highest levels, and where it makes sense, we're always looking for ways to help operators as well. If they have specific things going on around the sites where we're invested, they need some help from a funding perspective with ESG initiatives. We're happy to have those conversations and see if there is an opportunity for us to contribute. On this slide here, I've just shown our ratings over time. We've done a lot of work over the past several years just to try and daylight some of our thinking around ESG and the risk of these that fall into this category.
I think we've been quite pleased to see how perception and recognition of our practices has actually improved over time. Now, at this point, I'll talk about our business model. The key to our model is optionality. That's optionality to preserve and resource growth. That's without having to make further investments. I've got two examples shown on this slide. We've got PV and Wassa. We made both of these investments in 2015. In both cases today, total resources and reserves are higher than at the time that we made the original investments. That's in addition to production that has come in and allowed us to generate revenue that has recovered about 80% of our investment at PV and over 100% of our investment at Wassa. The interesting thing is that both assets today, there are growth projects underway.
We don't have to contribute or fund any further to get access to these growth projects. At PV, there's an expansion that's in the commissioning stage right now and a potential new tailings facility that will extend the life of the mine to the mid-2040s. At Wassa, there's an additional resource that's being looked at by the operator. And they could add another 11 years of life to that asset if that moves forward. So that's an important part of our business. And understanding the expiration and production upside when we look at new assets, that's a very important part of our due diligence process because it's a very important part of our business model. I'll talk a bit about the efficiency of our business model as well. We have 30 employees within the company.
And that, as I said at the beginning, we produced $600 million of revenue last year. Our market cap today is just a shade under $7 billion. So on a per-employee basis, we have an efficiency metric that is beyond that of most companies that's inside and outside of the precious metal sector. And I don't think that's appreciated by a lot of folks. And our low employee count really means that we have a low fixed cash G&A, which further contributes to our efficiency. Our EBITDA margin is about 80%, 79% last year. And our cash G&A was about 4% of our revenue. And our G&A is low, and it's mostly made up of fixed costs. So inflation should not be a significant risk to our margins.
And if you look at this next slide, our cost structure versus the cost structure of the average gold producer in 2022, you can see that our cost structure is very much insulated from inflation directly. Producers are exposed to inflation from various different sources. So their input costs to assets would include things like labor, energy, consumables, other site costs. And a lot of those things actually, they rise when metal prices rise. Whereas if you look at our G&A costs, they're generally steady. So things like salaries, services, office rents, they're not typically subject to short-term increases. So that provides us that additional level of protection from inflation. And obviously, we're not directly exposed to the operating and capital costs inflation pressures that our counterparties are.
Now, I'll move into our portfolio here and just talk about the breadth and the depth of our portfolio and some of the organic growth within that, and this slide just shows our global portfolio. We're weighted towards lower risk and more mining-friendly jurisdictions. On the right-hand side, those six assets are what we call our principal properties. They provide the bulk of our revenue, so about 70% of our revenue comes from those six assets, but our portfolio is well-diversified, and so that obviously provides some stability to our cash flow. Our largest country exposures are to Canada, the USA, Dominican Republic, and Chile. Our revenue comes from 39 mines in total, so that portfolio breadth compares very well to any mining company and obviously reduces our exposure to single asset underperformance.
Then finally, our underlying assets are about 50% precious metals, but then the other 50% would be copper gold and other base metals. So fairly well-diversified portfolio on the whole. In our portfolio on slide 24, you can see the different stages of mining project development. Our portfolio spans those stages. We have 142 assets that are not producing today that are at various stages of exploration, evaluation, or development. We would expect there to be organic growth as any of these assets move through this pipeline and advance to production. That's where we get our revenue. An example of something that did move through the pipeline fairly recently was King of the Hills. It's been in our portfolio for well over 10 years. It's kind of a dormant asset.
And a new management team came into that asset a few years ago, gave it a bit of a refresh, a rethink. And they've just started production from a rescoped new operation at King of the Hills. And that's revenue that we're starting to see today. And that organic growth, obviously, is very important to us to be able to show because it's dormant assets that have relatively low value, suddenly starting to produce revenue. That's where you get that optionality. That's where you get that kicker from developments within the portfolio. And to continue on the theme of organic growth, this slide just shows some of the key catalysts that we see in the portfolio today from various assets. The grouping of the dimensions of production increases from assets that are already contributing revenue. The next grouping down in the gold color would be new revenue from development assets.
So we've got Goldr ush at Cortez, where Barrick is expecting a Record of Decision towards the end of this year. We're expecting new revenue from Bellevue in Australia later this year. And then next year, Côté, Mara Rosa, Manh Choh, and then beyond that, Back River. And then I think it's worth pointing out that this is all free optionality within our portfolio. All of these are funded. We don't have to contribute any further to get exposure to this growth. Now, we are obviously the portfolio provides some growth, but we're not just sitting on our hands expecting the portfolio to provide us growth into the future. We're also very active looking at adding new assets to the portfolio. And this slide summarizes what we've done over the past couple of years.
We've deployed $1.2 billion on six transactions on five assets that provide gold exposure to assets with good production upside in safe jurisdictions. And we funded all of these acquisitions using our cash on hand, our revolving credit facility. And we haven't issued any equity to provide our shareholders access to these transactions and assets. And this slide here shows a little bit more detail. There's a lot going on this slide, but I'll try and make this fairly easy to understand. But I just want to give a sense of the long-term potential that we see at these acquisitions. So starting on the left, at Cortez in Nevada, we did two transactions out of this asset last year. We did one in early August and one at the end of December. We bought royalties. This is a world-class gold complex in a mining-friendly jurisdiction in Nevada.
It's operated by Nevada Gold Mines, which is owned by Barrick and Newmont, the two biggest companies in the gold sector. We've always owned royalties at Cortez. Cortez is one of the foundational assets of Royal Gold. With these two new transactions, we were able to broaden our royalty coverage and get exposure to additional targets within the Cortez complex. Barrick is doing a lot of work here to push forward growth potential at Goldr ush, Four mile, Robertson. These are all projects that we're expecting to see production over the next few years. We think Cortez is one of the most prolific gold mining projects in the world. Moving over to Red Chris, the next one from the left in Northern British Columbia. It's operated by Newcrest, soon to be Newmont. Newcrest has done a lot of work since getting their exposure to this asset.
They've done a lot of work on advancing studies to convert this mine from really kind of a small high-cost open pit to a large bulk tonnage underground operation. And they've been doing a lot of work on exploration. And they're continuing to find more and add to the existing resource. And earlier this summer, they announced that they're continuing to push east. They have the East Ridge Target. Now they have another one called the Far East Ridge Target, which they think is the fifth porphyry center that they found on this property. All of this is within our royalty ground.
They're expecting to put out a resource at the end of this year, but I think it's probably a little bit too early to be able to include some of the other, perhaps some of the East Ridge and definitely some of the Far East Ridge resource that they or mineralization they've found that they just haven't done enough work on that yet to be able to bring it into the resource, but the pre-feasibility study that they put out a couple of years ago, just after we acquired our royalty there, they expected a 36+ year mine life from this asset, and that does not include the East Ridge and the Far East Ridge, so we think there's a lot of good to come still from Red Chris. Now, Xavantina in Brazil, this is in the middle column.
This is the smallest of the transactions, the smallest asset that we've done a transaction on. This is operated by Ero Copper, and Ero has done a lot of work to do exploration to try and fill the mill and sustain annual gold production of 60,000 ounces a year from this asset, so we're very pleased with the results that have been coming out of this one. They've been coming faster than we certainly expected when we did our due diligence. At Côté Gold, this is a project under development in Northern Ontario by IAMGOLD . Construction is over 85% complete today, and IAMGOLD is targeting commercial production. There in Ontario, this is a project that Kinross is operating. Kinross announced a 5 billion ounce resource in early February this year.
But they're doing more drilling this year now as we speak that they hope to add to this resource over the coming years. And they're targeting first production from this asset in 2029. And I think if you were to step back and look at these assets together, you would say they're all very consistent with our strategies. They're all precious metals assets. They all provide further exposure to production with very good exploration upside. And three of these five are producing revenue today. So that's directly hitting our bottom line today. Now, I'll end off with valuations, as I promised. Oops, there we go. So I just want to have a look at our multiples over the past 10 years. As I said, I think we're trading at pretty historic attractive multiples. We did very well in 2022. Our stock price did extremely well.
We beat all of our large cap peers, and that really, I think, did reflect the strong company performance. Today isn't getting a lot of love. There's a lot of uncertainty in the marketplace, but I think when I think about Royal Gold specifically, when I look at our cash flow multiple and where we're trading relative to the rest of the peer group, which is near the bottom, it doesn't make sense to me. I think the market is not paying the appropriate multiple for the quality of the cash flow that we're delivering from our portfolio, well-diversified portfolio with high-quality assets. The market does seem to be giving us credit slowly for some of the transactions that we've done recently, but I don't think it's fully recognized or reflected in the multiple yet, so, John, with that, I've come to the end of my formal remarks.
I'd be happy to try and answer any questions if anyone want to lob in.
Well, thank you, Alistair. Once again, anyone on the call can enter questions through the question dialog box. Alistair, the Great Bear Royalty was purchased before there was a resource. Kinross came through and published a five million ounce resource. They had spent about a year drilling and documenting to do their own work and verify the seller's work. Their stock seemed to sell down initially as though some investors were disappointed it was only five million ounces. The grade was good at three or four grams. Why do you think that? By the way, congratulations on the resource being documented. Why do you think the market sold off Kinross presenting a high-grade open pit and large resource like that?
That's a good question.
I don't know except to say that perhaps there was an expectation that they would get to a much larger number faster. I think from our perspective, it was exactly as we expected. I think the work that they have done. It takes a long time to convert drilling to resources. There's a lot of work that goes on, and they just don't have access to the full depth of the ore body from surface. They were able to drill from surface down to about a depth of 500 meters. They have a few holes that go a little bit deeper than 500 meters, but they just didn't have enough density of drilling to be able to convert what was lower or deeper than 500 meters right away into a resource.
So their plan and what they're doing right now is they're going through the permitting process to actually construct a decline into the ore body that will allow them to get access underground and drill further into the ore body at further depths. So I think it was probably the market was just expecting it to be a bigger number, although I think it was unrealistic for the market to expect it to be a bigger number just given the constraints that are on drilling at deep ore bodies. So hopefully over the next couple of years, they'll continue to add to the resource. From our perspective, it was what we expected. We didn't expect them to come out today or at the end of 2022 with the final resource number. We expect this number to change over time as they get more information. But it will take time.
So if they did something as simple as a 10,000-ton-a-day open pit mine and mill at three or four grams with at least a 90% recovery, it should be about 365,000 ounces of gold. That seems like a very straightforward approach to me. What are the uncertainties in the ore controls that make them want to go underground, kiss the rock, and drill from underground? Are there lenses where it's non-uniform and they don't trust the drilling results?
I don't know if I can speak to that specifically, John. I think what they are trying to do is scope out as much as they can before they make any development decisions. I think they're trying to keep their options open. And so their view, I think, is just to take a very measured approach to try and understand all of what they've got.
I don't think it's necessarily around lack of confidence. I think it's just a question of trying to scope it out as much as they can before they even.
When you've got a 2% NSR on 365,000 ounces or a 10,000-ton-a-day open pit, it would be worth about 25,000 ounces to your 2% NSR. And that would be about 8% growth in your company. So is that a reasonable expectation, thinking of it from the Royal Gold standpoint with the information we have at hand now?
Yeah, I think your math makes sense. I think the.
And that would be maybe a 12-year life, 13-year life?
Yeah, what they've talked about is roughly these numbers are rough, obviously. They're doing the studies. They're doing the thinking today. But they've talked about 4 50,000 ounces-500,000 ounces for a couple of decades would be the ultimate goal.
They're counting more reserves than they have, obviously, which they're allowed to do. And they have the best information to make that guess.
I think that's right. The other thing I just want to point out just to make sure you don't forget. So we have a 2% NSR on this property. It's a large property. It's 91 sq km. But we did this transaction. We did something very unusual. We actually got access.
They can buy back a quarter of it.
That's correct. So we offered that back to Kinross at our cost because they gave us access to information that helped de-risk the acquisition from our perspective.
So if they did that, it would only be 5% or 6% net growth to you.
Correct. Yeah, it would obviously.
And you would get a $51 million or $52 million.
They have put most of that information out into the market. I don't recall the specific dates for the PEA or the feasibility. But they're talking about a construction decision in 2025, 2026. The first production in 2029. So this is their biggest project. It's their biggest focus. They're working very hard on it. Hopefully, they'll be able to compress that in a timeline. But I think the critical path here is going to be permitting.
So in terms of Goldr ush and Fourm ile on the Cortez property, neither of those are permitted, but Gold rush has been in the process of a good five years or more. When do you think those might have revenue for Royal Gold?
Well, Gold rush, they've talked about a Record of Decision. It keeps moving slightly. I think as they get closer, I don't know what the issues are.
They're talking about by the end of this year, Record of Decision. So hopefully, that is very soon. Keep in mind that they're test mining at Gold rush and were able to extract fairly large quantities of ore while they're waiting for the Record of Decision. So if they're getting any revenue from that ore, then they are getting our royalty payment already. When it comes to Four mile, there is no timing that's been put into the marketplace yet by Barrick. But about three or four weeks ago, they put out a press release with a presentation that had a fair bit of information on Four mile and how they think about it. And they're thinking about Four mile as a 300,000 ounces-400,000-ounce producer on its own for at least a 10-year period. So very exciting to see how they're thinking about that.
Now, they called that a conceptual preliminary economic assessment. So it's a very high-level estimate. But still, that's an indication of how they're thinking. We're very excited to see. Oh, that one specifically. I'd have to look for that one, John. I'll get back to you.
No, but the processing facilities already exist metallurgically. So once they, and they've already done exploratory tunnels. So once they get the permits in hand, that could be in production in two years.
It should be very quick, yes. Now, I'll have to get that number for you on Gold rush. I'm just looking at some of my notes here. I don't know if I have that broken out.
So the three transactions from last year might exceed 10% revenue growth where you got the upfront lump from the Rio Tinto acquisition where the royalty was already paying out.
And then you've got the other things that may pay out, Gold rush and Four mile and Great Bear, that just take time. Then you have a series of other not-in-production projects. Côté, Khoemacau just started, King of the Hills Red 5, Ero Copper, Hochschild Mara Rosa, Manh Choh, Bellevue Gold, Back River. Do all these other things add up to another 10% sweetener on revenue?
So the way we've talked about it is if you take those small assets you just ran through, it would be somewhere between 20,000-25,000 gold equivalent ounces per year when they all hit their run range. So that is about the equivalent of a Khoemacau. So about a 5%-6% revenue growth. So individually, they're not that big. But when you combine them together, actually, they do amount to something that moves the needle.
Super.
Once again, any questions from the audience are encouraged and appreciated. There aren't any at the moment. Do you have any fixed payments you're required to make?
Nothing of any substance. We have a small payment, which I think is $6 million thereabouts to Xavantina in Brazil. And that's based only on success. They're successful adding resources and successful drilling more meters. Then we'll make some additional payments there. But it's relatively nominal.
So your net debt could be paid off from eight months of production. So there's probably a strong urgency in your team to find some more projects and make some more investments. Although today, if you hold cash, at least it pays 5%. And some royalty investments don't pay 5% that fast. So the opportunity cost if you were to hold cash isn't so severe.
Yeah, I mean, we're happy to have cash on the balance sheet.
Obviously, we think there's better value in deploying that cash into new assets. I think if you look at the way that we trade, if we're to take cash at one time's NAV on the balance sheet and deploy it into assets and get a two-time's NAV in the marketplace, that creates a lot of value, so we would prefer to be investing in assets, but at the same time, we're going to be very disciplined, and we'll look to see each of the assets we see out there, are we willing to pay for those assets? And if not, we're happy to keep our cash. I think if you look at the way that our business has proceeded with acquisitions, it's fairly lumpy in terms of when we're able to get deals done. Sometimes deals come up very quickly, and we don't expect them to come up.
You always want to have that access to cash on your balance sheet. You want a strong balance sheet because you want to be able to make those acquisitions or at least give offers to people without any financing conditions. The last thing you want to be doing is scrambling around looking for financing. So now that the strong balance sheet has cash on it, we're happy to have that.
Do you have any step-downs that are going to impact your revenue in the next several years?
We have step-downs on most of the streams that we have. And so those step-downs are designed so that at the end of reserve life, at the time the acquisitions were done, generally speaking, those step-downs do occur. And that's to share some upside projects with operators.
We certainly want to incentivize the operators to continue investing in the assets and finding more and extending lines. And so that's why those step-downs occur. So we do have step-downs for streams.
Which is the largest nearest step-down?
Largest year? I don't know if I can answer that question by year because our step-downs are designed based on ounces produced. So it really does depend on how production is.
Does Royal Gold give a multi-year annual guidance?
No. No, we do not. It's a good one year.
And that's the current year?
Correct. Yeah.
You expect a production gain next year, though, because of Khoemacau and the other various expansions?
We're certainly expecting to see some positive developments from within the portfolio. It's always hard to tell what is going to happen. I think Peñasquito is a great example of that.
At the beginning of this year, we didn't expect there would be a labor strike, but there was, and so that all gets factored into our guidance. When we give our guidance early next year, we'll be thinking about that kind of thing, and so we don't know what's going to happen between now and then. There could be impacts that are negative as well.
Do you still expect to make your 2023 guidance?
Well, when we put out our last quarter results in early August, we said that we expected to be able to come in around the low end of the guidance, and that was assuming that Peñasquito did not restart operations by the end of the year. On Friday, Newmont announced that there's been a preliminary agreement with the labor union of Peñasquito, and so we hope that operations will restart.
Unfortunately, Newmont did not say they didn't give any timing expectations for a restart. So we don't know how much production we're going to get.
So this is just an example. Last week, Pan Am idled their Colorado mine because of a concentrate theft. Under U.S. law, law enforcement concedes any property they have a reasonable suspicion is stolen, cash or property. I have a nephew that has a jewelry business that includes some cash for gold. And if he got a lot of coins, he had to take a picture of the front and back of every coin. And he basically stopped trying to accept bullion for fear of police seizure because you can never verify if someone's the true owner. And he migrated to custom jewelry manufacturing. He actually cuts stones and makes custom jewelry. He starts with a rough gemstone.
I can't understand how someone will accept in Mexico stolen concentrates because they're unique and traceable, so if you just take Pan Am's example, it would appear that they were robbed by their own employees in cahoots with the police. It's amazing to me that a criminal can resell silver concentrates. I had an example, oh, maybe 15 years ago in Cancún, where my hotel room was robbed in the Hyatt about eight hours before I was going to fly out of the country and come home, and it had to be an inside job. When I went to the hotel desk to complain, they threatened to call the police on me for complaining and told me that I had to go to the police station to report the crime, that I couldn't call the police, so the hotel appeared to be in cahoots with the police.
So things are tough in Mexico. You're better off being the royalty holder. There's really investors I think don't pay enough of a premium for the royalty streaming model compared to the headaches of being the operator. And Newmont's situation is illustrative of that. They have a big dry stack tailings that's like a big rectangle coming out of the plain. It's a very large structure. I visited there four years ago. And it's a risk to you as well as to them because someday they're going to be told it's big enough. But it's great to be the royalty company. Royal Gold and earlier management had the Peak project in Alaska that's become the Manh Choh project from Kinross. Is there any appetite in Royal Gold to pay to drill some holes and look at your own project again?
No, I think it's a little too far afield strategically.
I think one of the things we learned from Manh Choh, I think it was a good investment for us. It did well. It made a decent return. But it was also very time-consuming. And we're not set up to manage projects directly. We have a lean team. We have 30 people in the company. As I said, we can't afford to have multiple people dedicated to assets 100% of the time. It's just not the way that we want to manage our business. So by selling to Kinross, we thought the project was going to the right party, somebody who's going to push it forward and do a good job of pushing it forward. We took back cash, but also royalties. So that's more consistent with our core business. I think it was a good experience. But it was also one that we probably don't want to do again.
Osisko Gold Royalties was penalized greatly for having projects, and they spun them out into ODV, and it's fallen about 75% from its initial price, so it's been very hard for them to get the market to recognize value for the three projects that became ODV and all the exploration costs. In terms of credit lines, how large are your unused credit lines?
So our revolving credit facility is $1 billion, and at the end of June, we had $400 million drawn, so we had $600 million available.
And you have $100 million of cash and $700 million available. You could increase your revolver because your revolver is. It's bigger than a year's cash flow, but it's less than two years' cash flow, particularly as you grow, so it's not a terrible stretch for Royal Gold to draw it all down.
No, it's not.
But it depends on the business development environment. I mean, we do see opportunities today. But we don't see that many large opportunities. So the $100 million-$300 million range seems to be what we are focusing most of our time on. So I think for us to deploy all of the revolver, to draw on it fully and deploy all of that into new opportunities, I think we just don't see it today based on what we see in the marketplace. It's a possibility. Absolutely. But I think it's unlikely given the pace and scale of opportunities that we're looking at right now.
In terms of the revolver, how much are the fees for every $100 million unused?
So it's a grid. Let me see. I actually have a table here in front. I mean, we paid last quarter. We were paying just over 6%.
It's a leverage ratio that is the definition of the.
That's the interest you're paying on the money you draw.
Exactly. Exactly.
How much are you paying on the money you don't draw to have the credit line?
So at our leverage ratio of 0.6, we would be about 0.24% per year would be the commitment fee.
So it costs $1 million to have a $400 million unused line?
Yeah, I think that would be about right.
That's not the end of the world. But if you don't think you're going to use it, every penny you save in G&A is a good penny saved. In terms of project flow, we made the comment earlier today that 95% of what they're seeing are single-asset companies that can't finance themselves, generally $300 million in smaller deals. Is your deal flow similar?
Yeah.
It sounds like it's the same, which doesn't surprise me.
The people are calling you, Franco, and Wheaton with the same projects.
Yeah, I think most, I mean, there's enough competition between the three of us and a few other players that I think it's easy enough for people if they're looking for capital to call a small number of folks and provide a competitive process and it's what they should do to get the lowest cost of capital. So I think we're all in some instances, perhaps we source our own opportunities that are unique. But I think in most cases, even if they are unique opportunities, there will be a price check that's done by the counterparty. And they'll call one of our competitors just to make sure that everyone's being honest. So that seems to be the way it works. We look at very, very similar things.
We come across our peers quite a lot over when they do opportunities.
Well, super. Congratulations. If the biggest bump in the road is Newmont having a strike for three or four months, in the grand scheme of things, it's pretty good. Worse things have happened.
That's true. I mean, it's unfortunate. You never want to see strikes. I mean, obviously, there's a lot of personal disruption and so on. But from our perspective, the opportunity.
The gold is still in the ground and didn't go anywhere.
Exactly.
And maybe it's a disappointment that you don't have a transaction done this year, but you got almost $1 billion done last year. So it all averages out pretty good. Super. Thank you very much in regards to the team.
Thank you, John. Appreciate it. And I will get you an answer on Gold rush as soon as I can. So.
All right. Take care. Enjoy the rest of your day. Very confirming that for so long that it probably makes them grit their teeth to mention it in an update.
It did.
Take care.
Thank you and have a good night. Thanks a lot, John. Take care. Bye-bye. Thank you.