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'd like to thank everyone in Atlanta and surrounding areas for joining us today for the presentation of Royal Gold trading on the Nasdaq under the ticker symbol RGLD. Presenting today is Alistair Baker, Senior Vice President of Investor Relations and Business Development. With that being said, I will now hand the floor over to Alistair.
It's been a great year for the gold price, a great year for Royal Gold, so I'm very happy to give you an update as we approach the very end of the year and look forward to 2025. I'll start by just making a standard disclaimer that 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, filed with the SEC, so what I'm going to do is just give you an overview during this presentation of 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.
I will talk about our low-risk leverage to the gold price, our long history of executing a very simple business strategy, our unique business model, organic growth potential from within a diverse portfolio, and then finally, I'll end up with some comments on our valuation. So as we set the table here, I just want to explain Royal Gold at a very high level for those of you who don't know who we are. 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 well over 40 years now. We have two segments to our business. We have the streaming segment, which contributes about 70% of our revenue. We have the royalty segment, which is about 30% of our revenue. They're both basically the same thing.
They both provide us top-line exposure to the production for mining assets. We released our third-quarter results in early November. It was an excellent quarter for us. We had excellent results that really do demonstrate that we benefit directly from strong and rising gold prices. That revenue of the quarter was a record $194 million. We had record-adjusted earnings of $1.47 per share. We maintained our 81% adjusted EBITDA margin. Revenue was 76% from gold. And from a jurisdictional perspective, it was 60% Canada, the U.S., and Australia. We ended the quarter with $0 of debt and $1.1 billion of liquidity. If you think about where we are year-to-date in 2024, we've already produced, as of the end of Q3, revenue of $517 million, $225 million of earnings, and $388 million of operating cash flow.
So it's been a very, very good year for Royal Gold in a rising gold price environment. Now, the final comment I'll use to set the table before we get into the remainder of the presentation is just where we compare to peers and how we compare to peers. We sit in a very interesting position. We're large enough to compete for the largest transactions in our sector. We have significant cash flow. We have significant access to low-cost capital. Yet we're also small enough that we can show growth. A small transaction for us can actually add meaningful value. So I just want to keep that in mind as we go through the remainder of the presentation. So I'm going to talk now about our low-risk leverage to the gold price.
There are different ways you can invest in gold, and this attempts to show how we are positioned. Our model provides exposure to precious metals without many of the risks that come with operating companies or investing in operating companies. We provide upside exposure to gold and to optionality and mining assets while reducing downside risk by holding a diverse portfolio that doesn't have direct exposure to operating and capital costs. That's very important when you think about the mining sector. In the last several years, we've seen inflation, margin erosion, and we have not been subject to those pressures. There are other ways you can hold gold. You can buy an ounce of gold if you want to be very conservative, but that ounce will always be an ounce. It'll cost you to hold it. It's never going to pay you a dividend, and it will never grow.
You can also be more aggressive, and you can buy equities in mining companies, or you can buy equities in exploration companies. But those come with their own risks, mainly operating and capital cost risk exposure. We don't have that directly. And our historic performance, as you can see on this next slide, shows why we think we're a good alternative for those who are looking for conservative exposure to precious metals. On the left-hand side, you can see our beta of 1.8 to the gold price provides us very good leverage to the gold price. Yet on the right-hand side, you can see our share price performance over the long term has beaten the gold price, the GDX index, and general market indices. And this price chart goes back to the beginning of the GDX in 2006.
Now, we have a very long history of execution, and it's really based around consistent and disciplined performance. And I'll talk about that in this next section here. So this slide is one of my favorites when we talk about Royal Gold. It's our 20-plus year history of capital allocation and growth. And it's really the focus for us is providing accretive growth to our shareholders. And since 2000, we've seen significant revenue and cash flow growth. We've grown our business significantly. But there are aspects of this growth. There are three aspects that I think are really worth calling out. The first is our business is high margin, and it's scalable. So our revenue growth far exceeds the growth in our G&A expense. We do not need to add people when we add assets to our portfolio.
The second is our revenue growth is not dependent solely on metal prices. We have seen a nice rising gold price environment for the last several years, but we've been able to add volume to our business and actually grow our business by adding assets, and then thirdly, we've been able to add these assets and finance that growth internally 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 that index. We have not issued equity since 2012, and we really want to avoid shareholder dilution, so if we can fund our business using internal resources, that means that we can provide per-share growth to our shareholders. Now, an important part of our business is maintaining liquidity. We have to be patient in our business.
Sometimes opportunities come up quickly, and we have to have a strong balance sheet to be able to act on those opportunities when they arise, and our approach to funding growth is to use cash on hand first, operating cash flow then, and then finally revolving credit facility, and equity is our least preferred source of financing for our business. The waterfall on the left-hand side of this page shows how we allocated our cash flow in 2023. We used our operating cash flow to repay our debt, pay our dividends, and build our balance sheet, and now we have liquidity of $1.1 billion. That includes working capital, and that was the end of the third quarter of this year. We have no debt, and we have 100% of our revolving credit facility as undrawn and available. That's lots of liquidity for the environment that we find ourselves in today.
Just to further on that point about our revolving credit facility, it's $1 billion, and it's a cheap and flexible form of financing. We view it as a very strategic tool for us to use. We have eight top-tier banks in our credit facility. And what we do is we draw on the facility when we need the funds to make an acquisition, and we'll pay back the drawings based on cash flow as it comes in from the portfolio. 2022 was a really big year for us from an acquisition perspective. We borrowed in the third and fourth quarters, and we acquired long-lived assets in the form of royalties, the Cortez Project, as well as Great Bear. We've now repaid all of that borrowing. We repaid the borrowing from cash flow as it came into the portfolio.
That rapid paydown really shows you how quickly our cash flow can be generated from our portfolio. And while there is an interest cost to using this revolving credit facility, the short-term interest expense, in our view, is a worthy trade-off when you think about buying assets that have multi-decades of production potential, which is what we did with Cortez and Great Bear. Now, when we think about capital allocation, return of capital to our shareholders is a key strategic objective, and it's something that makes us unique in the precious metal sector. And when you think about other gold investments more broadly, we've paid a growing and sustainable dividend since 2000, and we've increased the dividend every year since 2001, despite volatility in the gold price. We raised our 2020-2025 dividends just over a month ago. It was the 24th consecutive annual increase.
We've raised it by 12.5% over what we are or have paid in 2024. And since we started paying dividend, we paid out almost $1 billion of dividends to our shareholders. We're the only company in the GDX that has paid an increasing dividend every year since the GDX was formed in 2006. And we're the only precious metals company in the S&P High Yield Dividend Aristocrats Index. So that is a differentiator for Royal Gold against all other precious metals investments. Now, another differentiator for us is due diligence. And we view due diligence as being a core competency of Royal Gold. Good due diligence is very important because we want to make sure that we add the right assets to our portfolio and avoid adding the wrong assets. We're always busy looking at new opportunities. Not all opportunities make it through our filters, our due diligence filters.
So our process is very extensive, and we're very disciplined around how we allocate our capital. If we see risks in assets that we don't like, or there's something that we don't think can be mitigated, we'll walk away from transactions. We're not compensated to do a certain number of transactions in a certain time period. There's no pressure to do transactions. If we can find the right opportunities, we'll collect revenue from our portfolio, build our balance sheet, and wait. History has shown us that by being patient and waiting, the best opportunities will present themselves. And 2023 is a good case in point. We were very, very busy in 2022, as I mentioned. But in 2023, we didn't see the right opportunities to transact. So what we did was we focused on our balance sheet, repaid our debt, and rebuilt our liquidity.
Now, our business model is passive, so we don't have direct operating control. But ESG considerations have always been a very important part of the way that we think about our business. We invest for the long term. So we invest in an asset. We expect to get life-of-mine production from that asset. So ensuring the sustainability of our investments is a very important part of our due diligence when we're looking at those investments in the first instance. MSCI and Sustainalytics are two very good ratings providers in our sector. And we're ranked top-rated by Sustainalytics, and we're AA by MSCI. We've done a lot over the past several years to daylight what we've done or what we do in this area. And so I think with that improved disclosure, you've seen improving trends in our scores.
In this next section, I'll talk about our business model, which is quite unique. And there are a number of factors that make it unique. The first, though, is optionality. And the real key to our business model is optionality to reserve and resource growth at the assets where we invest without having to make further investments. And I've got two assets shown on this slide here. We've got PV, and we've got Wassa. Both of those, we made our initial investments in 2015. And in both cases, reserves and resources today are higher than at the time that we made our initial investments. And that's in addition to production that's allowed us to recover over 85% of our investment at PV and almost 150% of our investment at Wassa. But there are growth projects at both of these assets. At PV, there's an expansion in the very final stages.
In Mine Life Extension Project, you could see that mine life extended to the mid-2040s. At Wassa, there's a significant underground resource that's being worked on that could see mine life getting extended to the mid-2040s as well. In both cases, we are not required to fund any further to get exposure to this upside. It's growth that we don't have to pay for. That exploration and production upside is very important when we look at new opportunities because that optionality is the thing that provides our shareholders that excess return. It's a very important feature of our business model. Now, another feature of our business model is our efficiency. We have 30 employees in the company. Last year, we produced over $600 billion of revenue. Today, our market cap is around $9.5 billion.
On a per-employee basis, we compare well to any business in any sector. That's a very important differentiator. That low employee share count means that we have a low fixed cash G&A, which obviously further contributes to our efficiency. In 2023, we had a 79% adjusted EBITDA margin, and cash G&A was about 5% of our revenue. In the third quarter that we just released a month ago, our EBITDA margin was about 81%, and our cash G&A was about 4% of revenue. You can see that we've had a direct benefit from that rising gold price that I referred to at the beginning of the presentation. Our G&A costs are low, and they're mostly fixed. Inflation should not be a significant risk to our margins. We are insulated from cost inflation compared to the average gold producer.
If you look on the left-hand side of this, you can see that our cost structure versus the average gold producer, they're very different. Producers are exposed to inflation and input costs, any costs that they incur to run the operation. Things like labor, energy, and other consumables, many of those actually increase when you're in a rising commodity price environment. If you look at our G&A costs, on the other hand, they're mostly steady. We've got salaries, office rents, services, things like that that typically don't move in a short-term manner. Our margins are a lot less exposed to inflation pressures simply because we're not directly exposed to operating and capital costs. Now, I'm going to talk in this next section about our portfolio, which is broad and deep, and it's got a very good organic growth potential within it.
This map just shows where we are on the globe. You can see we're weighted towards lower risk and more mining-friendly jurisdictions. If you look further, you can see on this next slide where we are in established mining camps. We have very good exposure to established mining camps and very key jurisdictions. About 50% of our revenue came in 2023, came from Nevada, British Columbia, and Western Australia. All of those have been mining jurisdictions for a century or two. We have significant exposure to earlier stage projects in all of those regions. Historical mining areas are great to have investments in because there's generally very good prospectivity from a geologic perspective, generally very supportive regulatory environments. You also have access to people and expertise in the mining sector.
There's a saying in the mining business, "The best place to find a mine is near a mine." So we're very well situated to capture additional optionality from exploration success in these areas. Now, our portfolio is very well diversified, and that provides stability to cash flow. Our operators are best in class, and in most cases, they're large, well-capitalized, and very experienced. We have 40 mines that produce revenue to our account. That breadth of portfolio compares well to any mining company. Our underlying assets are about 50% precious metals, and 50% would be a mix of base metal and precious metals assets. And our largest country exposures are to Canada, the USA, the Dominican Republic, and Chile. So all of those are pretty mining-friendly jurisdictions. And that portfolio diversification really does reduce our exposure to single asset operator and jurisdictional risks, which are very important considerations.
Our portfolio spans the various stages of mining project development. We have 135 assets today that are not producing any revenue, but they're in various stages of either exploration, evaluation, or development, and we expect the potential for organic growth from any asset that moves through this pipeline from the left of this slide to the right towards production, which is where we get our revenue. We've got good examples of assets that have very recently come into production that have been in our portfolio for a long time. Two of those would be King of the Hills and Bellevue Gold, and they've moved through that pipeline in the last several years, and a few years ago, if you'd asked me about those assets, I'd say they're dormant. There's not a lot of value.
But today, they're actually producing revenue to us, and they've got management teams that have scoped out long mine lives on both of those assets. So that is organic growth that is very important to our shareholders. And to continue on that theme, on this slide, we just show some of the catalysts, some of the key catalysts that we see within the portfolio at various assets. At the top of this slide, you see in the light blue color, the potential for mine life extensions and production increase in several assets that are already producing revenue in our portfolio. Move down into the next sector with the gold-colored arrows. These are development assets that have very recently started producing revenue or will start to produce soon. We've got first gold. We saw that produced from Mara Rosa in the first quarter of this year, Côté Gold in Canada.
Goldrush at the Cortez Complex has been ramping up. We'll continue to do so through 2008. We saw the first gold produce at Manh Choh in July. We're expecting the first gold from Back River in the second half or the middle of next year. Then finally, Great Bear, we're expecting to see production from that towards the end of this decade. All of the growth shown on this slide is free optionality to our shareholders. It's all fully funded. We don't need to pay any more to get exposure to this growth. Now, organic growth is great, but we don't just rely on organic growth to grow our business. We're always looking at new opportunities. We've been adding to our portfolio over the past several years. This slide summarizes what we've done in the last three years.
We've deployed $1.2 billion of capital on seven transactions on six assets that provide gold exposure on assets with upside potential in safe jurisdictions. We funded these transactions using cash on hand at our revolving credit facility. We have not issued equity and diluted our shareholders' exposure to any of these assets, and this next slide has a lot of detail on it, but I'll run through it quickly. It just summarizes some of the potential of these assets and what we see and what we did see when we did these transactions. Starting off at Cortez in Nevada, we've owned several royalty interests at Cortez since the beginning of Royal Gold, but we expanded that position materially in 2022. It gave us exposure to the entire Cortez Complex. This is a world-class gold complex in Nevada, a very mining-friendly jurisdiction.
It's operated by Barrick and Newmont, two of the biggest and best companies in our sector. The Goldrush Mine is ramping up, as I mentioned, but there's tremendous exploration potential here, and there's project potential being advanced at the Fourm ile Project and at Robertson as well, so we're expecting to see continued growth from this asset for years to come. At Red Chris in Northern British Columbia, Newmont is the operator there. They inherited a plan from Newcrest who they acquired not too long ago to transition this mine from an open pit to a large bulk tonnage operation, so that's a very exciting project for us. At Xavantina in Brazil, Ero Copper is the operator here. They have had tremendous exploration success. They're now targeting sustained gold production of around 60,000 ounces a year.
A couple of weeks ago, they came out with a new resource statement that further adds to the mine life. The Côté Gold Project in Ontario, I mentioned, poured its first gold in March and is continuing to ramp up. The Great Bear Project in Ontario, Kinross the operator there, released a preliminary economic assessment in September. There's a 6.6 million oz resource, and there's exploration at depth that's underway. Kinross is hoping to add to that resource as that exploration program unfolds. And then finally, Back River in Nunavut in Canada. We made an investment in the middle of this year, about $51 million, on two royalties to add to an existing royalty holding there. We now have about a 3.3% gross smelter return equivalent royalty interest on this project.
Construction is well underway, and this should produce about 3.3 million oz over a 15-year mine life starting in the middle of next year. And there is likewise similar exploration potential to extend this in the future. If you were to wrap all of these up together and say, "Is there a consistent theme?" I'd say, "Absolutely." These acquisitions are all very consistent with our strategy to acquire precious metals with further exploration and production upside in safe jurisdictions. Finally, I'll end now on valuation, and I'll turn it back to Noella for a Q&A session. But I think if you look back historically, we're trading at pretty attractive multiples relative to where we have traded. Our company is performing very well. We've got very strong cash flow. We've been very disciplined with our capital allocation, and we've got good organic growth from within the portfolio.
However, I don't think the share price today is necessarily reflecting the strong gold price outlook and that strong portfolio performance that we've seen, and particularly, if you look at the cash flow multiple, we're trading towards the lower half of our peer group, and I think it's because of long-life assets. The value of those assets and the optionality that those assets bring has not been recognized by the market properly. It also feels more generally like the market's just not pricing in where we are from a gold price. We feel very good about the gold price. We think it will be strong for the next several years, and that should continue to allow us to produce strong cash flow from the portfolio, so with that, I have come to the end of the presentation.
Like I said, I think Royal Gold is in a very, very strong position today. Our record is strong. Our business is performing very well. We've got high-quality assets and a well-diversified portfolio that has organic growth potential. We're trading at an attractive valuation, yet we have a very strong balance sheet, and we have ample liquidity to be able to continue growing our business and adding to that record. So Noella, I've come to the end now of the formal remarks. I'd be happy to turn it back to you to start a Q&A session.
Thank you very much, Alistair, for the presentation. As you said, we'll now begin the Q&A. Your first question is, "What percentage of the portfolio is attributed to silver streams or royalties? Will it increase moving forward?"
So silver for us is an interesting metal.
We consider it a precious metal just the same way that we consider gold. Silver right now is somewhere between 10% and 15% of our revenue, and that's been fairly consistent over the past several quarters. And I don't expect that to change materially. The silver streams that we have in our portfolio are operating, and so I don't see a significant change in that revenue as we go forward. We like silver quite a lot, but gold obviously is in our company name, and that's the main focus of the company. But silver is definitely a precious metal that we want to have exposure to as well.
When Royal Gold considers entering into a streaming agreement, is there an IRR range that you're looking for?
We have to be competitive with other sources of financing.
And so, operators, when they're talking to us about financing, they're looking potentially at equity. They're looking at debt. They're looking at things in between. So what we have to do is be competitive with those sources of financing on day one of the transaction. So that's generally something that's going to be a return in the mid-single digits. That, though, is not particularly exciting. We like to see returns that are significantly higher than that. So what we aim to end up at when mine life is extended or when production improves in the future, we intend to get to something that's higher than that, and double-digit returns would be the target. On day one, though, it's difficult for the market to necessarily see that because the market may not have access to the same information that we do.
We do a lot of due diligence before we announce a transaction, which goes all the way to very fundamental review of assets and the geologic potential. We'll only invest in assets if we think there's a very good potential for upside improvement in the future. So what we have to do is we have to balance that. How do we get that exposure to upside and pay a price today that will satisfy that counterparty? So we have to be competitive with other sources of capital, but we don't invest in assets that won't allow us to at least think about a much higher return at the end of the day. And if you look at what we've done, and we've got some examples in our investor materials of assets where we've invested on day one, Street estimates will be lower than what they are actually as time unfolds.
We have a very good record of adding value by picking assets in the portfolio and growing those returns over time.
Would you look at buying Orogen Silicon Project NSR?
We're always in the market for new opportunities. I won't comment on any specifically, but sometimes there are other companies, smaller competitors that we look at. We'll look at assets that come to us directly from counterparties who may be looking to raise capital. But we look at all opportunities, and it really depends on value. It depends on value in the asset. If the asset's good and the value is right, then we're happy to transact. We have done corporate transactions in the past. We acquired Great Bear Royalties a couple of years ago, and that was a company transaction to get a hold of the royalty on the Great Bear Project.
So we're certainly not afraid of doing things like that, but at the end of the day, it has to be good value there.
Given the heightened geopolitical risks in some regions, how does the company weigh jurisdictional safety versus the attractiveness of an asset itself?
We will not invest in an asset if it's in a jurisdiction where we won't go to visit that asset. It's a very simple calculus. But there are other factors as well when we think about geopolitical and jurisdictional risk. We think about stability. Do governments have a good record of leaving resource extraction alone, or do they meddle with ownership, things like that. Rule of law, again, is very important. In many cases, we structure contracts, so we need to make sure that we are able to rely on legal systems to be able to enforce if something goes wrong.
But personal safety and security, obviously, we want to make sure that we can visit those sites because we do our due diligence. Often that includes a site visit. We don't want to be sending our people to places where there's danger or there's a risk of something bad happening. So we will not consider investing in certain jurisdictions. There may be very good geologic prospectivity, but if we can't get comfortable with the risks, then we're not going to invest.
Are streaming and royalty companies as correlated to gold and silver prices as mining companies are?
Yes. I think if you look at our, as I mentioned in our presentation, we have a beta to the gold price of 1.8. Now it's a long-term 10-year beta. So yes, we do have very good leverage to the gold price.
I think there's a misconception that operating companies give you better leverage to the gold price. It's just simple math. If you've got high costs and the gold price goes up by $100, then you may see your earnings go up significantly if you're an operator. Because our margins are so big, if the gold price moves by $100, you may not see that margin expand so much. So that's the argument that many make that say that operators provide you better leverage to metal prices than streamers. But over the long term, you can see that we've had very good leverage to the gold price, and I would say that you get what you pay for.
So in many cases, you buy an operating mining company that may have high costs, and you think, "Well, this has got great leverage to the gold price." You've got to remember that leverage cuts both ways. So if the gold price goes down, you're investing in a high-cost company, then your investment may go down very quickly as well. Whereas you invest in a company like Royal Gold, we have fairly consistent margins. We've been able to show those over time. That risk is not the same.
Does the company have a process for divesting exploration assets that no longer meet its strategic or return criteria?
We don't because we generally don't sell assets. The great thing about our business is if we own assets that may be dormant today, they may look like they have no value.
They can actually, over time, move into, as I showed on that one slide, they move through that pipeline, and they actually move into production in some cases. There's no benefit to us selling assets. It doesn't cost us anything to keep these assets if we have them in the portfolio. It's just optionality, and that optionality is worth a lot, or it can be worth a lot. If we were to sell assets that don't have any perceived value today, we're going to get cents on the dollar for those assets. We'd rather keep them in the portfolio because that's where we may get multiples of dollar per dollar. So I would only point to things like King of the Hills and Bellevue Gold. We've had those assets in the portfolio for well over 10 years.
They were dormant for ages, and it did not look like anything was going to happen there for a long time. New management teams came into both of those assets. They had new project concepts. They were able to raise money, finance those concepts. They put those mines back into production, and both of those are very good assets to have in the portfolio today. If we had sold those assets seven or eight years ago, maybe we would have received nominal dollars for those. I think everybody would agree we're in a much better position today having kept those assets rather than selling them.
Would you consider a special dividend if the gold price remains high in 2025?
We're getting this question a lot more, and I think it's because the market's beginning to recognize that the gold price is probably going to stay strong, and that's very good for us and our cash flow generation. We consider return of capital as a key strategic objective, and I said that during the presentation. Our main vehicle for returning capital has been, and we hope will be, the regular dividend where we grow it, and we sustain that growth every year. But other things are not off the table. We do discuss these things as well, and special dividends may be an option. Share buybacks probably don't make as much sense given the multiple that we trade at, but that's also a potential way to return capital to shareholders.
I wouldn't say anything is off the table, but what we found is we occasionally get these questions when people see our cash balance building. We're hesitant to return capital and too much capital back to shareholders because the best value for us is to redeploy that capital in our business. If we can acquire assets at one time as net asset value, and we get a multiple of that in the marketplace, then you're seeing immediate accretion, and that's the best way for us to grow and add value to our business rather than returning it to shareholders. And we prefer not to, we may run a higher cash balance over a period of time, or maybe people expect us to return to run a higher cash balance, but we prefer to have that powder dry, if you will, because opportunities often come up very, very quickly.
And we'd hate to be in a position where we pay a special dividend out, and then suddenly, two weeks later, we find there's a very attractive opportunity, and we have to borrow to execute on that opportunity. So it's an interesting strategic question. Right now, it's a pretty hypothetical question. We have just over $100 million of cash on the balance sheet. So it's not something that's a burning issue for us today.
Why do you think the shares outperformed the miners in Q4?
It goes to costs. And if you remember what happened at the beginning of the third quarter reporting period, the market was very enthusiastic. We're starting to get enthusiastic about the gold price remaining at this level, and the market was looking at the gold sector and saying, "Some of these mining companies should do very, very well. They should see significant margin expansion.
So it will be an opportunity. It'll be a very good time to buy into the producers. Unfortunately, what happened was the very first company to report was Newmont, and they talked about additional costs, production costs, and inflation. And that theme tended to rear its head again. And so I think a lot of investors expected the entire sector to be suffering from the same. And what you saw was a rotation, or maybe not a rotation out of the producers into the streamers, but maybe you saw money on the sidelines that said, "I'm not ready. I'm still not convinced that the producers are out from under inflation. So I want to have exposure to the precious metals sector.
I'm going to invest that in the streaming companies because they're not exposed to inflation," so I think that's what happened was you saw an allocation of funds that potentially was earmarked for the operators, but because of cost inflation concerns, that allocation was deployed towards the streamers.
Is there an expectation that all projects in the evaluation stage will make it to development stage?
No. No. I think it would be unfair for me to suggest that every asset that's in our portfolio that's early stage will make it to production. Not all assets are the same. Some are higher quality. Some are led by management teams that are stronger. Some have financing. There are all sorts of things that could mean that certain assets will be successful and others will not, but we feel very good about the evaluation projects in our portfolio.
We think many of those are very high quality. So yeah, we expect those to get into production at some point, but I think it's very difficult for me to say with credibility that all of them will do that. So we'll wait and see, but we're very happy to have that optionality within our portfolio.
Has Royal Gold ever considered joint acquisitions given the competitive climate for deals?
We have. Syndication is definitely something that's come up. It's always a very interesting discussion. We know our peers very well. We understand how they look at things, and I think they understand how we look at things. In many cases, there are commonalities in approaches, and so we have looked at syndication in the past. Unfortunately, we haven't found the right opportunity. Right now, I think the business development environment is generally smaller assets.
There's no need for us to syndicate. We don't need it from a financing perspective. If it were for things like jurisdictional risk, if we're not interested in owning something 100%, we're not interested in owning it 50%. If it's a jurisdictional one, we just don't want to be involved at all. So we just haven't found the right opportunity, but it is something that does come up, and it is potential for us in the future.
What is your preference: to add more producing-stage properties to your portfolio or to add more early-stage development properties?
It really depends on the opportunity. I think we're focused on the fundamental quality of the assets. So if we can find very good quality assets that are producing cash today, yes, that would be definitely how we would like to proceed.
But we'll also look at earlier-stage assets that are very good quality. Great Bear is a very good example. We're not expecting to see any revenue from that asset for several years, but we thought at the time we made the acquisition, and we are still convinced, it's a world-class asset. It's a very high-quality project. So for us to get involved in the early stage, we're very comfortable doing that. We are taking a higher risk, there's no doubt, but we think the quality of the asset will mitigate that risk. So the preference is closer to cash flow, as close to cash flow as you can get, but it really does depend on the asset, the quality of the asset.
When do you expect to hit an impressive $1 billion in paid dividends since 2000?
Well, we are almost at $1 billion now.
So I think within the next quarter or two of dividend payments, you should see us there. If we're able to, if the board approves paying the dividends that we're expecting to pay. So it won't be very long, I hope, but stay tuned. That's ultimately a board decision to pay dividends, and I would hate to second-guess the board and get in front of their decision-making process.
With the new U.S. administration coming into office in a month, with a big focus on digital currency, how will this impact precious metal prices, do you think?
I think precious metals and digital currencies are different. They are different asset classes, and I think they're used for different things. If you think about the history of the two, gold has thousands of years of history in human evolution. Digital currencies have significantly less, so a handful of years.
They're used for different things. I think gold is viewed as a store of wealth. Central banks own gold because it's liquid. There's always a market for it. It's an understood commodity. Central banks don't own crypto assets the same way. They are different assets that appeal to different types of investors. Cryptocurrencies, they tend to do more, or they tend to be more correlated to tech and the performance of tech companies, whereas gold is correlated to all sorts of different things, and people own gold for different reasons. I don't think people buy cryptocurrencies as a hedge necessarily or as a store of value. They acquire cryptocurrencies for different reasons. So I think you need to think about them differently. I think there are pros and cons to owning both, but they are different asset classes.
How important is it for Royal Gold to have good ESG and credit ratings?
We're not rated by any credit services, so we just don't have a credit rating. We haven't gone through the work to try and get a credit rating, not to say that we couldn't get one if we didn't want one, but we don't use debt as a permanent source of, or a permanent part of our capital structure, so it's less strategically important for us to have that. We certainly want to have a very strong balance sheet, which essentially is the same as having a strong credit rating, so that's the credit rating part, but it's very important for us to have that strong balance sheet because we need to be able to execute transactions without financing conditions. On the ESG side, it's important for us.
I think we're less concerned about what the credit or the ESG rating agencies say. We're more concerned about how we actually think about ESG when it comes to the assets in our portfolio. As I said, we've got to make sure they're sustainable. So ESG factors can often be the reasons why mining assets are not sustainable. So if you've got community issues or you've got environmental problems or governance problems at assets, those can often be the things that stop mining assets from continuing to produce. So we have to be very, very cognizant and very aware of those issues and risks when we do our due diligence. So it's very, very important. For us as a company, our ESG performance is very good. I mean, we're a small company. We don't really have a large impact. We have four offices around the world. We have 30 employees.
So we don't have some of the same environmental concerns that large producers have as well. In addition, our governance. We've always had strong governance at Royal Gold. Our board is independent. Our processes are very rigorous. So the way that we conduct our business under the umbrella of ESG is a very important part of why we think we're an attractive investment for any shareholder, really, because we run our business very well, and we invest in assets we think are very strong and sustainable.
What was the highlight for Royal Gold in 2024?
I think it was a very good year. We're not at the end of the year yet, so I don't want to count my chickens before they hatch, but it's been a very good year so far.
And I think I would point to the financials, the performance that we put in for the first three quarters of the year. I mean, we had very strong revenue, excellent cash flow. We paid down our debt. We've done a lot of things to really set ourselves up well for 2025 and a strong gold price environment going forward. And I guess the one transaction that we did do in 2024 that was very good, and you may see. We'll see what this does in mid-2025, but we restructured our stream on Mount Milligan at the beginning of this year, and that allowed. It provided an incentive for the operator to look at extending the mine life. And so they've got a plan underway. They're working on a proposal, or they're working on a study right now that could see an extension to the mine life there that may be meaningful.
So if we were able to unlock the future potential of that asset by restructuring the stream this year, I think that will be viewed as a very, very good transaction for us. And so that's something that in the next several years we might point back to and say that was a very key highlight for 2024.
Thank you very much, Alistair, for your insight today. 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 our presentation for today, but before we go, I will turn back the floor to you, Alistair, for final remarks.
Well, thanks again, everybody. I really do appreciate the opportunity to talk to you. All the best for the holidays and a happy, safe, and prosperous 2025. I look forward to connecting with you then.
Thanks very much. Take care, and we'll talk to you soon.
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 happy holidays.