Hello and good afternoon, everyone. 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. The presentation will last approximately 25 minutes and will be followed by a Q&A session for which you can participate using the chat box in the top right-hand corner of your screen. With that being said, I will now hand the floor over to Alistair.
Thank you very much, Noella, and thanks to Renmark for the opportunity to present to you today. We've had lots of news at Royal Gold in the past several months, and it's obviously a great time for gold. It's a good time to give you an update before the end of the year. Just to cover off the obligatory statements about forward-looking statements, I will, in today's presentation, be making some forward-looking statements. 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, which we filed with the SEC. Now moving on to the main part of the presentation, I'll give you the investment thesis for Royal Gold. For those of you who don't know us, we are a high-margin business.
We generate consistent cash flows, and the majority of those cash flows come from precious metals. It's been a transformative year for Royal Gold. We've done a number of things that have materially changed the company. We did two corporate transactions. We acquired Sandstorm Gold, and we acquired Horizon Copper. And both of those acquisitions closed just over a month ago, towards the end of October. We also did two relatively large transactions. The first was the Warintza transaction in Ecuador on an emerging copper-gold mine. And then secondly, it was a very large transaction on the Kansanshi project, or mine, in Zambia, operated by First Quantum Minerals. So two very large transactions to add to the corporate acquisitions that we did. And then finally, we saw some very positive news in our portfolio from some of the larger assets in the portfolio.
So we had very good news at Mount Milligan. It's our largest asset. Mine life was extended by at least 10 years, and the operator thinks there could be a few more decades of production potential beyond that. And then probably the most exciting thing we saw in our portfolio was some very interesting developments at the Fourmile project at Cortez in Nevada, operated by Barrick. And in Barrick's words, this is the most interesting and important gold discovery of the century. So we have full royalty exposure to that. So we've added a lot of scale, diversity, and growth to our portfolio. And all of this is very good for us. But importantly, we haven't changed our strategy. So what I'll do is I'll go through this presentation and give you an update on where we are.
I'll talk about our gold exposure, our business model, which is high margin, and our approach to shareholder returns. I'll talk about our portfolio, which is the most diversified of all of the companies in our sector. I'll talk about the operating risks within our portfolio, which are a lot lower than mining companies and other ways you can invest in the gold sector. I'll talk about our size. We think we're, even though we've done all these things recently, we think we're still at a very opportunistic size for our sector. Then finally, I'll talk about optionality embedded in our portfolio, which is really the key to driving excess returns for shareholders. To start with, I will talk about our gold-focused portfolio. We've been around for well over 40 years. We've been on the Nasdaq for most of that time, so very well-established history.
Our strategy really hasn't changed. It's been very consistent over time. We've always been focused on gold, always been focused on getting exposure to good assets in good jurisdictions. Our revenue growth has been fairly consistent over that 40-year period. Our metal mix hasn't changed. As I go through this presentation, please note that some of the things that you see, some of the slides, they don't reflect some of the transactions we've done more recently. We just haven't had time to incorporate those results because there haven't been results from those assets yet in a meaningfully long period. Most of the information in this presentation deals with 2024, the last full year. They are indicative of what we expect as well. Really, what we're about is trying to provide gold exposure to shareholders in a conservatively managed vehicle.
If you look at our stock price performance over the long term, and this chart goes back to the beginning of the GDX in 2006, this historic performance really does show why we are a good alternative for those who are looking for conservative exposure to a volatile commodity. You look at our beta to the gold price on the left-hand side, is 1.7, so very good leverage to gold. On the right-hand side, you can see our share price performance. Over the long term, we've done very well. We've beaten the gold price. We've beaten the GDX index, and we've beaten the S&P, so we've done very well. That shows why we are a good buy-and-hold investment for those who are looking for exposure to a pretty volatile commodity. Now, we do have nice, large margins. We have an 80% EBITDA margin on average.
And it's because our business model is very unique. It's a high-margin and scalable business. Our typical EBITDA margins are well over 80%. Last year, it was 81%, and our cash G&A, so that's the cash that we require to run our business, last year was about 4% of revenue. This last quarter, the quarter ended September 30th, it was 3% of revenue. Our costs are low, and they're fixed, and cost inflation isn't something that really impacts our margins, and the thing about our business is that it's very efficient, and it's scalable. We have added a few new colleagues over the past several months because we do have a much larger business now to manage, but our headcount remains relatively low. We have less than 40 employees, and if you look at our market cap today, our market cap is about $17 billion.
On a per-employee basis, we compare very well to any company in any sector, and that includes some of the highest-profile names that you can find in the marketplace. Now, return of capital is and always has been a key strategic objective for us as we manage our business, and it's something that makes us unique when you think about us and other gold investments you can make. We have made dividend payments since 2000. We've grown our dividends since 2001, and we've done that despite volatility in the gold price. We just announced a couple of weeks ago that our 2026 dividend would be increased by about 6% over the 2025 level, so that's our 25th consecutive increase in the dividends, and we've paid out well over $1 billion now in dividends to our shareholders.
And we're the only company in the GDX that has paid an increasing dividend every year since the index was formed in 2006. And we're the only precious metals company in the S&P High Yield Dividend Aristocrats Index. So that is something that is very unique about Royal Gold, and nothing else can talk about that record. Nobody else can talk about that record like we can. Now, underpinning all of this is our portfolio. And we have a highly diversified portfolio. It's a global portfolio, and it's weighted towards lower risk and more mining-friendly jurisdictions. And the portfolio spans all stages of mining development. I've shown two bars here on this slide. We're in the process of integrating the Sandstorm and Horizon portfolios into the Royal Gold portfolio.
And the reason there are separate bars right now is simply because we just use different ways to categorize assets within the portfolios. We're unifying everything, and we'll bring it all together. And hopefully, next time I speak to you, we'll be in a position to say exactly what it is in terms of the number of properties in each of the categories. But combined, you can see that we've got over 80 producing assets. That's the most diversified portfolio of anybody in our sector. We have over 40 assets that are in development. So those are assets that are actually moving towards production. And then we have over 200 assets that are earlier stage. And that's where a lot of the embedded growth and the optionality is within Royal Gold, is in those earlier stage assets.
Because the organic growth, it really comes from development, exploration, assets that move through the pipeline to revenue generation and production. Now, our portfolio, as I said, is very diversified. And so that reduces single asset as well as single counterparty risks. Our operators are the best in class in the mining business. We have large, well-capitalized, and experienced operators who are on the other side of the contracts that we have. We recently added a few more very high-profile, very well-recognized names to our counterparty list, including First Quantum, Rio Tinto, and Glencore. So we have counterparty arrangements and relationships that are really second to none. On a net asset value basis, when we think about a diversified portfolio, as I said, we have the most diversified mining asset portfolio amongst all of our peers. And our largest asset is Mount Milligan. It's always been our largest asset.
It does remain our largest asset, but it's about, depending on the analyst who's doing the NAV calculation, it could be between 10% and 13% of our total portfolio. With the mine life extension that I mentioned at the very beginning, it's a very valuable asset and something that we expect will produce for multiple decades. That's a great position to be in when that's your largest asset. Now, all of the companies in our sector have diversification and concentration risks and issues. We have the least, and that's an important thing when you think about exposure to assets. In the past, whenever Mount Milligan had a problem, it would reflect on Royal Gold's valuation.
With the increased diversification and the reduced concentration of Mount Milligan within our portfolio, obviously, anything that happens there, like anything else that may happen within the portfolio, should be less obvious and less impactful to us overall. So that's a very important consideration for a generalist investor who wants to understand or wants to make sure they don't get into a situation where a single asset, something happening at one asset could actually impact the value of their investment. Now, I'll talk a little bit about operating risk and some of the unique features of our business model more generally. Our business model, it provides gold exposure with reduced risk. And this graph or this chart shows how we are positioned relative to other ways you can invest in precious metals.
We provide exposure to gold and optionality to the mining assets we have in our portfolio, but we also provide a dividend. We reduce our downside risk by having a diversified portfolio and without having direct exposure to operating and capital costs. There are other ways you can invest in gold. You can invest in physical metal if you want to be conservative. But if you buy an ounce today, there's always going to be an ounce, and it's never going to pay you a dividend. In fact, it's going to cost you to store that ounce. You can be more aggressive, and you can buy equities in a mining company or a development or exploration company. But with those, you're also getting technical risk. You're getting exposure to operating costs or capital costs or other things that could go wrong at the assets that underlie those investments.
There is a perception in the marketplace that our business model does not provide the same leverage to metal as some of the other ways you can invest in it, but I think the share price performance and the financial results of Royal Gold, they show otherwise. We do have very good leverage to the metals that we have invested in within our portfolio. Now, margins are an important thing to think about when you consider investing in a commodity business. Mining producers and Royal Gold have very different cost structures. Our costs are low and fixed, so margins expand as metal prices rise. However, operators are subject to inflation, and so their margins may not expand as quickly or, in some cases, at all.
You can see this a little bit more in a bit more detail on this slide here, where the way their costs are structured and the makeup of producer costs, they're exposed to inflation in input costs. So whether that be labor, energy, or consumables, the costs that they need to incur to extract metal from the assets they operate, often those costs will increase in a rising commodity price environment. So when the gold price rises, you would expect to see higher margins from a lot of operating companies. Sometimes you have costs that rise as quickly as the gold price, so those margins don't expand. You look at our costs, and they're pretty steady. Things like salaries, services, and office rents are things that don't move on a day-to-day basis generally. They're slower to increase.
We're not subject to the same inflationary pressures as some of the operators. It's that exposure, reduced exposure to inflation pressures that really allows us to see our margins expand. Now, as we think about where we are in our sector, we'd like to think we're in a Goldilocks position because we're able to do transactions that actually move the needle for us. We're large enough to compete. We've got lots of access to capital. We've got lots of cash flow coming in. We're also small enough to show growth. That's despite the fact that we've grown our business substantially over the past several months. Our sector generally is based on relatively small transactions. Most transactions in our sector are below the $300 million range. On average, if you go back long enough, they're just over $100 million per transaction.
We sit in a very interesting position because we can do those small transactions, and they actually show up in our results. And something like a Warintza, it's a $200 million transaction. Something like that can actually you can see the results in our revenue when that asset starts to produce. But we're big enough to be able to compete for the largest transactions. And we've got, as I said, lots of access to cash flow and low-cost capital. And we did the $1 billion Kansanshi stream earlier this year. And that's one of the largest transactions in our sector that's ever been done. So we can do both. And we sit in a very interesting position. We're not aiming to be the biggest. That doesn't necessarily make sense. What we want to be is the most valuable and the best in our sector.
So when we think about the portfolio, one of the things that's very important is thinking about per-share metrics, but it's also the embedded optionality and growth within the portfolio. And this graph shows what we've done in the 20-year period from 2000 to or the 24-year period, I should say, from 2000 to 2024. It doesn't include what happened in 2025. We'll obviously be updating this when we've got the 2025 numbers to add to this. But the whole idea or one of the premises of our business is to grow per-share metrics for our shareholders. And you can see since 2000, we've grown our revenue and our cash flow significantly. We have done that without a large growth in our share count. Now, we did the Sandstorm transaction. We did that. We issued some additional shares for that.
But we still remain the lowest. We have the lowest share count of any other company on the GDX index. So that is something that we're very careful about issuing shares and using shares to finance opportunities. But I'll make three observations on this page, I mean, that are very focused on our growth and the way we think about our business. Our G&A hasn't grown significantly over the past 20-odd years. Our revenue growth has far outpaced the G&A growth. And that shows you that our business is very scalable and we're very disciplined about maintaining our costs. The second is that we don't need higher metal prices to grow our business. Higher metal prices are a tailwind, obviously, to our business. But we've been able to add assets and opportunities to the portfolio as we have moved through that time period.
Then finally, as I said, the growth in share count has been relatively low compared to the growth in our top line. We have added new shares, and we have just over 80 million shares outstanding today from where we were before, and that's about 66 million shares. That is a change. Something that we haven't done for ages was issue shares. From 2012 to 2025, we didn't issue any shares. We've changed that recently, but I think you'll see on a per-share basis, a lot of what we've done recently actually adds tremendous value. We want to avoid shareholder dilution if we can and show that per-share growth to our shareholders. This slide shows one of the other founding or one of the other really important parts of our business, and that's optionality and embedded growth.
And it's from that resource and reserve growth and the optionality without having to provide further investment that really gives us that extra return or gives our shareholders extra return. This is a case study of a royalty that was capped. We don't like capped royalties. We like life-of-mine opportunities. But what this did, because it was capped, it allows us to very quickly and simply measure what we put in and what we got out. And we're not waving our arms about what may happen in the future. We're not making gold price assumptions. And so this illustrates our business very well. We acquired the Mulatos royalty when it was a project. The Mulatos mine is in Mexico. It was a project back in 2005. We acquired a royalty.
At the time, there were about three million ounces in reserves and resources, and the mine life was seven years. It operated, and it's still operating today, from about 2006 until our royalty cap was reached in 2018. In 2018, there were 4.3 million ounces in reserves and resources. That mine is still operating today, and it's one of the cornerstone assets of Alamos Gold. It's an excellent asset. We originally expected about an 8% return on that investment, but it ended up being around 36%. It was really as a result of finding more ounces, bringing those into the mine plan, and producing those ounces. With an extended mine life, we get a double benefit. We get more production, so that provides more revenue, but we also get longer and more exposure to the gold price.
As you have volatility in the gold price, that creates a tremendous amount of value for those new ounces that are added. So the appreciation and upside potential is very important when we look at new opportunities. And it's probably the most important feature of our business model. And as we look at the portfolio and what some of the growth assets are within the portfolio, we can look forward and see catalysts that will continue for the next several years. And what we've done on this slide is just highlight some of the brand new producing assets that we expect to see. This doesn't include things like the Khoemacau expansion, which we're expecting to see a feasibility study on later this year. It doesn't include the extension to the Mount Milligan life of mine. These are all brand new projects.
So you can see Back River just started production this year. Platreef is in the very first stages of production as we speak. They just turned the mill on a few weeks ago. At Robertson and Cortez, we're expecting to see that enter production in the next two or three years. Pueblo Viejo and Great Bear, we're expecting later this decade. And then into the 2030s, we're expecting new production from MARA in Argentina, Cactus in Arizona, Oyu Tolgoi in Mongolia, Warintza in Ecuador, and Fourmile. As I said at the beginning, one of the most exciting gold discoveries in decades, the Fourmile asset in Nevada. So we think we have one of the best organic growth pipelines in our sector. And as I said, this does not include the other assets that are producing today that may actually increase production or extend those asset lives.
I'm going to end on the final slide. Here is just talking about valuation. And we are trading at the very low end of our peer group. Our business is performing well. We've got lots of cash flow. We've got good organic growth ahead of us. Our share price is doing pretty well. But on a relative basis, we're not trading where we would like to be. When you look at us compared to our peers on a cash flow or an NAV basis, we're at the bottom end of the peer group. And I think there are a handful of reasons for this. I mean, first of all, we just issued 18 million-ish shares. And so that, I think, creates a little bit of noise in the marketplace. Those shares need to find a home. It looks like that is starting to occur as volumes settle down.
But that's the first reason: new issuance of shares. Second is we have an increased level of debt, which we're very comfortable with the amount of debt that we have, but on an absolute basis, it is larger than we've had in the past. But we think very good reasons for holding that debt. And obviously, we used it to finance some of the acquisitions that we just talked about. Our debt, we expect to repay within a couple of years, all else equal. So we don't think that's an issue, but it is something for the market to get its head around. And then thirdly, I think the other thing that we're struggling, or I shouldn't say struggling, we're spending a lot of time explaining to the market the growth potential within the portfolio.
And I don't think the market fully recognizes the growth potential and the quality of the assets that we've got within the portfolio. So we're doing a lot of work on educating the markets about the portfolio. And so that's something that's going to take a bit of time. But every time we have a meeting with shareholders, it's something that becomes clearer, and hopefully, we start to see a recognition of that in the market price. So it's really around education and execution of what I just talked about that will hopefully see us climb from where we are to something that's a little bit more typical and in line with some of the larger peers in our sector. So Noella, I think I've come to the end. I'll just make a couple of final comments.
We've done a lot to grow Royal Gold, strengthen it for a very strong gold price environment. We've added scale, diversification, and growth to the portfolio. We have very strong balance sheets. We have significant cash flow. And I think over the next several months, you'll see that our patient approach to executing on some of the objectives that we set for ourselves, hopefully, those will be rewarded by the market. So with that, I think I'm ready to turn it back to you for a Q&A session.
Thank you very much, Alistair, for the presentation. So we'll now begin the Q&A. Your first question is, will any of the Sandstorm/Horizon development projects go into production in 2026?
Well, as I said, Platreef is the one that's closest to production. So we know that they just started putting material through the mill.
They started doing that a few weeks ago. So first production, first revenue, we would expect to see in 2026. So that's the nearest term. Then after that, as I said during the presentation, we have a number of other assets. You can see them all on that one slide that we're expecting to see come in as time goes on. So we're feeling very excited about the growth potential of the combined portfolios. And hopefully, we'll be able to see some positive developments very, very soon.
Looking forward to it. The next question is, with a significant increase in assets, are you looking to expand the team to avoid being stretched thin?
So we did expand the team. We have hired a few new colleagues from Sandstorm. We now have a handful of people in our Vancouver office. So we're not moving people.
Vancouver is a very good place to have an office. It's a mining community. There's a lot of business development opportunity, and we have some new colleagues who spent many years with Sandstorm, so they will help us with this new portfolio. They have that institutional knowledge of the portfolio that Sandstorm brought to Royal Gold, and so that, we think, complements very nicely our business. We're in the process of integrating everything right now, and that's going to take a little bit of time because it is a very large portfolio, but we're very pleased to have a few new colleagues from Sandstorm join us.
Thank you for elaborating on that, Alistair. Your next question is, how did the Sandstorm transaction affect your revenue distribution by metals?
It doesn't really have a big impact. The Sandstorm revenue was very similar in terms of mix to what we had.
So they were about three-quarters gold, and we were maybe a little bit north of that. And then silver and other metals, including copper, made up the difference. When you add everything together, we actually have a pretty similar pro forma revenue mix as we did before. So it didn't impact our revenue mix in a big way. So very pleased about that as well.
Thank you for the response. Your next question is, a viewer says, "Fantastic to see the 25th increase to the dividend. How is management thinking about potential stock buybacks?"
Well, buybacks, whenever we consider return of capital, buybacks are always something we think about. Not something that we've done in certainly the recent history, simply because the math is harder. When you trade a significant premium to net asset value, then the math is harder.
When you're taking cash that's valued at one times and you're buying stock back at 1.8 times, it is pretty dilutive. I think with the stock price and the valuations where they are today, obviously, that's a question we're getting more. Hopefully, what we're seeing, though, is that this is a transitory valuation blip, and once the dust settles around all of the stuff that we've done this year, valuations will return to more normal levels. I think maybe in a year, if that hasn't occurred, then something like a buyback may make sense, but it's not something that we're seriously considering. We've got a very long record of dividend payments and increasing the dividend every year, and I think that's what our shareholders would expect us to continue doing, but a buyback, we'd never rule it out, but it's not at the top of the list.
We also have, I mean, I just want to make it clear that we do have debt that we want to repay, and that is a big focus of our activity over the next several months, is going to be reducing that debt. Because what it does is we reduce the debt levels. It means that we've got more capacity in our revolving credit facility to be able to go out and do more transactions, so that's something we want to do: reduce that debt, bring in additional revolver capacity, and continue adding to the portfolio. We think that's probably a higher value proposition than a share buyback.
Thank you for the clarity, Alistair. Your next question is, are there any remaining non-core assets from the Sandstorm Horizon portfolio that are being considered for divestment?
There were a handful of things within the portfolios that we acquired that don't fit our business. And when I say that, I'm not talking about royalties and streams. Those are very much core to our business. We don't have any intentions of doing anything with any existing royalties or streams. But there were a handful of other things within the portfolios, like equity investments and debt investments. And so we will be looking to opportunistically clean those up as time goes on. You may have seen a couple of weeks ago, we inherited a 25% position in Versamet, which is an emerging royalty company. And we're not in the business of owning small stakes of competitors. So we sold our interest. It was basically a block trade transaction that we were able to liquidate that entire interest.
And so what we'll do is we'll take the proceeds from that, which is just over CAD 200 million, and we'll use that to repay debt. So you should expect us to do more of that. Any equity positions, you may see news from us around selling those positions or reducing our exposure to equities. So those would be the only non-core assets that we would consider selling.
Thank you for that response, Alistair. Next, a viewer says, "Thank you for doing the call. One thing analysts said about Royal Gold prior to Sandstorm merger was that growth wasn't as good as the rest of the sector. I know Sandstorm deal was partially to correct this, but the side benefit of lowering Mount Milligan exposure, which was another thing investors worried about.
What does your growth look like out to 2023 versus the rest of the sector post-Sandstorm deal?"
So we haven't given long-term guidance for the combined portfolios. What we will be doing is we'll be doing an investor day in late March in 2026. And we'll be trying to make sure the market understands what that growth potential looks like. So that's going to be a big focus of what we're going to do. I think, more generally speaking, without giving you a specific growth profile or anything like that, we looked at our portfolio and we saw there was a lot of producing assets. We're generating a lot of cash flow. We were light on growth, absolutely. We looked at the Sandstorm portfolio and it was exactly the opposite. It was kind of the mirror image.
So you put the two together and you end up with a lot of cash flow and you end up with a nice growth profile. So that slide that I showed during the remarks, you almost have a catalyst every single year from a new asset that's coming into production. We will be outlining that in more detail when we do our investor day. But that's our growth profile. We think that we've addressed that concern in the marketplace. And now we should, if everything goes according to plan, we should see some very nice growth in the future. And as we've seen over the past several months, we've seen positive announcements from, I mentioned, Platreef, first ore through the mill. That asset is starting up as we speak. Yesterday, Glencore announced they had a capital markets day and they talked a lot about their copper growth portfolio.
We have a stream on the Agua Rica project. It's called MARA, M-A-R-A. And that is one of their core development projects. And they're talking about production from the Agua Rica portion in early 2031. So those are the kinds of things that we would expect as time goes on. We should see more of these developments becoming clear to the marketplace that will help the market understand the growth that we've got. But as I said, we'll be doing an investor day. We'll be talking about these things in more detail at that time.
Well, we hope everything goes to plan. Your next question is, how concentrated is your cash flow exposure to your top three producing assets? And what steps are you taking to reduce single asset dependency?
Well, our cash flow and revenue exposure is a lot lower after the Sandstorm Horizon transactions.
That was really one of the reasons why we did those. So when you ask about steps taken to reduce our exposure and reduce concentration, it was really around bulking up around those assets and reducing concentration. That is something we've been working on for many years. I've been with Royal Gold for over 10 years now. Mount Milligan was a big chunk of our net asset value and revenue. About 10 years ago, it was 30%- ish of both. Now you look at our net asset value exposure to Mount Milligan, and we're about a third of that. We haven't sold down our interest in Mount Milligan. We don't want to sell down interests or anything. What we'd like to do is bulk up around those assets because they're fundamentally good assets.
So if we can add more assets, then what it does is it just brings down concentration. And the one slide that I showed in the presentation hopefully illustrates that very nicely. We do have some concentration at the top end. So Mount Milligan, obviously, Kansanshi, Cortez, Pueblo Viejo, Andacollo. But those are all very good assets. And so having those at the top end of the portfolio, there's no concern about that. But we've certainly done a lot to reduce single asset exposure by bulking up around those assets.
Thank you for elaborating on that. Your next question is, what are you planning to do with the Entrée Resources equity? Is it a takeover and then closing a deal with Rio Tinto, a possibility to increase Oyu Tolgoi exposure? Any idea when Wassa will update the remaining reserve life of mine? Any update on KSM?
Okay.
A couple of questions. I may forget. I'll start. Yeah. Okay. The KSM, I don't really have any significant updates there. I mean, they are working on things there. I think there was a permitting substantial start deadline that they hit, if I remember correctly, in July. That is moving along. I mean, in this gold price environment, I think an asset like that is certainly very interesting. We're very happy to have the exposure that we do. Wassa, this is run by a Chinese company. Their disclosure is not the same as a Western company, so it's not as frequent. They did put out a Competent Person's Report last year when they did their Hong Kong Stock Exchange listing. They talked about a resource life that goes out to 2049. We haven't seen them put anything out into the market that's more current than that.
That's the current thinking. We were there in October. We had a visit to the site. They're still working on all of the longer-term expansion potential at the mine, but they haven't put anything into the public domain. It's very difficult for me to comment any further on that. Then the first part of the question, you'll have to remind me, Noella.
Absolutely. It was, what are you planning to do with Entrée Resources equity?
The Entrée stake is an important and interesting asset for us. As I said, we don't plan to own equity stakes. That's not what we would like to do. There is an interesting dynamic there between Entrée Resources, Rio Tinto, and the government of Mongolia. I think that 24% position that we own in Entrée is strategically important.
We haven't talked about what we're going to do with that at the moment. But what we would like to do is obviously increase our exposure to the asset itself. Whether that 24% stake allows us to do that, we're not really, it's premature for me to talk about.
Thank you, Alistair, for answering all of those questions. The next question for you is, looking forward now, how do you define your sweet spot for future deals? Will you continue prioritizing mid-size transactions?
We don't prioritize any size transactions. We tend to look at whatever's available. And we don't say that we're going to target a certain size transaction and go after those only. I think what you've seen from us hopefully indicates that we are able to do everything. We've done billion-dollar deals, but we've also done deals that are less than $10 million.
So it really depends on the opportunity. And we don't feel like we're limited in our ability to do large transactions. And we certainly are willing to spend the time on small transactions if we think the assets are good. So the reality, though, is that the marketplace, generally, transactions are smaller. They're the smaller end. So that $100 million-$300 million range is where we typically see things. And those are the ones that are available. And occasionally, we see things that are larger, and we don't feel like we were restricted in any way from doing those. And I think with the combined portfolios now and the amount of cash flow that we're expecting to generate, I think you'll be able to, you'll see us if there are large transactions. There shouldn't be any doubt in anyone's mind that we're able to do those.
So we're looking forward to seeing what's coming. But as I said, the majority of the transactions are smaller than some of the, certainly smaller than $1 billion.
Thank you for the clarity. Next, the question is, are there other company shares? Are there other company shares that came with the Sandstorm deal that can be sold like you did with Versamet?
Yep, there are. And we just talked about Entrée Resources. There are a handful of other smaller positions. I wouldn't say they're necessarily strategic. So you'll see us probably deal with those over time. I mean, obviously, smaller companies are less liquid. So we've got to be careful how we deal with those. We want to try and get as much value as we can. But we'll pick away at those over time. And when there's opportunity to liquidate some of those in bulk, we'll do that.
But it doesn't really cost us anything to hold them. It would be nice to clean them up because they do cause a little bit of volatility in our income statement. We have to mark to market those positions every quarter. So if we can deal with those and clean them up and not have to bother with them anymore, that's what we would like to do. But we will be disciplined in how we do that.
Thank you for the clarity on that, Alistair. Your next question is, what is your confidence level in Barrick production outlook for Cortez?
Well, I think Cortez has, over the past couple of years, it's been a little bit disappointing in terms of meeting guidance. I think some of the recent changes you've seen at Barrick, they're probably good for us. What they've talked about doing is potentially focusing on North America.
And by that, they're including Nevada Gold Mines, which is Cortez as part of that. They're also talking about PV, which is one of the big streams that we've got in the Dominican Republic. So if they're able to focus their attention on North American assets, I think what that probably means is that they will operate those assets with a little bit of a closer focus. They were doing other things outside of North America, and I think that potentially distracted them. So we think some of these things that you've seen in the press about what Barrick is up to will be ultimately positive for us. It may take a little bit of time. I think probably with a new CEO, they're going to go through some changes. And perhaps culturally, there will be some adjustments.
But we think ultimately putting all the North American assets into a vehicle where their sole focus is on those assets will be good for us.
Thank you for that response. The next of you says, great discussion on margins. One of the things I have noticed investing in the sector is that different royalty/streaming companies have different incremental margins to gold prices because some streaming/royalty deals have fixed gold price obligations. What is your leverage to increasing gold price versus the rest of the sector?
We haven't published a new leverage number for the combined portfolio. Bear with us as we do that. We'll be doing that in February. We think our leverage to the gold price is very strong. I mean, I think we only have one stream now that's a fixed gold price payment. Everything else is a percentage of spot basis.
It's the gold price paid for the Mount Milligan stream. Everything else is linked to the spot price. But it's designed in such a way that margins are maintained. So that's on the streaming side. On the royalty side, obviously, we have no costs for any ounces that are delivered. So that's all 100% margin. But we're pretty competitive compared to everybody else. I think it's just the way we're structured is similar to any company that's got a mix of royalties and streams. So very high margin. Don't expect that to change.
Thank you, Alistair. Your next question is, how does your price to NAV compare to peers?
Well, as I said on the last slide, we are at the low end of our peer group.
And I think a lot of that has to do with the market just digesting a lot of the news that we've put into the market over the past several months. I think it's still early days for people trying to get their head around some of the changes. And so it's just resulted in a little bit more weakness in our share price. We issued 18 million shares for Sandstorm. And we don't know if those shares have all ended up in hands that are long-only sticky holders. We don't know if that's the case yet. So I think you've seen a lot of things happening that the market just hasn't been able to get its head around quick enough. And so that's resulted in a bit of a disconnect on valuation.
We will be working, as I said, we'll be working very hard to educate the market and make sure that the market understands what the growth profile is and what our cash flow potential is over the next several weeks and months. And we would hope that any disconnect will start to correct itself. I mean, I don't think it makes any sense that we're a $17 billion company with, if you look forward, our EBITDA is going to be significant. It doesn't make sense that we would trade at the low end of our peer group, including peers who are about a third of the size. So I think this is probably a transitory phenomenon. But obviously, it's going to take some work on our side to see it come to fruition.
Thank you for the transparency, Alistair. We're coming up on your last two questions.
The first one is, I'd like to ask if the new project El Alto from Barrick Gold would be included inside the Pascua-Llama Royalty Interest Zone.
Yeah. So we have royalties at Pascua-Llama on the Chilean side of the project, which is where the majority of the ore is. It's about 75% of the ore is on the Chilean side. And we have that 5.41% royalty on that side. So yes, we do have exposure there. And it doesn't look like Barrick is moving that fast on developing that right now. They've kind of gone back to early-stage fundamentals, looking at metallurgy and looking at exploration and things like that. The fact that they're still continuing to do that work, I think, is important. It is a huge gold resource and silver as well.
And if they're able to push that forward, then that would be, I think that's hidden value in our portfolio because I don't think anybody's really valuing that today.
Thank you, Alistair. So we actually got one more question in. And it's a bit of a long one. So I'll start reading it now. In the Q3 press release, it states that $380.9 million in cash to fully repay the outstanding balance drawn on the Sandstorm credit facility and paid $127.1 million in cash consideration to the shareholders of Horizon, excluding Sandstorm, and funded Horizon's purchase of its outstanding warrants for CAD 40.6 million. Royal Gold had originally estimated to draw around $400 million for both Sandstorm and Horizon from the Sandstorm acquisition presentation.
Was the $380.9 million listed in the press release actually the combined cash used to close both Sandstorm and Horizon transactions, or was significantly more than $400 million in cash required to close both transactions?
So there are a lot of numbers in there. I think so when we closed those transactions, we had to pay cash for Horizon. That was a cash offer. And we had to repay the revolving credit facility that Sandstorm had outstanding at the time. So those were the two big disbursements. Remember that during the quarter, at the beginning of August, when we announced the acquisition transaction, we funded that with mostly the revolving credit facility. But we did make a repayment in September on the revolving credit facility.
So you saw that repayment during the quarter, which we then would have applied to the amount that we had to pay at closing on the Sandstorm Horizon transaction. So I'm not quite sure I understand. After hearing all of that, I would have to go through it in a bit more detail. I'd be happy to take this offline. But what I can tell you is that the Sandstorm credit facility no longer exists. We've closed it. The Horizon payment is behind us. So we ended the quarter with, after doing everything that we said we would do, we had $1.2 billion of debt outstanding. And so we sold the Versamet shares. We expect to pay the proceeds of those towards debt repayment. And then, obviously, operating cash flow between that point and the end of December will see us hopefully reduce some further outstanding debt.
We'll be coming out with our financials in the middle of February that will show the December 31 numbers. And this, I think, is an illustration of why maybe the market's not quite clear on everything because there were a lot of moving parts with a lot of different things happening during the third quarter. And once we get the fourth quarter results out into the market in mid-February, it should provide clarity. So hopefully, I've answered the question. If not, please let Renmark know. I'd be happy to get back to you in person if there is further clarity required.
Thank you for that response, nonetheless, Alistair. And your last question for today is, what does Royal Gold see as its competitive edge versus Wheaton and Franco-Nevada? And how is that advantage defensible over the next decade?
So I think one of the things that we do differently is we try to compete against our peers using structure as something that maybe our peers are less willing to do is consider other ways to do things. We approach every opportunity as kind of a blank sheet of paper. So somebody comes to us and they say they want something. And we'll think about, okay, well, what are they asking for? What are their constraints? We'll try and design something that will fit what they're looking for and also, obviously, give us what we're looking for. And we don't say to our counterparties, well, this is the way we've done things in the past, and this is what we need. We'll say, what are you looking for? How can we be thoughtful about structuring something that makes sense to you?
I think the Cobre transaction is a good example. We have a $1 billion stream, but we gave First Quantum the ability to accelerate payments on that stream if they meet two balance sheet and really credit profile criteria, and we did that because the only reason they were coming to us or looking at stream financing to begin with was because their balance sheet, they needed to do some restructuring of the balance sheet, but they are also working on getting the Cobre Panama line up and running, which will be hugely beneficial to their business. They didn't need or they didn't want a big stream burden on Cobre if they think that they're able to get Cobre Panama. If they're successful in getting that up and running, then a big burden is not something they really were interested in having.
So we thought providing them the ability to accelerate payments into the stream would be something that would be very attractive because it allows them to right-size the longer-term exposure or longer-term stream at contention for a business that may have Cobre Panama coming up into production again soon. So that's an example of something that we did. We don't think our competitors offered that up, and we think that was a differentiator for us. So that's the way we think about our business. And that's something that just over time, you get a reputation for listening to what your counterparties want, and you deliver what they ask for. And over time, that's a helpful thing for us as we do more transactions and people think about us as a potential partner.
Excellent. Well, thank you very much, Alistair, for all of your responses today.
Thank you to everyone who submitted questions. If you did not get a chance to submit your question, you can reach out to the appropriate account manager here at Renmark. That concludes our presentation for today. Before we go, I will turn back the floor to Alistair for final remarks.
Thanks again, everybody. I appreciate it. Some very good questions in there. Happy to go into any more detail. If you do have questions I didn't answer properly, I'd be happy to take that up with you individually offline. Just let Renmark know. I guess in the meantime, have a good Christmas. I look forward to talking to you again soon. Thanks very much.
Thank you very much, Alistair. And once again, this was Royal Gold trading on the Nasdaq under the ticker symbol RGLD.
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