Hello and good morning, 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 San Francisco 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 through which you can participate by using the chat box in the top right-hand corner of your screen. I will now hand it over to Alistair.
Thanks very much, Noella. I appreciate the opportunity to present to you today. We've had a very busy time at Royal Gold over the past year, and I think we haven't seen recognition in the market for a lot of what we've done. I think it's very timely to give you an update today. I will be making forward-looking statements during this presentation. There are risks and uncertainties that could cause actual results to differ materially from these statements. All of these risks and uncertainties are discussed in our most recent Form 10-K filing with the SEC. During this presentation, I'm going to give you the investment thesis for Royal Gold. We are a high margin business. We generate consistent cash flows from precious metals. We are not a mining company.
The presentation is divided into the various pieces that are really the key attributes of Royal Gold in our business model. I'll start talking about our focus on precious metals, which really gold is where we focus most of our time. We'll talk about our high margin business. We have also a long-standing commitment to dividend growth within that business. We'll talk about our portfolio, which is the most diversified amongst our peers in terms of assets, operators, and jurisdictions. We'll talk about our business model, which has limited operating risks with steady margins and no direct exposure to capital and operating cost risks. We'll talk about our size.
We think we're the optimal size for a relatively small sector, and we have enough scale to be able to compete for the largest transactions, yet still show growth by doing the transactions that are kind of bread and butter in our sector. Finally, I'll talk about the optionality within our portfolio and the fact that we don't need to pay to get additional organic growth from within the portfolio once we have assets inside the company. 2025 for us was a pretty transformative year, I should say. We've completed a number of transactions, but the biggest was the Sandstorm Horizon corporate transaction, which we closed late in October. This allowed us to really change the face of our portfolio. We added significant growth and diversification to our portfolio with this corporate transaction.
We also did a couple of other transactions that were the normal course for us, which is single asset transactions. We did a gold stream on Kansanshi mine in Zambia, which provides immediate cash flow on a very high quality, long life asset. We also did a stream and royalty on the Warintza project in Ecuador. This is something that gives us exposure to an emerging Tier 1 operation in a new jurisdiction. We didn't just do transactions last year to help us show growth. We saw some very interesting optionality that was surfaced from within the portfolio, and two of those are Mount Milligan. We saw an extension of the mine life to 2045, which is a significant achievement for Centerra and for us as a holder of the gold and copper stream on that asset.
We saw Barrick advance the Fourmile project in Nevada, which is by Barrick's account, one of the best and most interesting gold discoveries that we've seen globally in the last few decades. We have full exposure on the Fourmile project. We've also done a lot of things within the company aside from adding those things to the portfolio. We released our first quarter results in May, in early May, just over a month ago, and we had record revenue, cash flow and earnings, and our EBITDA on an adjusted basis was almost $400 million. That was the first clean quarter we've had since we did all those transactions last year. That represents the full ability of the company to generate cash flow.
We've also, since October 20th, we've repaid $800 million of debt, which is really pretty incredible if you think about that just over a few short months. That shows the cash flow generation potential of our business. We also last year, with all the work that we did and the changes to the portfolio, we increased the reserve life of our portfolio, the duration of our portfolio on average to about 18 years. That's about a 25% increase over where we stood this time last year. That's significant. That does not include resource growth as a potential that could come from additional or adds to reserves. We also, we've done a number of transactions to clean up some of the things that were in the Sandstorm portfolio that the market didn't like.
We were very clear when we announced the transaction that we're going to focus on those. We did a lot of that, raised some money that helped us to repay our debt. We feel much better about the simplicity of our portfolio. Finally, we raised our dividends in November for the 25th year in a row running. That is unmatched in our sector. We've done a lot. We added scale, diversification, and growth to the portfolio, but we did not change our strategy. I'll talk to that in the coming slides. In this section of the presentation, I'll talk about our gold focus. We've been around since the mid 1980s. We've got 45 years of history on the Nasdaq as a listed company. We're one of the grandparents on the Nasdaq, if you will.
Our strategy hasn't changed over that time, over that 45 years. It's been very consistent. We're very focused on gold revenue from good assets in good jurisdictions operated by the best counterparties. As you can see on this slide, our revenue has grown consistently over the past several years, but the metal mix has not changed. We aim to give our shareholders gold exposure in a conservatively managed vehicle. You can see how we've performed over the long term when you look at our stock price against other metrics, and we compare ourselves again, and this hopefully shows you why we think we're a good alternative for those who are looking for conservative exposure to a very volatile commodity. On the left-hand side, you can see our beta to the gold price is 1.6.
We do have a strong correlation or leverage to the gold price. On the right-hand side, you can see our share price performance over the long term. This goes back to when the GDX index was formed in 2006. Since that period, which is almost 20 years, we've beaten the gold price, we've beaten the GDX, and we've beaten the S&P 500. This hopefully gives you the proof that we are a very good long-term investment in a volatile commodity. I'll talk in this next section about our margins and our dividend growth, and we do have a very high operating margin in Royal Gold. Our business model is unique. By virtue of what we do, it's a high margin business, but it's also very scalable. We have in 2025, our EBITDA margin was 82%, and our cash G&A was about 4% of total revenue.
Our costs are low and they're fixed, which means that cost inflation should not be something that causes significant risk to our margins. Our business model is very efficient. Our headcount is low for the size of company we are. We have 39 employees with Royal Gold today. Our market cap is almost $20 billion. You can compare us to any company in any sector, and we compare very well when you think about us on a per employee basis. Return of capital, as I said before in my opening comments, is a very important thing for us. It's a key strategic objective, and it's something that makes us unique when you think about other gold investment trusts. We've paid a growing and sustainable dividend since 2000. We've increased the dividend every year since 2001, despite ups and downs of the gold price.
You can see that on this slide. You see the gold price in periods where it's come down, we have not cut or kept our dividends flat. We've actually raised them. We've raised our dividend for 25 years in a row, and we've paid out well over $1 billion in dividends to our shareholders. We're the only company in the GDX index that's paid an increasing dividend since the index was formed in 2006, and we're the only precious metals company in the S&P High Yield Dividend Aristocrats Index. That sets us apart from all of our peers and everybody else in the precious metal sector. We have a very diversified portfolio in Royal Gold. You can see on this map, it's a global portfolio. It's weighted towards lower risk and mining-friendly jurisdictions. The portfolio spans the various stages of project developments.
We have over 360 assets in the portfolio. 80 produce revenue today, 30 assets are in development, the remaining 250 or 260 would be at various stages of earlier exploration or evaluation. Organic growth comes to us from development and exploration stage assets that advance through the pipeline to production. In the diversified portfolio, it reduces single asset and counterparty risks. Our commodity focus is gold, as you can see at the left-hand side, we have the highest gold revenue percentage of our large cap peers. We do also have significant silver and copper contributions from within the portfolio. Geographically, we are diverse, but we're very much a North American-focused company in terms of the revenue weighting on a quarterly basis. We are diversified when you think about assets and operators.
On a net asset value basis, on the left-hand side, we have the most diversified asset portfolio in our sector, eight of the top 10 assets that we identify as being the highest net asset value within the portfolio are in production today. They're producing revenue. We also have expansion and extension projects underway at five of those. Five of those producing assets. A very interesting portfolio mix. Our operators are best in class, if you look at the names on this list, we've got large, well-capitalized, and experienced companies on the other side of our contracts, we've recently added First Quantum, Rio Tinto, and Glencore. We think that we've got a pretty world-class portfolio and operated by some of the best in the business.
It's important when you think about the portfolio, the diversification of a business like ours, because it reduces our exposure to single assets, operator, and jurisdiction risks. That's important for generalist investors who really don't want to spend the time understanding the assets in our portfolio. We've got a diverse slate of portfolio or assets that contribute revenue. If one of those underperforms, hopefully something will counteract that within the portfolio, or if we do have underperformance of one asset, hopefully it doesn't impact the value of our business, which is really important when you think about our business model. Our business model does have limited operating risk, I want to talk about that and some of the advantages of the royalty model. What we provide for our investors is gold exposure with reduced risk.
There are many different ways you can invest in gold, this slide shows how we are positioned. Our business is designed to provide exposure to gold and optionality to the mining projects that are in our portfolio, we provide a dividend to our shareholders while reducing the downside risk by holding a diverse portfolio that doesn't have direct exposure to operating and capital costs. There are many other ways you can invest in the gold sector. If you want to be very conservative, you can buy physical gold. If you buy an ounce today, that ounce will never grow. It's always going to be an ounce. It won't give you any upside, and it won't give you a dividend. It's probably going to cost you to store that ounce.
You can be more aggressive, you can buy equities in mining companies or exploration companies or single asset developers. With those, you are also going to get exposure to operating and capital cost risks. In today's environment, when people are talking about inflation, that is a real risk. There's a perception that our business doesn't provide good leverage to gold. I think if you look at our financial results, that addresses that misperception. We have very good leverage to the gold price. You can see on this slide how that works. I mean, we have a very different cost structure than operating companies. Our costs are low, and they're fixed, so margins should expand as metal prices increase. Whereas operator costs are subject to inflation risks. Margins may not expand or expand as quickly if gold prices increase when costs also increase.
You can see that in this next slide when we look at the different cost structure between us and the average operator. Producers are exposed to inflation in the input costs that they use to run the assets or run the mines that they have in their portfolio. Things like labor, energy, costs for consumables that they need to buy to run the assets that they operate. Many of those actually they increase when you see a rising commodity price environment. You may see the gold price increase, you also get increases in steel price or oil or something like that actually will mean that margins don't expand because while your top line is increasing, your cost line is also increasing. If you look at our costs, on the other hand, as exposed to G&A, which are mostly steady costs.
Things like salaries, services, office rents. These things don't move in a short-term nature, they're not subject to these wild swings in the short term. It's important because anything that impacts costs impacts margins. In the first quarter of this year, you didn't see many mining companies talking about the impact of the higher energy prices as a result of the tariff war. Those have not shown up in the first quarter of this year, I think we will likely start to see that in the next couple of quarters. We're going to see some cost inflation coming through on the operator side because energy has been very volatile, and you've seen that increase pretty significantly since the middle of March. We are a pretty well-sized company in our sector, we're large enough to compete, we're also small enough to show growth.
Our sector is built on small transactions. Most transactions in the sector, if you look back over history, they would be smaller than $300 million. The average transaction size is just over $100 million. We sit in a pretty interesting position because we're big enough, we have the cash flow, we have the scale to compete for the largest transactions. You can see that last year we did the Kansanshi stream with First Quantum is a $1 billion transaction. We won that transaction. We're also small enough to be able to show growth. Small transactions for us can actually be meaningful when you look at the results of those small transactions. Something like Vernon's is a good example. We did that last year as well.
$200 million transaction. We think that is going to be something that actually shows up nicely in our results when that asset starts producing. We're not aiming to be the biggest in our sector. That's not helpful. We want to be the best in our sector. We want to be able to get the best returns and have the highest valuation. We think this Goldilocks position that we're in, if you want to call it that, is a great platform to continue executing on our strategy of growth and gold. I'm going to talk a little bit now about growth and optionality. I'll start with a discussion of capital allocation and capital allocation priorities. Our growth really does depend on our ability to successfully allocate capital. The strategy remains simple and very consistent.
First, we always look to reinvest in our business when we can, and we try to reinvest using non-dilutive sources of financing. Second, we want to maintain a strong balance sheet and access to liquidity. We need to do that because opportunities come up quickly. We always want to make sure we're funded and can participate. Thirdly, we're always looking to return capital to shareholders using our dividends. As I said before, the dividend growing in a sustainable way, we want that to continue into the future. We have a framework that we announced when we did our investor day at the end of March. We have to be flexible when we think about these uses of capital, the allocation mix for our capital. We have to be flexible because market conditions change all the time.
Our framework is really to target double-digit returns on new investments, and thereby provide per share growth for our shareholders. We want to repay debt quickly, keep a very strong balance sheet, liquidity on hand, and we also want to continue growing the dividend. That's the framework. We added two new tools, which we announced with our first quarter results just over a month ago, two new tools to help us allocate capital. The first is, we added a $600 million recording to the revolving credit facility, which should give us additional liquidity to really grow out and target and actually bid on other transactions. The second is our board authorized a share buyback.
That's not something we've had in place before, but we thought it was a prudent time to put it in place, because if we see opportunities that are perhaps better value by buying our own stock versus what's in the market or what have you, then it makes sense to have that at our disposal. We didn't intend for either of those to be used in the near term, but we thought we would set them up when we had the time. We set them up, they're in our toolbox, and now we can use them if we see the right conditions for those to be used. When we talk about capital allocation, it's really helpful to look at our record. You can see on this slide how we've done over the last 25 years.
You can see since 2000, our revenue and cash flow growth, they've been pretty significant. There are three aspects of this growth that I really want to highlight. First is, our G&A has not grown at the same speed or the same rate as that growth in revenue and cash flow. We don't need to add new people when we add new assets to the portfolio. Our business is very scalable, which is, it goes to that point about it being high margin and also keeping costs down. It's a scalable business. We can grow without growing our G&A significantly. The second is our revenue growth is not dependent only on metal prices. Metal prices are important. They're a great tailwind when we've got it, but we've added volume to our portfolio, and we've seen organic growth as well from the portfolio.
That's an important consideration when you think about the optionality that when you buy a Royal Gold share, what are you getting? Thirdly, we finance our growth mostly from internal sources without a significant rise in our share count. We did issue 19 million shares last year for the Sandstorm transaction, but that was the first time we'd issued equity since 2012. Even with those new shares on the register, we have 84.5 million shares outstanding. We still have the lowest share count in the GDX, and we were around when the GDX was formed in 2006. Hopefully that gives you a good sense of how we've been able to steward our share count carefully. We do want to avoid shareholder dilution, and providing per share growth to our shareholders is one of our strategic objectives.
When we look at the assets we've added to the portfolio, we aim for double-digit IRRs, as I said when we're talking about the capital allocation framework, we have to be patient. We're in a patient business. Exploration and production upside is very important when we look at new investment opportunities, sometimes it takes time for the growth to show up in the assets that we invest in. We do extensive due diligence of new opportunities, and we take a bottoms-up fundamental approach to asset reviews. Sometimes when the Street, they put out their notes talking about the assets that we've acquired, they don't have the benefit of that work. The Street estimates, their returns on an announcement may often undershoot pretty significantly, and it takes time for the upsides to become visible.
We'll see that upside when we do our due diligence, we're often subject to confidentiality provisions and other things that make it difficult for us to talk about some of those upsides. You have to wait and be patient for the Street to see that. Over time, we've got a very good record of investing in assets where returns have grown significantly over time. This slide does illustrate that point. As time has passed on, expected returns have increased with production expansions and mine life extensions, and that's all driven by reserve and resource growth without having to fund further capital or investing further to get exposure to that growth. The next slide here shows the same concepts but in a slightly different way.
As time passes, we recover our investments and any value added to the asset by the operators also increases the future value of our interests. That's the top line on this slide. Hopefully, this top line is going to be a multiple of the bottom line, which is what we put into those assets to get those original exposures. Over time, what we're aiming for is a multiple of the investment that we've put in. The way this works is through a multiplier effect that really creates optionality. Any extension to mine life provides a double benefit to us. First of all, if a mine life is extended, it just means more volume is produced, which means more revenue to us. It also means that you're exposing yourself to a volatile metal price over a longer time.
There's a tremendous amount of value in that additional exposure, that additional time that the operations are running. Operators are always looking to extend asset lives. It makes sense. They've invested capital. They want to make their return on that capital. They're always looking for that incremental revenue that they can grow their returns from. We saw last year, in 2025, 2 million meters of drilling had been done at the assets within our portfolio. That's an example of how operators are trying to push things forward. We get exposure to that. We don't have to fund capital or invest further to get any exposure to this upside. This is growth that we don't have to pay for. The optionality is really one of the most important features of our business model.
When we think about our portfolio and the optionality that's embedded in it, this slide shows some of the key catalysts that we see in some of the new assets that we expect to provide some growth to us over the next several years. We have a pretty significant organic growth pipeline, and there are catalysts we think that are extending into the next decade. We've got very near term Back River continuing to ramp up. They started commercial production late last year. Platreef, exactly the same thing. That's continuing to ramp up. That's a stage in project development, we would expect to see revenue growth from that over the next year. We've got brand new production from Robertson expected in 2027, new production from Haggan, Great Bear, and Lawrence later in the decade.
Beyond that, after the turn of the decade, we're expecting to see new revenue from the Mara project in Argentina, Fourmile, and up in Nevada. We feel very comfortable about the growth that's in our portfolio today. This doesn't include some of the existing assets where you're seeing expansion. I mentioned the Mount Milligan mine life extension, an additional 10 years of mine life there, which really adds to the value of what we own. At assets like Cowal, there's a doubling of the production levels there that should see our silver increase by about 35%. That's growth that we didn't expect to see when we made those original investments, is we have, we think, one of the best organic pipelines in the industry, and that's reflected in the five-year outlook that we gave it in March.
I'll make a comment that this growth isn't reliant on one or two big assets. It's a multitude of assets. It's probably lower risk growth than perhaps those who can point to one or two things that are going to drive their production higher. We feel very comfortable that this is a very good quality growth outlook. I'm going to end on this slide here, which is an opportunity, I think. We are trading at pretty attractive multiples today. The business is performing very well. We've got strong cash flow, very good organic growth. We're executing on all the priorities that we set for ourselves, and we told the market when we announced the Sandstorm transaction last year. The share price still isn't reflecting all of that. It's not reflecting the growth in the portfolio.
It's not reflecting the risk mitigation by having that large portfolio. Our net asset value and cash flow multiples are lagging relative to our peer group. I think the biggest reason for that is because we did a lot last year, and the market still hasn't quite recognized that. When we released our first quarter results, that first clean quarter, as I mentioned, that was in early May, which is really when the precious metals market was under a lot of pressure. I don't think the market has really paid attention yet to some of the benefits that we've added to the company. We are working hard to close this gap. How are we doing that? We gave long-term guidance when we did our investor day in March.
We did the investor day to daylight the value in the portfolio and make sure that people understand the assets that are in the portfolio. We did an asset handbook. It's available on our website. It's got a description of every single asset that underpins the value of the company. We're just working hard to make sure that we're on the investors all the time about the scale, the growth in the company, the potential of the portfolio. In closing, I think we've done a lot to really strengthen our position and strengthen our position for hopefully a sustained and continued strong gold market. We've added scale, diversification, growth to the portfolio. We've got a strong balance sheet. We've got significant cash flow, and we are a patient company.
We're conservative and patient, we think that our patient approach and our commitment to our long-term strategy, a strategy that's proven to work, should be rewarded by the market, it will take some time for that to happen. With that, Noella, I have come to the end of the prepared presentation. I'll be happy to turn it back to you for a Q&A session.
Thank you very much, Alistair, for the presentation. We will now take some questions. Your first question is: Can you give an update on Mercedes and Cerro Moro mines? There is possibility on future life of mine expansion on surface included in the royalties, or will we cease to see ounces pouring from them in the near term?
Those are both relatively small assets in our portfolio. I cannot really offer too much in terms of detail because to be completely honest with you, I have not focused on those that much. I have been more focused on the bigger value drivers within the portfolio. Mercedes and Cerro Moro are pretty small when it comes to the revenue potential and the growth potential. The one thing we did do with the Sandstorm transaction is we restructured our investment in Mercedes. If you remember, that was owned by Bear Creek. Sandstorm had a number of equity and debt investments at Bear Creek, which we streamlined, and we had a stream at Mercedes. We now have a royalty, which we think puts the asset in a better position to be able to extend this production profile because it will be less of a burden on the asset.
I think that is really all I can offer at this point. Obviously, any asset that is in the portfolio, regardless of whether it is big or small, does have that optionality associated with it. I think those two assets are probably ones that you will likely see some additional growth for them over the longer term. Really, to our accounts, they are relatively small, just given the size of the investments for us.
Thank you for your insight on that. Your next question: if Seabridge finds a JV for KSM, taking into consideration the big CapEx it will require, are you willing to increase the royalty if a possibility arises? How probable do you see it?
Well, Seabridge Gold is something we're, and KSM, that we're very excited about. We have these options in our portfolio right now to, for very low dollars, to be able to receive NSR royalties. I think if they're able to find a joint venture partner, then that unlocks the development of the asset. I think those options can be worth a tremendous amount. We'll have to see. I mean, we've heard a lot of speculation about a joint venture partner there, and we'll have to see what happens. We are obviously quite pleased to have those in the portfolio, and they could add significant value. If there's an opportunity for us to make additional investments there, I think we'd always be open to having a conversation with the operator to see what they need and see if it makes sense and lines up with our criteria.
One of the best places for us to get new business opportunities is with people who we have relationships with. Because they're in our portfolio, we've got that relationship with Seabridge Gold as a counterparty, that I think would be natural for us to think about opportunities to create new business development opportunities at that asset. I think there's a lot that needs to happen before I can say with any certainty. Certainly, we would try and have that conversation if it looked like it even more funded, yes.
Appreciate you commenting on that. Next viewer is asking, can you summarize in plain terms why the restructuring of Hod Maden preserves value for shareholders compared with keeping the priority equity position?
Yeah. We don't get value by holding direct equity stakes in assets. The biggest value in our portfolio is holding that top line exposure. If we own streams or royalties, that gives us top line exposure. When you own direct stakes, what you're getting is exposure to operating capital and cost risks. I think that's something that is valued differently in the marketplace. When we announced the restructuring of the Hod Maden joint venture, really it was in line with something we said when we announced the Sandstorm transaction almost one year ago today, when we said we think Hod Maden is a great project. There's no doubt. It's very high grade. It's simple project, very high returning project. We like the exposure, but we didn't like the structure of the exposure.
We didn't like that 30% joint venture interest because it just exposes us to risks on things that we don't want to have exposure to. When we restructured the investment, what we did was we took that 30% direct ownership, reduced it to 15%, and took back a royalty. We now have other rights on the SSR royalties that were granted at the same time. That's more in line with our business model. We would expect that over time, as the asset moves through development and into production, we'll get a higher multiple on the royalty interest than we will on the direct ownership interests. That was the reason why we did it. As we talked to a lot of our largest institutional shareholders, I think they were quite pleased to see that.
I think it would be consistent with our prior messaging if we got that direct interest down to zero and took back further royalties. Just given the deal dynamics and given the situation that we're dealing with at the time, we weren't able to make that go from 30% to zero in one transaction. We'll probably end up holding this 15% direct stake for a period of time, and we'll look for opportunities to reduce it as those opportunities come up.
Thank you for clarifying that. This next question also relates to Hod Maden. The question is: how do you think the cash flow payback for the new NSR Hod Maden compared with other recent royalty additions in the portfolio?
I think the royalty is quite valuable. I think it'll be a similar kind of payback in terms of the economics around the royalty, but it's not. What's the word I'm looking for? We would rather have the royalty than we would that direct exposure to the asset. Just because, as I mentioned before in the previous comments, it's that how the multiple will be applied to that royalty interest in the marketplace. We'd rather have that and no exposure to the costs. If Hod Maden came to us today as a standalone entity and it was an opportunity for us to invest either a stream or a royalty, we'd be very interested in it because it is, like I said, it's a high margin project. It's high grade, simple. It's a very robust project.
If you look at the technical work that's been done on it's an excellent project. We would very seriously look at it. It just wasn't quite the right structure in our portfolio. Holding that royalty will give us the exposure that we want to this project. Hopefully that answers the question.
That was a great answer. Thanks, Alistair. Your next question is: Several major growth projects such as Mara, Oyu Tolgoi, Fourmile, and Horne 5 are excluded from the current five-year outlook. What probability weighting does management internally assign to each of these projects entering production on schedule?
Well, they're not in our five-year outlook simply because the operators have said they expect to see production beyond that five-year outlook. What we've done is we've added those to what we say is the five-year plus. We think when you look at Mara, Glencore has done a lot to advance that project. They came out in December with their capital market stay and put parameters on production levels and timing, and they applied for the RIGI process and the taxability process in Argentina in August. That project is moving forward. We have very strong confidence that Glencore will execute that project on the timeline that they talked about. Fourmile is a similar kind of thing. Barrick is spending $150 million or so this year on exploration and studies. They're really pushing that project hard.
That, again, is a very high-quality project, and I think they want to get that into production as soon as they possibly can, just it'll help their returns. Whether that occurs beyond that five-year outlook that we've already provided or maybe it starts producing a little bit earlier, don't know. It'll depend on a lot of work that Barrick still needs to get done. We are very confident that those two projects will move forward. Oyu Tolgoi, operated by Rio Tinto. Again, this is a very serious operator. They know how to operate mines, they know how to do things. We think there's a high probability that that's going to come into the plan as well. The problem with longer-dated assets, though, is that you're always subject to those risks that may cause timelines to shift a little bit.
You may have permitting delays, or you may have something like that it's very difficult to predict today. That's why we put those things in that beyond five-year period, because we think that they're relatively early stage compared to some of the other things within our portfolio. It probably makes sense that they are beyond that five-year window.
Thank you for clarifying that, Alistair. Your next question: Does management believe the industry is entering a period where royalty and streaming companies may earn lower returns on invested capital because of increased competition for assets?
No, I don't think so. We do track returns, the way that we bid on things and the way that our peers bid on things as well. We don't see a big change, and we haven't seen a big change in the level of competition either. You do see smaller royalty companies starting up every so often, those are usually so small that they don't necessarily hunt in the same grounds that we do. Our competitors have always been the big, Franco and Wheaton have been there for a long period of time. We always compete against other sources of financing, so equity and debt. Those have been around for decades. The competitive landscape as far as we're concerned and where we're situated, don't think it's really changed all that much, and we're not seeing that returns are changing either.
I think sometimes, though, when you see Street estimates of returns, this goes back to a point I made during the presentation. The Street may look at returns, or they may give low returns. They may estimate low returns on new transactions, it may not be indicative of what the ultimate return is going to be. When we make an investment in something, the Street may say, "Well, that was a 3% return. That's not very good." We're certainly not investing for a 3% return. We would hope that we're going to get a multiple of that. That's the kind of thing that on paper, it may look like returns are declining over time.
Our view is that if we do transactions on the right assets that have the right amount of optionality, and they've got the good operators with financial resources to be able to develop that optionality, our returns should grow over time. We're not seeing a big change.
Thank you for that response. Next viewer is asking: As copper becomes a larger contributor through Kansanshi, Mount Milligan, and future development projects, how does management view the balance between precious metals exposure and base metals exposure over the next decade?
Just clarifying in case it's misunderstood, the Kansanshi stream is a gold stream on a copper asset. We look at gold revenue there. We haven't done anything to change our metal focus with respect to that, except it is a copper asset that we're taking a stream on the gold's byproduct production. We're not out looking for copper. We like copper. We understand it. By virtue of the fact that we are in a number of copper assets, we're taking the gold byproduct at Kansanshi, obviously, and then [NiCuO] is another good example of a large copper asset where we're taking the gold. We're not out looking, though, for new copper opportunities. We will look at copper and certain other base metals if they come to us and they're good opportunities. Cactus, for example, we bought a royalty there in late 2024.
That's a copper development project in Arizona. It's a near population center. It's got good infrastructure. It's got a good management team. We knew the management team from prior business. There are a lot of things lined up, and it was a good returning royalty for us. We did buy that. It was $55 million. It wasn't a huge allocation of capital. We just thought it was a nice opportunistic thing to add to the portfolio. That's the kind of thing that when we think about other metals that aren't precious, that's how we think about them, is if they come to us and they're attractive on their own merits, then yeah, we'll certainly look at them, but we're not out there looking to diversify our exposure into other metals. Our focus is very much precious and gold is our preference.
Thank you for that response. Your next question: have Lidya provided Royal Gold with an updated development timeline since assuming operatorship of Hod Maden?
We're a member of the joint venture, by virtue of the fact that we have that 15% ownership. We are in discussions with Lidya, and as you correctly mentioned, they've just taken over operatorship. It's been just a handful of weeks now. They're getting themselves prepared and positioned to move the project forward. When we have something to talk about with respect to the developments and timelines, we certainly will disclose that. I expect that Royal Gold will become the source of information for developments at Hod Maden simply because we're the only publicly traded company that's now a partner there. Lidya is a privately held entity, and they probably won't be putting too much into the public domain.
I think what you need to do is just follow our quarterly results from this point forward, and we'll be making comments on the developments at Hod Maden as they warrant.
Appreciate you verifying that. Next, do you expect to exercise the option to acquire half of the [RGLD] ?
I think we'll wait and see. The option doesn't expire for a number of years, so we have some time to evaluate. I think at this point, it's probably unlikely because the asset needs to be de-risked. We need to see the asset get into production. At that point, that royalty is probably going to be worth a lot more. I think I'll defer the answer to that question until we're getting closer to production at the asset. Certainly, we think there's a lot of value in that option, and we certainly are happy to have it.
Great. Looking forward to an update in the near future. The next question is: looking towards 2030, which is more likely to drive shareholder value, additional acquisitions, organic growth from existing assets, or commodity price appreciation?
That's a very good question. I think we'll probably see all three. It's hard for me to handicap which is going to give us the best, they're all somewhat related because we're going to see them If metal prices continue to do well, then what you'll see is more growth from the assets within the portfolio because operators of those assets will want to try and take advantage of high metal prices. If you see metal prices do well, it also means that the acquisition pipeline is probably going to be pretty solid for us as well because you're going to see other companies that need to raise financing for their own projects will likely be looking for us to help them. I think you may see all of those contribute.
I think if we couldn't do any more acquisitions, we do feel very comfortable that we've got a nice growing portfolio. We've got lots of growth from within the portfolio. We're not relying on acquisitions to continue that growth. When we gave our guidance, obviously that's based on what we have within the portfolio today, we've got a nice growth trajectory. We're not expecting that acquisitions will be the source of growth. We don't need acquisitions, we're always looking for acquisitions because that's probably the best way for us to add value. If we take our cash flow and we're able to reinvest it in high performing or high optionality assets, then we'll get a premium in the marketplace for what we've just invested. That's how we think we'll get the maximum value from our cash flow.
It's really going to be a combination of those things. You've got price, the optionality within the portfolio, and new acquisitions.
Thank you for clarifying. Your next question: considering your assets as they stand today, what is the life of your overall portfolio?
The life of the overall portfolio on reserves only, and there's a slide in our investor deck, it's in the appendix to the investor presentation that I just walked through a few minutes ago. We have just about 18 years of average duration in our portfolio. That's weighted by NAV. Over the last year, we've grown that by about 25%. The important thing to note is, if you look at the histogram of mine lives and the buckets of value, we've actually pushed the mine lives out to the right-hand side, so they're much longer duration assets. They're 20+ year assets, which is really where that shift has occurred, which is a very good thing to have in our portfolio. It just means that we don't need to be panicked about adding to the portfolio because we have those long life duration assets.
We'll be able to continue adding cash flow that we'll be able to harvest and reinvest in the business. That's what we were really pleased to see that additional growth in asset duration. I will make one point here, is that when we provide that number, it's based on reserves only. We have not included resource conversions. If you believe that resources will get converted into reserves, then obviously that impacts mine life. You may see that go out even beyond 18 years, we haven't done that analysis. We've only looked at reserves for that number.
Appreciate that response, Alistair. We're coming up to your last two questions for today. The first one is, are you considering a stock split?
Stock split? No. We have considered it in the past lightly. I think from the perspective of retail shareholders, perhaps it would be more attractive to have a stock that's got a much lower per share value to it. The institutional shareholders who own us, it doesn't impact how they think about things. There are a lot of companies in the markets today that have share prices well over one or $200, and it doesn't seem to impact how people value those stocks. I think in the old days, there used to be this perception that lower dollar value stocks had higher liquidity and there was a valuation impact or benefit to having that. I don't think that holds anymore. I haven't seen any research that would indicate that's the case.
We don't get many people asking us about splitting the stock, so it's not something that we have considered. If we see a valuation reason for doing it, if we thought that we could get additional value from doing it, that would be a different story. It doesn't look like that's the case.
Thank you for offering some clarity on that. Your last question for today is, if Royal Gold were being built from scratch today, would management construct their portfolio differently than it exists today?
That's a really interesting question. I think it would be very difficult to reconstruct Royal Gold today if you started from scratch. The reason is because we started at Cortez, which was a foundational asset. You look at the biggest companies in our sector, they've all started with one big foundational asset. We got that asset as a result of a change in business strategy way back in the 1980s, and it was a very fortunate and very wise change in our business focus. Having that interest in Cortez was really the engine that gave us the ability to grow our cash flow, consolidate further royalties, which allowed us to grow our cash flow further, then we got involved in the streaming and finance business. It's that cash flow that's really important.
I think if we were to start the company today, it would be very difficult because the largest, most interesting assets are the ones that people really compete over. It's unlikely that a brand new Royal Gold would be able to compete for the largest and best foundational asset that could be available. It would be practically difficult, but I think when we think about our portfolio, we're quite pleased with it. I think we've got a very high margin portfolio. It's very gold focused. As I just talked about, the duration is long. It's diversified. It's got very good counterparties on the other side. We don't see anything in our portfolio that we think is a detriment. We don't see anything that really holds us back. We're very pleased with the portfolio as it is today.
I think with the benefit of hindsight, there are certain things that maybe we could have bid more on and won them and have those in the portfolio. That's a question that I think everybody in our sector can talk to, is that they wish they had won certain things that maybe a competitor has won. That would be the only thing I would say would be the thing that we would. If we could rewind the clock, maybe we would just have been a little bit more aggressive on certain very high-quality assets that we saw our competitors win instead of us. Apart from that, I think we feel pretty comfortable with where we stand today.
Excellent. Thank you very much, Alistair, for all of your insight today. Thank you to everyone who submitted questions. If you did not get a chance to submit a 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 everyone. I appreciate your questions. Some very good questions in there. If I didn't answer anything quite right, please get back to Renmark and they'll let me know, and I'd be happy to take it up with you in person if there's anything you'd like to discuss further. Thanks very much. Hopefully it's a good summer for everybody, and look forward to talking to you again soon.
Thank you, Alistair. Once again, this was Royal Gold trading on the Nasdaq under the ticker symbol RGLD. Thank you to everyone in San Francisco and surrounding areas for joining us today. The playback for this virtual and non-deal roadshow will be available on our website 24 to 48 hours after this presentation under the VNDR Library tab. Please stay tuned for other presentations in your area, see you next time