Royal Gold, Inc. RGLD has issued an update for third-quarter fiscal 2021 (ended Mar 31, 2021) operations. During the quarter, RGLD Gold AG — the fully-owned subsidiary of Royal Gold — sold 52,500 gold equivalent ounces (GEOs) comprising 36,000 gold ounces, 484,000 silver ounces and 2,000 tons of copper related to its streaming agreements. Stream sales during the fiscal third quarter were near the higher end of the previous guided range of 48,000 to 53,000 GEOs.
The average realized price of gold was $1,828 per ounce in the quarter, down 2.8% sequentially. Average realized price of silver went up 9.4% sequentially to $26.44 per ounce. Average realized copper prices were $8,575 per ton, up from the previous quarter’s $6,995 per ton. The company ended third-quarter fiscal 2021 with 33,000 gold equivalent ounces in inventory, including 28,500 ounces of gold and 320,000 silver ounces.
During the fiscal third quarter, cost of sales came in at around $410 per gold equivalent ounce compared with the fiscal second-quarter figure of $432 per gold equivalent ounce. The cost of sales is based on the quarterly average silver-gold ratio of roughly 68 to 1, and copper-gold ratio of 0.21 tons per ounce.
The Zacks Consensus Estimate for fiscal third-quarter earnings is pegged at 84 cents, suggesting an improvement of 23.5% from the prior-year reported figure.
Royal Gold is focused on allocating its solid cash flow to dividends, debt reduction and investments in new businesses. As of Jan 4, 2021, the company had $850 million available and $150 million outstanding under the revolving credit facility.
Royal Gold is a precious metals stream and royalty company engaged in the acquisition and management of precious metal streams, royalties and similar production-based interests. As of Mar 31, 2021, the company owned interests on 187 properties on five continents, including interests on 41 producing mines and 19 development stage projects. Gold continues to be the most significant revenue driver for Royal Gold and accounted for 76% of total revenues during the fiscal second quarter. However, gold prices have dipped 8.5% so far this year and dropped below $1,800 per ounce lately on successful vaccine roll-out and massive stimulus package. If gold prices dip further, this might dent the company’s top-line results.
Price Performance
Over the past year, Royal Gold’s shares have gained 7% compared with the industry’s growth of 3%.
Zacks Rank & Stocks to Consider
Royal Gold currently carries a Zacks Rank #4 (Sell).
A few better-ranked stocks in the basic materials space are Impala Platinum Holdings Limited IMPUY, Fortescue Metals Group Limited FSUGY and BHP Group BHP, each sporting a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Impala Platinum has an expected earnings growth rate of 195.9% for the current fiscal year. The company’s shares have surged 84% in the past year.
Fortescue has a projected earnings growth rate of 84.3% for the current fiscal year. The company’s shares have soared 182% in a year’s time.
BHP Group has an estimated earnings growth rate of 77.6% for the current fiscal year. The company’s shares have appreciated 83% over the past year.
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