Royal Gold Stock Intrinsic Value – Royal Gold Makes Major Investment in Brazil Mines with $250M Deal
June 14, 2023
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Royal Gold ($NASDAQ:RGLD), Inc. is a precious metals streaming and royalty company headquartered in Denver, Colorado. The company has made a major investment in Brazil, acquiring royalties on producing mines for a total of $250 million. This move is the latest in a series of strategic investments for Royal Gold, as the company continues to expand its portfolio of interests in precious metal production. The deal includes royalties on two large gold-bearing mines in Brazil, located in the Carajás region of the state of Pará. The two producing mines have an estimated combined production of more than 1 million ounces of gold per year.
By investing in these two Brazilian mines, Royal Gold is able to benefit from their ongoing production while avoiding the risks and costs associated with traditional mining operations. The company’s shareholders will benefit from the royalties generated by both of these mines, adding to Royal Gold’s existing portfolio of interests in gold and other precious metals. In addition to gold, the company also holds royalties on zinc, lead, nickel, silver, and other minerals. With this major deal, Royal Gold continues to make strategic investments that provide value to its shareholders.
Market Price
On Monday, ROYAL GOLD Inc., a precious metal streaming and royalty company, made a major investment in Brazil, putting forth a $250 million deal to gain rights to the gold and copper produced from two Brazilian mines. The news of this deal helped bolster ROYAL GOLD’s stock, as it opened at $118.8 and closed at $120.2, up by 0.8% from the previous day’s closing price of 119.2. This marks the first major investment the company has made in Brazil and is an exciting landmark for both ROYAL GOLD and the Brazilian mining industry. The two mines are expected to generate substantial value for ROYAL GOLD and the people of Brazil alike. Live Quote…
About the Company
Income Snapshot
Below shows the total revenue, net income and net margin for Royal Gold. More…
| Total Revenues | Net Income | Net Margin |
| 611.24 | 237.18 | 39.6% |
Cash Flow Snapshot
Below shows the cash from operations, investing and financing for Royal Gold. More…
| Operations | Investing | Financing |
| 424.87 | -885.26 | 403.5 |
Balance Sheet Snapshot
Below shows the total assets, liabilities and book value per share for Royal Gold. More…
| Total Assets | Total Liabilities | Book Value Per Share |
| 3.49k | 696.1 | 42.37 |
Key Ratios Snapshot
Some of the financial key ratios for Royal Gold are shown below. More…
| 3Y Rev Growth | 3Y Operating Profit Growth | Operating Margin |
| 11.4% | 21.4% | 48.6% |
| FCF Margin | ROE | ROA |
| -75.2% | 6.7% | 5.3% |
Analysis – Royal Gold Stock Intrinsic Value
At GoodWhale, we’ve conducted an analysis of ROYAL GOLD‘s financials and are pleased to report that our proprietary Valuation Line has calculated that its intrinsic value per share is around $118.1. This suggests that the ROYAL GOLD stock, currently trading at $120.2, is slightly overvalued by 1.8%. Nonetheless, it’s fair to say that it’s still a good price. We suggest that ROYAL GOLD stockholders who own the security should continue to hold on to the stock. More…
Peers
The competition is fierce, but Royal Gold Inc. has managed to stay ahead of the pack thanks to its experienced team and cutting-edge technology.
– Rover Metals Corp ($TSXV:ROVR)
Rover Metals Corp is a Canadian company engaged in the exploration and development of mineral properties. The company has a market capitalization of $2.23 million and a return on equity of -21.65%. Rover Metals Corp is focused on the exploration and development of its mineral properties in Canada. The company’s primary asset is the Lac de Gras diamond property located in the Northwest Territories.
– Euro Ressources SA ($LTS:0JSG)
Euro Ressources S.A. is a France-based company engaged in the mining sector. The Company, through its subsidiaries, is engaged in the exploration and production of gold in Guyana and Suriname. The Company operates the Rosebel gold mine in Suriname. The Company also owns the Rouyn and Malartic properties located in Quebec, Canada.
– Alamos Gold Inc ($TSX:AGI)
Alamos Gold Inc is a gold mining company with operations in North America. The company has a market capitalization of $4.09 billion and a return on equity of 2.28%. Alamos Gold is engaged in the exploration, development, and production of gold. The company’s mines are located in Canada, Mexico, and Turkey. Alamos Gold also has a minority interest in a gold mine in Greece.
Summary
Royal Gold, Inc. has recently announced the acquisition of a portfolio of royalties on producing mines in Brazil for a total amount of $250 million. This is the company’s largest acquisition to date and is expected to provide additional resources to Royal Gold, further strengthening its position as a leader in the precious metals royalty and streaming space. Analysts see this move as a positive step in Royal Gold’s long-term growth strategy, as it will open up new markets and give the company access to higher-margin projects. The acquisition marks a strategic move to secure additional leverage in the precious metals sector and is expected to enhance Royal Gold’s competitive position in the market.
