Royal Gold, Inc.

hello everyone and welcome to the royal gold inc 2023 full year and fourth quarter conference call my name is emily and i'll be facilitating your call today after the presentation there will be the opportunity for any questions which you can ask by pressing start followed by the number one on your telephone keypad i'll now turn the call over to our host alistair baker vice president of investor relations and business development please go ahead alistair

Thank you, operator. Good morning and welcome to our discussion of Royal Gold's fourth quarter and full year 2023 results. This event is being webcast live and you will be able to access a replay of this call on our website. Speaking on the call today are Bill Heisenbottle, President and CEO, Martin Raffield, Vice President of Operations, and Paul Libner, CFO and Treasurer. Randy Sheffman, General Counsel, and Dan Breeze, Vice President Corporate Development of RGAG, are also available for questions. During today's call, we will make forward-looking statements, including statements about our projections and expectations for the future. These statements are subject to risks and uncertainties that could cause actual results to differ materially from these statements. These risks and uncertainties are discussed in yesterday's press release and our filings with the SEC. We will also refer to certain non-GAAP financial measures, including adjusted net income, adjusted net income per share, cash G&A, adjusted EBITDA, and net debt. Reconciliations of these measures to the most directly comparable gap measures are available in yesterday's press release, which can be found on our website. So we'll start with an overview of 2023 results. Martin will give some commentary on the portfolio, and Paul will wrap up with a financial summary of the quarter. After the formal remarks, we'll open the lines for a Q&A session.

Good morning, and thank you for joining the call. I'll begin on slide four. During 2023, we delivered revenue of $606 million, operating cash flow of $416 million, and earnings of $239 million, or $3.63 per share. And after adjustments, earnings were $3.53 per share. Our gold equivalent ounces, or GEOs, were slightly below our guidance range, as we indicated might occur during our third quarter conference call. And Martin will give you some more details a bit later. While inflation pressures have eased from their peak, operating companies are still seeing cost inflation and margin erosion. Without direct exposure to operating and capital costs, we are protected from inflation pressure and margin compression, and we maintained our strong adjusted EBITDA margin of 79%. We paid approximately $100 million in dividends in keeping with our commitment to return capital to shareholders, and we raised our dividend again by 7%. This is the 23rd consecutive annual increase to our dividend, which is an unmatched record in the precious metals sector. We also maintained our focus on the balance sheet and repaid $325 million outstanding on a revolving credit facility during the year. After an active year of acquisitions in 2022, we started the year with a revolver balance of $575 million. And we've quickly reduced that to $250 million increasing our total available liquidity at the end of the year to about $845 million. This is in keeping with our capital allocation strategy to use non-dilutive financing to acquire high quality assets. And we maintained our low share count during the year to ensure that shareholders have full exposure to our growth. Finally, we announced an agreement yesterday with Sentara to provide future cost support to the Mount Milligan mine that will allow an extension of the mine life to 2035 and potentially further into the future. The details are in our press release, but in summary, we will receive cash and gold consideration in the near and medium term with a value of approximately $125 million at the current gold price and a longer term free cash flow interest in Mount Milligan. In return, we'll make additional cash payments for gold and copper delivered with any support provided prior to approximately 2030 contingent upon Gold and copper prices being below $1,600 per ounce and $3.50 per pound respectively. These earlier payments are also subject to potential recovery against cost support payments made beyond 2030 when metal prices permit. This is a good development for both Royal Gold and Sentara as it should allow for further value to be realized through mine life extension. Mount Milligan has a large resource base and exploration potential and Sentara's plans include completing a preliminary economic assessment in the first half of 2025 to evaluate resources and projects that could provide further mine life extensions, continuing exploration drilling around the mine, and completing a site optimization program to improve cash flow. Royal Gold will benefit from getting further exposure to metal prices over an extended mine life, and we are pleased to provide support to Sentara as they review this potential. I'll now turn the call over to Martin to provide some comments on the portfolio.

Thanks, Bill. Turning to slide five, I'll cover portfolio performance over the year compared to the guidance that we gave in April 2023. Overall, the portfolio performance was solid for the year. However, as Bill mentioned, total sales of 315,600 GEOs were slightly below our 2023 guidance of 320,000 to 345,000 GEOs. This was due to underperformance at two of our principal properties, both of which we have discussed on our last earnings call. The first was Penasquito, where there was an unexpected four-month labor strike, and the second was the slower-than-anticipated ramp-up of the plant expansion at Pueblo Viejo. Our DD&A and tax rates were in line with guidance, and Paul will go into more detail on these items in his comments. Turning to slide six, I'll give some comments on fourth quarter revenue. Overall revenue for the quarter was $153 million with volume of 77,500 GEOs. Our royalty segment contributed revenue of $54 million in line with the prior year quarter. However, as a percentage of total revenue, the royalty segment was a larger contributor than in the recent past at about 36% of total revenue. Revenue from our stream segment was lower compared to last year at $98 million. Lower contributions from Mount Milligan and Pueblo Viejo were only partially offset by higher revenue from Andacoyo, Zavinchina, and Rainy River. I'll turn to slide seven and give some comments on notable developments at a handful of operations. At Mount Milligan, as Bill mentioned, Sentera reported an increase to the mine life to 2035, with the potential for work underway to increase this further. Centera also provided 2024 production guidance of 180,000 to 200,000 ounces of gold and 55 to 65 million pounds of copper. Centera expects this production to be evenly weighted throughout the year. At Pueblo Viejo, Eric reported yesterday that construction and commissioning of the plant expansion was substantially complete at the end of December, and they have resolved the equipment issues they were dealing with in the second half of the year. They are working on rebuilding the crushed ore stockpile feed conveyor and are targeting completion of this work in the second quarter, which is required for the plant to reach full throughput. Our stream is based on Barrick's share of production at PV, and Barrick is guiding to gold production of 420,000 to 490,000 ounces in 2024. Approximately 165,000 ounces of silver were deferred during the quarter, and the total deferred amount was 854,000 ounces at the end of December. In yesterday's report, Barrett commented that the focus for the first quarter will be the continued stability and optimization of the flotation circuit, which we expect should result in higher and more consistent silver recovery. This optimization work will likely take some time, and the recovery of our deferred silver ounces will depend on the outcome of this work. At Cortez, Barrick announced in mid-December that the record of decision was received for Gold Rush, and they expect to ramp up production from 130,000 ounces this year to about 400,000 ounces per year in 2028. They also announced 2024 guidance for Cortez yesterday of 620,000 to 680,000 ounces, which includes the contribution from Gold Rush. This guidance is significantly lower than the 2023 production at Cortez, And according to Barrick, it relates to grade reconciliation and resource model changes at crossroads that will reduce oxide mill feed. Our overlapping royalty interests at crossroads result in an effective gross royalty rate of approximately 9.4%, so the impact of lower production at crossroads has a disproportionately larger impact on Royal Gold. We are reviewing Barrick's forecast and will detail the impact to Royal Gold when we issue our full-year guidance. Turning to slide eight, at Andakoyo, Tech has reported that drought conditions are impacting production levels, and this is expected to continue while a solution is put in place in 2025. In the meantime, we're expecting production levels this year to remain in line with 2023 and then increase in 2025 through 2027 with the benefit of higher grades. At Comacow, operations are continuing at full production levels. ComiCow is a high-quality operation, and we are pleased that MMG, a well-capitalized and experienced operator, will become the new owner after completing the acquisition, which is expected during the current quarter. We have spoken with MMG, and at this point, we don't expect any significant changes to the operating approach put in place by KCM. And finally, we are pleased to see continued progress towards full production at King of the Hills and Bellevue mines in Western Australia. We expect to see first production from Cote Gold in Ontario and Mara Rosa in Brazil in the current quarter and Manchot in Alaska in the second half of the year. I'll now turn the call over to Paul for a review of our financial results.

Thanks, Martin. I'll now turn to slide nine and give an overview of the financial results for the quarter. For this discussion, I'll be comparing the quarter end of December 31, 2023 to the prior year quarter. Revenue was down 6% to $153 million for the quarter. As Martin mentioned in his remarks, lower contributions from Mount Milligan, Pueblo Viejo, and Penasquito were the main drivers for this quarter's lower revenue. The lower contributions from these properties were partially offset by higher contributions from Cortez and Anacoil, as well as higher average metal prices. Gold and silver prices were significantly higher, up 14% and 10% respectively, and the price of copper was up 2%. Gold continues to be the dominant revenue source, making up 80% of our total revenue for the quarter, followed by silver at 10% and copper at 8%. At 80%, Royal Gold has the highest gold revenue percentage compared to our major peers in the royalty and streaming sector. Turning to slide 10, I'll provide a bit more detail on specific line items for the quarter, which was another straightforward and quiet quarter for Royal Gold. G&A expense increased slightly to $9.7 million from $8.8 million in the prior year, and was due to higher corporate costs and non-cash stock compensation expense. Although we did see an increase over the prior year, our cash G&A costs remained low at about 5% of total revenue. Our DD&A expense decreased to $40 million from $49 million in the prior year. On a unit basis, this expense was $518 per GEO for the quarter, compared to $521 per GEO in the prior year. The lower overall DDNA expense was due to a lower depletion rate at Pueblo Viejo, as well as decreased sales from Mount Milligan and Pueblo Viejo when compared to the prior year. For the full year, DDNA of $529 per GEO was in line with our earlier guidance range of $490 to $540 per GEO. Interest expense was $6 million for the quarter, in line with $6.1 million in the prior year. The all-in interest rate for outstanding borrowings under our credit facility was 6.6% at the end of the fourth quarter. Tax expense for the quarter was $13.4 million, resulting in an effective tax rate of 17.5%. This compares to a similar tax expense of $12.6 million and an effective tax rate of 18.2% in the prior year. For the full year, the tax expense was $42 million and the effective tax rate was 14.9%, Our full year tax expense and effective tax rate benefited from a previously disclosed discrete tax event during the June quarter and related to the release of evaluation allowance on certain foreign deferred tax assets. Excluding this discrete item, the effective tax rate for the full year was 17.9%, which was in line with our guidance range of 17 to 22%. Net income for the quarter was up 11% over the prior year to $63 million, or $0.95 per share. The increase in net income was primarily attributable to the lower cost of sales and DD&A expense, along with the $4 million impairment we recognized in the prior year on a non-principle exploration stage royalty interest. Each of these were partially offset by a decrease in our revenue, as I previously mentioned. Our operating cash flow was strong again this quarter at $101 million and in line with the prior year. We expect to provide full year guidance for 2024 early in the second quarter, After most of our counterparties have issued their own production guidance for the year. However, to help you prepare your March quarter estimates, we expect our stream segment sales to range between 47,000 and 52,000 GEO during the first quarter of 2024. As with our prior practice, this is the only quarter during the year when we will give quarterly guidance. And this quarterly guidance should not be viewed as indicative of the full year guidance we intend to provide early in the second quarter. I will now turn to slide 11 and provide a summary of our financial position at the end of the quarter. During the quarter, we repaid $75 million on a revolving credit facility and reduced the amount drawn to $250 million. As Bill mentioned, our strong cash flow during 2023 allowed us to repay $325 million on a revolver balance during the year. With respect to leverage ratios, we ended 2022 with a one times net debt to EBITDA ratio, And by the end of 2023, this ratio was down to 0.3 times. This is a remarkable change in a short period and speaks to the cash flow generation of our portfolio and reinforces our overall capital allocation strategy, which also emphasizes a focus on the balance sheet. Absent significant business development activity and as cash flow allows, we expect to fully repay the remaining revolver balance by sometime early in the second half of 2024. We ended the year in a very strong financial position with total available liquidity of approximately $845 million, made up of $750 million of undrawn revolver capacity and $95 million of working capital. Finally, I'll also mention that upon completion of the acquisition of ComiCal by MMG, we expect repayment of the subordinated debt facility we provided to KCM as part of the overall development of the ComiCal mine. At the end of December, the total amount outstanding, including capitalized interest, was approximately $36 million. That concludes my comments on our financial performance for the quarter, and I'll turn the call back to Bill for closing comments.

Thanks, Paul. 2023 was another year of consistent and solid performance from Royal Gold. We maintain alignment with our strategic goals of keeping a disciplined focus on gold, strengthening our balance sheet, and increasing our capital returns. We had a very active year of adding assets to the portfolio in 2022, and during 2023 we took advantage of our strong cash flow to pay down the debt used to finance those transactions, as well as continue our long record of increasing our dividend. Our balance sheet is in great shape, and we have excellent liquidity to compete and take advantage of business development opportunities that may present themselves. We expect to provide full-year guidance for 2024 early in the second quarter, which will reflect the lower production at Cortez and smaller organic growth assets that we have previously discussed, like King of the Hills, Bellevue, Cote, Mar Rosa, and Manchot. We also expect to publish an asset handbook early in the second quarter, and we plan to host an in-person session to give a more fulsome update on the portfolio around the same time. Operator, that concludes our prepared remarks. I'll now open the line for questions.

Thank you. If you would like to ask a question today, please do so now by pressing Start, followed by the number 1 on your telephone keypad. If you change your mind or would like to be removed from the queue, please press Start and then 2. Our first question comes from Jackie Prisbelowski with BMO Capital Markets. Jackie, please go ahead.

Yeah, thanks very much, and thanks Thanks for taking my question. I know you addressed this a little bit in your prepared remarks, but if you could give us a little bit more color on what happened, I guess, at Nevada Gold Mines, that would be really helpful, whatever you can maybe tell us about it. I know they had sort of mentioned in their call yesterday that there were some issues with accessing assessing grade. Can you maybe just give us a little bit more color on what's happening there?

Hey, Jackie, thanks for the question. When you refer to Nevada gold mines, I assume you mean Cortez in particular?

Sorry, yeah. Yeah, sorry. Yeah, okay.

Yeah, that's fine. I'll just turn this over to Martin to give you a little background. I'm not sure we know much more, but Martin, over to you.

Yeah, thanks, Jackie. We really don't know much more than what was said on the call yesterday with Mark Bristow. You know, they talked about a resource model change to the crossroads area. They talked about that, indicating that it would reduce the oxide mill feed in 2024. And it was ascribed to a fault cutting off the high-grade ore in the pit that I think is a fairly recent point of understanding. Not really much more than that. In terms of how this impacts us, would you be interested in understanding more about that, Jackie?

Yeah, absolutely. Thank you.

So, you know, Cortez overall in 2023 had a really strong year. They produced about 890,000 ounces on a 100% basis. Out of that, we received about 49,000 GEOs. And about 80% of that 49,000 GEOs was sourced from our legacy zone with the high royalty rate of 9.4%. And that was really primarily driven in turn by the crossroads production. So 2024 guidance for Barrick is now 620 to 680,000 ounces, again, on a 100% basis. And this represents about a decrease of 27 percent from their 2023 production actual numbers to the midpoint of that 2024 guidance. And really with, you know, this impact to us is disproportionate because of our 9.4 gross royalty percentage over the crossroads area and the impact to that crossroads pit that they are now talking about. Due to our revenue mix at Cortez, the overall decrease from our 2023 production GEOs of 49,000 is going to be in the region of 40 to 50%. Can't really provide any more detail about what's happening at Crossroads at the moment. We don't know any more than the rest of the market, but we do hope to be able to provide some more detail on that when we get to our 2024 guidance.

Okay, great. That was actually going to be my next question. When you put your guidance out in April, that will be reflected in your guidance, I guess, right, for 2024?

Absolutely, yes.

Great. Okay. Thank you so much.

Thanks, Jackie.

Our next question comes from Cosmos Chu with CIBC. Please go ahead.

Hi, thanks Bill, Paul, Martin and Alistair. Maybe my first question is on your 2024 guidance as well. I know you haven't put it out yet. I'm just trying to figure out the thought process here and your process in terms of how how you come around in terms of putting your guidance together. You know, of course there's challenges like crossroads and Cortez. And as you mentioned, you know 2024 will also benefit. from startups or ramp ups at Bellevue, King of the Hills, and a number of new assets like Cote and Gold Rush. And so how do you go about your process of putting guidance together? And how do you kind of factor in any kind of risk, any kind of ramp up risk and startup risk and things like that?

Yeah, Cosmos, thanks for the question. I mean, the process is very much bottom up. And Martin and his team, I think they meet numerous times to talk about individual assets. Now, it kind of depends on the asset itself and the contract, because in some cases, we have excellent information rights. We may have a budget for the year. But in others, especially on the royalty side and the smaller royalty side, we don't really know. All we can go on is what the operators are saying publicly. You know, just as an example, you know, Penesquito is a royalty. We don't really have any information, right? So we, you know, we wait to hear what Newmont says about what's going to happen at Penesquito. So that's probably why it takes us a little bit longer than others, because we have to compile the guidance that is given by the operators. I will tell you that we do make adjustments. It's one of the reasons we don't give guidance on an asset by asset basis. Um, because we may get a number from an operator or see a number from an operator in the public domain. Um, and just say, well, you know, based on our experience, what we've seen at that mine historically, they may not achieve that recovery rate, or they may not achieve that grade, uh, that they expect. So, um, that kind of the process, uh, and that's why it takes us another couple of months to put it, put it together.

Yep. I guess, you know, ask more directly, would you say you're fairly conservative when you put this together?

I don't want to say we're fairly conservative. We try to be fair based on what we expect. I don't want anybody to think that we sort of take the numbers and then be more conservative on guidance so that hopefully we can exceed guidance. That's not how we do things. We put out the numbers that we think is achievable.

Understood. Great. Maybe switching gears a little bit, congratulations on getting an additional deal or kind of like the agreement with Sentera completed. From that perspective, I had to read it quite a few times, your first release yesterday, your new agreement with Sentera, fairly complex, a lot of moving parts. Can you maybe talk about how you came up with that structure, the different kind of production hurdles that that you've put in and would you would have been easier to kind of rewrite the original agreement because I know this agreement here is in addition to the original agreement so maybe the the thought process around that as well yeah I mean I I will say I I would agree with you the first place you would think of going is to to amend the existing agreement I will say

James Meeker & Sometimes amending agreements creates complications and we just felt that in order to avoid some some complications, it would be better to leave that agreement completely untouched. James Meeker & This is sort of a mind life extension project, this is a bolt on agreement that supports that mind life extension and and that's the you know that that's the direction that the negotiations sort of took over over time. You know, as for the specific numbers, I just wonder if I might ask Dan Brees to sort of offer his thoughts. Dan was sort of our lead negotiator on the transaction, and maybe he can share some thoughts with you.

Great. Hi, Cosmos. Yeah, thanks for the question. Hi, Dan. Maybe we just talk a little bit about, I think, if your question, if I understand your question, you're asking about how we ended up with this structure, generally speaking, or do you want to actually get into the numbers?

No, I think generally speaking, how you came up with the structure and how it is the best structure for the situation today.

Sure. Well, obviously, we had to consider our interest here and what we thought was appropriate and acceptable for our shareholders, but also what Sentara was looking to do. And ultimately, we were aligned in that sense with looking for ways to ultimately extend the mine life. And that was really the key reason or driver of the structure, thinking about the long-term, thinking about a way where we could provide long-term cost support. And that, as you heard Sentara talk about this yesterday in her call, that will allow them to make investments, if you will, today and going forward over the next year, year and a half to hopefully realize what that longer term plan will look like. So that was really the main driver, Cosmos. And then looking at the shorter term between now and say 2030, what we tried to do there is consider Sentara's focus on their reserve plan and the numbers that they were working towards and not wanting to impact our economics over that time period. And so that's what we put into place, a structure that is unlikely to be drawn, just given the triggers of the commodity prices below 1600 and 350 a pound in copper. So well below where we are with long-term consensus prices, but that structure just gives them the confidence to move forward on that reserve plan. So I think those are the two main factors that fit into, or we consider to fit into, this overall structure that you see.

Great. Thank you, Dan. That perfectly answers my question. And thanks, Bill, as well. Thank you. Thanks, Cosmos.

Before we take our next question, as a reminder, if you would like to ask a question today, please do so now by pressing start, followed by the number one on your telephone keypads. Our next question comes from Lawson Winder with Bank of America. Lawson, please go ahead.

Thank you very much, operator, and hello, gentlemen. Good morning and good afternoon. Just had a couple of questions for you. So one was on the guidance for Q1. Thank you for providing that. It's always helpful to have that in the full year guidance. How did you guys think about? And Akoya for that. In terms of production, I don't know if you can provide or in terms of deliveries. I don't know if you can provide a range, but is is something kind of like 2024 divided by four kind of kind of the right way to think about that and then. Yes, That'd be the first question on the guidance.

Hey, Lawson. So is your question on the quarterly guidance that we just gave? Because that number we would pretty much know, because Anacoya was one of those assets where we received the gold about five or six months after it's been shipped. So we would have a pretty good idea of what that is.

That's exactly what I'm asking. If you can tell us the number, that'd be great.

We don't do asset by asset guidance, and I don't think we've ever given exactly what a particular asset is going to do in any quarter.

So, yeah, so just thinking about Andakoya in particular, like, accounting for the fact that they had those issues with water in Q4. And you've disclosed now in your 10Q what the full year deliveries were. You know, I guess the question is then what was Q4 production, I guess, in terms of seasonality? Was Q4 much lower than Q1, Q2, and Q3 as a result of those? Or, you know, more in line? Just any sort of color on that direction would be helpful.

Martin, is there anything that you can think of that we could provide right now?

Look, PEC have talked, Lawson, about the issues going into next year with the drought conditions and how that is potentially going to impact them. I think we probably started to see some of those impacts towards the end of last year, but I don't have, I don't think numbers, individual numbers for the production we should be talking about at the moment?

Okay, no problem. And maybe I'll just leave the guidance there then. The other question I wanted to ask actually was about Cortez and the Gold Rush aspect of that. So the Gold Rush, you guys actually have multiple royalties. And on one portion of Gold Rush, it's higher than the other. And so what I wanted to understand is as Gold Rush ramps up, sort of when, based on the current mine plan, would Royal Gold start to get the benefit of that higher rate? And is there a point where there's an overlap in the royalties such that the two are additive?

Yeah, the area of Gold Rush where we have a higher royalty rate, I think is in the far southeast portion of it. Martin, do we have an estimate of timing as to when that might come in?

It's far, far in the future.

Yeah, that's what I thought.

Okay, that's very helpful to know. Thank you both very much. I appreciate that.

Thank you.

Our next question comes from Tanya Jakuskanak with Scotiabank. Please go ahead.

Great. Good morning, everyone. Thank you so much for taking my questions. I just wanted to come back to crossroads. I was the one who asked Barak on the call yesterday about crossroads and what exactly had happened. And maybe my understanding, which may be different from yours, was that we had this fault that they thought was an area where they had high grade. And when they did additional confirmation drilling, the fault seemed to have, you know, was there that they hadn't expected. And We lost this high-grade gold. But my understanding was that we also have lost reserves and resources from this area as well. Is that your understanding? So, are you expecting also a decline in the reserves and resources in this area?

Martin, I'm going to hand that one to you.

Thanks, Tanya. We don't... I know.

Sorry, Martin, but it was just...

Yeah, look, I think we would expect some sort of change based on what has been said over the past couple of days, but I can't really give you any detail around that because we haven't seen the detail ourselves yet.

Okay. So I guess from our perspective, just for the 2024 number, from what very high-level guidance you've provided, it would be safe to assume that that 49,000 GEOs that you achieved in 2023, we can kind of remove maybe 20,000 off that number for 2024.

Yes, that's exactly right.

Okay. And then we will wait. Would you know about these reserves and resources when you report in, when you give us guidance in April? In your new reserves? Yes. We're going to. Congratulations.

Yes.

All right. Okay. Maybe we can come back. We will try and give more detail around that. Okay. All right. Thank you. And maybe I guess I'm just going to come back to just the M&A environment yet again. You mentioned now you've paid off a lot of your debt. I'm just wondering what you are seeing out there and sort of size-wise and how big would you be looking at in terms of potential transactions?

Yeah, Tanya, I'll hand that over to Dan to make a comment.

Thank you. Sure, Bill. Hi, Tanya. Hi, thanks for the question, Tanya. Look, I think, well, as you know, we didn't announce a transaction last year. But looking back, I think it was one of our busier years with the internal reviews that we do on opportunities. And I think what you saw in the market, and maybe we're going to see here at least in the near term, is probably representative of the state of the market right now, which is smaller, lots, but smaller opportunities across the board. And I think it's really being driven, Tonya, still by a high cost of debt right now and the equity markets, which maybe they're recovering a little bit now, but generally they've been less supportive of smaller companies in particular, those with single asset development project type risks. And so I think that's what's driven the smaller royalty financing that we've seen in the market in the last 12 months or so. I think that's going to continue, but we do still see that we obviously do the same range, a hundred to $300 million, I think that still holds, but there are many more opportunities at the lower end of that size range. But it's busy, and I think it's, as I said, I think it's being driven by other types of capital just not being readily available right now. Okay.

And can I ask, you know, you already have, yes, that's, thank you, so similar range, similar, you know, sort of structure helping these smaller guys. um question for you obviously newmont which is looking to solve some of the assets you know and my understanding is that the data room is open and people are looking and have you um have you seen or heard of any opportunities for you there well we're yeah i mean go ahead i'm sorry bill go ahead okay no i was just going to say look i we we always point to these events

as opportunities for stream financing and to the extent we can be a good financing partner in that process we are always happy to to do it the only caveat being we said the same thing about barrack and rand gold we said the same thing about newmont and gold corp and really didn't see much develop uh so we you know certainly have our uh our eyes and ears open um but i i guess i wouldn't want you to say yeah there's going to be a lot of opportunity based on on the disposal process

Would you, Bill, increase your exposure to Africa if there was an opportunity for a stream there?

Sorry, which asset?

Just in Africa, the continental Africa. Would you take on that higher geopolitical risk?

I'd be very country specific. We've had a very good experience in Botswana. We haven't had a bad experience in Ghana, but again, eyes wide open. There, we've had a long-term reluctance in South Africa. So, you know, I would say the number of countries in Africa where we would be comfortable is maybe a handful, and you might not need all the fingers on your hand to do it.

Okay. Got it. All right. Thank you so much. I really appreciate it and really would hope for more clarity on the crossroads if you could by April.

The next question comes from Brian MacArthur with Raymond James. Please go ahead, Brian.

Good morning. Most of my questions have been answered, but can I just ask for the Mount Milligan deal, how this will be accounted for, i.e., when you get the gold payments and you get the free cash flow at the bottom, is that going to be

through revenue and be counted as geos or is it going to be if i just want to think of it as other cash items coming through yeah brian i'm going to i'm going to ask paul to step in here and talk a little bit about the accounting the only thing i the only caveat i will give you is he's going to tell you that they're working on the finalization of the accounting so Bear with him a little bit.

Yeah, I'm sure.

Yeah. Hey, Brian, how are you? Yeah, and Bill's right. Obviously, we need to qualify some of these statements with that fact that, yeah, we're still evaluating the accounting treatment, but we do expect to complete that analysis here during our first quarter, at which time we'll certainly give you more information within our next report. But as I sit here today, the consideration that we received obviously was the cash as well as those deferred gold ounces. You know, I do anticipate bringing those on to the balance sheet certainly as a receivable. And, you know, obviously since that receivable is in the form of gold, a commodity, you know, I do anticipate that we will have to mark to market that receivable through the P&L each subsequent reporting period. You know, as far as when the time comes that we receive those ounces, obviously through that mark to marketing, if you will, over time, we'll take those ounces into inventory under our normal policy and we'll sell those. I can't say today with certainty that it would be revenue. I don't think it would be revenue. It could be some other form of an income, maybe not revenue, which equals then GEOs. But again, more to come on that, but that would be where I would see things today.

So can I maybe just ask, I mean, I can guess I can see the deferred gold maybe one way, but for the 20, I mean, the money you're going to get in up front, I mean, I guess where that goes is obviously with Cortez coming down your growth rate and geo isn't going to be that high this year, I suspect. So you're going to count that 25 million as part of geo growth this year. Cause it is in a way, I guess, part of that stream and it's not an insignificant amount of money.

No, I mean, that wouldn't touch revenue.

Right. That'll just go straight to, say, if I should think about it, that'll come in with, say, the $36 million from the subdebt coming back from ComiCow, right? It's just going to be cash in. Correct. Okay. Great. Sorry about that. That's great. That was the last question I really had in all this. Thank you.

Thank you.

Those are all the questions we have, so this concludes today's call. Thank you, everyone, for your participation, and you may now disconnect your lines.