Royal Gold Reports Fiscal First Quarter 2009 Results

Higher revenues were largely driven by increased production at Robinson, Leeville and Goldstrike in addition to higher metal prices on a quarter-over-quarter basis. The increase in net earnings was partially offset by a decrease in production at the Cortez Pipeline Mining Complex and an increase in depletion rates as a result of the newer properties which have been added to the Company's royalty portfolio.

Free cash flow for the current quarter was $13.3 million, representing 83% of revenues compared to free cash flow of $9.8 million, or 78% of revenues for the prior year comparable quarter.

As of September 30, 2008, the Company had a working capital surplus of $208.6 million. Current assets were $221.7 million (including $209.8 million in cash and equivalents), compared to current liabilities of $13.1 million, resulting in a current ratio of 17 to 1. On October 2, 2008, the Company used $150 million in cash to complete the acquisition of the Barrick Gold royalty portfolio.

"Our results for the first fiscal quarter reflect solid performance from our overall portfolio of producing royalties, which offset the lower production at Cortez and production curtailment at Taparko," said Tony Jensen, President and CEO. "Many of Royal Gold's prior royalty acquisitions are now poised to generate revenue. In the next quarter we look forward to revenue contributions from the recently acquired Barrick Gold royalty portfolio, the beginning of revenue from Dolores, and we await sustained production at Taparko."

RESTATEMENT

As part of the Company's royalty monitoring program, Royal Gold has identified a $3.1 million overpayment from Barrick Gold Corporation with respect to the Company's GSR1 and GSR2 royalties at the Cortez Pipeline Mining Complex, which the Company received and had previously recognized as royalty revenue.

The overpayment of the royalty was the result of Barrick improperly including non-Royal Gold royalty production in the Company's quarterly GSR1 and GSR2 royalty payments, principally during fiscal year 2008.

The Audit Committee of the Company's Board of Directors has discussed the matter disclosed in this press release with management and the Company's independent registered public accounting firm, PricewaterhouseCoopers LLP, and has concluded that the previously issued financial statements for fiscal year ended June 30, 2008, can no longer be relied upon and must be restated.

The effect of the restatement on our fiscal year 2008 results of operations reduced royalty revenues by $3.1 million from $69.4 million to $66.3 million, reduced net income by $2.1 million from $26.1 million to $24.0 million, and reduced earnings per share by $0.07 from $0.69 to $0.62. The restatement is not expected to affect estimates of future production or reserves associated with the Cortez Pipeline Mining Complex. The Company intends to file an amended Annual Report on Form 10-K/A for fiscal year 2008 on or before November 10, 2008. See Schedule B.

Commenting on the restatement, Jensen said, "The error was identified during the Company's royalty monitoring review process. The Company was paid for production that was not on our Cortez Pipeline Mining Complex royalty ground and we called this error to Barrick's attention. Management is working directly with Barrick to avoid such mistakes in the future."

As a result of the error, management has reassessed the Company's controls and procedures, including internal controls over financial reporting. Management concluded that there was a deficiency in the operating effectiveness of the Company's controls in place over the accuracy of royalty revenue which constituted a material weakness in the Company's disclosure controls and procedures and internal controls over financial reporting.

Management's conclusions regarding disclosure controls and procedures and report on internal control over financial reporting will be included in the amended Annual Report on Form 10-K/A for fiscal year 2008. In response to the error, management is working to enhance its controls and procedures over its royalty monitoring program to ensure that royalty payments associated with production that is not subject to our royalty interests is properly reconciled and reviewed in the future. -- www.cnxmarketlink.com