Pipeline powers Royal Gold

A sliding-scale royalty at the Pipeline gold project in Nevada jumped to a higher rate late last year, enabling Royal Gold (RGL-T) to boost fourth-quarter earnings by 85%.

The Denver-based company’s net income in the quarter climbed to US$2.27 million, compared with US$1.2 million in the last three months of 2002, while royalty revenue rose to US$5 million from US$3.1 million.

For the second half of 2003, net income totalled US$3.6 million on royalty revenue of US$9.2 million, compared with US$2.6 million on US$6.4 million in the second half of 2002.

Royal Gold owns two sliding-scale gross smelter return royalties, a fixed gross royalty, and a net value return royalty on the Pipeline mining complex, which is operated by Placer Dome (PDG-T) in Nevada’s Lander Cty.

Pipeline produced 217,866 oz. gold in the recent quarter and, in the process, generated US$4.3 million of royalty revenue for Royal Gold.

The company also holds a 1.8% net smelter return royalty covering most of the Leeville gold project, which is being developed by Newmont Mining (NEM-N) in Nevada’s Carlin trend.

Other royalties cover operating mines in Nevada, as well as the Martha silver mine in Argentina’s Santa Cruz province. The latter is operated by Coeur d’Alene Mines (CDE-N).