On Feb 13, we issued an updated research report on
Royal Gold, Inc.
RGLD. The company expects to benefit from the ramping up of new mines. A strong balance sheet bodes well.
Settlement of Voisey’s Bay Dispute a Positive
Royal Gold has settled its long-standing litigation with VALE S.A VALE over the world-class Voisey's Bay mine in Newfoundland and Labrador. Vale will be investing $1.7 billion to develop underground resources that will extend the mine life from 2023 to 2034.
The settlement gives Royal Gold exposure to a world-class operating asset that ensures its shareholders a steady stream of royalty revenues. The company expects Voisey's Bay to feature among its top 10 revenue generators.
Peak Gold Project Holds Promise
Royal Gold announced that the Peak Gold joint venture, in which its subsidiary Royal Alaska holds a 40% interest, has completed a Preliminary Economic Assessment (PEA) on the Peak Gold Project located near Tok, Alaska. The company is focused on maximizing the value of interest in the project.
There are other several catalysts for the company, which include the beginning of production at Cortez Crossroads, early deployment of the Peñasquito Pyrite Leach Project and production improvement at Rainy River. Progress in the pilot pre-oxidation plant at Pueblo Viejo and preliminary economic assessment at the Peak Gold joint venture are other positives. Long-hole drilling at Wassa and Prestea mines are expected to continue which will support production in 2019. Royal Gold is focused on allocating its strong cash flow toward dividend payouts, debt reduction and new businesses.
The company's shares have outperformed the industry it belongs to over the past year. Its shares have gained around 1.6%, while the industry saw a decline of 6.6%.
Zacks Rank & Other Stocks to Consider
Royal Gold currently carries Zacks Rank #2 (Buy)
A few other top-ranked stocks in the basic materials space are Kirkland Lake Gold Ltd. KL and Israel Chemicals Ltd ICL. While Kirkland currently sports a Zacks Rank #1 (Strong Buy), Israel Chemicals carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
Kirkland has an expected earnings growth rate of 20.9% for 2019. The company’s shares have rallied 113.4% in the past year.
Israel Chemicals has an expected earnings growth rate of 11.1% for 2019. Its shares have gained 34.3% in a year’s time.
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Israel Chemicals Shs (ICL) : Free Stock Analysis Report
Royal Gold, Inc. (RGLD) : Free Stock Analysis Report
VALE S.A. (VALE) : Free Stock Analysis Report
Kirkland Lake Gold Ltd. (KL) : Free Stock Analysis Report
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