Why Royal Gold Shares Advanced 10% in July

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What happened

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Shares of Royal Gold, Inc. (NASDAQ: RGLD) rose 10% in July. The gain was spread across most of the month, but it began to notably outperform its precious-metals streaming peers Wheaton Precious Metals and Franco Nevada after it released an update on its fiscal fourth-quarter production and costs.  

So what

Royal Gold's update was quite positive in many respects. For example, gold production was down about 1% year over year, but silver production increased almost 80%. And the company began receiving copper between the two periods following the rework of the Mount Milligan streaming deal, adding 1,165 tonnes of copper to the mix. So year-over-year production was, essentially, way up for the precious-metals streaming company.

Prices were also a positive. Although the company saw a sequential quarter decline in the price of silver of 0.2%, the price of gold was up sequentially from the fiscal third quarter by 3.5%. It was the first quarter of copper sales, so there's no comparable here. However, that means that copper sales that the company made will simply add to the top line over other periods.

Costs, meanwhile, fell to $318 per-gold-equivalent ounce. That was sequentially down from the fiscal third-quarter figure of $356. Costs were lower year over year, as well, compared to the fiscal fourth quarter of 2016 gold-equivalent cost of $344 per ounce.

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Now what

The big takeaway here is that Royal Gold is setting investors up for a solid fiscal fourth-quarter earnings release. That news is scheduled to hit the market August 10th. Although it appears that the good news is already being priced into the stock, it will mark another in a long string of solid earnings reports for this streaming company that has 16 years of consecutive dividend increases. Investors looking for precious-metals exposure should strongly consider Royal Gold.

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Reuben Brewer has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.