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iii iiiiiiiiniiiiii <br />ROYAL RESC sss ~TION <br />1660 WYNKOOP STREET, SUITE 1000 <br />~'t DENVER, COLORADO 80202-1132 <br />(303)573-1b60 <br />Dear Stockholder: <br />You are cordially invited to attend a Special Meeting of Stockholders of Royal Resources Corporation <br />t (the "Company") to be held in the Hershner Room of One United Bank Censer (new United Bank Building), <br />1700 Lincoln, Denver, Colorado 80274 on May 7, 1987 a[ 2:00 p.nt., Mountain Daylight Time. <br />At the Special Meeting stockholders will be asked to consider and take action upon an agreement (the <br />"Agreement") pursuant to which Victoria Exploration Inc. ("Victoria") will acquire substantially all of the <br />Company's oil and gas properties, which represent substantially all of the assets of the Company and its <br />subsidiaries, for a cash purchase price of $3,650,000. The proposed transaction will result in the Company <br />ceasing to be engaged in the oil and gas business and thereafter the Company's primary line of business will be <br />gold exploration, development, production and finance. After completion of the proposed sale of assets, the <br />Company intends to use the proceeds of the sale to retire the outstanding loan on the Company's line of credit <br />with United Bank of Denver and for wanking capital [o partially finance the Company's gold activities. <br />The agenda for the Special Meeting also includes proposals (i) to amend the Company's Certificate of <br />Incorporation to change the name of the Company to Royal Gold, Inc., and (ii) to increase the Company's <br />authorized Common Stock. <br />Attached are a Notice of Special Meeting of Stockholders, a Proxy Statement, the Company's 1986 <br />Annual Report and the Company's quarterly report on Form 10-Q far the quarter ended December 31, 1986, <br />as amended, which contain important information about the meeting, the matters to be considered at the <br />meeting and the Company that you should review. <br />Your Board of Directors has given careful consideration to the proposed sale of assets and believes that it <br />is in the best interest of the Company's stockholders. Mr. Jack Wanner, consulting petroleum engineer, has <br />expressed his opinion that, based upon his review as described therein, the consideration to be paid in the <br />proposed sale of assets is fair to the Company's stockholders from a financial paint o(view. The full text of <br />such opinion is attached to the Proxy Statement and should be read in its entirety. <br />YOUR BOARD OF DIRECTORS HAS UNANIMOUSLY APPROVED THE PROPOSED SALE <br />OF ASSETS AND EACH OF'fHE OTHER PROPOSALS AND, ACCORDINGLY, RECOMMENDS <br />THAT YOU VOTE "FOR" APPROVAL OFTHE AGREEMENT AND SUCH OTHER PROPOSALS. <br />THE OFFICERS AND DIRECTORS OF THE COMPANY INTEND TO VOTE THEIR SHARES <br />"FOR" APPROVAL OF THE AGREEMENT AND "FOR" EACIi OF THE OTHER PROPOSALS. <br />It is extremely important that your shares be represented at the May 7 meeting whether or not you are <br />able to attend personally. As discussed in the Proxy Statement, if a majority of the outstanding shares of [he <br />Company are nos voted "FOR" adoption of the Agreement by Mtty 12, 1987, the Agreement and the <br />transactions contemplated thereby may not be consummated and the Company may be required to pay <br />Victoria $350,000 as liquidated damages. Therefore, I urge you to sign, date and mail the enclosed proxy card <br />as soon as possible. <br />Sincerely, <br />Michae <br />Chairman ojthe Board <br />and ChiejExecutive OJjirer <br />