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STOCK OWNERSHIP
<br />The following table shows the ownership as of April 14, 1987 of the Company's Common Stock by each
<br />director and by all of the Company's directors and officers as a group and the number of shares of Common
<br />Stock owned by each person known to the Company to have awned more than five percent of the outstanding
<br />Corttnton Stock on such date.
<br />Directly
<br />and Under Percent
<br />Neme Beneficial Oplion Tolal of Class
<br />Michael Owen(I) ........................................ 29,338 70,100 99,438 1.48
<br />Kenneth W. Nickerson .................................... 2,042 70,100 72,142 1.07
<br />Gerald L. Bader,Jr ....................................... 13,328 59,557 72,885 1.09
<br />Stanley Dempsey ........................................ 83,078 28,500 111,878 1.66
<br />All Directors and OfTicers as a Group (5 persons) .......... 131,716 261,807 393,523 5.86
<br />James Stuckert, Louisville, Kentucky(2) ...................... 391,749 -0- 391,749 5.84
<br />(I) 28,296 shares previously owned by Mr. Owen were transferred on January 28, 1987 to his Former spouse
<br />by order of court.
<br />(2) Includes 380,000 shares owned by Mr. Stuckert directly, 8,000 shares owned by Mr. Stuckert's wife and
<br />3,749 shares held by his wife as custodian for one of his children.
<br />PROPOSAL 1:
<br />PROPOSAL TO APPROVE SALE OF OIL AND CAS
<br />PROPERTIES OF THE COMPANY
<br />A. Background
<br />Since its formation in 1981, the Company's principal business has been the exploration, development and
<br />production of oil and gas. During 1986, oil and gas prices dropped significantly, making oil and gas
<br />exploration and development less attractive to smaller independent oil companies such as the Company. In
<br />1986, in response to these developments, the Company commenced its gold mining activities, and through a
<br />wholly owned subsidiary, Royal Gold, Inc. ("RGI"), the Company acquired interests in gold properties.
<br />The Board of Directors of the Company has determined [hat the Company should revise its primary line
<br />of business from oil and gas exploration and development to gold exploration, development, production and
<br />finance. In connection with the decision to change its principal business, the Company has entered into an
<br />agreement (the "Purchase Agreement") with Victoria Exploration Inc. ("Victoria"), c/o Nelson & Harding,
<br />717 17th Street, Denver, Colorado 80202, providing for the sale to Victoria for 53,650,000 of substantially all
<br />of the oil and gas properties of the Company and its subsidiaries, subject to stockholder approval. (See Section
<br />J following For a description of the Company's oil and gas properties at December 31, 1986. See also Section K
<br />for a description of certain properties sold prior to the "Purchase Agreement" with Victoria.) The primary
<br />reasons for the decision to revise the Company's principal business <md to sell the Company's oil and gas
<br />properties are summarized below.
<br />1. The depressed state o(prices for oil and gas has resulted in decreased revenues to the Company.
<br />The Company believes oil and gas prices will remain depressed for the near term. Consequently, the
<br />Company ti Board of Directors does not believe it is financially feasible or prudent to explore far oil and
<br />gas reserves to replace those oil and gas reserves that it is producing.
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