How to Avoid Rising Capital! and Operating Costs" Denver Gold Show September 8, 2008 Forward-Looking Statements Some of the statements contained in this presentation are forward-looking statements, such as statements that describe IRC's goals and expectations and IRCʼs estimated revenues from its royalties, production levels and mine life. Since forward-looking statements are not statements of historical fact and address future events, conditions and expectations, they inherently involve unknown risks, uncertainties, assumptions and other factors well beyond IRCʼs ability to control or predict. Actual results and developments may differ materially from those contemplated by such forward-looking statements. Material factors that could cause actual revenues to differ materially from any such forward looking statements include metal price fluctuations; interpretation of royalty contract terms; operatorsʼ production changes; mine developers abilities to develop, build and operate the mines; the effects of weather, operating hazards, adverse geological conditions, global warming, work slowdowns or stoppages, availability of labour, materials and equipment, changes in governmental laws, regulations, economic conditions or political instability; currency exchange rates; uncertainties involved in interpreting drilling results and other tests; possible variations in ore grade and recovery rates; risks of delays, accidents, equipment breakdowns; the possibility of unanticipated costs or expenses related to mining, processing, mine closures; and IRC's ability to acquire additional royalty interests. Forward-looking statements are based on the beliefs, estimates and opinions of management at the date the statements are made. IRC does not undertake to update forward-looking statements if managementʼs beliefs, estimates or opinions or other circumstances should change. 2 Important Notices Resource Estimates - All “reserve” and “resource” estimates included in this presentation were prepared in accordance with the Canadian Institute of Mining and Metallurgy classification system or the Joint Ore Reserve Committee as outlined in National Instrument (NI) 43-101 of the Canadian Securities Administrators and the Canadian Institute of Mining and Metallurgy Classification System. These standards differ significantly from the requirements of the U.S. Securities and Exchange Commission (SEC). In particular, “resources” are not the equivalent of “reserves” and the SEC does not normally permit the use of the term “resources” or of resource estimates in documents filed with the SEC. Accordingly, information included in the presentation may not be comparable to information disclosed by United States mining companies. IRC does not operate or explore but relies on others. Because it is not the operator, it must rely on decisions made by others, decisions on which it has little or no influence. It must also assume that public disclosure by its operators is accurate and true. Information contained herein is based on information made available by these operators. This presentation has been reviewed by a qualified person employed by SRK Consulting (U.S.) Inc, for the purposes of NI 43-101. See Company disclosure documents filed on SEDAR (www.SEDAR.com), including the Annual Information Form dated March 28, 2008, and the Companyʼs Annual Report on Form 40-F filed with the SEC (available at www.sec.gov <http://www.sec.gov> ). Trailing 12 monthsʼ (TTM) EBITDA, TTM adjusted EBITDA, TTM free cash flow per share, TTM EBITDA per share, EBITDA margins and EBITDA are non-GAAP financial measures. Such non-GAAP financial measures do not have any standardized meaning prescribed by Canadian GAAP and therefore may not be comparable to similar measures presented by other issuers. Management uses these measures internally. 3 Passive Foreign Investment Company PFIC NOTICE OF U. S. TAX INFORMATION FOR U. S. PERSONS This statement is provided for shareholders who are United States persons for purposes of the U.S. Internal Revenue Code. It is not relevant to other shareholders. NOTICE PURSUANT TO IRS CIRCULAR 230: ANYTHING CONTAINED IN THIS NOTICE CONCERNING ANY U.S. FEDERAL TAX ISSUE IS NOT INTENDED OR WRITTEN TO BE USED, AND IT CANNOT BE USED BY A U.S. HOLDER, FOR THE PURPOSE OF AVOIDING FEDERAL TAX PENALTIES UNDER THE INTERNAL REVENUE CODE. THIS NOTICE WAS WRITTEN TO SUPPORT THE PROMOTION OR MARKETING OF IRC SHARES. EACH SHAREHOLDER SHOULD SEEK U.S. FEDERAL TAX ADVICE, BASED ON SUCH U.S. SHAREHOLDER'S PARTICULAR CIRCUMSTANCES, FROM AN INDEPENDENT TAX ADVISOR. International Royalty Corporation ("IRC") believes that it is currently a Passive Foreign Investment Company ("PFIC") as defined in Section 1297 of the Internal Revenue Code. Certain U. S. income tax consequences flow from this designation and these tax consequences may be mitigated by electing to treat IRC as a Qualified Electing Fund ("QEF"). The PFIC Annual Information Statement for IRC provided herewith is given to allow shareholders who make the QEF election with respect to IRC stock, should they so desire. Shareholders are urged to consult their tax advisors for more information regarding QEF elections. For more information, please visit http://library.corporate-ir.net/library/18/188/188772/items/284231/ PFICWebsiteNotice2007.pdf 4 Capital and Operating Cost Study 650 Pre-feasibility to Production-stage projects reviewed ~70 reports had sufficient information to use for this study Multiple project stages, commodity, locations, mining and processing types Compared prior and current feasibility figures Study covers time period of 2005 – 2008 Based solely on public disclosures by operators Operators are very inconsistent in their reporting standards Must Standardize the Analysis 5 Conclusions Capital and operating costs are rising Increase crosses all boundaries: not commodity specific Rise in Costs Per Year! 1 Average Return! Capital Costs! Operating Costs! IRR1! +44%! +20%! +20%! Based on mean after-tax calculations only Costs Rising Faster than Returns 6 Macro Reasons for Changes Different types of feasibility studies Pre-feasibility (Scoping, PEA) => Feasibility => Bankable Feasibility Study => Production Different levels of feasibility studies have different confidence levels: Stage Pre-feasibility: Feasibility: Bankable Feasibility: Range 5.0% -30.0% 5.3% - 16.9% 10.0% - 15.0% Different time periods between disclosures Changes in scope Must Make Adjustments Prior to Drawing Judgments 7 Micro Reasons for Changes Price inflation: diesel, raw materials, labor Currency exchange rates Time delays Inclement weather Customs holdups Backlogs in equipment deliveries by manufacturers Lengthier permitting times Special interest group obstructionists Not All Increases are Related to Inflation 8 Total Change Capital and Operating Costs are Rising 9 Change Per Year Adjusting for Time Periods Shows the Rise is Worse than Expected 10 Pre- and After-tax Mean IRRs Pre- and After-Tax IRR Range of 15.5% to 28% 11 Conclusions Rise in Costs Per Year! 1 Average Return! Capital Costs! Operating Costs! IRR1! +44%! +20%! +23%/ +20%! Based on mean after-tax calculations only. IRR figures are pre- and after-tax, respectively. When Costs Rise More Than IRR, One is Either Trading Dollars or Losing Money 12 How does one invest in commodities yet avoid these capital and operating costs overruns? 13 Royalty Companies Maximum Exposure to Upside 14 ~85 High Quality Mineral Royalties Australia ~13 Royalties North America / Latin America ~65 Royalties Europe / Africa ~7 Royalties 95% in Secure Investment-Grade Countries 15 Company Overview TSX: IRC, AMEX: ROY ~85 diversified mineral royalties Trailing 12 month Revenue: $45.4 million Trailing 12 month EBITDA: $26.3 million Annual Dividend: US$0.04 per share Market Cap: ~US$250 million North Americaʼs fastest growing Diversified Mineral Royalty Company As of 6/30/08 16 IRC Investment Highlights 1. Proven low-risk mineral royalty structure 2. Industry leading revenue growth 3. Strong, fully-funded growth pipeline 4. High quality, long-lived, diversified royalty assets 5. Experienced and highly aligned management team delivering profitable growth Attractive Risk Adjusted Returns Throughout the Commodity Cycle 17 Experienced Management Team Industry Experience Douglas Silver- Chairman and CEO 27 years BA and MS in Economic Geology Certified General Appraiser (Minerals) Paul Zink- President 18 years 20+ years with J.P. Morgan and Koch Industries 10+ years mining related valuation and acquisition experience Ray Jenner- CFO and Secretary 20 years BS Physics and Math, B Comm, Honors, Chartered Accountant Former VP and Treasurer, Echo Bay Mines, former CFO, Nord Resources Corp. James Lydic- VP, Business Development 30 years BA Geology, MBA Former head of Economic Valuation, Anaconda Copper Co. Dave Hammond- VP, Strategic Planning 35 years BS and MS in Geological Engineering, MBA and PhD in Mineral Economics $10 billion in transaction experience as mining service consultant for PricewaterhouseCoopers Management and Board Committed with ~18% Ownership 18 Comparative Revenue Growth IRC 422% Silver Wheaton 101% Royal Gold 31% Franco-Nevada 18% 0% 100% 200% 300% 400% 500% Compound Annual Growth Rate 2004-07 Strong Annual Growth Rate 19 High-Margin, Scalable Business Model +,-./0$%123&)*$ '#" '!" &#" !"#$%&''&()*$ &!" %#" %!" $#" $!" #" !" %!!(" %!!)" 123456" $*+",-./"%!!0" 78+"98:8;<8*" Revenue Growth Magnifies Profit Margins 20 Long Life Projects Project Commodity Voisey’s Bay Ni, Cu, Co 27 Legacy Industrial Sand 20 Las Cruces Cu 15 BC Coal Coal 21 Avebury Ni 8-10 Gwalia Deeps Au 9 Bell Creek Ni 15 Horizon Coal 30 Pascua Au 23 Fedorova Pt, Pd 18 High Lake Zn, Pb, Ag, Au, Cu 12 Pinson Au 10 Commissioning date not yet announced Westmoreland U 11 Commissioning date not yet announced Berg Cu, Mo, Ag 17 Commissioning date not yet announced Schaft Creek Cu, Mo, Au, Ag 30+ Commissioning date not yet announced Mine Life 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Solid Foundation Underpins Long-Term Growth See appendix for references. 21 An Expanding Project Pipeline Operator Legacy Avebury Las Cruces Belahouro Gwalia Deeps Wolverine Pascua Gold Hill Pinson Bell Creek High Lake Westmoreland Fedorova South Laverton Horizon Coal Schaft Creek Ambrosia Lake Commodity Pre-Feasibility Feasibility Development Genoa Holding Company, LLC Industrial Sand OZ Minerals Ltd. Ni Inmet Mining Corp. Cu Wega Mining ASA Au St Barbara Ltd. Au Jinduicheng Molybdenum Ltd. Ag, Au Barrick Gold Corp. Au Round Mountain Gold Corp. Au Barrick Gold Corp. Au Metallica Minerals Ltd. Ni OZ Minerals Ltd. Zn, Pb, Ag, Au, Cu Laramide Resources Ltd. U Barrick Gold Corp. Pt, Pd Saracen Minerals Holding Ltd. Au Western Canadian Coal Corp. Coal Copper Fox Metals Inc. Cu, Mo, Au, Ag Rio Algom Mining Corp. U Strong Growth Pipeline Funded by Others 22 Key Development and Feasibility Projects $370 Million Annual Operator Spending 2005-2007 See appendix for references. 23 Gold Revenue For purposes of illustration, assumes US$925/oz gold price for 2008 forward. See appendix for references and further assumptions. 24 Diversifying Revenue Sources 2008 2009 2010 US$40MM US$54MM US$59MM Nickel Copper Cobalt Gold Energy Increasing Gold and Copper Balance For purposes of illustration, assumes US$925/oz Au, US$9.35/lb Ni, US$3.70/lb Cu, US$40.00/lb Co. Assumes Wolverine Coal litigation favorably resolved. See appendix for references and further assumptions. See Forward Looking Statements on p. 2-3. 25 International Royalty Corporation TSX:IRC AMEX:ROY For additional information contact: Douglas B. Silver, Chairman and CEO Paul H. Zink, President Telephone: (303) 799-9020 [email protected] [email protected] www.internationalroyalty.com 26 Assumptions and References Diversifying Revenue Sources, Metal Price Sensitivities Voiseyʼs Bay: Company calculations based on Incoʼs 2004 NI 43-101 report Avebury: Allegiance Mining NL press release, February 6, 2008; www.allegiance-mining.com.au Las Cruces:www.inmetmining.com/theme/files/pdf2008 01-LasCrucesSectionpdf Energy: Based on internal Company calculations Gold – Pascua: Based on 80% of stated production levels, 2011 assumes 1/2 year; Southern Cross, Williams: Estimates based on current and past production levels; Belahouro: Goldbelt Resources Ltd, press release October 4, 2007, Gwalia Deeps: St Barbara Ltd press release, February 7, 2007; Meekatharra: Mercator Gold plc press release, August 8, 2007 Gold Revenue Pascua: Based on 80% of stated production levels, 2011 assumes 1/2 year; Southern Cross, Williams: Estimates based on current and past production levels; Belahouro: Goldbelt Resources Ltd, press release October 4, 2007, Gwalia Deeps: St Barbara Ltd press release, February 7, 2007; Meekatharra: Mercator Gold plc press release, August 8, 2007 Long Life Projects Voiseyʼs Bay: www.vbnc.com, February 2005 Legacy: Personal communication, January 30, 2008 Las Cruces: Inmet Mining Corporation, quarter report for the three months ending March 31, 2008, p.22. www.inmetmning.com/ouroperations/development/LasCruces/ Avebury: Allegiance Mining Quarterly report for the three month period ending March 31, 2008, p.2. www.allegiance-mining.com.au Bell Creek: www.metallicminerals.com.au Pascua: www.barrick.com/GlobalOperations/SouthAmerica/PascuaLamaProject/ Fedorova: PGE Fedorova project – Russia, Kolar peninsular, Lovozero area, November 2007 High Lake: www.ozminerals.com/Operations/Mining-Operations/High-Lake.html 27 Assumptions and References Long Life Projects Pinson: Assumes 100,000 Oz Au production per year. B.C. Coal: assumes the litigation is favorably resolved. Key Development and Feasibility Projects Inmet Mining Corporation AIF, March 10, 2008 "A New Nickel Province for China" presentation by Allegiance Minning, November 2007 Confidential information, 12/2007 Wega Mining Presentation, May 9, 2008 St Barbara Mines Ltd Presentation, BMO Capital Markets, 2/27/08 Yukon Zink Corporation NI 43-101 report Wardrop Engineering, Inc., 10/22/07 www.barrick.com/globaloperations/southamerica/pascualamaproject/default.aspx <http://www.barrick.com/globaloperations/southamerica/pascualamaproject/default.aspx> Copper Fox Metals Inc, 1/14/08 Fedorova Tundra Pt, Pd, Au, Ni, Cu deposit, restated by Barrick Gold Corp. 11/07 28 29