UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)


☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period Ended ~~March 31, 2021~~June 30, 2022


☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number: 001-13357

Royal Gold, Inc.

(Exact Name of Registrant as Specified in Its Charter)

Delaware		84-0835164
(State or Other Jurisdiction of		(I.R.S. Employer
Incorporation)		Identification No.)

1144 15^th Street, Suite 2500
Denver, Colorado		80202
(Address of Principal Executive Offices)		(Zip Code)

Registrant’s telephone number, including area code (303) 573-1660

Securities registered pursuant to Section 12(b) of the Act:


Title of Each Class	Trading Symbol	Name of the Exchange on which Registered
Common Stock, $0.01 par value	RGLD	Nasdaq Global Select Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☒	Accelerated filer ☐
Non-accelerated filer ☐	Smaller reporting company ☐
Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

There were ~~65,606,496~~65,639,660 shares of ~~the Company’s~~Royal Gold common stock ~~par value $0.01 per share,~~ outstanding as of ~~April 29, 2021.~~July 28, 2022.

Table of Contents

In this Quarterly Report on Form 10-Q, Royal Gold, Inc., together with its subsidiaries, is collectively referred to as “Royal Gold,” “we,” “us,” or “our.”

INDEX

		PAGE

PART I	FINANCIAL INFORMATION

Item 1.	Financial Statements (Unaudited)

	Consolidated Balance Sheets	3
	Consolidated Statements of Operations and Comprehensive Income	4
	Consolidated Statements of Changes in Stockholders’ Equity	5
	Consolidated Statements of Cash Flows	6
	Notes to Consolidated Financial Statements	7

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	1918

Item 3.	Quantitative and Qualitative Disclosures about Market Risk	3229

Item 4.	Controls and Procedures	3229

PART II	OTHER INFORMATION

Item 1.	Legal Proceedings	3229

Item 1A.	Risk Factors	3329

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	3330

Item 3.	Defaults Upon Senior Securities	3330

Item 4.	Mine Safety Disclosures	3330

Item 5.	Other Information	3330

Item 6.	Exhibits	3431

SIGNATURES		3532

Table of Contents

ITEM 1. FINANCIAL STATEMENTS

ROYAL GOLD, INC.

Consolidated Balance Sheets

(Unaudited, amounts in thousands except share data)


	March 31,		June 30,		June 30,		December 31,
	2021		2020		2022		2021
ASSETS
Cash and equivalents	$	370,260	$	319,128	$	280,617	$	143,551
Royalty receivables		45,427		27,689		36,868		54,088
Income tax receivable		14,669		2,435		7,712		4,915
Stream inventory		14,491		11,671		13,172		11,607
Prepaid expenses and other		1,475		1,227		1,971		1,835
Total current assets		446,322		362,150		340,340		215,996
Stream and royalty interests, net (Note 3)		2,224,435		2,318,913		2,389,864		2,443,752
Other assets		82,769		85,224		122,842		97,284
Total assets	$	2,753,526	$	2,766,287	$	2,853,046	$	2,757,032
LIABILITIES
Accounts payable	$	4,380	$	2,484	$	7,067	$	6,475
Dividends payable		19,680		18,364		22,984		22,966
Income tax payable		25,660		13,323		24,047		19,070
Other current liabilities		12,971		9,384		9,915		12,917
Total current liabilities		62,691		43,555		64,013		61,428
Debt (Note 5)		146,270		300,439

Deferred tax liabilities		84,079		86,439		86,206		87,705
Uncertain tax positions		12,957		25,427
Other liabilities		7,404		8,308		6,169		6,688
Total liabilities		313,401		464,168		156,388		155,821
Commitments and contingencies (Note 13)
Commitments and contingencies (Note 12)
EQUITY
Preferred stock, $.01 par value, 10,000,000 shares authorized; and 0 shares issued		—		—		—		—
Common stock, $.01 par value, 200,000,000 shares authorized; and 65,550,445 and 65,531,288 shares outstanding, respectively		656		655
Common stock, $.01 par value, 200,000,000 shares authorized; and 65,569,687 and 65,564,364 shares outstanding, respectively						656		656
Additional paid-in capital		2,202,410		2,210,429		2,210,809		2,206,159
Accumulated earnings		224,254		61,133		472,764		381,929
Total Royal Gold stockholders’ equity		2,427,320		2,272,217		2,684,229		2,588,744
Non-controlling interests		12,805		29,902		12,429		12,467
Total equity		2,440,125		2,302,119		2,696,658		2,601,211
Total liabilities and equity	$	2,753,526	$	2,766,287	$	2,853,046	$	2,757,032

The accompanying notes are an integral part of these consolidated financial statements.

Table of Contents

ROYAL GOLD, INC.

Consolidated Statements of Operations and Comprehensive Income

(Unaudited, amounts in thousands except share data)


	Three Months Ended				Nine Months Ended				Three Months Ended				Six Months Ended
	March 31,		March 31,		March 31,		March 31,		June 30,		June 30,		June 30,		June 30,
	2021		2020		2021		2020		2022		2021		2022		2021
Revenue (Note 7)	$	142,589	$	136,437	$	447,829	$	378,853
Revenue (Note 6)									$	146,441	$	168,027	$	308,796	$	310,616

Costs and expenses
Cost of sales (excludes depreciation, depletion and amortization)		21,469		21,961		68,230		63,149		23,810		24,668		46,450		46,137
General and administrative		6,932		9,551		21,175		23,658		9,312		7,212		18,243		14,143
Production taxes		1,835		851		4,591		2,934		1,425		2,152		3,646		3,987
Exploration costs		—		565		563		4,705
Depreciation, depletion and amortization		41,296		51,228		135,541		130,038		43,989		48,028		91,976		89,324
Total costs and expenses		71,532		84,156		230,100		224,484		78,536		82,060		160,315		153,591

Gain on sale of Peak Gold JV interest		—		—		33,906		—
Operating income		71,057		52,281		251,635		154,369		67,905		85,967		148,481		157,025

Fair value changes in equity securities		1,902		(3,819)		4,060		(4,972)		(2,191)		1,957		(1,577)		3,859
Interest and other income		733		620		1,767		1,621		1,118		676		2,093		1,409
Interest and other expense		(1,820)		(2,088)		(5,274)		(7,139)		(1,398)		(1,145)		(2,296)		(2,965)
Income before income taxes		71,872		46,994		252,188		143,879		65,434		87,455		146,701		159,328

Income tax (expense) benefit		(17,679)		(8,702)		(31,332)		3,700
Income tax benefit (expense)										5,911		(5,536)		(9,393)		(23,214)
Net income and comprehensive income		54,193		38,292		220,856		147,579		71,345		81,919		137,308		136,114
Net (income) loss and comprehensive (income) loss attributable to non-controlling interests		(167)		262		(1)		2,750
Net income and comprehensive income attributable to non-controlling interests										(205)		(242)		(492)		(409)
Net income and comprehensive income attributable to Royal Gold common stockholders	$	54,026	$	38,554	$	220,855	$	150,329	$	71,140	$	81,677	$	136,816	$	135,705
Net income per share attributable to Royal Gold common stockholders:
Basic earnings per share	$	0.82	$	0.59	$	3.36	$	2.30	$	1.08	$	1.24	$	2.08	$	2.07
Basic weighted average shares outstanding		65,550,400		65,511,878		65,544,978		65,501,678		65,569,190		65,550,682		65,567,621		65,550,542
Diluted earnings per share	$	0.82	$	0.59	$	3.36	$	2.29	$	1.08	$	1.24	$	2.08	$	2.07
Diluted weighted average shares outstanding		65,621,603		65,600,770		65,624,472		65,626,400		65,678,320		65,636,964		65,661,653		65,629,284
Cash dividends declared per common share	$	0.300	$	0.280	$	0.880	$	0.825	$	0.35	$	0.30	$	0.70	$	0.60

The accompanying notes are an integral part of these consolidated financial statements.

Table of Contents

ROYAL GOLD, INC.

Consolidated Statements of Changes in Stockholders’ Equity

Three months ended ~~March 31,~~June 30, 2022, and 2021 ~~and 2020~~

~~(unaudited, amounts in thousands except share data)~~

Royal Gold Stockholders

Additional

Common Shares

Paid-In

Accumulated

Non-controlling

Total

Shares

Amount

Capital

Earnings (Losses)

Interests

Equity
Balance at December 31, 2020

65,548,415

$
656

$
2,201,076

$
189,910

$
13,037

$
2,404,679
Stock-based compensation and related share issuances

2,030

—

1,334

—

—

1,334
Distributions to non-controlling interests

—

—

—

—

(399)

(399)
Net income and comprehensive income

—

—

—

54,026

167

54,193
Dividends declared

—

—

—

(19,682)

—

(19,682)
Balance at March 31, 2021

65,550,445

$
656

$
2,202,410

$
224,254

$
12,805

$
2,440,125

Royal Gold Stockholders

Additional

Common Shares

Paid-In

Accumulated

Non-controlling

Total

Shares

Amount

Capital

Earnings (Losses)

Interests

Equity
Balance at December, 2019

65,496,004

$
655

$
2,205,364

$
10,290

$
30,905

$
2,247,214
Stock-based compensation and related share issuances

16,244

—

3,134

—

—

3,134
Distributions from (to) non-controlling interests

—

—

600

—

(344)

256
Net income (loss) and comprehensive income (loss)

—

—

—

38,554

(262)

38,292
Dividends declared

—

—

—

(18,361)

—

(18,361)
Balance at March 31, 2020

65,512,248

$
655

$
2,209,098

$
30,483

$
30,299

$
2,270,535

~~ROYAL GOLD, INC.~~

~~Consolidated Statements of Changes in Stockholders’ Equity~~

~~Nine months ended March 31, 2021 and 2020~~

(unaudited, amounts in thousands except share data)


	Royal Gold Stockholders											Royal Gold Stockholders

				Additional											Additional
	Common Shares			Paid-In		Accumulated		Non-controlling		Total		Common Shares			Paid-In		Accumulated		Non-controlling		Total
	Shares	Amount		Capital		Earnings (Losses)		Interests		Equity		Shares	Amount		Capital		Earnings		Interests		Equity
Balance at June 30, 2020	65,531,288	$	655	$	2,210,429	$	61,133	$	29,902	$	2,302,119
Balance at March 31, 2022												65,568,799	$	656	$	2,208,425	$	424,608	$	12,425	$	2,646,114
Stock-based compensation and related share issuances	19,157		1		2,810		—		—		2,811	888		—		2,384		—		—		2,384
Sale of Peak Gold JV interest	—		—		(10,829)		—		(16,218)		(27,047)
Distributions to non-controlling interests	—		—		—		—		(880)		(880)	—		—		—		—		(201)		(201)
Net income and comprehensive income	—		—		—		220,855		1		220,856	—		—		—		71,140		205		71,345
Dividends declared	—		—		—		(57,734)		—		(57,734)	—		—		—		(22,984)		—		(22,984)
Balance at March 31, 2021	65,550,445	$	656	$	2,202,410	$	224,254	$	12,805	$	2,440,125
Balance at June 30, 2022												65,569,687	$	656	$	2,210,809	$	472,764	$	12,429	$	2,696,658

	Royal Gold Stockholders											Royal Gold Stockholders

				Additional											Additional
	Common Shares			Paid-In		Accumulated		Non-controlling		Total		Common Shares			Paid-In		Accumulated		Non-controlling		Total
	Shares	Amount		Capital		(Losses) Earnings		Interests		Equity		Shares	Amount		Capital		Earnings		Interests		Equity
Balance at June 30, 2019	65,440,492	$	655	$	2,201,773	$	(65,747)	$	33,772	$	2,170,453
Balance at March 31, 2021												65,550,445	$	656	$	2,202,410	$	224,254	$	12,805	$	2,440,125
Stock-based compensation and related share issuances	71,756		—		4,025		—		—		4,025	616		—		1,453		—		—		1,453
Distributions from (to) non-controlling interests	—		—		3,300		—		(723)		2,577
Net income (loss) and comprehensive income (loss)	—		—		—		150,329		(2,750)		147,579
Distributions to non-controlling interests												—		—		—		—		(400)		(400)
Net income and comprehensive income												—		—		—		81,677		242		81,919
Dividends declared	—		—		—		(54,099)		—		(54,099)	—		—		—		(19,682)		—		(19,682)
Balance at March 31, 2020	65,512,248	$	655	$	2,209,098	$	30,483	$	30,299	$	2,270,535
Balance at June 30, 2021												65,551,061	$	656	$	2,203,863	$	286,249	$	12,647	$	2,503,415

ROYAL GOLD, INC.

Consolidated Statements of Changes in Stockholders’ Equity

Six Months ended June 30, 2022, and 2021

(unaudited, amounts in thousands except share data)


	Royal Gold Stockholders

				Additional
	Common Shares			Paid-In		Accumulated		Non-controlling		Total
	Shares	Amount		Capital		Earnings		Interests		Equity
Balance at December 31, 2021	65,564,364	$	656	$	2,206,159	$	381,929	$	12,467	$	2,601,211
Stock-based compensation and related share issuances	5,323		—		4,650		—		—		4,650
Distributions to non-controlling interests	—		—		—		—		(530)		(530)
Net income and comprehensive income	—		—		—		136,816		492		137,308
Dividends declared	—		—		—		(45,981)		—		(45,981)
Balance at June 30, 2022	65,569,687	$	656	$	2,210,809	$	472,764	$	12,429	$	2,696,658

	Royal Gold Stockholders

				Additional
	Common Shares			Paid-In		Accumulated		Non-controlling		Total
	Shares	Amount		Capital		Earnings		Interests		Equity
Balance at December 31, 2020	65,548,415	$	656	$	2,201,076	$	189,910	$	13,037	$	2,404,679
Stock-based compensation and related share issuances	2,646		—		2,787		—		—		2,787
Distributions to non-controlling interests	—		—		—		—		(799)		(799)
Net income and comprehensive income	—		—		—		135,705		409		136,114
Dividends declared	—		—		—		(39,366)		—		(39,366)
Balance at June 30, 2021	65,551,061	$	656	$	2,203,863	$	286,249	$	12,647	$	2,503,415

The accompanying notes are an integral part of these consolidated financial statements.

Table of Contents

ROYAL GOLD, INC.

Consolidated Statements of Cash Flows

(Unaudited, amounts in thousands)

Nine Months Ended

March 31,

March 31,

2021

2020
Cash flows from operating activities:

Net income and comprehensive income

$
220,856

$
147,579
Adjustments to reconcile net income and comprehensive income to net cash provided by operating activities:

Depreciation, depletion and amortization

135,541

130,038
Gain on sale of Peak Gold JV interest

(33,906)

—
Non-cash employee stock compensation expense

4,236

8,283
Fair value changes in equity securities

(4,060)

4,972
Deferred tax benefit

(9,050)

(37,117)
Other

684

703
Changes in assets and liabilities:

Royalty receivables

(17,738)

(11,589)
Stream inventory

(2,820)

(567)
Income tax receivable

(12,235)

(8,658)
Prepaid expenses and other assets

998

(5,771)
Accounts payable

1,244

(1,295)
Income tax payable

12,337

14,054
Uncertain tax positions

(12,470)

(132)
Other liabilities

2,681

8,695
Net cash provided by operating activities

$
286,298

$
249,195

Cash flows from investing activities:

Acquisition of stream and royalty interests

(82,488)

(107,855)
Proceeds from sale of Peak Gold JV interest

49,154

—
Proceeds from sale of Contango shares

12,146

—
Other

(451)

2,766
Net cash used in investing activities

$
(21,639)

$
(105,089)

Cash flows from financing activities:

Repayment of debt

(155,000)

(115,000)
Net payments from issuance of common stock

(1,425)

(4,257)
Common stock dividends

(56,417)

(53,111)
Other

(685)

2,502
Net cash used in financing activities

$
(213,527)

$
(169,866)
Net increase (decrease) in cash and equivalents

51,132

(25,760)
Cash and equivalents at beginning of period

319,128

119,475
Cash and equivalents at end of period

$
370,260

$
93,715


	Six Months Ended
	June 30,		June 30,
	2022		2021
Cash flows from operating activities:
Net income and comprehensive income	$	137,308	$	136,114
Adjustments to reconcile net income and comprehensive income to net cash provided by operating activities:
Depreciation, depletion and amortization		91,976		89,324
Non-cash employee stock compensation expense		4,542		2,837
Fair value changes in equity securities		1,577		(3,859)
Deferred tax (benefit) expense		(28,114)		8,861
Other		491		572
Changes in assets and liabilities:
Royalty receivables		17,220		(2,925)
Stream inventory		(1,564)		(3,785)
Income tax receivable		(2,797)		4,419
Prepaid expenses and other assets		(1,359)		(582)
Accounts payable		592		3,786
Income tax payable		4,976		(8,839)
Uncertain tax positions		—		(12,358)
Other liabilities		(3,519)		(479)
Net cash provided by operating activities	$	221,329	$	213,086

Cash flows from investing activities:
Acquisition of stream and royalty interests		(37,841)		(119,315)
Khoemacau subordinated debt facility		—		(18,000)
Proceeds from sale of equity securities		—		8,651
Other		(36)		(177)
Net cash used in investing activities	$	(37,877)	$	(128,841)

Cash flows from financing activities:
Repayment of debt		—		(200,000)
Net payments from issuance of common stock		108		(50)
Common stock dividends		(45,953)		(39,364)
Other		(541)		(774)
Net cash used in financing activities	$	(46,386)	$	(240,188)
Net increase (decrease) in cash and equivalents		137,066		(155,943)
Cash and equivalents at beginning of period		143,551		381,859
Cash and equivalents at end of period	$	280,617	$	225,916

The accompanying notes are an integral part of these consolidated financial statements.

Table of Contents

ROYAL GOLD, INC.

Notes to Consolidated Financial Statements

(Unaudited)

1. OPERATIONS, SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND ~~RECENTLY ADOPTED~~RECENT ACCOUNTING STANDARDS

Royal Gold Inc., together with its subsidiaries (“Royal Gold,” the “Company,” “we,” “us,” or “our”), is engaged in the business of acquiring and managing precious metals streams, royalties and similar interests. We seek to acquire existing stream and royalty interests or to finance projects that are in production or in the development stage in exchange for stream or royalty interests. A metal stream is a purchase agreement that provides, in exchange for an upfront deposit payment, the right to purchase all or a portion of one or more metals produced from a mine at a price determined for the life of the transaction by the purchase agreement. Royalties are non-operating interests in a mining project that provide the right to revenue or metals produced from the project after deducting contractually specified costs, if any.

Summary of Significant Accounting Policies

The accompanying unaudited consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X under the Securities Exchange Act of 1934, as amended. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for annual financial statements. In the opinion of management, all adjustments which are of a normal recurring nature considered necessary for a fair presentation of our interim financial statements have been included in this Form 10-Q. Operating results for the three and ~~nine~~six months ended ~~March 31, 2021~~June 30, 2022 are not necessarily indicative of the results that may be expected for the ~~fiscal~~calendar year ending ~~June 30, 2021.~~December 31, 2022. These interim unaudited consolidated financial statements should be read in conjunction with our ~~Annual~~Transition Report on Form 10-K for the ~~fiscal year~~six months ended ~~June 30, 2020~~December 31, 2021, filed with the Securities and Exchange Commission (“SEC”) on ~~August 6, 2020~~February 17, 2022 (“~~Fiscal 2020 10-K”~~Transition Report”).

~~Recently Adopted~~Recent Accounting Standards

~~Current Expected Credit Loss~~

~~In June 2016,~~We have evaluated all the recently issued, but not yet effective, accounting standards that have been issued or proposed by the Financial Accounting Standards Board ~~issued ASU No. 2016-13,~~ ~~Financial Instruments-Credit Losses (Topic 326): Measurement~~or other standards-setting bodies through the filing date of ~~Credit Losses of Financial Instruments~~, which, together with subsequent amendments, changes how an entity records credit losses from an “incurred loss” approach to an “expected loss” approach. This update was effective for annual periods beginning after December 15, 2019these unaudited consolidated financial statements and ~~interim financial statement periods within those years, with early adoption permitted. On July 1, 2020, we adopted~~do not believe the ~~new guidance and, based on our assessment, the~~future adoption of ~~the new guidance did not~~any such standards will have ~~any~~a material impact on our consolidated financial statements.

2. ~~SALE OF PEAK GOLD JV INTEREST~~ACQUISITIONS

Lawyers Royalty Acquisition

On ~~September 30, 2020,~~March 24, 2022, we ~~entered into~~acquired a 0.5% net smelter returns royalty (“NSR”) on production from the Lawyers Project, currently operated by Benchmark Metals Inc., which is located in British Columbia, Canada. As part of this transaction, we also acquired a right of first offer (“ROFO”) for an ~~agreement with an affiliate of Kinross~~existing 2.0% NSR royalty over the Ranch Project owned by Thesis Gold, ~~Corporation~~Inc. that is located adjacent to ~~sell our 40% membership interest~~the Lawyers Project. We paid $8.0 million in ~~the Manh Choh Project (formerly known as the Peak Gold Project) for~~ cash consideration ~~of $49.2~~for the royalty and ROFO to Guardsmen Resources Inc. The Lawyers Project acquisition has been accounted for as an asset acquisition. The $8.0 million ~~and to sell our 809,744 common shares in Contango Ore, Inc. (“Contango”), our partner in Peak Gold, LLC, the owner of the Manh Choh Project, for~~ cash consideration, ~~of $12.1 million.~~plus direct acquisition costs, have been recorded as an exploration stage royalty interest (Note 3) within Stream and royalty interests, net on our consolidated balance sheets.

~~In addition to the total cash consideration of $61.3 million, we received the following royalty interests:~~Khoemacau Silver Stream

●

An incremental 28% net smelter return royalty on silver produced from an area of interest which includes the current Manh Choh Project resource area. Peak Gold, LLC retains the right to acquire 50% of this royalty for consideration of $4.0 million; and

●

An incremental 1% net smelter return royalty on certain State of Alaska mining claims acquired by a wholly owned subsidiary of Contango in the transaction, increasing our royalty on this area from 2% to 3%.

On February 23, 2022, we made an advance payment of $10.0 million toward the option stream which increased our right to receive payable silver produced from Khoemaca

~~The royalties are~~u from 90% to 93%, and on March 14, 2022, we made our final advance payment of $16.5 million toward the option stream which increased our right to receive payable silver produced from 93% to 100%. Cumulative advance payments of $265 million, plus direct acquisition costs, have been recorded as ~~exploration~~a production stage ~~royalty interests in~~stream interest within Stream and royalty interests, net inon our consolidated balance ~~sheet as~~sheets.

As of ~~March 31, 2021~~June 30, 2022, $25.0 million of the subordinated debt facility, and ~~were assigned a combined value~~$3.5 million of ~~approximately $4.4 million~~accrued interest remains outstanding on the ~~date of the transaction.We recorded~~ Khoemaca ~~gain of $33.9 million on the sale of our 40% membership interest~~u subordinated debt facility, and these amounts are included in ~~the Manh Choh Project during the three months ended September 30, 2020. The mark-to-market increase of $3.6 million on the sale of~~Other assets in our ~~809,744~~

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ROYAL GOLD, INC.

Notes to Consolidated Financial Statements

(Unaudited)

~~common shares in Contango is included in~~ ~~Fair value changes in equity securities~~ consolidated balance sheets. Refer to our Transition Report for further details on ~~our consolidated statements of operations~~the Khoemacau silver stream acquisition and ~~comprehensive income and was recognized during the three months ended September 30, 2020.~~subordinated debt facility.

3. STREAM AND ROYALTY INTERESTS, NET

The following tables summarize our stream and royalty interests, net as of ~~March 31, 2021 and~~ June 30, ~~2020.~~2022 and December 31, 2021.


As of March 31, 2021 (Amounts in thousands):	Cost		Accumulated Depletion		Net
As of June 30, 2022 (Amounts in thousands):							Cost		Accumulated Depletion		Net
Production stage stream interests:
Mount Milligan	$	790,635	$	(283,660)	$	506,975	$	790,635	$	(369,245)	$	421,390
Pueblo Viejo		610,404		(235,169)		375,235		610,404		(274,189)		336,215
Andacollo		388,182		(124,225)		263,957		388,182		(146,235)		241,947
Khoemacau								265,911		(8,055)		257,856
Rainy River		175,727		(38,368)		137,359		175,727		(56,351)		119,376
Wassa		146,475		(76,131)		70,344		146,475		(90,625)		55,850
Other								69,101		(8,371)		60,730
Total production stage stream interests		2,111,423		(757,553)		1,353,870		2,446,435		(953,071)		1,493,364

Production stage royalty interests:
Voisey's Bay		205,724		(107,225)		98,499		205,724		(116,383)		89,341
Red Chris								116,187		(1,797)		114,390
Peñasquito		99,172		(48,765)		50,407		99,172		(55,399)		43,773
Cortez		80,681		(17,584)		63,097		80,681		(28,232)		52,449
Other		442,891		(377,642)		65,249		447,251		(392,962)		54,289
Total production stage royalty interests		828,468		(551,216)		277,252		949,015		(594,773)		354,242
Total production stage stream and royalty interests		2,939,891		(1,308,769)		1,631,122		3,395,450		(1,547,844)		1,847,606

Development stage stream interests:
Khoemacau		212,877		—		212,877
Other		12,037		—		12,037		12,038		—		12,038
Development stage royalty interests:
Côté								45,421		—		45,421
Other		73,416		—		73,416		62,796		—		62,796
Total development stage stream and royalty interests		298,330		—		298,330		120,255		—		120,255

Exploration stage stream interests:
NX Gold								34,253		—		34,253
Exploration stage royalty interests:
Pascua-Lama		177,690		—		177,690		177,690		—		177,690
Red Chris								48,895		—		48,895
Côté								29,610		—		29,610
Other		117,293		—		117,293		131,555		—		131,555
Total exploration stage royalty interests		294,983		—		294,983
Total exploration stage stream and royalty interests								422,003		—		422,003
Total stream and royalty interests, net	$	3,533,204	$	(1,308,769)	$	2,224,435	$	3,937,708	$	(1,547,844)	$	2,389,864

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ROYAL GOLD, INC.

Notes to Consolidated Financial Statements

(Unaudited)


As of June 30, 2020 (Amounts in thousands):	Cost		Accumulated Depletion		Impairments		Net
As of December 31, 2021 (Amounts in thousands):									Cost		Accumulated Depletion		Net
Production stage stream interests:
Mount Milligan	$	790,635	$	(236,352)	$	—	$	554,283	$	790,635	$	(336,921)	$	453,714
Pueblo Viejo		610,404		(203,935)		—		406,469		610,405		(260,321)		350,084
Andacollo		388,182		(110,521)		—		277,661		388,182		(139,035)		249,147
Khoemacau										239,411		(3,402)		236,009
Rainy River		175,727		(27,278)		—		148,449		175,727		(50,115)		125,612
Wassa		146,475		(67,619)		—		78,856		146,475		(84,915)		61,560
Other										69,101		(4,193)		64,908
Total production stage stream interests		2,111,423		(645,705)		—		1,465,718		2,419,936		(878,902)		1,541,034

Production stage royalty interests:
Voisey's Bay		205,724		(101,381)		—		104,343		205,724		(113,602)		92,122
Red Chris										116,187		—		116,187
Peñasquito		99,172		(44,614)		—		54,558		99,172		(53,022)		46,150
Cortez		80,681		(15,065)		—		65,616		80,681		(23,225)		57,456
Other		521,837		(426,931)		(1,341)		93,565		447,799		(387,364)		60,435
Total production stage royalty interests		907,414		(587,991)		(1,341)		318,082		949,563		(577,213)		372,350
Total production stage stream and royalty interests		3,018,837		(1,233,696)		(1,341)		1,783,800		3,369,499		(1,456,115)		1,913,384

Development stage stream interests:
Khoemacau		136,608		—		—		136,608
Other		12,037		—		—		12,037		12,037		—		12,037

Development stage royalty interests:
Côté										45,421		—		45,421
Other		70,952		—		—		70,952		54,755		—		54,755
Total development stage royalty interests		70,952		—		—		70,952
Total development stage stream and royalty interests		219,597		—		—		219,597		112,213		—		112,213

Exploration stage stream interests:
NX Gold										30,974		—		30,974
Exploration stage royalty interests:
Pascua-Lama		177,690		—		—		177,690		177,690		—		177,690
Red Chris										48,895		—		48,895
Côté										29,610		—		29,610
Other		137,826		—		—		137,826		130,986		—		130,986
Total exploration stage royalty interests		315,516		—		—		315,516
Total exploration stage stream and royalty interests										418,155		—		418,155
Total stream and royalty interests, net	$	3,553,950	$	(1,233,696)	$	(1,341)	$	2,318,913	$	3,899,867	$	(1,456,115)	$	2,443,752

~~Separation of the Wassa and Prestea and Bogoso Stream Agreement~~

~~On October 1, 2020, we announced the separation~~4. MARKETABLE EQUITY SECURITIES

As of ~~the Wassa gold stream and the Prestea and Bogoso gold streams into two separate stream agreements effective September~~June 30, ~~2020. This separation was completed~~2022, our marketable equity securities include warrants to ~~facilitate the sale by Golden Star Resources Ltd. (“Golden Star”)~~purchase up to 19,640,000 common shares of ~~the Prestea and Bogoso mines to Future Global Resources (“FGR”).~~TriStar Gold Inc. Our marketable equity securities are measured at fair value (Note 11) each reporting period with any changes in fair value recognized in net income.

The ~~Wassa stream agreement, which remains with Golden Star, continues to provide us~~fair value of our marketable equity securities decreased $2.2 million and $1.6 million for the ~~right to purchase 10.5%~~three and six months ended June 30, 2022, respectively, and increased $2.0 million and $3.9 million for the three and six months ended June 30, 2021, respectively. These changes are included in Fair value changes in equity securities on our consolidated statements of ~~the gold payable from the Wassa mine until the delivery~~operations and comprehensive income. The carrying value of ~~240,000 ounces, after which the stream percentage will decrease to 5.5%. The cash purchase price for gold remains at 20%~~our marketable equity securities as of ~~the spot price per ounce delivered until the delivery of 240,000 ounces,~~June 30, 2022 and ~~30% of the spot price per ounce delivered thereafter. As of March~~December 31, 2021, ~~approximately 115,700 ounces remain to be delivered from the Wassa mine until the 240,000 ounce delivery threshold~~was $0.2 million and $1.7 million, respectively, and is ~~reached.~~

~~The Prestea and Bogoso stream agreement with FGR provides us the right to purchase 5.5% of the gold payable from the Prestea and Bogoso mines~~included in ~~return for a cash purchase price of 30% of the spot price per ounce delivered.~~

The material terms of both the Wassa stream agreement and the Prestea and Bogoso stream agreement, including security and the rights and obligations of both Royal Gold and Golden Star, remain substantially consistent with those terms in the original agreement. The Wassa stream is recorded as a production stage stream interest within ~~Stream and royalty interests, net~~Other assets on our consolidated balance ~~sheets and has a carrying value of $70.3 million as of March 31, 2021.~~sheets.

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ROYAL GOLD, INC.

Notes to Consolidated Financial Statements

(Unaudited)

~~COVID-19 Pandemic~~

Throughout calendar 2020 and into calendar 2021, several of our operating counterparties have instituted temporary operational curtailments due to the ongoing COVID-19 pandemic. In addition, the pandemic and resulting economic and societal impacts have made it difficult for operators to forecast expected production amounts and, at times, operators have had to withdraw or revise previously disclosed guidance. For the most part, our results of operations and financial condition have not been materially impacted by these measures to date. However, the effects of the pandemic will ultimately depend on many factors that are outside of our control, including the severity and duration of the pandemic, government and operator actions in response to the pandemic, and the development, availability, and public acceptance of effective treatments and vaccines. As a result, we are currently unable to predict the nature or extent of any future impact on our results of operations and financial condition. We continue to monitor the impact of developments associated with the pandemic on stream and royalty interests as part of our regular asset impairment analysis.

~~4. MARKETABLE EQUITY SECURITIES~~

As of March 31, 2021, our marketable equity securities include 3,949,575 common shares of Battle North Gold Corporation (“Battle North Gold”), and warrants to purchase up to 19,640,000 common shares of TriStar Gold Inc. Our marketable equity securities are measured at fair value (Note 12) each reporting period with any changes in fair value recognized in net income.

On March 15, 2021, Evolution Mining Limited announced it had entered into a definitive arrangement with Battle North Gold to acquire all of the issued and outstanding shares of Battle North Gold at a price of $2.65 Canadian dollars per common share, payable in cash. The transaction remains subject to the affirmative vote of Battle North Gold’s shareholders, which is expected to be held in May 2021, and is expected to close during the quarter ending June 30, 2021.

As discussed in Note 2, on September 30, 2020, we sold 809,744 common shares of Contango for total consideration of $12.1 million and recorded a mark-to-market increase of $3.6 million on the sale, which is included in ~~Fair value changes in equity securities~~ ~~in our consolidated statement of operations and comprehensive income for the nine months ended March 31, 2021.~~

~~The fair value of our marketable equity securities increased $1.9 million and $4.0 million for the three and nine months ended March 31, 2021, respectively, and are included in~~ ~~Fair value changes in equity securities~~ on our consolidated statements of operations and comprehensive income. The carrying value of our marketable equity securities as of March 31, 2021 and June 30, 2020 was $9.8 million and $17.9 million, respectively, and is included in ~~Other assets~~ ~~on our consolidated balance sheets.~~

5. DEBT

~~Our debt as of March 31, 2021 and June 30, 2020 consists of the following:~~

As of March 31, 2021

As of June 30, 2020


Principal

Debt Issuance Costs

Total

Principal

Debt Issuance Costs

Total

(Amounts in thousands)

(Amounts in thousands)
Revolving credit facility

$
150,000

$
(3,730)

$
146,270

$
305,000

$
(4,561)

$
300,439
Total debt

$
150,000

$
(3,730)

$
146,270

$
305,000

$
(4,561)

$
300,439

Revolving credit facility

As of ~~March 31, 2021,~~June 30, 2022, we had ~~$150 million~~0 amounts outstanding ~~and $850 million available under our revolving credit facility. The interest rate on borrowings~~ under our revolving credit facility dated June 2, 2017, and as ~~of March 31, 2021 was LIBOR plus 1.10% for an all-in rate of 1.34%.~~amended. Interest expense, which includes interest on outstanding borrowings and amortization of debt issuance costs, was ~~$0.8~~$0.2 million and ~~$3.0~~$0.5 million for the three and ~~nine~~six months ended ~~March 31, 2021,~~June 30, 2022, respectively, and ~~$1.2~~$0.3 million and ~~$5.0~~$1.1 million for the three and ~~nine~~six months ended ~~March 31, 2020,~~June 30, 2021, respectively. ~~As discussed in Note 6 to the consolidated financial statements in our Fiscal 2020 10-K, we have financial covenants associated with our revolving credit facility. As of March 31, 2021, we~~We were in compliance with each financial ~~covenant.~~

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~~ROYAL GOLD, INC.~~

~~Notes to Consolidated Financial Statements~~

~~(Unaudited)~~

~~On April 1, 2021, we repaid~~covenant (leverage ratio and interest coverage ratio) under the ~~remaining outstanding borrowings ($150 million) under our revolving credit facility. This increased the amount available under our~~ revolving credit facility ~~to $1 billion and decreased the amount outstanding to 0.~~as of June 30, 2022.

~~Royal Gold~~We may repay any borrowings under ~~our~~the revolving credit facility at any time without premium or penalty. ~~Our revolving credit facility matures on June 3, 2024.~~

~~6. LEASES~~

Our significant lease arrangements relate to our office spaces. These arrangements are for leases of assets such as corporate office space and office equipment. We lease office space and office equipment under operating leases expiring at various dates through the fiscal year ending June 30, 2030. The following amounts were recorded in the consolidated balance sheets at March 31, 2021 (amounts in thousands):

Classification

March 31, 2021
Operating Leases

Right-of-use assets - current

Prepaid expenses and other

$
805
Right-of-use assets - non-current

Other assets

6,206
Total right-of-use assets

$
7,011

Lease liabilities - current

Other current liabilities

$
952
Lease liabilities - non-current

Other long-term liabilities

7,403
Total operating lease liabilities

$
8,355

~~Maturities of operating lease liabilities at March 31, 2021 were as follows (amounts in thousands):~~

Fiscal Years:

Operating Leases
2021

$
287
2022

1,143
2023

1,120
2024

1,120
2025

1,083
Thereafter

4,533
Total lease payments

$
9,286
Less imputed interest

(931)
Total

$
8,355

~~Other information pertaining to leases consists of the following:~~


	~~March 31, 2021~~
~~Operating Lease Term and Discount Rate~~
~~Weighted average remaining lease term in years~~		~~8.5~~
~~Weighted average discount rate~~		~~2.5%~~

~~We did not have any finance leases as of March 31, 2021.~~

7.6. REVENUE

Revenue Recognition

~~Under U.S. GAAP guidance, a~~A performance obligation is a promise in a contract to transfer control of a distinct good or service (or integrated package of goods and/or services) to a customer. A contract’s transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, a performance obligation is satisfied. In accordance with this guidance, revenue attributable to our stream interests and royalty interests is generally recognized at the point in

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~~ROYAL GOLD, INC.~~

~~Notes to Consolidated Financial Statements~~

~~(Unaudited)~~

time that control of the related metal production transfers to our customers. The amount of revenue we recognize further reflects the consideration to which we are entitled under the respective stream or royalty agreement. A more detailed summary of our revenue recognition policies for our stream and royalty interests is discussed below.

Stream Interests

A metal stream is a purchase agreement that provides, in exchange for an upfront deposit payment, the right to purchase all or a portion of one or more of the metals produced from a mine, at a price determined for the life of the transaction by the purchase agreement. Gold, silver and copper received under our metal streaming agreements are taken into inventory, and then sold primarily using average spot rate gold, silver and copper forward contracts. The sales price for these average spot rate forward contracts is determined by the average daily gold, silver or copper spot prices during the term of the contract, typically a consecutive number of trading days between ten days and three months (depending on the frequency of deliveries under the respective streaming agreement and our sales policy in effect at the time) commencing shortly after receipt and purchase of the metal. We settle our forward sales contracts via physical delivery of the metal to the purchaser (our customer) on the settlement date specified in the contract. Under our forward sales contracts, there is a single performance obligation to sell a contractually specified volume of metal to the purchaser, and we satisfy this obligation at the point in time of physical delivery. Accordingly, revenue from our metal sales is recognized on the date of settlement, which is the date that control, custody and title to the metal transfer to the purchaser.

Royalty Interests

Royalties are non-operating interests in mining projects that provide the right to a percentage of revenue or metals produced from the project after deducting specified costs, if any. We are entitled to payment for our royalty interest in a mining project based on a contractually specified commodity price (for example, a monthly or quarterly average spot price) for the period in which metal production occurs. As a royalty holder, we act as a passive entity in the production and operations of the mining project, and the third-party operator of the mining project is responsible for all mining activities, including subsequent marketing and delivery of all metal production to their ultimate customer. In all of our material royalty interest arrangements, we have concluded that we transfer control of our interest in the metal production to the operator at the point at which production occurs, and thus, the operator is our customer. We have further determined that the transfer of each unit of metal production comprising our royalty interest to the operator represents a separate performance obligation under the contract, and each performance obligation is satisfied at the point in time of metal production by the operator. Accordingly, we recognize revenue attributable to our royalty interests in the period in which metal production occurs at the specified commodity price per the agreement, net of any contractually allowable ~~offsite treatment, refining, transportation and, if applicable, mining~~ costs.

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ROYAL GOLD, INC.

Notes to Consolidated Financial Statements

(Unaudited)

Royalty Revenue Estimates

For a small number of our royalty interests, we may not receive, or be entitled to receive, payment information, including production information from the operator, for the period in which metal production occurred prior to issuance of our financial statements for that period. As a result, we may estimate revenue for these royalties based on available information, including public information, from the operator. If adequate information is not available from the operator or from other public sources before we issue our financial statements, we will recognize royalty revenue during the period in which the necessary payment information is received. Differences between estimates and actual amounts could differ significantly and are recorded in the period that the actual amounts are known. Please also refer to our “Use of Estimates” accounting policy discussed in our ~~Fiscal 2020 10-K.~~Transition Report. For the three ~~and nine~~ months ended ~~March 31, 2021,~~June 30, 2022, royalty revenue that was estimated or was attributable to metal production for a period prior to ~~March 31, 2021,~~June 30, 2022, was not material.

Disaggregation of Revenue

We have identified 2 material revenue sources in our business: stream interests and royalty interests. These identified revenue sources are consistent with our reportable segments as discussed in Note ~~11.~~10.

Revenue by metal type attributable to each of our revenue sources is disaggregated as follows (amounts in thousands):


	Three Months Ended				Six Months Ended
	June 30,		June 30,		June 30,		June 30,
	2022		2021		2022		2021
Stream revenue:
Gold	$	75,325	$	91,187	$	152,827	$	156,698
Silver		12,892		8,449		24,331		21,255
Copper		16,662		14,785		32,972		31,814
Total stream revenue	$	104,879	$	114,421	$	210,130	$	209,767
Royalty revenue:
Gold	$	28,974	$	37,164	$	66,890	$	68,409
Silver		3,512		4,356		7,829		8,564
Copper		3,281		3,977		9,986		7,993
Other		5,795		8,109		13,961		15,883
Total royalty revenue	$	41,562	$	53,606	$	98,666	$	100,849
Total revenue	$	146,441	$	168,027	$	308,796	$	310,616

Revenue attributable to our principal stream and royalty interests is disaggregated as follows (amounts in thousands):


		Three Months Ended				Six Months Ended
		June 30,		June 30,		June 30,		June 30,
	Metal(s)	2022		2021		2022		2021
Stream revenue:
Mount Milligan	Gold & Copper	$	45,627	$	43,802	$	88,043	$	77,606
Pueblo Viejo	Gold & Silver		19,812		26,585		43,076		56,759
Andacollo	Gold		11,721		27,868		27,395		40,889
Wassa	Gold		8,248		7,129		15,451		15,902
Khoemacau	Silver		5,203		—		7,591		—
Other	Gold & Silver		14,268		9,037		28,574		18,611
Total stream revenue		$	104,879	$	114,421	$	210,130	$	209,767
Royalty revenue:
Peñasquito	Gold, Silver, Lead & Zinc	$	9,664	$	13,399	$	22,758	$	26,527
Cortez	Gold		8,138		13,739		24,852		22,348
Other	Various		23,760		26,468		51,056		51,974
Total royalty revenue		$	41,562	$	53,606	$	98,666	$	100,849
Total revenue		$	146,441	$	168,027	$	308,796	$	310,616

Please refer to Note 10 for the geographical distribution of our revenue by reportable segment.

1211

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ROYAL GOLD, INC.

Notes to Consolidated Financial Statements

(Unaudited)

~~Revenue by metal type attributable to each of our revenue sources is disaggregated as follows (amounts in thousands):~~

Three Months Ended

Nine Months Ended

March 31,

March 31,

March 31,

March 31,

2021

2020

2021

2020
Stream revenue:

Gold
$
65,511

$
78,503

$
232,793

$
219,838
Silver

12,805

8,284

34,832

25,648
Copper

17,030

10,673

41,943

28,579
Total stream revenue
$
95,346

$
97,460

$
309,568

$
274,065
Royalty revenue:

Gold
$
31,245

$
28,792

$
94,620

$
72,617
Silver

4,208

2,666
��

11,842

7,860
Copper

4,015

3,340

12,471

10,427
Other

7,775

4,179

19,328

13,884
Total royalty revenue
$
47,243

$
38,977

$
138,261

$
104,788
Total revenue
$
142,589

$
136,437

$
447,829

$
378,853

~~Revenue attributable to our principal stream and royalty interests is disaggregated as follows (amounts in thousands):~~

Three Months Ended

Nine Months Ended

March 31,

March 31,

March 31,

March 31,

Metal(s)

2021

2020

2021

2020
Stream revenue:

Mount Milligan

Gold & Copper

$
33,803

$
32,298

$
113,135

$
93,423
Pueblo Viejo

Gold & Silver

30,173

28,302

88,998

73,534
Andacollo

Gold

13,022

22,055

54,297

63,324
Wassa

Gold

8,774

8,647

24,644

18,760
Other

Gold & Silver

9,574

6,158

28,494

25,024
Total stream revenue

$
95,346

$
97,460

$
309,568

$
274,065
Royalty revenue:

Peñasquito

Gold, Silver, Lead & Zinc

$
13,128

$
7,425

$
36,289

$
19,422
Cortez

Gold

8,609

6,400

22,421

14,109
Other

Various

25,506

25,152

79,551

71,257
Total royalty revenue

$
47,243

$
38,977

$
138,261

$
104,788
Total revenue

$
142,589

$
136,437

$
447,829

$
378,853

~~Please refer to Note 11 for the geographical distribution of our revenue by reportable segment.~~

8.7. STOCK-BASED COMPENSATION

We recognized stock-based compensation expense as ~~follows:~~follows (amounts in thousands):


	Three Months Ended				Nine Months Ended				Three Months Ended				Six Months Ended
	March 31,		March 31,		March 31,		March 31,		June 30,		June 30,		June 30,		June 30,
	2021		2020		2021		2020		2022		2021		2022		2021

		(Amounts in thousands)				(Amounts in thousands)
Stock options	$	17	$	94	$	50	$	151
Stock appreciation rights		430		1,365		1,231		2,237
Restricted stock		533		2,659		2,118		4,599	$	1,201	$	550	$	2,356	$	1,082
Performance stock		364		526		837		1,296		847		479		1,478		844
Stock appreciation rights										360		446		692		876
Stock options										10		18		16		35
Total stock-based compensation expense	$	1,344	$	4,644	$	4,236	$	8,283	$	2,418	$	1,493	$	4,542	$	2,837

Stock-based compensation expense is included within General and administrative expense in the consolidated statements of operations and comprehensive income.

~~Table of Contents~~

~~ROYAL GOLD, INC.~~

~~Notes to Consolidated Financial Statements~~

~~(Unaudited)~~

There were 0 awards granted during the three months ended June 30, 2022 and 2021. During the ~~three and nine~~six months ended ~~March 31,~~June 30, 2022 and 2021, ~~and 2020,~~ we granted the following stock-based compensation awards:


	Three Months Ended		Nine Months Ended			Six Months Ended
	March 31,	March 31,	March 31,	March 31,		June 30,		June 30,
	2021	2020	2021	2020	2022		2021

	(Number of shares)		(Number of shares)			(Number of shares)
Stock options	—	—	2,860	1,604
Stock appreciation rights	—	6,890	64,100	53,616
Performance stock (at maximum 200% attainment)						39,380		—
Restricted stock	—	2,050	26,104	26,026		28,220		—
Performance stock (at maximum 200% attainment)	—	4,280	35,380	32,840
Total equity awards granted	—	13,220	128,444	114,086		67,600		—

As of ~~March 31, 2021,~~June 30, 2022, unrecognized compensation expense (expressed in thousands below) and weighted-average vesting period for each of our stock-based compensation awards were as follows:


	Unrecognized		Weighted-		Unrecognized		Weighted-
	compensation		average vesting		compensation		average vesting
	expense		period (years)		expense		period (years)
Stock options	$	108		2.1
Stock appreciation rights		2,790		2.0
Restricted stock		4,551		3.3	$	8,347		2.4
Performance stock		2,050		1.7		6,039		2.2
Stock appreciation rights						964		1.1
Stock options						33		1.1

9.8. EARNINGS PER SHARE (“EPS”)

Basic EPS ~~were~~was computed using the weighted average number of shares of common stock outstanding during the period, considering the effect of participating securities. Unvested stock-based compensation awards that contain non-forfeitable rights to dividends or dividend equivalents are considered participating securities and are included in the computation of EPS pursuant to the two-class method. Our unvested restricted stock awards contain non-forfeitable dividend rights and participate equally with common stock with respect to dividends issued or declared. Our unexercised stock option awards, unexercised stock-settled stock appreciation rights and unvested performance stock do not contain rights to dividends. Under the two-class method, the earnings used to determine basic EPS are reduced by an amount allocated to participating securities. Use of the two-class method has an immaterial impact on the calculation of basic and diluted EPS.

~~The following tables summarize the effects of dilutive securities on diluted EPS for the period (amounts in thousands, except share data):~~

Three Months Ended

Nine Months Ended

March 31,

March 31,

March 31,

March 31,


2021

2020

2021

2020
Net income attributable to Royal Gold common stockholders

$
54,026

$
38,554

$
220,855

$
150,329
Weighted-average shares for basic EPS

65,550,400

65,511,878

65,544,978

65,501,678
Effect of other dilutive securities

71,203

88,892

79,494

124,722
Weighted-average shares for diluted EPS

65,621,603

65,600,770

65,624,472

65,626,400
Basic EPS

$
0.82

$
0.59

$
3.36

$
2.30
Diluted EPS

$
0.82

$
0.59

$
3.36

$
2.29

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ROYAL GOLD, INC.

Notes to Consolidated Financial Statements

(Unaudited)

The following tables summarize the effects of dilutive securities on diluted EPS for the periods shown below (amounts in thousands, except share data):


	Three Months Ended				Six Months Ended
	June 30,		June 30,		June 30,		June 30,
	2022		2021		2022		2021
Net income attributable to Royal Gold common stockholders	$	71,140	$	81,677	$	136,816	$	135,705
Weighted-average shares for basic EPS		65,569,190		65,550,682		65,567,621		65,550,542
Effect of other dilutive securities		109,130		86,282		94,032		78,742
Weighted-average shares for diluted EPS		65,678,320		65,636,964		65,661,653		65,629,284
Basic EPS	$	1.08	$	1.24	$	2.08	$	2.07
Diluted EPS	$	1.08	$	1.24	$	2.08	$	2.07

~~10.~~9. INCOME TAXES


	Three Months Ended				Nine Months Ended				Three Months Ended				Six Months Ended
	March 31,		March 31,		March 31,		March 31,		June 30,		June 30,		June 30,		June 30,
	2021		2020		2021		2020		2022		2021		2022		2021

	(Amounts in thousands, except rate)				(Amounts in thousands, except rate)
Income tax expense (benefit)	$	17,679	$	8,702	$	31,332	$	(3,700)
Income tax benefit (expense)									$	5,911	$	(5,536)	$	(9,393)	$	(23,214)
Effective tax rate		24.6%		18.5%		12.4%		(2.6)%		9.0%		(6.3%)		(6.4%)		(14.6%)

The effective tax rate for the three and six months ended ~~March 31, 2021,~~June 30, 2022, included ana discrete income tax ~~expense~~benefit of $18.8 million attributable to ~~an increase in~~the release of a valuation allowance on certain deferred tax assets. The effective tax rate for the three and six months ended ~~March 31, 2020, included income tax benefits resulting from foreign exchange rate movements compared to the U.S. dollar.~~

~~The effective tax rate for the nine months ended March 31,~~June 30, 2021, included a discrete tax ~~benefits ($21.8 million) primarily~~benefit of $11.5 million attributable to the settlement of an uncertain tax position with a foreign jurisdiction and the release of a valuation allowance related to deferred tax assets. The effective tax rate for the nine months ended March 31, 2020, included discrete benefits ($32.3 million) attributable to the remeasurement of certain deferred tax assets and a net step-up in the basis of tax assets due to the enactment of the Federal Act on Tax Reform and AHV Financing (Swiss Tax Reform).

jurisdiction.

~~11.~~10. SEGMENT INFORMATION

We manage our business under 2 reportable segments, consisting of the acquisition and management of stream interests and the acquisition and management of royalty interests. ~~Royal Gold’s~~Our long-lived assets (stream and royalty interests, net) are geographically distributed as shown in the following table (amounts in thousands):


	As of March 31, 2021						As of June 30, 2020						As of June 30, 2022						As of December 31, 2021
					Total stream						Total stream						Total stream						Total stream
	Stream		Royalty		and royalty		Stream		Royalty		and royalty		Stream		Royalty		and royalty		Stream		Royalty		and royalty
	interest		interest		interests, net		interest		interest		interests, net		interest		interest		interests, net		interest		interest		interests, net
Canada	$	644,334	$	181,382	$	825,716	$	702,732	$	189,855	$	892,587	$	540,766	$	414,496	$	955,262	$	579,326	$	412,419	$	991,745
Chile														241,947		224,116		466,063		249,147		224,116		473,263
Dominican Republic		375,235		—		375,235		406,469		—		406,469		336,215		—		336,215		350,083		—		350,083
Chile		263,957		224,116		488,073		277,661		223,922		501,583
Africa		283,221		321		283,542		215,463		321		215,784		313,707		321		314,028		297,569		321		297,890
United States														—		101,921		101,921		—		107,761		107,761
Mexico		—		69,440		69,440		—		75,951		75,951		—		55,877		55,877		—		60,977		60,977
United States		—		114,776		114,776		—		159,445		159,445
Australia		—		28,484		28,484		—		30,006		30,006		—		26,861		26,861		—		27,496		27,496
Rest of world		12,037		27,132		39,169		12,038		25,050		37,088		107,020		26,617		133,637		107,920		26,617		134,537
Total	$	1,578,784	$	645,651	$	2,224,435	$	1,614,363	$	704,550	$	2,318,913	$	1,539,655	$	850,209	$	2,389,864	$	1,584,045	$	859,707	$	2,443,752

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ROYAL GOLD, INC.

Notes to Consolidated Financial Statements

(Unaudited)

Our reportable segments for purposes of assessing performance are shown below (amounts in thousands):


	Three Months Ended March 31, 2021										Three Months Ended June 30, 2022
	Revenue		Cost of sales⁽¹⁾		Production taxes		Depletion ⁽²⁾		Segment gross profit		Revenue		Cost of sales⁽¹⁾		Production taxes		Depletion ⁽²⁾		Segment gross profit
Stream interests	$	95,346	$	21,469	$	—	$	32,595	$	41,282	$	104,879	$	23,810	$	—	$	37,790	$	43,279
Royalty interests		47,243		—		1,835		8,607		36,801		41,562		—		1,425		6,075		34,062
Total	$	142,589	$	21,469	$	1,835	$	41,202	$	78,083	$	146,441	$	23,810	$	1,425	$	43,865	$	77,341

	Three Months Ended March 31, 2020										Three Months Ended June 30, 2021
	Revenue		Cost of sales⁽¹⁾		Production taxes		Depletion ⁽²⁾		Segment gross profit		Revenue		Cost of sales⁽¹⁾		Production taxes		Depletion ⁽²⁾		Segment gross profit
Stream interests	$	97,460	$	21,961	$	—	$	43,240	$	32,259	$	114,421	$	24,668	$	—	$	38,746	$	51,007
Royalty interests		38,977		—		851		7,875		30,251		53,606		—		2,152		9,190		42,264
Total	$	136,437	$	21,961	$	851	$	51,115	$	62,510	$	168,027	$	24,668	$	2,152	$	47,936	$	93,271

Nine Months Ended March 31, 2021


Revenue

Cost of sales⁽¹⁾

Production taxes

Depletion ⁽²⁾

Segment gross profit
Stream interests

$
309,568

$
68,230

$
—

$
111,848

$
129,490
Royalty interests

138,261

—

4,591

23,428

110,242
Total

$
447,829

$
68,230

$
4,591

$
135,276

$
239,732

Nine Months Ended March 31, 2020


Revenue

Cost of sales⁽¹⁾

Production taxes

Depletion ⁽²⁾

Segment gross profit
Stream interests

$
274,065

$
63,149

$
—

$
106,883

$
104,033
Royalty interests

104,788

—

2,934

22,875

78,979
Total

$
378,853

$
63,149

$
2,934

$
129,758

$
183,012


	Six Months Ended June 30, 2022
	Revenue		Cost of sales⁽¹⁾		Production taxes		Depletion ⁽²⁾		Segment gross profit
Stream interests	$	210,130	$	46,450	$	—	$	74,169	$	89,511
Royalty interests		98,666		—		3,646		17,561		77,459
Total	$	308,796	$	46,450	$	3,646	$	91,730	$	166,970

	Six Months Ended June 30, 2021
	Revenue		Cost of sales⁽¹⁾		Production taxes		Depletion ⁽²⁾		Segment gross profit
Stream interests	$	209,767	$	46,137	$	—	$	71,341	$	92,289
Royalty interests		100,849		—		3,987		17,797		79,065
Total	$	310,616	$	46,137	$	3,987	$	89,138	$	171,354

(1)	Excludes depreciation, depletion and amortization

(2)	Depletion amounts are included within Depreciation, depletion and amortization on our consolidated statements of operations and comprehensive income.

A reconciliation of total segment gross profit to the consolidated Income before income taxes is shown below (amounts in thousands):


	Three Months Ended				Nine Months Ended				Three Months Ended				Six Months Ended
	March 31,		March 31,		March 31,		March 31,		June 30,		June 30,		June 30,		June 30,
		2021		2020		2021		2020		2022		2021		2022		2021
Total segment gross profit	$	78,083	$	62,510	$	239,732	$	183,012	$	77,341	$	93,271	$	166,970	$	171,354

Costs and expenses
General and administrative expenses		6,932		9,551		21,175		23,658		9,312		7,212		18,243		14,143
Exploration costs		—		565		563		4,705
Depreciation and amortization		94		113		265		280		124		92		246		186
Gain on sale of Peak Gold JV interest		—		—		(33,906)		—
Operating income		71,057		52,281		251,635		154,369		67,905		85,967		148,481		157,025
Fair value changes in equity securities		1,902		(3,819)		4,060		(4,972)		(2,191)		1,957		(1,577)		3,859
Interest and other income		733		620		1,767		1,621		1,118		676		2,093		1,409
Interest and other expense		(1,820)		(2,088)		(5,274)		(7,139)		(1,398)		(1,145)		(2,296)		(2,965)
Income before income taxes	$	71,872	$	46,994	$	252,188	$	143,879	$	65,434	$	87,455	$	146,701	$	159,328

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ROYAL GOLD, INC.

Notes to Consolidated Financial Statements

(Unaudited)

Our revenue by reportable segment for the three and ~~nine~~six months ended ~~March 31,~~June 30, 2022 and 2021 ~~and 2020~~ is geographically distributed as shown in the following table (amounts in thousands):


	Three Months Ended				Nine Months Ended				Three Months Ended				Six Months Ended
	March 31,		March 31,		March 31,		March 31,		June 30,		June 30,		June 30,		June 30,
	2021		2020		2021		2020		2022		2021		2022		2021
Stream interests:
Canada	$	42,609	$	37,136	$	138,497	$	112,990	$	54,591	$	52,040	$	106,077	$	94,649
Dominican Republic		30,173		28,302		88,998		73,534		19,812		26,585		43,076		56,759
Africa										14,540		7,928		25,375		17,470
Chile		13,022		22,055		54,296		63,323		11,721		27,868		27,395		40,889
Africa		9,542		9,967		27,777		24,218
Rest of world										4,215		—		8,207		—
Total stream interests	$	95,346	$	97,460	$	309,568	$	274,065	$	104,879	$	114,421	$	210,130	$	209,767

Royalty interests:
United States	$	16,474	$	13,199	$	47,262	$	33,813	$	16,845	$	21,349	$	41,202	$	37,823
Mexico		15,270		9,126		42,021		26,084		11,940		16,191		27,821		31,461
Canada										5,773		9,601		16,551		18,213
Australia		4,360		9,160		17,217		24,923		4,040		4,249		8,086		8,610
Canada		8,612		3,714		22,069		11,062
Africa		748		925		2,241		2,531		114		559		430		1,307
Rest of world		1,779		2,853		7,451		6,375		2,850		1,657		4,576		3,435
Total royalty interests	$	47,243	$	38,977	$	138,261	$	104,788	$	41,562	$	53,606	$	98,666	$	100,849
Total revenue	$	142,589	$	136,437	$	447,829	$	378,853	$	146,441	$	168,027	$	308,796	$	310,616

~~12.~~11. FAIR VALUE MEASUREMENTS

Fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. As a basis for considering such assumptions, we utilize a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows:

Level 1: Quoted prices for identical instruments in active markets;

Level 2: Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets; and

Level 3: Prices or valuation techniques requiring inputs that are both significant to the fair value measurement and unobservable (supported by little or no market activity).

The following table sets forth our financial assets measured at fair value on a recurring basis (at least annually) by level within the fair value hierarchy.


	As of March 31, 2021										As of June 30, 2022
			Fair Value										Fair Value
	Carrying Amount		Total		Level 1		Level 2		Level 3		Carrying Value		Total		Level 1		Level 2		Level 3
Assets (amounts in thousands):
Marketable equity securities⁽¹⁾	$	9,777	$	9,777	$	8,155	$	1,622	$	—	$	155	$	155	$	—	$	155	$	—

(1) Included in Other assets on our consolidated balance sheets.

~~Our marketable equity securities classified within Level 1 of the fair value hierarchy are valued using quoted market prices in active markets multiplied by the quantity of shares held.~~ The TriStar Gold Inc. warrants (Note 4) classified within Level 2 of the fair value hierarchy are model-derived (Black-Scholes) valuations in which the significant inputs are observable in active markets. The carrying value of our revolving credit facility (Note 5) approximates fair value as of ~~March 31, 2021.~~June 30, 2022.

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ROYAL GOLD, INC.

Notes to Consolidated Financial Statements

(Unaudited)

As of ~~March 31, 2021,~~June 30, 2022, we had assets that, under certain conditions, are subject to measurement at fair value on a non-recurring basis like those associated with stream and royalty interests, intangible assets and other long-lived assets. For these assets, measurement at fair value in periods subsequent to their initial recognition is applicable if any of these assets are determined to be impaired. If recognition of these assets at their fair value becomes necessary, such measurements will be determined utilizing Level 3 inputs.

~~13.~~12. COMMITMENTS AND CONTINGENCIES

~~Khoemac~~a~~u Silver Stream Acquisition~~NX Gold Exploration Payment

~~Our Khoemac~~au silver stream transaction closed in February 2019. Between November 2019 and January 2021, we completed a total of $212 million in advanced payments required to earn the base silver stream of 80% of payable silver under our conditional funding schedule:

●

~~$65.8 million – November 5, 2019~~

●

~~$22.0 million – February 2, 2020~~

●

~~$47.9 million – April 3, 2020~~

●

~~$11.1 million – July 5, 2020~~

●

~~$32.5 million – October 5, 2020~~

●

~~$32.6 million – January 6, 2021~~

On ~~April 7, 2021,~~March 22, 2022, we made a ~~seventh advance~~ payment of ~~$10.6 million toward the option silver stream which increased our right to receive payable silver produced from Khoemac~~a~~u from a rate of 80% to 84% until the delivery of approximately 33.6 million silver ounces, and 42% (from 40%) thereafter. Additionally, on April 7, 2021, Khoemac~~au Copper Mining (Pty.) Limited (“KCM”) drew $18.0 million on a $25.0 million subordinated debt facility provided by Royal Gold. The subordinated debt facility has a term of seven years, carries interest at a rate of LIBOR +11% and requires mandatory repayment upon certain events.

~~Royal Gold has remaining committed funding of $49.4~~$3.2 million to ~~KCM in~~a subsidiary of Ero Copper Corporation (“Ero”) as part of our commitment to support the ~~form~~achievement of ~~$42.4~~success-based targets related to regional exploration and mineral resource additions. This payment has been recorded to exploration stage stream interests (Note 3) within Stream and royalty interests, net on our consolidated balance sheets. As of June 30, 2022, $6.8 million of ~~additional stream financing~~advance payments remain if Ero meets certain success-based targets related to regional exploration and ~~$7.0 million of debt, both of which may be drawn at the election of KCM prior to the completion of construction.~~mineral resource additions through calendar 2024. Refer to our ~~Fiscal 2020 10-K~~Transition Report for further ~~details~~information on the ~~Khoemac~~a~~u silver~~NX Gold stream ~~acquisition and subordinated debt facility.~~acquisition.

Ilovica Gold Stream Acquisition

As of ~~March 31, 2021,~~June 30, 2022, our conditional funding schedule of $163.75 million, as part of the Ilovica gold stream acquisition entered into in October 2014, remains subject to certain conditions.

13. SUBSEQUENT EVENTS

Acquisition of Additional Royalty Interest on Cortez Complex

On August 2, 2022, we announced that we acquired a sliding-scale gross royalty (the “Cortez Royalty”) on an area including the Cortez mine operational area and the Fourmile development project in Nevada (the “Cortez Complex”). We paid $525 million in cash consideration for the Cortez Royalty to Kennecott Royalty Company, a wholly owned subsidiary of Rio Tinto European Holdings Limited. The area within the Cortez Complex is owned or controlled by Nevada Gold Mines LLC (“NGM”), a joint venture between Barrick Gold Corporation (“Barrick”) (61.5% owner and operator) and Newmont Corporation (38.5% owner), with the exception of the Fourmile project which is 100% owned and operated by Barrick.

The Cortez Royalty is a life of mine sliding scale gross royalty payable at a rate of 0% at a gold price less than $400 per ounce, increasing to 3% at a gold price above $900 per ounce, and is payable on 40% of all production from the Cortez Complex. The Cortez Royalty does not cover the existing deposits within the Robertson property. At current gold prices the Cortez Royalty is an effective 1.2% gross royalty on the Cortez Complex and is not subject to any stepdowns or caps.

The Cortez Royalty is payable after cumulative production from the Cortez Complex of 15 million gold equivalent ounces from January 1, 2008 onwards. According to Barrick public disclosure, cumulative production from January 1, 2008, was approximately 14.8 million ounces as of June 30, 2022.

The purchase price was funded with debt and available cash on hand. In anticipation of this acquisition, we borrowed $500 million under our revolving credit facility in July 2022, leaving $500 million available. Per our credit facility dated June 2, 2017, as amended, the borrowing was under a Base Rate loan option with an all-in interest rate of approximately 5.6%. We anticipate converting the Base Rate loan into a LIBOR loan on or around August 5, 2022.

Agreement to Acquire Great Bear Royalties Corporation

On July 11, 2022, we announced that we had entered into a definitive agreement with Great Bear Royalties Corporation (“GBR”) to acquire all of the issued and outstanding common shares of GBR for cash consideration of C$6.65 per common share, which values GBR at approximately C$199.5 million (approximately US$155 million) on a fully diluted basis. GBR’s sole material asset is a 2.0% NSR royalty (the “Royalty”) that includes the entire 9,140 hectares of the Great Bear Project in the Red Lake district of Ontario, Canada, indirectly owned and operated by Kinross Gold Corporation (“Kinross”). We plan to fund the purchase price with available cash on hand.

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ROYAL GOLD, INC.

Notes to Consolidated Financial Statements

(Unaudited)

As part of our due diligence, we entered into a co-operation agreement with Kinross to obtain access to Kinross personnel and certain information pertaining to the Great Bear Project. In exchange, we agreed to amend certain terms of the royalty agreement upon closing of the acquisition, including providing an option to Kinross to purchase a 25% interest in the Royalty for an amount equal to 25% of our purchase price of GBR, adjusted for inflation, at any time from the transaction closing date until the earlier of a construction decision for the Great Bear Project and 10 years after the transaction closing date.

The acquisition has been unanimously approved by the boards of directors of both Royal Gold and GBR, and the board of directors of GBR has resolved to recommend that the shareholders of GBR approve the acquisition. All directors and officers of GBR have entered into support agreements to vote their shares in support of the acquisition representing, in aggregate, approximately 10.5% of the outstanding common shares of GBR. The arrangement agreement provides us a customary right to match any superior proposal and includes customary non-solicitation covenants. In addition, the arrangement agreement requires GBR to pay a termination fee of C$7.0 million (approximately US$6 million) to us if GBR terminates the arrangement agreement in certain circumstances.

The transaction is subject to approval by the shareholders of GBR, and regulatory and court approvals. GBR expects to hold a special meeting of shareholders to approve the transaction on August 31, 2022, and subject to approval by shareholders, GBR will shortly thereafter seek approval by the Supreme Court of British Columbia of a plan of arrangement under the provisions of the Business Corporations Act (British Columbia). We expect the transaction to close during the quarter ending September 30, 2022.

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

General Presentation

This Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) is intended to provide information to assist you in better understanding and evaluating our financial condition and results of ~~operations.~~operations of Royal Gold. You should read this MD&A in conjunction with our consolidated financial statements included in Item 1 of this Quarterly Report on Form 10-Q, as well as our ~~Annual~~Transition Report on Form 10-K for the ~~fiscal year~~six months ended ~~June 30, 2020,~~December 31, 2021, filed with the Securities and Exchange Commission ~~(the “SEC”~~(“SEC”) on ~~August 6, 2020~~February 17, 2022 (“~~Fiscal 2020 10-K”~~Transition Report”).

This MD&A contains forward-looking information. You should review our important note about forward-looking statements following this MD&A.

We do not own, develop, or mine the properties on which we hold stream or royalty interests. Certain information provided in this Quarterly Report on Form 10-Q about operating properties in which we hold interests, including information about mineral reserves, historical production, production estimates, property descriptions, and property developments, was provided to us by the operators of those properties or is publicly available information filed by these operators with applicable securities regulatory bodies, including the SEC. We have not verified, and are not in a position to verify, and expressly disclaim any responsibility for the accuracy, completeness, or fairness of, this third-party information and refer the reader to the public reports filed by the operators for information regarding those properties.

~~We refer to “GSR,” “NSR,” “NVR,” “metal stream (or “stream”)” and other types of royalty or similar interests throughout this MD&A. These terms are defined in our Fiscal 2020 10-K.~~

Overview of Our Business

We acquire and manage precious metal streams, royalties, and similar interests. We seek to acquire existing stream and royalty interests or finance projects that are in production or in the development stage in exchange for stream or royalty interests.

We manage our business under two segments:

●

Acquisition and Management of Stream Interests — A metal stream is a purchase agreement that provides, in exchange for an upfront deposit payment, the right to purchase all or a portion of one or more metals produced from a mine, at a price determined for the life of the transaction by the purchase agreement. As of ~~March 31, 2021,~~June 30, 2022, we owned ~~eight~~nine stream interests, which are on ~~six~~eight producing properties and ~~two~~one development stage ~~properties.~~property. Stream interests accounted for approximately ~~67%~~72% and ~~69%~~68% of our total revenue for the three and ~~nine~~six months ended ~~March 31, 2021, respectively,~~June 30, 2022, respectfully, and ~~71% and 72%~~68% for each of the three and ~~nine~~six months ended ~~March 31, 2020, respectively.~~June 30, 2021, respectfully. We expect stream interests to continue representing a significant portion of our total revenue.

●

Acquisition and Management of Royalty Interests — Royalties are non-operating interests in mining projects that provide the right to revenue or metals produced from the project after deducting specified costs, if any. As of ~~March 31, 2021,~~June 30, 2022, we owned royalty interests on 3533 producing properties, 1718 development stage properties and ~~127~~125 exploration stage properties, of which we consider 4853 to be evaluation stage projects. We use “evaluation stage” to describe exploration stage properties that contain ~~mineralized material~~mineral resources and on which operators are engaged in the search for mineral reserves. Royalty interests accounted for ~~33%~~28% and ~~31%~~32% of our total revenue for the three and ~~nine~~six months ended ~~March 31, 2021, respectively,~~June 30, 2022, respectfully, and ~~29% and 28%~~32% for each of the three and ~~nine~~six months ended ~~March 31, 2020, respectively.~~June 30, 2021, respectfully.

We do not conduct mining operations on the properties in which we hold stream and royalty interests, and we generally are not required to contribute to capital ~~costs, exploration~~ costs, environmental costs or other operating costs on those properties.

We are continually reviewing opportunities to grow our portfolio, whether through the creation or acquisition of new or existing stream or royalty interests or other acquisition activity. We generally have acquisition opportunities in various

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stages of review. Our review process may include, for example, engaging consultants and advisors to analyze an opportunity; analysis of technical, financial, legal, and other confidential information of an opportunity; submission of

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indications of interest and term sheets; participation in preliminary discussions and negotiations; and involvement as a bidder in competitive processes.

Business Trends and Uncertainties

Metal Prices

Our financial results are primarily tied to the price of gold, silver, copper, and other metals. Metal prices have fluctuated widely in recent years and we expect this volatility to continue. The marketability and price of metals are influenced by numerous factors beyond our control, and significant changes in metal prices can have a material effect on our revenue.

For the three and ~~nine~~six months ended ~~March 31,~~June 30, 2022, and 2021, ~~and 2020,~~ average metal prices and percentages of revenue by metal were as follows:


	Three Months Ended						Nine Months Ended						Three Months Ended						Six Months Ended
	March 31, 2021			March 31, 2020			March 31, 2021			March 31, 2020			June 30, 2022			June 30, 2021			June 30, 2022			June 30, 2021
Metal	Average Price		Percentage of Revenue	Average Price		Percentage of Revenue	Average Price		Percentage of Revenue	Average Price		Percentage of Revenue	Average Price		Percentage of Revenue	Average Price		Percentage of Revenue	Average Price		Percentage of Revenue	Average Price		Percentage of Revenue
Gold ($/ounce)	$	1,794	68%	$	1,583	79%	$	1,859	73%	$	1,512	77%	$	1,871	71%	$	1,816	76%	$	1,874	71%	$	1,805	72%
Silver ($/ounce)	$	26.26	12%	$	16.90	8%	$	24.96	10%	$	17.07	9%	$	22.60	11%	$	26.69	8%	$	23.32	10%	$	26.47	10%
Copper ($/pound)	$	3.86	15%	$	2.56	10%	$	3.35	12%	$	2.62	10%	$	4.31	14%	$	4.40	11%	$	4.43	14%	$	4.12	13%
Other		N/A	5%		N/A	3%		N/A	5%		N/A	4%		N/A	4%		N/A	5%		N/A	5%		N/A	5%

Acquisition of Additional Royalty Interest on Cortez Complex

On August 1, 2022, we announced that we acquired a sliding-scale gross royalty (the “Cortez Royalty”) on an area including the Cortez mine operational area and the Fourmile development project in Nevada (the “Cortez Complex”). We paid $525 million in cash consideration for the Cortez Royalty to Kennecott Royalty Company, a wholly owned subsidiary of Rio Tinto European Holdings Limited. The area within the Cortez Complex is owned or controlled by Nevada Gold Mines LLC (“NGM”), a joint venture between Barrick Gold Corporation (“Barrick”) (61.5% owner and operator) and Newmont Corporation (38.5% owner), with the exception of the Fourmile project which is 100% owned and operated by Barrick. Refer to Note 13 of our notes to consolidated financial statements for further discussion on the Cortez Royalty.

Agreement to Acquire Great Bear Royalties Corporation

On July 11, 2022, we announced that we had entered into a definitive agreement with Great Bear Royalties Corporation (“GBR”) to acquire all of the issued and outstanding common shares of GBR for cash consideration of C$6.65 per common share, which values GBR at approximately C$199.5 million (approximately US$155 million) on a fully diluted basis (the “Great Bear Acquisition”). GBR’s sole material asset is a 2.0% NSR royalty (the “Royalty”) that includes the entire 9,140 hectares of the Great Bear Project in the Red Lake district of Ontario, Canada, indirectly owned and operated by Kinross Gold Corporation.

The transaction is subject to approval by the shareholders of GBR, and regulatory and court approvals. Subject to the receipt of all necessary approvals, we expect the transaction to close during the quarter ending September 30, 2022. Refer to Note 13 of our notes to consolidated financial statements for further discussion on the Great Bear Acquisition.

Lawyers Royalty Acquisition

On March 24, 2022, we acquired a 0.5% net smelter returns royalty (“NSR”) on production from the Lawyers Project, an exploration stage project currently operated by Benchmark Metals Inc., which is located in British Columbia, Canada. As part of this transaction, we also acquired a right of first offer (“ROFO”) for an existing 2.0% NSR royalty over the Ranch Project owned by Thesis Gold, Inc. that is located adjacent to the Lawyers Project. We paid $8.0 million in cash consideration for the royalty and ROFO to Guardsmen Resources Inc.

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NX Gold Exploration Payment

On March 22, 2022, we made a payment of $3.2 million to a subsidiary of Ero Copper Corporation (“Ero”) as part of our commitment to support achievement of success-based targets related to regional exploration and mineral resource additions. As of June 30, 2022, up to $6.8 million of additional exploration and mineral resource addition payments remain if Ero meets certain success-based targets through calendar 2024. Refer to our Transition Report for further information on the NX Gold stream acquisition.

COVID-19 Pandemic

~~Throughout calendar~~At times since early 2020, ~~and into calendar 2021,~~ several of our operating counterparties have instituted temporary operational curtailments due to the ongoing COVID-19 pandemic. In addition, the pandemic and resulting economic and societal impacts have made it difficult for operators to forecast expected production amounts and, at times, operators have had to withdraw or revise previously disclosed guidance. For the most part, our results of operations and financial condition have not been materially impacted by these measures to date. However, the effects of the pandemic will ultimately depend on many factors that are outside of our control, including the severity and duration of the pandemic, government and operator actions in response to the pandemic, and the development, availability, and public acceptance of effective treatments and vaccines. As a result, we are currently unable to predict the nature or extent of any future impact on our results of operations and financial condition. We continue to monitor the impact of developments associated with the pandemic on stream and royalty interests as part of our regular asset impairment analysis.

~~Sale of Peak Gold JV Interest~~

On September 30, 2020, we announced an agreement with Kinross Gold Corporation to sell our interest in the Manh Choh Project (formerly known as the Peak Gold Project) and our common share position in Contango Ore, Inc. (“Contango”), our partner in Peak Gold, LLC and owner of the Manh Choh Project. Consideration received for the sale of these interests included cash of $61.3 million, an incremental 28% net smelter return royalty on silver produced from an area of interest which includes the current Manh Choh Project resource area, and an incremental 1% net smelter return royalty on certain State of Alaska mining claims acquired by a wholly owned subsidiary of Contango in the transaction. Peak Gold, LLC retains the right to acquire 50% of the incremental 28% net smelter return royalty on silver for $4 million.

After this transaction, our interests in the Manh Choh Project and State of Alaska mining claim property owned by Contango consist solely of net smelter return royalties. Refer to Note 2 of our notes to the consolidated financial statements for further discussion on the sale of the Peak Gold JV interest.

~~Separation of the Wassa and Prestea and Bogoso Stream Agreement~~

On October 1, 2020, we announced the separation of the Wassa gold stream and the Prestea and Bogoso gold streams into two separate stream agreements effective September 30, 2020. This separation was completed to facilitate the sale by Golden Star Resources Ltd. (“Golden Star”) of the Prestea and Bogoso mines to Future Global Resources (“FGR”).

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The Wassa stream agreement, which remains with Golden Star, continues to provide us the right to purchase 10.5% of the gold payable from the Wassa mine until the delivery of 240,000 ounces, after which the stream percentage will decrease to 5.5%. The cash purchase price for gold remains at 20% of the spot price per ounce delivered until the delivery of 240,000 ounces, and 30% of the spot price per ounce delivered thereafter. As of March 31, approximately 115,700 ounces remain to be delivered from the Wassa mine until the 240,000 ounce delivery threshold is reached.

The Prestea and Bogoso stream agreement with FGR provides us the right to purchase 5.5% of the gold payable from the Prestea and Bogoso mines in return for a cash purchase price of 30% of the spot price per ounce delivered.

Operators’ Production Estimates by Stream and Royalty Interest for Calendar ~~2021~~2022

We generally receive annual production estimates from many of the operators of ~~our~~the producing mines in which we own a stream or royalty interest during the first quarter of each calendar year. In some instances, an operator may revise its original calendar year guidance throughout the year. The following table shows current production estimates for calendar ~~2021,~~2022, as well as actual production through ~~March 31, 2021,~~June 30, 2022, for our principal properties as reported to us by the operators.

Operators’ Estimated and Actual Production by Stream and Royalty Interest for Calendar ~~2021~~2022

Principal Producing Properties

Calendar 2021 Operator’s Production

Calendar Year 2022 Operator’s Production

Estimate⁽¹⁾

Actual⁽²⁾

Estimate⁽¹⁾

Actual⁽²⁾

Gold

Silver

Base Metals

Gold

Silver

Base Metals

Gold

Silver

Base Metals

Gold

Silver

Base Metals

Stream/Royalty

(oz.)

(lbs.)

(oz.)

(lbs.)

(oz.)

(lbs.)

(oz.)

(lbs.)

Stream:

Andacollo⁽³⁾

N/A

10,500

36,000

12,200

Mount Milligan⁽⁴⁾

180,000 - 200,000

N/A

190,000 - 210,000

39,100

Copper

70 - 80 Million

N/A

70 - 80 Million

20.6 Million

Pueblo Viejo⁽⁵⁾

470,000 - 510,000

N/A

137,000

N/A

400,000 - 440,000

N/A

209,000

N/A

Wassa⁽⁶⁾

165,000 - 175,000

N/A

155,000 - 170,000

77,400

Khoemacau⁽⁷⁾

N/A

0.5 Million

Royalty:

Cortez⁽⁷⁾

350,000 - 375,000

58,600

Peñasquito⁽⁸⁾

660,000

30 Million

178,000

8.2 Million

Cortez⁽⁸⁾

280,000

154,000

Peñasquito⁽⁹⁾

475,000

29 Million

258,000

15.8 Million

Lead

190 Million

50 Million

150 Million

79 Million

Zinc

475 Million

111 Million

350 Million

208 Million

(1)

Production estimates received from our operators are for calendar ~~2021.~~2022. There can be no assurance that production estimates received from the operators will be achieved. Please also refer to our cautionary language regarding forward-looking statements, as well as the Risk Factors identified in Part I, Item 1A, of our Transition Report for information regarding factors that could affect actual results.

(2)

Actual production figures shown are ~~provided by our~~from the operators and cover the period from January 1, ~~2021,~~2022, through ~~March 31, 2021,~~June 30, 2022, unless otherwise noted in footnotes to this table. Such amounts may differ from our reported revenue and production and are not reduced to show the production attributable to our interests.

(3)	The actual production figure shown for Andacollo is contained gold in concentrate. ~~The estimated production figure was not available on the date of this report.~~

(4)	The estimated production figures shown for Mount Milligan are payable gold and copper in concentrate. ~~The actual~~Actual figures reflect production ~~figure was not available on the date of this report.~~through March 31, 2022.

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(5)	The estimated and actual production figures shown for Pueblo Viejo are payable gold in doré and represent the 60% interest in Pueblo Viejo held by Barrick Gold Corporation (“Barrick”). The operator did not provide estimated or actual silver production.

(6)	The estimated production figure shown for Wassa is payable gold in doré~~. The actual production figure was not available on~~ poured in the ~~date of this report.~~period.

(7)	~~Production from~~The estimated production figures for Khoemacau are not available through the ramp-up period, which the operator expects to be completed by the fourth quarter of 2022.

(8)	The estimated and actual production figures for Cortez represent the areas subject to ~~Royal Gold’s~~our royalty interests.

~~(8)~~(9)

The estimated and actual gold and silver production figures shown for Peñasquito are payable gold and silver in concentrate and doré. The estimated and actual lead and zinc production figures shown are payable lead and zinc in concentrate.

Property Developments

This section provides recent updates for our principal properties as reported by the operators, either directly to us or in their publicly available documents.

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Stream Interests

Andacollo

Gold stream deliveries from Andacollo were approximately ~~10,700~~9,900 ounces for the three months ended ~~March 31, 2021,~~June 30, 2022, compared to approximately ~~9,500~~11,300 ounces for the three months ended ~~March 31, 2020.~~June 30, 2021. The decrease in deliveries resulted primarily from Andacollo experiencing lower gold grades and lower gold recoveries, in line with the expected downward trend of gold grades, as well as differences in the timing of shipments and settlements during the periods.

~~Teck Resources Limited (“Teck”) expects grades to continue to decline towards reserve grades.~~ The current life of mine for Andacollo is expected to continue until ~~calendar~~ 2035. According to Teck, additional permits or permit amendments will be required to execute the life of mine plan.

~~Khoemacau~~Khoemacau Project

Silver stream deliveries from Khoemacau were approximately 246,800 ounces for the three months ended June 30, 2022. First concentrate was shipped from Khoemacau in mid-July 2021 and we received our first silver stream deliveries during the quarter ended September 30, 2021.

According to ~~Khoemacau~~Khoemacau Copper Mining (Pty.) Limited (“KCM”), ~~progress~~ramp-up of operations continued and average monthly underground production increased consistently during the quarter ended June 30, 2022, from approximately 6,300 tons per day (5,700 tonnes per day) in March to approximately 8,000 tons per day (7,300 tonnes per day) in June. KCM reported an accident in the underground mine and two fatalities on May 11, 2022, which resulted in short-term production disruptions immediately after the accident. Investigations into the cause of the accident remain ongoing.

KCM expects that the mining rate will continue to increase steadily from current levels and reach full sustained production by the fourth quarter of 2022, absent further COVID-19 impacts. With the results experienced so far during the ramp-up period, KCM continues to expect that at ~~the~~full production Khoemacau ~~Project (“Khoemac~~a~~u”) during the three months ended March 31, 2021,~~will produce 171,000 to 182,000 tons (155,000 to 165,000 tonnes) of high-grade copper and ~~the project reached~~silver concentrate a year, containing approximately ~~92%~~66,000 to 72,000 tons (60,000 to 65,000 tonnes) of ~~construction completion as~~payable copper and 1.8 to 2.0 million ounces of ~~March 31, 2021. According to KCM, activities are focused on refurbishment and upgrading of the Boseto mill, underground development, completion of accommodation, power and water infrastructure at~~payable silver, over an approximate 20-year mine life from Zone 5, completion of haul road surfacing between Zone 5 and the Boseto mill, and the tailings storage facility. The Zone 5 area was connected to the national power grid in February 2021 and commissioning of support systems within the Boseto plant was initiated in March 2021. Also, according to KCM, underground development had cumulatively advanced 11,181 meters in the three mines and approximately 190,000 tonnes of ore were stockpiled on surface at the end of March 2021.5.

The state of emergency declared by the Government of Botswana in March 2020 to help prevent the spread of COVID-19 was extended again on March 30, 2021 for a further six months through September 30, 2021. Mining remains designated as an “essential service” and KCM reports that general development activity at Khoemacau is continuing. Barring any potential further unforeseen impacts caused by COVID-19 considerations, KCM expects to continue commissioning activities through the second quarter of calendar 2021 with first shipment of concentrate to occur in the third quarter of calendar 2021 and a ramp-up to nameplate production capacity by the beginning of calendar 2022.

On January 6, 2021, Royal Gold made the sixth advance payment of $32.6 million toward the silver stream. With this payment, Royal Gold has completed the total $212 million advance payment required to earn the base silver stream of 80% of payable silver. On April 7, 2021, we made a seventh advance payment of $10.6 million toward the option silver stream, which increased our right to purchase 84% of the payable silver from Khoemacau until the delivery of approximately 33.6 million silver ounces and 42% thereafter. Additionally, on April 7, 2021, KCM drew $18.0 million on a $25.0 million subordinated debt facility provided by Royal Gold. The subordinated debt facility has a term of seven years, carries interest at a rate of LIBOR +11% and requires mandatory repayment upon certain events.

Royal Gold has remaining committed funding of $49.4 million to KCM in the form of $42.4 million of additional advance payments and $7.0 million of debt, both of which may be drawn at the election of KCM prior to completion of construction. KCM has advised that subject to maintaining the schedule mentioned above for commissioning, first concentrate and operational ramp-up, no further material funding will be required from Royal Gold.

Mount Milligan

Gold stream deliveries from Mount Milligan were approximately ~~12,200~~23,800 ounces for the three months ended ~~March 31, 2021,~~June 30, 2022, compared to approximately ~~12,100~~20,800 ounces for the three months ended ~~March 31, 2020.~~ June 30, 2021. Increased gold deliveries resulted from differences in the timing of shipments and settlements during the periods and gold grade variability in the concentrate shipments.

Copper stream deliveries from Mount Milligan were approximately ~~3.4~~4.0 million pounds during ~~each of~~ the three months ended ~~March 31, 2021, and 2020.~~

~~In calendar 2021, Centerra Gold Inc. (“Centerra”) expects total gold production~~June 30, 2022, compared to beapproximately 5.1 million pounds during the three months ended June 30, 2021. Decreased copper deliveries resulted from differences in the ~~range~~timing of ~~180,000 to 200,000 ounces~~shipments and copper production of between 70 to 80 million pounds, compared to actual gold and copper production of 161,900 ounces and 83 million pounds, respectively, in calendar 2020. Gold and copper production is expected to be slightly back-end weighted in calendar 2021 with 45% or more ofsettlements during the ~~total annual metal production to occur in the first half of the year and up to 55% in the second half of the year.~~periods.

2221

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Centerra expects to continue to work on continuous improvement projects in calendar 2021, including secondary crusher improvements and the installation of staged flotation reactors, which is expected to improve metal recoveries in future years. Centerra also expects to have adequate water inventory levels for targeted throughput and is working with government regulators, its First Nations partners, and other stakeholders to maintain access to its existing water resources and secure a stable long-term water solution.

Pueblo Viejo

Gold stream deliveries from Pueblo Viejo were approximately ~~11,100~~8,600 ounces for the three months ended ~~March 31, 2021,~~June 30, 2022, compared to approximately ~~10,200~~9,800 ounces for the three months ended ~~March 31, 2020.~~June 30, 2021. Decreased deliveries resulted from processing lower grade stockpile ore.

Silver stream deliveries were approximately ~~247,500~~307,100 ounces for the three months ended ~~March 31, 2021,~~June 30, 2022, compared to approximately ~~394,700~~386,500 ounces for the three months ended ~~March 31, 2020. Decreased~~June 30, 2021. During the second quarter an additional 45,000 ounces of silver deliveries were deferred. The deferred ounces are the result of ~~temporary operational issues with~~a mechanism in the stream agreement that allows for the deferral of deliveries in a period if Barrick’s share of silver ~~circuit that caused~~production is insufficient to cover its stream delivery obligations. The stream agreement terms include a fixed 70% silver ~~recoveries to~~recovery rate. If actual recovery rates fall below the ~~fixed~~contractual 70% recovery rate, ~~specified in the stream agreement. The stream agreement includes a deferral mechanism for~~ ounces ~~that cannot~~may be deferred with deferred ounces to be delivered ~~at this fixed recovery rate, with the economic impact of any shortfall in deliveries to be made up~~ in future ~~periods. Deferred deliveries~~periods as silver recovery allows. As of June 30, 2022, approximately ~~362,000~~484,000 ounces remain deferred, and the timing for the delivery of ~~silver are expected to be made incrementally as Barrick expects~~ the ~~operational issues with the silver circuit to be resolved.~~entire deferred amount is uncertain.

On May 4, 2022, Barrick reported continued progress ~~at Pueblo Viejo during~~on the ~~March 2021 quarter~~plant expansion and mine life extension project to ~~expand the process plant and tailings storage facilities. Barrick estimates that the expansion project could significantly~~ increase throughput and allow the mine to maintain minimum average annual gold production of approximately 800,000 ounces after calendar 2022 ~~(on a 100% basis),~~ and ~~that the increase in tailings storage capacity has the potential to convert over 9 million ounces of mineralized material to reserves (on a 100%~~beyond calendar 2040 (100% basis). ~~Barrick expects completion of~~With respect to the ~~process~~ plant expansion, Barrick reported that as of March 31, 2022, construction was 39% complete, with completion expected by the end of calendar 2022.

~~In calendar 2021, gold production from Barrick’s 60% interest~~ With respect to the mine life extension, Barrick also disclosed that social, environmental and technical studies for additional tailings capacity continued to advance, and that the final location and construction of the tailings storage facility would be subject to the completion of an Environmental and Social Impact Assessment (“ESIA”) in ~~Pueblo Viejo is expected~~accordance with Dominican Republic legislation and international standards. Once completed, the ESIA would be submitted to ~~be between 470,000~~the Government of the Dominican Republic for evaluation and ~~510,000 ounces, compared to actual gold production of 542,000 ounces in calendar 2020.~~final decision.

~~Wassa~~Royalty Interests

Cortez

Gold ~~stream deliveries from Wassa were~~production attributable to our existing royalty interest at Cortez was approximately ~~4,400~~52,000 ounces for the three months ended ~~March 31, 2021,~~June 30, 2022, compared to approximately ~~3,800~~89,800 ounces for the three months ended ~~March 31, 2020.~~June 30, 2021.

~~In calendar 2021, Golden Star expects Wassa~~On July 14, 2022, Barrick reported lower production at Cortez for the quarter ended June 30, 2022 due to ~~produce between 165,000 and 175,000 ounces, in line with~~mine sequencing as it transitions from the ~~calendar 2020 actual production performance,~~end of open pit mining at Pipeline to a new phase at Crossroads, which ~~benefited from an increase in the underground mining rates and the processing of low-grade stockpiles. The contribution from low-grade stockpiles~~ is expected to ~~continue throughout calendar 2021, subject to gold prices sustaining near current levels. Golden Star expects mining rates~~underpin stronger performance for ~~calendar 2021 to be~~Cortez in ~~excess~~the December quarter of ~~4,500 tonnes per day, in line with the 4,469 tonnes per day achieved in calendar 2020.~~

Golden Star released an updated mineral reserve on March 1, 2021. The mineral reserve plan outlines a six-year mine life with annual production averaging 177,000 ounces of gold. In addition, Golden Star issued a Preliminary Economic Assessment (“PEA”) on the Southern Extension of the Wassa orebody. The PEA supports an 11-year mine life with average annual gold production of 294,000 ounces for total gold production of 3.5 million ounces. Golden Star is targeting early calendar 2023 for the completion of a final feasibility study on the Southern Extension.2022.

~~Royalty Interests~~

~~Cortez~~

Production attributable to our royalty interest at Cortez was approximately 51,900 ounces of gold for the three months ended March 31, 2021, compared to approximately 57,700 ounces of gold for the three months ended March 31, 2020.

Nevada Gold Mines LLC expects total gold production from the regions subject to our interests at Cortez to be approximately 350,000 to 375,000 ounces in calendar 2021, compared to actual calendar 2020 gold production of 206,000, and average approximately 415,000 ounces per year from calendar 2022 through calendar 2026. The Crossroads deposit is expected to provide the majority of the royalty ounces during this period.

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Peñasquito

Production attributable to our royalty interest at Peñasquito was approximately 130,600 ounces of gold, 8.07 million ounces of silver, 35.0 million pounds of lead and 84.9 million pounds of zinc for the three months ended ~~March 31, 2021, increased by~~June 30, 2022. This compares to approximately ~~86% for~~179,800 ounces of gold, ~~and decreased approximately 6% for~~7.61 million ounces of silver, ~~17% for~~41.8 million pounds of lead and 4%101.7 million pounds of zinc for ~~zinc~~the three months ended June 30, 2021. Gold production was lower compared to the prior year ~~quarter. The increase in gold production was a result of higher~~quarter due to lower ore grade milled and ~~higher~~lower mill ~~throughput, while the decrease in silver, lead and zinc was a result of lower ore grade milled, partially offset by higher mill throughput.~~

On December 8, 2020, Newmont Corporation provided full calendar 2021 production guidance for Peñasquito of 660,000 ounces of gold, 30 million ounces of silver, 475 million pounds of zinc and 190 million pounds of lead, compared to calendar 2020 actual production of 526,000 ounces of gold, 28 million ounces of silver, 318 million pounds of zinc and 179 million pounds of lead.recovery.

Results of Operations

Quarter Ended ~~March 31, 2021,~~June 30, 2022, Compared to Quarter Ended ~~March 31, 2020~~June 30, 2021

For the quarter ended ~~March 31, 2021,~~June 30, 2022, we recorded net income and comprehensive income attributable to Royal Gold stockholders (“net income”) of ~~$54.0~~$71.1 million, or ~~$0.82~~$1.08 per basic and diluted share, as compared to net income of ~~$38.6~~$81.7 million, or ~~$0.59~~$1.24 per basic and diluted share, for the quarter ended ~~March 31, 2020~~June 30, 2021. The ~~increase~~decrease in net income was primarily attributable to ~~an increase in revenue and~~ a decrease in ~~depreciation, depletion and amortization expense, each~~revenue, as discussed below.

For the quarter ended ~~March 31, 2021,~~June 30, 2022, we recognized total revenue of ~~$142.6~~$146.4 million, comprised of stream revenue of ~~$95.3~~$104.9 million and royalty revenue of ~~$47.3~~$41.6 million at an average gold price of ~~$1,794~~$1,871 per ounce, an average silver price of ~~$26.26~~$22.60 per ounce and an average copper price of ~~$3.86~~$4.31 per pound. This is compared to total revenue of ~~$136.4~~$168.0 million for the

Table of Contents

three months ended ~~March 31, 2020,~~June 30, 2021, comprised of stream revenue of ~~$97.4~~$114.4 million and royalty revenue of ~~$39.0~~$53.6 million, at an average gold price of ~~$1,583~~$1,816 per ounce, an average silver price of ~~$16.90~~$26.69 per ounce and an average copper price of ~~$2.56~~$4.40 per pound. Revenue and the corresponding production attributable to our stream and royalty interests for the quarter ended ~~March 31, 2021,~~June 30, 2022, compared to the quarter ended ~~March 31, 2020,~~June 30, 2021, are as follows:

~~Table of Contents~~

Revenue and Reported Production Subject to Our Stream and Royalty Interests

~~Quarter Ended March 31, 2021 and 2020~~

(Amounts in thousands, except reported production oz. and lbs.)


		Three Months Ended				Three Months Ended					Three Months Ended				Three Months Ended
		March 31, 2021				March 31, 2020					June 30, 2022				June 30, 2021
				Reported				Reported					Reported				Reported
Stream/Royalty	Metal(s)	Revenue		Production⁽¹⁾		Revenue		Production⁽¹⁾		Metal(s)	Revenue		Production⁽¹⁾		Revenue		Production⁽¹⁾
Stream⁽²⁾:
Mount Milligan		$	33,803			$	32,298				$	45,627			$	43,802
	Gold			9,200	oz.			14,000	oz.	Gold			15,500	oz.			16,100	oz.
	Copper			4.4	Mlbs.			4.3	Mlbs.	Copper			4.0	Mlbs.			3.4	Mlbs.
Pueblo Viejo		$	30,173			$	28,302				$	19,812			$	26,585
	Gold			10,500	oz.			13,200	oz.	Gold			7,100	oz.			11,100	oz.
	Silver			418,200	oz.			417,800	oz.	Silver			274,500	oz.			247,500	oz.
Andacollo	Gold	$	13,022	7,100	oz.	$	22,055	13,900	oz.	Gold	$	11,721	6,300	oz.	$	27,868	15,400	oz.
Wassa	Gold	$	8,774	4,800	oz.	$	8,647	5,600	oz.	Gold	$	8,248	4,400	oz.	$	7,129	4,000	oz.
Khoemacau										Silver	$	5,202	221,800	oz.	$	—	—
Other⁽³⁾		$	9,574			$	6,158				$	14,268			$	9,037
	Gold			4,300	oz.			3,400	oz.	Gold			6,900	oz.			4,000	oz.
	Silver			66,200	oz.			47,900	oz.	Silver			53,700	oz.			72,000	oz.
Total stream revenue		$	95,346			$	97,459				$	104,879			$	114,421

Royalty⁽²⁾:
Peñasquito		$	13,128			$	7,425				$	9,664			$	13,399
	Gold			180,400	oz.			97,200	oz.	Gold			130,600	oz.			179,800	oz.
	Silver			8.1	Moz.			8.7	Moz.	Silver			8.1	Moz.			7.6	Moz.
	Lead			50.1	Mlbs.			60.5	Mlbs.	Lead			35.0	Mlbs.			41.8	Mlbs.
	Zinc			119.3	Mlbs.			124.5	Mlbs.	Zinc			84.9	Mlbs.			101.7	Mlbs.
Cortez	Gold	$	8,609	51,900	oz.	$	6,400	57,700	oz.	Gold	$	8,138	52,000	oz.	$	13,739	89,800	oz.
Other⁽³⁾	Various	$	25,506	N/A		$	25,152	N/A		Various	$	23,760	N/A		$	26,468	N/A
Total royalty revenue		$	47,243			$	38,977				$	41,562			$	53,606
Total Revenue		$	142,589			$	136,437				$	146,441			$	168,027

(1)	Reported production relates to the amount of metal sales subject to our stream and royalty interests for the three months ended ~~March 31,~~June 30, 2022, and 2021, ~~and 2020,~~ and may differ from the operators’ public reporting.

(2)	Refer to “Property Developments” above for a discussion of recent developments at principal properties.

(3)	Individually, except for our stream interest at Rainy River, which contributed 6% of total revenue for the three months ended ~~March 31,~~June 30, 2022 and 2021, no stream or royalty included within the “Other” category contributed greater than 5% of our total revenue for either period.

The ~~increase~~decrease in our total revenue resulted primarily from ~~an increase in the average~~lower gold ~~silver~~sales at Andacollo and ~~copper prices compared to the prior period~~Pueblo Viejo and ~~an increase in~~lower gold production at Cortez and Peñ~~asquito,~~asquito. The decrease was offset by ~~a decrease in~~$9.4 million of new revenue from ~~Andacollo due to lower gold sales.~~ the NX Gold and Khoemacau streams which were not in production during the prior year quarter.

Table of Contents

Gold and silver ounces and copper pounds purchased and sold during the three months ended

~~Table of Contents~~

~~March 31,~~ June 30, 2022 and 2021, ~~and 2020,~~ and gold and silver ounces and copper pounds in inventory as of ~~March~~June 30, 2022, and December 31, 2021, ~~and June 30, 2020,~~ for our streaming interests were as follows:


	Three Months Ended		Three Months Ended		As of	As of	Three Months Ended		Three Months Ended		As of	As of
	March 31, 2021		March 31, 2020		March 31, 2021	June 30, 2020	June 30, 2022		June 30, 2021		June 30, 2022	December 31, 2021
Gold Stream	Purchases (oz.)	Sales (oz.)	Purchases (oz.)	Sales (oz.)	Inventory (oz.)	Inventory (oz.)	Purchases (oz.)	Sales (oz.)	Purchases (oz.)	Sales (oz.)	Inventory (oz.)	Inventory (oz.)
Mount Milligan	12,200	9,200	12,100	14,000	6,800	3,300	23,800	15,500	20,800	16,100	8,500	4,100
Andacollo							9,900	6,300	11,300	15,400	3,600	2,200
Pueblo Viejo	11,100	10,500	10,200	13,200	11,100	11,100	8,600	7,100	9,800	11,100	8,600	8,600
Andacollo	10,700	7,100	9,400	13,900	6,500	100
Wassa	4,400	4,800	3,800	5,600	2,700	2,900	3,500	4,400	3,600	4,000	1,400	1,600
Other	4,600	4,300	4,500	3,400	1,500	1,500	6,900	6,900	3,800	4,000	1,900	2,200
Total	43,000	35,900	40,000	50,100	28,600	18,900	52,700	40,200	49,300	50,600	24,000	18,700

	Three Months Ended		Three Months Ended		As of	As of	Three Months Ended		Three Months Ended		As of	As of
	March 31, 2021		March 31, 2020		March 31, 2021	June 30, 2020	June 30, 2022		June 30, 2021		June 30, 2022	December 31, 2021
Silver Stream	Purchases (oz.)	Sales (oz.)	Purchases (oz.)	Sales (oz.)	Inventory (oz.)	Inventory (oz.)	Purchases (oz.)	Sales (oz.)	Purchases (oz.)	Sales (oz.)	Inventory (oz.)	Inventory (oz.)
Pueblo Viejo	247,500	418,200	394,700	417,800	247,500	451,200	307,000	274,500	386,500	247,500	307,100	316,000
Khoemacau							247,000	221,800	—	—	79,600	42,000
Other	72,200	66,200	40,800	47,900	72,300	23,400	55,200	53,700	98,600	72,000	16,400	34,300
Total	319,700	484,400	435,500	465,700	319,800	474,600	609,200	550,000	485,100	319,500	403,100	392,300

	Three Months Ended		Three Months Ended		As of	As of	Three Months Ended		Three Months Ended		As of	As of
	March 31, 2021		March 31, 2020		March 31, 2021	June 30, 2020	June 30, 2022		June 30, 2021		June 30, 2022	December 31, 2021
Copper Stream	Purchases (Mlbs.)	Sales (Mlbs.)	Purchases (Mlbs.)	Sales (Mlbs.)	Inventory (Mlbs.)	Inventory (Mlbs.)	Purchases (Mlbs.)	Sales (Mlbs.)	Purchases (Mlbs.)	Sales (Mlbs.)	Inventory (Mlbs.)	Inventory (Mlbs.)
Mount Milligan	3.4	4.4	3.4	4.3	—	0.8	4.0	4.0	4.2	3.4	—	0.9

Cost of sales, which excludes depreciation, depletion and amortization, decreased to ~~$21.5~~$23.8 million for the three months ended ~~March 31, 2021,~~June 30, 2022, from ~~$22.0~~$24.7 million for the three months ended ~~March 31, 2020.~~June 30, 2021. The decrease, ~~was primarily due to lower gold sales from Mount Milligan, Pueblo Viejo and Andacollo compared to the prior period. This decrease was partially offset by an increase in gold, silver and copper prices~~ when compared to the prior ~~period.~~period, was primarily due to a decrease in gold sales at Andacollo and Pueblo Viejo, offset by gold sales at NX Gold and silver sales at Khoemacau. Stream deliveries from the NX Gold and Khoemacau streams were not due to us during the prior year comparable quarter. Cost of sales is specific to our stream agreements and is the result of our purchase of gold, silver and copper for a cash payment. The cash payment for gold from Mount Milligan is the lesser of $435 per ounce or the prevailing market price of gold when purchased, while the cash payment for our other streams is a set contractual percentage of the gold, silver or copper (Mount Milligan) spot price near the date of metal delivery.

General and administrative costs ~~decreased~~increased to ~~$6.9~~$9.3 million for the three months ended ~~March 31, 2021,~~June 30, 2022, from ~~$9.6~~$7.2 million for the three months ended ~~March 31, 2020.~~June 30, 2021. The ~~decrease~~increase was primarily due to ~~additional~~an increase in employee-related costs including non-cash ~~stock~~ compensation expense, ~~of approximately $3.3 million from the accelerated vesting of certain equity awards in connection~~as well as higher costs associated with ~~the retirement of our former President~~environmental, social and ~~Chief Executive Officer and our former Vice President and General Counsel in January 2020.~~

Exploration costs decreased to zero for the three months ended March 31, 2021, from $0.6 million for the three months ended March 31, 2020. Exploration costs were specific to the exploration and advancement of the Peak Gold JV. On September 30, 2020, we sold our Peak Gold JV interest which is discussed earlier in this MD&A and Note 2 of our notes to consolidated financial statements.governance (“ESG”) initiatives.

Depreciation, depletion and amortization decreased to ~~$41.3~~$44.0 million for the three months ended ~~March 31, 2021~~June 30, 2022, from ~~$51.2~~$48.0 million for the three months ended ~~March 31, 2020.~~June 30, 2021. The decrease was primarily due to lower gold sales at ~~Mount Milligan,~~ Andacollo and Pueblo Viejo ~~when~~ compared to the prior period. The decrease was ~~also attributable to decreases in our gold~~partially offset by additional depletion from the newly producing Khoemacau and ~~silver depletion rates at Pueblo Viejo and gold depletion rate at Mount Milligan. Our gold and silver depletion rates at Pueblo Viejo decreased in~~ the ~~current period due to an increase in proven and probable reserves as reported by Barrick, while our gold depletion rate at Mount Milligan decreased as a result of improved gold recoveries.~~

Interest and other expense decreased to $1.8 million for the three months ended March 31, 2021, from $2.1 million for the three months ended March 31, 2020. The decrease was primarily attributable to lower interest expense as a result of lower interest rates on our outstanding debtnewly acquired NX Gold streams when compared to the prior ~~period. Refer to Note 5 of our notes to consolidated financial statements for further discussion on our outstanding debt.~~year comparable quarter.

For the three months ended ~~March 31, 2021,~~June 30, 2022, we recorded an income tax ~~expense totaling $17.7~~benefit of $5.9 million, compared with income tax expense of ~~$8.7~~$5.5 million for the three months ended ~~March 31, 2020.~~June 30, 2021. The income tax ~~expense~~benefit resulted in an effective tax rate of ~~24.6%~~(9.0%) in the current period, compared with ~~18.5%~~6.3% for the three months ended ~~March 31, 2020.~~June 30, 2021. The three months ended June 30, 2022, included a discrete tax benefit attributable to a release of a valuation allowance while the three months ended June 30, 2021, included a discrete tax benefit attributable to the settlement of an uncertain tax position in a foreign jurisdiction.

Six Months Ended June 30, 2022, Compared to Six Months Ended June 30, 2021

For the six months ended June 30, 2022, we recorded net income and comprehensive income attributable to Royal Gold stockholders (“net income”) of $136.8 million, or $2.08 per basic and diluted share, as compared to net income of $135.7 million, or $2.07 per basic and diluted share, for the six months ended June 30, 2021.

2624

Table of Contents

~~three~~For the six months ended March 31, 2021 included approximately $2.6 million of certain discrete income tax expense items, which were primarily due to a change in the realizability of certain deferred tax assets. The effective tax rate for the three months ended March 31, 2020 included income tax benefits resulting from foreign exchange rate movements compared to the U.S. dollar. Absent these discrete income tax expense items, our effective tax rate would have been approximately 21% during the third quarter.

~~Nine Months Ended March 31, 2021, Compared to Nine Months Ended March 31, 2020~~

For the nine months ended March 31, 2021, we recorded net income of $220.9 million, or $3.36 per basic and diluted share, as compared to net income of $150.3 million, or $2.30 per basic share and $2.29 per diluted share, for the nine months ended March 31, 2020. The increase in our earnings per share was primarily attributable to an increase in revenue, a one-time gain attributable to the sale of our Peak Gold JV interest during the September 2020 quarter and various discrete income tax benefits recognized during the September 2020 quarter. Each item contributing to the increase in our earnings per share during the period is discussed below. These increases were partially offset by an increase in our cost of sales and an increase in depreciation, depletion and amortization expense, each discussed below.

~~For nine months ended March 31, 2021,~~June 30, 2022, we recognized total revenue of ~~$447.8~~$308.8 million, comprised of stream revenue of ~~$309.5~~$210.1 million and royalty revenue of ~~$138.3~~$98.7 million at an average gold price of ~~$1,859~~$1,874 per ounce, an average silver price of ~~$24.96~~$23.32 per ounce and an average copper price of ~~$3.35~~$4.43 per pound. This is compared to total revenue of ~~$378.9~~$310.6 million for the ~~nine~~six months ended ~~March 31, 2020,~~June 30, 2021, comprised of stream revenue of ~~$274.1~~$209.8 million and royalty revenue of ~~$104.8~~$100.8 million, at an average gold price of ~~$1,512~~$1,805 per ounce, an average silver price of ~~$17.07~~$26.47 per ounce and an average copper price of ~~$2.62~~$4.12 per pound. Revenue and the corresponding production attributable to our stream and royalty interests for the ~~nine~~six months ended ~~March 31, 2021,~~June 30, 2022, compared to the ~~nine~~six months ended ~~March 31, 2020,~~June 30, 2021, are as follows:

Revenue and Reported Production Subject to Our Stream and Royalty Interests

~~Nine Months Ended March 31, 2021 and 2020~~

(Amounts in thousands, except reported production ~~ozs.~~oz. and lbs.)

Nine Months Ended

Nine Months Ended

March 31, 2021

March 31, 2020

Reported

Reported
Stream/Royalty

Metal(s)

Revenue

Production⁽¹⁾

Revenue

Production⁽¹⁾
Stream⁽²⁾:

Mount Milligan

$
113,135

$
93,423

Gold

38,000
oz.

43,500
oz.

Copper

12.5
Mlbs.

10.9
Mlbs.
Pueblo Viejo

$
88,998

$
73,534

Gold

31,000
oz.

33,100
oz.

Silver

1.3
Moz.

1.4
Moz.
Andacollo

Gold

$
54,297

28,700
oz.

$
63,324

41,800
oz.
Wassa

Gold

$
24,644

13,300
oz.

$
18,760

12,500
oz.
Other⁽³⁾

$
28,494

$
25,024

Gold

13,300
oz.

15,400
oz.

Silver

141,300
oz.

133,500
oz.
Total stream revenue

$
309,568

$
274,065

Royalty⁽²⁾:

Peñasquito

$
36,289

$
19,422

Gold

521,700
oz.

228,500
oz.

Silver

23.2
Moz.

22.6
Moz.

Lead

143.8
Mlbs.

151.7
Mlbs.

Zinc

311.1
Mlbs.

303.6
Mlbs.
Cortez

Gold

$
22,421

147,200
oz.

$
14,109

120,800
oz.
Other⁽³⁾

Various

$
79,551

N/A

$
71,257

N/A

Total royalty revenue

$
138,261

$
104,788

Total revenue

$
447,829

$
378,853


		Six Months Ended				Six Months Ended
		June 30, 2022				June 30, 2021
				Reported				Reported
Stream/Royalty	Metal(s)	Revenue		Production⁽¹⁾		Revenue		Production⁽¹⁾
Stream⁽²⁾:
Mount Milligan		$	88,043			$	77,606
	Gold			29,400	oz.			25,400	oz.
	Copper			7.6	Mlbs.			7.8	Mlbs.
Pueblo Viejo		$	43,076			$	56,759
	Gold			15,600	oz.			21,600	oz.
	Silver			.6	Moz.			.7	Moz.
Andacollo	Gold	$	27,395	14,700	oz.	$	40,889	22,500	oz.
Wassa	Gold	$	15,451	8,300	oz.	$	15,902	8,700	oz.
Khoemacau	Silver	$	7,592	221,800	oz.	$	—	—
Other⁽³⁾		$	28,573			$	18,611
	Gold			13,700	oz.			8,200	oz.
	Silver			226,900	oz.			138,300	oz.
Total stream revenue		$	210,130			$	209,767

Royalty⁽²⁾:
Cortez	Gold	$	24,852	154,000	oz.	$	22,348	141,700	oz.
Peñasquito		$	22,758			$	26,527
	Gold			264,100	oz.			360,100	oz.
	Silver			15.7	Moz.			15.7	Moz.
	Lead			77.0	Mlbs.			91.9	Mlbs.
	Zinc			205.0	Mlbs.			221.0	Mlbs.
Other⁽³⁾	Various	$	51,056	N/A		$	51,974	N/A
Total royalty revenue		$	98,666			$	100,849
Total revenue		$	308,796			$	310,616

⁽¹⁾Reported production relates to the amount of metal sales subject to our stream and royalty interests for the nine months ended March 31, 2021, and 2020, and may differ from the operators’ public reporting.

Reported production relates to the amount of metal sales subject to our stream and royalty interests for the six months ended June 30, 2022, and 2021, and may differ from the operators’ public reporting.

⁽²⁾	Refer to “Property Developments” above for a discussion of recent developments at principal properties.

~~Table of Contents~~

⁽³⁾

Individually, except for our stream interest at Rainy River, which contributed 6% of total revenue for the ~~nine~~six months ended ~~March 31,~~June 30, 2022 and 2021, ~~and 2020,~~ no stream or royalty included within the “Other” category contributed greater than 5% of our total revenue for either period.

The ~~increase~~decrease in our total revenue ~~for the nine months ended March 31, 2021~~ resulted primarily from ~~an increase~~lower gold sales at Andacollo and Pueblo Viejo and lower gold production at Peñasquito. The decrease was offset by $15.8 million of new revenue from the NX Gold and Khoemacau streams which were not in ~~the average gold, silver and copper prices compared to~~production during the prior ~~period and an increase in production within the royalty segment.~~year comparable period.

Gold and silver ounces and copper pounds purchased and sold during the ~~nine~~six months ended ~~March 31,~~June 30, 2022 and 2021, ~~and 2020,~~ and gold and silver ounces and copper pounds in inventory as of ~~March~~June 30, 2022, and December 31, 2021, ~~and June 30, 2020~~ for our streaming interests were as follows:

Nine Months Ended

Nine Months Ended

As of

As of

March 31, 2021

March 31, 2020

March 31, 2021

June 30, 2020
Gold Stream

Purchases (oz.)

Sales (oz.)

Purchases (oz.)

Sales (oz.)

Inventory (oz.)

Inventory (oz.)
Mount Milligan

41,500

38,000

44,900

43,500

6,800

3,300
Andacollo

35,100

28,800

37,700

41,800

6,500

100
Pueblo Viejo

31,000

31,000

33,900

33,100

11,100

11,100
Wassa

13,100

13,300

11,600

12,500

2,700

2,900
Other

13,400

13,300

15,900

15,400

1,500

1,500
Total

134,100

124,400

144,000

146,300

28,600

18,900

Nine Months Ended

Nine Months Ended

As of

As of

March 31, 2021

March 31, 2020

March 31, 2021

June 30, 2020
Silver Stream

Purchases (oz.)

Sales (oz.)

Purchases (oz.)

Sales (oz.)

Inventory (oz.)

Inventory (oz.)
Pueblo Viejo

1,074,200

1,278,000

1,274,900

1,355,800

247,500

451,200
Other

190,300

141,300

138,300

133,500

72,300

23,400
Total

1,264,500

1,419,300

1,413,200

1,489,300

319,800

474,600

Nine Months Ended

Nine Months Ended

As of

As of

March 31, 2021

March 31, 2020

March 31, 2021

June 30, 2020
Copper Stream

Purchases (Mlbs.)

Sales (Mlbs.)

Purchases (Mlbs.)

Sales (Mlbs.)

Inventory (Mlbs.)

Inventory (Mlbs.)
Mount Milligan

11.8

12.5

10.2

11.0

—

0.8

Cost of sales, which excludes depreciation, depletion and amortization, increased to $68.2 million for the nine months ended March 31, 2021, from $63.1 million for the nine months ended March 31, 2020. The increase was primarily due to an increase in gold, silver and copper prices and an increase in copper sales at Mount Milligan when compared to the prior period. This increase was partially offset by a decrease in gold sales at Andacollo when compared to the prior period. Cost of sales is specific to our stream agreements and is the result of our purchase of gold, silver and copper for a cash payment. The cash payment for gold from Mount Milligan is the lesser of $435 per ounce or the prevailing market price of gold when purchased, while the cash payment for our other streams is a set contractual percentage of the gold, silver or copper (Mount Milligan) spot price near the date of metal delivery.

General and administrative costs decreased to $21.2 million for the nine months ended March 31, 2021, from $23.7 million for the nine months ended March 31, 2020. The decrease was primarily due to additional non-cash stock compensation expense of approximately $3.3 million from the accelerated vesting of certain equity awards in connection with the retirement of our former President and Chief Executive Officer and our former Vice President and General Counsel in January 2020.

Exploration costs decreased to $0.6 million for the nine months ended March 31, 2021, from $4.7 million for the three months ended March 31, 2020. Exploration costs were specific to the exploration and advancement of the Peak Gold JV. On September 30, 2020, we sold our Peak Gold JV interest which is discussed earlier in this MD&A and Note 2 of our notes to consolidated financial statements.

Depreciation, depletion and amortization increased to $135.5 million for the nine months ended March 31, 2021, from $130.0 million for the nine months ended March 31, 2020. The increase was primarily due to higher copper sales at Mount Milligan and an increase in depletion rates at Mount Milligan through the six months ended December 31, 2020, as previously discussed in our Fiscal 2020 10-K. During the three months ended March 31, 2021, the gold depletion rate at Mount Milligan decreased as a result of improved gold recoveries. The increase in depreciation, depletion and amortization was partially offset by a decrease in gold sales at Andacollo when compared to the prior period.

2825

Table of Contents

Revenue and Reported Production Subject to Our Stream and Royalty Interests

(Amounts in thousands, except reported production oz. and lbs.)


	Six Months Ended		Six Months Ended		As of	As of
	June 30, 2022		June 30, 2021		June 30, 2022	December 31, 2021
Gold Stream	Purchases (oz.)	Sales (oz.)	Purchases (oz.)	Sales (oz.)	Inventory (oz.)	Inventory (oz.)
Mount Milligan	33,800	29,400	33,000	25,400	8,500	4,100
Andacollo	16,000	14,700	22,000	22,500	3,500	2,200
Pueblo Viejo	15,700	15,600	20,900	21,600	8,700	8,600
Wassa	8,000	8,300	8,000	8,700	1,300	1,600
Other	13,500	13,700	8,300	8,200	2,000	2,200
Total	87,000	81,700	92,200	86,400	24,000	18,700

	Six Months Ended		Six Months Ended		As of	As of
	June 30, 2022		June 30, 2021		June 30, 2022	December 31, 2021
Silver Stream	Purchases (oz.)	Sales (oz.)	Purchases (oz.)	Sales (oz.)	Inventory (oz.)	Inventory (oz.)
Pueblo Viejo	581,600	590,500	634,000	665,600	307,100	316,000
Khoemacau	362,100	221,800	—	—	79,600	42,000
Other	106,300	226,900	170,800	138,300	16,400	34,300
Total	1,050,000	1,039,200	804,800	803,900	403,100	392,300

	Six Months Ended		Six Months Ended		As of	As of
	June 30, 2022		June 30, 2021		June 30, 2022	December 31, 2021
Copper Stream	Purchases (Mlbs.)	Sales (Mlbs.)	Purchases (Mlbs.)	Sales (Mlbs.)	Inventory (Mlbs.)	Inventory (Mlbs.)
Mount Milligan	6.7	7.6	8.6	7.8	—	0.9

~~We recognized an increase in fair value changes in equity securities of $4.1~~General and administrative costs increased to $19.9 million for the ~~nine~~six months ended ~~March 31, 2021, compared to a decrease in fair value of $5.0~~June 30, 2022, from $14.1 million for the ~~nine~~six months ended ~~March 31, 2020.~~June 30, 2021. The increase was primarily due to ~~a $3.6 million mark-to-market~~an increase ~~on the sale of 809,744 Contango common shares~~in employee-related costs including non-cash compensation expense, as part of the sale of our interest in the Peak Gold JV during the September 2020 quarter. Refer to Note 4 of our notes to consolidated financial statements for further discussion on our marketable equity securities.well as higher costs associated with ESG initiatives.

~~Interest~~Depreciation, depletion and ~~other expense decreased~~amortization increased to ~~$5.3~~$92.0 million for the ~~nine~~six months ended ~~March 31, 2021,~~June 30, 2022, from ~~$7.1~~$89.3 million for the ~~nine~~six months ended ~~March 31, 2020.~~June 30, 2021. The ~~decrease~~increase was primarily ~~attributable~~due to ~~lower interest expense as~~ higher gold sales at Mount Milligan, higher gold production at Cortez and additional depletion from the newly acquired Khoemaca ~~result of lower interest rates on our outstanding debt~~u and NX Gold streams when compared to the prior year period. ~~Refer to Note 5 of our notes to consolidated financial statements for further discussion on our outstanding debt.~~The increase was partially offset by lower gold and silver sales at Pueblo Viejo and lower gold sales at Andacollo.

For the ~~nine~~six months ended ~~March 31, 2021,~~June 30, 2022, we recorded income tax expense totaling ~~$31.3~~$9.4 million, compared with an income tax ~~benefit~~expense of ~~$3.7~~$23.2 million for the ~~nine~~six months ended ~~March 31, 2020.~~June 30, 2021. The income tax expense resulted in an effective tax rate of ~~12.4%~~6.4% in the current period, compared with ~~(2.6%)~~14.6% for the ~~nine~~six months ended ~~March 31, 2020.~~June 30, 2021. The ~~nine~~six months ended ~~March 31, 2021 effective tax rate~~June 30, 2022, included a discrete income tax ~~benefits~~benefit attributable to the release of ~~$21.8 million resulting primarily from~~a valuation allowance on certain deferred tax assets. The six months ended June 30, 2021, included a discrete tax benefit attributable to the ~~release~~settlement of an uncertain tax position ~~due to a settlement agreement~~ with a foreign tax authority and a change to the realizability of certain deferred tax assets. For the nine months ended March 31, 2020, the effective tax rate included an income tax benefit of $32.3 million primarily related to the enactment of the Federal Act on Tax Reform and AHV Financing in Switzerland (Swiss Tax Reform).jurisdiction.

Liquidity and Capital Resources

Overview

At ~~March 31, 2021,~~June 30, 2022, we had current assets of ~~$446.3~~$340.3 million compared to current liabilities of ~~$62.7~~$64.0 million, which resulted in working capital of ~~$383.6~~$276.3 million and a current ratio of 75 to 1. This compares to current assets of ~~$362.2~~$216.0 million and current liabilities of ~~$43.6~~$61.4 million at ~~June 30, 2020,~~December 31, 2021, resulting in working capital of ~~$318.6~~$154.6 million and a current ratio of approximately 84 to 1. The increase in working capital was primarily due to ~~increased revenue and proceeds from the sale of~~an increase in our ~~interests in the Manh Choh Project during the quarter ended September 30, 2020.~~available cash.

During the ~~nine~~six months ended ~~March 31, 2021,~~June 30, 2022, liquidity needs were met from ~~$286.3~~$221.3 million in net cash provided by operating activities and our available cash resources. As of ~~March 31, 2021,~~June 30, 2022, we had ~~$850 million~~$1 billion available ~~and $150 million outstanding~~ under our revolving credit facility. Working capital, combined with available capacity under our revolving credit facility, resulted in approximately ~~$1.2~~$1.3 billion of total liquidity at ~~March 31, 2021.~~June 30, 2022. We were in compliance with each financial covenant under the revolving credit facility as of ~~March 31, 2021.~~June 30, 2022. Refer to Note 513 of our notes to consolidated financial statements and below (“Recent Liquidity Developments”) for further discussion on our ~~outstanding~~ debt. On April 1, 2021, we repaid the remaining $150 million outstanding under the credit facility. Upon this repayment, the amount available under our revolving credit facility is $1 billion, with no amounts outstanding.

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We believe that our current financial resources and funds generated from operations will be adequate to cover anticipated expenditures for debt service, general and administrative expense costs and capital expenditures for the foreseeable future. Our current financial resources are also available to fund dividends and for acquisitions of stream and royalty interests, including any conditional funding schedules. Our long-term capital requirements are primarily affected by our ongoing acquisition activities. We currently, and generally at any time, have acquisition opportunities in various stages of active review. In the event of one or more substantial stream or royalty interest or other acquisitions, we may seek additional debt or equity financing as necessary. We occasionally borrow and repay amounts under our revolving credit facility and may do so in the future.

Please refer to our risk factors included in Part 1, Item 1A of our ~~Fiscal 2020 10-K~~Transition Report for a discussion of certain risks that may impact our liquidity and capital resources.

29Recent Liquidity Developments

~~Table~~

Revolving Credit Facility Draw

In July 2022, we borrowed $500 million under our revolving credit facility for business development activities and have $500 million available.

Business Development Activities

Refer to Note 13 of ~~Contents~~our notes to consolidated financial statements for further discussion on the liquidity needs for the proposed Great Bear Acquisition and the Cortez Royalty acquisition.

Cash Flows

Operating Activities

Net cash provided by operating activities totaled ~~$286.3~~$221.3 million for the ~~nine~~six months ended ~~March 31, 2021,~~June 30, 2022, compared to ~~$249.2~~$213.1 million for the ~~nine~~six months ended ~~March 31, 2020.~~June 30, 2021. The increase was primarily due to an increase in cash proceeds received from our stream and royalty interests, net of cost of sales and production taxes, of approximately ~~$54.4 million. The~~$20.2 million compared to the prior year period. This increase was partially offset by an increase in income taxes paid of ~~$24.1 million.~~$6.1 million compared to the prior year period.

Investing Activities

Net cash used in investing activities totaled ~~$21.6~~$37.9 million for the ~~nine~~six months ended ~~March 31, 2021,~~June 30, 2022, compared to ~~net cash used in investing activities of $105.1~~$128.8 million for the ~~nine~~six months ended ~~March 31, 2020.~~June 30, 2021. The decrease was primarily due to ~~$49.2 million received for the sale~~lower acquisitions of ~~our Peak Gold JV investment~~stream and ~~$12.1 million for the sale of our Contango shares. This decrease was partially offset by advance payments totaling $77.2 million for the Khoemac~~a~~u silver stream acquisition during the current period,~~royalty interests compared to ~~$87.8 million during~~ the prior year period.

Financing Activities

Net cash used in financing activities totaled ~~$213.5~~$46.4 million for the ~~nine~~six months ended ~~March 31, 2021,~~June 30, 2022, compared to ~~$169.9~~net cash used in financing activities of $240.2 million for the ~~nine~~six months ended ~~March 31, 2020.~~June 30, 2021. The ~~increase~~decrease was primarily due to ~~an increase in repayments on our revolving credit facility. We repaid $155.0~~a repayment of $200 million on our revolving credit facility during the ~~nine months ended March 31, 2021, compared to $115.0 million during the nine months ended March 31, 2020.~~

~~Recent Liquidity and Capital Resource Development~~

~~Dividend Increase~~

On November 17, 2020, we announced an increase in our annual dividend for calendar 2021 from $1.12 to $1.20, payable on a quarterly basis of $0.30 per share. The newly declared dividend is 7% higher than the dividend paid during calendar 2020. We have steadily increased our annual dividend for 20 years, or since calendar 2001. We expect to pay our annual dividend using cash on hand.prior year period.

Recently Adopted Accounting Standards and Critical Accounting Policies

Refer to Note 1 of our notes to consolidated financial statements for further discussion on any recently adopted accounting standards. Refer to Management’s Discussion and Analysis of Financial Condition and Results of Operations in our ~~Fiscal 2020 10-K~~Transition Report for discussion on our critical accounting policies.

Forward-Looking Statements

This report and our other public communications include “forward-looking statements” within the meaning of U.S. federal securities laws. Forward-looking statements are any statements other than statements of historical fact. Forward-looking statements are not guarantees of future performance, and actual results may differ materially from these statements.

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Forward-looking statements are often identified by words like “will,” “may,” “could,” “should,” “would,” “believe,” “estimate,” “expect,” “anticipate,” “plan,” “forecast,” “potential,” “intend,” “continue,” “project,” or negatives of these words or similar expressions. Forward-looking statements include, among others, statement regarding the following: ~~statements about~~funding of the purchase price for the Great Bear Acquisition; timing of the receipt of approvals for and closing of the Great Bear Acquisition; our due diligence review process; volatility of metal prices and factors impacting same; our expected financial performance and outlook, including sales volume, revenue, expenses, tax rates, earnings or cash flow; operators’ expected operating and financial performance, including production, deliveries, mine plans, facilities, mineral resources and reserves, access to and adequacy of water sources, development, cash flows, capital expenditures, and ~~capital expenditures; planned~~permitting and environmental impact studies; effects of the pandemic; estimates of fair value and potential ~~acquisitions~~impairments; tax changes; timing for the delivery of deferred silver ounces from Pueblo Viejo; stronger performance at Cortez for the fourth quarter of 2022; adequacy of our current financial resources and funds from operations to cover anticipated expenditures for the foreseeable future; seeking additional debt or ~~dispositions, including funding schedules~~equity financing as necessary; borrowing and ~~conditions; liquidity, financing~~repaying amounts under our revolving credit facility; and ~~shareholder returns; our overall investment portfolio; macroeconomic~~disclosure controls and ~~market conditions including the impacts of COVID-19; prices for gold, silver, copper, nickel~~procedures and ~~other metals; potential impairments; or tax changes.~~internal controls over financial reporting.

~~Factors~~The risks and uncertainties that could cause actual results to differ materially from ~~these forward-looking~~those in forward looking statements include, ~~among others, the following:~~without limitation, a lower-price environment for gold, silver, copper, nickel or other metals; operating activities or financial performance of ~~properties on which we hold stream or royalty interests,~~operators, including inaccuracies in the operator’s disclosures, variations between actual and forecasted performance, ~~operators’~~the operator’s ability to complete projects on schedule and as planned, the operator’s changes to mine plans and reserves

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and resources, the operator’s liquidity needs, mining ~~and environmental~~ hazards, labor disputes, distribution and supply chain disruptions, permitting and licensing issues, contractual issues involving our ~~stream or~~ royalty ~~agreements,~~agreement, or operational disruptions due to ~~COVID-19;~~public health crises; environmental risks, including those caused by climate change; potential cyber-attacks, including ransomware; risks associated with doing business in foreign countries; ~~our ability to identify, finance, value~~increased competition for stream and ~~complete acquisitions;~~royalty interests; adverse economic and market conditions; changes in laws or regulations governing us, operators or operating properties; changes in management and key employees; the ability to obtain, or delays in obtaining, stockholder and court approval of the Great Bear Acquisition; the risk that an event, change or other circumstance could give rise to the termination of the arrangement agreement with GBR; the risk that a condition to closing of the Great Bear Acquisition may not be satisfied; the risk that any announcement relating to an acquisition could have adverse effects on the market price of Royal Gold’s common stock; the risk of litigation related to acquisitions; and the diversion of management time from ongoing business operations due to acquisition-related issues; and other factors described in ~~Item 1A. Risk Factors of~~ our ~~Fiscal 2020 10-K~~reports filed with the Securities and ~~subsequent Forms 10-Q.~~Exchange Commission, including our Transition Report. Most of these factors are beyond our ability to predict or control. Other unpredictable or unknown factors not discussed in this presentation could also have material adverse effects on forward looking statements.

Forward-looking statements speak only as of the date on which they are made. We disclaim any obligation to update any

forward-looking statements, except as required by law. Readers are cautioned not to put undue reliance on forward-looking statements.

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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Our earnings and cash flows are significantly impacted by changes in the market price of gold and other metals. Gold, silver, copper, and other metal prices can fluctuate significantly and are affected by numerous factors, such as demand, production levels, economic policies of central banks, producer hedging, world political and economic events, inflation and the strength of the U.S. dollar relative to other currencies. Please see the risk factor entitled “Our revenue is subject to volatility in metal prices, which could negatively affect our results of operations or cash flow.” under Part I, Item 1A of our ~~Fiscal 2020 10-K,~~Transition Report, for more information about risks associated with metal price volatility.

During the ~~nine~~six months ended ~~March 31, 2021,~~June 30, 2022, we reported revenue of ~~$447.8~~$308.8 million, with an average gold price for the period of ~~$1,859~~$1,874 per ounce, an average silver price of ~~$24.96~~$23.32 per ounce, and an average copper price of ~~$3.35~~$4.43 per pound. The table below shows the impact that a 10% increase or decrease in the average price of the specified metal would have had on our total reported revenue for the ~~nine~~six months ended ~~March 31, 2021:~~June 30, 2022:


Metal	Percentage of Total Reported Revenue Associated with Specified Metal	Amount by Which Total Reported Revenue Would Have Increased or Decreased If Price of Specified Metal Had Averaged 10% Higher or Lower in Period
Gold	~~73%~~71%	$~~22.5~~24.9 million
Copper	~~12%~~14%	$~~3.8~~7.9 million
Silver	10%	$~~3.3~~1.7 million

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

Under the supervision and with the participation of our management, including our ~~President and~~ Chief Executive Officer (the principal executive officer) and Chief Financial Officer ~~and Treasurer~~ (the principal financial and accounting officer), we evaluated the effectiveness of the design and operation of our disclosure controls and procedures as of ~~March 31, 2021.~~June 30, 2022. Based on this evaluation, our ~~President and~~ Chief Executive Officer and Chief Financial Officer ~~and Treasurer~~ have concluded that our disclosure controls and procedures were effective as of ~~March 31, 2021,~~June 30, 2022, at the reasonable assurance level.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting during the three months ended ~~March 31, 2021,~~June 30, 2022, that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Inherent Limitations on Effectiveness of Controls

Our management, including our ~~President and~~ Chief Executive Officer and Chief Financial Officer, ~~and Treasurer,~~ does not expect that our disclosure controls and procedures or our internal controls will prevent all error and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within Royal Gold have been detected.

PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

None.

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ITEM 1A. RISK FACTORS

There have been no material changes to the risk factors included in the section entitled “Risk Factors” of our ~~Fiscal 2020 10-K.~~Transition Report.

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ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

Issuer Purchases of Equity Securities


Period	(a) Total Number of Shares Purchased⁽¹⁾	(b) Average Price Paid Per Share	(c) Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	(d) Maximum Number (or Approximate Dollar Value) of Shares that May Yet Be Purchased Under the Plan or Programs
~~January 2021~~April 2022	—	—	N/A	N/A
~~February 2021~~May 2022	—	—	N/A	N/A
~~March 2021~~June 2022	—	—	N/A	N/A
Total	—	—	N/A	N/A

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURE

Not applicable.

ITEM 5. OTHER INFORMATION

None.

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ITEM 6. EXHIBITS


Exhibit Number		Description

~~10.1~~10.1*▲		~~Addendum~~Form of [First][Second] Amendment to ~~the~~ Employment ~~Contract, dated March 4, 2021, between RGLD Gold AG and Daniel Breeze~~Agreement, as applicable (filed as Exhibit 10.1 ~~to Royal Gold’s~~of the Current Report on Form 8-K ~~filed~~ on ~~March 8, 2021,~~May 25, 2022, and incorporated herein by reference).

10.2*▲		Form of Amendment to Employment Agreement (filed as Exhibit 10.1 of the Current Report on Form 8-K on April 11, 2022, and incorporated herein by reference).

31.1*		Certification of Chief Executive Officer pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2*		Certification of Chief Financial Officer pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1‡		Certification of the Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2‡		Certification of the Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101*		The following financial statements from Royal Gold, Inc.’s Quarterly Report on Form 10-Q for the quarter ended ~~March 31, 2021,~~June 30, 2022, formatted in Inline XBRL: (a) Consolidated Statements of Cash Flows, (b) Consolidated Statements of Operations, (c) Consolidated Statements of Comprehensive Income, (d) Consolidated Balance Sheets, and (e) Notes to Consolidated Financial Statements, tagged as blocks of text and including detailed tags.

104*		The cover page from Royal Gold, Inc.’s Quarterly Report on Form 10-Q for the quarter ended ~~March 31, 2021,~~June 30, 2022, formatted in Inline XBRL (included as Exhibit 101).

*	Filed herewith.

‡	Furnished herewith.

▲	Identifies a management contract or compensation plan or arrangement.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	ROYAL GOLD, INC.

Date: ~~May 6, 2021~~August 4, 2022
	By:	/s/ William Heissenbuttel
		William Heissenbuttel
		President and Chief Executive Officer
		(Principal Executive Officer)

Date: ~~May 6, 2021~~August 4, 2022	By:	/s/ Paul Libner
		Paul Libner
		Chief Financial Officer and Treasurer
		(Principal Financial and Accounting Officer)

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	As of March 31, 2021						As of June 30, 2020
	Principal		Debt Issuance Costs		Total		Principal		Debt Issuance Costs		Total

		(Amounts in thousands)						(Amounts in thousands)
Revolving credit facility	$	150,000	$	(3,730)	$	146,270	$	305,000	$	(4,561)	$	300,439
Total debt	$	150,000	$	(3,730)	$	146,270	$	305,000	$	(4,561)	$	300,439


	Classification	March 31, 2021
Operating Leases
Right-of-use assets - current	Prepaid expenses and other	$	805
Right-of-use assets - non-current	Other assets		6,206
Total right-of-use assets		$	7,011

Lease liabilities - current	Other current liabilities	$	952
Lease liabilities - non-current	Other long-term liabilities		7,403
Total operating lease liabilities		$	8,355


Fiscal Years:	Operating Leases
2021	$	287
2022		1,143
2023		1,120
2024		1,120
2025		1,083
Thereafter		4,533
Total lease payments	$	9,286
Less imputed interest		(931)
Total	$	8,355


	Nine Months Ended March 31, 2021
	Revenue		Cost of sales⁽¹⁾		Production taxes		Depletion ⁽²⁾		Segment gross profit
Stream interests	$	309,568	$	68,230	$	—	$	111,848	$	129,490
Royalty interests		138,261		—		4,591		23,428		110,242
Total	$	447,829	$	68,230	$	4,591	$	135,276	$	239,732

	Nine Months Ended March 31, 2020
	Revenue		Cost of sales⁽¹⁾		Production taxes		Depletion ⁽²⁾		Segment gross profit
Stream interests	$	274,065	$	63,149	$	—	$	106,883	$	104,033
Royalty interests		104,788		—		2,934		22,875		78,979
Total	$	378,853	$	63,149	$	2,934	$	129,758	$	183,012