Royal Gold (RGLD) 10-Q 2023 Q2 Quarterly report

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 June 30, 2023

or

☐ 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 15th 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 65,688,734 shares of Royal Gold common stock outstanding as of July 27, 2023.

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	17
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	29
Item 4.	Controls and Procedures	29
PART II	OTHER INFORMATION
Item 1.	Legal Proceedings	29
Item 1A.	Risk Factors	30
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	30
Item 3.	Defaults Upon Senior Securities	30
Item 4.	Mine Safety Disclosures	30
Item 5.	Other Information	30
Item 6.	Exhibits	31
SIGNATURES		32

2

ITEM 1.     FINANCIAL STATEMENTS

ROYAL GOLD, INC.

Consolidated Balance Sheets

(Unaudited, amounts in thousands except share data)

	June 30,		December 31,
	2023		2022
ASSETS
Cash and equivalents	$	106,157	$	118,586
Royalty receivables		36,458		49,405
Income tax receivable		9,602		3,066
Stream inventory		10,657		12,656
Prepaid expenses and other		2,375		2,120
Total current assets		165,249		185,833
Stream and royalty interests, net (Note 2)		3,155,561		3,237,402
Other assets		118,899		111,287
Total assets	$	3,439,709	$	3,534,522
LIABILITIES
Accounts payable	$	8,552	$	6,686
Dividends payable		24,646		24,627
Income tax payable		15,603		16,065
Other current liabilities		14,267		16,209
Total current liabilities		63,068		63,587
Debt (Note 4)		395,529		571,572
Deferred tax liabilities		136,136		138,156
Other liabilities		9,083		7,738
Total liabilities		603,816		781,053
Commitments and contingencies (Note 11)
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 65,609,736 and 65,592,597 shares outstanding, respectively		656		656
Additional paid-in capital		2,217,559		2,213,123
Accumulated earnings		605,347		527,314
Total Royal Gold stockholders’ equity		2,823,562		2,741,093
Non-controlling interests		12,331		12,376
Total equity		2,835,893		2,753,469
Total liabilities and equity	$	3,439,709	$	3,534,522

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

3

ROYAL GOLD, INC.

Consolidated Statements of Operations and Comprehensive Income

(Unaudited, amounts in thousands except share data)

	Three Months Ended				Six Months Ended
	June 30,		June 30,		June 30,		June 30,
	2023		2022		2023		2022
Revenue (Note 5)	$	144,042	$	146,441	$	314,434	$	308,796
Costs and expenses
Cost of sales (excludes depreciation, depletion and amortization)		23,367		23,810		48,387		46,450
General and administrative		9,093		9,312		20,093		18,243
Production taxes		1,274		1,425		3,263		3,646
Depreciation, depletion and amortization		38,412		43,989		84,741		91,976
Total costs and expenses		72,146		78,536		156,484		160,315
Operating income		71,896		67,905		157,950		148,481
Fair value changes in equity securities		(509)		(2,191)		291		(1,577)
Interest and other income		2,650		1,118		4,912		2,093
Interest and other expense		(8,408)		(1,398)		(17,582)		(2,296)
Income before income taxes		65,629		65,434		145,571		146,701
Income tax (expense) benefit		(2,029)		5,911		(17,900)		(9,393)
Net income and comprehensive income		63,600		71,345		127,671		137,308
Net income and comprehensive income attributable to non-controlling interests		(151)		(205)		(347)		(492)
Net income and comprehensive income attributable to Royal Gold common stockholders	$	63,449	$	71,140	$	127,324	$	136,816
Net income per share attributable to Royal Gold common stockholders:
Basic earnings per share	$	0.97	$	1.08	$	1.94	$	2.08
Basic weighted average shares outstanding		65,605,391		65,569,190		65,600,213		65,567,621
Diluted earnings per share	$	0.97	$	1.08	$	1.93	$	2.08
Diluted weighted average shares outstanding		65,762,903		65,678,320		65,736,028		65,661,653
Cash dividends declared per common share	$	0.375	$	0.35	$	0.75	$	0.70

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

4

ROYAL GOLD, INC.

Consolidated Statements of Changes in Stockholders’ Equity

Three months ended June 30, 2023, and 2022

(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 March 31, 2023	65,599,348	$	656	$	2,215,362	$	566,545	$	12,369	$	2,794,932
Stock-based compensation and related share issuances	10,388		—		2,197		—		—		2,197
Distributions to non-controlling interests	—		—		—		—		(189)		(189)
Net income and comprehensive income	—		—		—		63,449		151		63,600
Dividends declared	—		—		—		(24,647)		—		(24,647)
Balance at June 30, 2023	65,609,736	$	656	$	2,217,559	$	605,347	$	12,331	$	2,835,893
	Royal Gold Stockholders
				Additional
	Common Shares			Paid-In		Accumulated		Non-controlling		Total
	Shares	Amount		Capital		Earnings		Interests		Equity
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	888		—		2,384		—		—		2,384
Distributions to non-controlling interests	—		—		—		—		(201)		(201)
Net income and comprehensive income	—		—		—		71,140		205		71,345
Dividends declared	—		—		—		(22,984)		—		(22,984)
Balance at June 30, 2022	65,569,687	$	656	$	2,210,809	$	472,764	$	12,429	$	2,696,658

ROYAL GOLD, INC.

Consolidated Statements of Changes in Stockholders’ Equity

Six months ended June 30, 2023, and 2022

(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, 2022	65,592,597	$	656	$	2,213,123	$	527,314	$	12,376	$	2,753,469
Stock-based compensation and related share issuances	17,139		—		4,436		—		—		4,436
Distributions to non-controlling interests	—		—		—		—		(392)		(392)
Net income and comprehensive income	—		—		—		127,324		347		127,671
Dividends declared	—		—		—		(49,291)		—		(49,291)
Balance at June 30, 2023	65,609,736	$	656	$	2,217,559	$	605,347	$	12,331	$	2,835,893
	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

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

5

ROYAL GOLD, INC.

Consolidated Statements of Cash Flows

(Unaudited, amounts in thousands)

	Six Months Ended
	June 30,		June 30,
	2023		2022
Cash flows from operating activities:
Net income and comprehensive income	$	127,671	$	137,308
Adjustments to reconcile net income and comprehensive income to net cash provided by operating activities:
Depreciation, depletion and amortization		84,741		91,976
Non-cash employee stock compensation expense		4,579		4,542
Fair value changes in equity securities		(291)		1,577
Deferred tax benefit		(7,139)		(28,114)
Other		445		491
Changes in assets and liabilities:
Royalty receivables		12,948		17,220
Stream inventory		1,998		(1,564)
Income tax receivable		(6,536)		(2,797)
Prepaid expenses and other assets		(2,641)		(1,359)
Accounts payable		1,866		592
Income tax payable		(462)		4,976
Other liabilities		(597)		(3,519)
Net cash provided by operating activities	$	216,582	$	221,329
Cash flows from investing activities:
Acquisition of stream and royalty interests		(2,670)		(37,841)
Sale of equity securities		107		—
Other		(258)		(36)
Net cash used in investing activities	$	(2,821)	$	(37,877)
Cash flows from financing activities:
Repayment of debt		(175,000)		—
Debt issuance costs		(1,533)		—
Net payments from issuance of common stock		253		108
Common stock dividends		(49,271)		(45,953)
Other		(639)		(541)
Net cash used in financing activities	$	(226,190)	$	(46,386)
Net (decrease) increase in cash and equivalents		(12,429)		137,066
Cash and equivalents at beginning of period		118,586		143,551
Cash and equivalents at end of period	$	106,157	$	280,617

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

6

ROYAL GOLD, INC.

Notes to Consolidated Financial Statements

(Unaudited)

1.    OPERATIONS, SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND 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 six months ended June 30, 2023 are not necessarily indicative of the results that may be expected for the calendar year ending December 31, 2023. These interim unaudited consolidated financial statements should be read in conjunction with our Form 10-K for the year ended December 31, 2022, filed with the Securities and Exchange Commission (“SEC”) on February 16, 2023 (“2022 10-K”).

Recent Accounting Standards

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 or other standards-setting bodies through the filing date of these unaudited consolidated financial statements and do not believe the future adoption of any such standards will have a material impact on our consolidated financial statements.

7

ROYAL GOLD, INC.

Notes to Consolidated Financial Statements

(Unaudited)

2.    STREAM AND ROYALTY INTERESTS, NET

The following tables summarize our stream and royalty interests, net as of June 30, 2023 and December 31, 2022.

As of June 30, 2023 (Amounts in thousands):	Cost		Accumulated Depletion		Net
Production stage stream interests:
Mount Milligan	$	790,635	$	(413,284)	$	377,351
Pueblo Viejo		610,404		(295,407)		314,997
Andacollo		388,182		(157,761)		230,421
Khoemacau		265,911		(29,275)		236,636
Rainy River		175,727		(68,476)		107,251
Other		232,703		(121,328)		111,375
Total production stage stream interests		2,463,562		(1,085,531)		1,378,031
Production stage royalty interests:
Cortez (Legacy Zone and CC Zone)		353,850		(47,402)		306,448
Voisey's Bay		205,724		(119,356)		86,368
Red Chris		116,187		(3,758)		112,429
Peñasquito		99,172		(59,407)		39,765
Other		447,687		(403,171)		44,516
Total production stage royalty interests		1,222,620		(633,094)		589,526
Total production stage stream and royalty interests		3,686,182		(1,718,625)		1,967,557
Development stage stream interests:
Other		12,038		—		12,038
Development stage royalty interests:
Côté		45,421		—		45,421
Other		81,510		—		81,510
Total development stage stream and royalty interests		138,969		—		138,969
Exploration stage stream interests:
Xavantina		19,565		—		19,565
Exploration stage royalty interests:
Cortez (Legacy Zone and CC Zone)		456,471		—		456,471
Great Bear		209,106		—		209,106
Pascua-Lama		177,690		—		177,690
Red Chris		48,895		—		48,895
Côté		29,610		—		29,610
Other		107,698		—		107,698
Total exploration stage stream and royalty interests		1,049,035		—		1,049,035
Total stream and royalty interests, net	$	4,874,186	$	(1,718,625)	$	3,155,561

8

ROYAL GOLD, INC.

Notes to Consolidated Financial Statements

(Unaudited)

As of December 31, 2022 (Amounts in thousands):	Cost		Accumulated Depletion		Impairments		Net
Production stage stream interests:
Mount Milligan	$	790,635	$	(392,804)	$	—	$	397,831
Pueblo Viejo		610,404		(289,537)		—		320,867
Andacollo		388,182		(151,870)		—		236,312
Khoemacau		265,911		(15,905)		—		250,006
Rainy River		175,727		(61,601)		—		114,126
Other		215,576		(110,711)		—		104,865
Total production stage stream interests		2,446,435		(1,022,428)		—		1,424,007
Production stage royalty interests:
Cortez (Legacy Zone and CC Zone)		353,772		(35,276)		—		318,496
Voisey's Bay		205,724		(118,327)		—		87,397
Red Chris		116,187		(1,797)		—		114,390
Peñasquito		99,172		(57,772)		—		41,400
Other		447,535		(398,513)		—		49,022
Total production stage royalty interests		1,222,390		(611,685)		—		610,705
Total production stage stream and royalty interests		3,668,825		(1,634,113)		—		2,034,712
Development stage stream interests:
Other		12,038		—		—		12,038
Development stage royalty interests:
Côté		45,421		—		—		45,421
Other		74,225		—		—		74,225
Total development stage stream and royalty interests		131,684		—		—		131,684
Exploration stage stream interests:
Xavantina		34,253		—		—		34,253
Exploration stage royalty interests:
Cortez (Legacy Zone and CC Zone)		456,318		—		—		456,318
Great Bear		209,106		—		—		209,106
Pascua-Lama		177,690		—		—		177,690
Red Chris		48,895		—		—		48,895
Côté		29,610		—		—		29,610
Other		119,421		—		(4,287)		115,134
Total exploration stage royalty interests		1,075,293		—		(4,287)		1,071,006
Total stream and royalty interests, net	$	4,875,802	$	(1,634,113)	$	(4,287)	$	3,237,402

3.  MARKETABLE EQUITY SECURITIES

As of June 30, 2023, our marketable equity securities include warrants to purchase up to 19,640,000 common shares of TriStar Gold Inc and 250,000 common shares of Goldon Resources Ltd. Our marketable equity securities are measured at fair value (Note 10) each reporting period with any changes in fair value recognized in net income (amounts in thousands).

	June 30,		December 31,
	2023		2022
Carrying value of marketable securities(1)	$	547	$	373
Change in fair value of marketable securities	$	(509)	$	(1,503)

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

9

ROYAL GOLD, INC.

Notes to Consolidated Financial Statements

(Unaudited)

4.    DEBT

Our debt as of June 30, 2023 and December 31, 2022 consists of the following (amounts in thousands):

	As of June 30, 2023						As of December 31, 2022
	Principal		Debt Issuance Costs		Total		Principal		Debt Issuance Costs		Total
		(Amounts in thousands)						(Amounts in thousands)
Revolving credit facility	$	400,000	$	(4,471)	$	395,529	$	575,000	$	(3,428)	$	571,572
Total debt	$	400,000	$	(4,471)	$	395,529	$	575,000	$	(3,428)	$	571,572

Revolving credit facility

On March 6, 2023, we repaid $75 million and on June 6, 2023, we repaid $100 million of outstanding borrowings on our revolving credit facility.

On June 28, 2023, we entered into a fifth amendment to our revolving credit facility dated as of June 2, 2017, as amended. The fifth amendment extended the scheduled maturity date from July 7, 2026 to June 28, 2028, replaced LIBOR with Secured Overnight Financing Rate (“Term SOFR”) as a benchmark interest rate and made certain other administrative changes to the existing revolving credit facility.

As of June 30, 2023, we had $400 million outstanding and $600 million available under our revolving credit facility. The interest rate on borrowings under our revolving credit facility as of June 30, 2023, was LIBOR plus 1.20% for an all-in rate of 6.7%. Interest expense, which includes interest on outstanding borrowings and amortization of debt issuance costs, was $7.8 million and $16.3 million for the three and six months ended June 30, 2023, respectively, and $0.2 million and $0.5 million for the three and six months ended June 30, 2022, respectively. We were in compliance with each financial covenant (leverage ratio and interest coverage ratio) under our revolving credit facility as of June 30, 2023.

We may repay any borrowings under our revolving credit facility at any time without premium or penalty.

5.    REVENUE

Revenue Recognition

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 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.

10

ROYAL GOLD, INC.

Notes to Consolidated Financial Statements

(Unaudited)

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 costs.

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 2022 10-K. For the three months ended June 30, 2023, royalty revenue that was estimated or was attributable to metal production for a period prior to June 30, 2023, was not material.  

Disaggregation of Revenue

We have identified two 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 9.

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,
	2023		2022		2023		2022
Stream revenue:
Gold	$	80,227	$	75,325	$	158,856	$	152,827
Silver		19,230		12,892		37,539		24,331
Copper		6,558		16,662		24,610		32,972
Total stream revenue	$	106,015	$	104,879	$	221,005	$	210,130
Royalty revenue:
Gold	$	30,169	$	28,974	$	73,037	$	66,890
Silver		2,721		3,512		5,667		7,829
Copper		1,572		3,281		6,630		9,986
Other		3,565		5,795		8,095		13,961
Total royalty revenue	$	38,027	$	41,562	$	93,429	$	98,666
Total revenue	$	144,042	$	146,441	$	314,434	$	308,796

11

ROYAL GOLD, INC.

Notes to Consolidated Financial Statements

(Unaudited)

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)	2023		2022		2023		2022
Stream revenue:
Mount Milligan	Gold & Copper	$	41,208	$	45,627	$	87,863	$	88,043
Pueblo Viejo	Gold & Silver		23,540		19,812		45,898		43,076
Khoemacau	Silver		8,881		5,202		18,035		7,591
Andacollo	Gold		7,823		11,721		20,757		27,395
Other	Gold & Silver		24,563		22,517		48,452		44,025
Total stream revenue		$	106,015	$	104,879	$	221,005	$	210,130
Royalty revenue:
Cortez Legacy Zone	Gold	$	14,305	$	8,138	$	37,393	$	24,852
Cortez CC Zone	Gold		3,520		—		6,726		—
Peñasquito	Gold, Silver, Lead & Zinc		6,105		9,664		13,538		22,758
Other	Various		14,097		23,760		35,772		51,056
Total royalty revenue		$	38,027	$	41,562	$	93,429	$	98,666
Total revenue		$	144,042	$	146,441	$	314,434	$	308,796

Please refer to Note 9 for the geographical distribution of our revenue by reportable segment.

6.    STOCK-BASED COMPENSATION

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

	Three Months Ended				Six Months Ended
	June 30,		June 30,		June 30,		June 30,
	2023		2022		2023		2022
Restricted stock	$	1,540	$	1,201	$	3,154	$	2,356
Stock appreciation rights		212		360		417		692
Performance stock		183		847		993		1,478
Stock options		8		10		15		16
Total stock-based compensation expense	$	1,943	$	2,418	$	4,579	$	4,542

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

During the three and six months ended June 30, 2023 and 2022, we granted the following stock-based compensation awards:

	Three Months Ended			Six Months Ended
	June 30,		June 30,	June 30,		June 30,
	2023	2022		2023	2022
	(Number of shares)			(Number of shares)
Performance stock (at maximum 200% attainment)	—		—	82,360		39,380
Restricted Stock	—		—	56,530		28,220
Total equity awards granted	—		—	138,890		67,600

12

ROYAL GOLD, INC.

Notes to Consolidated Financial Statements

(Unaudited)

As of June 30, 2023, 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-
	compensation		average vesting
	expense		period (years)
Restricted stock	$	9,880		2.1
Performance stock		7,666		2.2
Stock appreciation rights		111		0.1
Stock options		4		0.1

7.    EARNINGS PER SHARE (“EPS”)

Basic EPS 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 table summarizes 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,
	2023		2022		2023		2022
Net income attributable to Royal Gold common stockholders	$	63,449	$	71,140	$	127,324	$	136,816
Weighted-average shares for basic EPS		65,605,391		65,569,190		65,600,213		65,567,621
Effect of other dilutive securities		157,512		109,130		135,815		94,032
Weighted-average shares for diluted EPS		65,762,903		65,678,320		65,736,028		65,661,653
Basic EPS	$	0.97	$	1.08	$	1.94	$	2.08
Diluted EPS	$	0.97	$	1.08	$	1.93	$	2.08

8.    INCOME TAXES

The following table provides the income tax expense (amounts in thousands) and effective tax rates for the periods indicated:

	Three Months Ended				Six Months Ended
	June 30,		June 30,		June 30,		June 30,
	2023		2022		2023		2022
Income tax expense (benefit)	$	2,029	$	(5,911)	$	17,900	$	9,393
Effective tax rate		3.1%		(9.0%)		12.3%		6.4%

The effective tax rates for the three and six months ended June 30, 2023, and June 30, 2022, included discrete income tax benefits of $8.5 million and $18.8 million, respectively, attributable to the release of a valuation allowance on certain deferred tax assets, respectively.  

13

ROYAL GOLD, INC.

Notes to Consolidated Financial Statements

(Unaudited)

9.    SEGMENT INFORMATION

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

	As of June 30, 2023						As of December 31, 2022
					Total stream						Total stream
	Stream		Royalty		and royalty		Stream		Royalty		and royalty
	interest		interest		interests, net		interest		interest		interests, net
Canada	$	484,602	$	616,920	$	1,101,522	$	511,957	$	620,549	$	1,132,506
Dominican Republic		314,998		—		314,998		320,867		—		320,867
Africa		280,517		321		280,838		299,722		321		300,043
Chile		230,421		224,116		454,537		236,312		224,116		460,428
United States		—		810,487		810,487		—		823,203		823,203
Mexico		—		45,703		45,703		—		50,156		50,156
Australia		—		21,743		21,743		—		22,120		22,120
Rest of world		99,095		26,638		125,733		101,440		26,639		128,079
Total	$	1,409,633	$	1,745,928	$	3,155,561	$	1,470,298	$	1,767,104	$	3,237,402

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

	Three Months Ended June 30, 2023
	Revenue		Cost of sales (1)		Production taxes		Depletion (2)		Segment gross profit
Stream interests	$	106,015	$	23,367	$	—	$	29,352	$	53,296
Royalty interests		38,027		—		1,274		8,945		27,808
Total	$	144,042	$	23,367	$	1,274	$	38,297	$	81,104
	Three Months Ended June 30, 2022
	Revenue		Cost of sales (1)		Production taxes		Depletion (2)		Segment gross profit
Stream interests	$	104,879	$	23,810	$	—	$	37,790	$	43,279
Royalty interests		41,562		—		1,425		6,075		34,062
Total	$	146,441	$	23,810	$	1,425	$	43,865	$	77,341

	Six Months Ended June 30, 2023
	Revenue		Cost of sales (1)		Production taxes		Depletion (2)		Segment gross profit
Stream interests	$	221,005	$	48,387	$	—	$	63,104	$	109,514
Royalty interests		93,429		—		3,263		21,408		68,758
Total	$	314,434	$	48,387	$	3,263	$	84,512	$	178,272
	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

(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.

14

ROYAL GOLD, INC.

Notes to Consolidated Financial Statements

(Unaudited)

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

	Three Months Ended				Six Months Ended
	June 30,		June 30,		June 30,		June 30,
		2023		2022		2023		2022
Total segment gross profit	$	81,104	$	77,341	$	178,272	$	166,970
Costs and expenses
General and administrative expenses		9,093		9,312		20,093		18,243
Depreciation and amortization		115		124		229		246
Operating income		71,896		67,905		157,950		148,481
Fair value changes in equity securities		(509)		(2,191)		291		(1,577)
Interest and other income		2,650		1,118		4,912		2,093
Interest and other expense		(8,408)		(1,398)		(17,582)		(2,296)
Income before income taxes	$	65,629	$	65,434	$	145,571	$	146,701

Our revenue by reportable segment for the three and six months ended June 30, 2023 and 2022 is geographically distributed as shown in the following table (amounts in thousands):

	Three Months Ended				Six Months Ended
	June 30,		June 30,		June 30,		June 30,
	2023		2022		2023		2022
Stream interests:
Canada	$	50,848	$	54,591	$	107,829	$	106,077
Dominican Republic		23,540		19,812		45,899		43,076
Africa		18,763		14,540		36,301		25,375
Chile		7,823		11,721		20,757		27,395
Rest of world		5,041		4,215		10,219		8,207
Total stream interests	$	106,015	$	104,879	$	221,005	$	210,130
Royalty interests:
United States	$	23,265	$	16,845	$	56,845	$	41,202
Mexico		8,155		11,940		17,449		27,821
Australia		5,081		4,040		9,180		8,086
Canada		(97)		5,773		6,495		16,551
Africa		—		114		—		430
Rest of world		1,623		2,850		3,460		4,576
Total royalty interests	$	38,027	$	41,562	$	93,429	$	98,666
Total revenue	$	144,042	$	146,441	$	314,434	$	308,796

10.  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

15

ROYAL GOLD, INC.

Notes to Consolidated Financial Statements

(Unaudited)

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 June 30, 2023
			Fair Value
	Carrying Value		Total		Level 1		Level 2		Level 3
Assets (amounts in thousands):
Marketable equity securities(1)	$	547	$	547	$	11	$	536	$	—

	As of December 31, 2022
			Fair Value
	Carrying Value		Total		Level 1		Level 2		Level 3
Assets (amounts in thousands):
Marketable equity securities(1)	$	373	$	373	$	121	$	252	$	—

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

Our marketable 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 3) 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 4) approximates fair value as of June 30, 2023.

As of June 30, 2023, 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.  

11.  COMMITMENTS AND CONTINGENCIES

Xavantina Exploration Payment

On April 20, 2023, we made a $2.4 million advance payment to a subsidiary of Ero Copper Corp. (“Ero”) as part of our commitment to support the achievement of success-based targets related to regional exploration and mineral resource additions. This payment was recorded to exploration stage stream interests within Stream and royalty interests, net on our consolidated balance sheets as of June 30, 2023. Advance payments of $4.4 million remain if Ero meets certain success-based targets related to regional exploration and mineral resource additions through calendar 2024. Refer to Note 3 of our 2022 10-K for further information on the Xavantina (formerly referred to as NX Gold) Gold Stream Acquisition.

Ilovica Gold Stream Acquisition

As of June 30, 2023, 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.

16

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 the financial condition and results of 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 the audited consolidated financial statements included in our Form 10-K for the year ended December 31, 2022, filed with the Securities and Exchange Commission (“SEC”) on February 16, 2023 (“2022 10-K”).

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 resources and 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.

Unless the context otherwise requires, references to “Royal Gold,” the “Company,” “we,” “us,” and “our” refer to Royal Gold, Inc. and its consolidated subsidiaries.

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 June 30, 2023, we owned nine stream interests, which are on eight producing properties and one development stage property. Stream interests accounted for approximately 74% and 70% of our total revenue for the three and six months ended June 30, 2023, respectively, and 72% and 68% for the three and six months ended June 30, 2022, respectively. 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 June 30, 2023, we owned royalty interests on 32 producing properties, 19 development stage properties and 121 exploration stage properties, of which we consider 52 to be evaluation stage projects. We use “evaluation stage” to describe exploration stage properties that contain mineral resources and on which operators are engaged in the search for mineral reserves. Royalty interests accounted for 26% and 30% of our total revenue for the three and six months ended June 30, 2023, respectively, and 28% and 32% for the three and six months ended June 30, 2022, respectively.

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.

17

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 stages of review. Our review process may include, for example, engaging consultants and advisors to analyze an opportunity; analysis of technical, financial, legal, environmental, social, governance and other confidential information regarding an opportunity; submission of 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 six months ended June 30, 2023 and 2022, average metal prices and percentages of revenue by metal were as follows:

	Three Months Ended						Six Months Ended
	June 30, 2023			June 30, 2022			June 30, 2023			June 30, 2022
Metal	Average Price		Percentage of Revenue	Average Price		Percentage of Revenue	Average Price		Percentage of Revenue	Average Price		Percentage of Revenue
Gold ($/ounce)(1)	$	1,976	77%	$	1,871	71%	$	1,932	74%	$	1,874	71%
Silver ($/ounce)(1)	$	24.13	15%	$	22.60	10%	$	23.31	14%	$	23.32	10%
Copper ($/pound)(2)	$	3.84	6%	$	4.31	14%	$	3.95	10%	$	4.43	14%
Other		N/A	2%		N/A	5%		N/A	2%		N/A	5%

⁽¹⁾    Based on the average U.S. dollars London Bullion Market Association PM fixing price for gold and daily fixing price           for silver, as applicable.

⁽²⁾    Based on the average U.S. dollars London Metals Exchange settlement price for copper.

Agreement to Acquire Royalty Interests on the Producing Santa Rita and Serrote Mines

On June 12, 2023, we announced that we entered into a binding commitment letter with ACG Acquisition Company to acquire new royalty interests on the producing Serrote and Santa Rita mines in Brazil for total cash consideration of $250 million, subject to satisfaction of certain conditions, including negotiation and execution of definitive documentation.

Based on current metal prices, we expect to fund the $250 million purchase price with approximately $50 million of available cash resources and approximately $200 million from a draw on our revolving credit facility.

Gold/Platinum/Palladium Royalties

At closing, we expect to pay cash consideration of $215 million in return for:

● A gross smelter return royalty of 85% of the payable gold from the Serrote mine until the achievement of a royalty revenue threshold of $250 million from this royalty, and 45% thereafter; and,

● A gross smelter return royalty of 64 ounces of gold, 135 ounces of platinum and 100 ounces of palladium for each 1 million pounds of payable nickel produced from the Santa Rita mine until the achievement of a royalty revenue threshold of $100 million from this royalty, at which point the royalty on gold will continue and the royalty on platinum and palladium will terminate.

Royalty revenue will be determined using fixed payabilities of 93% for gold at the Serrote mine and 86% for nickel at the Santa Rita mine. The royalties will have an economic effective date of May 1, 2023, and there will be no deductions applicable to the royalty payments.

18

Copper/Nickel Royalty

At closing, we expect to pay cash consideration of $35 million in return for a gross smelter return royalty on total payable copper and nickel production from the Serrote and Santa Rita mines at a rate of 0.50% during 2023 and 2024, 0.75% during 2025 and 1.10% thereafter until the achievement of a royalty revenue threshold of $90 million from this royalty, and 0.55% thereafter.

Royalty revenue will be determined using fixed payabilities of 97% for copper at the Serrote mine, and 86% for nickel and 72% for copper at the Santa Rita mine. The royalty will have an economic effective date of May 1, 2023, and there will be no deductions applicable to the royalty payments.

ESG Contribution

We will make a financial commitment of 0.25% of the annual royalty payments received to support programs benefiting the communities within the area of influence of each of the Serrote and Santa Rita mines.

Conditions to Closing

Closing of the proposed acquisition of the royalties will be conditional on the successful completion of the ACG transaction with Appian, a minimum working capital position for ACG at closing, and other closing conditions that are standard for transactions of this nature, including the negotiation and execution of definitive royalty and security agreements with ACG and an intercreditor agreement with the senior lenders.

Timing

Closing of the proposed acquisition of the royalties could occur within the coming weeks after completion of all conditions to closing.  

Xavantina Exploration Payment

On April 20, 2023, we made a $2.4 million advance payment to a subsidiary of Ero Gold Corporation (“Ero”) as part of our commitment to support the achievement of success-based targets related to regional exploration and mineral resource additions. Advance payments of $4.4 million remain if Ero meets certain success-based targets related to regional exploration and mineral resource additions through calendar 2024. Refer to Note 3 of our 2022 10-K for further information on the Xavantina (formerly referred to as NX Gold) Gold Stream Acquisition.

Operators’ Production Estimates by Stream and Royalty Interest for Calendar 2023

We generally receive annual production estimates from many of the operators of 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 2023, as well as actual production through June 30, 2023 (except as otherwise noted), for our principal properties as reported to us by the operators.

19

Operators’ Estimated and Actual Production by Stream and Royalty Interest for Calendar 2023

Principal Producing Properties

	Calendar Year 2023 Operator’s Production			Calendar Year 2023 Operator’s Production
	Estimate(1)			Actual(2)
	Gold	Silver	Base Metals	Gold	Silver	Base Metals
Stream/Royalty	(oz.)	(oz.)	(lbs.)	(oz.)	(oz.)	(lbs.)
Stream:
Andacollo(3)	22,000 - 27,000			12,100
Mount Milligan(4)	160,000 - 170,000			74,300
Copper			60 - 70 Million			27.1 Million
Pueblo Viejo(5)	470,000 - 520,000	N/A		166,000	N/A
Khoemacau(6)		1.5 - 1.7 Million			0.8 Million
Royalty:
Cortez(7)	940,000 - 1,060,000			407,000
Peñasquito(8)	N/A	N/A		123,000	13.8 Million
Lead			N/A			86 Million
Zinc			N/A			180 Million

(1) Production estimates received from our operators are for calendar 2023. There can be no assurance that production estimates received from the operators will be achieved. Our stream interests can be affected by several factors that make it difficult to calculate our revenue for a period from the operator’s actual or estimated production for that same period. These factors include the timing of the operator’s concentrate shipments, the delivery of metal to us and the subsequent sale of the delivered metal. These factors do not typically affect our stream interests on operations that produce doré or our royalty interests. Refer to our cautionary language regarding forward-looking statements included herein, as well as the Risk Factors identified in Part I, Item 1A, of our 2022 10-K for information regarding factors that could affect actual results.

(2) Actual production figures shown are from the operators and cover the period from January 1, 2023, through June 30, 2023, 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 estimated and actual production figures shown for Andacollo are contained gold in concentrate. Deliveries to us are determined using a fixed gold payability factor of 89%.

(4) The estimated and actual production figures shown for Mount Milligan are payable gold and copper in concentrate.

(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”). Barrick did not provide estimated or actual silver production.

(6) The estimated and actual production figures for Khoemacau are payable silver in concentrate. Deliveries to us are determined using a fixed silver payability factor of 90%.

(7) The estimated and actual production figures for Cortez include the entirety of the Cortez Complex. Barrick reports total production from the Cortez Complex and does not report production separately for the Legacy Zone and CC Zone. Production estimates for the Legacy Zone are provided to us by Barrick and production estimates for 100% of the Cortez Complex are publicly disclosed by Barrick.

(8) 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. Actual figures are for the period January 1, 2023 through June 30, 2023. Estimated production figures are not available as 2023 production guidance was withdrawn by Newmont Corporation (“Newmont”) on July 20, 2023.

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.

Stream Interests

Andacollo

Gold stream deliveries from Andacollo were approximately 3,700 ounces for the three months ended June 30, 2023, compared to approximately 9,900 ounces for the three months ended June 30, 2022. The decrease in deliveries resulted

20

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.

Gold production at Andacollo has trended lower since the beginning of 2021 due to lower ore grades, as anticipated in the mine plan. According to Teck Resources Limited (“Teck”), the period of lower grades is expected to last through 2023, and the mine plan then anticipates a transition to higher grade ore as the next phase of mining is developed over the following years. Teck has reported that the current life of mine for Andacollo is expected to continue until 2035 and that additional permits or permit amendments will be required to execute the life of mine plan.

Khoemacau Project

Silver stream deliveries from Khoemacau were approximately 398,700 ounces for the three months ended June 30, 2023, compared to approximately 246,800 ounces for the three months ended June 30, 2022. Increased stream deliveries resulted from operations running at full capacity in the current period compared to the prior year period.  Deliveries in the prior year period were lower due to the ramp-up of mining and processing operations throughout 2022 after completion of project construction in 2021.

According to Khoemacau Copper Mining (Pty.) Limited (“KCM”), operations at Khoemacau continued at nameplate capacity through the quarter ended June 30, 2023, after the target production rate of 3.7 million tonnes per year (10,000 tonnes per day) was achieved in December 2022. As projected in the mine plan, KCM expects payable silver production in 2023 to range between 1.5 to 1.7 million ounces, which is slightly below the life of mine average due to lower silver grades in the upper portion of the Zone 5 deposit and the top-down mining sequence.

Mount Milligan

Gold stream deliveries from Mount Milligan were approximately 17,300 ounces for the three months ended June 30, 2023, compared to approximately 23,800 ounces for the three months ended June 30, 2022. Copper stream deliveries from Mount Milligan were approximately 2.5 million pounds during the three months ended June 30, 2023, compared to approximately 4.0 million pounds during the three months ended June 30, 2022. Gold and copper stream deliveries for the three months ended June 30, 2023, relate to mine production during the approximate period November 2022 to January 2023. During this period Centerra Gold Inc. (“Centerra”) reported negative variances to copper head grade, gold head grade and recovery, as compared to the previous year period.

On July 31, 2023, Centerra reported that gold and copper production for the three months ended June 30, 2023, was impacted by lower grades and recoveries due to mine sequencing, although process plant throughput for the period averaged 61,482 tonnes per day and record tonnes were processed in the months of May and June.  Centerra also reported that Mount Milligan remains on track to access higher-grade copper and gold ore from phase 7 and phase 9 in the second half of the year.

Centerra continues to expect that full year 2023 production at Mount Milligan will be back-end weighted, with gold production at the low end of the guidance range of 160,000 to 170,000 ounces, and copper production tracking towards the mid-point of the guidance range of 60 to 70 million pounds.  Centerra also expects to make four concentrate shipments in the third quarter and another four shipments in the fourth quarter, although the timing of shipments may be affected by logistical delays resulting from labor disruptions in the Port of Vancouver.

Pueblo Viejo

Gold stream deliveries from Pueblo Viejo were approximately 6,800 ounces for the three months ended June 30, 2023, compared to approximately 8,600 ounces for the three months ended June 30, 2022. Decreased deliveries resulted from processing lower grade gold stockpile material.

Silver stream deliveries were approximately 150,700 ounces for the three months ended June 30, 2023, compared to approximately 307,100 ounces for the three months ended June 30, 2022. Decreased silver deliveries resulted from lower silver recovery during the current period, and an additional 89,300 ounces of silver deliveries were deferred. The deferred ounces are the result of a mechanism in the stream agreement that allows for the deferral of deliveries in a period if Barrick’s share of silver production is insufficient to cover its stream delivery obligations. The stream agreement terms include a fixed 70% silver recovery rate. If actual recovery rates fall below the contractual 70% recovery rate, ounces may

21

be deferred with deferred ounces to be delivered in future periods as silver recovery allows. As of June 30, 2023, approximately 607,700 ounces remain deferred. We expect that silver recoveries could remain highly variable until the plant expansion project is complete and is running at full production levels. We do not expect material deliveries of deferred silver ounces while the plant ramps up to full production levels during 2023, and timing for the delivery of the entire deferred amount is uncertain.

On May 3 and May 10, 2023, Barrick provided updates on the plant expansion and mine life extension project at Pueblo Viejo.  With respect to the plant expansion, Barrick reported that construction was 93% complete as of March 31, 2023, and commissioning and operations handover of new equipment was underway. With respect to the mine life extension, Barrick further disclosed on July 27, 2023, that the engineering design for the El Naranjo tailings storage facility (“TSF”)  project continues to advance and that the environmental license for the new TSF was recently received. Barrick has also reported that geotechnical drilling and site investigation are ongoing to support a feasibility study on the TSF, which is due for completion in the second quarter of 2024.

Royalty Interests

Cortez

Production attributable to our royalty interest at the Cortez Complex was approximately 179,900 ounces of gold for the three months ended June 30, 2023, compared to approximately 52,000 ounces of gold for the three months ended June 30, 2022. The increase was primarily due to the addition of new royalties in 2022 that increased royalty coverage over producing areas within the Cortez Complex.

On May 3, 2023, Barrick reported that the Record of Decision (“ROD”) on the Goldrush project, which is located within the CC Zone, is expected in the second half of 2023. Barrick also reported that mine development and test stoping in the Redhill zone is continuing and a minor permit modification has been approved that will allow underground development to continue until the ROD on the Goldrush Plan of Operations is received. According to Barrick, the extension to the permitting timeline is not expected to have a significant impact on the 2023 outlook and the potential impact, if any, on the outlook from 2024 onwards is currently being reviewed.

Peñasquito

Production attributable to our royalty interest at Peñasquito was approximately 48,100 ounces of gold, 6.0 million ounces of silver, 35.6 million pounds of lead and 89.7 million pounds of zinc for the three months ended June 30, 2023. This compares to approximately 130,600 ounces of gold, 8.1 million ounces of silver, 35.0 million pounds of lead and 84.9 million pounds of zinc for the three months ended June 30, 2022. Newmont reported that production was lower in the current period due to a labor strike, and gold production was further impacted by lower mill recovery and ore grade mined.

On June 8, 2023, Newmont reported that operations at Peñasquito were suspended on June 7, 2023, following a strike action by the National Union of Mine and Metal Workers of the Mexican Republic. The suspension remains in effect as of the filing of this report and on July 20, 2023, Newmont announced the withdrawal of its full-year 2023 guidance for Peñasquito. Newmont further stated that it cannot estimate when the strike will be resolved, and it will reassess Peñasquito’s full year 2023 guidance once a resolution has been reached.

Results of Operations

Quarter Ended June 30, 2023, Compared to Quarter Ended June 30, 2022

For the quarter ended June 30, 2023, we recorded net income and comprehensive income attributable to Royal Gold stockholders (“net income”) of $63.4 million, or $0.97 per basic and diluted share, as compared to net income of $71.1 million, or $1.08 per basic and diluted share, for the quarter ended June 30, 2022. The decrease in net income was primarily attributable to higher debt-related interest expense and income tax expense, as discussed below.

For the quarter ended June 30, 2023, we recognized total revenue of $144.0 million, comprised of stream revenue of $106.0 million and royalty revenue of $38.0 million at an average gold price of $1,976 per ounce, an average silver price of $24.13 per ounce and an average copper price of $3.84 per pound. This is compared to total revenue of $146.4 million for the three months ended June 30, 2022, comprised of stream revenue of $104.9 million and royalty revenue of $41.6 million,

22

at an average gold price of $1,871 per ounce, an average silver price of $22.60 per ounce and an average copper price of $4.31 per pound. Revenue and the corresponding production attributable to our stream and royalty interests for the quarter ended June 30, 2023, compared to the quarter ended June 30, 2022, are as follows:

Revenue and Reported Production Subject to Our Stream and Royalty Interests

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

		Three Months Ended				Three Months Ended
		June 30, 2023				June 30, 2022
				Reported				Reported
Stream/Royalty	Metal(s)	Revenue		Production(1)		Revenue		Production(1)
Stream(2):
Mount Milligan		$	41,208			$	45,627
	Gold			17,500	oz.			15,500	oz.
	Copper			1.7	Mlbs.			4.0	Mlbs.
Pueblo Viejo		$	23,540			$	19,812
	Gold			7,400	oz.			7,100	oz.
	Silver			362,200	oz.			274,500	oz.
Khoemacau	Silver	$	8,881	373,000	oz.	$	5,202	221,800	oz.
Andacollo	Gold	$	7,823	4,000	oz.	$	11,721	6,300	oz.
Other(3)		$	24,563			$	22,517
	Gold			11,600	oz.			11,300	oz.
	Silver			65,700	oz.			53,700	oz.
Total stream revenue		$	106,015			$	104,879
			.
Royalty(2):
Cortez Legacy Zone	Gold	$	14,305	68,100	oz.	$	8,138	52,000	oz.
Cortez CC Zone	Gold	$	3,520	111,500	oz.		N/A
Peñasquito		$	6,105			$	9,664
	Gold			48,100	oz.			130,600	oz.
	Silver			6.0	Moz.			8.1	Moz.
	Lead			35.6	Mlbs.			35.0	Mlbs.
	Zinc			89.7	Mlbs.			84.9	Mlbs.
Other(3)	Various	$	14,097	N/A		$	23,760	N/A
Total royalty revenue		$	38,027			$	41,562
Total Revenue		$	144,042			$	146,441

(1) Reported production relates to the amount of stream metal sales and the metal sales attributable to our royalty interests for the three months ended June 30, 2023, and 2022, and may differ from the operators’ public reporting due to a number of factors, including the timing of the operator’s concentrate shipments, the delivery of metal to us and our subsequent sale of the delivered metal. Refer to Note 5 to the notes to consolidated financial statements.

(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 7% of total revenue for the three months ended June 30, 2023, and 6% for the three months ended June 30, 2022, no stream or royalty included within the “Other” category contributed greater than 5% of our total revenue for either period.

The decrease in our total revenue resulted primarily from lower gold sales at Andacollo, lower copper sales at Mount Milligan and lower gold and silver production attributable to our interest at Peñasquito. The decrease was offset by higher gold production attributable to our interest at Cortez as a result of the newly acquired royalties and higher gold and silver prices when compared to the prior year period.

23

Gold and silver ounces and copper pounds purchased and sold during the three months ended June 30, 2023 and 2022, and gold and silver ounces and copper pounds in inventory as of June 30, 2023, and December 31, 2022, for our streaming interests were as follows:

	Three Months Ended		Three Months Ended		As of	As of
	June 30, 2023		June 30, 2022		June 30, 2023	December 31, 2022
Gold Stream	Purchases (oz.)	Sales (oz.)	Purchases (oz.)	Sales (oz.)	Inventory (oz.)	Inventory (oz.)
Mount Milligan	17,300	17,500	23,800	15,500	3,800	5,200
Pueblo Viejo	6,800	7,400	8,600	7,100	6,800	7,900
Andacollo	3,700	4,000	9,900	6,300	1,800	3,800
Other	11,200	11,600	10,400	11,300	4,700	4,100
Total	39,000	40,500	52,700	40,200	17,100	21,000
	Three Months Ended		Three Months Ended		As of	As of
	June 30, 2023		June 30, 2022		June 30, 2023	December 31, 2022
Silver Stream	Purchases (oz.)	Sales (oz.)	Purchases (oz.)	Sales (oz.)	Inventory (oz.)	Inventory (oz.)
Khoemacau	398,700	373,000	247,000	221,800	155,100	105,900
Pueblo Viejo	150,700	362,200	307,000	274,500	150,700	337,800
Other	70,600	65,700	55,200	53,700	25,500	17,500
Total	620,000	800,900	609,200	550,000	331,300	461,200
	Three Months Ended		Three Months Ended		As of	As of
	June 30, 2023		June 30, 2022		June 30, 2023	December 31, 2022
Copper Stream	Purchases (Mlbs.)	Sales (Mlbs.)	Purchases (Mlbs.)	Sales (Mlbs.)	Inventory (Mlbs.)	Inventory (Mlbs.)
Mount Milligan	2.5	1.7	4.0	4.0	0.8	0.9

Cost of sales, which excludes depreciation, depletion and amortization, decreased to $23.4 million for the three months ended June 30, 2023, from $23.8 million for the three months ended June 30, 2022. The decrease, when compared to the prior year quarter, was primarily due to a decrease in copper sales at Mount Milligan and lower gold sales at Andacollo, offset by higher silver sales at Khoemacau. 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 $9.1 million for the three months ended June 30, 2023, from $9.3 million for the three months ended June 30, 2022. The decrease was primarily due to lower consulting costs and lower non-cash stock compensation expense during the current period.

Depreciation, depletion and amortization decreased to $38.4 million for the three months ended June 30, 2023, from $44.0 million for the three months ended June 30, 2022. The decrease was primarily due to lower depletion rates at Mount Milligan and Pueblo Viejo as a result of proven and probable mineral reserve increases when compared to the prior year quarter. The decrease was partially offset by higher depletion expense at Khoemacau due to the ramp-up of production and additional depletion expense from the newly acquired royalties at Cortez when compared to the prior year quarter.

Interest and other expense increased to $8.4 million for the three months ended June 30, 2023, from $1.4 million for the three months ended June 30, 2022. The increase was primarily due to higher interest expense as a result of higher average amounts outstanding under our revolving credit facility compared to the prior year quarter. We had $400 million outstanding under our revolving credit facility as of June 30, 2023, compared to zero outstanding as of June 30, 2022.  The current all-in borrowing rate under our revolving credit facility was 6.7% as of June 30, 2023.

For the three months ended June 30, 2023, we recorded income tax expense of $2.0 million, compared with income tax benefit of $5.9 million for the three months ended June 30, 2022. The income tax expense resulted in an effective tax rate of 3.1% in the current period, compared with (9.0%) for the three months ended June 30, 2022.  The three months ended June 30, 2023 and 2022, both included discrete tax benefits attributable to the release of a valuation allowance on certain deferred tax assets.

Six Months Ended June 30, 2023, Compared to Six Months Ended June 30, 2022

For the six months ended June 30, 2023, we recorded net income of $127.3 million, or $1.94 per basic and $1.93 per diluted share, as compared to net income of $136.8 million, or $2.08 per basic and diluted share, for the six months ended

24

June 30, 2022. The decrease in net income was primarily attributable to higher debt-related interest expense and income tax expense, as discussed below.

For the six months ended June 30, 2023, we recognized total revenue of $314.4 million, comprised of stream revenue of $221.0 million and royalty revenue of $93.4 million at an average gold price of $1,932 per ounce, an average silver price of $23.31 per ounce and an average copper price of $3.95 per pound. This is compared to total revenue of $308.8 million for the six months ended June 30, 2022, comprised of stream revenue of $210.1 million and royalty revenue of $98.7 million, at an average gold price of $1,874 per ounce, an average silver price of $23.32 per ounce and an average copper price of $4.43 per pound. Revenue and the corresponding production attributable to our stream and royalty interests for the six months ended June 30, 2023, compared to the six months ended June 30, 2022, are as follows:

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
		June 30, 2023				June 30, 2022
				Reported				Reported
Stream/Royalty	Metal(s)	Revenue		Production(1)		Revenue		Production(1)
Stream(2):
Mount Milligan		$	87,863			$	88,043
	Gold			32,700	oz.			29,400	oz.
	Copper			6.2	Mlbs.			7.6	Mlbs.
Pueblo Viejo		$	45,898			$	43,076
	Gold			15,300	oz.			15,600	oz.
	Silver			700,100	oz.			590,500	oz.
Andacollo	Gold	$	20,757	11,000	oz.	$	27,395	14,700	oz.
Khoemacau	Silver	$	18,035	777,000	oz.	$	7,592	221,800	oz.
Other(3)		$	48,452			$	44,024
	Gold			23,500	oz.			22,000	oz.
	Silver			131,900	oz.			226,900	oz.
Total stream revenue		$	221,005			$	210,130
Royalty(2):
Cortez Legacy Zone	Gold	$	37,393	185,300	oz.	$	24,852	154,000	oz.
Cortez CC Zone	Gold		$ 6,726	218,100			N/A
Peñasquito		$	13,538			$	22,758
	Gold			103,700	oz.			264,100	oz.
	Silver			12.0	Moz.			15.7	Moz.
	Lead			72.1	Mlbs.			77.0	Mlbs.
	Zinc			188.9	Mlbs.			205.0	Mlbs.
Other(3)	Various	$	35,772	N/A		$	51,056	N/A
Total royalty revenue		$	93,429			$	98,666
Total revenue		$	314,434			$	308,796

⁽¹⁾Reported production relates to the amount of stream metal sales and the metal sales attributable to our royalty interests for the six

months ended June 30, 2023, and 2022, and may differ from the operators’ public reporting due to a number of factors, including the timing of the operator’s concentrate shipments, the delivery of metal to us and our subsequent sale of the delivered metal. Refer to Note 5 to the notes to consolidated financial statements.

(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 six months ended June 30, 2023 and June 30, 2022, respectively, no stream or royalty included within the “Other” category contributed greater than 5% of our total revenue for either period.

The increase in our total revenue resulted primarily from higher silver sales at Khoemacau due to the ramp-up and higher gold production attributable to our interests at Cortez as a result of the newly acquired royalties. The increase was partially offset by lower gold sales at Andacollo and lower gold and silver production at Peñasquito when compared to the prior year period.

25

Gold and silver ounces and copper pounds purchased and sold during the six months ended June 30, 2023, and 2022, and gold and silver ounces and copper pounds in inventory as of June 30, 2023, and December 31, 2022, for our streaming interests were as follows:

	Six Months Ended		Six Months Ended		As of	As of
	June 30, 2023		June 30, 2022		June 30, 2023	December 31, 2022
Gold Stream	Purchases (oz.)	Sales (oz.)	Purchases (oz.)	Sales (oz.)	Inventory (oz.)	Inventory (oz.)
Mount Milligan	31,200	32,700	33,800	29,400	3,800	5,200
Pueblo Viejo	14,200	15,300	15,700	15,600	6,800	7,900
Andacollo	9,000	11,000	16,000	14,700	1,800	3,800
Other	24,200	23,500	21,500	22,000	4,700	4,100
Total	78,600	82,500	87,000	81,700	17,100	21,000
	Six Months Ended		Six Months Ended		As of	As of
	June 30, 2023		June 30, 2022		June 30, 2023	December 31, 2022
Silver Stream	Purchases (oz.)	Sales (oz.)	Purchases (oz.)	Sales (oz.)	Inventory (oz.)	Inventory (oz.)
Khoemacau	826,200	777,000	362,100	221,800	155,100	105,900
Pueblo Viejo	513,000	700,100	581,600	590,500	150,700	337,800
Other	140,000	131,900	106,300	226,900	25,500	17,500
Total	1,479,200	1,609,000	1,050,000	1,039,200	331,300	461,200
	Six Months Ended		Six Months Ended		As of	As of
	June 30, 2023		June 30, 2022		June 30, 2023	December 31, 2022
Copper Stream	Purchases (Mlbs.)	Sales (Mlbs.)	Purchases (Mlbs.)	Sales (Mlbs.)	Inventory (Mlbs.)	Inventory (Mlbs.)
Mount Milligan	6.0	6.2	6.7	7.6	0.8	0.9

Cost of sales, which excludes depreciation, depletion and amortization, increased to $48.4 million for the six months ended June 30, 2023, from $46.5 million for the six months ended June 30, 2022. The increase, when compared to the prior year was primarily due to higher silver sales at Khoemacau, offset by lower gold sales at Andacollo. 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 increased to $20.1 million for the six months ended June 30, 2023, from $18.2 million for the six months ended June 30, 2022. The increase was primarily due to an increase in employee-related costs.

Depreciation, depletion and amortization decreased to $84.7 million for the six months ended June 30, 2023, from $92.0 million for the six months ended June 30, 2022. The decrease was primarily due to lower depletion rates at Mount Milligan and Pueblo Viejo as a result of proven and probable mineral reserve increases when compared to the prior year period. The decrease was partially offset by higher depletion expense at Khoemacau due to the ramp-up of production and additional depletion from the newly acquired royalties at Cortez when compared to the prior year quarter.

Interest and other expense increased to $17.6 million for the six months ended June 30, 2023, from $2.3 million for the six months ended June 30, 2022. The increase was primarily due to higher interest expense as a result of higher average amounts outstanding under our revolving credit facility compared to the prior year period. We had $400 million outstanding under our revolving credit facility as of June 30, 2023, compared to zero outstanding as of June 30, 2022.  The current all-in borrowing rate under our revolving credit facility was 6.7% as of June 30, 2023.

26

For the six months ended June 30, 2023, we recorded income tax expense of $17.9 million, compared with income tax expense of $9.4 million for the six months ended June 30, 2022. The income tax expense resulted in an effective tax rate of 12.3% in the current period, compared with 6.4% for the six months ended June 30, 2022.  The six months ended June 30, 2023 and June 30, 2022, included discrete tax benefits attributable to the release of a valuation allowance on certain deferred tax assets.

Liquidity and Capital Resources

Overview

At June 30, 2023, we had current assets of $165.3 million compared to current liabilities of $63.1 million, which resulted in working capital of $102.2 million and a current ratio of approximately 3 to 1. This compares to current assets of $185.8 million and current liabilities of $63.6 million at December 31, 2022, resulting in working capital of $122.2 million and a current ratio of approximately 3 to 1. The decrease in working capital was primarily due to a decrease in our available cash, which resulted from increased debt repayments during the current period.

During the six months ended June 30, 2023, liquidity needs were met from $216.6 million in net cash provided by operating activities and our available cash resources. As of June 30, 2023, we had $600 million available and $400 million outstanding under our revolving credit facility.

Working capital, combined with available capacity under our revolving credit facility, resulted in approximately $702 million of total liquidity at June 30, 2023. We were in compliance with each financial covenant under the revolving credit facility as of June 30, 2023. Refer to Note 4 of our notes to consolidated financial statements and below under Recent Liquidity Developments for further discussion on our debt.

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 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 2022 10-K for a discussion of certain risks that may impact our liquidity and capital resources.

Recent Liquidity Developments

Revolving Credit Facility Amendment

On June 28, 2023, we entered into a fifth amendment to our revolving credit facility dated as of June 2, 2017. The fifth amendment extended the scheduled maturity date from July 7, 2026 to June 28, 2028, replaced LIBOR with Secured Overnight Financing Rate (“Term SOFR”) as a benchmark interest rate and made certain other administrative changes to the existing revolving credit facility.

Revolving Credit Facility Repayment

On June 6, 2023, we made a $100 million principal payment towards the outstanding balance on the revolving credit facility leaving $600 million available as of June 30, 2023.

Cash Flows

Operating Activities

Net cash provided by operating activities totaled $216.6 million for the six months ended June 30, 2023, compared to $221.3 million for the six months ended June 30, 2022. The decrease was primarily due to higher interest payments on

27

amounts outstanding under our revolving credit facility during the current period. The decrease was partially offset by an increase in cash proceeds received from our stream interests, net of cost of sales, when compared to the prior year period.

Investing Activities

Net cash used in investing activities totaled $2.8 million for the six months ended June 30, 2023, compared to $37.9 million for the six months ended June 30, 2022. The decrease was primarily due to fewer acquisitions of royalty and stream interests compared to the prior year period.

Financing Activities

Net cash used in financing activities totaled $226.2 million for the six months ended June 30, 2023, compared to $46.4 million for the six months ended June 30, 2022. The increase was primarily due to repayments of $175 million on our revolving credit facility during the current 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 2022 10-K 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.

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, statements regarding the following: the proposed acquisition of new royalty interests on the producing Serrote and Santa Rita mines in Brazil, including the details of the anticipated royalties thereon and funding of the purchase price; our expected financial performance and outlook, including sales volume, revenue, expenses, and tax rates; operators’ expected operating and financial performance, including production, deliveries, mine plans, estimates of mineral resources and mineral reserves, development, cash flows and liquidity, capital requirements, capital expenditures and completion of feasibility studies, permitting activities and resolution of labor strikes; receipt of metal deliveries; anticipated liquidity, capital resources, financing and stockholder returns; deliveries of deferred silver ounces from Pueblo Viejo; and prices for gold, silver, copper, nickel and other metals.

Factors that could cause actual results to differ materially from these forward-looking statements include, among others, the following: 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, including variations between actual and forecasted performance, operators’ ability to complete projects on schedule and as planned, operators’ changes to mine plans and mineral reserves and mineral resources (including updated mineral reserve and mineral resource information), 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, or operational disruptions; the timing of deliveries of metals from operators; risks associated with doing business in foreign countries; the impact of inadequately assessing new acquisitions; increased competition for stream and royalty interests; environmental risks, included those caused by climate change; the risk that the conditions to closing for the potential acquisition of royalties on the Serrote and Santa Rita mines may not be satisfied; delays in the completion of the plant expansion at Pueblo Viejo; potential cyber-attacks, including ransomware; our ability to identify, finance, value and complete acquisitions; adverse economic and market conditions; impact of health epidemics and pandemics; changes in laws or regulations governing us, operators or operating properties; changes in management and key employees; and other risk factors described in our reports filed with the Securities and Exchange Commission, including our 2022 10-K. Most of these factors are beyond our ability to predict or control.

28

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.

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 2022 10-K, for more information about risks associated with metal price volatility.

During the six months ended June 30, 2023, we reported revenue of $314.4 million, with an average gold price for the period of $1,932 per ounce, an average silver price of $23.31 per ounce, and an average copper price of $3.95 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 six months ended June 30, 2023:

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	74%	$23.7 million
Silver	14%	$2.4 million
Copper	10%	$5.7 million

ITEM 4.     CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

Under the supervision and with the participation of our management, including our Chief Executive Officer (the principal executive officer) and Chief Financial Officer (the principal financial and accounting officer), we evaluated the effectiveness of the design and operation of our disclosure controls and procedures as of June 30, 2023. Based on this evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures were effective as of June 30, 2023, 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 June 30, 2023, 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 Chief Executive Officer and Chief Financial Officer, 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.

29

ITEM 1A.    RISK FACTORS

There have been no material changes to the risk factors included in the section entitled “Risk Factors” of our 2022 10-K.

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

Issuer Purchases of Equity Securities

Period	(a) Total Number of Shares Purchased	(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
April 2023	—	—	N/A	N/A
May 2023	—	—	N/A	N/A
June 2023	—	—	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

On June 14, 2023, Paul Libner, Chief Financial Officer and Treasurer of Royal Gold, adopted a trading plan that is intended to satisfy the affirmative defense of Rule 10b5-1(c) of the Securities Exchange Act of 1934, as amended, regarding the sale of up to 1,700 shares of common stock of Royal Gold. The plan provides that sales may begin on September 13, 2023, and will end on September 30, 2024, or such earlier date as all 1,700 shares are sold.

No non-Rule 10b5-1 trading arrangements (as defined by Item 408(a) of Regulation S-K) were entered into by a Section 16 director or officer of the Company during the quarter.

30

ITEM 6.     EXHIBITS

Exhibit Number	Description
3.1	Certificate of Restatement of Certificate of Incorporation (filed as Exhibit 3.2(d) of the Current Report on Form 8-K on March 8, 2023, and incorporated herein by reference)
3.2	Certificate of Amendment to the Restated Certificate of Incorporation (filed as Exhibit 3.1 of the Current Report on Form 8-K on May 26, 2023, and incorporated herein by reference)
10.1	Fifth Amendment to Revolving Credit Facility Credit Agreement, dated as of June 28, 2023, together with Annex A (filed as Exhibit 10.1 of the Current Report on Form 8-K on February 16, 2023, 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 June 30, 2023, 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 June 30, 2023, formatted in Inline XBRL (included as Exhibit 101).

* Filed herewith.

‡ Furnished herewith.

31

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: August 3, 2023
	By:	/s/ William Heissenbuttel
		William Heissenbuttel
		President and Chief Executive Officer
		(Principal Executive Officer)
Date:  August 3, 2023	By:	/s/ Paul Libner
		Paul Libner
		Chief Financial Officer and Treasurer
		(Principal Financial and Accounting Officer)

32