What changed in this filing

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Item 2. Management’s Discussion and Analysis

2024-05-09 compared with 2023-11-02 · 175 added, 269 removed, 105 unchanged (81% of the section changed)

14 unchanged sentences

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 September 30, 2023, we owned nine stream interests, which are on eight producing properties and one development stage property.

Stream interests accounted for approximately 71% of our total revenue for both the three and nine months ended September 30, 2023, and 75% and 70% for the three and nine months ended September 30, 2022, respectively.

• Acquisition and Management of Stream Interests — A metal stream is a purchase agreement that provides, in exchange for an upfront deposit payment, the right and obligation to purchase all or a portion of one or more metals produced from a mine, at a price determined for the life of the transaction by the purchase agreement.

As of March 31, 2024, we owned nine stream interests, which are on eight producing properties and one development stage property.

Stream interests accounted for approximately 69% and 67% of our total revenue for the three months ended March 31, 2024 and 2023, 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 September 30, 2023, we owned royalty interests on 31 producing properties, 21 development stage properties and 120 exploration stage properties, of which we consider 51 to be evaluation stage projects.

As of March 31, 2024, we owned royalty interests on 29 producing properties, 23 development stage properties and 116 exploration stage properties, of which we consider 49 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 29% of our total revenue for both the three and nine months ended September 30, 2023, and 25% and 30% for the three and nine months ended September 30, 2022, respectively.

Royalty interests accounted for 31% and 33% of our total revenue for the three months ended March 31, 2024 and 2023, 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.

10 unchanged sentences

The marketability and price of metals are influenced by numerous factors beyond our control, and significant changes in metal prices can have a material effect on our revenue.

For the three and nine months ended September 30, 2023 and 2022, average metal prices and percentages of revenue by metal were as follows:

For the three months ended March 31, 2024 and 2023, average metal prices and percentages of revenue by metal were as follows:

Three Months Ended

Nine Months Ended

September 30, 2023

September 30, 2022

September 30, 2023

September 30, 2022

March 31, 2024 March 31, 2023

Metal Average

Gold ($/ounce) (1)

$ 2,070 75% $ 1,890 71%

Silver ($/ounce) (1)

$ 23.34 13% $ 22.55 12%

Copper ($/pound) (2)

$ 3.83 9% $ 4.05 14%

Other N/A 3% N/A 3%

(1) Based on the average U.S.

2 unchanged sentences

dollars London Metals Exchange settlement price for copper.

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

On September 28, 2023, ACG Acquisition Company Ltd.

(“ACG”) announced that the transaction for the acquisition by ACG of the entities that own the Serrote and Santa Rita mines in Brazil from funds advised by Appian Capital Advisory LLP (“Appian”) was terminated.

Completion of the now terminated transaction between ACG and Appian was a condition to our earlier announced acquisition of royalty interests on the Serrote and Santa Rita mines and the acquisition of royalty interests will not proceed.

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 September 30, 2023 (except as otherwise noted), for our principal properties as reported to us by the operators.

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

Principal Producing Properties

Calendar Year 2023 Operator’s Production

Stream/Royalty

Andacollo (3)

22,000 - 27,000

Mount Milligan (4)

150,000 - 160,000

60 - 70 Million

Pueblo Viejo (5)

470,000 - 520,000

Khoemac a u (6)

1.5 - 1.7 Million

940,000 - 1,060,000

Peñasquito (8)

(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 September 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.

Deliveries to us are determined using a fixed payability factor of 97% for gold and a minimum payability factor of 95% for copper.

(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.

Deliveries to us are determined using fixed payability factors of 99.9% for gold and 99% for silver.

(6) The estimated and actual production figures for Khoemac a u 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 production from the entirety of 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 September 30, 2023, and no production occurred during the third quarter of 2023 due to the suspension of operations resulting from a strike action on June 7, 2023.

Estimated production figures are not available as 2023 production guidance was withdrawn by Newmont Corporation (“Newmont”) on July 20, 2023 due to the suspension of operations.

Recent Developments

Mount Milligan Cost Support Agreement

On February 13, 2024, RGLD Gold AG, a subsidiary of the Company, entered into a Processing Cost Support Agreement (the "Mount Milligan Cost Support Agreement") with Centerra Gold Inc.

("Centerra") with respect to the Mount Milligan Mine for cash consideration of $24.5 million, 50,000 ounces of gold to be delivered in the future ("Deferred Gold Consideration") and a free cash flow interest.

The cost support allowed for the extension of the mine life from 2032 to 2035 and the potential to extend the mine life beyond 2035.

Refer to Note 4 to the notes to consolidated financial statements for more information on the Mount Milligan Cost Support Agreement and Deferred Gold Consideration.

Property Developments

1 unchanged sentence

Stream Interests

Gold stream deliveries from Andacollo were approximately 9,300 ounces for the three months ended September 30, 2023, compared to approximately 3,200 ounces for the three months ended September 30, 2022.

The increase in deliveries resulted primarily from the timing of shipments and settlements during the periods.

Teck Resources Limited (“Teck”) reported that production at Andacollo in the quarter ended September 30, 2023, was impacted by a 14-day unplanned shutdown in August 2023, due to a conveyor belt failure.

Any impact to Royal Gold on gold stream deliveries and sales is expected to be realized in the quarter ended March 31, 2024, as a result of the typical lag at Andacollo between production at the mine, and stream deliveries and sales.

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, the period of lower grades is expected to last through the remainder of 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.

Silver stream deliveries from Khoemac a u were approximately 315,000 ounces for the three months ended September 30, 2023, compared to approximately 290,700 ounces for the three months ended September 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 Khoemac a u Copper Mining (Pty.) Limited (“KCM”), operations at Khoemac a u continued at nameplate capacity through the quarter ended September 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.

Gold stream deliveries from Andacollo were approximately 4,900 ounces for the three months ended March 31, 2024, compared to approximately 5,200 ounces for the three months ended March 31, 2023.

The decrease in deliveries in the current period resulted primarily from Andacollo experiencing lower gold grades and lower gold recoveries.

Stream deliveries typically occur approximately 5 months after mine production.

On April 25, 2024, Teck Resources Limited ("Teck") reported that Andacollo continues to face extreme drought conditions, and continued water restrictions resulted in lower tonnes milled in the three months ended March 31, 2024.

According to Teck, it continues to assess steps that can be taken to mitigate these water restriction risks, with a solution expected to be in place in 2025.

As a result, and with the benefit of higher-grade ore, production is expected to increase between 2025 and 2027, compared to 2024.

Gold and copper grades are relatively well correlated at Andacollo and gold production tends to track copper production.

Teck expects that 2024 gold production from Andacollo will range between 18,000 and 24,000 ounces compared to actual gold production of 23,400 ounces in 2023.

We receive stream deliveries based on a fixed payability factor of 89%.

Teck has reported that the current life of mine for Andacollo is expected to continue until 2036 although additional permits or amendments to existing permits will be required to execute the life of mine plan.

Silver stream deliveries from Khoemac a u were 298,500 ounces for the three months ended March 31, 2024, compared to approximately 427,500 ounces for the three months ended March 31, 2023.

The decrease in deliveries in the current period resulted from lower tonnage milled due to equipment downtime and lower ore grade as a result of the mining schedule, and the timing of shipments and settlements during the periods.

We receive stream deliveries based on a fixed payability factor of 90%.

On March 22, 2024, MMG Limited (“MMG”) completed its acquisition of Cuprous Capital, the parent company that owns Khoemac a u.

Upon completion of its acquisition of Cuprous Capital, we received a $37 million repayment from MMG for the Khoemac a u debt facility outstanding principal and interest balance.

MMG expects payable silver production in 2024 to range between 1.2 to 1.4 million ounces, which is below the average life of mine production of 1.8 to 2.0 million ounces per year due to lower silver grades in the upper portion of the Zone 5 deposit and the top-down mining sequence.

In 2023 the actual silver production from Khoemacau was 1.5 million ounces.

Mount Milligan

Gold stream deliveries from Mount Milligan were approximately 13,000 ounces for the three months ended September 30, 2023, compared to approximately 18,400 ounces for the three months ended September 30, 2022.

Copper stream deliveries from Mount Milligan were approximately 2.4 million pounds during the three months ended September 30, 2023, compared to approximately 4.5 million pounds during the three months ended September 30, 2022.

Gold and copper stream deliveries for the three months ended September 30, 2023, relate to mine production during the approximate period February 2023 to April 2023.

On October 31, 2023, Centerra Gold Inc.

(“Centerra”) reported that a full asset optimization review of the Mount Milligan mine has been launched, which includes assessments of productivity and cost efficiency opportunities in concert with mine plan optimization.

Centerra expects this review to identify and drive incremental operational improvements and is expected to be completed in 2024.

Centerra also reported that production during the third quarter was impacted by mine sequencing and lower recoveries caused by blending of ores mined from different phases of the pit.

Centerra expects that medium-term recoveries for gold and copper will be similar to those achieved in 2023, and metallurgical reviews to increase recoveries from current levels are underway.

Centerra now expects full year 2023 gold production at Mount Milligan to be 150,000 to 160,000 ounces, down from the previous guidance range of 160,000 to 170,000 ounces, and copper production to be near the low end of the previously

provided guidance range of 60 to 70 million pounds.

Centerra also expects higher levels of gold production and similar levels of copper production in 2024 compared to 2023 production guidance levels.

Gold stream deliveries from Pueblo Viejo were approximately 5,000 ounces for the three months ended September 30, 2023, compared to approximately 8,900 ounces for the three months ended September 30, 2022.

On October 12, 2023, Barrick provided a brief update on production at Pueblo Viejo in the Dominican Republic.

According to Barrick, ramp-up of the expansion project was delayed due to equipment design deficiencies, and Barrick’s share of gold production at Pueblo Viejo was approximately 79,000 ounces in the third quarter.

Gold production in the third quarter was impacted by lower ore grades processed due to mine sequencing, as well as lower mill throughput and lower mill recovery associated with the commissioning of the mill expansion.

Silver stream deliveries were approximately 171,100 ounces for the three months ended September 30, 2023, compared to 319,100 ounces for the three months ended September 30, 2022 and an additional 80,600 ounces of silver were deferred.

As of September 30, 2023, approximately 688,300 ounces remain deferred, and the timing for the delivery of the entire deferred amount is uncertain.

We expect that silver recoveries could remain highly variable and material deliveries of deferred silver ounces are not expected until the plant expansion is complete and is running at full production levels.

Gold stream deliveries from Mount Milligan were approximately 15,200 ounces for the three months ended March 31, 2024, compared to approximately 13,900 ounces for the three months ended March 31, 2023.

Deliveries at Mount Milligan lag mine production by approximately 5 months.

Increased gold deliveries resulted from the earlier than expected settlement of a concentrate shipment in the current quarter, which offset lower gold grade and recovery in the production period related to the latest delivery.

Copper stream deliveries from Mount Milligan were approximately 3.38 million pounds during the three months ended March 31, 2024, compared to approximately 3.56 million pounds during the three months ended March 31, 2023.

Decreased copper deliveries are attributed to lower copper head grade and the processing of oxidized ore which negatively affected recovery.

On February 13, 2024, we entered into the Mount Milligan Cost Support Agreement with Centerra that provides near-term cash and deferred gold consideration to Royal Gold in return for long-term cost support that allows an extension of the mine life of Mount Milligan to 2035 and the potential for future increases in mine life beyond 2035.

With the announcement of the agreement, Centerra described a three-part strategy to further increase the Mount Milligan mine life that includes the completion of a Preliminary Economic Assessment (“PEA”) in the first half of 2025 to evaluate mine life extension opportunities, further exploration drilling, and a site optimization program that began in the fourth quarter of 2023.

On February 22, 2024, Centerra confirmed 2024 production guidance for Mount Milligan.

Centerra expects gold production of between 180,000 and 200,000 ounces, which, at the midpoint, is 23% higher than last year’s production.

This is mainly due to mine sequencing and higher gold grades.

Copper production is expected to be between 55 million and 65 million pounds, which, at the midpoint, is 3% lower than last year's production.

Both gold and copper production are expected to be evenly weighted throughout the year.

We receive gold stream deliveries based on a 97% payability factor, and copper stream deliveries based on a payability factor of the greater of 95% or the actual payability factor received by Centerra.

Gold stream deliveries from Pueblo Viejo were approximately 5,800 ounces for the three months ended March 31, 2024, compared to approximately 7,400 ounces for the three months ended March 31, 2023.

The decrease in gold deliveries in the current period resulted from lower ore grades processed due to mine sequencing, as well as lower mill throughput and lower mill recovery associated with the commissioning of the new plant.

Barrick reported mill throughput was additionally affected by the structural failure of the ore stockpile feed conveyor in the December quarter, delaying the ramp-up of the expanded plant to full production.

Silver stream deliveries were approximately 218,200 ounces for the three months ended March 31, 2024, compared to approximately 362,200 ounces for the three months ended March 31, 2023.

During the quarter an additional 123,300 ounces of silver 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 (ounces are only deferred below 52.5%).

If actual recovery rates fall below the contractual 70% recovery rate, ounces may be deferred with deferred ounces to be delivered in future periods as silver recovery allows.

As of March 31, 2024, approximately 966,000 ounces remain deferred.

We expect that silver recoveries could remain highly variable and material deliveries of deferred silver ounces are not expected until the expanded plant is running at full production levels.

We do not expect material deliveries of the outstanding balance of deferred silver in 2024.

On May 1, 2024, Barrick provided an update on the plant expansion and mine life extension project at Pueblo Viejo.

According to Barrick, process plant construction has been completed with the focus now on increasing production from the crushing and milling circuits and operational stability and recovery improvements in the flotation circuit.

Reconstruction of the ore stockpile feed conveyor was completed in April, which will allow the plant to commence throughput ramp-up in the second quarter.

With respect to the mine life extension project, Barrick reported that the technical and social studies for additional tailings storage capacity at the El Naranjo facility continued to advance and the feasibility study is due for completion in the third quarter of 2024.

Barrick continues to expect its share of 2024 gold production at Pueblo Viejo to remain in the range of 420,000 to 490,000 ounces in 2024.

This is compared to actual gold production of 335,000 ounces in 2023.

Royalty Interests

Production attributable to our royalty interests at Cortez was approximately 218,800 ounces of gold for the three months ended September 30, 2023, compared to approximately 36,600 ounces of gold for the three months ended September 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 October 12, 2023, Barrick reported that production in the September quarter was higher at Cortez as a result of higher oxide production from the Crossroads open pit and Cortez Hills underground.

Additionally, on September 12, 2023, Barrick provided an update on its 100%-owned Fourmile Project within the Cortez Complex, which is covered by royalty interests held by Royal Gold.

According to Barrick, ongoing drilling demonstrates the significant potential to increase the grade and size of the Fourmile Project, and work is underway to assess options for an independent exploration decline access in support of a pre-feasibility study.

Barrick expects this decline would also be used for development and production complementing the current development at the Goldrush Project.

Barrick’s preliminary economic assessment indicates that the Fourmile Project could support a potential gold production profile of 300,000 to 400,000 ounces per year in addition to the existing Cortez Complex production profile of 950,000 to 1,200,000 ounces per year over 10 years.

During the three months ended September 30, 2023, no royalty production from Peñasquito was reported due to the suspension of operations resulting from a strike action on June 7, 2023 by the National Union of Mine and Metal Workers of the Mexican Republic ("the Union").

According to Newmont, on October 13, 2023, a definitive agreement was reached between Newmont and the Union that also received approval from the Mexican Labor Court, ramp-up of operations has since commenced, and operations at Peñasquito are expected to reach full operating capacity by the end of the fourth quarter of 2023.

Production attributable to the Company’s royalty interest at the Cortez Complex was approximately 194,200 ounces of gold for the three months ended March 31, 2024, of which 69,200 ounces were attributable to the Legacy Zone, and 125,000 ounces were attributable to the CC Zone, compared to approximately 223,800 ounces of gold for the three months ended March 31, 2023, of which 117,200 ounces were attributable to the Legacy Zone, and 106,600 ounces were attributable to the CC Zone.

On May 1, 2024, Barrick reported that production from the Cortez Complex delivered on plan in the first quarter.

Barrick continues to expect 2024 gold production of approximately 620,000 to 680,000 ounces (100% basis), with production affected by lower oxide grades and tonnes at Crossroads (approximate 9.4% GSR royalty rate to Royal Gold), partially offset by a higher contribution from Goldrush (approximate 1.6% GSR royalty rate to Royal Gold).

Production attributable to the Company’s royalty interest at Peñasquito was approximately 44,000 ounces of gold, 9.85 million ounces of silver, 64.9 million pounds of lead, and 134.9 million pounds of zinc for the three months ended March 31, 2024.

This compares to approximately 55,600 ounces of gold, 6.09 million ounces of silver, 36.4 million pounds of lead, and 99.2 million pounds of zinc for the three months ended March 31, 2023.

According to Newmont, the lower gold production, and higher silver, lead and zinc production during the current quarter was primarily the result of lower gold and higher silver, lead and zinc grades being delivered from the Chile Colorado pit, which was in line with expectations.

Further, Newmont expects that the current stripping at Peñasquito will bring forward a higher proportion of gold ounces from the Peñasco pit, with gold production weighted approximately 60% toward the second half of 2024 with more ore mining from the Peñasco pit in the fourth quarter of 2024 and into 2025, balancing with the strong production of silver, lead and zinc from the Chile Colorado pit.

On April 25, 2024, Newmont reported that there is no change to the 2024 production guidance at Peñasquito of 250,000 ounces of gold, 34 million ounces of silver, 95,000 tonnes of lead and 245,000 tonnes of zinc.

Results of Operations

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

For the three months ended September 30, 2023, we recorded net income and comprehensive income attributable to Royal Gold stockholders (“net income”) of $49.3 million, or $0.75 per basic and diluted share, as compared to net income of $45.8 million, or $0.70 per basic and diluted share, for the three months ended September 30, 2022.

The increase in net income was primarily attributable to higher revenue, as discussed below.

For the three months ended September 30, 2023, we recognized total revenue of $138.6 million, comprised of stream revenue of $99.0 million and royalty revenue of $39.6 million at an average gold price of $1,928 per ounce, an average silver price of $23.57 per ounce and an average copper price of $3.79 per pound.

This is compared to total revenue of $131.4 million for the three months ended September 30, 2022, comprised of stream revenue of $98.7 million and royalty revenue of $32.7 million, at an average gold price of $1,729 per ounce, an average silver price of $19.23 per ounce and an average copper price of $3.51 per pound.

Revenue and the corresponding production attributable to our stream and royalty interests for the three months ended September 30, 2023, compared to the three months ended September 30, 2022, are as follows:

Quarter Ended March 31, 2024, Compared to Quarter Ended March 31, 2023

For the three months ended March 31, 2024, we recorded net income and comprehensive income attributable to Royal Gold stockholders (“net income”) of $47.2 million, or $0.72 per basic and diluted share, as compared to net income of $63.9 million, or $0.97 per basic and diluted share, for the three months ended March 31, 2023.

The decrease in net income was primarily attributable to lower revenue and higher income tax expense, as discussed below.

For the three months ended March 31, 2024, we recognized total revenue of $148.9 million, comprised of stream revenue of $102.5 million and royalty revenue of $46.4 million at an average gold price of $2,070 per ounce, an average silver price of $23.34 per ounce and an average copper price of $3.83 per pound.

This is compared to total revenue of $170.4 million

for the three months ended March 31, 2023, comprised of stream revenue of $115.0 million and royalty revenue of $55.4 million, at an average gold price of $1,890 per ounce, an average silver price of $22.55 per ounce and an average copper price of $4.05 per pound.

Revenue and the corresponding production attributable to our stream and royalty interests for the three months ended March 31, 2024, compared to the three months ended March 31, 2023, are as follows:

Revenue and Reported Production Subject to Our Stream and Royalty Interests

(Amounts in thousands, except reported production oz.

Three Months Ended

September 30, 2023

September 30, 2022

Stream/Royalty

Three Months Ended March 31, 2024 Three Months Ended March 31, 2023

Stream/Royalty Metal(s) Revenue Reported

Production (1)

Revenue Reported

Production (1)

Mount Milligan $ 34,995 $ 46,656

Gold 12,500 oz.

Copper 2.5 Mlbs.

Pueblo Viejo $ 17,760 $ 22,358

Gold 6,200 oz.

Silver 223,000 oz.

Andacollo Gold $ 11,689 5,700 oz.

$ 12,934 7,000 oz.

Silver $ 7,758 332,000 oz.

$ 9,153 404,100 oz.

$ 30,326 $ 23,889

Gold 13,800 oz.

Silver 80,100 oz.

Total stream revenue $ 102,528 $ 114,990

Royalty (2) :

Cortez Legacy Zone

Cortez CC Zone

Cortez Legacy Zone Gold $ 13,365 68,700 oz.

$ 23,087 117,200 oz.

Cortez CC Zone Gold $ 4,411 124,900 oz.

$ 3,206 106,600 oz.

Peñasquito $ 9,229 $ 7,433

Gold 44,000 oz.

Silver 9.8 Moz.

Lead 64.9 Mlbs.

Zinc 134.8 Mlbs.

Various $ 19,369 N/A $ 21,676

Total royalty revenue $ 46,374 $ 55,402

Total revenue $ 148,902 $ 170,392

(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 September 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.

_______________________________________________

(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 March 31, 2024, and 2023, 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 Wassa, which contributed 6% of total revenue for each of the three months ended September 30, 2023 and 2022, and our stream interest at Rainy River which contributed 6% of total revenue for the three months ended September 30, 2023, 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 gold production at the Cortez Legacy Zone, the new Cortez royalties acquired in 2022 and higher gold, silver and copper prices when compared to the prior year period.

This increase was partially offset by the suspension of operations at Peñasquito on June 7, 2023 due to a strike by the Union which resulted in no royalty revenue recognized for the three months ended September 30, 2023.

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

(3) Individually, no stream or royalty included within the “Other” category contributed greater than 10% of our total revenue for either period.

The decrease in our total revenue resulted primarily from lower gold production at the Cortez Legacy Zone, lower gold and copper sales at Mount Milligan and lower gold and silver sales at Pueblo Viejo.

These decreases were partially offset by higher average gold and silver prices and higher gold sales from Wassa and Xavantina compared to the prior year period.

Gold and silver ounces and copper pounds purchased and sold during the three months ended March 31, 2024 and 2023, and gold and silver ounces and copper pounds in inventory as of March 31, 2024, and December 31, 2023, for our streaming interests were as follows:

Three Months Ended

March 31, 2024

Three Months Ended

September 30, 2023

September 30, 2022

September 30, 2023

March 31, 2023

March 31, 2024

December 31, 2023

Purchases (oz.)

Inventory (oz.)

Gold Stream Purchases (oz.) Sales (oz.) Purchases (oz.) Sales (oz.) Inventory (oz.) Inventory (oz.)

Mount Milligan 15,200 12,500 13,900 15,200 6,700 4,000

Pueblo Viejo 5,800 6,200 7,400 7,900 5,800 6,200

Andacollo 4,900 5,700 5,200 7,000 — 800

Other 13,800 13,700 13,200 12,000 4,300 4,200

Total 39,700 38,100 39,700 42,100 16,800 15,200

Three Months Ended

March 31, 2024

Three Months Ended

September 30, 2023

September 30, 2022

September 30, 2023

March 31, 2023

March 31, 2024

December 31, 2023

Silver Stream

Purchases (oz.)

Inventory (oz.)

Silver Stream Purchases (oz.) Sales (oz.) Purchases (oz.) Sales (oz.) Inventory (oz.) Inventory (oz.)

298,500 332,000 427,500 404,100 101,900 135,300

Pueblo Viejo 218,200 223,000 362,300 337,900 218,200 223,000

Other 84,600 80,000 69,400 66,200 29,300 24,800

Total 601,300 635,000 859,200 808,200 349,400 383,100

Three Months Ended

March 31, 2024

Three Months Ended

September 30, 2023

September 30, 2022

September 30, 2023

December 31, 2022

Copper Stream

Purchases (Mlbs.)

Sales (Mlbs.)

Purchases (Mlbs.)

Sales (Mlbs.)

Inventory (Mlbs.)

Mount Milligan

Cost of sales, which excludes depreciation, depletion and amortization, decreased to $21.4 million for the three months ended September 30, 2023, from $23.2 million for the three months ended September 30, 2022.

The decrease, when compared to the prior year quarter, was primarily due to lower gold sales at Mount Milligan and lower gold and silver sales at Pueblo Viejo, partially offset by higher silver sales at Khoemac a u.

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 $9.9 million for the three months ended September 30, 2023, from $7.6 million for the three months ended September 30, 2022.

The increase was primarily due to higher corporate costs and an increase in non-cash stock compensation expense.

Depreciation, depletion and amortization increased to $40.1 million for the three months ended September 30, 2023, from $37.8 million for the three months ended September 30, 2022.

The increase was primarily due to higher depletion expense at Khoemac a u due to the ramp-up of production and additional depletion expense from the new royalties acquired at Cortez in 2022, when compared to the prior year quarter.

The increase was partially offset by lower depletion expense at Mount Milligan and Pueblo Viejo, which was due to lower depletion rates as a result of proven and probable mineral reserve increases when compared to the prior year period.

Interest and other expense decreased to $7.3 million for the three months ended September 30, 2023, from $8.8 million for the three months ended September 30, 2022.

The decrease was primarily due to lower interest expense as a result of lower average amounts outstanding under our revolving credit facility compared to the prior year quarter.

We had $325 million outstanding under our revolving credit facility as of September 30, 2023, compared to $450 million outstanding as of September 30, 2022.

The current all-in borrowing rate under our revolving credit facility was 6.7% as of September 30, 2023, compared to 4.2% in the prior year period.

For the three months ended September 30, 2023, we recorded income tax expense of $10.8 million, compared with income tax expense of $11.0 million for the three months ended September 30, 2022.

The income tax expense resulted in an effective tax rate of 17.8% in the current period, compared with 19.3% for the three months ended September 30, 2022.

Nine Months Ended September 30, 2023, Compared to Nine Months Ended September 30, 2022

For the nine months ended September 30, 2023, we recorded net income of $176.7 million, or $2.69 per basic and $2.68 per diluted share, as compared to net income of $182.6 million, or $2.78 per basic and diluted share, for the nine months ended September 30, 2022.

The decrease in net income was primarily attributable to higher debt-related interest expense, which was partially offset by an increase in revenue, each as discussed below.

For the nine months ended September 30, 2023, we recognized total revenue of $453.1 million, comprised of stream revenue of $320.0 million and royalty revenue of $133.1 million at an average gold price of $1,931 per ounce, an average silver price of $23.40 per ounce and an average copper price of $3.89 per pound.

This is compared to total revenue of $440.2 million for the nine months ended September 30, 2022, comprised of stream revenue of $308.9 million and royalty revenue of $131.3 million, at an average gold price of $1,824 per ounce, an average silver price of $21.92 per ounce and an average copper price of $4.11 per pound.

Revenue and the corresponding production attributable to our stream and royalty interests for the nine months ended September 30, 2023, compared to the nine months ended September 30, 2022, are as follows:

Revenue and Reported Production Subject to Our Stream and Royalty Interests

(Amounts in thousands, except reported production oz.

Nine Months Ended

September 30, 2023

September 30, 2022

Stream/Royalty

Production (1)

Mount Milligan

Total stream revenue

Royalty (2) :

Cortez Legacy Zone

Cortez CC Zone

Total royalty revenue

Total revenue

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

months ended September 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 4 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 Wassa, which contributed 5% and 6% of the total revenue for the nine months ended September 30, 2023 and 2022, respectively, and our stream interest at Rainy River, which contributed 6% of the total revenue for each of the nine months ended September 30, 2023 and 2022, 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 Khoemac a u due to the ramp-up, higher gold production from the Cortez Legacy Zone and additional revenue from the Cortez royalties acquired in 2022.

The increase was partially offset by lower gold sales at Mount Milligan and Andacollo and lower gold production at Peñasquito when compared to the prior year period.

Peñasquito gold production was lower for the current year period primarily due to the suspension of operations on June 7, 2023 due to a strike by the Union.

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

Nine Months Ended

September 30, 2023

September 30, 2022

September 30, 2023

December 31, 2022

Purchases (oz.)

Inventory (oz.)

Mount Milligan

Nine Months Ended

September 30, 2023

September 30, 2022

September 30, 2023

December 31, 2022

Silver Stream

Purchases (oz.)

Inventory (oz.)

Nine Months Ended

September 30, 2023

September 30, 2022

September 30, 2023

March 31, 2023

March 31, 2024

December 31, 2023

Copper Stream

Purchases (Mlbs.)

Sales (Mlbs.)

Purchases (Mlbs.)

Sales (Mlbs.)

Inventory (Mlbs.)

Copper Stream Purchases (Mlbs.) Sales (Mlbs.) Purchases (Mlbs.) Sales (Mlbs.) Inventory (Mlbs.) Inventory (Mlbs.)

Mount Milligan 3.4 2.5 3.6 4.5 0.9 —

Cost of sales, which excludes depreciation, depletion and amortization, remained flat at $69.7 million for the nine months ended September 30, 2023, and 2022.

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.

General and administrative costs increased to $30.0 million for the nine months ended September 30, 2023, from $25.8 million for the nine months ended September 30, 2022.

The increase was primarily due to higher corporate costs and an increase in non-cash stock compensation expense.

Depreciation, depletion and amortization decreased to $124.8 million for the nine months ended September 30, 2023, from $129.7 million for the nine months ended September 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 Khoemac a u due to the ramp-up of production and additional depletion from the newly acquired royalties at Cortez when compared to the prior year period.

Interest and other expense increased to $24.9 million for the nine months ended September 30, 2023, from $11.1 million for the nine months ended September 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.

For the nine months ended September 30, 2023, amounts outstanding under our revolving credit facility averaged $421 million at an average all-in borrowing rate of 5.1%, compared to average amounts outstanding of $165 million at an average all-in borrowing rate of 3.0% for the prior year period.

For the nine months ended September 30, 2023, we recorded income tax expense of $28.7 million, compared with income tax expense of $20.3 million for the nine months ended September 30, 2022.

The income tax expense resulted in an effective tax rate of 13.9% for the nine months ended September 30, 2023, compared with 10.0% for the nine months ended September 30, 2022.

The nine months ended September 30, 2023 and September 30, 2022, included discrete tax benefits attributable to the release of a valuation allowance on certain deferred tax assets.

Cost of sales, which excludes depreciation, depletion and amortization, decreased to $21.8 million for the three months ended March 31, 2024, from $25.0 million for the three months ended March 31, 2023.

The decrease, when compared to the prior year quarter, was primarily due to lower gold and copper sales at Mount Milligan.

Cost of sales is specific to our stream agreements and, except for Mount Milligan, is the result of our purchase of metal for a cash payment that is a set contractual percentage of the spot price for that metal near the date of metal delivery.

For Mount Milligan, the cash payments under the existing stream agreement are the lesser of $435 per ounce for gold and 15% of the spot price for copper near the date of metal delivery.

Separate, and in addition to the cash payments under the existing stream agreement, the Mount Milligan Cost Support Agreement detailed in Note 4 of our notes to consolidated financial statements provides for cash payments on gold and copper deliveries that are expected to begin after certain thresholds are met.

Depreciation, depletion and amortization decreased to $38.8 million for the three months ended March 31, 2024, from $46.3 million for the three months ended March 31, 2023.

The decrease was primarily due to lower depletion rates and lower gold and copper sales at Mount Milligan during the quarter.

The decrease was also due to lower gold production at the Cortez Legacy Zone compared to the prior year period.

Interest and other expense decreased to $4.6 million for the three months ended March 31, 2024, from $9.2 million for the three months ended March 31, 2023.

The decrease was primarily due to lower interest expense as a result of lower average amounts outstanding under our revolving credit facility compared to the prior year period.

We had $150 million outstanding under our revolving credit facility as of March 31, 2024, compared to $500 million outstanding as of March 31, 2023.

The current all-in borrowing rate under our revolving credit facility was 6.5% as of March 31, 2024, compared to 6.2% for the comparable prior year period.

For the three months ended March 31, 2024, we recorded income tax expense of $27.0 million, compared with income tax expense of $15.9 million for the three months ended March 31, 2023.

The income tax expense resulted in an effective tax rate of 36.4% in the current period, compared with 19.9% for the three months ended March 31, 2023.

The three months ended March 31, 2024, included a $13.0 million discrete U.S.

GILTI income tax expense related to consideration received from the Mount Milligan Cost Support Agreement.

Liquidity and Capital Resources

At September 30, 2023, we had current assets of $163.8 million compared to current liabilities of $70.9 million, which resulted in working capital of $92.9 million and a current ratio of 2 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 nine months ended September 30, 2023, liquidity needs were met from $314.7 million in net cash provided by operating activities and our available cash resources.

As of September 30, 2023, we had $675 million available and $325 million outstanding under our revolving credit facility.

Working capital, combined with available capacity under our revolving credit facility, resulted in approximately $768 million of total liquidity at September 30, 2023.

We were in compliance with each financial covenant under the revolving credit facility as of September 30, 2023.

At March 31, 2024, we had current assets of $193.0 million compared to current liabilities of $77.1 million, which resulted in working capital of $115.9 million.

This compares to current assets of $167.4 million and current liabilities of $72.4 million at December 31, 2023, resulting in working capital of $95 million.

The increase in working capital was primarily due to cash proceeds from the repayment of the Khoemac a u debt facility and the cash consideration as part of the Mount Milligan Cost Support Agreement.

During the three months ended March 31, 2024, liquidity needs were met from $138.3 million in net cash provided by operating activities and our available cash resources.

Working capital, combined with available capacity under our revolving credit facility, resulted in approximately $966 million of total liquidity at March 31, 2024.

As of March 31, 2024, we had $850 million available and $150 million outstanding under our revolving credit facility.

We were in compliance with each financial covenant under the revolving credit facility as of March 31, 2024.

Refer to Note 3 of our notes to consolidated financial statements and below under Recent Liquidity Developments for further discussion on our debt.

8 unchanged sentences

Revolving Credit Facility Repayment

On September 6, 2023, we made a $75 million principal payment towards the outstanding balance on the revolving credit facility leaving $675 million available as of September 30, 2023.

On March 6, 2024, we made a $100 million principal payment towards the outstanding balance on the revolving credit facility leaving $850 million available as of March 31, 2024.

On April 8, 2024 and May 8, 2024, we made principal payments of $25 million and $50 million, respectively, on the outstanding balance of the credit facility, leaving $925 million available as of the date of this report.

Operating Activities

Net cash provided by operating activities totaled $314.7 million for the nine months ended September 30, 2023, compared to $316.3 million for the nine months ended September 30, 2022.

The decrease was primarily due to higher interest payments on 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.

Net cash provided by operating activities totaled $138.3 million for the three months ended March 31, 2024, compared to $108.7 million for the three months ended March 31, 2023.

The increase, when compared to the prior year period, was primarily due to cash proceeds of $24.5 million received for the Mount Milligan Cost Support Agreement and $12.0 million of interest from the repayment of the Khoemac a u debt facility.

This increase was partially offset by lower cash receipts from the stream and royalty segments when compared to the prior year period.

Investing Activities

Net cash used in investing activities totaled $2.8 million for the nine months ended September 30, 2023, compared to $716.5 million for the nine months ended September 30, 2022.

The decrease was primarily due to fewer acquisitions of royalty and stream interests compared to the prior year period.

Net cash provided by investing activities totaled $23.6 million for the three months ended March 31, 2024, compared to net cash used in investing activities of $0.2 million for the three months ended March 31, 2023.

The change from the comparable prior year period was primarily due to the Khoemac a u debt facility principal repayment of $25 million.

Financing Activities

Net cash used in financing activities totaled $327.6 million for the nine months ended September 30, 2023, compared to net cash provided by financing activities of $378.9 million for the nine months ended September 30, 2022.

The decrease was primarily due to repayments of $250 million on our revolving credit facility during the current year period.

Net cash used in financing activities totaled $128.1 million for the three months ended March 31, 2024, compared to $100.2 million for the three months ended March 31, 2023.

The increase was primarily due to an increase in payments made on our revolving credit facility when compared to the prior year.

Recently Adopted Accounting Standards and Critical Accounting Policies

8 unchanged sentences

Forward-looking statements include, among others, statements regarding the following:

our acquisition strategy;

our due diligence process;

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, environmental and feasibility studies, technical reports, mine facilities, estimates of mineral resources and mineral reserves, development, and asset assessments (including Centerra’s full asset optimization review of Mount Milligan and Barrick’s preliminary economic assessment at the Fourmile Project), and permitting activities;

receipt of metal deliveries, including deferred amounts at Pueblo Viejo;

our expected financial performance and outlook, including sales volume, revenue, expenses, tax rates, earnings, and cash flows;

operators’ expected operating and financial performance, including production, deliveries, mine plans, environmental and feasibility studies, technical reports, mine facilities, estimates of mineral resources and mineral reserves, developments relating to their properties and operations, cash flows and liquidity, capital requirements and capital expenditures;

benefits from acquisitions and asset assessments;

receipt and timing of metal deliveries, including deferred amounts at Pueblo Viejo;

the timing and amount of future benefits and obligations in connection with the Mount Milligan Cost Support Agreement;

anticipated liquidity, capital resources, financing and stockholder returns;

2 unchanged sentences

a lower-price environment for gold, silver, copper, or other metals;

operating activities or financial performance of properties on which we hold stream or royalty interests, including inaccuracies in operators’ disclosures, 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 and risks (including from climate change), labor disputes, distribution and supply chain disruptions, permitting and licensing issues, or operational disruptions;

contractual issues involving our stream or royalty agreements;

delays in the completion of the plant expansion at Pueblo Viejo;

adverse results of Centerra’s Mount Milligan asset optimization studies and Barrick’s assessment of the Four Mile project;

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, other adverse government or court actions, or operational disruptions;

contractual issues involving our stream or royalty agreements;

2 unchanged sentences

increased competition for stream and royalty interests;

environmental risks, including those caused by climate change;

potential cyber-attacks, including ransomware;

our ability to identify, finance, and complete acquisitions;

adverse economic and market conditions, including as a result of government policies, war, natural disasters, and public health issues;

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;

pandemics and epidemics, and any related government policies and actions;

and other risk factors described in our reports filed with the Securities and Exchange Commission, including our 2022 10-K.

and other risk factors described in in this report and in our other reports filed with the Securities and Exchange Commission, including our 2023 10-K.

Most of these factors are beyond our ability to predict or control.

Other unpredictable or unknown factors not discussed in this report or our other reports could also have material adverse effects on forward-looking statements.

Forward-looking statements speak only as of the date on which they are made.

2 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis