What changed in this filing

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Item 1. Financial Statements

2024-08-08 compared with 2024-05-09 · 140 added, 67 removed, 424 unchanged (33% of the section changed)

15 unchanged sentences

Dividends payable 26,314 26,292

Current portion of long-term debt (Note 4) 50,000 —

Income tax payable 18,103 15,557

3 unchanged sentences

Deferred tax liabilities 133,351 134,299

Mount Milligan support liability (Note 4) 25,000 —

Mount Milligan deferred liability (Note 5) 25,000 —

Other liabilities 7,094 7,728

15 unchanged sentences

(Unaudited, amounts in thousands except share data)

Three Months Ended

2024 March 31,

Three Months Ended Six Months Ended

2024 June 30,

2023 June 30,

2024 June 30,

Revenue (Note 6) $ 174,096 $ 144,042 $ 322,999 $ 314,434

10 unchanged sentences

Income before income taxes 100,311 65,629 174,652 145,571

Income tax expense ( 27,033 ) ( 15,871 )

Income tax expense (Note 9) ( 18,991 ) ( 2,029 ) ( 46,025 ) ( 17,900 )

Net income and comprehensive income 81,320 63,600 128,627 127,671

10 unchanged sentences

Consolidated Statements of Changes in Stockholders’ Equity

Three months ended March 31, 2024, and 2023

Three months ended June 30, 2024, and 2023

(unaudited, amounts in thousands except share data)

5 unchanged sentences

Shares Amount

Balance at December 31, 2023 65,631,760 $ 656 $ 2,221,039 $ 666,522 $ 12,424 $ 2,900,641

Balance at March 31, 2024 65,648,831 $ 656 $ 2,223,021 $ 687,377 $ 12,312 $ 2,923,366

Stock-based compensation and related share issuances 7,794 — 2,921 — — 2,921

2 unchanged sentences

Dividends declared — — — ( 26,315 ) — ( 26,315 )

Balance at June 30, 2024 65,656,625 $ 656 $ 2,225,942 $ 742,270 $ 12,325 $ 2,981,193

Royal Gold Stockholders

Common Shares Additional

Capital Accumulated

Earnings Non-controlling

Interests Total

Shares Amount

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, INC.

Consolidated Statements of Changes in Stockholders’ Equity

Six months ended June 30, 2024, and 2023

(unaudited, amounts in thousands except share data)

Royal Gold Stockholders

9 unchanged sentences

Dividends declared — — — ( 52,624 ) — ( 52,624 )

Balance at March 31, 2023 65,599,348 $ 656 $ 2,215,362 $ 566,545 $ 12,369 $ 2,794,932

Balance at June 30, 2024 65,656,625 $ 656 $ 2,225,942 $ 742,270 $ 12,325 $ 2,981,193

Royal Gold Stockholders

Common Shares Additional

Capital Accumulated

Earnings Non-controlling

Interests Total

Shares Amount

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

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

2 unchanged sentences

(Unaudited, amounts in thousands)

Three Months Ended

2024 March 31,

Six Months Ended

2024 June 30,

Cash flows from operating activities:

4 unchanged sentences

Fair value changes in equity securities ( 383 ) ( 291 )

Deferred tax expense 648 1,092

Deferred tax expense (benefit) 3,419 ( 7,139 )

Other 484 445

6 unchanged sentences

Income tax payable 2,547 ( 462 )

Mount Milligan support liability 25,000 —

Mount Milligan deferred liability 25,000 —

Other liabilities ( 5,528 ) ( 597 )

4 unchanged sentences

Other ( 85 ) ( 151 )

Net cash provided by (used in) investing activities $ 23,591 $ ( 197 )

Net cash used in investing activities $ ( 27,341 ) $ ( 2,821 )

Cash flows from financing activities:

4 unchanged sentences

Net cash used in financing activities $ ( 254,393 ) $ ( 226,190 )

Net increase in cash and equivalents 33,783 8,230

Net decrease in cash and equivalents ( 29,935 ) ( 12,429 )

Cash and equivalents at beginning of period 104,167 118,586

15 unchanged sentences

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 months ended March 31, 2024 are not necessarily indicative of the results that may be expected for the calendar year ending December 31, 2024.

Operating results for the three and six months ended June 30, 2024 are not necessarily indicative of the results that may be expected for the calendar year ending December 31, 2024.

These interim unaudited consolidated financial statements should be read in conjunction with our Form 10-K for the year ended December 31, 2023, filed with the Securities and Exchange Commission (“SEC”) on February 15, 2024 (“2023 10-K”).

1 unchanged sentence

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.

Back River Royalties

On June 26, 2024, International Royalty Corporation, a wholly-owned subsidiary of Royal Gold, acquired a 0.7 % net smelter return ("NSR") royalty (the "Hill Royalty") that declines by 50 % after $ 5 million Canadian dollars in royalty revenue is received, and a 26.25 % interest in a 5 % gross smelter return royalty (the "KM Royalty") that is payable after approximately 780,000 ounces have been produced on the Back River Gold Project ("Back River") for aggregate cash consideration of $ 51 million.

Payments for the Hill Royalty are deductible from the KM Royalty.

Back River is operated by B2Gold Corporation and is located in Western Nunavut, Canada.

The Back River royalties have been accounted for as an asset acquisition and the $ 51 million cash consideration, plus direct transaction costs, have been allocated to development ($ 42 million) and exploration ($ 9 million) stage royalty interests within S tream and royalty interests, net on our consolidated balance sheets.

The purchase price was funded with available cash on hand.

ROYAL GOLD, INC.

1 unchanged sentence

STREAM AND ROYALTY INTERESTS, NET

The following tables summarize our stream and royalty interests, net as of March 31, 2024 and December 31, 2023.

As of March 31, 2024 (Amounts in thousands):

The following tables summarize our stream and royalty interests, net as of June 30, 2024 and December 31, 2023.

As of June 30, 2024 (Amounts in thousands):

Cost Accumulated Depletion Net

19 unchanged sentences

Côté 45,421 — 45,421

Back River 42,948 — 42,948

La Fortuna 35,140 — 35,140

52 unchanged sentences

Notes to Consolidated Financial Statements

Our debt as of March 31, 2024 and December 31, 2023 consists of the following (amounts in thousands):

As of March 31, 2024 As of December 31, 2023

Principal Debt Issuance Costs Total Principal Debt Issuance Costs Total

Revolving credit facility $ 150,000 $ ( 3,813 ) $ 146,187 $ 250,000 $ ( 4,033 ) $ 245,967

Our debt as of June 30, 2024 and December 31, 2023 consists of the following (amounts in thousands):

As of June 30, 2024 As of December 31, 2023

Principal Debt Issuance Costs (1)

Total Principal Debt Issuance Costs Total

Current portion of long-term debt $ 50,000 $ — $ 50,000 $ — $ — $ —

Long-term debt $ — $ — $ — $ 250,000 $ ( 4,033 ) $ 245,967

Total debt $ 50,000 $ — $ 50,000 $ 250,000 $ ( 4,033 ) $ 245,967

_______________________________________________

(1) Debt issuance costs of $ 3.6 million included within Other assets on our consolidated balance sheets.

Revolving credit facility

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

The interest rate on borrowings under our revolving credit facility as of March 31, 2024, was Term SOFR plus 1.20 % for an all-in rate of 6.5 %.

Interest expense, which includes interest on outstanding borrowings and amortization of debt issuance costs, was $ 3.9 million and $ 8.5 million for the three months ended March 31, 2024 and 2023, respectively.

We were in compliance with each financial covenant (leverage ratio and interest coverage ratio) under our revolving credit facility as of March 31, 2024.

We repaid $ 100 million, $ 25 million and $ 50 million of our outstanding revolving credit facility on March 6, 2024, April 8, 2024 and May 8, 2024, respectively.

For the six months ended June 30, 2024, we repaid a total of $ 200 million on our outstanding revolving credit facility.

As of June 30, 2024, we had $ 50 million outstanding and $ 950 million available under our revolving credit facility.

The interest rate on borrowings under our revolving credit facility as of June 30, 2024, was Term SOFR plus 1.20 % for an all-in rate of 6.5 %.

Interest expense, which includes interest on outstanding borrowings and amortization of debt issuance costs, was $ 1.7 million and $ 5.6 million for the three and six months ended June 30, 2024, respectively, and $ 7.8 million and $ 16.3 million for the three and six months ended June 30, 2023, respectively.

We were in compliance with each financial covenant (leverage ratio and interest coverage ratio) under our revolving credit facility as of June 30, 2024.

On July 10, 2024, we repaid $ 25 million on our outstanding revolving credit facility, and on August 12, 2024, we plan to pay the remaining outstanding balance.

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

MOUNT MILLIGAN SUPPORT LIABILITY

MOUNT MILLIGAN DEFERRED LIABILITY

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.

1 unchanged sentence

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

The value of the cash consideration and free cash flow interest received from Centerra, $ 25 million, have been recorded as a deferred liability in our consolidated balance sheets as of March 31, 2024.

The value of the cash consideration and free cash flow interest received from Centerra is recorded as a deferred liability in our consolidated balance sheets as of June 30, 2024.

This amount will be amortized as we provide future cost support to Centerra under the Mount Milligan Cost Support Agreement on a units of production basis over the Mount Milligan mine life beginning with the first cost support payment made after the First Threshold (defined below) is met.

6 unchanged sentences

Each of the Greenstone Deliveries will be delivered to Royal Gold within 30 days of such delivery to Centerra.

When the Deferred Gold Consideration is received and subsequently sold, we anticipate the value of the gold ounces sold will be recorded as a deferred liability and amortized on a units of production basis over the mine life of Mount Milligan as we provide future cost support.

ROYAL GOLD, INC.

Notes to Consolidated Financial Statements

Metal deliveries referenced in the Mount Milligan Cost Support Agreement are those with a bill of lading date on or after January 1, 2024 (the "Reference Date").

20 unchanged sentences

Nothing in the Mount Milligan Cost Support Agreement modifies the existing stream agreement, including the payment of $ 435 for each gold ounce delivered and 15 % of the spot price for each pound of copper delivered.

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

ROYAL GOLD, INC.

Notes to Consolidated Financial Statements

and recognized as revenue when, or as, a performance obligation is satisfied.

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.

21 unchanged sentences

Please also refer to our “Use of Estimates” accounting policy discussed in our 2023 10-K.

For the three months ended March 31, 2024, royalty revenue that was estimated or was attributable to metal production for a period prior to March 31, 2024, was not material.

For the three months ended June 30, 2024, royalty revenue that was estimated or was attributable to metal production for a period prior to June 30, 2024, was not material.

Disaggregation of Revenue

5 unchanged sentences

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

Three Months Ended

2024 March 31,

Three Months Ended Six Months Ended

2024 June 30,

2023 June 30,

2024 June 30,

Stream revenue:

11 unchanged sentences

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

Three Months Ended

Metal(s) March 31,

2024 March 31,

Three Months Ended Six Months Ended

Metal(s) June 30,

2024 June 30,

2023 June 30,

2024 June 30,

Stream revenue:

17 unchanged sentences

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

Three Months Ended

2024 March 31,

Three Months Ended Six Months Ended

2024 June 30,

2023 June 30,

2024 June 30,

Restricted stock $ 1,924 $ 1,540 $ 3,895 $ 3,154

4 unchanged sentences

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

During the three months ended March 31, 2024 and 2023, we granted the following stock-based compensation awards:

Three Months Ended

2024 March 31,

(Number of shares)

We granted the following stock-based compensation awards:

Three Months Ended Six Months Ended

2024 June 30,

2023 June 30,

2024 June 30,

(Number of shares) (Number of shares)

Performance stock (at maximum 200 % attainment)

2 unchanged sentences

Total equity awards granted — — 159,690 138,890

As of March 31, 2024, unrecognized compensation expense (expressed in thousands below) and weighted-average vesting period for each of our stock-based compensation awards were as follows:

As of June 30, 2024, unrecognized compensation expense (expressed in thousands below) and weighted-average vesting period for each of our stock-based compensation awards were as follows:

expense Weighted-

13 unchanged sentences

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

2024 March 31,

Three Months Ended Six Months Ended

2024 June 30,

2023 June 30,

2024 June 30,

Net income attributable to Royal Gold common stockholders $ 81,208 $ 63,449 $ 128,372 $ 127,324

5 unchanged sentences

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

Three Months Ended

2024 March 31,

Three Months Ended Six Months Ended

2024 June 30,

2023 June 30,

2024 June 30,

Income tax expense $ 18,991 $ 2,029 $ 46,025 $ 17,900

Effective tax rate 18.9 % 3.1 % 26.4 % 12.3 %

The effective tax rate for the three months ended March 31, 2024, included a $ 13.0 million discrete U.S.

The effective tax rate for the six months ended June 30, 2024, included a $ 13.0 million discrete U.S.

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

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

SEGMENT INFORMATION

1 unchanged sentence

Our long-lived assets (stream and royalty interests, net) are geographically distributed as shown in the following table (amounts in thousands):

As of March 31, 2024 As of December 31, 2023

As of June 30, 2024 As of December 31, 2023

interest Royalty

16 unchanged sentences

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

Three Months Ended March 31, 2024

Three Months Ended June 30, 2024

Revenue Cost of sales (1)

4 unchanged sentences

Total $ 174,096 $ 24,174 $ 1,581 $ 35,658 $ 112,683

Three Months Ended March 31, 2023

Three Months Ended June 30, 2023

Revenue Cost of sales (1)

4 unchanged sentences

Total $ 144,042 $ 23,367 $ 1,274 $ 38,297 $ 81,104

Six Months Ended June 30, 2024

Revenue Cost of sales (1)

Production taxes Depletion (2)

Segment gross profit

Stream interests $ 225,481 $ 45,924 $ — $ 53,525 $ 126,032

Royalty interests 97,518 — 3,031 20,816 73,671

Total $ 322,999 $ 45,924 $ 3,031 $ 74,341 $ 199,703

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

_______________________________________________

1 unchanged sentence

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

ROYAL GOLD, INC.

Notes to Consolidated Financial Statements

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

Three Months Ended

2024 March 31,

Three Months Ended Six Months Ended

2024 June 30,

2023 June 30,

2024 June 30,

Total segment gross profit $ 112,683 $ 81,104 $ 199,703 $ 178,272

7 unchanged sentences

Income before income taxes $ 100,311 $ 65,629 $ 174,652 $ 145,571

ROYAL GOLD, INC.

Notes to Consolidated Financial Statements

Our revenue by reportable segment for the three months ended March 31, 2024 and 2023, is geographically distributed as shown in the following table (amounts in thousands):

Three Months Ended

2024 March 31,

Our revenue by reportable segment for the three and six months ended June 30, 2024 and 2023, is geographically distributed as shown in the following table (amounts in thousands):

Three Months Ended Six Months Ended

2024 June 30,

2023 June 30,

2024 June 30,

Stream interests:

8 unchanged sentences

Mexico 12,888 8,155 23,656 17,449

Canada 5,131 6,591

Australia 7,047 5,081 12,022 9,180

Canada 3,035 ( 97 ) 8,166 6,495

Rest of world 2,901 1,623 4,322 3,460

6 unchanged sentences

Quoted prices for identical instruments in active markets;

ROYAL GOLD, INC.

Notes to Consolidated Financial Statements

Quoted prices for similar instruments in active markets;

2 unchanged sentences

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

As of March 31, 2024 and December 31, 2023, we had financial assets in the form of marketable securities which are measured at fair value on a recurring basis;

As of June 30, 2024 and December 31, 2023, we had financial assets in the form of marketable securities which are measured at fair value on a recurring basis;

however, the carrying value of such financial assets is not material.

The carrying value of our revolving credit facility (Note 3) approximates fair value as of March 31, 2024.

As of March 31, 2024, 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.

The carrying value of our revolving credit facility (Note 4) approximates fair value as of June 30, 2024.

As of June 30, 2024, 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.

ROYAL GOLD, INC.

Notes to Consolidated Financial Statements

COMMITMENTS AND CONTINGENCIES

Ilovica Gold Stream Acquisition

As of March 31, 2024, 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.

As of June 30, 2024, 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.

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 1. Financial Statements