What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2024-08-08 compared with 2024-05-09 · 197 added, 128 removed, 152 unchanged (68% of the section changed)

6 unchanged sentences

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.

6 unchanged sentences

• 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.

As of June 30, 2024, we owned nine stream interests, which are on seven producing properties and two development stage properties.

Stream interests accounted for approximately 71% and 70% of our total revenue for the three months and six months ended June 30, 2024, respectively, and 74% and 70% for the three and six months ended June 30, 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 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.

As of June 30, 2024, we owned royalty interests on 31 producing properties, 20 development stage properties and 117 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 31% and 33% of our total revenue for the three months ended March 31, 2024 and 2023, respectively.

Royalty interests accounted for 29% and 30% of our total revenue for the three and six months ended June 30, 2024, respectively, and 26% and 30% for the three and six months ended June 30, 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.

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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;

analysis of technical, financial, legal, environmental, social, governance and other confidential information

regarding an opportunity;

submission of indications of interest and term sheets;

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

Three Months Ended

March 31, 2024 March 31, 2023

For the three and six months ended June 30, 2024 and 2023, average metal prices and percentages of revenue by metal were as follows:

Three Months Ended Six Months Ended

June 30, 2024 June 30, 2023 June 30, 2024 June 30, 2023

Metal Average

5 unchanged sentences

$ 4.42 10% $ 3.84 6% $ 4.12 10% $ 3.95 10%

Other N/A 3% N/A 3%

Other N/A 3% N/A 2% N/A 3% N/A 2%

(1) Based on the average U.S.

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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.

Back River Royalties Acquisition

On June 26, 2024, International Royalty Corporation, a wholly-owned subsidiary of Royal Gold, acquired a 0.7% net smelter return 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 ("GSR") 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.

When considered together, the royalty interests are equivalent to an approximate effective 1.1% GSR royalty rate over the majority of the mine life.

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

Refer to Note 2 to the notes to consolidated financial statements for more information on the Back River royalties acquisition.

Property Developments

1 unchanged sentence

Stream Interests

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.

Gold stream deliveries from Andacollo were approximately 5,800 ounces for the three months ended June 30, 2024, compared to approximately 3,700 ounces for the three months ended June 30, 2023.

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

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.

On July 23, 2024, Teck Resources Limited (“Teck”) reported that production at Andacollo continued to be impacted by low water availability due to extreme drought conditions which limited ore processing rates.

The water restrictions improved during the June 2024 quarter and Teck expects that improvement to continue in the second half of 2024.

Silver stream deliveries from Khoemac a u were approximately 281,600 ounces for the three months ended June 30, 2024, compared to approximately 398,700 ounces for the three months ended June 30, 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.

On July 24, 2024, MMG Limited (“MMG”) reported that mining operations at Khoemac a u during the June 2024 quarter were influenced by equipment availability and high turnover of skilled labor, a situation intensified by a competitive labor market in Botswana, due to an increase in underground mining operations in the country.

To address this issue, Khoemac a u has sourced a significant number of replacements who are being trained and inducted.

MMG reported that mining activities during the June 2024 quarter were concentrated in lower-grade sectors due to the mining sequence, which, coupled with dilution, adversely impacted ore grades.

MMG is taking measures to reduce the dilution factor, with the expectation of achieving better ore grades in the forthcoming quarters.

Additionally, MMG reported it is committed to supporting the ramp-up of Khoemac a u to achieve an annual production of 60,000 tonnes of copper by 2026, facilitated by ongoing mining development efforts to increase mining fronts, operational flexibility and mined grades.

These efforts will be further enhanced by the completion of the primary vent fans as well as the paste fill project.

In addition, MMG is dedicated to completing the construction of an expansion project by 2028, which aims to increase production capacity to 130,000 tonnes of copper, and is expected to reach full capacity by 2029.

Any expanded production from the Zone 5 and Mango NE deposits falls within the area of interest covered by our silver stream interest.

Mount Milligan

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.

Gold stream deliveries from Mount Milligan were approximately 9,800 ounces for the three months ended June 30, 2024, compared to approximately 17,300 ounces for the three months ended June 30, 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.

Decreased gold deliveries primarily resulted from the timing of shipments and settlements during the periods, including the early settlement of a concentrate shipment that occurred in the prior quarter.

Copper stream deliveries from Mount Milligan were approximately 2.5 million pounds during the three months ended June 30, 2024, in line with the prior year quarter.

On August 1, 2024, Centerra Gold Inc.

("Centerra") reported that it continued to execute on its site-wide optimization program at Mount Milligan, initially launched in the fourth quarter of 2023.

According to Centerra, the program is focused on a holistic assessment of occupational health and safety, as well as improvements in mine and plant operations, and covers all aspects of the operation to maximize the potential of the orebody.

Centerra reported that milling costs in the six months ended June 30, 2024, were 12% lower than the prior year period.

Due to the longer-term nature of the mining optimization initiatives, Centerra expects to see improvements in mining costs per tonne in 2025.

Centerra also reported that work is progressing on a preliminary economic assessment to evaluate the substantial mineral resources at the Mount Milligan mine with a goal to unlock additional value beyond its current 2035 mine life.

Centerra continues to expect that the Preliminary Economic Assessment will be completed in the first half of 2025.

Gold stream deliveries from Pueblo Viejo were approximately 7,000 ounces for the three months ended June 30, 2024, compared to approximately 6,800 ounces for the three months ended June 30, 2023.

Silver stream deliveries were approximately 332,700 ounces for the three months ended June 30, 2024, compared to approximately 150,700 ounces for the three months ended June 30, 2023.

On July 16, 2024, Barrick reported that Pueblo Viejo’s production during the June 2024 quarter was flat sequentially as throughput is ramped up with a shift to recovery rate optimization in the second half of 2024.

Royalty Interests

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.

Production attributable to our royalty interest at the Cortez Complex was approximately 162,400 ounces of gold for the three months ended June 30, 2024, of which 42,600 ounces were attributable to the Legacy Zone, and 119,800 ounces were attributable to the CC Zone, compared to approximately 179,600 ounces of gold for the three months ended June 30, 2023, of which 68,100 ounces were attributable to the Legacy Zone, and 111,500 ounces were attributable to the CC Zone.

The reduction compared to the prior period is a result of planned lower production at Cortez.

Production attributable to our royalty interest at Peñasquito was approximately 64,200 ounces of gold, 7.95 million ounces of silver, 42.9 million pounds of lead and 113.3 million pounds of zinc for the three months ended June 30, 2024.

This compares to approximately 48,100 ounces of gold, 5.95 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.

Production was lower in the prior year quarter primarily due to a labor strike that was subsequently resolved.

On July 24, 2024, Newmont reported that full year 2024 production at Peñasquito is expected to be second half weighted driven primarily by improved grades.

Newmont reported that Peñasquito delivered strong gold and zinc grades from the Chile Colorado pit during the June 2024 quarter, and stripping in the Peñasco pit is expected to allow access to ore with 50% higher gold grades in the December 2024 quarter.

Results of Operations

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:

Quarter Ended June 30, 2024, Compared to Quarter Ended June 30, 2023

For the three months ended June 30, 2024, we recorded net income and comprehensive income attributable to Royal Gold stockholders (“net income”) of $81.2 million, or $1.23 per basic and diluted share, as compared to net income of $63.4 million, or $0.97 per basic and diluted share, for the three months ended June 30, 2023.

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

For the three months ended June 30, 2024, we recognized total revenue of $174.1 million, comprised of stream revenue of $123.0 million and royalty revenue of $51.1 million at an average gold price of $2,338 per ounce, an average silver price of $28.84 per ounce and an average copper price of $4.42 per pound.

This is compared to total revenue of $144.0 million for the three months ended June 30, 2023, 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.

Revenue and the corresponding production attributable to our stream and royalty interests for the three months ended June 30, 2024, compared to the three months ended June 30, 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 March 31, 2024 Three Months Ended March 31, 2023

Stream/Royalty Metal(s) Revenue Reported

Production (1)

Revenue Reported

Production (1)

Three Months Ended Three Months Ended

June 30, 2024 June 30, 2023

Reported Reported

Stream/Royalty Metal(s) Revenue Production (1)

Revenue Production (1)

Mount Milligan $ 52,139 $ 41,208

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Zinc 113.3 Mlbs.

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

Various $ 24,103 N/A $ 14,097 N/A

Total royalty revenue $ 51,144 $ 38,027

1 unchanged sentence

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(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.

(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, 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 6 to the notes to consolidated financial statements.

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(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

March 31, 2023

March 31, 2024

December 31, 2023

The increase in our total revenue resulted primarily from higher average gold, silver and copper prices compared to the prior period.

Higher copper sales at Mount Milligan, and higher gold and silver production at Peñasquito also contributed to the increase.

These increases were partially offset by lower gold and silver sales at Pueblo Viejo compared to the prior year period.

Gold and silver ounces and copper pounds purchased and sold during the three months ended June 30, 2024 and 2023, and gold and silver ounces and copper pounds in inventory as of June 30, 2024, and December 31, 2023, for our streaming interests were as follows:

Three Months Ended Three Months Ended As of As of

June 30, 2024 June 30, 2023 June 30, 2024 December 31, 2023

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

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Total 34,400 39,200 39,000 40,500 12,000 15,200

Three Months Ended

March 31, 2024

Three Months Ended

March 31, 2023

March 31, 2024

December 31, 2023

Three Months Ended Three Months Ended As of As of

June 30, 2024 June 30, 2023 June 30, 2024 December 31, 2023

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

Pueblo Viejo (1)

332,700 218,200 150,700 362,200 332,700 223,000

281,600 295,500 398,700 373,000 88,000 135,300

Other 80,000 79,500 70,600 65,700 29,800 24,800

Total 694,300 593,200 620,000 800,900 450,500 383,100

Three Months Ended Three Months Ended As of As of

June 30, 2024 June 30, 2023 June 30, 2024 December 31, 2023

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

Mount Milligan 2.5 3.4 2.5 1.7 — —

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(1) Pueblo Viejo silver purchases do not include 142,800 ounces of silver permitted to be deferred based on the terms of the Pueblo Viejo silver stream agreement.

Total deferred silver ounces were 1.12 million ounces at June 30, 2024, and the timing for the delivery of this deferred amount is uncertain.

Cost of sales, which excludes depreciation, depletion and amortization, increased to $24.2 million for the three months ended June 30, 2024, from $23.4 million for the three months ended June 30, 2023.

The increase, when compared to the prior year quarter, was primarily due to higher 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 or the prevailing market price of gold when purchased and 15% of the spot price for copper near the date of metal delivery.

Separately, and in addition to the cash payments under the existing stream agreement, the Mount Milligan Cost Support Agreement detailed in Note 5 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 or earlier, if metal prices are below certain thresholds but only as requested by Centerra.

General and administrative costs increased to $10.5 million for the three months ended June 30, 2024, from $9.1 million for the three months ended June 30, 2023.

The increase was primarily due to higher non-cash stock compensation expense compared to the prior year period.

Depreciation, depletion and amortization decreased to $35.7 million for the three months ended June 30, 2024, from $38.4 million for the three months ended June 30, 2023.

The decrease was primarily due to lower depletion rates at Khoemac a u and lower gold and silver sales at Pueblo Viejo compared to the prior year period.

Interest and other expense decreased to $2.5 million for the three months ended June 30, 2024, from $8.4 million for the three months ended June 30, 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.

For the three months ended June 30, 2024, amounts outstanding under our revolving credit facility averaged $92 million at an average all-in borrowing rate

of 6.5% compared to average amounts outstanding of $473 million at an average all-in borrowing rate of 6.3% for the prior year period.

For the three months ended June 30, 2024, we recorded income tax expense of $19.0 million, compared to $2.0 million for the three months ended June 30, 2023.

The income tax expense resulted in an effective tax rate of 18.9% in the current period, compared with 3.1% for the three months ended June 30, 2023.

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

Six Months Ended June 30, 2024, Compared to Six Months Ended June 30, 2023

For the six months ended June 30, 2024, we recorded net income of $128.4 million, or $1.95 per basic and diluted share, as compared to net income of $127.3 million, or $1.94 per basic and $1.93 per diluted share, for the six months ended June 30, 2023.

The increase in net income was primarily attributable to higher revenue, lower debt-related interest expense and lower depletion expense compared to the prior year period.

This increase was partially offset by higher tax expense, as discussed below.

For the six months ended June 30, 2024, we recognized total revenue of $323.0 million, comprised of stream revenue of $225.5 million and royalty revenue of $97.5 million at an average gold price of $2,203 per ounce, an average silver price of $26.07 per ounce and an average copper price of $4.12 per pound.

This is compared to total revenue of $314.4 million for the six months ended June 30, 2023, 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.

Revenue and the corresponding production attributable to our stream and royalty interests for the six months ended June 30, 2024, compared to the six months ended June 30, 2023, are as follows:

Revenue and Reported Production Subject to Our Stream and Royalty Interests

(Amounts in thousands, except reported production oz.

Six Months Ended Six Months Ended

June 30, 2024 June 30, 2023

Reported Reported

Stream/Royalty Metal(s) Revenue Production (1)

Revenue Production (1)

Mount Milligan $ 87,134 $ 87,863

Gold 28,600 oz.

Copper 5.8 Mlbs.

Pueblo Viejo $ 37,562 $ 45,898

Gold 12,000 oz.

Silver 441,200 oz.

Andacollo Gold $ 22,297 10,200 oz.

$ 20,757 11,000 oz.

Silver $ 16,152 627,400 oz.

$ 18,035 777,000 oz.

$ 62,336 $ 48,452

Gold 26,500 oz.

Silver 159,600 oz.

Total stream revenue $ 225,481 $ 221,005

Royalty (2) :

Cortez Legacy Zone Gold $ 24,579 111,300 oz.

$ 37,393 185,300 oz.

Cortez CC Zone Gold $ 8,959 244,700 oz.

$ 6,726 218,100 oz.

Peñasquito $ 20,508 $ 13,538

Gold 108,100 oz.

Silver 17.8 Moz.

Lead 107.5 Mlbs.

Zinc 248.1 Mlbs.

Various $ 43,472 N/A $ 35,772 N/A

Total royalty revenue $ 97,518 $ 93,429

Total Revenue $ 322,999 $ 314,434

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(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, 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 6 to the notes to consolidated financial statements.

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

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

The increase in our total revenue resulted primarily from higher average gold, silver and copper prices, higher production at Peñasquito, and higher gold sales at Xavantina which is included in other stream revenue in the table above.

The increase was partially offset by lower gold and silver sales at Pueblo Viejo and lower production at the Cortez Legacy Zone when compared to the prior year period.

Gold and silver ounces and copper pounds purchased and sold during the six months ended June 30, 2024, and 2023, and gold and silver ounces and copper pounds in inventory as of June 30, 2024, and December 31, 2023, for our streaming interests were as follows:

Six Months Ended Six Months Ended As of As of

June 30, 2024 June 30, 2023 June 30, 2024 December 31, 2023

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

Mount Milligan 25,100 28,600 31,200 32,700 500 4,000

Pueblo Viejo 12,700 12,000 14,200 15,300 7,000 6,200

Andacollo 10,700 10,200 9,000 11,000 1,200 800

Other 25,600 26,500 24,200 23,500 3,300 4,200

Total 74,100 77,300 78,600 82,500 12,000 15,200

Three Months Ended

March 31, 2024

Three Months Ended

March 31, 2023

March 31, 2024

December 31, 2023

Six Months Ended Six Months Ended As of As of

June 30, 2024 June 30, 2023 June 30, 2024 December 31, 2023

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

580,200 627,400 826,200 777,000 88,000 135,300

Pueblo Viejo (1)

550,900 441,200 513,000 700,100 332,700 223,000

Other 164,500 159,600 140,000 131,900 29,800 24,800

Total 1,295,600 1,228,200 1,479,200 1,609,000 450,500 383,100

Six Months Ended Six Months Ended As of As of

June 30, 2024 June 30, 2023 June 30, 2024 December 31, 2023

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

Mount Milligan 5.8 5.8 6.0 6.2 — —

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.

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(1) Pueblo Viejo silver purchases do not include 266,100 ounces of silver permitted to be deferred based on the terms of the Pueblo Viejo silver stream agreement.

Total deferred silver ounces were 1.12 million ounces at June 30, 2024, and the timing for the delivery of this deferred amount is uncertain.

Cost of sales, which excludes depreciation, depletion and amortization, decreased to $45.9 million for the six months ended June 30, 2024, from $48.4 million for the six months ended June 30, 2023.

The decrease was primarily due to lower gold and silver sales at Pueblo Viejo.

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.

General and administrative costs increased to $21.9 million for the six months ended June 30, 2024, from $20.1 million for the six months ended June 30, 2023.

The increase was primarily due to higher non-cash stock compensation expense compared to the prior year period.

Depreciation, depletion and amortization decreased to $74.5 million for the six months ended June 30, 2024, from $84.7 million for the six months ended June 30, 2023.

The decrease was primarily due to lower depletion rates at Mount Milligan and Khoemac a u as a result of proven and probable mineral reserve increases when compared to the prior year period.

Interest and other expense decreased to $7.1 million for the six months ended June 30, 2024, from $17.6 million for the six months ended June 30, 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.

For the six months ended June 30, 2024, amounts outstanding under our revolving credit facility averaged $156 million at an average all-in borrowing rate

of 6.5%, compared to average amounts outstanding of $442 million at an average all-in borrowing rate of 6.2% for the prior year period.

For the six months ended June 30, 2024, we recorded income tax expense of $46.0 million, compared with income tax expense of $17.9 million for the six months ended June 30, 2023.

The income tax expense resulted in an effective tax rate of 26.4% in the current period, compared with 12.3% for the six months ended June 30, 2023.

The six months ended June 30, 2024, included a $13.0 million discrete U.S.

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

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

Liquidity and Capital Resources

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.

At June 30, 2024, we had current assets of $133.5 million compared to current liabilities of $122.4 million, which resulted in working capital of $11.1 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.

The decrease in working capital was primarily due to a decrease in our available cash, which primarily resulted from increased debt repayments and the $51 million Back River royalties acquisition during the current period and our expected repayment of the outstanding balance under our revolving credit facility which resulted in the classification of the liability as current.

During the six months ended June 30, 2024, liquidity needs were met from $251.8 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 $961 million of total liquidity at June 30, 2024.

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

We were in compliance with each financial covenant under the revolving credit facility as of June 30, 2024.

Refer to Note 4 of our notes to consolidated financial statements and below under Recent Liquidity Developments for further discussion on our debt.

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Revolving Credit Facility Repayment

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.

During the six months ended June 30, 2024, we made payments totaling $200 million towards the outstanding balance on the revolving credit facility leaving $950 million available as of June 30, 2024.

On July 10, 2024, we repaid $25 million of the outstanding balance of our revolving credit facility, leaving $975 million available as of the date of this report.

On August 12, 2024, we plan to pay the remaining outstanding balance of our revolving credit facility.

Operating Activities

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.

Net cash provided by operating activities totaled $251.8 million for the six months ended June 30, 2024, compared to $216.6 million for the six months ended June 30, 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.

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

Investing Activities

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.

Net cash used in investing activities totaled $27.3 million for the six months ended June 30, 2024, compared to net cash used in investing activities of $2.8 million for the six months ended June 30, 2023.

The increase was primarily due to the $51 million in aggregate consideration paid for the acquisition of two royalties at Back River.

The increase was partially offset by the $25 million principal repayment on the Khoemac a u debt facility during the current period.

Financing Activities

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.

Net cash used in financing activities totaled $254.4 million for the six months ended June 30, 2024, compared to $226.2 million for the six months ended June 30, 2023.

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

10 unchanged sentences

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;

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

benefits from acquisitions and asset assessments;

17 unchanged sentences

changes in management and key employees;

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.

and other risk factors described 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.

4 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