What changed in this filing

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Item 2. Management’s Discussion and Analysis

2024-11-07 compared with 2024-08-08 · 136 added, 128 removed, 221 unchanged (54% of the section changed)

15 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 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.

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

Stream interests accounted for approximately 69% of our total revenue for the three and nine months ended September 30, 2024 and 71% for the three and nine months ended September 30, 2023.

We expect stream interests to continue representing a significant portion of our total revenue.

• Acquisition and Management of Royalty Interests — Royalties are non-operating interests in mining projects that provide the right to revenue or metals produced from the project after deducting specified costs, if any.

As of June 30, 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.

As of September 30, 2024, we owned royalty interests on 33 producing properties, 17 development stage properties and 116 exploration stage properties, of which we consider 50 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% 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.

Royalty interests accounted for 31% of our total revenue for the three and nine months ended September 30, 2024 and 29% for the three and nine months ended September 30, 2023.

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;

5 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 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

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

Three Months Ended

Nine Months Ended

September 30, 2024 September 30, 2023 September 30, 2024 September 30, 2023

Metal Average

20 unchanged sentences

Stream Interests

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.

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

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 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.

Gold stream deliveries from Andacollo were approximately 5,200 ounces for the three months ended September 30, 2024, compared to approximately 9,300 ounces for the three months ended September 30, 2023.

The decrease in deliveries was primarily due to lower tonnes milled as a result of water restrictions caused by extreme drought conditions earlier in the year.

Stream deliveries typically occur approximately six months after mine production and are based on a fixed payability factor of 89%.

On October 24, 2024, Teck Resources Limited reported improved mill throughput in the September 2024 quarter driven by increased water availability.

Silver stream deliveries from Khoemac a u were approximately 288,200 ounces for the three months ended September 30, 2024, compared to approximately 315,000 ounces for the three months ended September 30, 2023.

The decrease in

deliveries in the current period primarily resulted from lower tonnage milled.

Stream deliveries are based on a fixed payability factor of 90% and typically occur 1 to 2 months after mine production.

On October 24, 2024, MMG Limited (“MMG”) reported improved mining and milling volumes and higher ore grades at Zone 5 during the September 2024 quarter compared to the previous quarter.

According to MMG, operations were enhanced due to the gradual onboarding of skilled labor and increased availability of equipment, and the mining sequence allowed access to higher-grade areas.

Improved controls on dilution also supported the increase in ore mined grades.

MMG also reported that underground development advance increased by 25% during the quarter, which MMG expects will lead to greater mining volumes, access to higher-grade mining areas, and will increase mining flexibility in the near and medium term.

MMG also reported that it expects production at Zone 5 to further ramp up over the next year, and that it is committed to accessing the higher-grade areas to achieve an annual production of 60,000 tonnes of copper in concentrate by 2026.

This will be facilitated by ongoing mining development efforts to increase mining fronts, operational flexibility and access to higher-grade areas.

These efforts will be further enhanced by constructing a paste fill plant to increase extraction rates and completion of the installation of primary vent fans.

MMG plans to expand total production capacity at Khoemac a u to 130,000 tonnes of copper in concentrate per annum by building a new 4.5 million tonne per annum process plant, increasing Zone 5 output, and developing additional deposits.

MMG expects to begin the expansion feasibility study by the end of 2024, with construction to begin in 2026, production of first concentrate in 2028, and full capacity reached by 2029.

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

Mount Milligan

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.

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.

Gold stream deliveries from Mount Milligan were approximately 22,100 ounces for the three months ended September 30, 2024, compared to approximately 13,000 ounces for the three months ended September 30, 2023.

Copper stream deliveries from Mount Milligan were approximately 3.9 million pounds during the three months ended September 30, 2024, compared to approximately 2.4 million pounds during the three months ended September 30, 2023.

The increase in deliveries was primarily due to increased mill throughput, as well as higher gold grade earlier in 2024.

Stream metal deliveries typically occur approximately six months after mine production.

Gold stream deliveries are based on a fixed payability factor of 97% and copper stream deliveries are based on a minimum payability factor of 95%.

On October 31, 2024, Centerra Gold Inc.

("Centerra") reported that 2024 production guidance at the Mount Milligan mine in British Columbia remains unchanged at 180,000 to 200,000 ounces of gold and 55 to 65 million pounds of copper, with gold production trending towards the lower end of the range.

Centerra also reported that work continued on the site-wide optimization program, and notable achievements during the first nine months of 2024 include an improved safety record, increased availability and utilization of the haul fleet, and consistent ore supply which has led to increased mill throughput per operating day.

In addition, Centerra is progressing work on a preliminary economic assessment (“PEA”) to evaluate the substantial mineral resources at Mount Milligan with a goal to unlock additional value beyond its current 2035 mine life.

Centerra expects the PEA to be completed towards the end of the first half of 2025.

Gold stream deliveries from Pueblo Viejo were approximately 6,000 ounces for the three months ended September 30, 2024, compared to approximately 5,000 ounces for the three months ended September 30, 2023.

The increase in gold deliveries was primarily due to increased throughput in the current period.

Gold stream deliveries are based on a fixed payability factor of 99.9%.

Silver stream deliveries were approximately 89,600 ounces for the three months ended September 30, 2024, compared to approximately 171,100 ounces for the three months ended September 30, 2023.

The decrease in silver deliveries was primarily due to lower silver recoveries, partially offset by higher throughput.

Silver stream deliveries are based on a fixed payability factor of 99.0%.

Deliveries are quarterly and typically occur 1 to 3 months after mine production.

On October 16, 2024, Barrick Gold Corporation reported that Pueblo Viejo delivered a 23% improvement in gold production in the third quarter of 2024 compared to the second quarter of 2024 due to continued plant optimization.

Royalty Interests

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.

Production attributable to our royalty interest at the Cortez Complex was approximately 161,800 ounces of gold for the three months ended September 30, 2024, of which 45,300 ounces were attributable to the Legacy Zone, and 116,500 ounces were attributable to the CC Zone, compared to approximately 218,800 ounces of gold for the three months ended September 30, 2023, of which 98,800 ounces were attributable to the Legacy Zone, and 120,000 ounces were attributable to the CC Zone.

Production attributable to our royalty interest at Peñasquito was approximately 55,700 ounces of gold, 5.7 million ounces of silver, 36.4 million pounds of lead and 133.6 million pounds of zinc for the three months ended September 30, 2024.

During the three months ended September 30, 2023, no royalty production from Peñasquito was reported due to the suspension of operations resulting from a labor strike that was subsequently resolved in October 2023.

October 18, 2024, Newmont Corporation ("Newmont") reported that it had agreed on a new Collective Bargain Agreement (“CBA”) for 2024-2026 with the National Union of Mining, Metallurgical, Steel, and Similar Workers of Mexico.

According to Newmont, this CBA provides a solid foundation for continuing operations at Peñasquito.

On October 23, 2024, Newmont reported that it delivered steady gold, silver, lead and zinc production in the current quarter from the Chile Colorado pit and commenced mining ore in the higher gold grade Peñasco pit, ahead of plan due to efficient stripping.

Newmont expects this will result in an increase in gold production in the fourth quarter of 2024 and into 2025.

Results of Operations

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:

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

For the three months ended September 30, 2024, we recorded net income and comprehensive income attributable to Royal Gold stockholders (“net income”) of $96.2 million, or $1.46 per basic and diluted share, as compared to net income of $49.3 million, or $0.75 per basic and diluted share, for the three months ended September 30, 2023.

The increase in net income was primarily attributable to higher revenue and lower interest expense, each discussed below.

For the three months ended September 30, 2024, we recognized total revenue of $193.8 million, comprised of stream revenue of $133.1 million and royalty revenue of $60.8 million at an average gold price of $2,474 per ounce, an average silver price of $29.43 per ounce and an average copper price of $4.18 per pound.

This is compared to total revenue of $138.6 million for the three months ended September 30, 2023, 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.

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

Revenue and Reported Production Subject to Our Stream and Royalty Interests

1 unchanged sentence

Three Months Ended Three Months Ended

June 30, 2024 June 30, 2023

September 30, 2024 September 30, 2023

Reported Reported

29 unchanged sentences

_______________________________________________

(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.

(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, 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 unchanged sentences

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:

Higher gold sales from Mount Milligan, higher gold and silver sales from Pueblo Viejo, higher gold, silver, zinc and lead production from Peñasquito and new revenue of $12.6 million from non-principal royalties also contributed to the increase.

These increases were partially offset by lower gold sales from Andacollo, lower production from the Cortez Legacy Zone and lower silver sales from Khoemac a u when compared to the prior year period.

Gold and silver ounces and copper pounds purchased and sold during the three months ended September 30, 2024 and 2023, and gold and silver ounces and copper pounds in inventory as of September 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

September 30, 2024 September 30, 2023 September 30, 2024 December 31, 2023

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

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Three Months Ended Three Months Ended As of As of

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

September 30, 2024 September 30, 2023 September 30, 2024 December 31, 2023

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

5 unchanged sentences

Three Months Ended Three Months Ended As of As of

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

September 30, 2024 September 30, 2023 September 30, 2024 December 31, 2023

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

1 unchanged sentence

_______________________________________________

(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.

(1) Pueblo Viejo silver purchases for the three months ended September 30, 2024 do not include 115,600 ounces of silver permitted to be deferred based on the terms of the Pueblo Viejo silver stream agreement.

Total deferred silver ounces were 1.2 million ounces at September 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 $27.2 million for the three months ended September 30, 2024, from $21.4 million for the three months ended September 30, 2023.

The increase, when compared to the prior year period, was primarily due to higher gold, silver and copper prices, higher gold sales from Mount Milligan and higher silver sales from Pueblo Viejo.

The increase was partially offset by lower gold sales from Andacollo and lower silver sales from Khoemac a u compared to the prior year period.

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.

("Centerra").

General and administrative costs increased to $10.1 million for the three months ended September 30, 2024, from $9.9 million for the three months ended September 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.

Depreciation, depletion and amortization decreased to $36.2 million for the three months ended September 30, 2024, from $40.1 million for the three months ended September 30, 2023.

The decrease was primarily due to lower stream depletion rates as a result of proven and probable mineral reserve increases by our operators when compared to the prior year period, lower silver sales from Khoemac a u, lower gold sales from Andacollo and lower gold production at Cortez compared to the prior year period.

The decrease was partially offset by higher gold sales from Mount Milligan and higher gold and silver sales from Pueblo Viejo.

Interest and other expense decreased to $1.2 million for the three months ended September 30, 2024, from $7.3 million for the three months ended September 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.

For the three months ended September 30, 2024, amounts outstanding under our revolving credit facility averaged $14 million at an average all-in borrowing rate of 6.5% compared to average amounts outstanding of $380 million at an average all-in borrowing rate of 6.7% for the prior year period.

For the three months ended September 30, 2024, we recorded income tax expense of $21.5 million, compared to $10.8 million for the three months ended September 30, 2023.

The income tax expense resulted in an effective tax rate of 18.3% in the current period, compared with 17.8% for the three months ended September 30, 2023.

The higher income tax expense for the three months ended September 30, 2024 was primarily attributable to higher income before income taxes compared to the prior year period.

Nine Months Ended September 30, 2024, Compared to Nine Months Ended September 30, 2023

For the nine months ended September 30, 2024, we recorded net income of $224.6 million, or $3.41 per basic and diluted share, as compared to net income of $176.7 million, or $2.69 per basic and $2.68 per diluted share, for the nine months ended September 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:

For the nine months ended September 30, 2024, we recognized total revenue of $516.8 million, comprised of stream revenue of $358.5 million and royalty revenue of $158.3 million at an average gold price of $2,296 per ounce, an average silver price of $27.22 per ounce and an average copper price of $4.14 per pound.

This is compared to total revenue of $453.1 million for the nine months ended September 30, 2023, 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.

Revenue and the corresponding production attributable to our stream and royalty interests for the nine months ended September 30, 2024, compared to the nine months ended September 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

Nine Months Ended Nine Months Ended

September 30, 2024 September 30, 2023

Reported Reported

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Silver $ 24,148 902,700 oz.

$ 18,035 777,000 oz.

$ 27,082 1.2 Moz.

$ 94,583 $ 73,174

16 unchanged sentences

_______________________________________________

(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.

(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, 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.

1 unchanged sentence

(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

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

The increase was partially offset by lower silver sales from Khoemac a u, lower gold sales from Andacollo, and lower production from the Cortez Legacy Zone when compared to the prior year period.

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

Nine Months Ended

September 30, 2024 September 30, 2023 September 30, 2024 December 31, 2023

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

4 unchanged sentences

Total 119,800 118,000 117,600 120,000 17,000 15,200

Six Months Ended Six Months Ended As of As of

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

Nine Months Ended Nine Months Ended As of As of

September 30, 2024 September 30, 2023 September 30, 2024 December 31, 2023

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

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Total 1,752,400 1,916,400 2,031,100 2,222,700 219,100 383,100

Six Months Ended Six Months Ended As of As of

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

Nine Months Ended Nine Months Ended As of As of

September 30, 2024 September 30, 2023 September 30, 2024 December 31, 2023

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

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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.

(1) Pueblo Viejo silver purchases for the nine months ended September 30, 2024 do not include 381,700 ounces of silver permitted to be deferred based on the terms of the Pueblo Viejo silver stream agreement.

Total deferred silver ounces were 1.2 million ounces at September 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 $73.1 million for the nine months ended September 30, 2024, from $69.7 million for the nine months ended September 30, 2023.

The increase was primarily due to higher gold sales from Xavantina and Wassa, partially offset by lower silver sales from Khoemac a u and lower gold sales from Andacollo compared to the prior year period.

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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.

General and administrative costs increased to $32.0 million for the nine months ended September 30, 2024, from $30.0 million for the nine months ended September 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.

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.

Depreciation, depletion and amortization decreased to $110.7 million for the nine months ended September 30, 2024, from $124.8 million for the nine months ended September 30, 2023.

The decrease was primarily due to lower stream depletion rates, as a result of proven and probable mineral reserve increases by our operators when compared to the prior year period, lower gold sales from Andacollo, lower silver sales from Khoemac a u and lower gold production from the Cortez Legacy Zone.

Interest and other expense decreased to $8.3 million for the nine months ended September 30, 2024, from $24.9 million for the nine months ended September 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 nine months ended September 30, 2024, amounts outstanding under our revolving credit facility averaged $109 million at an average all-in borrowing rate of 6.5%, compared to average amounts outstanding of $421 million at an average all-in borrowing rate of 6.4% for the prior year period.

For the nine months ended September 30, 2024, we recorded income tax expense of $67.5 million, compared with income tax expense of $28.7 million for the nine months ended September 30, 2023.

The income tax expense resulted in an effective tax rate of 23.1% in the current period, compared with 13.9% for the nine months ended September 30, 2023.

The nine months ended September 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.

The nine months ended September 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 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.

At September 30, 2024, we had current assets of $202.1 million compared to current liabilities of $86.3 million, which resulted in working capital of $115.8 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 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.

The increase in working capital was primarily due to an increase in our available cash, which primarily resulted from higher net cash proceeds from our stream and royalty interests and cash proceeds received for the Mount Milligan Cost Support Agreement, partially offset by the $51 million Back River royalties acquisition during the current year.

During the nine months ended September 30, 2024, liquidity needs were met from $388.5 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 $1.1 billion of total liquidity at September 30, 2024.

As of September 30, 2024, we had $1.0 billion available under our revolving credit facility.

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

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.

During the three months ended September 30, 2024, we repaid the remaining $50 million of outstanding borrowings on our revolving credit facility, making the entire $1.0 billion revolving credit facility available as of September 30, 2024.

Operating Activities

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 royalty segment when compared to the prior year period.

Net cash provided by operating activities totaled $388.5 million for the nine months ended September 30, 2024, compared to $314.7 million for the nine months ended September 30, 2023.

The increase, when compared to the prior year period, was primarily due to net cash proceeds received from our stream and royalty interests of $34.6 million, cash proceeds of $24.5 million received for the Mount Milligan Cost Support Agreement, lower debt cash interest payments of $16.0 million, and $12.0 million of interest from the repayment of the Khoemac a u debt facility.

This increase was partially offset by higher cash taxes of $11.4 million when compared to the prior year period.

Investing Activities

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.

Net cash used in investing activities totaled $30.8 million for the nine months ended September 30, 2024, compared to net cash used in investing activities of $2.8 million for the nine months ended September 30, 2023.

The increase was primarily due to the $51.2 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.

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

Financing Activities

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.

Net cash used in financing activities totaled $334.0 million for the nine months ended September 30, 2024, compared to $327.6 million for the nine months ended September 30, 2023.

The increase was primarily due to an increase in dividend payments made when compared to the prior year.

Recently Adopted Accounting Standards and Critical Accounting Policies

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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;

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

opportunities for acquisitions and other transactions;

anticipated benefits from acquisitions and other transactions;

receipt and timing of future 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;

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Factors that could cause actual results to differ materially from these forward-looking statements include, among others, the following:

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

changes in the price of gold, silver, copper, or other metals;

operating activities or financial performance of properties on which we hold stream or royalty interests, including variations between actual and forecasted performance, operators’ ability to complete projects on schedule and as planned, operators’ changes to mine plans and mineral reserves and mineral resources (including updated mineral reserve and mineral resource information), liquidity needs, mining and environmental hazards, labor disputes, distribution and supply chain disruptions, permitting and licensing issues, other adverse government or court actions, or operational disruptions;

changes of control of properties or operators;

contractual issues involving our stream or royalty agreements;

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potential cyber-attacks, including ransomware;

our ability to identify, finance, value, and complete acquisitions;

our ability to identify, finance, value, and complete acquisitions or other transactions;

adverse economic and market conditions;

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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