ROYAL GOLD INC 10-K

ITEM 1A. RISK FACTORS ​ You should carefully consider the risks described in this section. Our future performance is subject to risks and uncertainties that could have a material adverse effect on our business, results of operations, and financial condition and the trading price of our common stock. We may be subject to other risks and uncertainties not presently known to us. In addition, please see our note about forward-looking statements included in the MD&A. ​ Risks Relating to our Business ​ Our revenue is subject to volatility in metal prices, which could negatively affect our results of operations or cash flow. ​ Market prices for gold, silver, copper, nickel, and other metals may fluctuate widely over time and are affected by numerous factors beyond our control. These factors include metal supply and demand, industrial and jewelry fabrication, investment demand, central banking actions, inflation expectations, currency values, interest rates, forward sales by metal producers, and political, trade, economic, or banking conditions. ​ Our revenue is directly tied to metal prices and is particularly sensitive to changes in the price of gold, as we derive a majority of our revenue from gold stream and royalty interests. Under our stream agreements, we purchase metal at a fixed price or a stated percentage of the market price and then sell the metal in the open market. If market prices decline, our revenue and cash flow from metal sales decline. A price decline can also impact our revenue under certain sliding-scale royalty agreements as we may receive a lower royalty rate when prices fall below specified thresholds. In addition, some 8 Table of Contents of our royalty agreements are based on the operator’s concentrate sales to smelters and allow for price adjustments between the operator and the smelter based on metals prices on a future date, typically three to five months after shipment of concentrate. These price adjustments can decrease our revenue in future periods if metal prices decline following shipment. ​ Price declines could cause an operator to reduce, suspend, or terminate production or development at a project, which would impact our future revenue from the project. These production or development decisions could prevent us from recovering our initial investment in the project or result in an impairment to the value of our initial investment. ​ We own nonoperating interests in mining properties and cannot ensure properties are developed or operated in our best interests. ​ Our revenue is derived entirely from stream and royalty interests in properties owned and operated by third parties. In general, we have no decision-making authority regarding the development or operation of the mineral properties underlying our stream and royalty interests. Operators make all development and operating decisions, including decisions about permitting, feasibility analysis, mine design and operation, processing, plant and equipment matters, and temporary or permanent suspension of operations. The interests of the operators and those of Royal Gold on the relevant properties are not always aligned, which can result in lower or delayed payments to us compared to what we anticipated. ​ The continuing COVID-19 pandemic significantly impacted the global economy, global markets, and operations at some properties in which we have stream or royalty interests over the past year and a half and may continue to do so; this could adversely affect our business, results of operations, and the trading price of our stock. ​ The world continues to experience a deadly outbreak of the coronavirus disease 2019, or COVID-19. The global economy, metal prices, and financial markets experienced significant volatility and uncertainty over the past year and a half due to COVID-19, including due to the recent emergence of variant strains of the virus. Continuing travel restrictions due to COVID-19 could limit or delay acquisition opportunities or other business activities. In addition, economic volatility, labor shortages, disruptions in the financial markets, or severe price declines for gold or other metals could adversely affect our ability to obtain future debt or equity financing for acquisitions on acceptable terms. ​ Although conditions have improved in the U.S., Canada, and Switzerland where we have employees, other parts of the world, including areas where we have stream and royalty interests, continue to be impacted by the pandemic. At varying locations and times, public health and government authorities have recommended and mandated precautions to mitigate the spread of COVID-19, including in some cases quarantines, shelter-in-place orders, and restrictions on mining-related activities. Throughout fiscal year 2021, several of our operating counterparties instituted temporary operational curtailments due to the pandemic, including the operators of Mount Milligan, Pueblo Viejo and Peñasquito. There may be additional curtailments. In addition, the pandemic and resulting economic and societal impacts have at times made it difficult for operators to forecast expected production amounts. The effects of the pandemic will ultimately depend on many factors that are outside of our control, including the severity and duration of the pandemic, the emergence of variant strains of the virus, government and operator actions in response to the pandemic, and the development, availability, and public acceptance of effective treatments and vaccines. As a result, we are currently unable to predict the nature or extent of any future impact on our business, results of operations, financial condition or the trading price of our stock. ​ We often have limited access to data about operating properties, which may make it difficult for us to project or assess the performance of our stream and royalty interests or to confirm mineral reserves. ​ We often do not have the contractual right to receive production, operating, and other data, nor do we have the right to access the property or obtain drilling and metallurgical data that would allow us to confirm reserves applicable to the properties in which we hold stream and royalty interests. As a result, it may be difficult for us to project or assess the performance of a stream or royalty interest and leaves us unable to conduct our own reserve or resource analysis. ​ ​ ​ ​ 9 Table of Contents Our stream and royalty interests may not result in the anticipated returns or may not otherwise ultimately benefit our business. ​ We are continually reviewing opportunities to acquire new stream and royalty interests, and we have acquisition opportunities at various stages of review. Any acquisition could be material to us. At times, we also consider opportunities to restructure our existing stream or royalty interests where we believe the restructuring would provide a long-term benefit to us, even though it could reduce near-term revenues or result in the incurrence of transaction-related costs. The success of our stream and royalty interests is based in part on our ability to make accurate assumptions at the time of acquisition about the amount and timing of revenue to be derived from those interests. These assumptions are based on a variety of factors, including the geological, metallurgical, permitting, environmental, and other aspects of the project. For development projects, we also make assumptions about the cost, timing, and conduct of development. If an operator fails to bring a project into production as expected or if actual performance otherwise falls short of our assumptions, our revenue derived from the project may not be sufficient to yield an adequate, or any, return on our investment. In addition, we could be required to decrease the carrying value of our investment, which could have a material adverse effect on our results of operations or financial condition. We cannot ensure that any acquisition or other transaction will ultimately benefit Royal Gold. ​ Our future success depends on our ability to acquire additional stream or royalty interests at appropriate valuations. ​ Our future success depends largely on our ability to acquire additional stream and royalty interests at appropriate valuations. We may not be able to identify and complete acquisitions of additional interests at appropriate prices or terms. We may not have sufficient liquidity or may not be able to obtain debt or equity financing to fund acquisitions due to economic volatility, credit crises, declines in metal prices, or other reasons. Certain of our competitors are larger and have greater financial resources than we do, and we may not be able to compete effectively against them. In addition, there has been significant growth in the number of stream and royalty companies over the last several years and some of these companies have different investment criteria, which has made the industry more competitive at times. Changes to tax rules, accounting policies, or the treatment of stream interests by ratings agencies could make streams or royalties less attractive to counterparties. ​ For some operating properties, we may not realize all of the expected benefits of our investments if operators are unable to replace current mineral reserves as they are depleted, which could impact our future results of operations. ​ For some operating properties, our return on investment depends in part on the operators’ ability to replace mineral reserves as they are consumed in the ordinary course of mining. If current mineral reserves are not replaced as they are mined by the operators of these properties, whether through expansion of known deposits, discovery of new mineralized material through exploration, conversion of mineralized material to mineral reserves, or otherwise, our expected investment returns or future results of operations could be adversely affected. ​ A significant portion of our revenue comes from a small number of operating properties, which means that adverse developments at these properties could have a more significant or lasting impact on our results of operations than if our revenue was less concentrated. ​ Approximately 77% of our revenue for fiscal year 2021 came from six properties: Mount Milligan, Andacollo, Pueblo Viejo, Wassa, Peñasquito, and Cortez. We expect these properties to continue to represent a significant portion of revenue going forward. This concentration of revenue could mean that adverse developments, including any adverse decisions made by the operators, at one or more of these properties could have a more significant or longer-term impact on our results of operations than if our revenue was less concentrated. ​ A significant disruption to our information technology systems could adversely affect our business and operating results. ​ We rely on a variety of information technology and automated operating systems to manage and support our operations. For example, we depend on our information technology systems for financial reporting, operational and investment management, and email. These systems contain our proprietary business information and personally identifiable 10 Table of Contents information of our employees. The proper functioning of these systems and the security of this data is critical to the efficient operation and management of our business. In addition, these systems could require modifications or upgrades as a result of technological changes or growth in our business. These changes could be costly and disruptive to our operations and could impose substantial demands on management time. Our systems, and those of third-party providers, could be vulnerable to damage or disruption caused by catastrophic events, power outages, natural disasters, computer system or network failures, viruses, ransomware or malware, physical or electronic break-ins, unauthorized access, or cyber-attacks. Any security breach could compromise our networks, and the information stored on them could be improperly accessed, disclosed, lost, or stolen. Because techniques used to sabotage, obtain unauthorized access to systems or prohibit authorized access to systems change frequently and generally are not detected until successfully launched against a target, we may be unable to anticipate these techniques and the steps that we have taken to secure our systems and electronic information may not be adequate to prevent a disruption or attack. Any unauthorized activities could disrupt our operations, damage our reputation, or result in legal claims or proceedings, any of which could adversely affect our business, reputation, or operating results. ​ We depend on the services of our executives and other key employees, and the loss of one or more members of our management team could harm our business. ​ We believe that our success depends on retaining qualified executives and other key employees. Our management team has significant industry and company-specific experience. If we are unsuccessful at retaining or attracting qualified personnel, our business could be disrupted and our ability to achieve our business objectives and grow effectively could be jeopardized. We do not currently maintain key person life insurance on any of our directors or employees. ​ Risks Relating to our Stream and Royalty Interests ​ Our revenue is subject to operational and other risks faced by operators of the properties in which we hold stream or royalty interests. ​ We generally are not required to pay capital or operating costs on projects in which we hold stream or royalty interests. However, our revenue and the value of our investments are indirectly subject to hazards and risks normally associated with developing and operating mining properties, including the following: ​ ● insufficient ore reserves ● increased capital or operating costs ● declines in the price of gold, silver, copper, nickel, or other metals ● construction or development delays ● operational disruptions, including those caused by pandemics or other global or local health crises ● inability to obtain or maintain necessary permits ● inability to replace or increase reserves as properties are mined ● inability to maintain, or challenges to, exploration or mining rights ● changes in mining taxes and royalties payable to governments ● significant changes to environmental, permitting, or other regulatory requirements ● challenges to operations, permits, or mining rights by local communities, indigenous populations, non-government organizations, or others ● litigation between operators and third parties relating to the properties ● community or civil unrest, including protests and blockades ● labor shortages, increased labor costs, labor disputes, strikes, or work stoppages ● unavailability of mining, drilling, or other equipment ● unanticipated geological conditions or metallurgical characteristics ● unanticipated ground or water conditions, including lack of access to sufficient water ● inadequate supplies of power or other raw materials ● pit wall or tailings dam failures or underground stability issues ● fires, explosions, or other industrial accidents ● injuries to humans, property, or the environment 11 Table of Contents ● natural catastrophes and environmental hazards such as earthquakes, droughts, floods, forest fires, hurricanes, weather, or climate events ● physical effects of climate change and regulatory changes designed to reduce the effects of climate change ● uncertain political and economic environments ● economic downturns ● insufficient financing or inability to obtain financing ● default by an operator on its obligations to us or its other creditors ● insolvency, bankruptcy, or other financial difficulty of the operator ● changes in laws or regulations or the enforcement of laws or regulations ​ The occurrence of any of these events could negatively impact operations at the properties in which we hold stream or royalty interests, which in turn could have a material adverse effect on our revenue and cash flow. ​ Most of our revenue is derived from properties outside the United States, and risks associated with conducting business in foreign countries or other sovereign jurisdictions could adversely affect our results of operations or financial condition. ​ Approximately 89% of our revenue comes from properties outside of the United States, and many of our operators are organized outside of the United States. Our principal producing stream and royalty interests on properties outside of the United States are located in Canada, Chile, the Dominican Republic, Ghana and Mexico. Within the United States and other countries, indigenous people may be recognized as sovereign entities and may enforce their own laws and regulations. Our and operators’ activities are subject to the risks associated with conducting business in foreign countries or other sovereign jurisdictions, including the following: ​ ● expropriation or nationalization of mining property or other government takings ● seizure of mineral production ● exchange and currency controls and fluctuations ● limitations on foreign exchange or repatriation of earnings ● restrictions on mineral production or price controls ● import or export regulations, including trade wars and sanctions and restrictions on metal exports ● changes in government taxation, royalties, tariffs, or duties ● changes in economic, trade, diplomatic, or other relationships between countries or the effects on global and economic conditions, the stability of global financial markets, or the ability of key market participants to operate in certain financial markets ● high rates of inflation ● unfamiliar or uncertain foreign real estate, mineral tenure, safety, or environmental rules ● war, crime, terrorism, sabotage, blockades, or other forms of civil unrest ● uncertain political or economic environments ● corruption ● exposure to liabilities under anti-corruption or anti-money laundering laws ● suspension of the enforcement of creditors’ or stockholders’ rights ● loss of access to government-controlled infrastructure, such as roads, bridges, rails, ports, power sources, and water supplies ​ In addition, many of our operators are organized outside of the United States. Our stream and royalty interests may be subject to the application of foreign laws to our operators, and their stockholders, including laws relating to foreign ownership structures, corporate transactions, creditors’ rights, bankruptcy and liquidation. Foreign operations also could be adversely impacted by laws and policies of the United States affecting foreign trade, investment and taxation. ​ These risks may limit or disrupt the development or operation of properties in which we hold stream and royalty interests or impair our rights or interests in these properties, which could adversely affect our results of operations or financial condition. ​ 12 Table of Contents If the assumptions underlying operators’ production, reserve, or mineralized material estimates are inaccurate or if future events cause operators to negatively adjust their previous estimates, our future revenue or the value of our investments could be adversely affected. ​ The operators of the properties in which we hold stream and royalty interests generally prepare production and reserve estimates for the properties. We do not independently prepare or verify this information. There are numerous uncertainties inherent in these estimates, many of which are outside the operators’ control. As a result, production and reserve estimates are subjective and necessarily depend upon a number of assumptions, including, among others, reliability of historical data, geologic and mining conditions, metallurgical recovery, metal prices, operating costs, capital expenditures, development and reclamation costs, mining technology improvements, and the effects of government regulation. If any of the assumptions that operators make in connection with production or reserve estimates are incorrect, actual production could be significantly lower than the production or reserve estimates, which could adversely affect our future revenue and the value of our investments. In addition, if operators’ estimates with respect to the timing of production are incorrect, we may experience variances in expected revenue from period to period. ​ Some operators also report publicly or to us estimates of mineralized material. The term “mineralized material” does not indicate proven or probable reserves as defined by the SEC. Mineralized material is subject to future exploration and development and associated risks and may never convert to future reserves. In addition, estimates of mineralized material are subject to similar uncertainties and assumptions as discussed above with respect to mineral reserves. ​ We and our operating properties may be subject to environmental risks, including risks associated with climate change, which could have a material adverse effect on our financial condition or the value of our interests or of our common stock. ​ Mining operations are subject to extensive laws and regulations governing land use and the protection of the environment. In addition, many countries have implemented laws and regulations designed to address the effects of climate change, including rules to reduce industrial emissions and increase energy efficiency. These laws and regulations are constantly evolving in a manner generally expected to result in stricter standards, more liability, and increased costs. Compliance with these laws and regulations can impose substantial costs and burdens on operators of properties subject to our interests. In addition, an operator’s failure to comply with these laws and regulations could result in injunctive action, orders to suspend or cease operations, damages, or civil or criminal penalties on the operator. If any of these events were to occur, our revenue or the value of our interests could be adversely affected. ​ Climate change may also pose physical risks to the properties in which we hold an interest. This could include adverse effects on operations as a result of increasing occurrences of extreme weather events, water shortages, changes in rainfall and storm patterns, changes in sea levels, and other negative weather and climate patterns. For example, the Mount Milligan mine has experienced a reduction in production due to water shortages in recent years. ​ In addition, public-company stockholders are increasingly sensitive to the climate change impacts and mitigation efforts of companies, are increasingly seeking enhanced disclosure on the risks, challenges, governance implications, and financial impacts of climate change faced by companies and demanding that companies take a proactive approach to addressing perceived environmental risks, including risks associated with climate change, relating to their operations. Adverse publicity or climate-related litigation that impacts any of the operators of the properties in which we hold interests could have a negative impact on our business. As a holder of stream and royalty interests, we generally will not have any influence on litigation such as this and generally will not have access to non-public information concerning such litigation. ​ Challenges relating to climate change could have an impact on the ability of these operators to access the capital markets and such limitations could have a corresponding negative effect on their business and operations. Although we do not conduct mining operations on the properties in which we hold stream and royalty interests and are not required to contribute to environmental or other operating costs on the properties, our stockholders may nonetheless demand that we bear some responsibility for managing these environmental risks. If this were to occur, the value of our interests or your shares of common stock could be adversely affected. ​ 13 Table of Contents Further, due to expansive environmental laws, it is possible that we could become subject to environmental liabilities for historic periods during which we owned or operated properties or relative to our current ownership interests in lease and underlying unpatented mining claims. These liabilities could have a material adverse effect on our results of operations or financial condition. ​ Financial Risks ​ Future indebtedness could adversely affect our financial condition and impair our ability to operate our business. ​ As of June 30, 2021, we had $1 billion available and no amount outstanding under our revolving credit facility. We may incur additional indebtedness in the future. Future indebtedness could have important consequences, including the following: ​ ● require us to dedicate a substantial portion of our cash flow from operations to service indebtedness, thereby reducing the availability of cash flow to fund acquisitions, working capital, or dividends ● limit our flexibility in planning for, or reacting to, changes in our business ● restrict us from exploiting business opportunities ● make us more vulnerable to a downturn in our business or the economy ● place us at a competitive disadvantage compared to our competitors with less indebtedness ● require the consent of our existing lenders to incur additional indebtedness ● limit our ability to borrow additional funds for acquisitions, working capital, or debt-service requirements ​ Our credit facility contains financial and other restrictive covenants. For example, the agreement includes financial covenants that require us to maintain a maximum leverage ratio and a minimum interest coverage ratio (as these terms are defined under the agreement). These covenants could limit our ability to engage in activities that are in our long-term best interests. Our failure to comply with these covenants would result in an event of default that, if not waived, could result in the acceleration of all outstanding indebtedness. Our credit facility expires in July 2026. In the future, we may be unable to obtain new financing or refinancing on acceptable terms. ​ The proposed phase out of the London Interbank Offered Rate ("LIBOR") could adversely affect our results of operations or financial condition. ​ In 2017, the United Kingdom's Financial Conduct Authority (the authority that regulates LIBOR) announced that it intends to phase out LIBOR by the end of calendar year 2021. The Federal Reserve Board has convened a group of private-market participants to identify a proposed alternative rate and address the transition from LIBOR to an alternative rate. In 2019, the FASB proposed guidance that would help facilitate the market transition from existing reference rates to alternative rates. Borrowings under our revolving credit facility bear interest at LIBOR plus an applicable margin. Under the agreement governing the facility, we have established provisions to provide for the eventual replacement of LIBOR as a benchmark interest rate under the facility. There is currently no definitive information regarding the future use of LIBOR or a replacement rate. We are unable to predict whether and to what extent a LIBOR change would impact our future results of operations and financial condition. ​ Legal Risks ​ Unknown defects in our stream or royalty interests or the bankruptcy or insolvency of an operator could have a material adverse effect on the value of our investments. ​ Despite our due diligence practices, it is possible that unknown defects or problems will exist relating to the existence, validity, enforceability, terms, or geographic extent of our stream and royalty interests. Similarly, stream interests and, in many jurisdictions, royalty interests are or can be contractual in nature, rather than interests in land. As a result, these interests may not survive a bankruptcy or insolvency of an operator. We often do not have the protection of security interests that could help us recover all or part of our investment in a stream or royalty interest in the event of an operator’s 14 Table of Contents bankruptcy or insolvency. If our stream or royalty interests were set aside through judicial or administrative proceedings, the value of our investments could be adversely affected. ​ Some of the agreements governing our stream and royalty interests contain terms that reduce or cap the revenue generated from those interests. ​ Revenue from some of our stream and royalty interests decreases or stops after threshold production, delivery, or payment milestones are achieved. For example, our stream interests at Pueblo Viejo, Andacollo, Wassa, and Khoemac a u and certain of our royalty interests at other properties contain these types of limitations. As a result, past production and revenue relating to these interests may not be indicative of future results. In addition, some of our stream and royalty interests do not cover all of the reserves at certain properties, which could mean that overall performance reported by the operators may not correlate to the performance of our interests in the properties. ​ Operators may fail to comply with their contractual arrangements with us or may interpret their obligations in a manner adverse to us, which could decrease our revenue or increase our costs. ​ At times, operators may be unable or unwilling to fulfill their contractual obligations to us. In addition, we often rely on the operators for the calculation of our stream deliveries or royalty payments and there is a risk of delay, error, and additional expense in receiving deliveries or payments. Payments may be delayed by restrictions imposed by lenders, delays in the sale or delivery of products, or the ability or willingness of smelters and refiners to process mine products. Our rights to payment under our royalty and stream agreements must, in most cases, be enforced by contract. When we enter into new stream or royalty agreements, we attempt to secure contractual rights that allow us to monitor operators’ compliance with their obligations to us, such as audit or access rights. However, these rights may not be sufficient to ensure compliance. In addition, our stream and royalty agreements are often complex and may be subject to interpretation or uncertainties. Operators and other counterparties may interpret our interests in a manner adverse to us. For these or other reasons, we could be forced to expend resources or take legal action to enforce our contractual rights. We may not be successful in enforcing our contractual rights. As a result, our revenue relating to the disputed interests could be adversely affected. We may also need to expend significant monetary and human resources to defend our position, which could adversely affect our results of operations. In addition, we may be required to make retroactive revenue adjustments in future periods relating to past period revenue as a result of information that we learn through audit or access rights. ​ Changes to U.S. and foreign tax laws could adversely affect our results of operations. ​ We are subject to tax in the U.S. and other foreign jurisdictions. Current economic and political conditions make tax laws and their interpretation subject to a significant change in any jurisdiction. We cannot predict the timing or significance of future tax law changes in the U.S. or other countries in which we do business. If material tax law changes are enacted, our future effective tax rate, results of operations, and cash flows could be adversely impacted. ​ Anti-corruption laws and regulations could subject us to liability and require us to incur costs. ​ We are subject to the U.S. Foreign Corrupt Practices Act (the "FCPA") and other laws that prohibit improper payments or offers of payments to third parties, including foreign governments and their officials, for the purpose of obtaining or retaining business. In some cases, we invest in mining operations in jurisdictions that have experienced corruption in the past. Our international investment activities create the risk of unauthorized payments or offers of payments in violation of the FCPA or other anti-corruption laws by one of our employees or agents in violation of our policies. In addition, the operators of the properties in which we own stream and royalty interests may fail to comply with anti-corruption laws and regulations. Although we do not operate these properties, enforcement authorities could deem us to have some culpability for the operators’ actions. Any violations of the FCPA or other anti-corruption laws could result in significant civil or criminal penalties to us and could have an adverse effect on our reputation. ​ ​ ​ ​ 15 Table of Contents We expect that our disclosures relating to operating properties will change as a result of new SEC disclosure rules, and we continue to face uncertainty around how some of these rules apply to a stream and royalty company. ​ In 2018, the SEC adopted amendments to its disclosure requirements for mining companies, including stream and royalty companies. We are required to comply with the new rules for our fiscal year beginning on July 1, 2021. We expect that our disclosures about operating properties will change under the new rules, and, in some cases, we may be required to disclose in our SEC filings more or less information than we currently disclose about these properties. There continues to be uncertainty about how the rules will apply to a stream and royalty company with significant investments in properties run by international operators that are not required to report under SEC rules. ​ Risks Related to our Common Stock ​ Our stock price may continue to be volatile, and you could lose all or part of your investment. ​ The market price of our common stock has fluctuated in the past and may continue to do so in the future. For example, during fiscal year 2021, the market price of our common stock ranged from a low of $99.32 to a high of $147.64. Many factors unrelated to operating performance can contribute to volatility in the market price of our common stock, including the following: ​ ● economic, market, or political conditions, including the effects of COVID-19 ● market prices of gold, silver, copper, nickel, and other metals ● developments relating to operating properties ● interest rates and expectations about inflation ● currency values ● credit market conditions ​ These market fluctuations, regardless of cause, may materially and adversely affect our stock price. As a result, you could lose all or part of your investment. ​ We may issue additional equity securities, which would dilute our existing stockholders and reduce our per-share financial measures and could reduce the market price of our common stock. ​ We may issue additional equity in the future in connection with acquisitions, strategic transactions, or for other purposes. If we issue additional equity securities, our existing stockholders would be diluted and our per-share financial measures would be reduced. In addition, shares of common stock that we issue in connection with an acquisition may not be subject to resale restrictions. The market price of our common stock could decline if our stockholders sell substantial amounts of our common stock or are perceived by the market as intending to sell these shares other than in an orderly manner. ​ We may change our practice of paying dividends, which could reduce the value of your investment. ​ We have paid a cash dividend on our common stock since calendar year 2000. Our board of directors has discretion in determining whether to declare a dividend based on a number of factors, including metal prices, economic or market conditions, earnings, cash flow, financial condition, and funding requirements for future opportunities or operations. In addition, corporate law limitations or future contractual restrictions could limit our ability to pay dividends in the future. If our board of directors reduces or eliminates future dividends, our stock price could fall, and the success of your investment would depend largely on any future stock price appreciation. We have increased our dividend in prior years. There can be no assurance, however, that we will continue to do so or that we will pay any dividends. ​ Provisions of Delaware law and our organizational documents could delay or prevent a third party from acquiring us. ​ The anti-takeover provisions of Delaware law impose barriers to the ability of a third party to acquire control of us, even if a change of control would be beneficial to our existing stockholders. In addition, our certificate of incorporation and bylaws contain provisions that may make it more difficult for a third party to acquire control of us without the approval of 16 Table of Contents our board of directors. These provisions may make it more difficult or expensive for a third party to acquire a majority of our outstanding common stock. Among other things, these provisions provide for the following: ​ ● allow our board of directors to issue shares of common stock and preferred stock without stockholder approval, except as may be required by Nasdaq rules ● allow our board of directors to establish the rights and preferences of authorized and unissued preferred stock ● provide for a classified board, whereby our board of directors is divided into three classes of directors serving staggered three-year terms ● prohibit stockholders from calling special meetings of stockholders ● require advance notice of stockholder proposals and related information ● require vacancies and newly created directorships on the board of directors to be filled only by affirmative vote of a majority of the directors then serving on the board ​ These provisions could increase the cost of acquiring us or discourage a third party from acquiring us or removing incumbent management, which could decrease the value of your investment. ​ ITEM 1B. UNRESOLVED STAFF COMMENTS None.