ROYAL GOLD INC 10-K

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA Index to Financial Statements ​ ​ ​ ​ ​ Page REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM ​ 43 CONSOLIDATED BALANCE SHEETS ​ 45 CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME ​ 46 CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY ​ 47 CONSOLIDATED STATEMENTS OF CASH FLOWS ​ 48 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS ​ 49 ​ ​ ​ 42 Table of Contents Report of Independent Registered Public Accounting Firm To the Stockholders and the Board of Directors of Royal Gold, Inc. ​ Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of Royal Gold, Inc. (the Company) as of June 30, 2021 and 2020, the related consolidated statements of operations and comprehensive income, changes in equity and cash flows for each of the three years in the period ended June 30, 2021, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at June 30, 2021 and 2020, and the results of its operations and its cash flows for each of the three years in the period ended June 30, 2021, in conformity with U.S. generally accepted accounting principles. ​ We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of June 30, 2021, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework), and our report dated August 12, 2021 expressed an unqualified opinion thereon. ​ Basis for Opinion ​ These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. ​ We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. ​ Critical Audit Matter The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments. The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates. ​ ​ ​ Impairment Assessment of Stream and Royalty Interests in Mineral Properties Description of the Matter At June 30, 2021, the Company’s stream and royalty interest balance totaled $2.3 billion. As more fully described in Note 2 to the consolidated financial statements, the Company evaluates its stream and royalty interests for impairment whenever events or changes in circumstances indicate that the carrying amounts of the asset or group of assets may not be recoverable (“triggering events”). Management evaluates various qualitative factors in determining whether or not events or changes in circumstances indicate that the carrying amount of an asset or group of assets may not be recoverable. The factors considered include, among others, significant changes in estimates of forecasted gold, silver, copper and other metal prices, significant changes in operators’ estimates 43 Table of Contents of proven and probable reserves and other relevant information received from the operators, which may include operational or legal information that indicates production from mineral interests will not likely occur or may be significantly reduced in the future. Auditing the Company’s impairment assessment involved our subjective judgment because, in determining whether a triggering event occurred, management uses estimates that include, among others, assumptions about forecasted gold, silver, copper and other metal prices and total future production using reserve or other relevant information reported by the operators. Significant uncertainty exists with these assumptions. Further, management’s evaluation of any new information indicating that production will not likely occur or may be significantly reduced in the future requires significant judgment. How We Addressed the Matter in Our Audit We obtained an understanding, evaluated the design and tested the operating effectiveness of controls over the Company’s process over the impairment assessment. For example, we tested controls over the Company’s process for identifying and evaluating potential impairment triggers and related significant assumptions and judgments. To test the Company’s impairment assessment, our audit procedures included, among others, evaluating the significant assumptions, judgments and operating data used in the Company’s analysis. Specifically, we compared forecasted gold, silver, copper and other metal prices to available market information, and we corroborated reserve information to available operator or publicly available information. We involved our specialist and searched for and evaluated other publicly available information that corroborates or contradicts the reserve estimates or indicates that production from mineral interests will not likely occur or may be significantly reduced in the future. We also considered the professional qualifications and objectivity of management’s specialists and the reputation of the third-party operators. Further, we evaluated the reasonableness of changes to estimated proven and probable reserves using our experience with the Company’s stream and royalty interests and industry knowledge. ​ ​ /s/ Ernst & Young LLP We have served as the Company's auditor since 2010. ​ Denver, Colorado August 12, 2021 ​ ​ ​ ​ 44 Table of Contents ROYAL GOLD, INC. Consolidated Balance Sheets As of June 30, (In thousands, except share data) ​ ​ ​ ​ ​ ​ ​ ​ ​ June 30, ​ June 30, ​ ​ 2021 ​ 2020 ASSETS ​ ​ ​ ​ ​ ​ Cash and equivalents ​ $ 225,916 ​ $ 319,128 Royalty receivables ​ ​ 47,242 ​ ​ 27,689 Income tax receivable ​ ​ 4,520 ​ ​ 2,435 Stream inventory ​ ​ 17,684 ​ ​ 11,671 Prepaid expenses and other ​ ​ 1,773 ​ ​ 1,227 Total current assets ​ ​ 297,135 ​ ​ 362,150 Stream and royalty interests, net (Note 4) ​ ​ 2,262,158 ​ ​ 2,318,913 Other assets ​ ​ 92,312 ​ ​ 85,224 Total assets ​ $ 2,651,605 ​ $ 2,766,287 LIABILITIES ​ ​ ​ ​ ​ ​ Accounts payable ​ $ 6,398 ​ $ 2,484 Dividends payable ​ ​ 19,681 ​ ​ 18,364 Income tax payable ​ ​ 14,479 ​ ​ 13,323 Other current liabilities ​ ​ 11,525 ​ ​ 9,384 Total current liabilities ​ ​ 52,083 ​ ​ 43,555 Debt (Note 6) ​ ​ — ​ ​ 300,439 Deferred tax liabilities ​ ​ 88,000 ​ ​ 86,439 Uncertain tax positions ​ ​ 910 ​ ​ 25,427 Other liabilities ​ ​ 7,197 ​ ​ 8,308 Total liabilities ​ ​ 148,190 ​ ​ 464,168 Commitments and contingencies (Note 16) ​ ​ ​ ​ ​ ​ EQUITY ​ ​ ​ ​ ​ ​ Preferred stock, $ .01 par value, 10,000,000 shares authorized; and 0 shares issued ​ ​ — ​ ​ — Common stock, $ .01 par value, 200,000,000 shares authorized; and 65,551,061 and 65,531,288 shares outstanding, respectively ​ ​ 656 ​ ​ 655 Additional paid-in capital ​ ​ 2,203,863 ​ ​ 2,210,429 Accumulated earnings ​ ​ 286,249 ​ ​ 61,133 Total Royal Gold stockholders’ equity ​ ​ 2,490,768 ​ ​ 2,272,217 Non-controlling interests ​ ​ 12,647 ​ ​ 29,902 Total equity ​ ​ 2,503,415 ​ ​ 2,302,119 Total liabilities and equity ​ $ 2,651,605 ​ $ 2,766,287 ​ The accompanying notes are an integral part of these consolidated financial statements. ​ 45 Table of Contents ROYAL GOLD, INC. Consolidated Statements of Operations and Comprehensive Income For the Years Ended June 30, (In thousands, except share data) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For The Year Ended ​ ​ ​ June 30, ​ June 30, ​ June 30, ​ ​ ​ 2021 ​ 2020 ​ 2019 Revenue (Note 8) ​ ​ ​ 615,856 ​ ​ 498,819 ​ ​ 423,056 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Costs and expenses ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cost of sales (excludes depreciation, depletion and amortization) ​ ​ ​ 92,898 ​ ​ 83,890 ​ ​ 77,535 General and administrative ​ ​ ​ 28,387 ​ ​ 30,195 ​ ​ 30,488 Production taxes ​ ​ ​ 6,743 ​ ​ 3,824 ​ ​ 4,112 Exploration costs ​ ​ ​ 563 ​ ​ 5,190 ​ ​ 7,158 Depreciation, depletion and amortization ​ ​ ​ 183,569 ​ ​ 175,434 ​ ​ 163,056 Impairment of royalty interests ​ ​ ​ — ​ ​ 1,341 ​ ​ — Total costs and expenses ​ ​ ​ 312,160 ​ ​ 299,874 ​ ​ 282,349 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Gain on sale of Peak Gold JV interest ​ ​ ​ 33,906 ​ ​ — ​ ​ — Operating income ​ ​ ​ 337,602 ​ ​ 198,945 ​ ​ 140,707 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fair value changes in equity securities ​ ​ ​ 6,017 ​ ​ 1,418 ​ ​ ( 6,800 ) Interest and other income ​ ​ ​ 2,443 ​ ​ 2,046 ​ ​ 2,320 Interest and other expense ​ ​ ​ ( 6,419 ) ​ ​ ( 9,813 ) ​ ​ ( 29,650 ) Income before income taxes ​ ​ ​ 339,643 ​ ​ 192,596 ​ ​ 106,577 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Income tax (expense) benefit ​ ​ ​ ( 36,867 ) ​ ​ 3,654 ​ ​ ( 17,498 ) Net income and comprehensive income ​ ​ ​ 302,776 ​ ​ 196,250 ​ ​ 89,079 Net (income) loss and comprehensive (income) loss attributable to non-controlling interests ​ ​ ​ ( 244 ) ​ ​ 3,093 ​ ​ 4,746 Net income and comprehensive income attributable to Royal Gold common stockholders ​ ​ $ 302,532 ​ $ 199,343 ​ $ 93,825 Net income per share attributable to Royal Gold common stockholders: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Basic earnings per share ​ ​ $ 4.61 ​ $ 3.04 ​ $ 1.43 Basic weighted average shares outstanding ​ ​ ​ 65,546,400 ​ ​ 65,523,024 ​ ​ 65,394,627 Diluted earnings per share ​ ​ $ 4.60 ​ $ 3.03 ​ $ 1.43 Diluted weighted average shares outstanding ​ ​ ​ 65,627,591 ​ ​ 65,643,390 ​ ​ 65,505,535 Cash dividends declared per common share ​ ​ $ 1.18 ​ $ 1.11 ​ $ 1.05 ​ The accompanying notes are an integral part of these consolidated financial statements. ​ 46 Table of Contents ROYAL GOLD, INC. Consolidated Statements of Changes in Equity For the Years Ended June 30, 2021, 2020 and 2019 (In thousands, except share data) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Royal Gold Stockholders ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Accumulated ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Additional ​ Other ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Common Shares ​ Paid-In ​ Comprehensive ​ Accumulated ​ Non-controlling ​ Total ​ ​ Shares ​ Amount ​ Capital ​ Income (Loss) ​ (Losses) Earnings ​ Interests ​ Equity Balance at June 30, 2018 65,360,041 ​ $ 654 $ 2,192,612 ​ $ ( 1,201 ) ​ $ ( 89,898 ) ​ $ 39,102 ​ $ 2,141,269 Stock-based compensation and related share issuances 80,451 ​ 1 5,021 ​ — ​ — ​ — ​ 5,022 Distributions from (to) non-controlling interests ​ — ​ — 4,140 ​ — ​ — ​ ( 584 ) ​ 3,556 Net income (loss) — ​ — — ​ — ​ 93,825 ​ ( 4,746 ) ​ 89,079 Other comprehensive income (loss) — ​ — — ​ 1,201 ​ ( 1,201 ) ​ — ​ — Dividends declared — ​ — — ​ — ​ ( 68,473 ) ​ — ​ ( 68,473 ) Balance at June 30, 2019 65,440,492 ​ $ 655 $ 2,201,773 ​ $ — ​ $ ( 65,747 ) ​ $ 33,772 ​ $ 2,170,453 Stock-based compensation and related share issuances 90,796 ​ — 4,936 ​ — ​ — ​ — ​ 4,936 Distributions from (to) non-controlling interests ​ — ​ — 3,720 ​ — ​ — ​ ( 777 ) ​ 2,943 Net income (loss) — ​ — — ​ — ​ 199,343 ​ ( 3,093 ) ​ 196,250 Dividends declared — ​ — — ​ — ​ ( 72,463 ) ​ — ​ ( 72,463 ) Balance at June 30, 2020 65,531,288 ​ $ 655 $ 2,210,429 ​ $ — ​ $ 61,133 ​ $ 29,902 ​ $ 2,302,119 Stock-based compensation and related share issuances 19,773 ​ 1 4,263 ​ — ​ — ​ — ​ 4,264 Sale of Peak Gold JV interest ​ — ​ ​ — ​ ​ ( 10,829 ) ​ ​ ​ ​ ​ ​ ​ ​ ( 16,218 ) ​ ​ ( 27,047 ) Distributions to non-controlling interests ​ — ​ — — ​ — ​ — ​ ( 1,281 ) ​ ( 1,281 ) Net income — ​ — — ​ — ​ 302,532 ​ 244 ​ 302,776 Dividends declared — ​ — — ​ — ​ ( 77,416 ) ​ — ​ ( 77,416 ) Balance at June 30, 2021 65,551,061 ​ $ 656 $ 2,203,863 ​ $ — ​ $ 286,249 ​ $ 12,647 ​ $ 2,503,415 ​ The accompanying notes are an integral part of these consolidated financial statements. ​ 47 Table of Contents ROYAL GOLD, INC. Consolidated Statements of Cash Flows For the Years Ended June 30, (In thousands) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended ​ ​ June 30, ​ June 30, ​ June 30, ​ 2021 2020 2019 Cash flows from operating activities: ​ ​ ​ ​ ​ ​ ​ ​ ​ Net income and comprehensive income ​ $ 302,776 ​ $ 196,250 ​ $ 89,079 Adjustments to reconcile net income and comprehensive income to net cash provided by operating activities: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Depreciation, depletion and amortization ​ ​ 183,569 ​ ​ 175,434 ​ ​ 163,056 Amortization of debt issuance costs ​ ​ 1,148 ​ ​ 1,136 ​ ​ 15,288 Gain on sale of Peak Gold JV interest ​ ​ ( 33,906 ) ​ ​ — ​ ​ — Non-cash employee stock compensation expense ​ ​ 5,730 ​ ​ 9,116 ​ ​ 6,617 Fair value changes in equity securities ​ ​ ( 6,017 ) ​ ​ ( 1,418 ) ​ ​ 6,800 Deferred tax expense (benefit) ​ ​ 456 ​ ​ ( 32,399 ) ​ ​ ( 1,745 ) Impairment of royalty interests ​ ​ — ​ ​ 1,341 ​ ​ — Other ​ ​ ( 177 ) ​ ​ ( 148 ) ​ ​ ( 2 ) Changes in assets and liabilities: ​ ​ ​ ​ ​ ​ ​ ​ ​ Royalty receivables ​ ​ ( 19,552 ) ​ ​ ( 6,957 ) ​ ​ 5,623 Stream inventory ​ ​ ( 6,014 ) ​ ​ ( 291 ) ​ ​ ( 2,069 ) Income tax receivable ​ ​ ( 2,085 ) ​ ​ 268 ​ ​ ( 2,663 ) Prepaid expenses and other assets ​ ​ 318 ​ ​ ( 7,828 ) ​ ​ 2,793 Accounts payable ​ ​ 3,237 ​ ​ ( 275 ) ​ ​ ( 6,426 ) Income tax payable ​ ​ 1,156 ​ ​ 6,349 ​ ​ ( 11,281 ) Uncertain tax positions ​ ​ ( 24,518 ) ​ ​ ( 11,146 ) ​ ​ 3,180 Other liabilities ​ ​ 1,030 ​ ​ 11,320 ​ ​ ( 15,084 ) Net cash provided by operating activities ​ $ 407,151 ​ $ 340,752 ​ $ 253,166 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cash flows from investing activities: ​ ​ ​ ​ ​ ​ ​ ​ ​ Acquisition of stream and royalty interests ​ ​ ( 168,147 ) ​ ​ ( 155,985 ) ​ ​ ( 1,055 ) Khoemac a u subordinated debt facility ​ ​ ( 18,000 ) ​ ​ — ​ ​ — Proceeds from sale of Peak Gold JV interest ​ ​ 49,154 ​ ​ — ​ ​ — Proceeds from sale of Contango shares ​ ​ 12,146 ​ ​ — ​ ​ — Proceeds from sale of equity securities ​ ​ 8,651 ​ ​ — ​ ​ — Other ​ ​ ( 541 ) ​ ​ 3,126 ​ ​ ( 4,540 ) Net cash used in investing activities ​ $ ( 116,737 ) ​ $ ( 152,859 ) ​ $ ( 5,595 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cash flows from financing activities: ​ ​ ​ ​ ​ ​ ​ ​ ​ Repayment of debt ​ ​ ( 305,000 ) ​ ​ ( 115,000 ) ​ ​ ( 370,000 ) Borrowings from revolving credit facility ​ ​ — ​ ​ 200,000 ​ ​ 220,000 Net payments from issuance of common stock ​ ​ ( 1,465 ) ​ ​ ( 4,180 ) ​ ​ ( 1,595 ) Common stock dividends ​ ​ ( 76,099 ) ​ ​ ( 71,471 ) ​ ​ ( 67,477 ) Other ​ ​ ( 1,062 ) ​ ​ 2,411 ​ ​ 2,226 Net cash (used in) provided by financing activities ​ $ ( 383,626 ) ​ $ 11,760 ​ $ ( 216,846 ) Net (decrease) increase in cash and equivalents ​ ​ ( 93,212 ) ​ ​ 199,653 ​ ​ 30,725 Cash and equivalents at beginning of period ​ ​ 319,128 ​ ​ 119,475 ​ ​ 88,750 Cash and equivalents at end of period ​ $ 225,916 ​ $ 319,128 ​ $ 119,475 See Note 12 for supplemental cash flow information. The accompanying notes are an integral part of these consolidated financial statements. ​ ​ 48 Table of Contents ROYAL GOLD, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 1. THE COMPANY Royal Gold, Inc. (“Royal Gold”, the “Company”, “we”, “us”, or “our”), together with its subsidiaries, is engaged in the business of acquiring and managing precious metals streams, royalties and similar interests. We seek to acquire existing stream and royalty interests or to finance projects that are in production or in the development stage in exchange for stream or royalty interests. A metal stream is a purchase agreement that provides, in exchange for an upfront deposit payment, the right to purchase all or a portion of one or more metals produced from a mine at a price determined for the life of the transaction by the purchase agreement. 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. ​ ​ 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND RECENTLY ADOPTED AND RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS Summary of Significant Accounting Policies Use of Estimates The preparation of our financial statements in conformity with U.S. generally accepted accounting principles (“U.S. GAAP”) requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities, and disclosure of contingent assets and liabilities at the dates of the financial statements, and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ significantly from those estimates. We rely on reserve estimates reported by the operators of properties on which we hold stream and royalty interests. These estimates and the underlying assumptions affect the potential impairments of long-lived assets and the ability to realize income tax benefits associated with deferred tax assets. These estimates and assumptions also affect the rate at which we recognize revenue or charge depreciation, depletion and amortization to earnings. On an ongoing basis, management evaluates these estimates and assumptions; however, actual amounts could differ from these estimates and assumptions. Differences between estimates and actual amounts are adjusted and recorded in the period that the actual amounts are known. Basis of Consolidation The consolidated financial statements include the accounts of Royal Gold, Inc., its wholly owned subsidiaries. All intercompany accounts, transactions, income and expenses, and profits or losses have been eliminated on consolidation. Peak Gold JV Royal Gold, through its wholly owned subsidiary, Royal Alaska, LLC (“Royal Alaska”), and Contango ORE, Inc., through its wholly owned subsidiary CORE Alaska, LLC, entered into a limited liability company agreement for the Peak Gold JV, a joint venture for exploration and advancement of the Manh Choh Project (formerly known as the Peak Gold Project) located near Tok, Alaska. We previously identified the Peak Gold JV as a Variable Interest Entity, with Royal Alaska as the primary beneficiary, due to the legal structure and certain related factors of the limited liability company agreement for the Peak Gold JV. We determined that the Peak Gold JV should be fully consolidated at fair value initially. As of June 30, 2020, Royal Alaska held a 40 % membership interest in the Peak Gold JV. The fair value of our non-controlling interest was $ 45.7 million and was based on the underlying value of the mineral property assigned to the Peak Gold JV, which was recorded as an exploration stage property within Stream and royalty interests, net on our consolidated balance sheets as of June 30, 2020. On September 30, 2020, we sold our Peak Gold JV interest which is discussed in Note 3 of our notes to consolidated financial statements. 49 Table of Contents ROYAL GOLD, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) Cash and Equivalents Cash and equivalents consist of all cash balances and highly liquid investments with an original maturity of three months or less. Cash and equivalents were primarily held in cash deposit accounts as of June 30, 2021, and 2020. Stream and Royalty Interests in Mineral Properties and Related Depletion Stream and royalty interests include acquired stream and royalty interests in production, development and exploration stage properties. The costs of acquired stream and royalty interests are capitalized as tangible assets as such interests do not meet the definition of a financial asset. Production stage stream and royalty interests are depleted using the units of production method over the life of the mineral property (as stream sales occur or royalty payments are recognized), which are estimated using proven and probable reserves as provided by the operator. Development stage mineral properties, which are not yet in production, are not depleted until the property begins production. Exploration stage mineral properties, where there are no proven and probable reserves, are not depleted. At such time as the associated exploration stage mineral interests are converted to proven and probable reserves, the mineral property is depleted over its life, using proven and probable reserves. Exploration costs are expensed when incurred. Asset Impairment We evaluate long-lived assets for impairment whenever events or changes in circumstances indicate that the related carrying amounts of an asset or group of assets may not be recoverable. When impairment indicators are identified, the recoverability of the carrying value of stream and royalty interests in production and development stage mineral properties is evaluated based upon estimated future undiscounted net cash flows from each stream and royalty interest using estimates of proven and probable reserves and other relevant information received from the operators. We evaluate the recoverability of the carrying value of royalty interests in exploration stage mineral properties in the event of significant decreases in the price of gold, silver, copper and other metals, and whenever new information regarding the mineral properties is obtained from the operator indicating that production will not likely occur or may be reduced in the future, thus potentially affecting the future recoverability of our stream or royalty interests. Impairments in the carrying value of each property are measured and recorded to the extent that the carrying value in each property exceeds its estimated fair value, which is generally calculated using estimated future discounted cash flows. Estimates of gold, silver, copper, and other metal prices, and operators’ estimates of proven and probable reserves or mineralized material related to our stream or royalty properties are subject to certain risks and uncertainties which may affect the recoverability of our investment in these stream and royalty interests in mineral properties. It is possible that changes could occur to these estimates, which could adversely affect the net cash flows expected to be generated from these stream and royalty interests. Refer to Note 4 for discussion and the results of our impairment assessments for the fiscal years ended June 30, 2021, 2020 and 2019. Revenue A performance obligation is a promise in a contract to transfer control of a distinct good or service (or integrated package of goods and/or services) to a customer. A contract’s transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, a performance obligation is satisfied. In accordance with this guidance, revenue attributable to our stream interests and royalty interests is generally recognized at the point in time that control of the related metal production transfers to our customers. The amount of revenue we recognize further reflects the consideration to which we are entitled under the respective stream or royalty agreement. A more detailed summary of our revenue recognition policies for our stream and royalty interests is discussed in Note 8. ​ 50 Table of Contents ROYAL GOLD, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) Metal Sales Gold, silver and copper received under our metal streaming agreements are taken into inventory, and then sold primarily using average spot rate gold, silver and copper forward contracts. The sales price for these average spot rate forward contracts is determined by the average daily gold, silver or copper spot prices during the term of the contract, typically a consecutive number of trading days between 10 days and three months (depending on the frequency of deliveries under the respective streaming agreement and our sales activity in effect at the time) commencing shortly after receipt and purchase of the metal. Revenue from gold, silver and copper sales is recognized on the date of the settlement, which is also the date that title to the metal passes to the purchaser. Cost of Sales Cost of sales, which excludes depreciation, depletion and amortization, is specific to our stream agreements and is the result of our purchase of gold, silver and copper for a cash payment. The cash payment for gold from Mount Milligan is the lesser of $ 435 per ounce or the prevailing market price of gold when purchased, while the cash payment for our other streams is a set contractual percentage of the gold, silver or copper spot price near the date of metal delivery. Production Taxes Certain royalty payments are subject to production taxes (or mining proceeds taxes), which are recognized at the time of revenue recognition. Production taxes are not income taxes and are included within the costs and expenses section in our consolidated statements of operations and comprehensive income. Stock-Based Compensation We recognize all share-based payments to employees, including grants of employee stock options, stock-settled stock appreciation rights (“SSARs”), restricted stock and performance shares, in our financial statements based upon their fair values. Income Taxes Our annual tax rate is based on income, statutory tax rates in effect, and tax planning opportunities available to us in the various jurisdictions in which we operate. Significant judgment is required in determining the annual tax expense, current tax assets and liabilities, deferred tax assets and liabilities, and our future taxable income, both as a whole and in various tax jurisdictions, for purposes of assessing our ability to realize future benefit from our deferred tax assets. Actual income taxes could vary from these estimates due to future changes in income tax law, significant changes in the jurisdictions in which we operate or unpredicted results from the final determination of each year’s liability by taxing authorities. We treat global intangible low-taxed income (“GILTI”) as a period cost and therefore do not record deferred tax impacts of GILTI in our consolidated financial statements. Our deferred income taxes reflect the impact of temporary differences between the reported amounts of assets and liabilities for financial reporting purposes and such amounts measured by tax laws and regulations. In evaluating the realizability of the deferred tax assets, management considers both positive and negative evidence that may exist, such as earnings history, reversal of taxable temporary differences, forecasted operating earnings and available tax planning strategies in each tax jurisdiction. A valuation allowance may be established to reduce our deferred tax assets to the amount that is considered more likely than not to be realized through the generation of future taxable income and other tax planning strategies. Our operations may involve dealing with uncertainties and judgments in the application of complex tax regulations in multiple jurisdictions. The final taxes paid are dependent upon many factors, including negotiations with taxing authorities in various jurisdictions and resolution of disputes arising from federal, state, and international tax audits. We recognize potential liabilities and records tax liabilities for anticipated tax audit issues in the United States and other tax jurisdictions 51 Table of Contents ROYAL GOLD, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) based on our estimate of whether, and the extent to which, additional taxes will be due. We adjust these reserves in light of changing facts and circumstances, such as the progress of a tax audit; however, due to the complexity of some of these uncertainties, the ultimate resolution could result in a payment that is materially different from our current estimate of the tax liabilities. These differences will be reflected as increases or decreases to income tax expense in the period which they are determined. We recognize interest and penalties, if any, related to unrecognized tax benefits in income tax expense. Earnings per Share Basic earnings per share is computed by dividing net income available to Royal Gold common stockholders by the weighted average number of outstanding common shares for the period, considering the effect of participating securities. Diluted earnings per share reflect the potential dilution that could occur if securities or other contracts that may require issuance of common shares were converted. Diluted earnings per share is computed by dividing net income available to common stockholders by the diluted weighted average number of common shares outstanding during each fiscal year. ​ Recently Adopted Accounting Standards Recently Adopted ​ In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses of Financial Instruments , which, together with subsequent amendments, changes how an entity will record credit losses from an “incurred loss” approach to an “expected loss” approach. This update was effective for annual periods beginning after December 15, 2019 (i.e. July 1, 2020 for Royal Gold) and interim financial statement periods within those years, with early adoption permitted. On July 1, 2020, we adopted the new guidance and, based on our assessment, the adoption of the new guidance did not have any impact on our consolidated financial statements. ​ 3. ACQUISITIONS AND DISPOSITIONS Côté Royalty Acquisition On June 7, 2021, we acquired a 1.0 % net smelter return royalty (“NSR”) on certain claims covering the Côté Gold Project in Northern Ontario, Canada. The Côté Gold Project is owned 92.5 % by the Côté Gold Joint Venture (a joint venture owned 70 % by IAMGOLD Corporation and 30 % by Sumitomo Metal Mining Co., Ltd.), and 7.5 % by a third party. The royalty covers the Chester 3 claims, which in turn cover approximately 70 % of the current reserves of the Côté Gold Project, as well as other areas outside the current project area. We acquired the royalty from a third-party royalty holder for $ 75 million in cash consideration. ​ The Côté royalty acquisition has been accounted for as an asset acquisition. The $ 75 million paid, plus direct acquisition costs, have been recorded and allocated between development and exploration stage royalty interest (Note 4) within Stream and royalty interest, net on our consolidated balance sheets. ​ Sale of Peak Gold JV Interest On September 30, 2020, we entered into an agreement with an affiliate of Kinross Gold Corporation to sell our 40 % membership interest in the Manh Choh Project (formerly known as the Peak Gold Project) for cash consideration of $ 49.2 million and to sell our 809,744 common shares in Contango Ore, Inc. (“Contango”), our partner in Peak Gold, LLC, the owner of the Manh Choh Project, for cash consideration of $ 12.1 million. In addition to the total cash consideration of $ 61.3 million, we received the following royalty interests: 52 Table of Contents ROYAL GOLD, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) ● An incremental 28 % NSR royalty on silver produced from an area of interest which includes the current Manh Choh Project resource area. Peak Gold, LLC retains the right to acquire 50 % of this royalty for consideration of $ 4.0 million; and ● An incremental 1 % NSR royalty on certain State of Alaska mining claims acquired by a wholly owned subsidiary of Contango in the transaction, increasing our royalty on this area from 2 % to 3 %. The royalties are recorded as exploration stage royalty interests in Stream and royalty interests, net in our consolidated balance sheet as of June 30, 2021 and were assigned a combined value of approximately $ 4.4 million on the date of the transaction. We recorded a gain of $ 33.9 million on the sale of our 40 % membership interest in the Manh Choh Project during the three months ended September 30, 2020. The mark-to-market increase of $ 3.6 million on the sale of our 809,744 common shares in Contango is included in Fair value changes in equity securities on our consolidated statements of operations and comprehensive income and was recognized during the three months ended September 30, 2020. Alturas Royalty Acquisition ​ On January 29, 2020, we entered into an agreement with various private individuals for the acquisition of a NSR royalty of up to 1.06 % (gold) and up to 1.59 % (copper) on mining concessions included as part of the Alturas project, which is located within the Coquimbo Region of Chile and held by Compañia Minera Salitrales Limitada, a subsidiary of Barrick Gold Corporation (“Barrick”). Total consideration for the royalty is up to $ 41 million, of which $ 11 million was paid on January 29, 2020. The $ 11 million paid as part of the funding schedule, plus direct acquisition costs, have been recorded as an exploration stage royalty interest within Stream and royalty interests, net on our consolidated balance sheets. A future payment of up to $ 20 million is conditioned based on a project construction decision by Barrick and the size of the minable mineralized material on the date of the construction decision. A further future payment of up to $ 10 million will be made upon first production from the mining concessions. ​ Castelo de Sonhos Royalty Acquisition ​ In August 2019, we entered into an agreement with TriStar Gold Inc. and its subsidiaries (together “TriStar”) to acquire (i) up to a 1.5 % NSR royalty on the Castelo de Sonhos gold project (“CDS”), located in Brazil, and (ii) warrants to purchase up to 19,640,000 common shares of TriStar. Total consideration is $ 7.5 million and is payable over three payments, of which $ 4.5 million was paid in August 2019, $ 1.5 million was paid in November 2019, and the final payment of $ 1.5 million was paid on March 30, 2020. ​ The CDS royalty acquisition has been accounted for as an asset acquisition. The $ 7.5 million paid as part of the aggregate funding schedule, plus direct acquisition costs, have been recorded as an exploration stage royalty interest within Stream and royalty interests, net on our consolidated balance sheets. ​ The warrants have been recorded within Other assets on our consolidated balance sheets and have a carrying value of approximately $ 3.1 million as of June 30, 2021. The warrants have been classified as a financial asset instrument and are recorded at fair value at each reporting date using the Black-Scholes model (see Note 13). As of June 30, 2021, we hold 19,640,000 warrants at an exercise price of C$ 0.25 per common share with a remaining term of approximately three years . ​ Acquisition of Silver Stream on Khoemac a u Copper Project ​ On February 25, 2019, we entered into a silver stream with Khoemac a u Copper Mining (Pty.) Limited (“KCM”) for the purchase of silver produced from the Khoemac a u Project (“Khoemac a u”). Between November 2019 and January 2021, we completed a total of $ 212 million in advanced payments required to earn the base silver stream (“Silver Stream”) of 80 % of payable silver produced from Khoemac a u, until the delivery of 32.0 million ounces, and 40 % thereafter. On April 7, 2021, we made a seventh advance payment of $ 10.6 million toward the option silver stream (“Option Stream”) which increased our right to receive payable silver produced from Khoemac a u from a rate of 80 % to 84 % until the delivery of 53 Table of Contents ROYAL GOLD, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) approximately 33.6 million silver ounces, and 42 % thereafter. We will pay a cash price equal to 20 % of the spot silver price for each ounce delivered; however, if KCM achieves mill expansion throughput levels above 13,000 tonnes per day ( 30 % above current mill design capacity), we will pay a higher ongoing cash price for silver ounces delivered in excess of specific annual thresholds. ​ We have accounted for the base Silver Stream and initial funding towards the Option Stream as an asset acquisition, consistent with the treatment of our other acquired streams. The $ 212 million in advance payments for the base Silver Stream made during our fiscal year 2021 and 2020 and the $ 10.6 million toward the Option Stream, plus direct transaction costs, have been recorded as a development stage stream interest within Stream and royalty interests, net on our consolidated balance sheets as of June 30, 2021. Any further advance payments made under the Option Stream (if exercised by KCM) will be recorded as a development stage interest within Stream and royalty interests, net on our consolidated balance sheets during the period the advance payment occurs. ​ Separate from the Silver Stream and Option Stream, and subject to various conditions, we will make up to $ 25 million available to KCM toward the end of development of Khoemac a u under a subordinated debt facility. Any amounts drawn by KCM under the debt facility will carry interest at LIBOR + 11 % and have a term of seven years . We will have the right to force repayment of the debt facility upon certain events. On April 7, 2021, KCM drew $ 18.0 million on the $ 25.0 million subordinated debt facility which is recorded under Other Assets on our consolidated balance sheets. ​ As of June 30, 2021, we had remaining committed funding of $ 49.4 million to KCM in the form of $ 42.4 million of additional advance payments under the Option Stream and $ 7.0 million of debt, both of which may be drawn at the election of KCM prior to completion of construction. On July 7, 2021, KCM drew the remaining $ 7.0 million amount on the subordinated debt facility, reducing our remaining committed funding to $ 42.4 million of additional advance payments under the Option Stream. KCM has indicated that it does not expect to draw any material amounts from the remaining committed funding as part of the Option Stream. ​ ​ 54 Table of Contents ROYAL GOLD, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) 4. STREAM AND ROYALTY INTERESTS, NET The following summarizes our stream and royalty interests as of June 30, 2021 and 2020: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ As of June 30, 2021 (Amounts in thousands): Cost Accumulated Depletion Net Production stage stream interests: ​ ​ ​ ​ ​ ​ ​ ​ ​ Mount Milligan ​ $ 790,635 ​ $ ( 300,378 ) ​ $ 490,257 Pueblo Viejo ​ ​ 610,404 ​ ​ ( 243,706 ) ​ ​ 366,698 Andacollo ​ ​ 388,182 ​ ​ ( 131,578 ) ​ ​ 256,604 Rainy River ​ ​ 175,727 ​ ​ ( 41,772 ) ​ ​ 133,955 Wassa ​ ​ 146,475 ​ ​ ( 78,865 ) ​ ​ 67,610 Total production stage stream interests ​ ​ 2,111,423 ​ ​ ( 796,299 ) ​ ​ 1,315,124 Production stage royalty interests: ​ ​ ​ ​ ​ ​ ​ ​ ​ Voisey's Bay ​ ​ 205,724 ​ ​ ( 109,850 ) ​ ​ 95,874 Peñasquito ​ ​ 99,172 ​ ​ ( 50,176 ) ​ ​ 48,996 Cortez ​ ​ 80,681 ​ ​ ( 19,128 ) ​ ​ 61,553 Other ​ ​ 442,871 ​ ​ ( 381,191 ) ​ ​ 61,680 Total production stage royalty interests ​ ​ 828,448 ​ ​ ( 560,345 ) ​ ​ 268,103 Total production stage stream and royalty interests ​ ​ 2,939,871 ​ ​ ( 1,356,644 ) ​ ​ 1,583,227 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Development stage stream interests: ​ ​ ​ ​ ​ ​ ​ ​ ​ Khoemac a u ​ ​ 223,502 ​ ​ — ​ ​ 223,502 Other ​ ​ 12,037 ​ ​ — ​ ​ 12,037 Development stage royalty interests: ​ ​ ​ ​ ​ ​ ​ ​ ​ Côté ​ ​ 45,423 ​ ​ ​ ​ ​ 45,423 Other ​ ​ 54,755 ​ ​ — ​ ​ 54,755 Total development stage stream and royalty interests ​ ​ 335,717 ​ ​ — ​ ​ 335,717 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Exploration stage royalty interests: ​ ​ ​ ​ ​ ​ ​ ​ ​ Pascua-Lama ​ ​ 177,690 ​ ​ — ​ ​ 177,690 Côté ​ ​ 29,610 ​ ​ ​ ​ ​ 29,610 Other ​ ​ 135,914 ​ ​ — ​ ​ 135,914 Total exploration stage royalty interests ​ ​ 343,214 ​ ​ — ​ ​ 343,214 Total stream and royalty interests, net ​ $ 3,618,802 ​ $ ( 1,356,644 ) ​ $ 2,262,158 ​ 55 Table of Contents ROYAL GOLD, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ As of June 30, 2020 (Amounts in thousands): Cost Accumulated Depletion Impairments ​ Net Production stage stream interests: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Mount Milligan ​ $ 790,635 ​ $ ( 236,352 ) ​ $ — ​ $ 554,283 Pueblo Viejo ​ ​ 610,404 ​ ​ ( 203,935 ) ​ ​ — ​ ​ 406,469 Andacollo ​ ​ 388,182 ​ ​ ( 110,521 ) ​ ​ — ​ ​ 277,661 Rainy River ​ ​ 175,727 ​ ​ ( 27,278 ) ​ ​ — ​ ​ 148,449 Wassa ​ ​ 146,475 ​ ​ ( 67,619 ) ​ ​ — ​ ​ 78,856 Total production stage stream interests ​ ​ 2,111,423 ​ ​ ( 645,705 ) ​ ​ — ​ ​ 1,465,718 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Production stage royalty interests: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Voisey's Bay ​ ​ 205,724 ​ ​ ( 101,381 ) ​ ​ — ​ ​ 104,343 Peñasquito ​ ​ 99,172 ​ ​ ( 44,614 ) ​ ​ — ​ ​ 54,558 Cortez ​ ​ 80,681 ​ ​ ( 15,065 ) ​ ​ — ​ ​ 65,616 Other ​ ​ 521,837 ​ ​ ( 426,931 ) ​ ​ ( 1,341 ) ​ ​ 93,565 Total production stage royalty interests ​ ​ 907,414 ​ ​ ( 587,991 ) ​ ​ ( 1,341 ) ​ ​ 318,082 Total production stage stream and royalty interests ​ ​ 3,018,837 ​ ​ ( 1,233,696 ) ​ ​ ( 1,341 ) ​ ​ 1,783,800 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Development stage stream interests: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Khoemac a u ​ ​ 136,608 ​ ​ — ​ ​ — ​ ​ 136,608 Other ​ ​ 12,037 ​ ​ — ​ ​ — ​ ​ 12,037 Development stage royalty interests: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Other ​ ​ 70,952 ​ ​ — ​ ​ — ​ ​ 70,952 Total development stage stream and royalty interests ​ ​ 219,597 ​ ​ — ​ ​ — ​ ​ 219,597 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Exploration stage royalty interests: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Pascua-Lama ​ ​ 177,690 ​ ​ — ​ ​ — ​ ​ 177,690 Other ​ ​ 137,826 ​ ​ — ​ ​ — ​ ​ 137,826 Total exploration stage royalty interests ​ ​ 315,516 ​ ​ — ​ ​ — ​ ​ 315,516 Total stream and royalty interests, net ​ $ 3,553,950 ​ $ ( 1,233,696 ) ​ $ ( 1,341 ) ​ $ 2,318,913 ​ Separation of the Wassa and Prestea and Bogoso Stream Agreement ​ On October 1, 2020, we announced the separation of the Wassa gold stream and the Prestea and Bogoso gold streams into two separate stream agreements effective September 30, 2020. This separation was completed to facilitate the sale by Golden Star Resources Ltd. (“Golden Star”) of the Prestea and Bogoso mines to Future Global Resources (“FGR”). ​ The Wassa stream agreement, which remains with Golden Star, continues to provide us the right to purchase 10.5 % of the gold payable from the Wassa mine until the delivery of 240,000 ounces, after which the stream percentage will decrease to 5.5 %. The cash purchase price for gold remains at 20 % of the spot price per ounce delivered until the delivery of 240,000 ounces, and 30 % of the spot price per ounce delivered thereafter. As of June 30, 2021, approximately 112,000 ounces remain to be delivered from the Wassa mine until the 240,000 ounce delivery threshold is reached. ​ The Prestea and Bogoso stream agreement with FGR provides us the right to purchase 5.5 % of the gold payable from the Prestea and Bogoso mines in return for a cash purchase price of 30 % of the spot price per ounce delivered. ​ The material terms of both the Wassa stream agreement and the Prestea and Bogoso stream agreement, including security and the rights and obligations of both Royal Gold and Golden Star, remain substantially consistent with those terms in the original agreement. The Wassa stream is recorded as a production stage stream interest within Stream and royalty interests, net on our consolidated balance sheets and has a carrying value of $ 67.6 million as of June 30, 2021. The Prestea and Bogoso stream has a carrying value of $ 0 as of June 30, 2021. 56 Table of Contents ROYAL GOLD, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) ​ Mount Milligan ​ We own the right to purchase 35 % of the payable gold and 18.75 % of the payable copper produced from the Mount Milligan copper-gold mine in British Columbia, Canada, which is operated by an indirect subsidiary of Centerra Gold Inc. (“Centerra”). Our carrying value for the stream interest at Mount Milligan is $ 490.3 million as of June 30, 2021. ​ On October 30, 2019, Centerra reported that issues identified with decreasing long-term gold recoveries and increased costs in the short-to medium-term led them to record an impairment charge against their carrying value of the Mount Milligan mine under applicable accounting standards, and that it had begun a comprehensive technical review of the operation with the objective of publishing an updated National Instrument 43-101 (“NI 43-101”) technical report. ​ On March 26, 2020, Centerra published an updated NI 43-101 technical report for Mount Milligan which provided, among other things, a detailed update to the life of mine plan and reductions to the proven and probable reserves due to increased costs, lower expected productivities and lower process plant throughput. ​ Significant reductions in proven and probable reserves or mineralized material are indicators of potential impairment for our stream and royalty interests. As part of our regular asset impairment analysis during the quarter ended March 31, 2020, we determined that an impairment of our stream interest at Mount Milligan was not necessary as (i) the financial impairment taken by Centerra does not impact the mine operating performance, and (ii) the reduction in reserves and mineralized material at Mount Milligan resulted in updated gold and copper depletion rates that remain well below current and long-term consensus gold and copper prices. As of June 30, 2021, the gold and copper depletion rates at our Mount Milligan stream interest are $ 712 per ounce of gold and $ 1.53 per pound of copper. Depletion rates well below current and long-term consensus metal prices are a strong indicator the carrying value of our stream or royalty interests are recoverable and thus we concluded no impairment indicators were present as of June 30, 2021. ​ Rainy River ​ We own the right to purchase 6.50 % of the gold produced from the Rainy River mine, which is located in northwestern Ontario, Canada and is operated by New Gold, Inc. (“New Gold”), until 230,000 gold ounces have been delivered, and 3.25 % thereafter; and 60 % of the silver produced from the Rainy River mine until 3.1 million silver ounces have been delivered, and 30 % thereafter. As of June 30, 2021, approximately 54,000 ounces of gold and approximately 699,400 ounces of silver have been delivered to us. Our carrying value for the stream interest at Rainy River is $ 134.0 million as of June 30, 2021. ​ During the quarter ended December 31, 2019, New Gold reported that it continued to advance a comprehensive mine optimization study that would include a review of alternative open pit and underground mining scenarios at Rainy River On February 13, 2020, New Gold reported the results of the comprehensive optimization study that included an updated mine plan, which resulted in, among other things, a reduction in gold and silver reserves and the potential to extend the underground mine life beyond calendar year 2028. New Gold published an updated NI 43-101 technical report for Rainy River on March 27, 2020, reflecting the updated mine plan and reserves. ​ Significant reductions in proven and probable reserves or mineralized material are indicators of potential impairment for our stream and royalty interests. As a result of the new information from New Gold, and as part of our regular asset impairment analysis, we determined that an impairment on our Rainy River stream interest was not necessary as of March 31, 2020 as the reduction in gold and silver reserves resulted in updated depletion rates that remain well below current and long-term consensus gold and silver prices. As of June 30, 2021, the gold and silver depletion rates at our Rainy River stream interest are $ 779 per ounce of gold and $ 9.07 per ounce of silver. Depletion rates well below current and long-term metal prices are a strong indicator the carrying value of our stream or royalty interests are recoverable. ​ 57 Table of Contents ROYAL GOLD, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) COVID-19 Pandemic ​ Throughout calendar year 2020 and into calendar year 2021, several of our operating counterparties have instituted temporary operational curtailments due to the ongoing COVID-19 pandemic. In addition, the pandemic and resulting economic and societal impacts have made it difficult for operators to forecast expected production amounts and, at times, operators have had to withdraw or revise previously disclosed guidance. For the most part, our results of operations and financial condition have not been materially impacted by these measures to date. However, 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, 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 results of operations and financial condition. We continue to monitor the impact of developments associated with the pandemic on stream and royalty interests as part of our regular asset impairment analysis. ​ Impairment of Royalty Interests In accordance with our impairment accounting policy discussed in Note 2, impairments in the carrying value of each royalty interests are measured and recorded to the extent that the carrying value in each royalty interest exceeds its estimated fair value, which is generally calculated using estimated future discounted cash-flows. ​ During the quarter ended June 30, 2019, we were made aware of insolvency proceedings at one of our non-principal producing properties (El Toqui). During the quarter ended June 30, 2020, we obtained new information regarding the insolvency proceedings and determined our carrying value for El Toqui was not recoverable and an impairment of $ 1.3 million was necessary. At June 30, 2020 and 2021, our carrying value for El Toqui was zero . ​ 5. MARKETABLE EQUITY SECURITIES ​ As of June 30, 2021, our marketable equity securities include warrants to purchase up to 19,640,000 common shares of TriStar Gold Inc. Our marketable equity securities are measured at fair value (Note 13) each reporting period with any changes in fair value recognized in net income. ​ As a result of the announcement on March 15, 2021, by Evolution Mining Limited to acquire all of the issued and outstanding shares of Battle North Gold Corporation (“Battle North Gold”) at a price of $ 2.65 Canadian dollars per share, we voted all 3,949,575 of our Battle North Gold common shares in favor of the transaction that completed on May 20, 2021, and received cash consideration of $ 8.6 million. ​ As discussed in Note 3, on September 30, 2020, we sold 809,744 common shares of Contango for total consideration of $ 12.1 million and recorded a mark-to-market increase of $ 3.6 million on the sale, which is included in Fair value changes in equity securities in our consolidated statement of operations and comprehensive income for the fiscal year ended June 30, 2021. ​ The fair value of our marketable equity securities increased $ 6.0 million and $ 1.4 million for the years ended June 30, 2021, and 2020, respectively, and these changes are included in Fair value changes in equity securities on our consolidated statements of operation and comprehensive income. The carrying value of our marketable equity securities as of June 30, 2021 and 2020 was $ 3.1 million and $ 17.9 million, respectively, and is included in Other assets on our consolidated balance sheets. ​ ​ 58 Table of Contents ROYAL GOLD, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) 6. DEBT The Company’s debt as of June 30, 2021 and 2020 consists of the following: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ As of June 30, 2021 ​ As of June 30, 2020 ​ Principal Debt Issuance Costs 1 Total Principal Debt Issuance Costs Total ​ ​ ​ (Amounts in thousands) ​ ​ (Amounts in thousands) Revolving credit facility ​ $ — ​ $ ( 3,443 ) ​ $ ( 3,443 ) ​ $ 305,000 ​ $ ( 4,561 ) ​ $ 300,439 Total debt ​ $ — ​ $ ( 3,443 ) ​ $ ( 3,443 ) ​ $ 305,000 ​ $ ( 4,561 ) ​ $ 300,439 (1) Included in Other assets on our consolidated balance sheets. Revolving Credit Facility As of June 30, 2021, we had no amounts outstanding under our revolving credit facility and $ 1 billion available. Interest expense recognized on the revolving credit facility for the fiscal years ended June 30, 2021, 2020 and 2019 was approximately $ 3.3 million, $ 7.0 million and $ 1.7 million, respectively, and included interest on the outstanding borrowings and the amortization of the debt issuance costs. We were in compliance with each financial covenant (leverage ratio and interest coverage ratio) under the revolving credit facility as of June 30, 2021. ​ On July 7, 2021, we entered into a fourth amendment to our revolving credit facility dated as of June 2, 2017. The amendment extends the maturity date from June 3, 2024, to July 7, 2026, adds provisions to provide for the eventual replacement of LIBOR and makes certain changes to the lenders under the agreement. ​ In August 2021, we borrowed $ 100 million under our revolving credit facility for business development activities and have $ 900 million available. ​ Royal Gold may repay any borrowings under the revolving credit facility at any time without premium or penalty. ​ 7. LEASES ​ Our significant lease arrangements relate to our office spaces. These arrangements are for leases of assets such as corporate office space and office equipment. We lease office space and office equipment under operating leases expiring at various dates through the fiscal year ending June 30, 2030. The following amounts were recorded in the consolidated balance sheets at June 30, 2021 (amounts in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ Classification ​ June 30, 2021 Operating Leases ​ ​ ​ ​ ​ Right-of-use assets - current ​ Prepaid expenses and other ​ $ 801 Right-of-use assets - non-current ​ Other assets ​ ​ 6,009 Total right-of-use assets ​ ​ ​ $ 6,810 ​ ​ ​ ​ ​ ​ Lease liabilities - current ​ Other current liabilities ​ $ 957 Lease liabilities - non-current ​ Other long-term liabilities ​ ​ 7,197 Total operating lease liabilities ​ ​ ​ $ 8,154 ​ 59 Table of Contents ROYAL GOLD, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) Maturities of operating lease liabilities at June 30, 2021 were as follows (amounts in thousands): ​ ​ ​ ​ ​ Fiscal Years: ​ Operating Leases 2022 ​ $ 1,149 2023 ​ ​ 1,126 2024 ​ ​ 1,126 2025 ​ ​ 1,088 2026 ​ ​ 1,051 Thereafter ​ ​ 3,495 Total lease payments ​ $ 9,035 Less imputed interest ​ ​ ( 881 ) Total ​ $ 8,154 ​ Other information pertaining to leases consists of the following: ​ ​ ​ ​ ​ ​ ​ June 30, 2021 Operating Lease Term and Discount Rate ​ ​ ​ Weighted average remaining lease term in years ​ ​ 8.3 Weighted average discount rate ​ ​ 2.5 % ​ We did not have any finance leases as of June 30, 2021. ​ 8. REVENUE Revenue Recognition ​ A performance obligation is a promise in a contract to transfer control of a distinct good or service (or integrated package of goods and/or services) to a customer. A contract’s transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, a performance obligation is satisfied. In accordance with this guidance, revenue attributable to our stream interests and royalty interests is generally recognized at the point in time that control of the related metal production transfers to our customers. The amount of revenue we recognize further reflects the consideration to which we are entitled under the respective stream or royalty agreement. A more detailed summary of our revenue recognition policies for our stream and royalty interests is discussed below. ​ Stream Interests ​ A metal stream is a purchase agreement that provides, in exchange for an upfront deposit payment, the right to purchase all or a portion of one or more of the metals produced from a mine, at a price determined for the life of the transaction by the purchase agreement. Gold, silver and copper received under our metal streaming agreements are taken into inventory, and then sold primarily using average spot rate gold, silver and copper forward contracts. The sales price for these average spot rate forward contracts is determined by the average daily gold, silver or copper spot prices during the term of the contract, typically a consecutive number of trading days between ten days and three months (depending on the frequency of deliveries under the respective streaming agreement and our sales policy in effect at the time) commencing shortly after receipt and purchase of the metal. We settle our forward sales contracts via physical delivery of the metal to the purchaser (our customer) on the settlement date specified in the contract. Under our forward sales contracts, there is a single performance obligation to sell a contractually specified volume of metal to the purchaser, and we satisfy this obligation at the point in time of physical delivery. Accordingly, revenue from our metal sales is recognized on the date of settlement, which is the date that control, custody and title to the metal transfer to the purchaser. ​ 60 Table of Contents ROYAL GOLD, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) Royalty Interests ​ Royalties are non-operating interests in mining projects that provide the right to a percentage of revenue or metals produced from the project after deducting specified costs, if any. We are entitled to payment for our royalty interest in a mining project based on a contractually specified commodity price (for example, a monthly or quarterly average spot price) for the period in which metal production occurred. As a royalty holder, we act as a passive entity in the production and operations of the mining project, and the third-party operator of the mining project is responsible for all mining activities, including subsequent marketing and delivery of all metal production to their ultimate customer. In all of our material royalty interest arrangements, we have concluded that we transfer control of our interest in the metal production to the operator at the point at which production occurs, and thus, the operator is our customer. We have further determined that the transfer of each unit of metal production, comprising our royalty interest, to the operator represents a separate performance obligation under the contract, and each performance obligation is satisfied at the point in time of metal production by the operator. Accordingly, we recognize revenue attributable to our royalty interests in the period in which metal production occurs at the specified commodity price per the agreement, net of any contractually allowable offsite treatment, refining, transportation and, if applicable, mining costs. ​ Royalty Revenue Estimates ​ For a small number of our royalty interests, we may not receive, or be entitled to receive, payment information, including production information from the operator, for the period in which metal production occurred prior to issuance of our financial statements. As a result, we may estimate revenue for these royalties based on available information, including public information, from the operator. If adequate information is not available from the operator or from other public sources before we issue our financial statements, we will recognize royalty revenue during the period in which the necessary payment information is received. Differences between estimates and actual amounts could differ significantly and are recorded in the period that the actual amounts are known. Please also refer to our “Use of Estimates” accounting policy discussed in Note 2. For the quarter ended June 30, 2021, royalty revenue that was estimated or was attributable to metal production for a period prior to June 30, 2021, was not material. ​ Disaggregation of Revenue ​ We have identified two material revenue sources in our business: stream interests and royalty interests. These identified revenue sources are consistent with our reportable segments as discussed in Note 15. ​ Revenue by metal type attributable to each of our revenue sources is disaggregated as follows (amounts in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fiscal Year Ended ​ ​ June 30, ​ June 30, ​ June 30, ​ 2021 2020 2019 Stream revenue: ​ ​ ​ ​ ​ ​ ​ ​ ​ Gold ​ $ 323,980 ​ $ 294,490 ​ $ 249,496 Silver ​ ​ 43,281 ​ ​ 32,744 ​ ​ 33,282 Copper ​ ​ 56,728 ​ ​ 32,634 ​ ​ 23,046 Total stream revenue ​ $ 423,989 ​ $ 359,868 ​ $ 305,824 Royalty revenue: ​ ​ ​ ​ ​ ​ ​ ​ ​ Gold ​ $ 131,784 ​ $ 98,153 ​ $ 78,570 Silver ​ ​ 16,198 ​ ​ 9,996 ​ ​ 5,497 Copper ​ ​ 16,448 ​ ​ 13,528 ​ ​ 13,808 Other ​ ​ 27,437 ​ ​ 17,274 ​ ​ 19,357 Total royalty revenue ​ $ 191,867 ​ $ 138,951 ​ $ 117,232 Total revenue ​ $ 615,856 ​ $ 498,819 ​ $ 423,056 ​ 61 Table of Contents ROYAL GOLD, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) Revenue by metal type attributable to each of our principal property revenue sources is disaggregated as follows (amounts in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fiscal Year Ended ​ ​ ​ June 30, June 30, ​ June 30, ​ ​ Metal(s) ​ 2021 ​ 2020 ​ 2019 Stream revenue: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Mount Milligan ​ Gold & Copper ​ $ 156,938 ​ $ 131,425 ​ $ 101,010 Pueblo Viejo ​ Gold & Silver ​ ​ 115,583 ​ ​ 96,978 ​ ​ 82,844 Andacollo ​ Gold ​ ​ 82,164 ​ ​ 74,219 ​ ​ 69,264 Wassa ​ Gold ​ ​ 31,772 ​ ​ 23,203 ​ ​ 22,098 Other ​ Gold & Silver ​ ​ 37,532 ​ ​ 34,043 ​ ​ 30,608 Total stream revenue ​ ​ ​ $ 423,989 ​ $ 359,868 ​ $ 305,824 Royalty revenue: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Peñasquito ​ Gold, Silver, Lead & Zinc ​ $ 49,688 ​ $ 25,498 ​ $ 13,865 Cortez ​ Gold ​ ​ 36,160 ​ ​ 22,342 ​ ​ 11,383 Other ​ Various ​ ​ 106,019 ​ ​ 91,111 ​ ​ 91,984 Total royalty revenue ​ ​ ​ $ 191,867 ​ $ 138,951 ​ $ 117,232 Total revenue ​ ​ ​ $ 615,856 ​ $ 498,819 ​ $ 423,056 ​ Refer to Note 15 for the geographical distribution of our revenue by reportable segment. ​ ​ 9. STOCK-BASED COMPENSATION In November 2015, our stockholders approved the 2015 Omnibus Long-Term Incentive Plan (“2015 LTIP”). Under the 2015 LTIP, 2,500,000 shares of common stock have been authorized for future grants to officers, directors, key employees and other persons. The 2015 LTIP provides for the grant of stock options, unrestricted stock, restricted stock, dividend equivalent rights, SSARs and cash awards. Any of these awards may, but need not, be made as performance incentives. Stock options granted under the 2015 LTIP may be non-qualified stock options or incentive stock options. We recognized stock-based compensation expense as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fiscal Year Ended June 30, ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2021 ​ 2020 ​ 2019 ​ ​ ​ (Amounts in thousands) Stock options ​ $ 68 ​ $ 163 ​ $ 221 Stock appreciation rights ​ ​ 1,677 ​ ​ 2,545 ​ ​ 2,025 Restricted stock ​ ​ 2,668 ​ ​ 5,117 ​ ​ 3,336 Performance stock ​ ​ 1,317 ​ ​ 1,291 ​ ​ 1,035 Total stock-based compensation expense ​ $ 5,730 ​ $ 9,116 ​ $ 6,617 ​ Stock-based compensation expense is included within General and administrative expense on the consolidated statements of operations and comprehensive income. Stock Options and Stock Appreciation Rights Stock option and SSARs awards are granted with an exercise price equal to the closing market price of our stock at the date of grant. Stock option and SSARs awards granted to officers, key employees and other persons vest based on one to three years of continuous service. Stock option and SSARs awards have 10-year contractual terms. 62 Table of Contents ROYAL GOLD, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) To determine stock-based compensation expense for stock options and SSARs, the fair value of each stock option and SSAR is estimated on the date of grant using the Black-Scholes-Merton (“Black-Scholes”) option pricing model for all periods presented. The Black-Scholes model requires key assumptions to determine fair value. Those key assumptions during the fiscal year 2021, 2020 and 2019 grants are noted in the following table: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Stock Options ​ SSARs ​ ​ 2021 ​ 2020 ​ 2019 ​ 2021 ​ 2020 ​ 2019 Weighted-average expected volatility ​ 39.4 % 34.4 % 36.5 % 39.2 % 34.6 % 37.6 % Weighted-average expected life in years 4.4 4.5 4.5 4.2 4.7 5.2 ​ Weighted-average dividend yield 0.9 % 1.0 % 1.1 % 0.9 % 1.0 % 1.1 % Weighted-average risk free interest rate 0.2 % 1.6 % 2.7 % 0.2 % 1.6 % 2.7 % ​ Our expected volatility is based on the historical volatility of our stock over the expected option term. Our expected option term is determined by historical exercise patterns along with other known employee or company information at the time of grant. The risk-free interest rate is based on the zero-coupon U.S. Treasury bond at the time of grant with a term approximate to the expected option term. Stock Options A summary of stock option activity for the fiscal year ended June 30, 2021, is presented below. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted- ​ ​ ​ ​ ​ ​ ​ Weighted- ​ Average ​ ​ ​ ​ ​ ​ ​ Average ​ Remaining ​ Aggregate ​ ​ Number of ​ Exercise ​ Contractual ​ Intrinsic Value ​ ​ Shares ​ Price ​ Life (Years) ​ (in thousands) Outstanding at July 1, 2020 18,901 ​ $ 70.38 ​ ​ ​ Granted 2,860 ​ $ 139.84 ​ ​ ​ Exercised — ​ $ — ​ ​ ​ Forfeited — ​ $ — ​ ​ ​ Outstanding at June 30, 2021 21,761 ​ $ 79.51 5.5 ​ $ 835 Exercisable at June 30, 2021 17,510 ​ $ 68.36 4.8 ​ $ 804 ​ The weighted-average grant date fair value of options granted during the fiscal years ended June 30, 2021, 2020 and 2019, was $ 41.92 , $ 17.42 and $ 24.12 , respectively. The total intrinsic value of options exercised during the fiscal years ended June 30, 2021, 2020 and 2019, was $ 0 , $ 1.3 million, and $ 0.7 million, respectively. As of June 30, 2021, there was approximately $ 0.1 million of total unrecognized stock-based compensation expense related to unvested stock options, which is expected to be recognized over a weighted-average period of 2.0 years. 63 Table of Contents ROYAL GOLD, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) SSARs A summary of SSARs activity for the fiscal year ended June 30, 2021, is presented below: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted- ​ ​ ​ ​ ​ ​ ​ Weighted- ​ Average ​ ​ ​ ​ ​ ​ ​ Average ​ Remaining ​ Aggregate ​ ​ Number of ​ Exercise ​ Contractual ​ Intrinsic Value ​ ​ Shares ​ Price ​ Life (Years) ​ (in thousands) Outstanding at July 1, 2020 122,604 ​ $ 95.57 ​ ​ ​ Granted 64,100 ​ $ 139.84 ​ ​ ​ Exercised ( 2,567 ) ​ $ 83.45 ​ ​ ​ Forfeited — ​ $ — ​ ​ ​ Outstanding at June 30, 2021 184,137 ​ $ 111.15 7.7 ​ $ 2,682 Exercisable at June 30, 2021 76,287 ​ $ 86.32 6.3 ​ $ 2,283 ​ The weighted-average grant date fair value of SSARs granted during the fiscal years ended June 30, 2021, 2020 and 2019 was $ 40.92 , $ 32.33 and $ 26.37 , respectively. The total intrinsic value of SSARs exercised during the fiscal years ended June 30, 2021, 2020 and 2019, was $ 0.1 million, $ 4.6 million, and $ 2.8 million, respectively. As of June 30, 2021, there was approximately $ 2.4 million of total unrecognized stock-based compensation expense related to unvested SSARs, which is expected to be recognized over a weighted-average period of 1.8 years. Other Stock-based Compensation Performance Shares During fiscal year 2021, officers and certain employees were granted shares of restricted common stock that can only be earned upon the achievement of certain pre-defined performance measures. Specifically, for performance shares granted in fiscal year 2021, one-half of the shares awarded may vest upon our achievement of annual growth in Net Gold Equivalent Ounces (“Net GEOs”) (“GEO Shares”). The second one-half of performance shares granted in fiscal year 2021 may vest based on our total shareholder return (“TSR”) compared to the TSRs of other members of the VanEck Vectors Gold Miners ETF (GDX) (“TSR Shares”). GEO Shares and TSR Shares may vest by linear interpolation in a range between zero shares if neither threshold Net GEO and TSR metric is met; to 100 % of GEO Shares and TSR Shares awarded if both target Net GEO and TSR metrics are met; to 200 % of the Net GEO and TSR Shares awarded if both the maximum Net GEO and TSR metrics are met. The GEO Shares will expire in five years from the date of grant if the performance measure is not met, while the TSR Shares will expire in three years from the date of grant if the TSR market condition and three year service condition are not met. We measure the fair value of the GEO Shares based upon the market price of our common stock as of the date of grant. The measurement date for the GEO Shares will be determined at such time that the performance goals are attained or that it is probable they will be attained. At such time that it is probable that a performance condition will be achieved, compensation expense will be measured by the number of shares that will ultimately be earned based on the grant date market price of our common stock. For shares that were previously estimated to be probable of vesting and are no longer deemed to be probable of vesting, compensation expense is reversed during the period in which it is determined they are no longer probable of vesting. Interim recognition of compensation expense will be made at such time as management can reasonably estimate the number of shares that will be earned. We measured the grant date fair value of the TSR Shares using a Monte Carlo valuation model. The fair value of the TSR Shares ($ 82.30 per share) is multiplied by the target number ( 100 %) of TSR Shares granted to determine total stock-based compensation expense. Total stock-based compensation expense of the TSR Shares is amortized on a straight-line basis 64 Table of Contents ROYAL GOLD, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) over the requisite service period, or three years . Stock-based compensation expense for the TSR Shares is recognized provided the requisite service period is rendered, regardless of when, if ever, the TSR market condition is satisfied. We will reverse previously recognized stock-based compensation expense attributable to the TSR Shares only if the requisite service period is not met. A summary of the status of our unvested Performance Shares at maximum ( 200 %) attainment for the fiscal year ended June 30, 2021, is presented below: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted- ​ ​ ​ ​ Average ​ ​ Number of ​ Grant Date ​ ​ Shares ​ Fair Value Outstanding at July 1, 2020 144,912 ​ $ 80.59 Granted 35,380 ​ $ 111.07 Vested ( 4,850 ) ​ $ 74.97 Forfeited — ​ $ — Non-attainment ( 21,040 ) ​ $ 71.44 Outstanding at June 30, 2021 154,402 ​ $ 88.99 ​ As of June 30, 2021, total unrecognized stock-based compensation expense related to Performance Shares was approximately $ 2.1 million, which is expected to be recognized over the average remaining vesting period of 2.1 years. Restricted Stock Officers, non-executive directors and certain employees may be granted shares of restricted stock that vest on continued service alone (“Restricted Stock”). During fiscal year 2021, officers and certain employees were granted 19,630 shares of Restricted Stock. Restricted Stock granted to officers and certain employees vest over three years beginning after a two-year holding period from the date of grant with one -third of the shares vesting in years three, four and five, respectively. Also, our non-executive directors were granted 6,744 shares of Restricted Stock during fiscal year 2021. The non-executive directors’ shares of Restricted Stock vest 50 % immediately and 50 % one year after the date of grant. We measure the fair value of the Restricted Stock based upon the market price of our common stock as of the date of grant. Restricted Stock is amortized over the applicable vesting period using the straight-line method. Unvested shares of Restricted Stock are subject to forfeiture upon termination of employment or service. A summary of the status of our unvested Restricted Stock for the fiscal year ended June 30, 2021, is presented below: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted- ​ ​ ​ ​ Average ​ ​ Number of ​ Grant Date ​ ​ Shares ​ Fair Value Outstanding at July 1, 2020 96,047 ​ $ 90.40 Granted 26,104 ​ $ 138.67 Vested ( 25,621 ) ​ $ 80.85 Forfeited — ​ $ — Outstanding at June 30, 2021 96,530 ​ $ 105.99 ​ As of June 30, 2021, total unrecognized stock-based compensation expense related to Restricted Stock was approximately $ 4.1 million, which is expected to be recognized over the weighted-average vesting period of 3.2 years. ​ 65 Table of Contents ROYAL GOLD, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) 10. EARNINGS PER SHARE (“EPS”) Basic earnings per common share were computed using the weighted average number of shares of common stock outstanding during the period, considering the effect of participating securities. Unvested stock-based compensation awards that contain non-forfeitable rights to dividends or dividend equivalents are considered participating securities and are included in the computation of earnings per share pursuant to the two-class method. Our unvested restricted stock awards contain non-forfeitable dividend rights and participate equally with common stock with respect to dividends issued or declared. Our unexercised stock options, unexercised SSARs and unvested performance stock do not contain rights to dividends. Under the two-class method, the earnings used to determine basic earnings per common share are reduced by an amount allocated to participating securities. Use of the two-class method has an immaterial impact on the calculation of basic and diluted earnings per common share. The following table summarizes the effects of dilutive securities on diluted EPS for the period (amounts in thousands, except share data): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fiscal Year Ended ​ ​ June 30, ​ June 30, ​ June 30, ​ ​ 2021 ​ 2020 ​ 2019 Net income attributable to Royal Gold common stockholders ​ $ 302,532 ​ $ 199,343 ​ $ 93,825 Weighted-average shares for basic EPS ​ ​ 65,546,400 ​ ​ 65,523,024 ​ ​ 65,394,627 Effect of other dilutive securities ​ ​ 81,191 ​ ​ 120,366 ​ ​ 110,908 Weighted-average shares for diluted EPS ​ ​ 65,627,591 ​ ​ 65,643,390 ​ ​ 65,505,535 Basic EPS ​ $ 4.61 ​ $ 3.04 ​ $ 1.43 Diluted EPS ​ $ 4.60 ​ $ 3.03 ​ $ 1.43 ​ ​ 11. INCOME TAXES For financial reporting purposes, Income before income taxes includes the following components: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fiscal Year Ended June 30, ​ ​ 2021 ​ 2020 ​ 2019 ​ ​ (Amounts in thousands) United States ​ $ 130,175 ​ $ 35,446 ​ $ ( 3,776 ) Foreign ​ 209,468 ​ 157,150 ​ 110,353 ​ ​ $ 339,643 ​ $ 192,596 ​ $ 106,577 ​ 66 Table of Contents ROYAL GOLD, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) Our Income tax expense (benefit) consisted of: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fiscal Year Ended June 30, ​ ​ 2021 ​ 2020 ​ 2019 ​ ​ (Amounts in thousands) Current: ​ ​ ​ ​ ​ ​ ​ ​ ​ Federal ​ $ 38,146 ​ $ 18,320 ​ $ ( 6,974 ) State ​ 867 ​ 347 ​ ( 13 ) Foreign ​ ( 2,602 ) ​ 10,078 ​ 26,230 ​ ​ $ 36,411 ​ $ 28,745 ​ $ 19,243 Deferred and others: ​ ​ ​ ​ ​ ​ Federal ​ $ 376 ​ $ ( 1,047 ) ​ $ 916 State ​ ( 2 ) ​ ( 19 ) ​ 17 Foreign ​ 82 ​ ( 31,333 ) ​ ( 2,678 ) ​ ​ $ 456 ​ $ ( 32,399 ) ​ $ ( 1,745 ) Total income tax expense (benefit) ​ $ 36,867 ​ $ ( 3,654 ) ​ $ 17,498 ​ The provision for income taxes for the fiscal years ended June 30, 2021, 2020 and 2019, differs from the amount of income tax determined by applying the applicable United States statutory federal income tax rate to pre-tax income (net of non-controlling interest in income of consolidated subsidiary and loss from equity investment) from operations as a result of the following differences: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fiscal Year Ended June 30, ​ ​ 2021 ​ 2020 ​ 2019 ​ ​ (Amounts in thousands) Total expense (benefit) computed by applying federal rates $ 71,325 $ 40,445 $ 22,381 State and provincial income taxes, net of federal benefit ​ 874 ​ 304 ​ 135 Excess depletion ​ ( 1,812 ) ​ ( 1,291 ) ​ ( 867 ) Estimates for uncertain tax positions ​ ( 26,179 ) ​ ( 11,146 ) ​ 3,180 Statutory tax attributable to non-controlling interest ​ ( 72 ) ​ 654 ​ 1,013 Effect of foreign earnings ​ ( 7,659 ) ​ ( 8,249 ) ​ ( 6,921 ) Unrealized foreign exchange gains ​ ( 616 ) ​ ( 286 ) ​ ( 38 ) Effects of Swiss income tax reform ​ ​ — ​ ​ ( 72,669 ) ​ ​ — Changes in estimates ​ ( 858 ) ​ 24 ​ ( 1,538 ) Valuation allowance ​ ​ 1,284 ​ ​ 47,840 ​ ​ ( 47 ) Other ​ 580 ​ 720 ​ 200 Total income tax expense (benefit) ​ $ 36,867 ​ $ ( 3,654 ) ​ $ 17,498 ​ The effective tax rate for the fiscal year ended June 30, 2021, includes the release of uncertain tax positions resulting from settlement agreements with foreign tax authorities. The effective tax rate for the fiscal year ended June 30, 2020, was primarily impacted by the Federal Act on Tax Reform and AHV Financing in Switzerland and the release of an uncertain tax position resulting from a settlement agreement with a foreign tax authority. ​ 67 Table of Contents ROYAL GOLD, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) The tax effects of temporary differences and carryforwards, which give rise to our deferred tax assets and liabilities at June 30, 2021 and 2020, are as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2021 ​ 2020 ​ ​ (Amounts in thousands) Deferred tax assets: ​ ​ ​ ​ ​ ​ Stock-based compensation ​ $ 1,500 ​ $ 1,313 Net operating losses ​ 74 ​ 104 Foreign tax credits ​ ​ 24,615 ​ ​ 17,159 Amortizable tax goodwill ​ ​ 62,191 ​ ​ 67,287 Other ​ 4,608 ​ 7,713 Total deferred tax assets ​ 92,988 ​ 93,576 Valuation allowance ​ ( 61,888 ) ​ ( 60,604 ) Net deferred tax assets ​ $ 31,100 ​ $ 32,972 Deferred tax liabilities: ​ ​ ​ ​ Mineral property basis ​ $ ( 70,352 ) ​ $ ( 67,639 ) Unrealized foreign exchange gains ​ ( 582 ) ​ ( 582 ) Investment in Peak Gold joint venture ​ ​ — ​ ​ ( 3,955 ) Other ​ ( 172 ) ​ ( 346 ) Total deferred tax liabilities ​ ( 71,106 ) ​ ( 72,522 ) Total net deferred taxes ​ $ ( 40,006 ) ​ $ ( 39,550 ) ​ We review the measurement of our deferred tax assets at each balance sheet date. Considering all available positive and negative evidence, including but not limited to recent earnings history and forecasted future results, the Company believes it is more likely-than-not that all net deferred tax assets not currently burdened with a valuation allowance will be fully realized. As of June 30, 2021, and 2020, we recorded a valuation allowance of $ 61.9 million and $ 60.6 million, respectively. The valuation allowance remaining at June 30, 2021 is attributable to US foreign tax credits, Swiss amortizable tax goodwill, and capital loss and other tax attribute carryforwards in non-US subsidiaries. At June 30, 2021 and 2020, we had $ 0.1 million of net operating loss carry forwards. The majority of the tax loss carry forwards are in jurisdictions that allow a twenty-year carry forward period. As a result, these losses do not begin to expire until the 2038 tax year, and the Company anticipates the losses will be fully utilized. As of June 30, 2021, and 2020, we had $ 0.7 million and $ 25.4 million of unrecognized tax benefits, respectively. If recognized, these unrecognized tax benefits would positively impact our effective income tax rate. A reconciliation of the beginning and ending amount of gross unrecognized tax benefits for the fiscal years ended June 30, 2021, 2020 and 2019 is as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2021 ​ 2020 ​ 2019 ​ ​ (Amounts in thousands) Total gross unrecognized tax benefits at beginning of year ​ $ 25,389 ​ $ 36,547 ​ $ 36,346 Additions / Reductions for tax positions of current year ​ — ​ 537 ​ 1,709 Additions / Reductions for tax positions of prior years ​ ​ ( 812 ) ​ ​ ( 694 ) ​ ​ ( 912 ) Reductions due to settlements with taxing authorities ​ ( 23,925 ) ​ ( 11,001 ) ​ ( 596 ) Total amount of gross unrecognized tax benefits at end of year ​ $ 652 ​ $ 25,389 ​ $ 36,547 ​ We file income tax returns in the U.S. federal jurisdiction, and various state and foreign jurisdictions. With few exceptions, the Company is no longer subject to U.S. Federal, state and local, and non-U.S. income tax examinations by tax authorities for fiscal years before 2017. As a result of possible settlements with taxing authorities in various jurisdictions, the Company believes that it is reasonably possible that the total amount of its net unrecognized income tax benefits may decrease to $ 0 in the next 12 months. 68 Table of Contents ROYAL GOLD, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) Our continuing practice is to recognize interest and/or penalties related to unrecognized tax benefits as part of our income tax expense. At June 30, 2021 and 2020, the amount of accrued income-tax-related interest and penalties was $ 0.3 million and $ 12.6 million, respectively. The gross unrecognized tax benefits reflected in the tabular reconciliation do not include interest and penalties. ​ 12. SUPPLEMENTAL CASH FLOW INFORMATION Our supplemental cash flow information for the fiscal years ended June 30, 2021, 2020 and 2019 is as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2021 ​ 2020 ​ 2019 ​ ​ (Amounts in thousands) Cash paid during the period for: ​ ​ ​ ​ ​ ​ ​ ​ ​ Interest ​ $ 3,510 ​ $ 4,900 ​ $ 10,638 Income taxes, net of refunds ​ $ 58,970 ​ $ 31,555 ​ $ 44,435 Non-cash investing and financing activities: ​ ​ ​ ​ ​ ​ Dividends declared ​ $ 77,416 ​ $ 72,463 ​ $ 68,473 ​ ​ 13. FAIR VALUE MEASUREMENTS Fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. As a basis for considering such assumptions, we utilize a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows: Level 1: Quoted prices for identical instruments in active markets; Level 2: Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets; and Level 3: Prices or valuation techniques requiring inputs that are both significant to the fair value measurement and unobservable (supported by little or no market activity). The following table sets forth our financial assets measured at fair value on a recurring basis (at least annually) by level within the fair value hierarchy. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ As of June 30, 2021 ​ ​ ​ ​ Fair Value ​ ​ Carrying Amount ​ Total ​ Level 1 ​ Level 2 ​ Level 3 Assets (amounts in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Marketable equity securities (1) ​ $ 3,082 ​ $ 3,082 ​ $ — ​ $ 3,082 ​ $ — (2) Included in Other assets on our consolidated balance sheets . The carrying value of our revolving credit facility (Note 6) approximates fair value as of June 30, 2021. The warrants issued by TriStar (Note 5) classified within Level 2 of the fair value hierarchy are model-derived (Black-Scholes) valuations in which the significant inputs are observable in active markets. As of June 30, 2021, we had assets that, under certain conditions, are subject to measurement at fair value on a non-recurring basis like those associated with stream and royalty interests, intangible assets and other long-lived assets. For these assets, measurement at fair value in periods subsequent to their initial recognition is applicable if any of these 69 Table of Contents ROYAL GOLD, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) assets are determined to be impaired. If recognition of these assets at their fair value becomes necessary, such measurements will be determined utilizing Level 3 inputs. ​ 14. MAJOR SOURCES OF REVENUE Operators that contributed greater than 10% of our total revenue for any of fiscal years ended June 30 2021, 2020 or 2019 were as follows (revenue amounts in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2021 ​ 2020 ​ 2019 ​ ​ ​ ​ ​ Percentage of ​ ​ ​ ​ Percentage of ​ ​ ​ ​ Percentage of ​ ​ ​ ​ ​ total ​ ​ ​ ​ total ​ ​ ​ ​ total Operator ​ Revenue ​ revenue ​ Revenue ​ revenue ​ Revenue ​ revenue Barrick ​ $ 157,972 25.7 % $ 125,458 25.2 % $ 99,283 23.5 % Centerra ​ 156,938 25.5 % ​ 131,425 26.3 % ​ 101,011 23.9 % Teck ​ 82,164 13.3 % 74,219 14.9 % 69,264 16.4 % ​ ​ 15. SEGMENT INFORMATION We manage our business under two reportable segments, consisting of the acquisition and management of stream interests and the acquisition and management of royalty interests. Royal Gold’s long-lived assets (stream and royalty interests, net) as of June 30, 2021 and 2020 are geographically distributed as shown in the following table (amounts in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ As of June 30, 2021 ​ As of June 30, 2020 ​ ​ ​ ​ ​ ​ ​ ​ Total stream ​ ​ ​ ​ ​ ​ ​ Total stream ​ ​ Stream ​ Royalty ​ and royalty ​ Stream ​ Royalty ​ and royalty ​ ​ interest ​ interest ​ interests, net ​ interest ​ interest ​ interests, net Canada ​ $ 624,212 ​ $ 252,547 ​ $ 876,759 ​ $ 702,732 ​ $ 189,855 ​ $ 892,587 Dominican Republic ​ ​ 366,698 ​ ​ — ​ ​ 366,698 ​ ​ 406,469 ​ ​ — ​ ​ 406,469 Chile ​ ​ 256,604 ​ ​ 224,116 ​ ​ 480,720 ​ ​ 277,661 ​ ​ 223,922 ​ ​ 501,583 Africa ​ ​ 291,112 ​ ​ 321 ​ ​ 291,433 ​ ​ 215,463 ​ ​ 321 ​ ​ 215,784 Mexico ​ ​ — ​ ​ 66,867 ​ ​ 66,867 ​ ​ — ​ ​ 75,951 ​ ​ 75,951 United States ​ ​ — ​ ​ 112,817 ​ ​ 112,817 ​ ​ — ​ ​ 159,445 ​ ​ 159,445 Australia ​ ​ — ​ ​ 28,117 ​ ​ 28,117 ​ ​ — ​ ​ 30,006 ​ ​ 30,006 Rest of world ​ ​ 12,038 ​ ​ 26,709 ​ ​ 38,747 ​ ​ 12,038 ​ ​ 25,050 ​ ​ 37,088 Total ​ $ 1,550,664 ​ $ 711,494 ​ $ 2,262,158 ​ $ 1,614,363 ​ $ 704,550 ​ $ 2,318,913 ​ 70 Table of Contents ROYAL GOLD, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) Our reportable segments for purposes of assessing performance are shown below (amounts in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fiscal Year Ended June 30, 2021 ​ Revenue Cost of sales Production taxes Depletion Segment gross profit Stream interests ​ $ 423,989 ​ $ 92,898 ​ $ — ​ $ 150,594 ​ $ 180,497 Royalty interests ​ ​ 191,867 ​ ​ — ​ ​ 6,743 ​ ​ 32,619 ​ ​ 152,505 Total ​ $ 615,856 ​ $ 92,898 ​ $ 6,743 ​ $ 183,213 ​ $ 333,002 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fiscal Year Ended June 30, 2020 ​ Revenue Cost of sales Production taxes Depletion Segment gross profit Stream interests ​ $ 359,868 ​ $ 83,890 ​ $ — ​ $ 144,678 ​ $ 131,300 Royalty interests ​ ​ 138,951 ​ ​ — ​ ​ 3,824 ​ ​ 30,369 ​ ​ 104,758 Total ​ $ 498,819 ​ $ 83,890 ​ $ 3,824 ​ $ 175,047 ​ $ 236,058 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fiscal Year Ended June 30, 2019 ​ Revenue Cost of sales Production taxes Depletion Segment gross profit Stream interests ​ $ 305,824 ​ $ 77,535 ​ $ — ​ $ 127,770 ​ $ 100,519 Royalty interests ​ ​ 117,232 ​ ​ — ​ ​ 4,112 ​ ​ 35,086 ​ ​ 78,034 Total ​ $ 423,056 ​ $ 77,535 ​ $ 4,112 ​ $ 162,856 ​ $ 178,553 ​ A reconciliation of total segment gross profit to the consolidated Income before income taxes is shown below (amounts in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fiscal Year Ended June 30 ​ ​ ​ 2021 ​ ​ 2020 ​ ​ 2019 Total segment gross profit ​ $ 333,002 ​ $ 236,058 ​ $ 178,553 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Costs and expenses ​ ​ ​ ​ ​ ​ ​ ​ ​ General and administrative expenses ​ ​ 28,387 ​ ​ 30,195 ​ ​ 30,488 Exploration costs ​ ​ 563 ​ ​ 5,190 ​ ​ 7,158 Depreciation ​ ​ 356 ​ ​ 387 ​ ​ 200 Impairment of royalty interests ​ ​ — ​ ​ 1,341 ​ ​ — Total costs and expenses ​ ​ 29,306 ​ ​ 37,113 ​ ​ 37,846 Gain on sale of Peak Gold JV interest ​ ​ 33,906 ​ ​ — ​ ​ — Operating income ​ ​ 337,602 ​ ​ 198,945 ​ ​ 140,707 Fair value changes in equity securities ​ ​ 6,017 ​ ​ 1,418 ​ ​ ( 6,800 ) Interest and other income ​ ​ 2,443 ​ ​ 2,046 ​ ​ 2,320 Interest and other expense ​ ​ ( 6,419 ) ​ ​ ( 9,813 ) ​ ​ ( 29,650 ) Income before income taxes ​ $ 339,643 ​ $ 192,596 ​ $ 106,577 ​ 71 Table of Contents ROYAL GOLD, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) Our revenue by reportable segment for the fiscal year’s ended June 30, 2021, 2020, and 2019 is geographically distributed as shown in the following table (amounts in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fiscal Year Ended June 30, ​ 2021 2020 2019 Stream interests: ​ ​ ​ ​ ​ ​ ​ ​ ​ Canada ​ $ 190,537 ​ $ 158,736 ​ $ 123,152 Dominican Republic ​ ​ 115,583 ​ ​ 96,978 ​ ​ 82,844 Chile ​ ​ 82,164 ​ ​ 74,219 ​ ​ 69,264 Africa ​ ​ 35,705 ​ ​ 29,935 ​ ​ 30,564 Total stream interests ​ $ 423,989 ​ $ 359,868 ​ $ 305,824 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Royalty interests: ​ ​ ​ ​ ​ ​ ​ ​ ​ United States ​ $ 68,611 ​ $ 48,692 ​ $ 34,845 Canada ​ ​ 31,671 ​ ​ 30,524 ​ ​ 32,602 Mexico ​ ​ 58,212 ​ ​ 32,731 ​ ​ 27,224 Australia ​ ​ 21,466 ​ ​ 15,252 ​ ​ 12,806 Africa ​ ​ 2,801 ​ ​ 2,575 ​ ​ 1,416 Chile ​ ​ — ​ ​ — ​ ​ — Rest of world ​ ​ 9,106 ​ ​ 9,177 ​ ​ 8,339 Total royalty interests ​ $ 191,867 ​ $ 138,951 ​ $ 117,232 Total revenue ​ $ 615,856 ​ $ 498,819 ​ $ 423,056 ​ ​ 16. COMMITMENTS AND CONTINGENCIES Khoemac a u Silver Stream Acquisition ​ Our Khoemac a u silver stream transaction closed in February 2019. Between November 2019 and January 2021, we completed a total of $ 212 million in advanced payments required to earn the base silver stream of 80 % of payable silver under our conditional funding schedule: ​ ● $ 65.8 million – November 5, 2019 ● $ 22.0 million – February 2, 2020 ● $ 47.9 million – April 3, 2020 ● $ 11.1 million – July 5, 2020 ● $ 32.5 million – October 5, 2020 ● $ 32.6 million – January 6, 2021 ​ On April 7, 2021, we made a seventh advance payment of $ 10.6 million toward the option silver stream which increased our right to receive payable silver produced from Khoemac a u from a rate of 80 % to 84 % until the delivery of approximately 33.6 million silver ounces, and 42 % (from 40 % ) thereafter. Additionally, on April 7, 2021, KCM drew $ 18.0 million on a $ 25.0 million subordinated debt facility we provided. The subordinated debt facility has a term of seven years , carries interest at a rate of LIBOR + 11 % and requires mandatory repayment upon certain events. As of June 30, 2021, we have remaining committed funding of $ 49.4 million to KCM in the form of $ 42.4 million of additional stream financing and $ 7.0 million of debt, both of which may be drawn at the election of KCM prior to the completion of construction. On July 7, 2021, KCM drew the remaining $ 7.0 million amount on the subordinated debt facility, reducing our remaining committed funding to $ 42.4 million of additional advance payments. KCM has indicated that it does not expect to draw any material amounts from this remaining committed funding. 72 Table of Contents ROYAL GOLD, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) Ilovica Gold Stream Acquisition As of June 30, 2021, our conditional funding schedule of $ 163.75 million, as part of the Ilovica gold stream acquisition in October 2014, remains subject to certain conditions. ​ 17. SUBSEQUENT EVENTS NX Gold Mine Gold Stream Acquisition On June 30, 2021, we announced that we entered into a precious metals purchase agreement for gold produced from the NX Gold Mine in Brazil (“NX Gold Stream”) with Ero Gold Corporation, a wholly-owned subsidiary of Ero Copper Corporation, and certain of its affiliates (together, “Ero”). ​ On August 6, 2021, we made an advance payment of $ 100 million upon closing of the transaction. We will make up to an additional $ 10 million of further payments from the beginning of calendar year 2022 through the end of calendar year 2024 depending on meeting success-based targets related to regional exploration and resource additions. In return, we will receive 25 % of the gold produced from the NX Gold Mine until the delivery of 93,000 ounces, and 10 % thereafter. We will pay 20 % of the spot gold price for each ounce delivered until the delivery of 49,000 ounces, and 40 % of the spot gold price thereafter. ​ A delivery of approximately 2,500 ounces of gold based on mine production through to closing is expected to be received from Ero within five business days of closing the transaction. ​ Red Chris Royalty Acquisition ​ On August 11, 2021, we acquired a 1.0 % net smelter return royalty covering approximately 5,100 hectares which include the currently known mineralization and prospective exploration areas of the Red Chris Mine in British Columbia, Canada. We paid $ 165 million in cash consideration for the royalty to Glencore Canada Corporation, a wholly owned subsidiary of Glencore International AG. ​ The Red Chris Mine is an operating open pit mine producing gold, copper and silver, and is located on the northern edge of the Skeena Mountains. The mine is owned and operated by the Red Chris JV, which is owned 70 % by Newcrest Mining Ltd. ( “ Newcrest ” ) and 30 % by Imperial Metals Corporation, in which Newcrest is the operator. ​ Fiscal year end change ​ On August 9, 2021, our board of directors approved a change in our fiscal year end from June 30 to December 31 effective as of December 31, 2021. As a result, we expect to file a Transitional Report on Form 10-KT in early 2022 for the six-month stub period from July 1, 2021, to December 31, 2021. ​ ​ ​ 73 Table of Contents ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE None.