What changed in this filing

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Item 1. Financial Statements

2021-11-04 compared with 2021-05-06 · 115 added, 185 removed, 336 unchanged (47% of the section changed)

3 unchanged sentences

(Unaudited, amounts in thousands except share data)

September 30,

Cash and equivalents

30 unchanged sentences

Three Months Ended

Nine Months Ended

September 30,

Revenue (Note 6)

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Consolidated Statements of Changes in Stockholders’ Equity

Three months ended March 31, 2021 and 2020

Three months ended September 30, 2021 and 2020

(unaudited, amounts in thousands except share data)

2 unchanged sentences

Non-controlling

Earnings (Losses)

Balance at December 31, 2020

Balance at June 30, 2021

Stock-based compensation and related share issuances

2 unchanged sentences

Dividends declared

Balance at March 31, 2021

Royal Gold Stockholders

Common Shares

Non-controlling

Earnings (Losses)

Balance at December, 2019

Stock-based compensation and related share issuances

Distributions from (to) non-controlling interests

Net income (loss) and comprehensive income (loss)

Dividends declared

Balance at March 31, 2020

ROYAL GOLD, INC.

Consolidated Statements of Changes in Stockholders’ Equity

Nine months ended March 31, 2021 and 2020

(unaudited, amounts in thousands except share data)

Balance at September 30, 2021

Royal Gold Stockholders

1 unchanged sentence

Non-controlling

Earnings (Losses)

Balance at June 30, 2020

2 unchanged sentences

Distributions to non-controlling interests

Net income and comprehensive income

Dividends declared

Balance at March 31, 2021

Royal Gold Stockholders

Common Shares

Non-controlling

(Losses) Earnings

Balance at June 30, 2019

Stock-based compensation and related share issuances

Distributions from (to) non-controlling interests

Net income (loss) and comprehensive income (loss)

Dividends declared

Balance at March 31, 2020

Balance at September 30, 2020

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

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(Unaudited, amounts in thousands)

Nine Months Ended

Three Months Ended

September 30,

Cash flows from operating activities:

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Acquisition of stream and royalty interests

Khoemac a u subordinated debt facility

Proceeds from sale of Peak Gold JV interest

Proceeds from sale of Contango shares

Net cash used in investing activities

Net cash (used in) provided by investing activities

Cash flows from financing activities:

Repayment of debt

Borrowings from revolving credit facility

Net payments from issuance of common stock

Common stock dividends

Net cash used in financing activities

Net increase (decrease) in cash and equivalents

Net provided by (used in) financing activities

Net (decrease) increase in cash and equivalents

Cash and equivalents at beginning of period

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Notes to Consolidated Financial Statements

OPERATIONS, SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND RECENTLY ADOPTED ACCOUNTING STANDARDS

OPERATIONS, SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND RECENT ACCOUNTING STANDARDS

Royal Gold is engaged in the business of acquiring and managing precious metals streams, royalties and similar interests.

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Royalties are non-operating interests in a mining project that provide the right to revenue or metals produced from the project after deducting contractually specified costs, if any.

Change in Fiscal Year End

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 transition period from July 1, 2021, to December 31, 2021.

Summary of Significant Accounting Policies

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In the opinion of management, all adjustments which are of a normal recurring nature considered necessary for a fair presentation of our interim financial statements have been included in this Form 10-Q.

Operating results for the three and nine months ended March 31, 2021 are not necessarily indicative of the results that may be expected for the fiscal year ending June 30, 2021.

Operating results for the three months ended September 30, 2021 are not necessarily indicative of the results that may be expected for the six-month transition period ending December 31, 2021.

These interim unaudited consolidated financial statements should be read in conjunction with our Annual Report on Form 10-K for the fiscal year ended June 30, 2021 filed with the Securities and Exchange Commission on August 12, 2021 (“Fiscal 2021 10-K”).

Recently Adopted Accounting Standards

Current Expected Credit Loss

In June 2016, the Financial Accounting Standards Board 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 records credit losses from an “incurred loss” approach to an “expected loss” approach.

This update was effective for annual periods beginning after December 15, 2019 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.

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:

● An incremental 28 % net smelter return 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;

● An incremental 1 % net smelter return 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 March 31, 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

Recent Accounting Standards

We have evaluated all the recently issued, but not yet effective, accounting standards that have been issued or proposed by the Financial Accounting Standards Board or other standards-setting bodies through the filing date of these unaudited consolidated financial statements and do not believe the future adoption of any such standards will have a material impact on our consolidated financial statements.

ACQUISITIONS AND DISPOSITIONS

Red Chris Royalty Acquisition

On August 11, 2021, we acquired a 1.0 % net smelter return royalty covering approximately 5,100 hectares, which includes 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 a joint venture (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.

The Red Chris royalty acquisition has been accounted for as an asset acquisition.

The $ 165 million cash consideration, plus direct acquisition costs, have been recorded and allocated between production and exploration stage royalty interests (Note 3) within Stream and royalty interests, net on our consolidated balance sheets.

Approximately $ 116.1 million and $ 48.9 million was allocated to production stage and exploration stage royalty interest, respectively, as of September 30,

ROYAL GOLD, INC.

Notes to Consolidated Financial Statements

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.

The acquisition cost of the production stage Red Chris royalty will be depleted using the units of production method, which is estimated using aggregate proven and probable reserves, as provided by Newcrest.

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 operating underground 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 the transaction.

In exchange for the consideration provided, 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.

Per the purchase agreement, we may make up to an additional $ 10 million of advance payments from the beginning of calendar 2022 through the end of calendar 2024 based on Ero meeting success-based targets related to regional exploration and resource additions.

The NX Gold Stream has been accounted for as an asset acquisition.

The $ 100 million advance payment, plus direct acquisition costs, have been recorded and allocated between production and exploration stage stream interests (Note 3) within Stream and royalty interests, net on our consolidated balance sheets.

Approximately $ 54.9 million and $ 45.1 million was allocated to production stage and exploration stage stream interest, respectively, as of September 30, 2021.The acquisition cost of the production stage NX Gold Stream will be depleted using the units of production method, which is estimated using aggregate proven and probable reserves, as provided by Ero.

ROYAL GOLD, INC.

Notes to Consolidated Financial Statements

STREAM AND ROYALTY INTERESTS, NET

The following tables summarize our stream and royalty interests, net as of March 31, 2021 and June 30, 2020.

As of March 31, 2021 (Amounts in thousands):

The following tables summarize our stream and royalty interests, net as of September 30, 2021, and June 30, 2021.

As of September 30, 2021 (Amounts in thousands):

Accumulated Depletion

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Total development stage stream and royalty interests

Exploration stage stream interests:

Exploration stage royalty interests:

Total exploration stage royalty interests

Total exploration stage stream and royalty interests

Total stream and royalty interests, net

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Development stage royalty interests:

Total development stage royalty interests

Total development stage stream and royalty interests

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( 1,356,644 )

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 March 31, 2021, approximately 115,700 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 $ 70.3 million as of March 31, 2021.

ROYAL GOLD, INC.

Notes to Consolidated Financial Statements

COVID-19 Pandemic

Throughout calendar 2020 and into calendar 2021, several of our operating counterparties have instituted temporary operational curtailments due to the ongoing COVID-19 pandemic.

At times since early 2020, 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.

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MARKETABLE EQUITY SECURITIES

As of March 31, 2021, our marketable equity securities include 3,949,575 common shares of Battle North Gold Corporation (“Battle North Gold”), and warrants to purchase up to 19,640,000 common shares of TriStar Gold Inc.

As of September 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 11) each reporting period with any changes in fair value recognized in net income.

On March 15, 2021, Evolution Mining Limited announced it had entered into a definitive arrangement with Battle North Gold to acquire all of the issued and outstanding shares of Battle North Gold at a price of $ 2.65 Canadian dollars per common share, payable in cash.

The transaction remains subject to the affirmative vote of Battle North Gold’s shareholders, which is expected to be held in May 2021, and is expected to close during the quarter ending June 30, 2021.

As discussed in Note 2, 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 nine months ended March 31, 2021.

The fair value of our marketable equity securities increased $ 1.9 million and $ 4.0 million for the three and nine months ended March 31, 2021, respectively, and are included in Fair value changes in equity securities on our consolidated statements of operations and comprehensive income.

The carrying value of our marketable equity securities as of March 31, 2021 and June 30, 2020 was $ 9.8 million and $ 17.9 million, respectively, and is included in Other assets on our consolidated balance sheets.

Our debt as of March 31, 2021 and June 30, 2020 consists of the following:

As of March 31, 2021

The fair value of our marketable equity securities increased $ 0.2 million and $ 2.5 million for the three months ended September 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

ROYAL GOLD, INC.

Notes to Consolidated Financial Statements

securities as of September 30, 2021, and June 30, 2021, was $ 3.3 million and $ 3.1 million, respectively, and is included in Other assets on our consolidated balance sheets.

Our debt as of September 30, 2021, and June 30, 2021, consists of the following:

As of September 30, 2021

As of June 30, 2021

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Revolving credit facility

(1) Included in Other assets on our consolidated balance sheets.

Revolving credit facility

As of March 31, 2021, we had $ 150 million outstanding and $ 850 million available under our revolving credit facility.

The interest rate on borrowings under our revolving credit facility as of March 31, 2021 was LIBOR plus 1.10 % for an all-in rate of 1.34 %.

Interest expense, which includes interest on outstanding borrowings and amortization of debt issuance costs, was $ 0.8 million and $ 3.0 million for the three and nine months ended March 31, 2021, respectively, and $ 1.2 million and $ 5.0 million for the three and nine months ended March 31, 2020, respectively.

As discussed in Note 6 to the consolidated financial statements in our Fiscal 2020 10-K, we have financial covenants associated with our revolving credit facility.

As of March 31, 2021, we were in compliance with each financial covenant.

ROYAL GOLD, INC.

Notes to Consolidated Financial Statements

On April 1, 2021, we repaid the remaining outstanding borrowings ($ 150 million) under our revolving credit facility.

This increased the amount available under our revolving credit facility to $ 1 billion and decreased the amount outstanding to zero .

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

Our revolving credit facility matures on June 3, 2024.

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 March 31, 2021 (amounts in thousands):

Classification

March 31, 2021

Operating Leases

Right-of-use assets - current

Prepaid expenses and other

Right-of-use assets - non-current

Total right-of-use assets

Lease liabilities - current

Other current liabilities

Lease liabilities - non-current

Other long-term liabilities

Total operating lease liabilities

Maturities of operating lease liabilities at March 31, 2021 were as follows (amounts in thousands):

Fiscal Years:

Operating Leases

Total lease payments

Less imputed interest

Other information pertaining to leases consists of the following:

March 31, 2021

Operating Lease Term and Discount Rate

Weighted average remaining lease term in years

Weighted average discount rate

We did not have any finance leases as of March 31, 2021.

As of September 30, 2021, we had $ 100 million outstanding and $ 900 million available under our revolving credit facility.

The interest rate on borrowings under our revolving credit facility as of September 30, 2021, was LIBOR plus 1.10 % for an all-in rate of 1.21 %.

Interest expense recognized on the revolving credit facility for the three months ended September 30, 2021, and 2020, was approximately $ 1.0 million and $ 1.3 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 September 30, 2021.

On July 7, 2021, we entered into a fourth amendment to our revolving credit facility dated 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.

On October 8, 2021, we repaid $ 50 million of the outstanding borrowings under our revolving credit facility.

This increased the amount available under our revolving credit facility to $ 950 million and decreased the amount outstanding to $ 50 million.

Royal Gold may repay any borrowings under the revolving credit facility at any time without premium or penalty.

Revenue Recognition

GAAP guidance, 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 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

ROYAL GOLD, INC.

Notes to Consolidated Financial Statements

time that control of the related metal production transfers to our customers.

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.

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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.

ROYAL GOLD, INC.

Notes to Consolidated Financial Statements

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.

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Please also refer to our “Use of Estimates” accounting policy discussed in our Fiscal 2021 10-K.

For the three and nine months ended March 31, 2021, royalty revenue that was estimated or was attributable to metal production for a period prior to March 31, 2021, was not material.

For the three months ended September 30, 2021, royalty revenue that was estimated or was attributable to metal production for a period prior to September 30, 2021, was not material.

Disaggregation of Revenue

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Three Months Ended

Nine Months Ended

September 30,

Stream revenue:

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Three Months Ended

Nine Months Ended

September 30,

Stream revenue:

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Three Months Ended

Nine Months Ended

(Amounts in thousands)

September 30,

(Amounts in thousands)

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Notes to Consolidated Financial Statements

During the three and nine months ended March 31, 2021 and 2020, we granted the following stock-based compensation awards:

During the three months ended September 30, 2021, and 2020, we granted the following stock-based compensation awards:

Three Months Ended

Nine Months Ended

(Number of shares)

September 30,

(Number of shares)

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Total equity awards granted

As of March 31, 2021, unrecognized compensation expense (expressed in thousands below) and weighted-average vesting period for each of our stock-based compensation awards were as follows:

As of September 30, 2021, unrecognized compensation expense (expressed in thousands below) and weighted-average vesting period for each of our stock-based compensation awards were as follows:

average vesting

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Use of the two-class method has an immaterial impact on the calculation of basic and diluted EPS.

The following tables summarize the effects of dilutive securities on diluted EPS for the period (amounts in thousands, except share data):

The following tables summarize the effects of dilutive securities on diluted EPS for the periods shown below (amounts in thousands, except share data):

Three Months Ended

Nine Months Ended

September 30,

Net income attributable to Royal Gold common stockholders

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Three Months Ended

Nine Months Ended

(Amounts in thousands, except rate)

September 30,

(Amounts in thousands, except rate)

1 unchanged sentence

Effective tax rate

The effective tax rate for the three months ended March 31, 2021, included an income tax expense attributable to an increase in valuation allowance on certain deferred tax assets.

The effective tax rate for the three months ended March 31, 2020, included income tax benefits resulting from foreign exchange rate movements compared to the U.S.

The effective tax rate for the nine months ended March 31, 2021, included discrete tax benefits ($ 21.8 million) primarily attributable to the settlement of an uncertain tax position with a foreign jurisdiction and the release of a valuation allowance related to deferred tax assets.

The effective tax rate for the nine months ended March 31, 2020, included discrete benefits ($ 32.3 million) attributable to the remeasurement of certain deferred tax assets and a net step-up in the basis of tax assets due to the enactment of the Federal Act on Tax Reform and AHV Financing (Swiss Tax Reform).

The effective tax rate for the three months ended September 30, 2020, included discrete tax benefits attributable to the settlement of an uncertain tax position with a foreign jurisdiction and the release of a valuation allowance related to deferred tax assets.

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) are geographically distributed as shown in the following table (amounts in thousands):

As of March 31, 2021

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

As of September 30, 2021

As of June 30, 2021

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Rest of world

ROYAL GOLD, INC.

Notes to Consolidated Financial Statements

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

Three Months Ended March 31, 2021

Cost of sales (1)

Production taxes

Depletion (2)

Segment gross profit

Stream interests

Royalty interests

Three Months Ended March 31, 2020

Cost of sales (1)

Production taxes

Depletion (2)

Segment gross profit

Stream interests

Royalty interests

Nine Months Ended March 31, 2021

Three Months Ended September 30, 2021

Cost of sales (1)

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Royalty interests

Nine Months Ended March 31, 2020

Three Months Ended September 30, 2020

Cost of sales (1)

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

ROYAL GOLD, INC.

Notes to Consolidated Financial Statements

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

Three Months Ended

Nine Months Ended

September 30,

Total segment gross profit

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Income before income taxes

ROYAL GOLD, INC.

Notes to Consolidated Financial Statements

Our revenue by reportable segment for the three and nine months ended March 31, 2021 and 2020 is geographically distributed as shown in the following table (amounts in thousands):

Our revenue by reportable segment for the three months ended September 30, 2021, and 2020, is geographically distributed as shown in the following table (amounts in thousands):

Three Months Ended

Nine Months Ended

September 30,

Stream interests:

Dominican Republic

Rest of world

Total stream interests

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Quoted prices for identical instruments in active markets;

ROYAL GOLD, INC.

Notes to Consolidated Financial Statements

Quoted prices for similar instruments in active markets;

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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 March 31, 2021

As of September 30, 2021

Carrying Amount

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(1) Included in Other assets on our consolidated balance sheets.

Our marketable equity securities classified within Level 1 of the fair value hierarchy are valued using quoted market prices in active markets multiplied by the quantity of shares held.

The TriStar Gold Inc.

warrants 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.

The carrying value of our revolving credit facility (Note 5) approximates fair value as of March 31, 2021.

ROYAL GOLD, INC.

Notes to Consolidated Financial Statements

As of March 31, 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.

The carrying value of our revolving credit facility (Note 5) approximates fair value as of September 30, 2021.

As of September 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 assets are determined to be impaired.

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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, Khoemac a u Copper Mining (Pty.) Limited (“KCM”) drew $ 18.0 million on a $ 25.0 million subordinated debt facility provided by Royal Gold.

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.

Royal Gold has 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.

Option Silver Stream

As of September 30, 2021, Royal Gold has remaining committed funding of $ 42.4 million as part of our Khoemac a u silver stream acquisition, which may be drawn at the election of Khoemac a u Copper Mining (Pty.) Limited (“KCM”) prior to the completion of construction.

Refer to our Fiscal 2021 10-K for further details on the Khoemac a u silver stream acquisition and subordinated debt facility.

Additionally, on October 8, 2021 we made an advance payment of $ 15.9 million toward the option stream which increased our right to receive payable silver produced from Khoemac a u from a rate of 84 % to 90 % until delivery of approximately 36.0 million silver ounces, and 45 % (from 42 %) thereafter.

Subordinated Debt Facility

On July 7, 2021, KCM drew the remaining $ 7.0 million on the $ 25.0 million subordinated debt facility provided by Royal Gold.

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 September 30, 2021, $ 25.0 million was outstanding on the subordinated debt facility and is included in Other assets in our consolidated balance sheets.

Ilovica Gold Stream Acquisition

As of March 31, 2021, our conditional funding schedule of $ 163.75 million, as part of the Ilovica gold stream acquisition entered into in October 2014, remains subject to certain conditions.

As of September 30, 2021, our conditional funding schedule of $ 163.75 million, as part of the Ilovica gold stream acquisition entered into in October 2014, remains subject to certain conditions.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements