ROYAL GOLD INC 10-Q

ITEM 1. FINANCIAL STATEMENTS ​ ROYAL GOLD, INC. Consolidated Balance Sheets (Unaudited, amounts in thousands except share data) ​ ​ ​ ​ ​ ​ ​ ​ ​ June 30, December 31, ​ 2022 2021 ASSETS ​ ​ ​ ​ ​ ​ Cash and equivalents ​ $ 280,617 ​ $ 143,551 Royalty receivables ​ ​ 36,868 ​ ​ 54,088 Income tax receivable ​ ​ 7,712 ​ ​ 4,915 Stream inventory ​ ​ 13,172 ​ ​ 11,607 Prepaid expenses and other ​ ​ 1,971 ​ ​ 1,835 Total current assets ​ ​ 340,340 ​ ​ 215,996 Stream and royalty interests, net (Note 3) ​ ​ 2,389,864 ​ ​ 2,443,752 Other assets ​ ​ 122,842 ​ ​ 97,284 Total assets ​ $ 2,853,046 ​ $ 2,757,032 LIABILITIES ​ ​ ​ ​ ​ ​ Accounts payable ​ $ 7,067 ​ $ 6,475 Dividends payable ​ ​ 22,984 ​ ​ 22,966 Income tax payable ​ ​ 24,047 ​ ​ 19,070 Other current liabilities ​ ​ 9,915 ​ ​ 12,917 Total current liabilities ​ ​ 64,013 ​ ​ 61,428 ​ ​ ​ ​ ​ ​ ​ Deferred tax liabilities ​ ​ 86,206 ​ ​ 87,705 Other liabilities ​ ​ 6,169 ​ ​ 6,688 Total liabilities ​ ​ 156,388 ​ ​ 155,821 Commitments and contingencies (Note 12) ​ ​ ​ ​ ​ ​ 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 65,569,687 and 65,564,364 shares outstanding, respectively ​ ​ 656 ​ ​ 656 Additional paid-in capital ​ ​ 2,210,809 ​ ​ 2,206,159 Accumulated earnings ​ ​ 472,764 ​ ​ 381,929 Total Royal Gold stockholders’ equity ​ ​ 2,684,229 ​ ​ 2,588,744 Non-controlling interests ​ ​ 12,429 ​ ​ 12,467 Total equity ​ ​ 2,696,658 ​ ​ 2,601,211 Total liabilities and equity ​ $ 2,853,046 ​ $ 2,757,032 ​ The accompanying notes are an integral part of these consolidated financial statements. ​ 3 Table of Contents ROYAL GOLD, INC. Consolidated Statements of Operations and Comprehensive Income (Unaudited, amounts in thousands except share data) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended ​ Six Months Ended ​ ​ June 30, ​ June 30, ​ June 30, ​ June 30, ​ 2022 2021 2022 2021 Revenue (Note 6) ​ $ 146,441 ​ $ 168,027 ​ $ 308,796 ​ $ 310,616 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Costs and expenses ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cost of sales (excludes depreciation, depletion and amortization) ​ ​ 23,810 ​ ​ 24,668 ​ ​ 46,450 ​ ​ 46,137 General and administrative ​ ​ 9,312 ​ ​ 7,212 ​ ​ 18,243 ​ ​ 14,143 Production taxes ​ ​ 1,425 ​ ​ 2,152 ​ ​ 3,646 ​ ​ 3,987 Depreciation, depletion and amortization ​ ​ 43,989 ​ ​ 48,028 ​ ​ 91,976 ​ ​ 89,324 Total costs and expenses ​ ​ 78,536 ​ ​ 82,060 ​ ​ 160,315 ​ ​ 153,591 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Operating income ​ ​ 67,905 ​ ​ 85,967 ​ ​ 148,481 ​ ​ 157,025 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fair value changes in equity securities ​ ​ ( 2,191 ) ​ ​ 1,957 ​ ​ ( 1,577 ) ​ ​ 3,859 Interest and other income ​ ​ 1,118 ​ ​ 676 ​ ​ 2,093 ​ ​ 1,409 Interest and other expense ​ ​ ( 1,398 ) ​ ​ ( 1,145 ) ​ ​ ( 2,296 ) ​ ​ ( 2,965 ) Income before income taxes ​ ​ 65,434 ​ ​ 87,455 ​ ​ 146,701 ​ ​ 159,328 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Income tax benefit (expense) ​ ​ 5,911 ​ ​ ( 5,536 ) ​ ​ ( 9,393 ) ​ ​ ( 23,214 ) Net income and comprehensive income ​ ​ 71,345 ​ ​ 81,919 ​ ​ 137,308 ​ ​ 136,114 Net income and comprehensive income attributable to non-controlling interests ​ ​ ( 205 ) ​ ​ ( 242 ) ​ ​ ( 492 ) ​ ​ ( 409 ) Net income and comprehensive income attributable to Royal Gold common stockholders ​ $ 71,140 ​ $ 81,677 ​ $ 136,816 ​ $ 135,705 Net income per share attributable to Royal Gold common stockholders: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Basic earnings per share ​ $ 1.08 ​ $ 1.24 ​ $ 2.08 ​ $ 2.07 Basic weighted average shares outstanding ​ ​ 65,569,190 ​ ​ 65,550,682 ​ ​ 65,567,621 ​ ​ 65,550,542 Diluted earnings per share ​ $ 1.08 ​ $ 1.24 ​ $ 2.08 ​ $ 2.07 Diluted weighted average shares outstanding ​ ​ 65,678,320 ​ ​ 65,636,964 ​ ​ 65,661,653 ​ ​ 65,629,284 Cash dividends declared per common share ​ $ 0.35 ​ $ 0.30 ​ $ 0.70 ​ $ 0.60 ​ The accompanying notes are an integral part of these consolidated financial statements. ​ ​ 4 Table of Contents ROYAL GOLD, INC. Consolidated Statements of Changes in Stockholders’ Equity Three months ended June 30, 2022, and 2021 (unaudited, amounts in thousands except share data) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Royal Gold Stockholders ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Additional ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Common Shares ​ Paid-In ​ Accumulated ​ Non-controlling ​ Total ​ ​ Shares ​ Amount ​ Capital ​ Earnings ​ Interests ​ Equity Balance at March 31, 2022 65,568,799 ​ $ 656 $ 2,208,425 ​ $ 424,608 ​ $ 12,425 ​ $ 2,646,114 Stock-based compensation and related share issuances 888 ​ — 2,384 ​ — ​ — ​ 2,384 Distributions to non-controlling interests ​ — ​ — — ​ — ​ ( 201 ) ​ ( 201 ) Net income and comprehensive income — ​ — — ​ ​ 71,140 ​ 205 ​ 71,345 Dividends declared — ​ — — ​ ( 22,984 ) ​ — ​ ( 22,984 ) Balance at June 30, 2022 65,569,687 ​ $ 656 $ 2,210,809 ​ $ 472,764 ​ $ 12,429 ​ $ 2,696,658 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Royal Gold Stockholders ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Additional ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Common Shares ​ Paid-In ​ Accumulated ​ Non-controlling ​ Total ​ ​ Shares ​ Amount ​ Capital ​ Earnings ​ Interests ​ Equity Balance at March 31, 2021 65,550,445 ​ $ 656 $ 2,202,410 ​ $ 224,254 ​ $ 12,805 ​ $ 2,440,125 Stock-based compensation and related share issuances 616 ​ — 1,453 ​ — ​ — ​ 1,453 Distributions to non-controlling interests ​ — ​ — — ​ — ​ ( 400 ) ​ ( 400 ) Net income and comprehensive income — ​ — — ​ 81,677 ​ 242 ​ 81,919 Dividends declared — ​ — — ​ ( 19,682 ) ​ — ​ ( 19,682 ) Balance at June 30, 2021 65,551,061 ​ $ 656 $ 2,203,863 ​ $ 286,249 ​ $ 12,647 ​ $ 2,503,415 ​ ROYAL GOLD, INC. Consolidated Statements of Changes in Stockholders’ Equity Six Months ended June 30, 2022, and 2021 (unaudited, amounts in thousands except share data) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Royal Gold Stockholders ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Additional ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Common Shares ​ Paid-In ​ Accumulated ​ Non-controlling ​ Total ​ ​ Shares ​ Amount ​ Capital ​ Earnings ​ Interests ​ Equity Balance at December 31, 2021 65,564,364 ​ $ 656 $ 2,206,159 ​ $ 381,929 ​ $ 12,467 ​ $ 2,601,211 Stock-based compensation and related share issuances 5,323 ​ — 4,650 ​ — ​ — ​ 4,650 Distributions to non-controlling interests ​ — ​ — — ​ — ​ ( 530 ) ​ ( 530 ) Net income and comprehensive income — ​ — — ​ 136,816 ​ 492 ​ 137,308 Dividends declared — ​ — — ​ ( 45,981 ) ​ — ​ ( 45,981 ) Balance at June 30, 2022 65,569,687 ​ $ 656 $ 2,210,809 ​ $ 472,764 ​ $ 12,429 ​ $ 2,696,658 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Royal Gold Stockholders ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Additional ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Common Shares ​ Paid-In ​ Accumulated ​ Non-controlling ​ Total ​ ​ Shares ​ Amount ​ Capital ​ Earnings ​ Interests ​ Equity Balance at December 31, 2020 65,548,415 ​ $ 656 $ 2,201,076 ​ $ 189,910 ​ $ 13,037 ​ $ 2,404,679 Stock-based compensation and related share issuances 2,646 ​ — 2,787 ​ — ​ — ​ 2,787 Distributions to non-controlling interests ​ — ​ — — ​ — ​ ( 799 ) ​ ( 799 ) Net income and comprehensive income — ​ — — ​ 135,705 ​ 409 ​ 136,114 Dividends declared — ​ — — ​ ( 39,366 ) ​ — ​ ( 39,366 ) 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. ​ ​ 5 Table of Contents ROYAL GOLD, INC. Consolidated Statements of Cash Flows (Unaudited, amounts in thousands) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Six Months Ended ​ ​ June 30, ​ June 30, ​ 2022 2021 Cash flows from operating activities: ​ ​ ​ ​ ​ ​ Net income and comprehensive income ​ $ 137,308 ​ $ 136,114 Adjustments to reconcile net income and comprehensive income to net cash provided by operating activities: ​ ​ ​ ​ ​ ​ Depreciation, depletion and amortization ​ ​ 91,976 ​ ​ 89,324 Non-cash employee stock compensation expense ​ ​ 4,542 ​ ​ 2,837 Fair value changes in equity securities ​ ​ 1,577 ​ ​ ( 3,859 ) Deferred tax (benefit) expense ​ ​ ( 28,114 ) ​ ​ 8,861 Other ​ ​ 491 ​ ​ 572 Changes in assets and liabilities: ​ ​ ​ ​ ​ ​ Royalty receivables ​ ​ 17,220 ​ ​ ( 2,925 ) Stream inventory ​ ​ ( 1,564 ) ​ ​ ( 3,785 ) Income tax receivable ​ ​ ( 2,797 ) ​ ​ 4,419 Prepaid expenses and other assets ​ ​ ( 1,359 ) ​ ​ ( 582 ) Accounts payable ​ ​ 592 ​ ​ 3,786 Income tax payable ​ ​ 4,976 ​ ​ ( 8,839 ) Uncertain tax positions ​ ​ — ​ ​ ( 12,358 ) Other liabilities ​ ​ ( 3,519 ) ​ ​ ( 479 ) Net cash provided by operating activities ​ $ 221,329 ​ $ 213,086 ​ ​ ​ ​ ​ ​ ​ Cash flows from investing activities: ​ ​ ​ ​ ​ ​ Acquisition of stream and royalty interests ​ ​ ( 37,841 ) ​ ​ ( 119,315 ) Khoemac a u subordinated debt facility ​ ​ — ​ ​ ( 18,000 ) Proceeds from sale of equity securities ​ ​ — ​ ​ 8,651 Other ​ ​ ( 36 ) ​ ​ ( 177 ) Net cash used in investing activities ​ $ ( 37,877 ) ​ $ ( 128,841 ) ​ ​ ​ ​ ​ ​ ​ Cash flows from financing activities: ​ ​ ​ ​ ​ ​ Repayment of debt ​ ​ — ​ ​ ( 200,000 ) Net payments from issuance of common stock ​ ​ 108 ​ ​ ( 50 ) Common stock dividends ​ ​ ( 45,953 ) ​ ​ ( 39,364 ) Other ​ ​ ( 541 ) ​ ​ ( 774 ) Net cash used in financing activities ​ $ ( 46,386 ) ​ $ ( 240,188 ) Net increase (decrease) in cash and equivalents ​ ​ 137,066 ​ ​ ( 155,943 ) Cash and equivalents at beginning of period ​ ​ 143,551 ​ ​ 381,859 Cash and equivalents at end of period ​ $ 280,617 ​ $ 225,916 ​ The accompanying notes are an integral part of these consolidated financial statements. ​ ​ 6 Table of Contents ROYAL GOLD, INC. Notes to Consolidated Financial Statements (Unaudited) 1. OPERATIONS, SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND RECENT ACCOUNTING STANDARDS ​ Royal Gold Inc., together with its subsidiaries (“Royal Gold,” the “Company,” “we,” “us,” or “our”), 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 a mining project that provide the right to revenue or metals produced from the project after deducting contractually specified costs, if any. ​ Summary of Significant Accounting Policies ​ The accompanying unaudited consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X under the Securities Exchange Act of 1934, as amended. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for annual financial statements. 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 six months ended June 30, 2022 are not necessarily indicative of the results that may be expected for the calendar year ending December 31, 2022. These interim unaudited consolidated financial statements should be read in conjunction with our Transition Report on Form 10-K for the six months ended December 31, 2021, filed with the Securities and Exchange Commission (“SEC”) on February 17, 2022 (“Transition Report”). ​ 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. ​ 2. ACQUISITIONS ​ Lawyers Royalty Acquisition ​ On March 24, 2022, we acquired a 0.5 % net smelter returns royalty (“NSR”) on production from the Lawyers Project, currently operated by Benchmark Metals Inc., which is located in British Columbia, Canada. As part of this transaction, we also acquired a right of first offer (“ROFO”) for an existing 2.0 % NSR royalty over the Ranch Project owned by Thesis Gold, Inc. that is located adjacent to the Lawyers Project. We paid $ 8.0 million in cash consideration for the royalty and ROFO to Guardsmen Resources Inc. The Lawyers Project acquisition has been accounted for as an asset acquisition. The $ 8.0 million cash consideration, plus direct acquisition costs, have been recorded as an exploration stage royalty interest (Note 3) within Stream and royalty interests, net on our consolidated balance sheets. ​ Khoemac a u Silver Stream ​ On February 23, 2022, we made an advance payment of $ 10.0 million toward the option stream which increased our right to receive payable silver produced from Khoemac a u from 90 % to 93 %, and on March 14, 2022, we made our final advance payment of $ 16.5 million toward the option stream which increased our right to receive payable silver produced from 93 % to 100 %. Cumulative advance payments of $ 265 million, plus direct acquisition costs, have been recorded as a production stage stream interest within Stream and royalty interests, net on our consolidated balance sheets. ​ As of June 30, 2022, $ 25.0 million of the subordinated debt facility, and $ 3.5 million of accrued interest remains outstanding on the Khoemac a u subordinated debt facility, and these amounts are included in Other assets in our 7 Table of Contents ROYAL GOLD, INC. Notes to Consolidated Financial Statements (Unaudited) ​ consolidated balance sheets. Refer to our Transition Report for further details on the Khoemac a u silver stream acquisition and subordinated debt facility. 3. STREAM AND ROYALTY INTERESTS, NET The following tables summarize our stream and royalty interests, net as of June 30, 2022 and December 31, 2021. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ As of June 30, 2022 (Amounts in thousands): Cost Accumulated Depletion Net Production stage stream interests: ​ ​ ​ ​ ​ ​ ​ ​ ​ Mount Milligan ​ $ 790,635 ​ $ ( 369,245 ) ​ $ 421,390 Pueblo Viejo ​ ​ 610,404 ​ ​ ( 274,189 ) ​ ​ 336,215 Andacollo ​ ​ 388,182 ​ ​ ( 146,235 ) ​ ​ 241,947 Khoemac a u ​ ​ 265,911 ​ ​ ( 8,055 ) ​ ​ 257,856 Rainy River ​ ​ 175,727 ​ ​ ( 56,351 ) ​ ​ 119,376 Wassa ​ ​ 146,475 ​ ​ ( 90,625 ) ​ ​ 55,850 Other ​ ​ 69,101 ​ ​ ( 8,371 ) ​ ​ 60,730 Total production stage stream interests ​ ​ 2,446,435 ​ ​ ( 953,071 ) ​ ​ 1,493,364 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Production stage royalty interests: ​ ​ ​ ​ ​ ​ ​ ​ ​ Voisey's Bay ​ ​ 205,724 ​ ​ ( 116,383 ) ​ ​ 89,341 Red Chris ​ ​ 116,187 ​ ​ ( 1,797 ) ​ ​ 114,390 Peñasquito ​ ​ 99,172 ​ ​ ( 55,399 ) ​ ​ 43,773 Cortez ​ ​ 80,681 ​ ​ ( 28,232 ) ​ ​ 52,449 Other ​ ​ 447,251 ​ ​ ( 392,962 ) ​ ​ 54,289 Total production stage royalty interests ​ ​ 949,015 ​ ​ ( 594,773 ) ​ ​ 354,242 Total production stage stream and royalty interests ​ ​ 3,395,450 ​ ​ ( 1,547,844 ) ​ ​ 1,847,606 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Development stage stream interests: ​ ​ ​ ​ ​ ​ ​ ​ ​ Other ​ ​ 12,038 ​ ​ — ​ ​ 12,038 Development stage royalty interests: ​ ​ ​ ​ ​ ​ ​ ​ ​ Côté ​ ​ 45,421 ​ ​ — ​ ​ 45,421 Other ​ ​ 62,796 ​ ​ — ​ ​ 62,796 Total development stage stream and royalty interests ​ ​ 120,255 ​ ​ — ​ ​ 120,255 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Exploration stage stream interests: ​ ​ ​ ​ ​ ​ ​ ​ ​ NX Gold ​ ​ 34,253 ​ ​ — ​ ​ 34,253 Exploration stage royalty interests: ​ ​ ​ ​ ​ ​ ​ ​ ​ Pascua-Lama ​ ​ 177,690 ​ ​ — ​ ​ 177,690 Red Chris ​ ​ 48,895 ​ ​ — ​ ​ 48,895 Côté ​ ​ 29,610 ​ ​ — ​ ​ 29,610 Other ​ ​ 131,555 ​ ​ — ​ ​ 131,555 Total exploration stage stream and royalty interests ​ ​ 422,003 ​ ​ — ​ ​ 422,003 Total stream and royalty interests, net ​ $ 3,937,708 ​ $ ( 1,547,844 ) ​ $ 2,389,864 ​ 8 Table of Contents ROYAL GOLD, INC. Notes to Consolidated Financial Statements (Unaudited) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ As of December 31, 2021 (Amounts in thousands): Cost Accumulated Depletion ​ Net Production stage stream interests: ​ ​ ​ ​ ​ ​ ​ ​ ​ Mount Milligan ​ $ 790,635 ​ $ ( 336,921 ) ​ $ 453,714 Pueblo Viejo ​ ​ 610,405 ​ ​ ( 260,321 ) ​ ​ 350,084 Andacollo ​ ​ 388,182 ​ ​ ( 139,035 ) ​ ​ 249,147 Khoemac a u ​ ​ 239,411 ​ ​ ( 3,402 ) ​ ​ 236,009 Rainy River ​ ​ 175,727 ​ ​ ( 50,115 ) ​ ​ 125,612 Wassa ​ ​ 146,475 ​ ​ ( 84,915 ) ​ ​ 61,560 Other ​ ​ 69,101 ​ ​ ( 4,193 ) ​ ​ 64,908 Total production stage stream interests ​ ​ 2,419,936 ​ ​ ( 878,902 ) ​ ​ 1,541,034 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Production stage royalty interests: ​ ​ ​ ​ ​ ​ ​ ​ ​ Voisey's Bay ​ ​ 205,724 ​ ​ ( 113,602 ) ​ ​ 92,122 Red Chris ​ ​ 116,187 ​ ​ — ​ ​ 116,187 Peñasquito ​ ​ 99,172 ​ ​ ( 53,022 ) ​ ​ 46,150 Cortez ​ ​ 80,681 ​ ​ ( 23,225 ) ​ ​ 57,456 Other ​ ​ 447,799 ​ ​ ( 387,364 ) ​ ​ 60,435 Total production stage royalty interests ​ ​ 949,563 ​ ​ ( 577,213 ) ​ ​ 372,350 Total production stage stream and royalty interests ​ ​ 3,369,499 ​ ​ ( 1,456,115 ) ​ ​ 1,913,384 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Development stage stream interests: ​ ​ ​ ​ ​ ​ ​ ​ ​ Other ​ ​ 12,037 ​ ​ — ​ ​ 12,037 Development stage royalty interests: ​ ​ ​ ​ ​ ​ ​ ​ ​ Côté ​ ​ 45,421 ​ ​ — ​ ​ 45,421 Other ​ ​ 54,755 ​ ​ — ​ ​ 54,755 Total development stage stream and royalty interests ​ ​ 112,213 ​ ​ — ​ ​ 112,213 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Exploration stage stream interests: ​ ​ ​ ​ ​ ​ ​ ​ ​ NX Gold ​ ​ 30,974 ​ ​ — ​ ​ 30,974 Exploration stage royalty interests: ​ ​ ​ ​ ​ ​ ​ ​ ​ Pascua-Lama ​ ​ 177,690 ​ ​ — ​ ​ 177,690 Red Chris ​ ​ 48,895 ​ ​ — ​ ​ 48,895 Côté ​ ​ 29,610 ​ ​ — ​ ​ 29,610 Other ​ ​ 130,986 ​ ​ — ​ ​ 130,986 Total exploration stage stream and royalty interests ​ ​ 418,155 ​ ​ — ​ ​ 418,155 Total stream and royalty interests, net ​ $ 3,899,867 ​ $ ( 1,456,115 ) ​ $ 2,443,752 ​ ​ 4. MARKETABLE EQUITY SECURITIES ​ As of June 30, 2022, 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. ​ The fair value of our marketable equity securities decreased $ 2.2 million and $ 1.6 million for the three and six months ended June 30, 2022, respectively, and increased $ 2.0 million and $ 3.9 million for the three and six months ended June 30, 2021, respectively. These changes 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 June 30, 2022 and December 31, 2021, was $ 0.2 million and $ 1.7 million, respectively, and is included in Other assets on our consolidated balance sheets. ​ ​ 9 Table of Contents ROYAL GOLD, INC. Notes to Consolidated Financial Statements (Unaudited) ​ 5. DEBT ​ Revolving credit facility ​ As of June 30, 2022, we had no amounts outstanding under our revolving credit facility dated June 2, 2017, and as amended. Interest expense, which includes interest on outstanding borrowings and amortization of debt issuance costs, was $ 0.2 million and $ 0.5 million for the three and six months ended June 30, 2022, respectively, and $ 0.3 million and $ 1.1 million for the three and six months ended June 30, 2021, respectively. We were in compliance with each financial covenant (leverage ratio and interest coverage ratio) under the revolving credit facility as of June 30, 2022. ​ We may repay any borrowings under the revolving credit facility at any time without premium or penalty. ​ 6. 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. ​ 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 occurs. 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 costs. ​ 10 Table of Contents ROYAL GOLD, INC. Notes to Consolidated Financial Statements (Unaudited) ​ 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 for that period. 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 our Transition Report. For the three months ended June 30, 2022, royalty revenue that was estimated or was attributable to metal production for a period prior to June 30, 2022, 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 10. ​ Revenue by metal type attributable to each of our revenue sources is disaggregated as follows (amounts in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended ​ Six Months Ended ​ June 30, June 30, June 30, June 30, ​ 2022 ​ 2021 ​ 2022 ​ 2021 Stream revenue: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Gold $ 75,325 ​ $ 91,187 ​ $ 152,827 ​ $ 156,698 Silver ​ 12,892 ​ ​ 8,449 ​ ​ 24,331 ​ ​ 21,255 Copper ​ 16,662 ​ ​ 14,785 ​ ​ 32,972 ​ ​ 31,814 Total stream revenue $ 104,879 ​ $ 114,421 ​ $ 210,130 ​ $ 209,767 Royalty revenue: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Gold $ 28,974 ​ $ 37,164 ​ $ 66,890 ​ $ 68,409 Silver ​ 3,512 ​ ​ 4,356 ​ ​ 7,829 ​ ​ 8,564 Copper ​ 3,281 ​ ​ 3,977 ​ ​ 9,986 ​ ​ 7,993 Other ​ 5,795 ​ ​ 8,109 ​ ​ 13,961 ​ ​ 15,883 Total royalty revenue $ 41,562 ​ $ 53,606 ​ $ 98,666 ​ $ 100,849 Total revenue $ 146,441 ​ $ 168,027 ​ $ 308,796 ​ $ 310,616 ​ Revenue attributable to our principal stream and royalty interests is disaggregated as follows (amounts in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended ​ Six Months Ended ​ ​ ​ ​ June 30, June 30, June 30, June 30, ​ ​ Metal(s) ​ 2022 ​ 2021 ​ 2022 ​ 2021 Stream revenue: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Mount Milligan ​ Gold & Copper ​ $ 45,627 ​ $ 43,802 ​ $ 88,043 ​ $ 77,606 Pueblo Viejo ​ Gold & Silver ​ ​ 19,812 ​ ​ 26,585 ​ ​ 43,076 ​ ​ 56,759 Andacollo ​ Gold ​ ​ 11,721 ​ ​ 27,868 ​ ​ 27,395 ​ ​ 40,889 Wassa ​ Gold ​ ​ 8,248 ​ ​ 7,129 ​ ​ 15,451 ​ ​ 15,902 Khoemac a u ​ Silver ​ ​ 5,203 ​ ​ — ​ ​ 7,591 ​ ​ — Other ​ Gold & Silver ​ ​ 14,268 ​ ​ 9,037 ​ ​ 28,574 ​ ​ 18,611 Total stream revenue ​ ​ ​ $ 104,879 ​ $ 114,421 ​ $ 210,130 ​ $ 209,767 Royalty revenue: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Peñasquito ​ Gold, Silver, Lead & Zinc ​ $ 9,664 ​ $ 13,399 ​ $ 22,758 ​ $ 26,527 Cortez ​ Gold ​ ​ 8,138 ​ ​ 13,739 ​ ​ 24,852 ​ ​ 22,348 Other ​ Various ​ ​ 23,760 ​ ​ 26,468 ​ ​ 51,056 ​ ​ 51,974 Total royalty revenue ​ ​ ​ $ 41,562 ​ $ 53,606 ​ $ 98,666 ​ $ 100,849 Total revenue ​ ​ ​ $ 146,441 ​ $ 168,027 ​ $ 308,796 ​ $ 310,616 ​ Please refer to Note 10 for the geographical distribution of our revenue by reportable segment. ​ 11 Table of Contents ROYAL GOLD, INC. Notes to Consolidated Financial Statements (Unaudited) ​ 7. STOCK-BASED COMPENSATION ​ We recognized stock-based compensation expense as follows (amounts in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended ​ Six Months Ended ​ ​ June 30, ​ June 30, ​ June 30, ​ June 30, ​ 2022 2021 2022 2021 Restricted stock ​ $ 1,201 ​ $ 550 ​ $ 2,356 ​ $ 1,082 Performance stock ​ ​ 847 ​ ​ 479 ​ ​ 1,478 ​ ​ 844 Stock appreciation rights ​ ​ 360 ​ ​ 446 ​ ​ 692 ​ ​ 876 Stock options ​ ​ 10 ​ ​ 18 ​ ​ 16 ​ ​ 35 Total stock-based compensation expense ​ $ 2,418 ​ $ 1,493 ​ $ 4,542 ​ $ 2,837 ​ Stock-based compensation expense is included within General and administrative expense in the consolidated statements of operations and comprehensive income. ​ There were no awards granted during the three months ended June 30, 2022 and 2021. During the six months ended June 30, 2022 and 2021, we granted the following stock-based compensation awards: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Six Months Ended ​ ​ ​ June 30, ​ ​ June 30, ​ 2022 2021 ​ ​ ​ (Number of shares) Performance stock (at maximum 200 % attainment) ​ ​ 39,380 ​ ​ — Restricted stock ​ ​ 28,220 ​ ​ — Total equity awards granted ​ ​ 67,600 ​ ​ — ​ As of June 30, 2022, unrecognized compensation expense (expressed in thousands below) and weighted-average vesting period for each of our stock-based compensation awards were as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Unrecognized Weighted- ​ ​ ​ ​ ​ ​ ​ ​ compensation ​ average vesting ​ ​ ​ ​ ​ ​ ​ ​ expense period (years) Restricted stock ​ ​ ​ ​ ​ ​ ​ $ 8,347 ​ ​ 2.4 Performance stock ​ ​ ​ ​ ​ ​ ​ ​ 6,039 ​ ​ 2.2 Stock appreciation rights ​ ​ ​ ​ ​ ​ ​ ​ 964 ​ ​ 1.1 Stock options ​ ​ ​ ​ ​ ​ ​ ​ 33 ​ ​ 1.1 ​ ​ 8. EARNINGS PER SHARE (“EPS”) ​ Basic EPS was 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 EPS 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 option awards, unexercised stock-settled stock appreciation rights and unvested performance stock do not contain rights to dividends. Under the two-class method, the earnings used to determine basic EPS 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 EPS. ​ 12 Table of Contents ROYAL GOLD, INC. Notes to Consolidated Financial Statements (Unaudited) ​ 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 ​ Six Months Ended ​ ​ June 30, ​ June 30, ​ June 30, ​ June 30, ​ 2022 2021 2022 2021 Net income attributable to Royal Gold common stockholders ​ $ 71,140 ​ $ 81,677 ​ $ 136,816 ​ $ 135,705 Weighted-average shares for basic EPS ​ ​ 65,569,190 ​ ​ 65,550,682 ​ ​ 65,567,621 ​ ​ 65,550,542 Effect of other dilutive securities ​ ​ 109,130 ​ ​ 86,282 ​ ​ 94,032 ​ ​ 78,742 Weighted-average shares for diluted EPS ​ ​ 65,678,320 ​ ​ 65,636,964 ​ ​ 65,661,653 ​ ​ 65,629,284 Basic EPS ​ $ 1.08 ​ $ 1.24 ​ $ 2.08 ​ $ 2.07 Diluted EPS ​ $ 1.08 ​ $ 1.24 ​ $ 2.08 ​ $ 2.07 ​ ​ 9. INCOME TAXES ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended ​ Six Months Ended ​ ​ June 30, ​ June 30, ​ June 30, ​ June 30, ​ 2022 2021 2022 2021 Income tax benefit (expense) ​ $ 5,911 ​ $ ( 5,536 ) ​ $ ( 9,393 ) ​ $ ( 23,214 ) Effective tax rate ​ ​ 9.0 % ​ ​ ( 6.3 %) ​ ​ ( 6.4 %) ​ ​ ( 14.6 %) ​ The effective tax rate for the three and six months ended June 30, 2022, included a discrete income tax benefit of $ 18.8 million attributable to the release of a valuation allowance on certain deferred tax assets. The effective tax rate for the three and six months ended June 30, 2021, included a discrete tax benefit of $ 11.5 million attributable to the settlement of an uncertain tax position with a foreign jurisdiction. ​ 10. 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. Our long-lived assets (stream and royalty interests, net) are geographically distributed as shown in the following table (amounts in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ As of June 30, 2022 ​ As of December 31, 2021 ​ ​ ​ ​ ​ ​ ​ ​ Total stream ​ ​ ​ ​ ​ ​ ​ Total stream ​ ​ Stream ​ Royalty ​ and royalty ​ Stream ​ Royalty ​ and royalty ​ interest interest interests, net interest interest interests, net Canada ​ $ 540,766 ​ $ 414,496 ​ $ 955,262 ​ $ 579,326 ​ $ 412,419 ​ $ 991,745 Chile ​ ​ 241,947 ​ ​ 224,116 ​ ​ 466,063 ​ ​ 249,147 ​ ​ 224,116 ​ ​ 473,263 Dominican Republic ​ ​ 336,215 ​ ​ — ​ ​ 336,215 ​ ​ 350,083 ​ ​ — ​ ​ 350,083 Africa ​ ​ 313,707 ​ ​ 321 ​ ​ 314,028 ​ ​ 297,569 ​ ​ 321 ​ ​ 297,890 United States ​ ​ — ​ ​ 101,921 ​ ​ 101,921 ​ ​ — ​ ​ 107,761 ​ ​ 107,761 Mexico ​ ​ — ​ ​ 55,877 ​ ​ 55,877 ​ ​ — ​ ​ 60,977 ​ ​ 60,977 Australia ​ ​ — ​ ​ 26,861 ​ ​ 26,861 ​ ​ — ​ ​ 27,496 ​ ​ 27,496 Rest of world ​ ​ 107,020 ​ ​ 26,617 ​ ​ 133,637 ​ ​ 107,920 ​ ​ 26,617 ​ ​ 134,537 Total ​ $ 1,539,655 ​ $ 850,209 ​ $ 2,389,864 ​ $ 1,584,045 ​ $ 859,707 ​ $ 2,443,752 ​ 13 Table of Contents ROYAL GOLD, INC. Notes to Consolidated Financial Statements (Unaudited) ​ Our reportable segments for purposes of assessing performance are shown below (amounts in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended June 30, 2022 ​ Revenue Cost of sales (1) Production taxes Depletion (2) Segment gross profit Stream interests ​ $ 104,879 ​ $ 23,810 ​ $ — ​ $ 37,790 ​ $ 43,279 Royalty interests ​ ​ 41,562 ​ ​ — ​ ​ 1,425 ​ ​ 6,075 ​ ​ 34,062 Total ​ $ 146,441 ​ $ 23,810 ​ $ 1,425 ​ $ 43,865 ​ $ 77,341 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended June 30, 2021 ​ Revenue Cost of sales (1) Production taxes Depletion (2) Segment gross profit Stream interests ​ $ 114,421 ​ $ 24,668 ​ $ — ​ $ 38,746 ​ $ 51,007 Royalty interests ​ ​ 53,606 ​ ​ — ​ ​ 2,152 ​ ​ 9,190 ​ ​ 42,264 Total ​ $ 168,027 ​ $ 24,668 ​ $ 2,152 ​ $ 47,936 ​ $ 93,271 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Six Months Ended June 30, 2022 ​ Revenue Cost of sales (1) Production taxes Depletion (2) Segment gross profit Stream interests ​ $ 210,130 ​ $ 46,450 ​ $ — ​ $ 74,169 ​ $ 89,511 Royalty interests ​ ​ 98,666 ​ ​ — ​ ​ 3,646 ​ ​ 17,561 ​ ​ 77,459 Total ​ $ 308,796 ​ $ 46,450 ​ $ 3,646 ​ $ 91,730 ​ $ 166,970 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Six Months Ended June 30, 2021 ​ Revenue Cost of sales (1) Production taxes Depletion (2) Segment gross profit Stream interests ​ $ 209,767 ​ $ 46,137 ​ $ — ​ $ 71,341 ​ $ 92,289 Royalty interests ​ ​ 100,849 ​ ​ — ​ ​ 3,987 ​ ​ 17,797 ​ ​ 79,065 Total ​ $ 310,616 ​ $ 46,137 ​ $ 3,987 ​ $ 89,138 ​ $ 171,354 (1) Excludes depreciation, depletion and amortization ​ (2) Depletion amounts are included within Depreciation, depletion and amortization on our consolidated statements of operations and comprehensive income. ​ A reconciliation of total segment gross profit to the consolidated Income before income taxes is shown below (amounts in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended ​ Six Months Ended ​ ​ June 30, ​ June 30, ​ June 30, ​ June 30, ​ ​ 2022 ​ 2021 ​ 2022 ​ 2021 Total segment gross profit ​ $ 77,341 ​ $ 93,271 ​ $ 166,970 ​ $ 171,354 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Costs and expenses ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ General and administrative expenses ​ ​ 9,312 ​ ​ 7,212 ​ ​ 18,243 ​ ​ 14,143 Depreciation and amortization ​ ​ 124 ​ ​ 92 ​ ​ 246 ​ ​ 186 Operating income ​ ​ 67,905 ​ ​ 85,967 ​ ​ 148,481 ​ ​ 157,025 Fair value changes in equity securities ​ ​ ( 2,191 ) ​ ​ 1,957 ​ ​ ( 1,577 ) ​ ​ 3,859 Interest and other income ​ ​ 1,118 ​ ​ 676 ​ ​ 2,093 ​ ​ 1,409 Interest and other expense ​ ​ ( 1,398 ) ​ ​ ( 1,145 ) ​ ​ ( 2,296 ) ​ ​ ( 2,965 ) Income before income taxes ​ $ 65,434 ​ $ 87,455 ​ $ 146,701 ​ $ 159,328 ​ 14 Table of Contents ROYAL GOLD, INC. Notes to Consolidated Financial Statements (Unaudited) ​ Our revenue by reportable segment for the three and six months ended June 30, 2022 and 2021 is geographically distributed as shown in the following table (amounts in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended ​ Six Months Ended ​ ​ June 30, ​ June 30, ​ June 30, ​ June 30, ​ 2022 2021 2022 2021 Stream interests: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Canada ​ $ 54,591 ​ $ 52,040 ​ $ 106,077 ​ $ 94,649 Dominican Republic ​ ​ 19,812 ​ ​ 26,585 ​ ​ 43,076 ​ ​ 56,759 Africa ​ ​ 14,540 ​ ​ 7,928 ​ ​ 25,375 ​ ​ 17,470 Chile ​ ​ 11,721 ​ ​ 27,868 ​ ​ 27,395 ​ ​ 40,889 Rest of world ​ ​ 4,215 ​ ​ — ​ ​ 8,207 ​ ​ — Total stream interests ​ $ 104,879 ​ $ 114,421 ​ $ 210,130 ​ $ 209,767 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Royalty interests: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ United States ​ $ 16,845 ​ $ 21,349 ​ $ 41,202 ​ $ 37,823 Mexico ​ ​ 11,940 ​ ​ 16,191 ​ ​ 27,821 ​ ​ 31,461 Canada ​ ​ 5,773 ​ ​ 9,601 ​ ​ 16,551 ​ ​ 18,213 Australia ​ ​ 4,040 ​ ​ 4,249 ​ ​ 8,086 ​ ​ 8,610 Africa ​ ​ 114 ​ ​ 559 ​ ​ 430 ​ ​ 1,307 Rest of world ​ ​ 2,850 ​ ​ 1,657 ​ ​ 4,576 ​ ​ 3,435 Total royalty interests ​ $ 41,562 ​ $ 53,606 ​ $ 98,666 ​ $ 100,849 Total revenue ​ $ 146,441 ​ $ 168,027 ​ $ 308,796 ​ $ 310,616 ​ ​ 11. 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, 2022 ​ ​ ​ ​ Fair Value ​ Carrying Value Total Level 1 Level 2 Level 3 Assets (amounts in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Marketable equity securities (1) ​ $ 155 ​ $ 155 ​ $ — ​ $ 155 ​ $ — (1) Included in Other assets on our consolidated balance sheets. ​ The TriStar Gold Inc. warrants (Note 4) 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 June 30, 2022. ​ 15 Table of Contents ROYAL GOLD, INC. Notes to Consolidated Financial Statements (Unaudited) ​ As of June 30, 2022, 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. If recognition of these assets at their fair value becomes necessary, such measurements will be determined utilizing Level 3 inputs. ​ ​ 12. COMMITMENTS AND CONTINGENCIES ​ NX Gold Exploration Payment ​ On March 22, 2022, we made a payment of $ 3.2 million to a subsidiary of Ero Copper Corporation (“Ero”) as part of our commitment to support the achievement of success-based targets related to regional exploration and mineral resource additions. This payment has been recorded to exploration stage stream interests (Note 3) within Stream and royalty interests, net on our consolidated balance sheets. As of June 30, 2022, $ 6.8 million of advance payments remain if Ero meets certain success-based targets related to regional exploration and mineral resource additions through calendar 2024. Refer to our Transition Report for further information on the NX Gold stream acquisition. ​ Ilovica Gold Stream Acquisition ​ As of June 30, 2022, 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. ​ 13. SUBSEQUENT EVENTS ​ Acquisition of Additional Royalty Interest on Cortez Complex ​ On August 2, 2022, we announced that we acquired a sliding-scale gross royalty (the “Cortez Royalty”) on an area including the Cortez mine operational area and the Fourmile development project in Nevada (the “Cortez Complex”). We paid $ 525 million in cash consideration for the Cortez Royalty to Kennecott Royalty Company, a wholly owned subsidiary of Rio Tinto European Holdings Limited. The area within the Cortez Complex is owned or controlled by Nevada Gold Mines LLC (“NGM”), a joint venture between Barrick Gold Corporation (“Barrick”) ( 61.5 % owner and operator) and Newmont Corporation ( 38.5 % owner), with the exception of the Fourmile project which is 100 % owned and operated by Barrick. ​ The Cortez Royalty is a life of mine sliding scale gross royalty payable at a rate of 0 % at a gold price less than $ 400 per ounce, increasing to 3 % at a gold price above $ 900 per ounce, and is payable on 40 % of all production from the Cortez Complex. The Cortez Royalty does not cover the existing deposits within the Robertson property. At current gold prices the Cortez Royalty is an effective 1.2 % gross royalty on the Cortez Complex and is not subject to any stepdowns or caps. ​ The Cortez Royalty is payable after cumulative production from the Cortez Complex of 15 million gold equivalent ounces from January 1, 2008 onwards. According to Barrick public disclosure, cumulative production from January 1, 2008, was approximately 14.8 million ounces as of June 30, 2022. ​ The purchase price was funded with debt and available cash on hand. In anticipation of this acquisition, we borrowed $ 500 million under our revolving credit facility in July 2022, leaving $ 500 million available. Per our credit facility dated June 2, 2017, as amended, the borrowing was under a Base Rate loan option with an all-in interest rate of approximately 5.6 %. We anticipate converting the Base Rate loan into a LIBOR loan on or around August 5, 2022. ​ Agreement to Acquire Great Bear Royalties Corporation ​ On July 11, 2022, we announced that we had entered into a definitive agreement with Great Bear Royalties Corporation (“GBR”) to acquire all of the issued and outstanding common shares of GBR for cash consideration of C $ 6.65 per common share, which values GBR at approximately C $ 199.5 million (approximately US $ 155 million) on a fully diluted basis. GBR’s sole material asset is a 2.0 % NSR royalty (the “Royalty”) that includes the entire 9,140 hectares of the Great Bear Project in the Red Lake district of Ontario, Canada, indirectly owned and operated by Kinross Gold Corporation (“Kinross”). We plan to fund the purchase price with available cash on hand. 16 Table of Contents ROYAL GOLD, INC. Notes to Consolidated Financial Statements (Unaudited) ​ ​ As part of our due diligence, we entered into a co-operation agreement with Kinross to obtain access to Kinross personnel and certain information pertaining to the Great Bear Project. In exchange, we agreed to amend certain terms of the royalty agreement upon closing of the acquisition, including providing an option to Kinross to purchase a 25 % interest in the Royalty for an amount equal to 25 % of our purchase price of GBR, adjusted for inflation, at any time from the transaction closing date until the earlier of a construction decision for the Great Bear Project and 10 years after the transaction closing date. ​ The acquisition has been unanimously approved by the boards of directors of both Royal Gold and GBR, and the board of directors of GBR has resolved to recommend that the shareholders of GBR approve the acquisition. All directors and officers of GBR have entered into support agreements to vote their shares in support of the acquisition representing, in aggregate, approximately 10.5 % of the outstanding common shares of GBR. The arrangement agreement provides us a customary right to match any superior proposal and includes customary non-solicitation covenants. In addition, the arrangement agreement requires GBR to pay a termination fee of C $ 7.0 million (approximately US $ 6 million) to us if GBR terminates the arrangement agreement in certain circumstances. ​ The transaction is subject to approval by the shareholders of GBR, and regulatory and court approvals. GBR expects to hold a special meeting of shareholders to approve the transaction on August 31, 2022, and subject to approval by shareholders, GBR will shortly thereafter seek approval by the Supreme Court of British Columbia of a plan of arrangement under the provisions of the Business Corporations Act (British Columbia). We expect the transaction to close during the quarter ending September 30, 2022. ​ ​ ​ ​ 17 Table of Contents ​