What changed in this filing

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Item 1. Financial Statements

2022-11-03 compared with 2022-08-04 · 167 added, 96 removed, 358 unchanged (42% of the section changed)

3 unchanged sentences

(Unaudited, amounts in thousands except share data)

September 30,

Cash and equivalents

10 unchanged sentences

Total current liabilities

Debt (Note 5)

Deferred tax liabilities

16 unchanged sentences

Three Months Ended

Six Months Ended

Nine Months Ended

September 30,

Revenue (Note 6)

10 unchanged sentences

Income before income taxes

Income tax benefit (expense)

Income tax expense

Net income and comprehensive income

10 unchanged sentences

Consolidated Statements of Changes in Stockholders’ Equity

Three months ended June 30, 2022, and 2021

Three months ended September 30, 2022, and 2021

(unaudited, amounts in thousands except share data)

2 unchanged sentences

Non-controlling

Balance at March 31, 2022

Balance at June 30, 2022

Stock-based compensation and related share issuances

2 unchanged sentences

Dividends declared

Balance at June 30, 2022

Balance at September 30, 2022

Royal Gold Stockholders

1 unchanged sentence

Non-controlling

Balance at March 31, 2021

Balance at June 30, 2021

Stock-based compensation and related share issuances

2 unchanged sentences

Dividends declared

Balance at June 30, 2021

Balance at September 30, 2021

ROYAL GOLD, INC.

Consolidated Statements of Changes in Stockholders’ Equity

Six Months ended June 30, 2022, and 2021

Nine Months ended September 30, 2022, and 2021

(unaudited, amounts in thousands except share data)

7 unchanged sentences

Dividends declared

Balance at June 30, 2022

Balance at September 30, 2022

Royal Gold Stockholders

6 unchanged sentences

Dividends declared

Balance at June 30, 2021

Balance at September 30, 2021

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

2 unchanged sentences

(Unaudited, amounts in thousands)

Six Months Ended

Nine Months Ended

September 30,

Cash flows from operating activities:

22 unchanged sentences

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 cash provided by (used in) financing activities

Net decrease in cash and equivalents

Cash and equivalents at beginning of period

15 unchanged sentences

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.

Operating results for the three and nine months ended September 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”).

1 unchanged sentence

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.

Acquisition of Great Bear Royalties Corporation

On September 9, 2022, we completed the previously announced acquisition of all of the issued and outstanding shares of Great Bear Royalties Corporation (“GBR”) for cash consideration of approximately C$ 199.6 million (US$ 151.7 million) (“the Acquisition Price”).

GBR’s sole material asset is a 2.0 % net smelter return royalty (“Great Bear Royalty”) that covers the entirety of the Great Bear Project in the Red Lake district of Ontario, Canada, owned and operated by a subsidiary of Kinross Gold Corporation (“Kinross”).

The Great Bear Royalty includes all metals produced from contiguous claims covering 9,140 hectares and will be registered on title to the relevant claims.

Royalty payments will be made quarterly with applicable standard deductions.

The purchase price was funded with available cash on hand.

As part of the acquisition and in exchange for information and access to the project provided by Kinross, we granted an option to Kinross to purchase a 25 % interest in the Great Bear Royalty ( 0.5 % of the 2.0 % royalty rate) for an amount equal to 25 % of the Acquisition Price, 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 Great Bear Royalty is the sole material asset of GBR and represents substantially all the fair value of GBR’s gross assets.

As a result, the GBR acquisition has been accounted for as an asset acquisition and the fair values of the GBR assets acquired are shown below:

ROYAL GOLD, INC.

Notes to Consolidated Financial Statements

(in thousands)

Purchase Price

Royalty interests in mineral property (Great Bear royalty)

Total allocated purchase price

The $ 151.1 million allocated fair value of the Great Bear Royalty, plus $ 2.3 million of direct transaction costs and deferred tax of $ 53.6 million have been capitalized with the Great Bear Royalty interest and allocated to exploration stage royalty interests within Stream and royalty interests, net on our consolidated balance sheets.

The deferred tax was recorded as a gross-up to the Great Bear Royalty mineral interest as prescribed by the applicable guidance.

Acquisition of Additional Royalty Interest on Cortez Complex

On August 2, 2022, we acquired a sliding scale gross royalty (“Cortez Complex Royalty”) on production from an area including the Cortez mine operational area and the Fourmile development project (the “Cortez Complex”) for cash consideration of $ 525 million.

The area within the Cortez Complex is owned or controlled by Nevada Gold Mines LLC (“NGM”), a joint venture between Barrick Gold Corporation (“Barrick”) and Newmont Corporation, with the exception of the Fourmile development project which is 100 % owned and operated by Barrick.

The 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.

Based on information available, the royalty would not cover the existing deposits within the Robertson property.

At current gold prices the Cortez Complex Royalty is an effective 1.2 % gross royalty on the Cortez Complex and is not subject to any stepdowns or caps.

Deductions from the Cortez Complex Royalty payments are limited to third-party royalties that existed prior to the creation of the royalty in 2008, which include the existing Crossroads and Pipeline royalties owned by Royal Gold.

The purchase price was funded with debt and available cash on hand.

The acquisition has been accounted for as an asset acquisition and the $ 525 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.

On the date of acquisition, approximately $ 199 million and $ 326 million was allocated to production stage and exploration stage royalty interests, respectively.

The acquisition cost of the production stage Cortez Complex Royalty will be depleted using the units of production method, which is estimated using aggregate proven and probable reserves, as provided by NGM.

The royalty is payable after cumulative production from the Cortez Complex of 15 million gold equivalent ounces from January 1, 2008 onwards.

During the quarter ended September 30, 2022, the production threshold was reached and approximately 3,300 ounces of gold production was attributable to the royalty.

We expect all production from the Cortez Complex in the fourth quarter of 2022 to be subject to the royalty.

The royalty is payable within forty-five days after the end of each calendar quarter.

Lawyers Royalty Acquisition

6 unchanged sentences

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

ROYAL GOLD, INC.

Notes to Consolidated Financial Statements

consolidated balance sheets.

As of September 30, 2022, $ 25.0 million of the subordinated debt facility, and $ 4.4 million of accrued interest remains outstanding on the Khoemac a u subordinated debt facility, and these amounts are included in Other assets in our consolidated balance sheets.

Refer to our Transition Report for further details on the Khoemac a u silver stream acquisition and subordinated debt facility.

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):

The following tables summarize our stream and royalty interests, net as of September 30, 2022 and December 31, 2021.

As of September 30, 2022 (Amounts in thousands):

Accumulated Depletion

30 unchanged sentences

Exploration stage royalty interests:

Total exploration stage stream and royalty interests

Total exploration stage royalty interests

Total stream and royalty interests, net

( 1,456,115 )

Mount Milligan

On October 4, 2022, Centerra Gold, Inc.

(“Centerra”) announced the highlights of an updated life of mine plan for Mount Milligan which provided, among other things, a four-year extension of the mine life to 2033 and increases to the proven and probable reserves.

As a result of the increase in proven and probable reserves, the gold and copper depletion rates on our Mount Milligan stream decreased to $ 416 per ounce of gold and $ 1.06 per pound of copper as of September 30, 2022 from $ 703 per ounce of gold and $ 1.53 per pound of copper.

Centerra reported that it expects to file a new technical report detailing the life of mine plan within 45 days of October 4, 2022.

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.

As of September 30, 2022, our marketable equity securities include warrants to purchase up to 19,640,000 common shares of TriStar Gold Inc, 250,000 common shares of Goldon Resources Ltd.

and 1,242,500 common shares of Mountain Boy Minerals Ltd.

The common shares of Goldon Resources Ltd.

and Mountain Boy Minerals Ltd.

were acquired as part of the GBR acquisition.

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.

ROYAL GOLD, INC.

Notes to Consolidated Financial Statements

The fair value of our marketable equity securities increased $ 0.4 million for the three months ended September 30, 2022, and decreased $ 1.2 million for nine months ended September 30, 2022, and increased $ 0.2 million and $ 4.0 million for the three and nine months ended September 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 September 30, 2022 and December 31, 2021, was $ 0.7 million and $ 1.7 million, respectively, and is included in Other assets on our consolidated balance sheets.

Our debt as of September 30, 2022 and December 31, 2021 consists of the following (amounts in thousands):

As of September 30, 2022

As of December 31, 2021

Debt Issuance Costs

Debt Issuance Costs 1

(Amounts in thousands)

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.

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

Revolving credit facility

On July 2, 2022, we borrowed $ 500 million under our revolving credit facility for the acquisition of the Cortez Complex Royalty, and on September 6, 2022, we repaid $ 50 million of the outstanding borrowings.

Refer to Note 2 of our notes to consolidated financial statements for further discussion on the Cortez Complex Royalty acquisition.

As of September 30, 2022, we had $ 450 million outstanding and $ 550 million available under our revolving credit facility dated June 2, 2017, and as amended.

The interest rate on borrowings under our revolving credit facility as of September 30, 2022, was LIBOR plus 1.10 % for an all-in rate of 4.2 %.

Interest expense, which includes interest on outstanding borrowings and amortization of debt issuance costs, was $ 3.9 million and $ 4.4 million for the three and nine months ended September 30, 2022, respectively, and $ 1.0 million and $ 2.1 million for the three and nine months ended September 30, 2021, respectively.

We were in compliance with each financial covenant (leverage ratio and interest coverage ratio) under the revolving credit facility as of September 30, 2022.

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

8 unchanged sentences

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

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.

8 unchanged sentences

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.

ROYAL GOLD, INC.

Notes to Consolidated Financial Statements

Royalty Revenue Estimates

4 unchanged sentences

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.

For the three months ended September 30, 2022, royalty revenue that was estimated or was attributable to metal production for a period prior to September 30, 2022, was not material.

Disaggregation of Revenue

2 unchanged sentences

These identified revenue sources are consistent with our reportable segments as discussed in Note 10.

ROYAL GOLD, INC.

Notes to Consolidated Financial Statements

Revenue by metal type attributable to each of our revenue sources is disaggregated as follows (amounts in thousands):

Three Months Ended

Six Months Ended

Nine Months Ended

September 30,

Stream revenue:

5 unchanged sentences

Three Months Ended

Six Months Ended

Nine Months Ended

September 30,

Stream revenue:

9 unchanged sentences

Please refer to Note 10 for the geographical distribution of our revenue by reportable segment.

ROYAL GOLD, INC.

Notes to Consolidated Financial Statements

STOCK-BASED COMPENSATION

1 unchanged sentence

Three Months Ended

Six Months Ended

Nine Months Ended

September 30,

Restricted stock

4 unchanged sentences

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

ROYAL GOLD, INC.

Notes to Consolidated Financial Statements

During the three and nine months ended September 30, 2022 and 2021, we granted the following stock-based compensation awards:

Three Months Ended

Nine Months Ended

September 30,

(Number of shares)

Performance stock (at maximum 200 % attainment)

1 unchanged sentence

Total equity awards granted

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:

As of September 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:

average vesting

11 unchanged sentences

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

ROYAL GOLD, INC.

Notes to Consolidated Financial Statements

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

Nine Months Ended

September 30,

Net income attributable to Royal Gold common stockholders

3 unchanged sentences

Three Months Ended

Six Months Ended

Income tax benefit (expense)

Nine Months Ended

September 30,

Income tax expense

Effective tax rate

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.

ROYAL GOLD, INC.

Notes to Consolidated Financial Statements

The effective tax rate for the nine months ended September 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 nine months ended September 30, 2021, included a discrete tax benefit of $ 12.0 million attributable to the settlement of an uncertain tax position with a foreign jurisdiction.

SEGMENT INFORMATION

1 unchanged sentence

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 September 30, 2022

As of December 31, 2021

4 unchanged sentences

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 June 30, 2022

Three Months Ended September 30, 2022

Cost of sales (1)

4 unchanged sentences

Royalty interests

Three Months Ended June 30, 2021

Three Months Ended September 30, 2021

Cost of sales (1)

4 unchanged sentences

Royalty interests

Six Months Ended June 30, 2022

Nine Months Ended September 30, 2022

Cost of sales (1)

4 unchanged sentences

Royalty interests

Six Months Ended June 30, 2021

Nine Months Ended September 30, 2021

Cost of sales (1)

5 unchanged sentences

(1) Excludes depreciation, depletion and amortization

ROYAL GOLD, INC.

Notes to Consolidated Financial Statements

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

1 unchanged sentence

Three Months Ended

Six Months Ended

Nine Months Ended

September 30,

Total segment gross profit

7 unchanged sentences

Income before income taxes

ROYAL GOLD, INC.

Notes to Consolidated Financial Statements

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):

Our revenue by reportable segment for the three and nine months ended September 30, 2022 and 2021 is geographically distributed as shown in the following table (amounts in thousands):

Three Months Ended

Six Months Ended

Nine Months Ended

September 30,

Stream interests:

12 unchanged sentences

Quoted prices for identical instruments in active markets;

ROYAL GOLD, INC.

Notes to Consolidated Financial Statements

Quoted prices for similar instruments in active markets;

3 unchanged sentences

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

As of September 30, 2022

Carrying Value

1 unchanged sentence

Marketable equity securities (1)

As of December 31, 2021

Carrying Value

Assets (amounts in thousands):

Marketable equity securities (1)

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

Our marketable 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 (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.

ROYAL GOLD, INC.

Notes to Consolidated Financial Statements

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.

The carrying value of our revolving credit facility (Note 5) approximates fair value as of September 30, 2022.

As of September 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.

4 unchanged sentences

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.

As of September 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.

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.

ROYAL GOLD, INC.

Notes to Consolidated Financial Statements

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.

As of September 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.

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