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Item 2. Management’s Discussion and Analysis

2022-11-03 compared with 2022-08-04 · 238 added, 166 removed, 202 unchanged (67% of the section changed)

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This Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) is intended to provide information to assist you in better understanding and evaluating our financial condition and results of operations of Royal Gold.

You should read this MD&A in conjunction with our consolidated financial statements included in Item 1 of this Quarterly Report on Form 10-Q, as well as 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”).

You should read this MD&A in conjunction with our consolidated financial statements included in Item 1 of this Quarterly Report on Form 10-Q, as well as the audited consolidated financial statements included in 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”).

This MD&A contains forward-looking information.

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We do not own, develop, or mine the properties on which we hold stream or royalty interests.

Certain information provided in this Quarterly Report on Form 10-Q about operating properties in which we hold interests, including information about mineral reserves, historical production, production estimates, property descriptions, and property developments, was provided to us by the operators of those properties or is publicly available information filed by these operators with applicable securities regulatory bodies, including the SEC.

Certain information provided in this Quarterly Report on Form 10-Q about operating properties in which we hold interests, including information about mineral resources and reserves, historical production, production estimates, property descriptions, and property developments, was provided to us by the operators of those properties or is publicly available information filed by these operators with applicable securities regulatory bodies, including the SEC.

We have not verified, and are not in a position to verify, and expressly disclaim any responsibility for the accuracy, completeness, or fairness of, this third-party information and refer the reader to the public reports filed by the operators for information regarding those properties.

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● Acquisition and Management of 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 metals produced from a mine, at a price determined for the life of the transaction by the purchase agreement.

As of June 30, 2022, we owned nine stream interests, which are on eight producing properties and one development stage property.

Stream interests accounted for approximately 72% and 68% of our total revenue for the three and six months ended June 30, 2022, respectfully, and 68% for each of the three and six months ended June 30, 2021, respectfully.

As of September 30, 2022, we owned nine stream interests, which are on eight producing properties and one development stage property.

Stream interests accounted for approximately 75% and 70% of our total revenue for the three and nine months ended September 30, 2022, respectively, and 66% for each of the three and nine months ended September 30, 2021, respectively.

We expect stream interests to continue representing a significant portion of our total revenue.

● Acquisition and Management of Royalty Interests — Royalties are non-operating interests in mining projects that provide the right to revenue or metals produced from the project after deducting specified costs, if any.

As of June 30, 2022, we owned royalty interests on 33 producing properties, 18 development stage properties and 125 exploration stage properties, of which we consider 53 to be evaluation stage projects.

As of September 30, 2022, we owned royalty interests on 33 producing properties, 19 development stage properties and 125 exploration stage properties, of which we consider 54 to be evaluation stage projects.

We use “evaluation stage” to describe exploration stage properties that contain mineral resources and on which operators are engaged in the search for mineral reserves.

Royalty interests accounted for 28% and 32% of our total revenue for the three and six months ended June 30, 2022, respectfully, and 32% for each of the three and six months ended June 30, 2021, respectfully.

Royalty interests accounted for 25% and 30% of our total revenue for the three and nine months ended September 30, 2022, respectively, and 34% for each of the three and nine months ended September 30, 2021, respectively.

We do not conduct mining operations on the properties in which we hold stream and royalty interests, and we generally are not required to contribute to capital costs, environmental costs or other operating costs on those properties.

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Our review process may include, for example, engaging consultants and advisors to analyze an opportunity;

analysis of technical, financial, legal, and other confidential information of an opportunity;

submission of

indications of interest and term sheets;

analysis of technical, financial, legal, and other confidential information regarding an opportunity;

of indications of interest and term sheets;

participation in preliminary discussions and negotiations;

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The marketability and price of metals are influenced by numerous factors beyond our control, and significant changes in metal prices can have a material effect on our revenue.

For the three and six months ended June 30, 2022, and 2021, average metal prices and percentages of revenue by metal were as follows:

For the three and nine months ended September 30, 2022 and 2021, average metal prices and percentages of revenue by metal were as follows:

Three Months Ended

Six Months Ended

June 30, 2022

June 30, 2021

June 30, 2022

June 30, 2021

Nine Months Ended

September 30, 2022

September 30, 2021

September 30, 2022

September 30, 2021

Gold ($/ounce)

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Copper ($/pound)

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.

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

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.

Acquisition of Additional Royalty Interest on Cortez Complex

On August 1, 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.

Refer to Note 13 of our notes to consolidated financial statements for further discussion on the Cortez Royalty.

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 (the “Great Bear Acquisition”).

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.

The transaction is subject to approval by the shareholders of GBR, and regulatory and court approvals.

Subject to the receipt of all necessary approvals, we expect the transaction to close during the quarter ending September 30, 2022.

Refer to Note 13 of our notes to consolidated financial statements for further discussion on the Great Bear Acquisition.

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

The area within the Cortez Complex is owned or controlled by Nevada Gold Mines LLC a joint venture between Barrick Gold Corporation (“Barrick”) and Newmont Corporation (“Newmont”), 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 except for the existing deposits within the Robertson property.

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

Refer to Note 2 and Note 5 of our notes to consolidated financial statements for further discussion on the Cortez complex royalty acquisition and funding.

Lawyers Royalty Acquisition

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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 achievement of success-based targets related to regional exploration and mineral resource additions.

As of June 30, 2022, up to $6.8 million of additional exploration and mineral resource addition payments remain if Ero meets certain success-based targets through calendar 2024.

As of September 30, 2022, up to $6.8 million of additional exploration and mineral resource addition payments remain if Ero meets certain success-based targets through calendar 2024.

Refer to our Transition Report for further information on the NX Gold stream acquisition.

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.

For the most part, our results of operations and financial condition have not been materially impacted by these measures to date.

However, the effects of the pandemic will ultimately depend on many factors that are outside of our control, including the severity and duration of the pandemic, government and operator actions in response to the pandemic, and the development, availability, and public acceptance of effective treatments and vaccines.

As a result, we are currently unable to predict the nature or extent of any future impact on our results of operations and financial condition.

We continue to monitor the impact of developments associated with the pandemic on stream and royalty interests as part of our regular asset impairment analysis.

Operators’ Production Estimates by Stream and Royalty Interest for Calendar 2022

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In some instances, an operator may revise its original calendar year guidance throughout the year.

The following table shows current production estimates for calendar 2022, as well as actual production through June 30, 2022, for our principal properties as reported to us by the operators.

The following table shows current production estimates for calendar 2022, as well as actual production through September 30, 2022 (except as otherwise noted), for our principal properties as reported to us by the operators.

Operators’ Estimated and Actual Production by Stream and Royalty Interest for Calendar 2022

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There can be no assurance that production estimates received from the operators will be achieved.

Please also refer to our cautionary language regarding forward-looking statements, as well as the Risk Factors identified in Part I, Item 1A, of our Transition Report for information regarding factors that could affect actual results.

(2) Actual production figures shown are from the operators and cover the period from January 1, 2022, through June 30, 2022, unless otherwise noted in footnotes to this table.

Please also refer to our cautionary language regarding forward-looking statements included herein, as well as the Risk Factors identified in Part I, Item 1A, of our Transition Report for information regarding factors that could affect actual results.

(2) Actual production figures shown are from the operators and cover the period from January 1, 2022, through September 30, 2022, unless otherwise noted in footnotes to this table.

Such amounts may differ from our reported revenue and production and are not reduced to show the production attributable to our interests.

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(4) The estimated production figures shown for Mount Milligan are payable gold and copper in concentrate.

Actual figures reflect production through March 31, 2022.

Actual figures reflect production through June 30, 2022.

(5) The estimated and actual production figures shown for Pueblo Viejo are payable gold in doré and represent the 60% interest in Pueblo Viejo held by Barrick Gold Corporation (“Barrick”).

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(6) The estimated production figure shown for Wassa is payable gold in doré poured in the period.

(7) The estimated production figures for Khoemac a u are not available through the ramp-up period, which the operator expects to be completed by the fourth quarter of 2022.

(8) The estimated and actual production figures for Cortez represent the areas subject to our royalty interests.

(7) The estimated production figures for Khoemac a u are not available through the ramp-up period.

(8) The estimated and actual production figures for Cortez represent the areas subject to our royalty interests excluding the production from the Cortez Complex Royalty.

(9) The estimated and actual gold and silver production figures shown for Peñasquito are payable gold and silver in concentrate and doré.

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Stream Interests

Gold stream deliveries from Andacollo were approximately 9,900 ounces for the three months ended June 30, 2022, compared to approximately 11,300 ounces for the three months ended June 30, 2021.

The decrease in deliveries resulted primarily from Andacollo experiencing lower gold grades and lower gold recoveries, in line with the expected downward trend of gold grades, as well as differences in the timing of shipments and settlements during the periods.

The current life of mine for Andacollo is expected to continue until 2035.

According to Teck, additional permits or permit amendments will be required to execute the life of mine plan.

Gold stream deliveries from Andacollo were approximately 3,200 ounces for the three months ended September 30, 2022, compared to approximately 6,400 ounces for the three months ended September 30, 2021.

The decrease in deliveries resulted primarily from Andacollo experiencing lower gold grades and lower gold recoveries, as well as differences in the timing of shipments and settlements during the periods.

As reported by Teck Resources Limited (“Teck”), a significant rainfall event in July caused operations to shut down for five days.

We expect the impact of this shutdown will affect stream deliveries in the first quarter of 2023.

Gold production at Andacollo has trended lower since the beginning of 2021 due to lower ore grades, as anticipated in the mine plan.

According to Teck, the period of lower grades is expected to last through 2023, and the mine plan then anticipates a transition to higher grade ore as the next phase of mining is developed over the following years.

Teck has reported that the current life of mine for Andacollo is expected to continue until 2035 and that additional permits or permit amendments will be required to execute the life of mine plan.

Khoemac a u Project

Silver stream deliveries from Khoemac a u were approximately 246,800 ounces for the three months ended June 30, 2022.

First concentrate was shipped from Khoemac a u in mid-July 2021 and we received our first silver stream deliveries during the quarter ended September 30, 2021.

According to Khoemac a u Copper Mining (Pty.) Limited (“KCM”), ramp-up of operations continued and average monthly underground production increased consistently during the quarter ended June 30, 2022, from approximately 6,300 tons per day (5,700 tonnes per day) in March to approximately 8,000 tons per day (7,300 tonnes per day) in June.

KCM reported an accident in the underground mine and two fatalities on May 11, 2022, which resulted in short-term production disruptions immediately after the accident.

Investigations into the cause of the accident remain ongoing.

KCM expects that the mining rate will continue to increase steadily from current levels and reach full sustained production by the fourth quarter of 2022, absent further COVID-19 impacts.

With the results experienced so far during the ramp-up period, KCM continues to expect that at full production Khoemac a u will produce 171,000 to 182,000 tons (155,000 to 165,000 tonnes) of high-grade copper and silver concentrate a year, containing approximately 66,000 to 72,000 tons (60,000 to 65,000 tonnes) of payable copper and 1.8 to 2.0 million ounces of payable silver, over an approximate 20-year mine life from Zone 5.

Silver stream deliveries from Khoemac a u were approximately 290,700 ounces for the three months ended September 30, 2022.

First concentrate was shipped from Khoemac a u in mid-July 2021 and silver stream deliveries to us were approximately 105,800 ounces for the three months ended September 30, 2021.

According to Khoemac a u Copper Mining (Pty.) Limited (“KCM”), the operator of Khoemac a u, ramp-up of operations continued and average monthly underground production increased consistently during the quarter ended September 30, 2022, from approximately 7,300 tonnes per day (8,000 tons per day) in June to approximately 8,000 tonnes per day (8,800 tons per day) in September 2022.

Production has reached the target mining rate of 10,000 tonnes per day (11,000 tons per day) for short periods during the ramp up period but has not yet been consistently sustained at this level.

KCM expects to reach the target mining rate on a sustained basis toward the end of December 2022 and into the first quarter of 2023.

KCM continues to expect that at full production Khoemac a u will produce 155,000 to 165,000 tonnes (171,000 to 182,000 tons) of high-grade copper and silver concentrate a year, containing approximately 60,000 to 65,000 tonnes (66,000 to 72,000 tons) of payable copper and 1.8 to 2.0 million ounces of payable silver per year, over an approximate 20-year mine life from Zone 5.

Mount Milligan

Gold stream deliveries from Mount Milligan were approximately 23,800 ounces for the three months ended June 30, 2022, compared to approximately 20,800 ounces for the three months ended June 30, 2021.

Gold stream deliveries from Mount Milligan were approximately 18,400 ounces for the three months ended September 30, 2022, compared to approximately 10,800 ounces for the three months ended September 30, 2021.

Increased gold deliveries resulted from differences in the timing of shipments and settlements during the periods and gold grade variability in the concentrate shipments.

Copper stream deliveries from Mount Milligan were approximately 4.0 million pounds during the three months ended June 30, 2022, compared to approximately 5.1 million pounds during the three months ended June 30, 2021.

Decreased copper deliveries resulted from differences in the timing of shipments and settlements during the periods.

Gold stream deliveries from Pueblo Viejo were approximately 8,600 ounces for the three months ended June 30, 2022, compared to approximately 9,800 ounces for the three months ended June 30, 2021.

Decreased deliveries resulted from processing lower grade stockpile ore.

Silver stream deliveries were approximately 307,100 ounces for the three months ended June 30, 2022, compared to approximately 386,500 ounces for the three months ended June 30, 2021.

During the second quarter an additional 45,000 ounces of silver deliveries were deferred.

Copper stream deliveries from Mount Milligan were approximately 4.5 million pounds during the three months ended September 30, 2022, compared to approximately 2.6 million pounds during the three months ended September 30, 2021.

Increased deliveries resulted from differences in the timing of shipments and settlements during the periods.

Stream deliveries during the quarter from Mount Milligan provided for complete repayment of the $781.5 million advance deposit made by Royal Gold to Thompson Creek Metals Company, Inc.

(“Thompson Creek”), a subsidiary of Centerra Gold Inc.

(“Centerra”).

Royal Gold contributed three advance payments prior to and during the development of the mine in 2010 through 2012, in return for the right to acquire 52.25% of the payable gold produced from Mount Milligan.

Gold and Centerra subsequently amended the stream interest in 2016 to a 35% gold stream and 18.75% copper stream.

Mount Milligan began commercial production in early 2014 and was Royal Gold’s first stream acquisition.

Subsequent to the end of the quarter on October 4, 2022, Centerra published the highlights of an updated life of mine plan for Mount Milligan.

According to Centerra, the mine life is expected to be extended by over four years to 2033.

Centerra expects total payable gold and copper to increase more than 800,000 ounces and 191 million pounds, respectively, from 2022 onwards when compared to the previous plan, with average annual production of 175,000 ounces of gold and 68 million pounds of copper.

Centerra also indicated the potential for future resource growth due to exploration success in areas proximal to the open pit.

Centerra expects to file a new technical report detailing the life of mine plan and updated reserve and resource information within 45 days of October 4, 2022.

As a result of the increase in proven and probable reserves as announced by Centerra, 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.

Royal Gold will update its annual SK1300 disclosure for the Mount Milligan technical report update within its 2022 Annual Report on Form 10-K, which we expect to file in February 2023.

Centerra remains on track to meet 2022 production guidance of between 190,000 to 210,000 ounces of payable gold and between 70 to 80 million pounds of payable copper.

Gold stream deliveries from Pueblo Viejo were approximately 8,900 ounces for the three months ended September 30, 2022, compared to approximately 9,200 ounces for the three months ended September 30, 2021.

During the current quarter, Barrick reported continued progress on the plant expansion and mine life extension project at Pueblo Viejo to increase throughput and allow the mine to maintain minimum average annual gold production of approximately 800,000 ounces after 2022 and beyond 2040 (100% basis).

With respect to the plant expansion, on August 8, 2022, Barrick reported that as of June 30, 2022, overall construction was 56% complete and it expects the expansion to be substantially completed by the end of 2022 with commissioning in the first quarter of 2023.

Barrick reported that the final location and construction of the additional TSF would be subject to the completion of an Environmental and Social Impact Assessment (“ESIA”) in accordance with Dominican Republic legislation and international standards, which would then be submitted to the Government of the Dominican Republic for evaluation and final decision.

Further according to Barrick, basic engineering of the additional TSF is expected to be completed in the fourth quarter of 2022.

Silver stream deliveries were approximately 319,100 ounces for the three months ended September 30, 2022, compared to 396,500 ounces for the three months ended September 30, 2021.

During the third quarter an additional 47,000 ounces of silver deliveries were deferred.

The deferred ounces are the result of a mechanism in the stream agreement that allows for the deferral of deliveries in a period if Barrick’s share of silver production is insufficient to cover its stream delivery obligations.

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If actual recovery rates fall below the contractual 70% recovery rate, ounces may be deferred with deferred ounces to be delivered in future periods as silver recovery allows.

As of June 30, 2022, approximately 484,000 ounces remain deferred, and the timing for the delivery of the entire deferred amount is uncertain.

On May 4, 2022, Barrick reported continued progress on the plant expansion and mine life extension project to increase throughput and allow the mine to maintain minimum average annual gold production of approximately 800,000 ounces after calendar 2022 and beyond calendar 2040 (100% basis).

With respect to the plant expansion, Barrick reported that as of March 31, 2022, construction was 39% complete, with completion expected by the end of calendar 2022.

With respect to the mine life extension, Barrick also disclosed that social, environmental and technical studies for additional tailings capacity continued to advance, and that the final location and construction of the tailings storage facility would be subject to the completion of an Environmental and Social Impact Assessment (“ESIA”) in accordance with Dominican Republic legislation and international standards.

Once completed, the ESIA would be submitted to the Government of the Dominican Republic for evaluation and final decision.

As of September 30, 2022, approximately 530,000 ounces remain deferred.

We expect that silver recoveries could remain highly variable until the plant expansion project is complete and bottlenecks associated with the silver circuit and silver recovery can be fully addressed, and we do not expect material deliveries of deferred silver this year.

Gold stream deliveries from Wassa were approximately 4,800 ounces for the three months ended September 30, 2022, compared to approximately 4,300 ounces for the three months ended September 30, 2021.

Royalty Interests

Gold production attributable to our existing royalty interest at Cortez was approximately 52,000 ounces for the three months ended June 30, 2022, compared to approximately 89,800 ounces for the three months ended June 30, 2021.

On July 14, 2022, Barrick reported lower production at Cortez for the quarter ended June 30, 2022 due to mine sequencing as it transitions from the end of open pit mining at Pipeline to a new phase at Crossroads, which is expected to underpin stronger performance for Cortez in the December quarter of 2022.

Production attributable to our royalty interest at Peñasquito was approximately 130,600 ounces of gold, 8.07 million ounces of silver, 35.0 million pounds of lead and 84.9 million pounds of zinc for the three months ended June 30, 2022.

This compares to approximately 179,800 ounces of gold, 7.61 million ounces of silver, 41.8 million pounds of lead and 101.7 million pounds of zinc for the three months ended June 30, 2021.

Gold production was lower compared to the prior year quarter due to lower ore grade milled and lower mill recovery.

Production attributable to our royalty interest at Cortez was approximately 36,600 ounces of gold for the three months ended September 30, 2022, compared to approximately 98,300 ounces of gold for the three months ended September 30, 2021.

This production is attributable to the Company’s legacy royalty interests, including overlapping royalties at the Pipeline and Crossroads deposits (known as GSR1, GSR2, GSR 3, NVR1 and NVR1C).

Refer to the Business Trends and Uncertainties section of this MD&A for information on the recent Cortez Complex Royalty acquisition.

On August 8, 2022, Barrick reported that mining of Phase 5 of Crossroads is expected to deliver oxide ore and underpin stronger performance for Cortez in the December quarter of 2022.

As a result of the acquisition of the Cortez Complex Royalty, there has been an increase of over 300% in gold mineral reserves and an increase of over 1200% in measured and indicated gold mineral resources attributable to our royalty interests at Cortez beyond the resources and reserves previously disclosed in detail in our Transition Report.

Refer to the “Property Mineral Reserve and Mineral Resource Update for Cortez” section below.

During the three months ended September 30, 2022, gold production at Peñasquito was approximately 144,300 ounces;

silver production was approximately 6.80 million ounces;

lead production was approximately 29.6 million pounds;

and zinc production was approximately 84.6 million pounds.

Gold production was approximately 170,400 ounces;

silver production was approximately 7.79 million ounces;

lead production was approximately 41.9 million pounds;

and zinc production was approximately 98.3 million pounds during the three months ended September 30, 2021.

Results of Operations

Quarter Ended June 30, 2022, Compared to Quarter Ended June 30, 2021

For the quarter ended June 30, 2022, we recorded net income and comprehensive income attributable to Royal Gold stockholders (“net income”) of $71.1 million, or $1.08 per basic and diluted share, as compared to net income of $81.7 million, or $1.24 per basic and diluted share, for the quarter ended June 30, 2021 .

Quarter Ended September 30, 2022, Compared to Quarter Ended September 30, 2021

For the quarter ended September 30, 2022, we recorded net income and comprehensive income attributable to Royal Gold stockholders (“net income”) of $45.8 million, or $0.70 per basic and diluted share, as compared to net income of $70.2 million, or $1.07 per basic and diluted share, for the quarter ended September 30, 2021 .

The decrease in net income was primarily attributable to a decrease in revenue, as discussed below.

For the quarter ended June 30, 2022, we recognized total revenue of $146.4 million, comprised of stream revenue of $104.9 million and royalty revenue of $41.6 million at an average gold price of $1,871 per ounce, an average silver price of $22.60 per ounce and an average copper price of $4.31 per pound.

This is compared to total revenue of $168.0 million for the

three months ended June 30, 2021, comprised of stream revenue of $114.4 million and royalty revenue of $53.6 million, at an average gold price of $1,816 per ounce, an average silver price of $26.69 per ounce and an average copper price of $4.40 per pound.

Revenue and the corresponding production attributable to our stream and royalty interests for the quarter ended June 30, 2022, compared to the quarter ended June 30, 2021, are as follows:

For the quarter ended September 30, 2022, we recognized total revenue of $131.4 million, comprised of stream revenue of $98.7 million and royalty revenue of $32.7 million at an average gold price of $1,729 per ounce, an average silver price of $19.23 per ounce and an average copper price of $3.51 per pound.

This is compared to total revenue of $174.4 million for the three months ended September 30, 2021, comprised of stream revenue of $115.9 million and royalty revenue of $58.5 million, at an average gold price of $1,790 per ounce, an average silver price of $24.36 per ounce and an average copper price of $4.25 per pound.

Revenue and the corresponding production attributable to our stream and royalty interests for the quarter ended September 30, 2022, compared to the quarter ended September 30, 2021, are as follows:

Revenue and Reported Production Subject to Our Stream and Royalty Interests

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Three Months Ended

June 30, 2022

June 30, 2021

September 30, 2022

September 30, 2021

Stream/Royalty

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Total Revenue

(1) Reported production relates to the amount of metal sales subject to our stream and royalty interests for the three months ended June 30, 2022, and 2021, and may differ from the operators’ public reporting.

(1) Reported production relates to the amount of stream metal sales and the metal sales attributable to our royalty interests for the three months ended September 30, 2022, and 2021, and may differ from the operators’ public reporting.

(2) Refer to “Property Developments” above for a discussion of recent developments at principal properties.

(3) Individually, except for our stream interest at Rainy River, which contributed 6% of total revenue for the three months ended June 30, 2022 and 2021, no stream or royalty included within the “Other” category contributed greater than 5% of our total revenue for either period.

The decrease in our total revenue resulted primarily from lower gold sales at Andacollo and Pueblo Viejo and lower gold production at Cortez and Peñasquito.

The decrease was offset by $9.4 million of new revenue from the NX Gold and Khoemac a u streams which were not in production during the prior year quarter.

Gold and silver ounces and copper pounds purchased and sold during the three months ended June 30, 2022 and 2021, and gold and silver ounces and copper pounds in inventory as of June 30, 2022, and December 31, 2021, for our streaming interests were as follows:

(3) Individually, except for our stream interest at Rainy River, which contributed 6% of total revenue for the three months ended September 30, 2021, no stream or royalty included within the “Other” category contributed greater than 5% of our total revenue for either period.

The decrease in our total revenue resulted primarily from lower gold sales at Mount Milligan and Pueblo Viejo, lower gold production at Cortez and Peñasquito, and lower average gold, silver and copper prices.

The decrease was offset by higher silver sales at Khoemacau, which shipped its first concentrate during the prior year quarter.

Gold and silver ounces and copper pounds purchased and sold during the three months ended September 30, 2022 and 2021, and gold and silver ounces and copper pounds in inventory as of September 30, 2022, and December 31, 2021, for our streaming interests were as follows:

Three Months Ended

June 30, 2022

June 30, 2021

June 30, 2022

September 30, 2022

September 30, 2021

September 30, 2022

December 31, 2021

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Three Months Ended

June 30, 2022

June 30, 2021

June 30, 2022

September 30, 2022

September 30, 2021

September 30, 2022

December 31, 2021

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Three Months Ended

June 30, 2022

June 30, 2021

June 30, 2022

September 30, 2022

September 30, 2021

September 30, 2022

December 31, 2021

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Mount Milligan

Cost of sales, which excludes depreciation, depletion and amortization, decreased to $23.8 million for the three months ended June 30, 2022, from $24.7 million for the three months ended June 30, 2021.

The decrease, when compared to the prior period, was primarily due to a decrease in gold sales at Andacollo and Pueblo Viejo, offset by gold sales at NX Gold and silver sales at Khoemac a u.

Stream deliveries from the NX Gold and Khoemac a u streams were not due to us during the prior year comparable quarter.

Cost of sales, which excludes depreciation, depletion and amortization, decreased to $23.2 million for the three months ended September 30, 2022, from $27.2 million for the three months ended September 30, 2021.

The decrease, when compared to the prior period, was primarily due to a decrease in gold and silver sales at Pueblo Viejo and lower gold sales at Mount Milligan, offset by higher silver sales at Khoemac a u.

Stream deliveries from Khoemac a u began in the prior year quarter.

Cost of sales is specific to our stream agreements and is the result of our purchase of gold, silver and copper for a cash payment.

The cash payment for gold from Mount Milligan is the lesser of $435 per ounce or the prevailing market price of gold when purchased, while the cash payment for our other streams is a set contractual percentage of the gold, silver or copper (Mount Milligan) spot price near the date of metal delivery.

General and administrative costs increased to $9.3 million for the three months ended June 30, 2022, from $7.2 million for the three months ended June 30, 2021.

The increase was primarily due to an increase in employee-related costs including non-cash compensation expense, as well as higher costs associated with environmental, social and governance (“ESG”) initiatives.

Depreciation, depletion and amortization decreased to $44.0 million for the three months ended June 30, 2022, from $48.0 million for the three months ended June 30, 2021.

The decrease was primarily due to lower gold sales at Andacollo and Pueblo Viejo compared to the prior period.

The decrease was partially offset by additional depletion from the newly producing Khoemac a u and the newly acquired NX Gold streams when compared to the prior year comparable quarter.

For the three months ended June 30, 2022, we recorded an income tax benefit of $5.9 million, compared with income tax expense of $5.5 million for the three months ended June 30, 2021.

The income tax benefit resulted in an effective tax rate of (9.0%) in the current period, compared with 6.3% for the three months ended June 30, 2021.

The three months ended June 30, 2022, included a discrete tax benefit attributable to a release of a valuation allowance while the three months ended June 30, 2021, included a discrete tax benefit attributable to the settlement of an uncertain tax position in a foreign jurisdiction.

Six Months Ended June 30, 2022, Compared to Six Months Ended June 30, 2021

For the six months ended June 30, 2022, we recorded net income and comprehensive income attributable to Royal Gold stockholders (“net income”) of $136.8 million, or $2.08 per basic and diluted share, as compared to net income of $135.7 million, or $2.07 per basic and diluted share, for the six months ended June 30, 2021 .

For the six months ended June 30, 2022, we recognized total revenue of $308.8 million, comprised of stream revenue of $210.1 million and royalty revenue of $98.7 million at an average gold price of $1,874 per ounce, an average silver price of $23.32 per ounce and an average copper price of $4.43 per pound.

This is compared to total revenue of $310.6 million for the six months ended June 30, 2021, comprised of stream revenue of $209.8 million and royalty revenue of $100.8 million, at an average gold price of $1,805 per ounce, an average silver price of $26.47 per ounce and an average copper price of $4.12 per pound.

Revenue and the corresponding production attributable to our stream and royalty interests for the six months ended June 30, 2022, compared to the six months ended June 30, 2021, are as follows:

General and administrative costs increased to $7.6 million for the three months ended September 30, 2022, from $7.1 million for the three months ended September 30, 2021.

The increase was primarily due to an increase in employee-related costs including non-cash compensation expense.

Depreciation, depletion and amortization decreased to $37.8 million for the three months ended September 30, 2022, from $50.6 million for the three months ended September 30, 2021.

The decrease was primarily due to lower gold production at Cortez and lower gold sales and at Mount Milligan.

Lower depletion rates at Mount Milligan compared to the prior quarter also contributed to the decrease.

Refer to Note 3 of our notes to consolidated financial statements for further discussion on the decrease in depletion rates at Mount Milligan.

The decrease was partially offset by additional depletion from Khoemac a u which produced first deliveries in the prior year comparable quarter.

Interest and other expense increased to $8.8 million for the three months ended September 30, 2022, from $1.9 million for the three months ended September 30, 2021.

The increase was primarily due to higher interest expense as a result of the $500 million draw on the revolving credit facility and foreign exchange losses related to the GBR acquisition.

For the three months ended September 30, 2022, we recorded an income tax expense of $11.0 million, compared with income tax expense of $16.0 million for the three months ended September 30, 2021.

The income tax expense resulted in an effective tax rate of 19.3% in the current period, compared with 18.5% for the three months ended September 30, 2021.

Nine Months Ended September 30, 2022, Compared to Nine Months Ended September 30, 2021

For the nine months ended September 30, 2022, we recorded net income and comprehensive income attributable to Royal Gold stockholders (“net income”) of $182.6 million, or $2.78 per basic and diluted share, as compared to net income of $205.9 million, or $3.14 per basic and diluted share, for the nine months ended September 30, 2021 .

For the nine months ended September 30, 2022, we recognized total revenue of $440.2 million, comprised of stream revenue of $308.9 million and royalty revenue of $131.4 million at an average gold price of $1,824 per ounce, an average silver price of $21.92 per ounce and an average copper price of $4.11 per pound.

This is compared to total revenue of $485.0 million for the nine months ended September 30, 2021, comprised of stream revenue of $325.7 million and royalty revenue of $159.4 million, at an average gold price of $1,800 per ounce, an average silver price of $25.75 per ounce and an average copper price of $4.17 per pound.

Revenue and the corresponding production attributable to our stream and royalty interests for the nine months ended September 30, 2022, compared to the nine months ended September 30, 2021, are as follows:

Revenue and Reported Production Subject to Our Stream and Royalty Interests

(Amounts in thousands, except reported production oz.

Six Months Ended

June 30, 2022

June 30, 2021

Nine Months Ended

September 30, 2022

September 30, 2021

Stream/Royalty

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Total revenue

Reported production relates to the amount of metal sales subject to our stream and royalty interests for the six months ended June 30, 2022, and 2021, and may differ from the operators’ public reporting.

Reported production relates to the amount of stream metal sales and the metal sales attributable to our royalty interests for the nine months ended September 30, 2022, and 2021, and may differ from the operators’ public reporting.

Refer to “Property Developments” above for a discussion of recent developments at principal properties.

Individually, except for our stream interest at Rainy River, which contributed 6% of total revenue for the six months ended June 30, 2022 and 2021, no stream or royalty included within the “Other” category contributed greater than 5% of our total revenue for either period.

The decrease in our total revenue resulted primarily from lower gold sales at Andacollo and Pueblo Viejo and lower gold production at Peñasquito.

The decrease was offset by $15.8 million of new revenue from the NX Gold and Khoemac a u streams which were not in production during the prior year comparable period.

Gold and silver ounces and copper pounds purchased and sold during the six months ended June 30, 2022 and 2021, and gold and silver ounces and copper pounds in inventory as of June 30, 2022, and December 31, 2021, for our streaming interests were as follows:

Individually, except for our stream interest at Rainy River, which contributed 6% of total revenue for the nine months ended September 30, 2022 and 2021, no stream or royalty included within the “Other” category contributed greater than 5% of our total revenue for either period.

The decrease in our total revenue resulted primarily from lower gold sales at Andacollo and Pueblo Viejo and lower gold production at Cortez and Peñasquito.

The decrease was offset by $26.1 million of new revenue from the NX Gold and Khoemac a u streams which were not in full production during the prior year comparable period.

Cost of sales, which excludes depreciation, depletion and amortization, decreased to $69.7 million for the nine months ended September 30, 2022, from $73.4 million for the nine months ended September 30, 2021.

The decrease, when compared to the prior period, was primarily due to a decrease in gold and silver sales at Pueblo Viejo and lower gold sales at Andacollo, offset by higher silver sales at Khoemac a u.

Stream deliveries from Khoemac a u began in the prior year comparable period.

Cost of sales is specific to our stream agreements and is the result of our purchase of gold, silver and copper for a cash payment.

The cash payment for gold from Mount Milligan is the lesser of $435 per ounce or the prevailing

market price of gold when purchased, while the cash payment for our other streams is a set contractual percentage of the gold, silver or copper (Mount Milligan) spot price near the date of metal delivery.

Gold and silver ounces and copper pounds purchased and sold during the nine months ended September 30, 2022 and 2021, and gold and silver ounces and copper pounds in inventory as of September 30, 2022, and December 31, 2021, for our streaming interests were as follows:

Revenue and Reported Production Subject to Our Stream and Royalty Interests

(Amounts in thousands, except reported production oz.

Six Months Ended

June 30, 2022

June 30, 2021

June 30, 2022

Nine Months Ended

September 30, 2022

September 30, 2021

September 30, 2022

December 31, 2021

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Mount Milligan

Six Months Ended

June 30, 2022

June 30, 2021

June 30, 2022

Nine Months Ended

September 30, 2022

September 30, 2021

September 30, 2022

December 31, 2021

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Inventory (oz.)

Six Months Ended

June 30, 2022

June 30, 2021

June 30, 2022

Nine Months Ended

September 30, 2022

September 30, 2021

September 30, 2022

December 31, 2021

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Mount Milligan

General and administrative costs increased to $19.9 million for the six months ended June 30, 2022, from $14.1 million for the six months ended June 30, 2021.

The increase was primarily due to an increase in employee-related costs including non-cash compensation expense, as well as higher costs associated with ESG initiatives.

Depreciation, depletion and amortization increased to $92.0 million for the six months ended June 30, 2022, from $89.3 million for the six months ended June 30, 2021.

The increase was primarily due to higher gold sales at Mount Milligan, higher gold production at Cortez and additional depletion from the newly acquired Khoemac a u and NX Gold streams when compared to the prior year period.

The increase was partially offset by lower gold and silver sales at Pueblo Viejo and lower gold sales at Andacollo.

For the six months ended June 30, 2022, we recorded income tax expense totaling $9.4 million, compared with income tax expense of $23.2 million for the six months ended June 30, 2021.

The income tax expense resulted in an effective tax rate of 6.4% in the current period, compared with 14.6% for the six months ended June 30, 2021.

The six months ended June 30, 2022, included a discrete income tax benefit attributable to the release of a valuation allowance on certain deferred tax assets.

The six months ended June 30, 2021, included a discrete tax benefit attributable to the settlement of an uncertain tax position with a foreign jurisdiction.

General and administrative costs increased to $25.8 million for the nine months ended September 30, 2022, from $21.3 million for the nine months ended September 30, 2021.

The increase was primarily due to an increase in employee-related costs including non-cash compensation expense, as well as higher costs associated with certain environmental, social and governance initiatives.

Depreciation, depletion and amortization decreased to $129.7 million for the nine months ended September 30, 2022, from $139.9 million for the nine months ended September 30, 2021.

The decrease was primarily due to lower gold sales at Mount Milligan and Andacollo and lower gold and silver sales at Pueblo Viejo.

Refer to Note 3 of our notes to consolidated financial statements for further discussion on the decrease in depletion rates at Mount Milligan.

The decrease in depletion was partially offset by the additional depletion from the newly acquired Khoemac a u and NX Gold streams when compared to the prior year period.

Interest and other expense increased to $11.1 million for the nine months ended September 30, 2022, from $4.9 million for the nine months ended September 30, 2021.

The increase was primarily due to higher interest expense as a result of the $500 million draw on the revolving credit facility in July 2022 as part of the Cortez Complex Royalty acquisition discussed earlier in this MD&A and foreign exchange losses related to the GBR acquisition.

For the nine months ended September 30, 2022, we recorded income tax expense totaling $20.3 million, compared with income tax expense of $39.2 million for the nine months ended September 30, 2021.

The income tax expense resulted in an effective tax rate of 10.0% in the current period, compared with 16.0% for the nine months ended September 30, 2021.

The nine months ended September 30, 2022, included a discrete income tax benefit attributable to the release of a valuation allowance on certain deferred tax assets.

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

Liquidity and Capital Resources

At June 30, 2022, we had current assets of $340.3 million compared to current liabilities of $64.0 million, which resulted in working capital of $276.3 million and a current ratio of 5 to 1.

At September 30, 2022, we had current assets of $181.8 million compared to current liabilities of $64.5 million, which resulted in working capital of $117.3 million and a current ratio of 3 to 1.

This compares to current assets of $216.0 million and current liabilities of $61.4 million at December 31, 2021, resulting in working capital of $154.6 million and a current ratio of approximately 4 to 1.

The increase in working capital was primarily due to an increase in our available cash.

During the six months ended June 30, 2022, liquidity needs were met from $221.3 million in net cash provided by operating activities and our available cash resources.

As of June 30, 2022, we had $1 billion available under our revolving credit facility.

Working capital, combined with available capacity under our revolving credit facility, resulted in approximately $1.3 billion of total liquidity at June 30, 2022.

We were in compliance with each financial covenant under the revolving credit facility as of June 30, 2022.

Refer to Note 13 of our notes to consolidated financial statements and below (“Recent Liquidity Developments”) for further discussion on our debt.

The decrease in working capital was primarily due to a decrease in our available cash as a result of the Cortez Complex Royalty and GBR acquisitions.

During the nine months ended September 30, 2022, liquidity needs were met from $316.3 million in net cash provided by operating activities and our available cash resources.

As of September 30, 2022, we had $550 million available and $450 million outstanding under our revolving credit facility.

Working capital, combined with available capacity under our revolving credit facility, resulted in approximately $667 million of total liquidity at September 30, 2022.

We were in compliance with each financial covenant under the revolving credit facility as of September 30, 2022.

Refer to Note 5 of our notes to consolidated financial statements and below under Recent Liquidity Developments for further discussion on our debt.

We believe that our current financial resources and funds generated from operations will be adequate to cover anticipated expenditures for debt service, general and administrative expense costs and capital expenditures for the foreseeable future.

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Revolving Credit Facility Draw

In July 2022, we borrowed $500 million under our revolving credit facility for business development activities and have $500 million available.

Business Development Activities

Refer to Note 13 of our notes to consolidated financial statements for further discussion on the liquidity needs for the proposed Great Bear Acquisition and the Cortez Royalty acquisition.

In July 2022, we borrowed $500 million under our revolving credit facility to fund the acquisition of the Cortez Complex Royalty, and on September 6, 2022, we made a $50 million principal payment towards the outstanding balance leaving $550 million available as of September 30, 2022.

Operating Activities

Net cash provided by operating activities totaled $221.3 million for the six months ended June 30, 2022, compared to $213.1 million for the six months ended June 30, 2021.

The increase was primarily due to an increase in cash proceeds received from our stream and royalty interests, net of cost of sales and production taxes, of approximately $20.2 million compared to the prior year period.

This increase was partially offset by an increase in income taxes paid of $6.1 million compared to the prior year period.

Net cash provided by operating activities totaled $316.3 million for the nine months ended September 30, 2022, compared to $343.0 million for the nine months ended September 30, 2021.

The decrease was primarily due to a decrease in cash proceeds received from our stream interests, net of cost of sales, of approximately $16.9 million compared to the prior year period.

Higher income taxes paid due to the change in year-end of $9.8 million compared to the prior year period also contributed to the decrease.

Investing Activities

Net cash used in investing activities totaled $37.9 million for the six months ended June 30, 2022, compared to $128.8 million for the six months ended June 30, 2021.

The decrease was primarily due to lower acquisitions of stream and royalty interests compared to the prior year period.

Net cash used in investing activities totaled $716.5 million for the nine months ended September 30, 2022, compared to $401.6 million for the nine months ended September 30, 2021.

The increase over the prior year period was primarily due to higher acquisitions of royalty interests due to the GBR and Cortez Complex Royalty acquisitions.

Financing Activities

Net cash used in financing activities totaled $46.4 million for the six months ended June 30, 2022, compared to net cash used in financing activities of $240.2 million for the six months ended June 30, 2021.

The decrease was primarily due to a repayment of $200 million on our revolving credit facility during the prior year period.

Net cash provided by financing activities totaled $378.9 million for the nine months ended September 30, 2022, compared to net cash used in financing activities of $163.1 million for the nine months ended September 30, 2021.

The increase was primarily due to a $500 million draw on our revolving credit facility during the current year period.

Recently Adopted Accounting Standards and Critical Accounting Policies

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Refer to Management’s Discussion and Analysis of Financial Condition and Results of Operations in our Transition Report for discussion on our critical accounting policies.

Property Mineral Reserve and Mineral Resource Update for Cortez

Below is certain updated information regarding the estimates of mineral resources and mineral reserves (as such terms are defined in Subpart 1300 of Regulation S-K (“SK1300”)) previously reported by the operator of Cortez and included in our Transition Report on Form 10-KT (“Form 10-KT”) and our Current Report on Form 8-K dated April 12, 2022.

On August 1, 2022, we acquired an additional royalty at Cortez that we refer to as the Cortez Complex Royalty.

The updated disclosures herein reflect the change in Royal Gold’s royalty position on the Cortez property as a result of that acquisition.

We own various royalty positions at Cortez, including:

(1) overlapping royalties covering the Pipeline and Crossroads deposits (known as GSR1, GSR2, GSR 3, NVR1 and NVR1C);

(2) a 1% NVR on a portion of the Goldrush development property (NVR2);

and (3) the Cortez Complex Royalty.

The Cortez Complex Royalty covers an area including the Cortez mine operational area (including the Fourmile development project owned by Barrick).

Refer to footnote 3 in each of the tables below for further detail regarding our royalties at Cortez.

Deductions under the Cortez Complex Royalty are limited to third-party royalties that existed prior to the creation of the royalty in 2008, which include the royalties listed under (1) and (2) above.

The Cortez Complex Royalty is not subject to any stepdowns or caps.

Based on the information available to Royal Gold, the Cortez Complex Royalty does not cover the existing deposits in the Robertson property.

As a result of the acquisition of the Cortez Complex Royalty, there has been an increase of 380% in gold mineral reserves and an increase of 1230% in measured and indicated gold mineral resources attributable to our royalty interests at Cortez beyond the resources and reserves previously disclosed in detail in our Transition Report.

The disclosures below are derived from the Annual Information Form of Barrick, dated March 18, 2022, attached as Exhibit 99.1 to Barrick’s Annual Report on Form 40-F for the year ended December 31, 2021, which reports resources and reserves for Cortez pursuant to National Instrument 43-101 and CIM Standards, and nonpublic mineral resource and reserve updates provided by Barrick to us specific to the portions of the property to which our legacy royalty interests apply.

Measurement units presented in this section are US standard units.

There may be rounding differences due to unit conversions.

Table 1 Cortez – Summary of Gold Mineral Resources at December 31, 2021, Based on $1,500 Au (1)(2)(3)

Cut-Off Grade

Metallurgical Recovery

Measured Mineral Resources

Indicated Mineral Resources

Measured + Indicated Mineral Resources

Inferred Mineral Resources

Mineral resources are estimated by Barrick as at December 31, 2021, and are shown exclusive of mineral reserves

Cortez mineral resources as reported by Barrick under its March 18, 2022, filing and separately to us are determined pursuant to CIM Standards.

(ii) NVR2 over a portion of the Goldrush property, which is a 1% NVR covering 1 million tons of indicated resource averaging 0.129 opt and 2.3 million tons of inferred resources grading 0.136 opt.

and (iii) The Cortez Complex Royalty is an effective 1.2% gross royalty on the Cortez Complex at gold prices above $900 per ounce.

Our resources for Cortez may vary from other information published by Barrick because we exclude any amounts for areas not covered by our royalties.

Our royalties for Cortez cover all metals, but Barrick reports only gold resources for Cortez.

Specific cutoff grades and metallurgical recoveries used for resource estimates for Cortez have not been disclosed by Barrick.

Table 2 Cortez – Summary of Gold Mineral Reserves at December 31, 2021, Based on $1,200 Au and $16.50 Ag (1)(2)(3)

Cut-Off Grade

Metallurgical Recovery

Proven Mineral Reserves

Probable Mineral Reserves

Total Mineral Reserves

Mineral reserves are estimated by Barrick as at December 31, 2021.

Cortez mineral reserves are reported by Barrick pursuant to CIM Standards.

We control various royalty positions at Cortez, including (i) the overlapping royalties covering the Pipeline and Crossroads deposits (known as GSR1, GSR2, GSR 3, NVR1 and NVR1C), which are equivalent to an approximate 8% gross smelter return royalty and cover 62.4 million tons of probable reserves at an average grade of 0.048 opt, (ii) (ii) NVR2 over a portion of the Goldrush property, which is a 1% NVR covering 5.4 million tons of probable reserves averaging 0.208 opt and (iii) The Cortez Complex Royalty is an effective 1.2% gross royalty on the Cortez Complex at gold prices above $900 per ounce.

Our reserves for Cortez may vary from other information published by Barrick because we exclude any amounts for areas not covered by our royalties.

Our royalties for Cortez cover all metals, but Barrick reports only gold reserves for the property.

Reserves have been estimated based on an assumed gold price of $1,200 per ounce and an assumed silver price of $16.50 per ounce.

Specific cutoff grades and metallurgical recoveries used for mineral reserve estimates for Cortez have not been disclosed by Barrick.

Forward-Looking Statements

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Forward-looking statements include, among others, statement regarding the following:

funding of the purchase price for the Great Bear Acquisition;

timing of the receipt of approvals for and closing of the Great Bear Acquisition;

our due diligence review process;

volatility of metal prices and factors impacting same;

our expected financial performance and outlook, including sales volume, revenue, expenses, tax rates, earnings or cash flow;

operators’ expected operating and financial performance, including production, deliveries, mine plans, facilities, mineral resources and reserves, access to and adequacy of water sources, development, cash flows, capital expenditures, and permitting and environmental impact studies;

operators’ expected operating and financial performance, including production, deliveries, mine plans, mine lives, facilities, mineral resources and reserves, access to and adequacy of water sources, development, cash flows, capital expenditures, and permitting and environmental impact studies;

effects of the pandemic;

estimates of fair value and potential impairments;

timing for the delivery of deferred silver ounces from Pueblo Viejo;

stronger performance at Cortez for the fourth quarter of 2022;

deferral of silver ounces from Pueblo Viejo;

impact on stream deliveries due to rainfall and the resulting temporary shutdown of operations at Andacollo;

anticipated stronger performance at Cortez for the fourth quarter of 2022;

adequacy of our current financial resources and funds from operations to cover anticipated expenditures for the foreseeable future;

seeking additional debt or equity financing as necessary;

seeking additional debt or equity

financing as necessary;

borrowing and repaying amounts under our revolving credit facility;

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increased competition for stream and royalty interests;

adverse economic and market conditions;

effects of global and regional economic and market conditions, including as a result of government policies, war, natural disasters, and public health issues;

changes in laws or regulations governing us, operators or operating properties;

changes in management and key employees;

the ability to obtain, or delays in obtaining, stockholder and court approval of the Great Bear Acquisition;

the risk that an event, change or other circumstance could give rise to the termination of the arrangement agreement with GBR;

the risk that a condition to closing of the Great Bear Acquisition may not be satisfied;

the risk that any announcement relating to an acquisition could have adverse effects on the market price of Royal Gold’s common stock;

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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 2. Management’s Discussion and Analysis