ROYAL GOLD INC 10-Q

ITEM 1. FINANCIAL STATEMENTS ​ ROYAL GOLD, INC. Consolidated Balance Sheets (Unaudited, amounts in thousands except share data) ​ ​ ​ ​ ​ ​ ​ ​ ​ September 30, December 31, ​ 2022 2021 ASSETS ​ ​ ​ ​ ​ ​ Cash and equivalents ​ $ 122,238 ​ $ 143,551 Royalty receivables ​ ​ 28,476 ​ ​ 54,088 Income tax receivable ​ ​ 15,056 ​ ​ 4,915 Stream inventory ​ ​ 13,691 ​ ​ 11,607 Prepaid expenses and other ​ ​ 2,322 ​ ​ 1,835 Total current assets ​ ​ 181,783 ​ ​ 215,996 Stream and royalty interests, net (Note 3) ​ ​ 3,084,380 ​ ​ 2,443,752 Other assets ​ ​ 110,630 ​ ​ 97,284 Total assets ​ $ 3,376,793 ​ $ 2,757,032 LIABILITIES ​ ​ ​ ​ ​ ​ Accounts payable ​ $ 7,332 ​ $ 6,475 Dividends payable ​ ​ 22,985 ​ ​ 22,966 Income tax payable ​ ​ 21,716 ​ ​ 19,070 Other current liabilities ​ ​ 12,443 ​ ​ 12,917 Total current liabilities ​ ​ 64,476 ​ ​ 61,428 ​ ​ ​ ​ ​ ​ ​ Debt (Note 5) ​ ​ 446,327 ​ ​ — Deferred tax liabilities ​ ​ 140,197 ​ ​ 87,705 Other liabilities ​ ​ 5,854 ​ ​ 6,688 Total liabilities ​ ​ 656,854 ​ ​ 155,821 Commitments and contingencies (Note 12) ​ ​ ​ ​ ​ ​ EQUITY ​ ​ ​ ​ ​ ​ Preferred stock, $ .01 par value, 10,000,000 shares authorized; and 0 shares issued ​ ​ — ​ ​ — Common stock, $ .01 par value, 200,000,000 shares authorized; and 65,592,597 and 65,564,364 shares outstanding, respectively ​ ​ 656 ​ ​ 656 Additional paid-in capital ​ ​ 2,211,353 ​ ​ 2,206,159 Accumulated earnings ​ ​ 495,570 ​ ​ 381,929 Total Royal Gold stockholders’ equity ​ ​ 2,707,579 ​ ​ 2,588,744 Non-controlling interests ​ ​ 12,360 ​ ​ 12,467 Total equity ​ ​ 2,719,939 ​ ​ 2,601,211 Total liabilities and equity ​ $ 3,376,793 ​ $ 2,757,032 ​ The accompanying notes are an integral part of these consolidated financial statements. ​ 3 Table of Contents ROYAL GOLD, INC. Consolidated Statements of Operations and Comprehensive Income (Unaudited, amounts in thousands except share data) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended ​ Nine Months Ended ​ ​ September 30, ​ September 30, ​ September 30, ​ September 30, ​ 2022 2021 2022 2021 Revenue (Note 6) ​ $ 131,429 ​ $ 174,431 ​ ​ 440,226 ​ $ 485,047 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Costs and expenses ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cost of sales (excludes depreciation, depletion and amortization) ​ ​ 23,221 ​ ​ 27,230 ​ ​ 69,670 ​ ​ 73,367 General and administrative ​ ​ 7,554 ​ ​ 7,129 ​ ​ 25,797 ​ ​ 21,272 Production taxes ​ ​ 1,119 ​ ​ 2,054 ​ ​ 4,765 ​ ​ 6,042 Depreciation, depletion and amortization ​ ​ 37,761 ​ ​ 50,611 ​ ​ 129,739 ​ ​ 139,935 Total costs and expenses ​ ​ 69,655 ​ ​ 87,024 ​ ​ 229,971 ​ ​ 240,616 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Operating income ​ ​ 61,774 ​ ​ 87,407 ​ ​ 210,255 ​ ​ 244,431 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fair value changes in equity securities ​ ​ 356 ​ ​ 176 ​ ​ ( 1,221 ) ​ ​ 4,035 Interest and other income ​ ​ 3,571 ​ ​ 819 ​ ​ 5,665 ​ ​ 2,227 Interest and other expense ​ ​ ( 8,814 ) ​ ​ ( 1,908 ) ​ ​ ( 11,110 ) ​ ​ ( 4,873 ) Income before income taxes ​ ​ 56,887 ​ ​ 86,494 ​ ​ 203,589 ​ ​ 245,820 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Income tax expense ​ ​ ( 10,954 ) ​ ​ ( 16,028 ) ​ ​ ( 20,347 ) ​ ​ ( 39,242 ) Net income and comprehensive income ​ ​ 45,933 ​ ​ 70,466 ​ ​ 183,242 ​ ​ 206,578 Net income and comprehensive income attributable to non-controlling interests ​ ​ ( 141 ) ​ ​ ( 290 ) ​ ​ ( 633 ) ​ ​ ( 699 ) Net income and comprehensive income attributable to Royal Gold common stockholders ​ $ 45,792 ​ $ 70,176 ​ $ 182,609 ​ $ 205,879 Net income per share attributable to Royal Gold common stockholders: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Basic earnings per share ​ $ 0.70 ​ $ 1.07 ​ $ 2.78 ​ $ 3.14 Basic weighted average shares outstanding ​ ​ 65,579,834 ​ ​ 65,556,608 ​ ​ 65,571,737 ​ ​ 65,552,586 Diluted earnings per share ​ $ 0.70 ​ $ 1.07 ​ $ 2.78 ​ $ 3.13 Diluted weighted average shares outstanding ​ ​ 65,660,152 ​ ​ 65,627,845 ​ ​ 65,661,197 ​ ​ 65,628,827 Cash dividends declared per common share ​ $ 0.35 ​ $ 0.30 ​ $ 1.05 ​ $ 0.90 ​ The accompanying notes are an integral part of these consolidated financial statements. ​ ​ 4 Table of Contents ROYAL GOLD, INC. Consolidated Statements of Changes in Stockholders’ Equity Three months ended September 30, 2022, and 2021 (unaudited, amounts in thousands except share data) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Royal Gold Stockholders ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Additional ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Common Shares ​ Paid-In ​ Accumulated ​ Non-controlling ​ Total ​ ​ Shares ​ Amount ​ Capital ​ Earnings ​ Interests ​ Equity Balance at June 30, 2022 65,569,687 ​ $ 656 $ 2,210,809 ​ $ 472,764 ​ $ 12,429 ​ $ 2,696,658 Stock-based compensation and related share issuances 22,910 ​ — 544 ​ — ​ — ​ 544 Distributions to non-controlling interests ​ — ​ — — ​ — ​ ( 210 ) ​ ( 210 ) Net income and comprehensive income — ​ — — ​ ​ 45,792 ​ 141 ​ 45,933 Dividends declared — ​ — — ​ ( 22,986 ) ​ — ​ ( 22,986 ) Balance at September 30, 2022 65,592,597 ​ $ 656 $ 2,211,353 ​ $ 495,570 ​ $ 12,360 ​ $ 2,719,939 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Royal Gold Stockholders ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Additional ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Common Shares ​ Paid-In ​ Accumulated ​ Non-controlling ​ Total ​ ​ Shares ​ Amount ​ Capital ​ Earnings ​ Interests ​ Equity Balance at June 30, 2021 65,551,061 ​ $ 656 $ 2,203,863 ​ $ 286,249 ​ $ 12,647 ​ $ 2,503,415 Stock-based compensation and related share issuances 12,741 ​ — 594 ​ — ​ — ​ 594 Distributions to non-controlling interests ​ — ​ — — ​ — ​ ( 271 ) ​ ( 271 ) Net income and comprehensive income — ​ — — ​ 70,176 ​ 290 ​ 70,466 Dividends declared — ​ — — ​ ( 19,691 ) ​ — ​ ( 19,691 ) Balance at September 30, 2021 65,563,802 ​ $ 656 $ 2,204,457 ​ $ 336,734 ​ $ 12,666 ​ $ 2,554,513 ​ ROYAL GOLD, INC. Consolidated Statements of Changes in Stockholders’ Equity Nine Months ended September 30, 2022, and 2021 (unaudited, amounts in thousands except share data) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Royal Gold Stockholders ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Additional ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Common Shares ​ Paid-In ​ Accumulated ​ Non-controlling ​ Total ​ ​ Shares ​ Amount ​ Capital ​ Earnings ​ Interests ​ Equity Balance at December 31, 2021 65,564,364 ​ $ 656 $ 2,206,159 ​ $ 381,929 ​ $ 12,467 ​ $ 2,601,211 Stock-based compensation and related share issuances 28,233 ​ — 5,194 ​ — ​ — ​ 5,194 Distributions to non-controlling interests ​ — ​ — — ​ — ​ ( 740 ) ​ ( 740 ) Net income and comprehensive income — ​ — — ​ 182,609 ​ 633 ​ 183,242 Dividends declared — ​ — — ​ ( 68,968 ) ​ — ​ ( 68,968 ) Balance at September 30, 2022 65,592,597 ​ $ 656 $ 2,211,353 ​ $ 495,570 ​ $ 12,360 ​ $ 2,719,939 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Royal Gold Stockholders ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Additional ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Common Shares ​ Paid-In ​ Accumulated ​ Non-controlling ​ Total ​ ​ Shares ​ Amount ​ Capital ​ Earnings ​ Interests ​ Equity Balance at December 31, 2020 65,548,415 ​ $ 656 $ 2,201,076 ​ $ 189,910 ​ $ 13,037 ​ $ 2,404,679 Stock-based compensation and related share issuances 15,387 ​ — 3,381 ​ — ​ — ​ 3,381 Distributions to non-controlling interests ​ — ​ — — ​ — ​ ( 1,070 ) ​ ( 1,070 ) Net income and comprehensive income — ​ — — ​ 205,879 ​ 699 ​ 206,578 Dividends declared — ​ — — ​ ( 59,055 ) ​ — ​ ( 59,055 ) Balance at September 30, 2021 65,563,802 ​ $ 656 $ 2,204,457 ​ $ 336,734 ​ $ 12,666 ​ $ 2,554,513 ​ The accompanying notes are an integral part of these consolidated financial statements. ​ ​ 5 Table of Contents ROYAL GOLD, INC. Consolidated Statements of Cash Flows (Unaudited, amounts in thousands) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Nine Months Ended ​ ​ September 30, ​ September 30, ​ 2022 2021 Cash flows from operating activities: ​ ​ ​ ​ ​ ​ Net income and comprehensive income ​ $ 183,242 ​ $ 206,578 Adjustments to reconcile net income and comprehensive income to net cash provided by operating activities: ​ ​ ​ ​ ​ ​ Depreciation, depletion and amortization ​ ​ 129,739 ​ ​ 139,935 Non-cash employee stock compensation expense ​ ​ 6,632 ​ ​ 4,340 Fair value changes in equity securities ​ ​ 1,221 ​ ​ ( 4,035 ) Deferred tax (benefit) expense ​ ​ ( 17,757 ) ​ ​ 8,465 Other ​ ​ 734 ​ ​ 1,418 Changes in assets and liabilities: ​ ​ ​ ​ ​ ​ Royalty receivables ​ ​ 25,612 ​ ​ ( 8,643 ) Stream inventory ​ ​ ( 2,083 ) ​ ​ 1,678 Income tax receivable ​ ​ ( 10,141 ) ​ ​ 4,858 Prepaid expenses and other assets ​ ​ ( 3,073 ) ​ ​ ( 1,608 ) Accounts payable ​ ​ 857 ​ ​ 2,859 Income tax payable ​ ​ 2,646 ​ ​ 615 Uncertain tax positions ​ ​ — ​ ​ ( 12,378 ) Other liabilities ​ ​ ( 1,310 ) ​ ​ ( 1,111 ) Net cash provided by operating activities ​ $ 316,319 ​ $ 342,971 ​ ​ ​ ​ ​ ​ ​ Cash flows from investing activities: ​ ​ ​ ​ ​ ​ Acquisition of stream and royalty interests ​ ​ ( 715,829 ) ​ ​ ( 384,315 ) Khoemac a u subordinated debt facility ​ ​ — ​ ​ ( 25,000 ) Proceeds from sale of equity securities ​ ​ — ​ ​ 8,651 Other ​ ​ ( 676 ) ​ ​ ( 910 ) Net cash used in investing activities ​ $ ( 716,505 ) ​ $ ( 401,574 ) ​ ​ ​ ​ ​ ​ ​ Cash flows from financing activities: ​ ​ ​ ​ ​ ​ Repayment of debt ​ ​ ( 50,000 ) ​ ​ ( 200,000 ) Borrowings from revolving credit facility ​ ​ 500,000 ​ ​ 100,000 Net payments from issuance of common stock ​ ​ ( 1,438 ) ​ ​ ( 959 ) Common stock dividends ​ ​ ( 68,938 ) ​ ​ ( 59,046 ) Other ​ ​ ( 751 ) ​ ​ ( 3,043 ) Net cash provided by (used in) financing activities ​ $ 378,873 ​ $ ( 163,048 ) Net decrease in cash and equivalents ​ ​ ( 21,313 ) ​ ​ ( 221,651 ) Cash and equivalents at beginning of period ​ ​ 143,551 ​ ​ 381,859 Cash and equivalents at end of period ​ $ 122,238 ​ $ 160,208 ​ The accompanying notes are an integral part of these consolidated financial statements. ​ ​ 6 Table of Contents ROYAL GOLD, INC. Notes to Consolidated Financial Statements (Unaudited) 1. OPERATIONS, SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND RECENT ACCOUNTING STANDARDS ​ Royal Gold Inc., together with its subsidiaries (“Royal Gold,” the “Company,” “we,” “us,” or “our”), is engaged in the business of acquiring and managing precious metals streams, royalties and similar interests. We seek to acquire existing stream and royalty interests or to finance projects that are in production or in the development stage in exchange for stream or royalty interests. A metal stream is a purchase agreement that provides, in exchange for an upfront deposit payment, the right to purchase all or a portion of one or more metals produced from a mine at a price determined for the life of the transaction by the purchase agreement. Royalties are non-operating interests in a mining project that provide the right to revenue or metals produced from the project after deducting contractually specified costs, if any. ​ Summary of Significant Accounting Policies ​ The accompanying unaudited consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X under the Securities Exchange Act of 1934, as amended. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for annual financial statements. In the opinion of management, all adjustments which are of a normal recurring nature considered necessary for a fair presentation of our interim financial statements have been included in this Form 10-Q. Operating results for the three and 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”). ​ Recent Accounting Standards ​ We have evaluated all the recently issued, but not yet effective, accounting standards that have been issued or proposed by the Financial Accounting Standards Board or other standards-setting bodies through the filing date of these unaudited consolidated financial statements and do not believe the future adoption of any such standards will have a material impact on our consolidated financial statements. ​ 2. ACQUISITIONS ​ 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: ​ 7 Table of Contents ROYAL GOLD, INC. Notes to Consolidated Financial Statements (Unaudited) ​ ​ ​ ​ ​ ​ ​ (in thousands) Purchase Price ​ $ 151,679 Cash ​ ​ 315 Other assets ​ ​ 293 Royalty interests in mineral property (Great Bear royalty) ​ ​ 151,071 Total allocated purchase price ​ $ 151,679 ​ 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 ​ On March 24, 2022, we acquired a 0.5 % net smelter returns royalty (“NSR”) on production from the Lawyers Project, currently operated by Benchmark Metals Inc., which is located in British Columbia, Canada. As part of this transaction, we also acquired a right of first offer (“ROFO”) for an existing 2.0 % NSR royalty over the Ranch Project owned by Thesis Gold, Inc. that is located adjacent to the Lawyers Project. We paid $ 8.0 million in cash consideration for the royalty and ROFO to Guardsmen Resources Inc. The Lawyers Project acquisition has been accounted for as an asset acquisition. The $ 8.0 million cash consideration, plus direct acquisition costs, have been recorded as an exploration stage royalty interest (Note 3) within Stream and royalty interests, net on our consolidated balance sheets. ​ Khoemac a u Silver Stream ​ On February 23, 2022, we made an advance payment of $ 10.0 million toward the option stream which increased our right to receive payable silver produced from Khoemac a u from 90 % to 93 %, and on March 14, 2022, we made our final advance payment of $ 16.5 million toward the option stream which increased our right to receive payable silver produced from 93 % 8 Table of Contents ROYAL GOLD, INC. Notes to Consolidated Financial Statements (Unaudited) ​ 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 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. 3. STREAM AND ROYALTY INTERESTS, NET 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): Cost Accumulated Depletion Net Production stage stream interests: ​ ​ ​ ​ ​ ​ ​ ​ ​ Mount Milligan ​ $ 790,635 ​ $ ( 379,708 ) ​ $ 410,927 Pueblo Viejo ​ ​ 610,404 ​ ​ ( 281,730 ) ​ ​ 328,674 Andacollo ​ ​ 388,182 ​ ​ ( 149,586 ) ​ ​ 238,596 Khoemac a u ​ ​ 265,911 ​ ​ ( 11,621 ) ​ ​ 254,290 Rainy River ​ ​ 175,727 ​ ​ ( 58,328 ) ​ ​ 117,399 Wassa ​ ​ 146,475 ​ ​ ( 93,474 ) ​ ​ 53,001 Other ​ ​ 69,100 ​ ​ ( 11,200 ) ​ ​ 57,900 Total production stage stream interests ​ ​ 2,446,434 ​ ​ ( 985,647 ) ​ ​ 1,460,787 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Production stage royalty interests: ​ ​ ​ ​ ​ ​ ​ ​ ​ Cortez ​ ​ 280,219 ​ ​ ( 28,352 ) ​ ​ 251,867 Voisey's Bay ​ ​ 205,724 ​ ​ ( 117,228 ) ​ ​ 88,496 Red Chris ​ ​ 116,187 ​ ​ ( 1,797 ) ​ ​ 114,390 Peñasquito ​ ​ 99,172 ​ ​ ( 56,529 ) ​ ​ 42,643 Other ​ ​ 447,246 ​ ​ ( 395,641 ) ​ ​ 51,605 Total production stage royalty interests ​ ​ 1,148,548 ​ ​ ( 599,547 ) ​ ​ 549,001 Total production stage stream and royalty interests ​ ​ 3,594,982 ​ ​ ( 1,585,194 ) ​ ​ 2,009,788 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Development stage stream interests: ​ ​ ​ ​ ​ ​ ​ ​ ​ Other ​ ​ 12,038 ​ ​ — ​ ​ 12,038 Development stage royalty interests: ​ ​ ​ ​ ​ ​ ​ ​ ​ Côté ​ ​ 45,421 ​ ​ — ​ ​ 45,421 Other ​ ​ 73,233 ​ ​ ​ ​ ​ 73,233 Total development stage stream and royalty interests ​ ​ 130,692 ​ ​ — ​ ​ 130,692 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Exploration stage stream interests: ​ ​ ​ ​ ​ ​ ​ ​ ​ NX Gold ​ ​ 34,253 ​ ​ — ​ ​ 34,253 Exploration stage royalty interests: ​ ​ ​ ​ ​ ​ ​ ​ ​ Cortez ​ ​ 325,654 ​ ​ — ​ ​ 325,654 Great Bear ​ ​ 206,965 ​ ​ — ​ ​ 206,965 Pascua-Lama ​ ​ 177,690 ​ ​ — ​ ​ 177,690 Red Chris ​ ​ 48,895 ​ ​ — ​ ​ 48,895 Côté ​ ​ 29,610 ​ ​ — ​ ​ 29,610 Other ​ ​ 120,833 ​ ​ — ​ ​ 120,833 Total exploration stage stream and royalty interests ​ ​ 943,900 ​ ​ — ​ ​ 943,900 Total stream and royalty interests, net ​ $ 4,669,574 ​ $ ( 1,585,194 ) ​ $ 3,084,380 ​ 9 Table of Contents ROYAL GOLD, INC. Notes to Consolidated Financial Statements (Unaudited) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ As of December 31, 2021 (Amounts in thousands): Cost Accumulated Depletion ​ Net Production stage stream interests: ​ ​ ​ ​ ​ ​ ​ ​ ​ Mount Milligan ​ $ 790,635 ​ $ ( 336,921 ) ​ $ 453,714 Pueblo Viejo ​ ​ 610,405 ​ ​ ( 260,321 ) ​ ​ 350,084 Andacollo ​ ​ 388,182 ​ ​ ( 139,035 ) ​ ​ 249,147 Khoemac a u ​ ​ 239,411 ​ ​ ( 3,402 ) ​ ​ 236,009 Rainy River ​ ​ 175,727 ​ ​ ( 50,115 ) ​ ​ 125,612 Wassa ​ ​ 146,475 ​ ​ ( 84,915 ) ​ ​ 61,560 Other ​ ​ 69,101 ​ ​ ( 4,193 ) ​ ​ 64,908 Total production stage stream interests ​ ​ 2,419,936 ​ ​ ( 878,902 ) ​ ​ 1,541,034 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Production stage royalty interests: ​ ​ ​ ​ ​ ​ ​ ​ ​ Voisey's Bay ​ ​ 205,724 ​ ​ ( 113,602 ) ​ ​ 92,122 Red Chris ​ ​ 116,187 ​ ​ — ​ ​ 116,187 Peñasquito ​ ​ 99,172 ​ ​ ( 53,022 ) ​ ​ 46,150 Cortez ​ ​ 80,681 ​ ​ ( 23,225 ) ​ ​ 57,456 Other ​ ​ 447,799 ​ ​ ( 387,364 ) ​ ​ 60,435 Total production stage royalty interests ​ ​ 949,563 ​ ​ ( 577,213 ) ​ ​ 372,350 Total production stage stream and royalty interests ​ ​ 3,369,499 ​ ​ ( 1,456,115 ) ​ ​ 1,913,384 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Development stage stream interests: ​ ​ ​ ​ ​ ​ ​ ​ ​ Other ​ ​ 12,037 ​ ​ — ​ ​ 12,037 Development stage royalty interests: ​ ​ ​ ​ ​ ​ ​ ​ ​ Côté ​ ​ 45,421 ​ ​ — ​ ​ 45,421 Other ​ ​ 54,755 ​ ​ — ​ ​ 54,755 Total development stage stream and royalty interests ​ ​ 112,213 ​ ​ — ​ ​ 112,213 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Exploration stage stream interests: ​ ​ ​ ​ ​ ​ ​ ​ ​ NX Gold ​ ​ 30,974 ​ ​ — ​ ​ 30,974 Exploration stage royalty interests: ​ ​ ​ ​ ​ ​ ​ ​ ​ Pascua-Lama ​ ​ 177,690 ​ ​ — ​ ​ 177,690 Red Chris ​ ​ 48,895 ​ ​ — ​ ​ 48,895 Côté ​ ​ 29,610 ​ ​ — ​ ​ 29,610 Other ​ ​ 130,986 ​ ​ — ​ ​ 130,986 Total exploration stage royalty interests ​ ​ 418,155 ​ ​ — ​ ​ 418,155 Total stream and royalty interests, net ​ $ 3,899,867 ​ $ ( 1,456,115 ) ​ $ 2,443,752 ​ 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. ​ 4. MARKETABLE EQUITY SECURITIES ​ 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. ​ 10 Table of Contents ROYAL GOLD, INC. Notes to Consolidated Financial Statements (Unaudited) ​ 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. ​ 5. DEBT ​ 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 ​ Principal Debt Issuance Costs Total Principal Debt Issuance Costs 1 Total ​ ​ ​ (Amounts in thousands) ​ ​ (Amounts in thousands) Revolving credit facility ​ $ 450,000 ​ $ ( 3,673 ) ​ $ 446,327 ​ $ — ​ $ ( 4,408 ) ​ $ ( 4,408 ) Total debt ​ $ 450,000 ​ $ ( 3,673 ) ​ $ 446,327 ​ $ — ​ $ ( 4,408 ) ​ $ ( 4,408 ) (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. ​ 6. REVENUE ​ Revenue Recognition ​ A performance obligation is a promise in a contract to transfer control of a distinct good or service (or integrated package of goods and/or services) to a customer. A contract’s transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, a performance obligation is satisfied. In accordance with this guidance, revenue attributable to our stream interests and royalty interests is generally recognized at the point in time that control of the related metal production transfers to our customers. The amount of revenue we recognize further reflects the consideration to which we are entitled under the respective stream or royalty agreement. A more detailed summary of our revenue recognition policies for our stream and royalty interests is discussed below. ​ Stream Interests ​ A metal stream is a purchase agreement that provides, in exchange for an upfront deposit payment, the right to purchase all or a portion of one or more of the metals produced from a mine, at a price determined for the life of the transaction by the purchase agreement. Gold, silver and copper received under our metal streaming agreements are taken into inventory, and then sold primarily using average spot rate gold, silver and copper forward contracts. The sales price for these average spot rate forward contracts is determined by the average daily gold, silver or copper spot prices during the term of the contract, typically a consecutive number of trading days between ten days and three months (depending on the frequency 11 Table of Contents ROYAL GOLD, INC. Notes to Consolidated Financial Statements (Unaudited) ​ of deliveries under the respective streaming agreement and our sales policy in effect at the time) commencing shortly after receipt and purchase of the metal. We settle our forward sales contracts via physical delivery of the metal to the purchaser (our customer) on the settlement date specified in the contract. Under our forward sales contracts, there is a single performance obligation to sell a contractually specified volume of metal to the purchaser, and we satisfy this obligation at the point in time of physical delivery. Accordingly, revenue from our metal sales is recognized on the date of settlement, which is the date that control, custody and title to the metal transfer to the purchaser. ​ Royalty Interests ​ Royalties are non-operating interests in mining projects that provide the right to a percentage of revenue or metals produced from the project after deducting specified costs, if any. We are entitled to payment for our royalty interest in a mining project based on a contractually specified commodity price (for example, a monthly or quarterly average spot price) for the period in which metal production occurs. As a royalty holder, we act as a passive entity in the production and operations of the mining project, and the third-party operator of the mining project is responsible for all mining activities, including subsequent marketing and delivery of all metal production to their ultimate customer. In all of our material royalty interest arrangements, we have concluded that we transfer control of our interest in the metal production to the operator at the point at which production occurs, and thus, the operator is our customer. We have further determined that the transfer of each unit of metal production comprising our royalty interest to the operator represents a separate performance obligation under the contract, and each performance obligation is satisfied at the point in time of metal production by the operator. Accordingly, we recognize revenue attributable to our royalty interests in the period in which metal production occurs at the specified commodity price per the agreement, net of any contractually allowable costs. ​ Royalty Revenue Estimates ​ For a small number of our royalty interests, we may not receive, or be entitled to receive, payment information, including production information from the operator, for the period in which metal production occurred prior to issuance of our financial statements for that period. As a result, we may estimate revenue for these royalties based on available information, including public information, from the operator. If adequate information is not available from the operator or from other public sources before we issue our financial statements, we will recognize royalty revenue during the period in which the necessary payment information is received. Differences between estimates and actual amounts could differ significantly and are recorded in the period that the actual amounts are known. Please also refer to our “Use of Estimates” accounting policy discussed in our Transition Report. For the three months ended 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 ​ We have identified two material revenue sources in our business: stream interests and royalty interests. These identified revenue sources are consistent with our reportable segments as discussed in Note 10. ​ 12 Table of Contents ROYAL GOLD, INC. Notes to Consolidated Financial Statements (Unaudited) ​ Revenue by metal type attributable to each of our revenue sources is disaggregated as follows (amounts in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended ​ Nine Months Ended ​ September 30, September 30, September 30, September 30, ​ 2022 ​ 2021 ​ 2022 ​ 2021 Stream revenue: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Gold $ 76,833 ​ $ 83,318 ​ $ 229,661 ​ $ 240,016 Silver ​ 12,063 ​ ​ 13,877 ​ ​ 36,393 ​ ​ 35,132 Copper ​ 9,836 ​ ​ 18,726 ​ ​ 42,809 ​ ​ 50,540 Total stream revenue $ 98,732 ​ $ 115,921 ​ $ 308,863 ​ $ 325,688 Royalty revenue: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Gold $ 23,163 ​ $ 43,417 ​ $ 90,054 ​ $ 111,826 Silver ​ 2,648 ​ ​ 3,952 ​ ​ 10,477 ​ ​ 12,517 Copper ​ 1,285 ​ ​ 4,967 ​ ​ 11,271 ​ ​ 12,960 Other ​ 5,601 ​ ​ 6,174 ​ ​ 19,561 ​ ​ 22,056 Total royalty revenue $ 32,697 ​ $ 58,510 ​ $ 131,363 ​ $ 159,359 Total revenue $ 131,429 ​ $ 174,431 ​ $ 440,226 ​ $ 485,047 ​ Revenue attributable to our principal stream and royalty interests is disaggregated as follows (amounts in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended ​ Nine Months Ended ​ ​ ​ ​ September 30, September 30, September 30, September 30, ​ ​ Metal(s) ​ 2022 ​ 2021 ​ 2022 ​ 2021 Stream revenue: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Mount Milligan ​ Gold & Copper ​ $ 41,553 ​ $ 53,455 ​ $ 129,596 ​ $ 131,061 Pueblo Viejo ​ Gold & Silver ​ ​ 21,156 ​ ​ 27,198 ​ ​ 64,232 ​ ​ 83,957 Andacollo ​ Gold ​ ​ 12,170 ​ ​ 11,601 ​ ​ 39,565 ​ ​ 52,491 Wassa ​ Gold ​ ​ 7,390 ​ ​ 8,033 ​ ​ 22,840 ​ ​ 23,935 Khoemac a u ​ Silver ​ ​ 5,050 ​ ​ 107 ​ ​ 12,641 ​ ​ 107 Other ​ Gold & Silver ​ ​ 11,413 ​ ​ 15,527 ​ ​ 39,989 ​ ​ 34,137 Total stream revenue ​ ​ ​ $ 98,732 ​ $ 115,921 ​ $ 308,863 ​ $ 325,688 Royalty revenue: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Peñasquito ​ Gold, Silver, Lead & Zinc ​ $ 9,010 ​ $ 12,212 ​ $ 31,768 ​ $ 38,739 Cortez ​ Gold ​ ​ 4,562 ​ ​ 17,126 ​ ​ 29,413 ​ ​ 39,475 Other ​ Various ​ ​ 19,125 ​ ​ 29,172 ​ ​ 70,182 ​ ​ 81,145 Total royalty revenue ​ ​ ​ $ 32,697 ​ $ 58,510 ​ $ 131,363 ​ $ 159,359 Total revenue ​ ​ ​ $ 131,429 ​ $ 174,431 ​ $ 440,226 ​ $ 485,047 ​ Please refer to Note 10 for the geographical distribution of our revenue by reportable segment. ​ 7. STOCK-BASED COMPENSATION ​ We recognized stock-based compensation expense as follows (amounts in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended ​ Nine Months Ended ​ ​ ​ September 30, ​ September 30, ​ September 30, ​ September 30, ​ ​ 2022 2021 2022 2021 Restricted stock ​ $ 1,140 ​ $ 1,116 ​ $ 3,496 ​ $ 2,198 ​ Performance stock ​ ​ 658 ​ ​ ( 43 ) ​ ​ 2,136 ​ ​ 801 ​ Stock appreciation rights ​ ​ 283 ​ ​ 414 ​ ​ 975 ​ ​ 1,290 ​ Stock options ​ ​ 9 ​ ​ 16 ​ ​ 25 ​ ​ 51 ​ Total stock-based compensation expense ​ $ 2,090 ​ $ 1,503 ​ $ 6,632 ​ $ 4,340 ​ ​ Stock-based compensation expense is included within General and administrative expense in the consolidated statements of operations and comprehensive income. ​ 13 Table of Contents ROYAL GOLD, INC. Notes to Consolidated Financial Statements (Unaudited) ​ 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, ​ ​ September 30, ​ ​ September 30, ​ ​ September 30, ​ ​ 2022 2021 ​ 2022 2021 ​ ​ ​ (Number of shares) ​ ​ (Number of shares) Performance stock (at maximum 200 % attainment) ​ ​ — ​ ​ 73,200 ​ ​ 39,380 ​ ​ 73,200 Restricted Stock ​ ​ — ​ ​ 50,604 ​ ​ 28,220 ​ ​ 50,604 Total equity awards granted ​ ​ — ​ ​ 123,804 ​ ​ 67,600 ​ ​ 123,804 ​ 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: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Unrecognized Weighted- ​ ​ ​ ​ ​ ​ ​ ​ compensation ​ average vesting ​ ​ ​ ​ ​ ​ ​ ​ expense period (years) Restricted stock ​ ​ ​ ​ ​ ​ ​ $ 7,361 ​ ​ 2.2 Performance stock ​ ​ ​ ​ ​ ​ ​ ​ 5,265 ​ ​ 2.0 Stock appreciation rights ​ ​ ​ ​ ​ ​ ​ ​ 701 ​ ​ 0.9 Stock options ​ ​ ​ ​ ​ ​ ​ ​ 25 ​ ​ 0.9 ​ ​ 8. EARNINGS PER SHARE (“EPS”) ​ Basic EPS was computed using the weighted average number of shares of common stock outstanding during the period, considering the effect of participating securities. Unvested stock-based compensation awards that contain non-forfeitable rights to dividends or dividend equivalents are considered participating securities and are included in the computation of EPS pursuant to the two-class method. Our unvested restricted stock awards contain non-forfeitable dividend rights and participate equally with common stock with respect to dividends issued or declared. Our unexercised stock option awards, unexercised stock-settled stock appreciation rights and unvested performance stock do not contain rights to dividends. Under the two-class method, the earnings used to determine basic EPS are reduced by an amount allocated to participating securities. Use of the two-class method has an immaterial impact on the calculation of basic and diluted EPS. ​ The following tables summarize the effects of dilutive securities on diluted EPS for the periods shown below (amounts in thousands, except share data): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended ​ Nine Months Ended ​ ​ September 30, ​ September 30, ​ September 30, ​ September 30, ​ 2022 2021 2022 2021 Net income attributable to Royal Gold common stockholders ​ $ 45,792 ​ $ 70,176 ​ $ 182,609 ​ $ 205,879 Weighted-average shares for basic EPS ​ ​ 65,579,834 ​ ​ 65,556,608 ​ ​ 65,571,737 ​ ​ 65,552,586 Effect of other dilutive securities ​ ​ 80,318 ​ ​ 71,237 ​ ​ 89,460 ​ ​ 76,241 Weighted-average shares for diluted EPS ​ ​ 65,660,152 ​ ​ 65,627,845 ​ ​ 65,661,197 ​ ​ 65,628,827 Basic EPS ​ $ 0.70 ​ $ 1.07 ​ $ 2.78 ​ $ 3.14 Diluted EPS ​ $ 0.70 ​ $ 1.07 ​ $ 2.78 ​ $ 3.13 ​ ​ 9. INCOME TAXES ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended ​ Nine Months Ended ​ ​ September 30, ​ September 30, ​ September 30, ​ September 30, ​ 2022 2021 2022 2021 Income tax expense ​ $ 10,954 ​ $ 16,028 ​ $ 20,347 ​ $ 39,242 Effective tax rate ​ ​ 19.3 % ​ ​ 18.5 % ​ ​ 10.0 % ​ ​ 16.0 % ​ 14 Table of Contents ROYAL GOLD, INC. Notes to Consolidated Financial Statements (Unaudited) ​ 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. ​ 10. SEGMENT INFORMATION ​ We manage our business under two reportable segments, consisting of the acquisition and management of stream interests and the acquisition and management of royalty interests. Our long-lived assets (stream and royalty interests, net) are geographically distributed as shown in the following table (amounts in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ As of September 30, 2022 ​ As of December 31, 2021 ​ ​ ​ ​ ​ ​ ​ ​ Total stream ​ ​ ​ ​ ​ ​ ​ Total stream ​ ​ Stream ​ Royalty ​ and royalty ​ Stream ​ Royalty ​ and royalty ​ interest interest interests, net interest interest interests, net Canada ​ $ 528,325 ​ $ 620,035 ​ $ 1,148,360 ​ $ 579,326 ​ $ 412,419 ​ $ 991,745 Dominican Republic ​ ​ 328,674 ​ ​ — ​ ​ 328,674 ​ ​ 350,083 ​ ​ — ​ ​ 350,083 Africa ​ ​ 307,291 ​ ​ 321 ​ ​ 307,612 ​ ​ 297,569 ​ ​ 321 ​ ​ 297,890 Chile ​ ​ 238,596 ​ ​ 224,116 ​ ​ 462,712 ​ ​ 249,147 ​ ​ 224,116 ​ ​ 473,263 United States ​ ​ — ​ ​ 626,525 ​ ​ 626,525 ​ ​ — ​ ​ 107,761 ​ ​ 107,761 Mexico ​ ​ — ​ ​ 53,046 ​ ​ 53,046 ​ ​ — ​ ​ 60,977 ​ ​ 60,977 Australia ​ ​ — ​ ​ 26,642 ​ ​ 26,642 ​ ​ — ​ ​ 27,496 ​ ​ 27,496 Rest of world ​ ​ 104,192 ​ ​ 26,617 ​ ​ 130,809 ​ ​ 107,920 ​ ​ 26,617 ​ ​ 134,537 Total ​ $ 1,507,078 ​ $ 1,577,302 ​ $ 3,084,380 ​ $ 1,584,045 ​ $ 859,707 ​ $ 2,443,752 ​ Our reportable segments for purposes of assessing performance are shown below (amounts in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended September 30, 2022 ​ Revenue Cost of sales (1) Production taxes Depletion (2) Segment gross profit Stream interests ​ $ 98,732 ​ $ 23,221 ​ $ — ​ $ 32,576 ​ $ 42,935 Royalty interests ​ ​ 32,697 ​ ​ — ​ ​ 1,119 ​ ​ 5,063 ​ ​ 26,515 Total ​ $ 131,429 ​ $ 23,221 ​ $ 1,119 ​ $ 37,639 ​ $ 69,450 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended September 30, 2021 ​ Revenue Cost of sales (1) Production taxes Depletion (2) Segment gross profit Stream interests ​ $ 115,921 ​ $ 27,230 ​ $ — ​ $ 41,922 ​ $ 46,769 Royalty interests ​ ​ 58,510 ​ ​ — ​ ​ 2,054 ​ ​ 8,596 ​ ​ 47,860 Total ​ $ 174,431 ​ $ 27,230 ​ $ 2,054 ​ $ 50,518 ​ $ 94,629 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Nine Months Ended September 30, 2022 ​ Revenue Cost of sales (1) Production taxes Depletion (2) Segment gross profit Stream interests ​ $ 308,863 ​ $ 69,670 ​ $ — ​ $ 106,745 ​ $ 132,448 Royalty interests ​ ​ 131,363 ​ ​ — ​ ​ 4,765 ​ ​ 22,623 ​ ​ 103,975 Total ​ $ 440,226 ​ $ 69,670 ​ $ 4,765 ​ $ 129,368 ​ $ 236,423 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Nine Months Ended September 30, 2021 ​ Revenue Cost of sales (1) Production taxes Depletion (2) Segment gross profit Stream interests ​ $ 325,688 ​ $ 73,367 ​ $ — ​ $ 113,263 ​ $ 139,058 Royalty interests ​ ​ 159,359 ​ ​ — ​ ​ 6,042 ​ ​ 26,394 ​ ​ 126,923 Total ​ $ 485,047 ​ $ 73,367 ​ $ 6,042 ​ $ 139,657 ​ $ 265,981 (1) Excludes depreciation, depletion and amortization ​ 15 Table of Contents ROYAL GOLD, INC. Notes to Consolidated Financial Statements (Unaudited) ​ (2) Depletion amounts are included within Depreciation, depletion and amortization on our consolidated statements of operations and comprehensive income. ​ A reconciliation of total segment gross profit to the consolidated Income before income taxes is shown below (amounts in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended ​ Nine Months Ended ​ ​ September 30, ​ September 30, ​ September 30, ​ September 30, ​ ​ 2022 ​ 2021 ​ 2022 ​ 2021 Total segment gross profit ​ $ 69,450 ​ $ 94,629 ​ $ 236,423 ​ $ 265,981 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Costs and expenses ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ General and administrative expenses ​ ​ 7,554 ​ ​ 7,129 ​ ​ 25,797 ​ ​ 21,272 Depreciation and amortization ​ ​ 122 ​ ​ 93 ​ ​ 371 ​ ​ 278 Operating income ​ ​ 61,774 ​ ​ 87,407 ​ ​ 210,255 ​ ​ 244,431 Fair value changes in equity securities ​ ​ 356 ​ ​ 176 ​ ​ ( 1,221 ) ​ ​ 4,035 Interest and other income ​ ​ 3,571 ​ ​ 819 ​ ​ 5,665 ​ ​ 2,227 Interest and other expense ​ ​ ( 8,814 ) ​ ​ ( 1,908 ) ​ ​ ( 11,110 ) ​ ​ ( 4,873 ) Income before income taxes ​ $ 56,887 ​ $ 86,494 ​ $ 203,589 ​ $ 245,820 ​ 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 ​ Nine Months Ended ​ ​ September 30, ​ September 30, ​ September 30, ​ September 30, ​ 2022 2021 2022 2021 Stream interests: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Canada ​ $ 46,861 ​ $ 64,031 ​ $ 152,938 ​ $ 158,679 Dominican Republic ​ ​ 21,156 ​ ​ 27,198 ​ ​ 64,232 ​ ​ 83,957 Chile ​ ​ 12,170 ​ ​ 11,601 ​ ​ 39,566 ​ ​ 52,491 Africa ​ ​ 13,257 ​ ​ 8,679 ​ ​ 38,633 ​ ​ 26,149 Rest of world ​ ​ 5,288 ​ ​ 4,412 ​ ​ 13,494 ​ ​ 4,412 Total stream interests ​ $ 98,732 ​ $ 115,921 ​ $ 308,863 ​ $ 325,688 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Royalty interests: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ United States ​ $ 11,413 ​ $ 27,080 ​ $ 52,616 ​ $ 64,903 Mexico ​ ​ 11,095 ​ ​ 15,427 ​ ​ 38,915 ​ ​ 46,888 Canada ​ ​ 4,826 ​ ​ 6,402 ​ ​ 21,377 ​ ​ 24,616 Australia ​ ​ 3,446 ​ ​ 6,917 ​ ​ 11,533 ​ ​ 15,526 Africa ​ ​ — ​ ​ 602 ​ ​ 430 ​ ​ 1,909 Rest of world ​ ​ 1,917 ​ ​ 2,082 ​ ​ 6,492 ​ ​ 5,517 Total royalty interests ​ $ 32,697 ​ $ 58,510 ​ $ 131,363 ​ $ 159,359 Total revenue ​ $ 131,429 ​ $ 174,431 ​ $ 440,226 ​ $ 485,047 ​ ​ 11. FAIR VALUE MEASUREMENTS ​ Fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. As a basis for considering such assumptions, we utilize a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows: ​ Level 1: Quoted prices for identical instruments in active markets; ​ 16 Table of Contents ROYAL GOLD, INC. Notes to Consolidated Financial Statements (Unaudited) ​ Level 2: Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets; and ​ Level 3: Prices or valuation techniques requiring inputs that are both significant to the fair value measurement and unobservable (supported by little or no market activity). ​ The following table sets forth our financial assets measured at fair value on a recurring basis (at least annually) by level within the fair value hierarchy. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ As of September 30, 2022 ​ ​ ​ ​ Fair Value ​ Carrying Value Total Level 1 Level 2 Level 3 Assets (amounts in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Marketable equity securities (1) ​ $ 655 ​ $ 655 ​ $ 117 ​ $ 538 ​ $ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ As of December 31, 2021 ​ ​ ​ ​ Fair Value ​ Carrying Value Total Level 1 Level 2 Level 3 Assets (amounts in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Marketable equity securities (1) ​ $ 1,733 ​ $ 1,733 ​ $ — ​ $ 1,733 ​ $ — ​ (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 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. If recognition of these assets at their fair value becomes necessary, such measurements will be determined utilizing Level 3 inputs. ​ ​ 12. COMMITMENTS AND CONTINGENCIES ​ NX Gold Exploration Payment ​ On March 22, 2022, we made a payment of $ 3.2 million to a subsidiary of Ero Copper Corporation (“Ero”) as part of our commitment to support the achievement of success-based targets related to regional exploration and mineral resource additions. This payment has been recorded to exploration stage stream interests (Note 3) within Stream and royalty interests, net on our consolidated balance sheets. As of 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 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. ​ ​ ​ ​ 17 Table of Contents ​