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Item 1A. Risk Factors

2023-02-16 compared with 2021-08-12 · 122 added, 129 removed, 150 unchanged (63% of the section changed)

You should carefully consider the risks described in this section.

Our future performance is subject to risks and uncertainties that could have a material adverse effect on our business, results of operations, and financial condition and the trading price of our common stock.

Our future performance is subject to risks and uncertainties that could have a material adverse effect on our business, results of operations, and financial condition and

the trading price of our common stock.

We may be subject to other risks and uncertainties not presently known to us.

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Market prices for gold, silver, copper, nickel, and other metals may fluctuate widely over time and are affected by numerous factors beyond our control.

These factors include metal supply and demand, industrial and jewelry fabrication, investment demand, central banking actions, inflation expectations, currency values, interest rates, forward sales by metal producers, and political, trade, economic, or banking conditions.

Our revenue is directly tied to metal prices and is particularly sensitive to changes in the price of gold, as we derive a majority of our revenue from gold stream and royalty interests.

Our revenue is directly tied to metal prices and is particularly sensitive to changes in the price of gold, as we derive the majority of our revenue from gold stream and royalty interests.

Under our stream agreements, we purchase metal at a fixed price or a stated percentage of the market price and then sell the metal in the open market.

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A price decline can also impact our revenue under certain sliding-scale royalty agreements as we may receive a lower royalty rate when prices fall below specified thresholds.

In addition, some

of our royalty agreements are based on the operator’s concentrate sales to smelters and allow for price adjustments between the operator and the smelter based on metals prices on a future date, typically three to five months after shipment of concentrate.

In addition, some of our royalty agreements are based on the operator’s concentrate sales to smelters and allow for price adjustments between the operator and the smelter based on changes in metals prices between the date an operator ships concentrate to its offtake customer and the date the sale of concentrate is finally settled (typically a period of three to five months).

These price adjustments can decrease our revenue in future periods if metal prices decline following shipment.

Price declines could cause an operator to reduce, suspend, or terminate production or development at a project, which would impact our future revenue from the project.

Metal price declines could cause an operator to reduce, suspend, or terminate production or development at a project, which would impact our future revenue from the project.

These production or development decisions could prevent us from recovering our initial investment in the project or result in an impairment to the value of our initial investment.

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In general, we have no decision-making authority regarding the development or operation of the mineral properties underlying our stream and royalty interests.

Operators make all development and operating decisions, including decisions about permitting, feasibility analysis, mine design and operation, processing, plant and equipment matters, and temporary or permanent suspension of operations.

Operators make all or substantially all development and operating decisions, including decisions about permitting, feasibility analysis, mine design and operation, processing, plant and equipment matters, and temporary or permanent suspension of operations, as well as estimates of resources and reserves.

The interests of the operators and those of Royal Gold on the relevant properties are not always aligned, which can result in lower or delayed payments to us compared to what we anticipated.

The continuing COVID-19 pandemic significantly impacted the global economy, global markets, and operations at some properties in which we have stream or royalty interests over the past year and a half and may continue to do so;

this could adversely affect our business, results of operations, and the trading price of our stock.

The world continues to experience a deadly outbreak of the coronavirus disease 2019, or COVID-19.

The global economy, metal prices, and financial markets experienced significant volatility and uncertainty over the past year and a half due to COVID-19, including due to the recent emergence of variant strains of the virus.

Continuing travel restrictions due to COVID-19 could limit or delay acquisition opportunities or other business activities.

In addition, economic volatility, labor shortages, disruptions in the financial markets, or severe price declines for gold or other metals could adversely affect our ability to obtain future debt or equity financing for acquisitions on acceptable terms.

Although conditions have improved in the U.S., Canada, and Switzerland where we have employees, other parts of the world, including areas where we have stream and royalty interests, continue to be impacted by the pandemic.

At varying locations and times, public health and government authorities have recommended and mandated precautions to mitigate the spread of COVID-19, including in some cases quarantines, shelter-in-place orders, and restrictions on mining-related activities.

Throughout fiscal year 2021, several of our operating counterparties instituted temporary operational curtailments due to the pandemic, including the operators of Mount Milligan, Pueblo Viejo and Peñasquito.

There may be additional curtailments.

In addition, the pandemic and resulting economic and societal impacts have at times made it difficult for operators to forecast expected production amounts.

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, the emergence of variant strains of the virus, 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 business, results of operations, financial condition or the trading price of our stock.

We often have limited access to data about operating properties, which may make it difficult for us to project or assess the performance of our stream and royalty interests or to confirm mineral reserves.

We often do not have the contractual right to receive production, operating, and other data, nor do we have the right to access the property or obtain drilling and metallurgical data that would allow us to confirm reserves applicable to the properties in which we hold stream and royalty interests.

As a result, it may be difficult for us to project or assess the performance of a stream or royalty interest and leaves us unable to conduct our own reserve or resource analysis.

Our stream and royalty interests may not result in the anticipated returns or may not otherwise ultimately benefit our business.

We often do not have the contractual right under our stream and royalty agreements to receive production, operating, and other data, nor do we have the right to access the property or obtain drilling and metallurgical data that would allow us to confirm mineral reserves and mineral resources applicable to the properties in which we hold stream and royalty interests.

As a result, it may be difficult for us to project or assess the performance of a stream or royalty interest, and we generally are unable to conduct our own mineral reserve and mineral resource analysis.

Our stream and royalty interests may not result in anticipated returns or may not otherwise ultimately benefit our business.

We are continually reviewing opportunities to acquire new stream and royalty interests, and we have acquisition opportunities at various stages of review.

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At times, we also consider opportunities to restructure our existing stream or royalty interests where we believe the restructuring would provide a long-term benefit to us, even though it could reduce near-term revenues or result in the incurrence of transaction-related costs.

The success of our stream and royalty interests is based in part on our ability to make accurate assumptions at the time of acquisition about the amount and timing of revenue to be derived from those interests.

These assumptions are based on a variety of factors, including the geological, metallurgical, permitting, environmental, and other aspects of the project.

of our stream and royalty interests is based in part on our ability to make accurate assumptions at the time of acquisition or restructuring about the amount and timing of revenue to be derived from those interests.

These assumptions are based on a variety of factors, including the geological, geotechnical, hydrogeological, hydrological, metallurgical, legal, permitting, environmental, social, and other aspects of the projects.

For development projects, we also make assumptions about the cost, timing, and conduct of development.

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Our future success depends largely on our ability to acquire additional stream and royalty interests at appropriate valuations.

We may not adequately assess technical, operational, legal, environmental or social risks in connection with new acquisitions, which might adversely impact our expected investment returns or future results of operations.

We may not be able to identify and complete acquisitions of additional interests at appropriate prices or terms.

We may not have sufficient liquidity or may not be able to obtain debt or equity financing to fund acquisitions due to economic volatility, credit crises, declines in metal prices, or other reasons.

Certain of our competitors are larger and have greater financial resources than we do, and we may not be able to compete effectively against them.

In addition, there has been significant growth in the number of stream and royalty companies over the last several years and some of these companies have different investment criteria, which has made the industry more competitive at times.

Changes to tax rules, accounting policies, or the treatment of stream interests by ratings agencies could make streams or royalties less attractive to counterparties.

For some operating properties, we may not realize all of the expected benefits of our investments if operators are unable to replace current mineral reserves as they are depleted, which could impact our future results of operations.

For some operating properties, our return on investment depends in part on the operators’ ability to replace mineral reserves as they are consumed in the ordinary course of mining.

If current mineral reserves are not replaced as they are mined by the operators of these properties, whether through expansion of known deposits, discovery of new mineralized material through exploration, conversion of mineralized material to mineral reserves, or otherwise, our expected investment returns or future results of operations could be adversely affected.

We may not have sufficient liquidity or may not be able to obtain debt or equity financing at an acceptable cost of capital in order to fund acquisitions due to economic volatility, credit crises, declines in metal prices, or changes in legal, political, social or other conditions.

In addition, certain of our competitors are larger and have greater financial resources than we do, and we may not be able to compete effectively against them.

Further, there has been significant growth in the number and relative size of stream and royalty companies over the last several years and some of these companies might have different investment criteria and costs of capital than we do, or are subject to different tax and accounting rules than we are, and we may not be able to compete effectively against them.

Changes to tax rules, accounting policies, or the treatment of stream interests by ratings agencies could make streams or royalties less attractive to operators or render us less able to compete with other stream and royalty companies that are organized in countries with more favorable tax, accounting and regulatory regimes.

For some properties, we may not realize all of the expected benefits of our investments if operators are unable to replace current mineral reserves as they are consumed or identify new mineral resources, which could impact our future results of operations.

For some properties, our return on investment depends in part on the operators’ ability to replace mineral reserves as they are consumed in the ordinary course of mining.

If current mineral reserves are not replaced as they are mined through conversion of mineral resources to new mineral reserves, or new mineral resources are not identified through expansion of known deposits, exploration, or otherwise, our expected investment returns or future results of operations could be adversely affected.

A significant portion of our revenue comes from a small number of operating properties, which means that adverse developments at these properties could have a more significant or lasting impact on our results of operations than if our revenue was less concentrated.

Approximately 77% of our revenue for fiscal year 2021 came from six properties:

Mount Milligan, Andacollo, Pueblo Viejo, Wassa, Peñasquito, and Cortez.

We expect these properties to continue to represent a significant portion of revenue going forward.

Approximately 70% of our revenue for the year ended December 31, 2022 came from 6 properties:

Mount Milligan (30%), Pueblo Viejo (14%), Cortez (8%), Andacollo (8%), Peñasquito (7%), and Khoemac a u (3%).

We expect these properties to continue to represent a significant portion of our revenue going forward.

This concentration of revenue could mean that adverse developments, including any adverse decisions made by the operators, at one or more of these properties could have a more significant or longer-term impact on our results of operations than if our revenue was less concentrated.

A significant disruption to our information technology systems could adversely affect our business and operating results.

A significant disruption to our information technology systems or those of our third party service providers could adversely affect our business and operating results.

We rely on a variety of information technology and automated operating systems to manage and support our operations.

For example, we depend on our information technology systems for financial reporting, operational and investment management, and email.

These systems contain our proprietary business information and personally identifiable

information of our employees.

The proper functioning of these systems and the security of this data is critical to the efficient operation and management of our business.

In addition, these systems could require modifications or upgrades as a result of technological changes or growth in our business.

These changes could be costly and disruptive to our operations and could impose substantial demands on management time.

Our systems, and those of third-party providers, could be vulnerable to damage or disruption caused by catastrophic events, power outages, natural disasters, computer system or network failures, viruses, ransomware or malware, physical or electronic break-ins, unauthorized access, or cyber-attacks.

Any security breach could compromise our networks, and the information stored on them could be improperly accessed, disclosed, lost, or stolen.

Because techniques used to sabotage, obtain unauthorized access to systems or prohibit authorized access to systems change frequently and generally are not detected until successfully launched against a target, we may be unable to anticipate these techniques and the steps that we have taken to secure our systems and electronic information may not be adequate to prevent a disruption or attack.

Any unauthorized activities could disrupt our operations, damage our reputation, or result in legal claims or proceedings, any of which could adversely affect our business, reputation, or operating results.

We depend on the services of our executives and other key employees, and the loss of one or more members of our management team could harm our business.

We believe that our success depends on retaining qualified executives and other key employees.

Our management team has significant industry and company-specific experience.

If we are unsuccessful at retaining or attracting qualified personnel, our business could be disrupted and our ability to achieve our business objectives and grow effectively could be jeopardized.

We do not currently maintain key person life insurance on any of our directors or employees.

These systems contain, among other information, our proprietary business information and personally identifiable information of our employees.

The proper functioning of these systems and the security of such data is critical to the efficient operation and management of our business, and these functions are outsourced by us to third-

party service providers on whom we rely for the security and proper functioning of these systems.

In addition, these systems could require modifications or upgrades from time to time as a result of technological changes or growth in our business, and we might change the third-party service providers with whom we contract to maintain the functioning or security of these systems from time to time, which modifications, upgrades or changes could be costly and disruptive to our operations and could impose substantial demands on management’s time.

Our systems, and those of our third-party service providers, could be vulnerable to damage or disruption caused by catastrophic events, power outages, natural disasters, computer system or network failures, viruses, ransomware or malware, physical or electronic break-ins, unauthorized access, or cyber-attacks.

Any security breach could compromise our networks, and the information stored on them could be improperly accessed, disclosed, lost, stolen or restricted.

Because techniques used to sabotage, obtain unauthorized access to systems or prohibit authorized access to systems change frequently and generally are not detected until successfully launched against a target, we or our third party service providers might be unable to anticipate these techniques, and the steps that we or our third party service providers have taken to secure our systems and electronic information might not be adequate to prevent a disruption or attack.

Any unauthorized activities could disrupt our operations or those of our third-party service providers on which we are dependent, damage our reputation, or result in legal claims or proceedings, any of which could adversely affect our business, reputation, or operating results.

We depend on the services of our executives and other key employees, and the loss of one or more of these individuals could harm our business.

We believe that our success depends on retaining qualified executives and other key employees, especially in light of our limited number of personnel.

These individuals have significant industry and Company-specific experience.

If we are unsuccessful at retaining or attracting qualified personnel, our business could be disrupted and our reputation could be harmed, adversely impacting our ability to achieve our business objectives.

We do not currently maintain key person life insurance on any of these individuals or our directors.

We face various risks related to health epidemics, pandemics and similar outbreaks, which could have material adverse effects on our business, results of operations, financial position, and/or the trading price of our stock.

Health epidemics, pandemics and similar outbreaks could cause significant volatility and uncertainty in the global economy and financial markets, supply chain issues, labor shortages, and declines in metal prices, and such events could adversely affect our ability to obtain future debt or equity financing for acquisitions on acceptable terms, or at all, and could require temporary curtailments of operations at the properties subject to our royalty and streaming interests, as occurred at Mount Milligan, Pueblo Viejo, Peñasquito and Khoemac a u in response to the COVID 19 pandemic.

In addition, health epidemics, pandemics and similar outbreaks and their resulting impacts may make it difficult for the operators of the properties subject to our royalty and streaming interests to forecast expected production amounts.

The effects of health epidemics, pandemics and similar outbreaks will ultimately depend on many factors that are outside of our control (including the severity and duration of such events and government and operator actions in response to such events) and could materially and adversely impact our business, results of operations, financial position, and/or the trading price of our stock.

Risks Relating to our Stream and Royalty Interests

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● declines in the price of gold, silver, copper, nickel, or other metals

● declines in metallurgical recoveries

● construction or development delays

● operational disruptions, including those caused by pandemics or other global or local health crises

● inability to assess and manage project technical risks

● inability to obtain or maintain necessary permits

● inability to replace or increase reserves as properties are mined

● inability to replace or increase reserves and/or mineral resources as properties are mined

● inability to maintain, or challenges to, exploration or mining rights

● changes in mining taxes and royalties payable to governments

● significant changes to environmental, permitting, or other regulatory requirements

● challenges to operations, permits, or mining rights by local communities, indigenous populations, non-government organizations, or others

● changes in mining taxes and royalties payable to governments and political environments in general

● significant changes to environmental, permitting, or other legal or regulatory requirements or the enforcement of such requirements

● challenges to operations, permits, or mining rights by local communities, indigenous populations, non-government organizations, or others and ineffective management of stakeholder communications and relations

● litigation between operators and third parties relating to the properties

● community or civil unrest, including protests and blockades

● labor shortages, increased labor costs, labor disputes, strikes, or work stoppages

● labor shortages, increased labor costs, labor disputes, strikes, or work stoppages or inability to access sufficient experienced and trained personnel

● unavailability of mining, drilling, or other equipment

● unanticipated geological conditions or metallurgical characteristics

● unanticipated ground or water conditions, including lack of access to sufficient water

● unanticipated groundwater or surface conditions, including lack of access to sufficient water

● inadequate supplies of power or other raw materials

● pit wall or tailings dam failures or underground stability issues

● fires, explosions, or other industrial accidents

● injuries to humans, property, or the environment

● natural catastrophes and environmental hazards such as earthquakes, droughts, floods, forest fires, hurricanes, weather, or climate events

● physical effects of climate change and regulatory changes designed to reduce the effects of climate change

● uncertain political and economic environments

● economic downturns

● insufficient financing or inability to obtain financing

● default by an operator on its obligations to us or its other creditors

● fires, explosions, major mechanical or electrical equipment failures, other industrial accidents or other property damage

● challenges managing land disturbances, reclamation requirements, tailing and waste storage, release of contaminants or other environmental incidents or damage

● failure to operate in accordance with industry standard safety practices or government regulations

● occurrence of safety events, including lost time incidents and/or fatalities

● natural catastrophes and environmental hazards such as unanticipated groundwater or surface water conditions, earthquakes or hurricanes

● physical effects of climate change, such as extreme changes in temperature, extreme precipitation events, flooding, longer wet or dry seasons, increased temperatures and drought, increased or decreased precipitation and snowfall, wildfires, or more severe storms, and regulatory changes designed to reduce the effects of climate change, including regulations designed to curtail greenhouse gas emissions, which may lead to increased costs for mine operators

● market risks associated with the perception of mine operators’ environmental, social and governance (“ESG”) performance and their ability to deliver on ESG commitments and expectations

● market conditions, including prolonged periods of inflation and supply-chain disruptions and increased interest rates

● uncertain political and economic environments, including economic downturns

● insufficient financing or inability to obtain financing at all or at an acceptable cost of capital

● default by an operator on its obligations to us or its other creditors and counterparties

● insolvency, bankruptcy, or other financial difficulty of the operator

● changes in laws or regulations or the enforcement of laws or regulations

The occurrence of any of these events could negatively impact operations at the properties in which we hold stream or royalty interests, which in turn could have a material adverse effect on our revenue and cash flow.

Most of our revenue is derived from properties outside the United States, and risks associated with conducting business in foreign countries or other sovereign jurisdictions could adversely affect our results of operations or financial condition.

Approximately 89% of our revenue comes from properties outside of the United States, and many of our operators are organized outside of the United States.

Our principal producing stream and royalty interests on properties outside of the United States are located in Canada, Chile, the Dominican Republic, Ghana and Mexico.

Within the United States and other countries, indigenous people may be recognized as sovereign entities and may enforce their own laws and regulations.

Our and operators’ activities are subject to the risks associated with conducting business in foreign countries or other sovereign jurisdictions, including the following:

Approximately 86% of our revenue for the year ended December 31, 2022, came from properties outside of the United States, and many of our operators are organized outside of the United States.

Our principal production stage stream and royalty interests on properties outside of the United States are located in Canada, the Dominican Republic, Mexico, Chile and Botswana.

Within the United States and other countries, indigenous people may be recognized as sovereign entities

and may enforce their own laws and regulations.

Our activities and operators’ activities are subject to the risks associated with conducting business in foreign countries or other sovereign jurisdictions, including the following:

● expropriation or nationalization of mining property or other government takings

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● changes in government taxation, royalties, tariffs, or duties

● changes in economic, trade, diplomatic, or other relationships between countries or the effects on global and economic conditions, the stability of global financial markets, or the ability of key market participants to operate in certain financial markets

● high rates of inflation

● unfamiliar or uncertain foreign real estate, mineral tenure, safety, or environmental rules

● unfamiliar or uncertain foreign real estate, mineral tenure, safety, or environmental laws or rules

● war, crime, terrorism, sabotage, blockades, or other forms of civil unrest

● uncertain political or economic environments

● uncertain political or economic environments, including economic downturns

● exposure to liabilities under anti-corruption or anti-money laundering laws

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● loss of access to government-controlled infrastructure, such as roads, bridges, rails, ports, power sources, and water supplies

In addition, many of our operators are organized outside of the United States.

Our stream and royalty interests may be subject to the application of foreign laws to our operators, and their stockholders, including laws relating to foreign ownership structures, corporate transactions, creditors’ rights, bankruptcy and liquidation.

In addition, because many of our operators are organized outside of the United States, our stream and royalty interests may be subject to the application of foreign laws to our operators, and their stockholders, including laws relating to foreign ownership structures, corporate transactions, creditors’ rights, bankruptcy and liquidation.

Foreign operations also could be adversely impacted by laws and policies of the United States affecting foreign trade, investment and taxation.

These risks may limit or disrupt the development or operation of properties in which we hold stream and royalty interests or impair our rights or interests in these properties, which could adversely affect our results of operations or financial condition.

If the assumptions underlying operators’ production, reserve, or mineralized material estimates are inaccurate or if future events cause operators to negatively adjust their previous estimates, our future revenue or the value of our investments could be adversely affected.

The operators of the properties in which we hold stream and royalty interests generally prepare production and reserve estimates for the properties.

We do not independently prepare or verify this information.

If the assumptions underlying operators’ production, mineral reserve, or mineral resource estimates are inaccurate or if future events cause operators to negatively adjust their previous estimates, our future revenue or the value of our investments could be adversely affected.

The operators of the properties in which we hold stream and royalty interests generally prepare production, mineral reserve and mineral resource estimates for the properties.

We do not independently prepare or verify this information and generally lack sufficient information and access to properties to do so.

There are numerous uncertainties inherent in these estimates, many of which are outside the operators’ control.

As a result, production and reserve estimates are subjective and necessarily depend upon a number of assumptions, including, among others, reliability of historical data, geologic and mining conditions, metallurgical recovery, metal prices, operating costs, capital expenditures, development and reclamation costs, mining technology improvements, and the effects of government regulation.

If any of the assumptions that operators make in connection with production or reserve estimates are incorrect, actual production could be significantly lower than the production or reserve estimates, which could adversely affect our future revenue and the value of our investments.

As a result, production and mineral reserve or mineral resource estimates are subjective and necessarily depend upon a number of assumptions, including, among others, reliability of historical data, geological interpretation, geotechnical, geologic and mining conditions, metallurgical recovery, metal prices, operating costs, capital expenditures, development and reclamation costs, mining technology improvements, and the effects of government regulation.

If any of the assumptions that operators make in connection with production and mineral reserve or mineral resource estimates are incorrect, actual production could be significantly lower than the production, mineral reserve or mineral resource estimates, which could adversely affect our future revenue and the value of our investments.

In addition, if operators’ estimates with respect to the timing of production are incorrect, we may experience variances in expected revenue from period to period.

Some operators also report publicly or to us estimates of mineralized material.

The term “mineralized material” does not indicate proven or probable reserves as defined by the SEC.

Mineralized material is subject to future exploration and development and associated risks and may never convert to future reserves.

In addition, estimates of mineralized material are subject to similar uncertainties and assumptions as discussed above with respect to mineral reserves.

We and our operating properties may be subject to environmental risks, including risks associated with climate change, which could have a material adverse effect on our financial condition or the value of our interests or of our common stock.

Further, operators’ estimates of mineral resources are subject to future exploration and development and associated risks and may never convert to future reserves.

In addition, estimates of mineral resources are subject to similar uncertainties and assumptions as discussed above with respect to mineral reserves.

The operators of properties subject to our interests may be subject to growing environmental risks, including risks associated with climate change, which could have a material adverse effect on us, our financial condition or the value of our interests or of our common stock.

Mining operations are subject to extensive laws and regulations governing land use and the protection of the environment.

In addition, many countries have implemented laws and regulations designed to address the effects of climate change, including rules to reduce industrial emissions and increase energy efficiency.

In addition, many countries have implemented laws and regulations designed to address the effects of climate change, including rules to disclose and reduce industrial emissions and other environmental impacts to which operators or we might be subject.

These laws and regulations are constantly evolving in a manner generally expected to result in stricter standards, more liability, and increased costs.

Compliance with these laws and regulations can impose substantial costs and burdens on operators of properties subject to our interests.

Compliance with these laws and regulations can impose substantial costs and burdens on the operators of properties subject to our interests and perhaps on us as well.

In addition, an operator’s failure to comply with these laws and regulations could result in injunctive action, orders to suspend or cease operations, damages, or civil or criminal penalties on the operator.

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Climate change may also pose physical risks to the properties in which we hold an interest.

This could include adverse effects on operations as a result of increasing occurrences of extreme weather events, water shortages, changes in rainfall and storm patterns, changes in sea levels, and other negative weather and climate patterns.

For example, the Mount Milligan mine has experienced a reduction in production due to water shortages in recent years.

In addition, public-company stockholders are increasingly sensitive to the climate change impacts and mitigation efforts of companies, are increasingly seeking enhanced disclosure on the risks, challenges, governance implications, and financial impacts of climate change faced by companies and demanding that companies take a proactive approach to addressing perceived environmental risks, including risks associated with climate change, relating to their operations.

This could include adverse effects on operations as a result of increasing occurrences of extreme weather events, flooding, water shortages, changes in rainfall and storm patterns, changes in sea levels, heat stress, wildfires, and other negative weather and climate patterns.

For example, Andacollo experienced flooding due to a significant rainfall event in July 2022, which caused operations to shut down for five days.

These events could damage assets, negatively impact production, harm human life, halt mining operations, temporarily close supporting infrastructure or reduce labor productivity, among other effects.

Market impacts due to climate change and the transition to a low-carbon economy will be varied and complex.

Supply and demand for certain commodities, products and services might shift in connection with evolving consumer and investor sentiments.

Market perceptions of the mining sector, and, in particular, the role that certain metals will or will not play in the transition to a low-carbon economy, remain uncertain.

Potential financial impacts may include increased production costs due to changing input prices, re-pricing of land and assets, increased global competition for key materials needed for new technologies, potential cost increases by insurers and lenders, and potential increases in taxation of the mining and metals sector.

In addition, governments and public-company stockholders are increasingly seeking enhanced disclosures on the risks, challenges, governance implications, and financial impacts of climate change faced by companies and demanding that companies take a proactive approach to addressing and reducing perceived environmental risks, including the physical, transition and liability risks associated with climate change, relating to their operations.

Adverse publicity or climate-related litigation that impacts any of the operators of the properties in which we hold interests could have a negative impact on our business.

As a holder of stream and royalty interests, we generally will not have any influence on litigation such as this and generally will not have access to non-public information concerning such litigation.

As a holder of stream and royalty interests, we generally will not have any influence on litigation such as this and more than likely not have access to non-public information concerning such litigation.

In addition, we might not have access to sufficient information on the operations in respect of which we hold stream and royalty agreements in order to adequately comply with regulations or meet stockholder expectations on adequate disclosure or to quantify the potential impacts of climate change on our business.

Challenges relating to climate change could have an impact on the ability of these operators to access the capital markets and such limitations could have a corresponding negative effect on their business and operations.

Although we do not conduct mining operations on the properties in which we hold stream and royalty interests and are not required to contribute to environmental or other operating costs on the properties, our stockholders may nonetheless demand that we bear some responsibility for managing these environmental risks.

Although we do not conduct mining operations on the properties in which we hold stream and royalty interests and are not legally required to contribute to environmental or other operating costs on the properties, our own governmental regulators and stockholders may nonetheless demand that we bear some responsibility for addressing these environmental risks.

If this were to occur, the value of our interests or your shares of common stock could be adversely affected.

Further, due to expansive environmental laws, it is possible that we could become subject to environmental liabilities for historic periods during which we owned or operated properties or relative to our current ownership interests in lease and underlying unpatented mining claims.

These liabilities could have a material adverse effect on our results of operations or financial condition.

Financial Risks

Future indebtedness could adversely affect our financial condition and impair our ability to operate our business.

As of June 30, 2021, we had $1 billion available and no amount outstanding under our revolving credit facility.

Finally, lenders might be unwilling to provide financing to the mining industry, including companies like Royal Gold that acquire stream and royalty interests in mining projects, due to such lenders’ concerns regarding market perceptions of the

mining sector and lender commitments to net-zero emissions targets.

If we encounter difficulties in accessing the commercial debt market, our ability to finance new acquisitions of stream and royalty interests could be materially and adversely affected.

In addition, if we have to rely on issuing equity to finance transactions, our stock price could be negatively impacted and our stockholders’ ownership could be diluted.

Financing Risks

Current and future indebtedness could adversely affect our financial condition and impair our ability to operate our business.

As of December 31, 2022, we had $575 million outstanding and $425 million available under our revolving credit facility.

Our credit facility contains a floating interest rate.

We may incur additional indebtedness in the future.

Future indebtedness could have important consequences, including the following:

Current and future indebtedness could have important consequences, including the following:

● require us to dedicate a substantial portion of our cash flow from operations to service indebtedness, thereby reducing the availability of cash flow to fund acquisitions, working capital, or dividends

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● limit our ability to borrow additional funds for acquisitions, working capital, or debt-service requirements

● increase our cost of capital, including as a result of higher interest rates and the effects of exchange rates

● increase our exposure to the credit risks of bank group lenders or those institutions with which we maintain deposits

Our credit facility contains financial and other restrictive covenants.

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In the future, we may be unable to obtain new financing or refinancing on acceptable terms.

The proposed phase out of the London Interbank Offered Rate ("LIBOR") could adversely affect our results of operations or financial condition.

In 2017, the United Kingdom's Financial Conduct Authority (the authority that regulates LIBOR) announced that it intends to phase out LIBOR by the end of calendar year 2021.

The Federal Reserve Board has convened a group of private-market participants to identify a proposed alternative rate and address the transition from LIBOR to an alternative rate.

In 2019, the FASB proposed guidance that would help facilitate the market transition from existing reference rates to alternative rates.

Borrowings under our revolving credit facility bear interest at LIBOR plus an applicable margin.

Under the agreement governing the facility, we have established provisions to provide for the eventual replacement of LIBOR as a benchmark interest rate under the facility.

There is currently no definitive information regarding the future use of LIBOR or a replacement rate.

We are unable to predict whether and to what extent a LIBOR change would impact our future results of operations and financial condition.

Unknown defects in our stream or royalty interests or the bankruptcy or insolvency of an operator could have a material adverse effect on the value of our investments.

Defects in our stream or royalty interests or the bankruptcy or insolvency of an operator could have a material adverse effect on the value of our investments.

Despite our due diligence practices, it is possible that unknown defects or problems will exist relating to the existence, validity, enforceability, terms, or geographic extent of our stream and royalty interests.

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As a result, these interests may not survive a bankruptcy or insolvency of an operator.

We often do not have the protection of security interests that could help us recover all or part of our investment in a stream or royalty interest in the event of an operator’s

bankruptcy or insolvency.

If our stream or royalty interests were set aside through judicial or administrative proceedings, the value of our investments could be adversely affected.

We often do not have the protection of security interests that could help us recover all or part of our investment in a stream or royalty interest in the event of an operator’s bankruptcy or insolvency.

In addition, the contracts governing our stream and royalty interests might not have sufficient legal protections or a court could impose restrictions on our enforcement rights.

If our stream or royalty interests were set aside through judicial or administrative proceedings or if we are unable to enforce our contractual rights, the value of our investments could be adversely affected.

Some of the agreements governing our stream and royalty interests contain terms that reduce or cap the revenue generated from those interests.

Revenue from some of our stream and royalty interests decreases or stops after threshold production, delivery, or payment milestones are achieved.

For example, our stream interests at Pueblo Viejo, Andacollo, Wassa, and Khoemac a u and certain of our royalty interests at other properties contain these types of limitations.

Revenue from some of our stream and royalty interests decreases or stops after threshold production, delivery, or payment milestones are achieved or other events occur.

For example, our stream interests at Pueblo Viejo, Andacollo

and Khoemac a u and certain of our royalty interests at other properties contain these types of limitations.

As a result, past production and revenue relating to these interests may not be indicative of future results.

In addition, some of our stream and royalty interests do not cover all of the reserves at certain properties, which could mean that overall performance reported by the operators may not correlate to the performance of our interests in the properties.

In addition, some of our stream and royalty interests do not cover all of the mineral reserves or mineral resources at certain properties, which could mean that overall performance reported by the operators may not correlate to the performance of our interests in the properties.

Operators may fail to comply with their contractual arrangements with us or may interpret their obligations in a manner adverse to us, which could decrease our revenue or increase our costs.

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Payments may be delayed by restrictions imposed by lenders, delays in the sale or delivery of products, or the ability or willingness of smelters and refiners to process mine products.

Our rights to payment under our royalty and stream agreements must, in most cases, be enforced by contract.

Our rights to payment under our stream and royalty agreements must, in most cases, be enforced by contract.

When we enter into new stream or royalty agreements, we attempt to secure contractual rights that allow us to monitor operators’ compliance with their obligations to us, such as audit or access rights.

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We may also need to expend significant monetary and human resources to defend our position, which could adversely affect our results of operations.

In addition, we may be required to make retroactive revenue adjustments in future periods relating to past period revenue as a result of information that we learn through audit or access rights.

In addition, we may be required to make retroactive revenue adjustments in future periods relating to past period revenue as a result of information that we learn through audit or access rights or otherwise from operators and other counterparties.

Changes to U.S.

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Foreign Corrupt Practices Act (the "FCPA") and other laws that prohibit improper payments or offers of payments to third parties, including foreign governments and their officials, for the purpose of obtaining or retaining business.

In some cases, we invest in mining operations in jurisdictions that have experienced corruption in the past.

In some cases, we invest in mining operations in certain jurisdictions where corruption may be more common.

Our international investment activities create the risk of unauthorized payments or offers of payments in violation of the FCPA or other anti-corruption laws by one of our employees or agents in violation of our policies.

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Any violations of the FCPA or other anti-corruption laws could result in significant civil or criminal penalties to us and could have an adverse effect on our reputation.

We expect that our disclosures relating to operating properties will change as a result of new SEC disclosure rules, and we continue to face uncertainty around how some of these rules apply to a stream and royalty company.

In 2018, the SEC adopted amendments to its disclosure requirements for mining companies, including stream and royalty companies.

We are required to comply with the new rules for our fiscal year beginning on July 1, 2021.

We expect that our disclosures about operating properties will change under the new rules, and, in some cases, we may be required to disclose in our SEC filings more or less information than we currently disclose about these properties.

There continues to be uncertainty about how the rules will apply to a stream and royalty company with significant investments in properties run by international operators that are not required to report under SEC rules.

Risks Related to our Common Stock

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The market price of our common stock has fluctuated in the past and may continue to do so in the future.

For example, during fiscal year 2021, the market price of our common stock ranged from a low of $99.32 to a high of $147.64.

For example, during the year ended December 31, 2022, the market price of our common stock ranged from a low of $86.46 to a high of $146.33.

Many factors unrelated to operating performance can contribute to volatility in the market price of our common stock, including the following:

● economic, market, or political conditions, including the effects of COVID-19

● economic, market, or political, social or public health conditions

● market prices of gold, silver, copper, nickel, and other metals

● developments relating to operating properties

● interest rates and expectations about inflation

● developments relating to properties on which we hold stream or royalty interests

● interest rates and inflation rates and expectations about both

● currency values

● credit market conditions

These market fluctuations, regardless of cause, may materially and adversely affect our stock price.

Market fluctuations, regardless of cause, may materially and adversely affect our stock price.

As a result, you could lose all or part of your investment.

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The anti-takeover provisions of Delaware law impose barriers to the ability of a third party to acquire control of us, even if a change of control would be beneficial to our existing stockholders.

In addition, our certificate of incorporation and bylaws contain provisions that may make it more difficult for a third party to acquire control of us without the approval of

our board of directors.

In addition, our certificate of incorporation and bylaws contain provisions that may make it more difficult for a third party to acquire control of us without the approval of our board of directors.

These provisions may make it more difficult or expensive for a third party to acquire a majority of our outstanding 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-K

Item 1A. Risk Factors