What changed in this filing

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Item 1. Financial Statements

2023-08-03 compared with 2023-05-04 · 88 added, 38 removed, 351 unchanged (26% of the section changed)

34 unchanged sentences

Three Months Ended

Six Months Ended

Revenue (Note 5)

10 unchanged sentences

Income before income taxes

Income tax expense

Income tax (expense) benefit

Net income and comprehensive income

10 unchanged sentences

Consolidated Statements of Changes in Stockholders’ Equity

Three months ended March 31, 2023, and 2022

Three months ended June 30, 2023, and 2022

(unaudited, amounts in thousands except share data)

2 unchanged sentences

Non-controlling

Balance at December 31, 2022

Balance at March 31, 2023

Stock-based compensation and related share issuances

2 unchanged sentences

Dividends declared

Balance at June 30, 2023

Royal Gold Stockholders

Common Shares

Non-controlling

Balance at March 31, 2022

Stock-based compensation and related share issuances

Distributions to non-controlling interests

Net income and comprehensive income

Dividends declared

Balance at June 30, 2022

ROYAL GOLD, INC.

Consolidated Statements of Changes in Stockholders’ Equity

Six months ended June 30, 2023, and 2022

(unaudited, amounts in thousands except share data)

Royal Gold Stockholders

6 unchanged sentences

Dividends declared

Balance at March 31, 2022

Balance at June 30, 2023

Royal Gold Stockholders

Common Shares

Non-controlling

Balance at December 31, 2021

Stock-based compensation and related share issuances

Distributions to non-controlling interests

Net income and comprehensive income

Dividends declared

Balance at June 30, 2022

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

2 unchanged sentences

(Unaudited, amounts in thousands)

Three Months Ended

Six Months Ended

Cash flows from operating activities:

4 unchanged sentences

Fair value changes in equity securities

Deferred tax expense

Deferred tax benefit

Changes in assets and liabilities:

9 unchanged sentences

Acquisition of stream and royalty interests

Sale of equity securities

Net cash used in investing activities

1 unchanged sentence

Repayment of debt

Debt issuance costs

Net payments from issuance of common stock

1 unchanged sentence

Net cash used in financing activities

Net increase in cash and equivalents

Net (decrease) increase in cash and equivalents

Cash and equivalents at beginning of period

15 unchanged sentences

In the opinion of management, all adjustments which are of a normal recurring nature considered necessary for a fair presentation of our interim financial statements have been included in this Form 10-Q.

Operating results for the three months ended March 31, 2023 are not necessarily indicative of the results that may be expected for the calendar year ending December 31, 2023.

Operating results for the three and six months ended June 30, 2023 are not necessarily indicative of the results that may be expected for the calendar year ending December 31, 2023.

These interim unaudited consolidated financial statements should be read in conjunction with our Form 10-K for the year ended December 31, 2022, filed with the Securities and Exchange Commission (“SEC”) on February 16, 2023 (“2022 10-K”).

4 unchanged sentences

STREAM AND ROYALTY INTERESTS, NET

The following tables summarize our stream and royalty interests, net as of March 31, 2023 and December 31, 2022.

As of March 31, 2023 (Amounts in thousands):

The following tables summarize our stream and royalty interests, net as of June 30, 2023 and December 31, 2022.

As of June 30, 2023 (Amounts in thousands):

Accumulated Depletion

40 unchanged sentences

MARKETABLE EQUITY SECURITIES

As of March 31, 2023, 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.

As of June 30, 2023, our marketable equity securities include warrants to purchase up to 19,640,000 common shares of TriStar Gold Inc and 250,000 common shares of Goldon Resources Ltd.

Our marketable equity securities are measured at fair value (Note 10) each reporting period with any changes in fair value recognized in net income (amounts in thousands).

4 unchanged sentences

Notes to Consolidated Financial Statements

Our debt as of March 31, 2023 and December 31, 2022 consists of the following (amounts in thousands):

As of March 31, 2023

Our debt as of June 30, 2023 and December 31, 2022 consists of the following (amounts in thousands):

As of June 30, 2023

As of December 31, 2022

5 unchanged sentences

Revolving credit facility

On March 6, 2023, we repaid $ 75 million of outstanding borrowings on our revolving credit facility.

As of March 31, 2023, we had $ 500 million outstanding and $ 500 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 March 31, 2023, was LIBOR plus 1.20 % for an all-in rate of 6.2 %.

Interest expense, which includes interest on outstanding borrowings and amortization of debt issuance costs, was $ 8.5 million and $ 0.2 million for the three months ended March 31, 2023 and 2022, respectively.

We were in compliance with each financial covenant (leverage ratio and interest coverage ratio) under our revolving credit facility as of March 31, 2023.

On March 6, 2023, we repaid $ 75 million and on June 6, 2023, we repaid $ 100 million of outstanding borrowings on our revolving credit facility.

On June 28, 2023, we entered into a fifth amendment to our revolving credit facility dated as of June 2, 2017, as amended.

The fifth amendment extended the scheduled maturity date from July 7, 2026 to June 28, 2028, replaced LIBOR with Secured Overnight Financing Rate (“Term SOFR”) as a benchmark interest rate and made certain other administrative changes to the existing revolving credit facility.

As of June 30, 2023, we had $ 400 million outstanding and $ 600 million available under our revolving credit facility.

The interest rate on borrowings under our revolving credit facility as of June 30, 2023, was LIBOR plus 1.20 % for an all-in rate of 6.7 %.

Interest expense, which includes interest on outstanding borrowings and amortization of debt issuance costs, was $ 7.8 million and $ 16.3 million for the three and six months ended June 30, 2023, respectively, and $ 0.2 million and $ 0.5 million for the three and six months ended June 30, 2022, respectively.

We were in compliance with each financial covenant (leverage ratio and interest coverage ratio) under our revolving credit facility as of June 30, 2023.

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

12 unchanged sentences

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

ROYAL GOLD, INC.

Notes to Consolidated Financial Statements

the period in which metal production occurs.

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.

8 unchanged sentences

Please also refer to our “Use of Estimates” accounting policy discussed in our 2022 10-K.

For the three months ended March 31, 2023, royalty revenue that was estimated or was attributable to metal production for a period prior to March 31, 2023, was not material.

For the three months ended June 30, 2023, royalty revenue that was estimated or was attributable to metal production for a period prior to June 30, 2023, was not material.

Disaggregation of Revenue

4 unchanged sentences

Three Months Ended

Six Months Ended

Stream revenue:

7 unchanged sentences

Three Months Ended

Six Months Ended

Stream revenue:

14 unchanged sentences

Three Months Ended

Six Months Ended

Restricted stock

Performance stock

Stock appreciation rights

Performance stock

Stock options

1 unchanged sentence

Stock-based compensation expense is included within General and administrative expense in the consolidated statements of operations and comprehensive income.

During the three months ended March 31, 2023 and 2022, we granted the following stock-based compensation awards:

During the three and six months ended June 30, 2023 and 2022, we granted the following stock-based compensation awards:

Three Months Ended

Six Months Ended

(Number of shares)

Performance stock (at maximum 200 % attainment)

3 unchanged sentences

Notes to Consolidated Financial Statements

As of March 31, 2023, unrecognized compensation expense (expressed in thousands below) and weighted-average vesting period for each of our stock-based compensation awards were as follows:

As of June 30, 2023, unrecognized compensation expense (expressed in thousands below) and weighted-average vesting period for each of our stock-based compensation awards were as follows:

average vesting

13 unchanged sentences

Three Months Ended

Six Months Ended

Net income attributable to Royal Gold common stockholders

4 unchanged sentences

Three Months Ended

Income tax expense

Six Months Ended

Income tax expense (benefit)

Effective tax rate

The effective tax rates for the three and six months ended June 30, 2023, and June 30, 2022, included discrete income tax benefits of $ 8.5 million and $ 18.8 million, respectively, attributable to the release of a valuation allowance on certain deferred tax assets, respectively.

ROYAL GOLD, INC.

3 unchanged sentences

Our long-lived assets (stream and royalty interests, net) are geographically distributed as shown in the following table (amounts in thousands):

As of March 31, 2023

As of June 30, 2023

As of December 31, 2022

5 unchanged sentences

Our reportable segments for purposes of assessing performance are shown below (amounts in thousands):

Three Months Ended March 31, 2023

Three Months Ended June 30, 2023

Cost of sales (1)

4 unchanged sentences

Royalty interests

Three Months Ended March 31, 2022

Three Months Ended June 30, 2022

Cost of sales (1)

4 unchanged sentences

Royalty interests

Six Months Ended June 30, 2023

Cost of sales (1)

Production taxes

Depletion (2)

Segment gross profit

Stream interests

Royalty interests

Six Months Ended June 30, 2022

Cost of sales (1)

Production taxes

Depletion (2)

Segment gross profit

Stream interests

Royalty interests

(1) Excludes depreciation, depletion and amortization.

4 unchanged sentences

Three Months Ended

Six Months Ended

Total segment gross profit

7 unchanged sentences

Income before income taxes

Our revenue by reportable segment for the three months ended March 31, 2023 and 2022 is geographically distributed as shown in the following table (amounts in thousands):

Our revenue by reportable segment for the three and six months ended June 30, 2023 and 2022 is geographically distributed as shown in the following table (amounts in thousands):

Three Months Ended

Six Months Ended

Stream interests:

19 unchanged sentences

The following table sets forth our financial assets measured at fair value on a recurring basis (at least annually) by level within the fair value hierarchy.

As of March 31, 2023

As of June 30, 2023

Carrying Value

9 unchanged sentences

warrants (Note 3) 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 4) approximates fair value as of March 31, 2023.

As of March 31, 2023, we had assets that, under certain conditions, are subject to measurement at fair value on a non-recurring basis like those associated with stream and royalty interests, intangible assets and other long-lived assets.

The carrying value of our revolving credit facility (Note 4) approximates fair value as of June 30, 2023.

As of June 30, 2023, 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.

2 unchanged sentences

Xavantina Exploration Payment

On April 20, 2023, we made a $ 2.4 million advance payment to a subsidiary of Ero Gold Corporation as part of our commitment to support the achievement of success-based targets related to regional exploration and mineral resource additions.

This payment will be recorded to exploration stage stream interests within Stream and royalty interests, net on our consolidated balance sheets during the second quarter of 2023.

On April 20, 2023, we made a $ 2.4 million advance payment to a subsidiary of Ero Copper Corp.

(“Ero”) as part of our commitment to support the achievement of success-based targets related to regional exploration and mineral resource additions.

This payment was recorded to exploration stage stream interests within Stream and royalty interests, net on our consolidated balance sheets as of June 30, 2023.

Advance payments of $ 4.4 million remain if Ero meets certain success-based targets related to regional exploration and mineral resource additions through calendar 2024.

1 unchanged sentence

Ilovica Gold Stream Acquisition

As of March 31, 2023, 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.

As of June 30, 2023, our conditional funding schedule of $ 163.75 million, as part of the Ilovica gold stream acquisition entered into in October 2014, remains subject to certain conditions.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements