What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2023-11-02 compared with 2023-08-03 · 103 added, 78 removed, 361 unchanged (33% of the section changed)

3 unchanged sentences

(Unaudited, amounts in thousands except share data)

September 30,

Cash and equivalents

29 unchanged sentences

Three Months Ended

Six Months Ended

Nine Months Ended

September 30,

Revenue (Note 4)

10 unchanged sentences

Income before income taxes

Income tax (expense) benefit

Income tax expense

Net income and comprehensive income

10 unchanged sentences

Consolidated Statements of Changes in Stockholders’ Equity

Three months ended June 30, 2023, and 2022

Three months ended September 30, 2023, and 2022

(unaudited, amounts in thousands except share data)

2 unchanged sentences

Non-controlling

Balance at March 31, 2023

Balance at June 30, 2023

Stock-based compensation and related share issuances

2 unchanged sentences

Dividends declared

Balance at June 30, 2023

Balance at September 30, 2023

Royal Gold Stockholders

1 unchanged sentence

Non-controlling

Balance at March 31, 2022

Balance at June 30, 2022

Stock-based compensation and related share issuances

2 unchanged sentences

Dividends declared

Balance at June 30, 2022

Balance at September 30, 2022

ROYAL GOLD, INC.

Consolidated Statements of Changes in Stockholders’ Equity

Six months ended June 30, 2023, and 2022

Nine months ended September 30, 2023, and 2022

(unaudited, amounts in thousands except share data)

7 unchanged sentences

Dividends declared

Balance at June 30, 2023

Balance at September 30, 2023

Royal Gold Stockholders

6 unchanged sentences

Dividends declared

Balance at June 30, 2022

Balance at September 30, 2022

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

2 unchanged sentences

(Unaudited, amounts in thousands)

Six Months Ended

Nine Months Ended

September 30,

Cash flows from operating activities:

20 unchanged sentences

Repayment of debt

Borrowings from revolving credit facility

Debt issuance costs

1 unchanged sentence

Common stock dividends

Net cash used in financing activities

Net (decrease) increase in cash and equivalents

Net cash (used in) provided by financing activities

Net decrease in cash and equivalents

Cash and equivalents at beginning of period

15 unchanged sentences

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

Operating results for the three and six months ended June 30, 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 nine months ended September 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 June 30, 2023 and December 31, 2022.

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

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

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

Accumulated Depletion

39 unchanged sentences

( 1,634,113 )

MARKETABLE EQUITY SECURITIES

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).

Carrying value of marketable securities (1)

Change in fair value of marketable securities

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

ROYAL GOLD, INC.

Notes to Consolidated Financial Statements

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

As of June 30, 2023

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

As of September 30, 2023

As of December 31, 2022

4 unchanged sentences

Revolving credit facility

ROYAL GOLD, INC.

Notes to Consolidated Financial Statements

Revolving credit facility

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 March 6, June 6, and September 6, 2023, we repaid $ 75 million, $ 100 million, and $ 75 million, respectively, 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.

As of September 30, 2023, we had $ 325 million outstanding and $ 675 million available under our revolving credit facility.

The interest rate on borrowings under our revolving credit facility as of September 30, 2023, was Term SOFR 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 $ 6.7 million and $ 23.0 million for the three and nine months ended September 30, 2023, respectively, and $ 3.9 million and $ 4.4 million for the three and nine months ended September 30, 2022, respectively.

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

ROYAL GOLD, INC.

Notes to Consolidated Financial Statements

Royalty Interests

2 unchanged sentences

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.

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

ROYAL GOLD, INC.

Notes to Consolidated Financial Statements

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.

6 unchanged sentences

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

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.

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

Disaggregation of Revenue

4 unchanged sentences

Three Months Ended

Six Months Ended

Nine Months Ended

September 30,

Stream revenue:

7 unchanged sentences

Three Months Ended

Six Months Ended

Nine Months Ended

September 30,

Stream revenue:

10 unchanged sentences

Total revenue

Peñasquito Revenue

During the three months ended September 30, 2023, no royalty revenue from Peñasquito was recognized due to the suspension of operations resulting from a strike action on June 7, 2023, by the National Union of Mine and Metal Workers of the Mexican Republic ("the Union").

According to Newmont Corporation (“Newmont”), on October 13, 2023, a definitive agreement was reached between Newmont and the Union that also received approval from the Mexican Labor Court, ramp-up of operations has since commenced, and operations at Peñasquito are expected to reach full operating capacity by the end of the fourth quarter of 2023.

Please refer to Note 8 for the geographical distribution of our revenue by reportable segment.

2 unchanged sentences

Three Months Ended

Six Months Ended

Nine Months Ended

September 30,

Restricted stock

Stock appreciation rights

Performance stock

Stock appreciation rights

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

ROYAL GOLD, INC.

Notes to Consolidated Financial Statements

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

Three Months Ended

Six Months Ended

Nine Months Ended

September 30,

(Number of shares)

3 unchanged sentences

Total equity awards granted

ROYAL GOLD, INC.

Notes to Consolidated Financial Statements

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:

As of September 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

2 unchanged sentences

Performance stock

Stock appreciation rights

Stock options

EARNINGS PER SHARE (“EPS”)

7 unchanged sentences

Three Months Ended

Six Months Ended

Nine Months Ended

September 30,

Net income attributable to Royal Gold common stockholders

4 unchanged sentences

Three Months Ended

Six Months Ended

Income tax expense (benefit)

Nine Months Ended

September 30,

Income tax expense

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.

Notes to Consolidated Financial Statements

The effective tax rates for the nine months ended September 30, 2023 and 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.

SEGMENT INFORMATION

1 unchanged sentence

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

As of June 30, 2023

As of September 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 June 30, 2023

Three Months Ended September 30, 2023

Cost of sales (1)

4 unchanged sentences

Royalty interests

Three Months Ended June 30, 2022

Three Months Ended September 30, 2022

Cost of sales (1)

4 unchanged sentences

Royalty interests

Six Months Ended June 30, 2023

Nine Months Ended September 30, 2023

Cost of sales (1)

4 unchanged sentences

Royalty interests

Six Months Ended June 30, 2022

Nine Months Ended September 30, 2022

Cost of sales (1)

5 unchanged sentences

(1) Excludes depreciation, depletion and amortization.

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

ROYAL GOLD, INC.

Notes to Consolidated Financial Statements

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

A reconciliation of total segment gross profit to the consolidated Income before income taxes is shown below (amounts in thousands):

Three Months Ended

Six Months Ended

Nine Months Ended

September 30,

Total segment gross profit

7 unchanged sentences

Income before income taxes

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):

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

Three Months Ended

Six Months Ended

Nine Months Ended

September 30,

Stream interests:

12 unchanged sentences

Quoted prices for identical instruments in active markets;

ROYAL GOLD, INC.

Notes to Consolidated Financial Statements

Quoted prices for similar instruments in active markets;

1 unchanged sentence

and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets;

ROYAL GOLD, INC.

Notes to Consolidated Financial Statements

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 June 30, 2023

Carrying Value

Assets (amounts in thousands):

Marketable equity securities (1)

As of December 31, 2022

Carrying Value

Assets (amounts in thousands):

Marketable equity securities (1)

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

Our marketable securities classified within Level 1 of the fair value hierarchy are valued using quoted market prices in active markets multiplied by the quantity of shares held.

The TriStar Gold Inc.

warrants (Note 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 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.

As of September 30, 2023 and December 31, 2022, we had financial assets in the form of marketable securities which are measured at fair value on a recurring basis;

however, the carrying value of such financial assets is not material.

The carrying value of our revolving credit facility (Note 3) approximates fair value as of September 30, 2023.

As of September 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.

4 unchanged sentences

(“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.

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

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 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.

As of September 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