What changed in this filing

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Item 1. Business

2024-02-15 compared with 2023-02-16 · 28 added, 36 removed, 175 unchanged (27% of the section changed)

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References in this report to the “transition period” refer to the six-month period ended December 31, 2021.

See Item 8, Note 17 to our Consolidated Financial Statements for further information.

We acquire and manage precious metal streams, royalties, and similar interests.

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Please refer to Item 2, Properties, for a discussion of the developments at our principal properties.

In the ordinary course of business, we engage in a continual review of opportunities to acquire existing stream and royalty interests, to establish new stream and royalty interests on operating mines, to create new stream and royalty interests through the financing of mine development or exploration, or to acquire companies that hold stream and royalty interests.

We currently, and generally at any time, have acquisition opportunities in various stages of active review, including, for example, our engagement of consultants and advisors to analyze particular opportunities, our analysis of technical, financial, legal and other confidential information of particular opportunities, submission of indications of interest and term sheets, participation in preliminary discussions and negotiations and involvement as a bidder in competitive processes.

We are continually reviewing opportunities to grow our portfolio, whether through the creation or acquisition of new or existing stream or royalty interests or other acquisition activity.

We generally have acquisition opportunities in various stages of review.

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

analysis of financial, legal (including corporate governance) and technical (including environmental issues concerning air, water and biodiversity and social impacts) and other confidential information regarding an opportunity;

submission of indications of interest and term sheets;

participation in preliminary discussions and negotiations;

and involvement as a bidder in competitive processes.

As discussed in further detail throughout this report, some key highlights and developments for our business for the year ended December 31, 2023 were as follows:

● On December 29, 2022 we acquired two portions of a gross smelter return royalty that together cover a large area including the Cortez mine operational area and the entirety of the Fourmile development project in Nevada from certain holders who are successors in interest to Idaho Mining Corporation for cash consideration of $204.1 million.

The two portions of the gross smelter return royalty are comprised of a 0.24% gross royalty that covers

areas including the Pipeline and Crossroads deposits and a 0.45% gross royalty that covers areas including the Cortez Hills, Goldrush, Fourmile and Robertson deposits.

These royalties are not subject to stepdowns or caps and have no applicable deductions.

● On September 9, 2022, we completed the acquisition of all the issued and outstanding shares of Great Bear Royalties Corporation for cash consideration of approximately C$199.6 million (US$151.7 million).

The sole material asset of Great Bear Royalties Corp.

is a 2.0% net smelter 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.

● On August 1, 2022, we acquired a sliding scale gross royalty from Kennecott Royalty Company, a wholly owned subsidiary of Rio Tinto European Holdings Limited, on production from an area including the Cortez mine operational area, including the Pipeline, Crossroads, Cortez Hills and Goldrush deposits, and the Fourmile development project for cash consideration of $525 million.

Based on information available, the royalty would not cover the existing Robertson deposits.

At gold prices above $900 per ounce, the sliding scale gross royalty is an effective 1.2% gross royalty and is not subject to any stepdowns or caps.

● On March 14, 2022, we made our final advance payment toward the Khoemac a u option stream which increased our right to receive payable silver produced from Khoemac a u from 93% to 100%.

● During calendar year 2023 we repaid $325 million under our revolving credit facility.

At December 31, 2023, we had $250 million outstanding under our $1.0 billion revolving credit facility and had cash and equivalents of $104 million.

● We had revenue of $605.7 million for the year ended December 31, 2023, compared to $603.2 million for the comparable prior year period.

This was an 8% decrease period over period.

● We generated $415.8 million of net operating cash flow for the year ended December 31, 2023, compared to $417.3 million for the comparable prior year period.

This was a 9.7% decrease period over period.

● At December 31, 2022, we had $575 million outstanding under our $1.0 billion revolving credit facility and had cash and equivalents of $119 million.

● We increased our calendar year dividend to $1.60 per basic share, which is paid in quarterly installments throughout calendar year 2024.

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Certain Definitions

Development stage property .

A property that has mineral reserves disclosed but no material extraction.

Dollar or “$”:

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We refer to Canadian dollars as C$.

Development stage property .

A property that has mineral reserves disclosed but no material extraction.

Exploration stage property:

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Gold equivalent ounces (GEOs):

GEOs are calculated as Royal Gold’s revenue divided by the average gold price for the period, with the gold price determined based on the LBMA Price.

GEOs are calculated as Royal Gold’s revenue divided by the average gold price for the period, with the gold price determined based on the LBMA PM Price.

Gross smelter return (GSR) royalty:

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A defined percentage of the gross revenue from a resource extraction operation less certain contract-defined costs.

Payable metal:

Ounces or pounds of metal in concentrate after deduction of a percentage of metal in concentrate by a third-party smelter pursuant to smelting contracts.

Probable mineral reserve:

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The economically mineable part of a measured mineral resource that can only result from conversion of a measured mineral resource.

Payable metal:

Ounces or pounds of metal in concentrate after deduction of a percentage of metal in concentrate by a third-party smelter pursuant to smelting contracts.

The right to receive a percentage or other denomination of mineral production from a mining operation.

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As of December 31, 2023, we owned nine stream interests, which are on eight production stage properties and one development stage property.

Stream interests accounted for 69%, 66%, 69%, and 72% of our total revenue for the year ended December 31, 2022, six months ended December 31, 2021, and fiscal years ended June 30, 2021 and 2020, respectively.

Stream interests accounted for 69% of our total revenue for the years ended December 31, 2023 and 2022, and 66% and 69% of our total revenue for the six months ended

December 31, 2021, and the fiscal year ended June 30, 2021, respectively.

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

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

Royalty interests accounted for 31%, 34%, 31%, and 28% of our total revenue for the year ended December 31, 2022, six months ended December 31, 2021, and fiscal years ended June 30, 2021 and 2020, respectively.

Royalty interests accounted for 31% of our royalty revenue for the years ended December 31, 2023 and 2022, and 34%, and 31% of our total revenue for the six months ended December 31, 2021, and fiscal year ended June 30, 2021, respectively.

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

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Rest of world

Our reportable segments for purposes of assessing performance for the year ended December 31, 2022, six months ended December 31, 2021, and fiscal years ended June 30, 2021 and 2020, respectfully, are shown below (amounts are in thousands):

Our reportable segments for purposes of assessing performance for the years ended December 31, 2023 and 2022, six months ended December 31, 2021, and fiscal year ended June 30, 2021, respectively, are shown below (amounts are in thousands):

Year Ended December 31, 2023

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Total royalty interests

Six Months Ended December 31, 2021

Year Ended December 31, 2022

Cost of sales (1)

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Total royalty interests

Fiscal Year Ended June 30, 2021

Six Months Ended December 31, 2021

Cost of sales (1)

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Dominican Republic

Rest of World

Total stream interests

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The prices of gold, silver, copper, and other metals have fluctuated widely in recent years.

The marketability and the price of metals are influenced by numerous factors beyond our control.

The marketability and the price of metals are influenced by numerous factors beyond

Significant declines in the prices of gold, silver, or copper could have a material adverse effect on our results of operations and financial condition.

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We are committed to providing equal opportunities for promotion, compensation, training and development to all qualified individuals.

We maintain a Diversity & Inclusion Policy that outlines our values, commitment to a diverse and inclusive Board and workforce and procedures for carrying out the policy.

Among other things, when identifying new director candidates, the Compensation, Nominating and Governance Committee of our Board of Directors will require that the initial list of candidates, whether generated internally or by a third-party search firm, include qualified diverse candidates

of gender, as well as racial and ethnic, diversity.

Candidates for new hire employee positions, including senior management, will be recruited and considered in similar fashion.

We maintain a Diversity & Inclusion Policy that outlines our values, commitment to a diverse and inclusive

Board and workforce and procedures for carrying out the policy.

We are committed to the wellbeing of all our employees.

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We maintain a People Policy that outlines our approach to maintaining safe work conditions for our employees.

In response to the continued effects of the COVID-19 pandemic, we put in place initiatives to support our team in maintaining a healthy work-life balance at all our offices, including a hybrid in-office work schedule.

We are committed to respecting human rights in the jurisdictions where we operate and affirm our commitment to comply with all applicable laws concerning human rights through our Human Rights Policy.

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Host Community Commitment

We actively seek opportunities to advance sustainability initiatives with the goal of supporting communities that host the operations in which we hold stream and royalty interests during and following our operators’ mining operations.

Many of our operators also actively and positively impact the communities where they mine.

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We also believe in supporting the communities where we live and work.

Our annual charitable giving is administered by a committee of employees that selects donation targets and recipients in our local communities.

We are proud to partner with leading charities in Denver, Lucerne, Toronto, and Vancouver that are actively responding to community needs with respect to medical supplies, homelessness, food security, elder care, and education.

Our annual charitable giving is administered by a committee of employees, including members of senior management, that selects donation targets and recipients in our local communities.

We are proud to partner with leading charities in Denver, Lucerne, Toronto, and Vancouver that are actively responding to community needs with respect to medical supplies, food availability and security, elder care, and education.

We file periodic and current reports, proxy statements, and other information with the SEC.

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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 1. Business