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Item 7. Management’s Discussion and Analysis

2024-02-15 compared with 2023-02-16 · 68 added, 139 removed, 241 unchanged (46% of the section changed)

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General Presentation

Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) generally discusses year-to-year comparisons between the year ended December 31, 2022 and the comparative year ended December 31, 2021.

Due to our change in fiscal year from June 30 to December 31, the comparative year ended December 31, 2021 was unaudited.

A discussion of the changes in our financial condition and results of operations for the six months ended December 31, 2021 transition period and fiscal years ended June 30, 2021 and 2020 have been omitted from this report, but may be found in Item 7.

MD&A, of our Annual Reports on Form 10-K for the six month transition period ended December 31, 2021 and for the years ended June 30, 2021 and 2020, filed with the SEC on February 17, 2022, August 12, 2021 and August 6, 2020, respectively, which are available free of charge on the SEC’s website at www.sec.gov and our website at www.royalgold.com.

A discussion of the changes in our financial condition and results of operations for the year ended December 31, 2022, the six month transition period ended December 31, 2021 and fiscal year ended June 30, 2021 has been omitted from this report, but may be found in Item 7.

MD&A, of our Annual Reports on Form 10-K for the year ended December 31, 2022, the six month transition period ended December 31, 2021 and the year ended June 30, 2021, filed with the SEC on February 16, 2023, February 17, 2022 and August 12, 2021, respectively, which are available free of charge on the SEC’s website at www.sec.gov and our website at www.royalgold.com.

Overview of Our Business

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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% and 67% of our total revenue for the years ended December 31, 2022 and 2021, respectively.

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

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

● Acquisition and Management of Royalty Interests — Royalties are non-operating interests in mining projects that provide the right to revenue or metals produced from the project after deducting specified costs, if any.

As of December 31, 2022, we owned royalty interests on 32 production stage properties, 18 development stage properties and 123 exploration stage properties, of which we consider 52 to be evaluation stage projects.

As of December 31, 2023, we owned royalty interests on 29 production stage properties, 21 development stage properties and 119 exploration stage properties, of which we consider 52 to be evaluation stage properties.

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

Royalty interests accounted for 31% and 33% of our total revenue for the years ended December 31, 2022 and 2021, respectively.

Royalty interests accounted for 31% of our total revenue for the years ended December 31, 2023 and 2022 .

We do not conduct mining operations on the properties in which we hold stream and royalty interests, and we generally are not required to contribute to capital costs, exploration costs, environmental costs or other operating costs on those properties.

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(2) Based on the average LME Price for the period.

Acquisition of Additional Royalty Interests on Cortez Complex

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

The area within the Cortez Complex is owned or controlled by Nevada Gold Mines LLC (“NGM”), a joint venture between Barrick Gold Corporation (“Barrick”) and Newmont Corporation (“Newmont”), with the exception of the Fourmile development project which is 100% owned and operated by Barrick.

The Idaho Royalty comprises 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.

The Idaho Royalty is life of mine, not subject to any stepdowns or caps, and has no applicable deductions.

The purchase price was funded with amounts available under the revolving credit facility and cash on hand.

The economic effective date for the transaction was December 1, 2022, and revenue of $0.7 million on production of approximately 116,000 ounces attributable to the royalty was recognized in the fourth quarter of 2022.

Acquisition of Great Bear Royalties Corp.

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

GBR’s sole material asset is a 2.0% net smelter return royalty (“Great Bear Royalty”) that covers the entirety of the Great Bear Project in the Red Lake district of Ontario, Canada, owned and operated by a subsidiary of Kinross Gold Corporation (“Kinross”).

The Great Bear Royalty includes all metals produced from contiguous claims covering 9,140 hectares.

Royalty payments will be made quarterly with applicable standard deductions.

Refer to Note 3 of our notes to consolidated financial statements for further discussion on the GBR acquisition.

The purchase price was funded with available cash on hand.

As part of the acquisition and in exchange for information and access to the project provided by Kinross, we granted an option to Kinross to purchase a 25% interest in the Great Bear Royalty (0.5% of the 2.0% royalty rate) for an amount equal to 25% of the Acquisition Price, adjusted for inflation, at any time from the transaction closing date until the earlier of a construction decision for the Great Bear Project and 10 years after the transaction closing date.

On February 13, 2023, Kinross announced an initial mineral resource of 5 million ounces of gold (2.7 million ounces Indicated, 2.3 million ounces Inferred) at the Great Bear Project based on drilling to an approximate depth of 500 meters.

Kinross expects 2023 activity to include drilling of 180,000 meters at depth, along strike and on parallel structures to support engineering studies and permitting activities.

Acquisition of Gross Royalty on Cortez Complex

On August 2, 2022, we acquired a sliding scale gross royalty (the “Rio Tinto Royalty”) on production from an area within the Cortez Complex for cash consideration of $525 million.

The area within the Cortez Complex is owned or controlled by NGM, with the exception of the Fourmile development project which is 100% owned and operated by Barrick.

The royalty is a life of mine sliding scale gross royalty payable at a rate of 0% at a gold price less than $400 per ounce, increasing to 3% at a gold price above $900 per ounce, and is payable on 40% of all production from the Cortez Complex except for the existing deposits within the Robertson property.

The purchase price was funded with debt and available cash on hand.

For the year ended December 31, 2022, we received revenue of $4.5 million on production of approximately 227,000 ounces attributable to the Rio Tinto Royalty.

Lawyers Royalty Acquisition

On March 24, 2022, we acquired a 0.5% net smelter returns royalty (“NSR”) on production from the Lawyers Project, currently operated by Benchmark Metals Inc., which is located in British Columbia, Canada.

As part of this transaction, we also acquired a right of first offer (“ROFO”) for an existing 2.0% NSR royalty over the Ranch Project owned by Thesis Gold, Inc.

that is located adjacent to the Lawyers Project.

We paid $8.0 million in cash consideration for the royalty and ROFO to Guardsmen Resources Inc.

The Lawyers Project acquisition has been accounted for as an asset acquisition.

Khoemac a u Silver Stream

On February 23, 2022, we made an advance payment of $10.0 million toward the option stream which increased our right to receive payable silver produced from Khoemac a u from 90% to 93%, and on March 14, 2022, we made our final advance payment of $16.5 million toward the option stream which increased our right to receive payable silver produced from 93% to 100%.

Cost Support Agreement for Mount Milligan

On February 13, 2024, we entered into a Cost Support Agreement with Centerra to incentivize Centerra to continue to invest and maximize the value of the large mineral endowment at Mount Milligan.

The Cost Support Agreement is expected to provide a basis for a reserve increase and extension of the Mount Milligan mine life to 2035.

Please refer to Part I, Item 2, Properties, of this report for additional information regarding the Cost Support Agreement.

Operators’ Production Estimates by Stream and Royalty Interest for Calendar 2023

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Andacollo (3)

22,000 - 27,000

Mount Milligan (4)

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Khoemac a u (6)

1.5 - 1.7 Million

940,000 - 1,060,000

Peñasquito (8)

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(2) Actual production figures shown are from our operators and cover the period January 1, 2023, through December 31, 2023, unless otherwise noted in footnotes to this table.

Such amounts may differ from our reported revenue and production and are not reduced to show the production attributable to our interests.

(3) The estimated and actual production figures shown for Andacollo are contained gold in concentrate.

Deliveries to Royal Gold are determined using a fixed gold payability factor of 89%.

(4) The estimated and actual production figures shown for Mount Milligan are payable gold and copper in concentrate.

Deliveries to Royal Gold are determined using a fixed payability factor of 97% for gold and a minimum payability factor of 95% for copper.

Actual production figures are for the period January 1, 2023, through September 30, 2023.

(5) The estimated and actual production figures shown for Pueblo Viejo are payable gold in doré and represent the 60% interest in Pueblo Viejo held by Barrick.

Barrick did not provide estimated or actual silver production.

(6) The estimated and actual production figures for Khoemac a u are not available through the ramp-up period.

(7) The estimated and actual production figures for Cortez represent the Cortez Legacy Zone area only.

(8) The estimated and actual gold and silver production figures shown for Peñasquito are payable gold and silver in concentrate and doré.

The estimated and actual lead and zinc production figures shown are payable lead and zinc in concentrate.

The actual production figure is for the period January 1, 2022 through September 30, 2022.

Deliveries to Royal Gold are determined using a fixed payability factors of 99.9% for gold and 99% for silver.

(6) The estimated and actual production figures for Khoemac a u are payable silver in concentrate.

Deliveries to Royal Gold are determined using a fixed silver payability factor of 90%.

(7) The estimated and actual production figures for Cortez include the entirety of the Cortez Complex.

Barrick reports production from the entirety of the Cortez Complex and does not report production separately for the Legacy Zone and CC Zone.

Production estimates for the Legacy Zone are provided to us by Barrick and production estimates for 100% of the Cortez Complex are publicly disclosed by Barrick.

(8) The gold and silver production figures shown for Peñasquito are payable gold and silver in concentrate and doré.

The lead and zinc production figures shown are payable lead and zinc in concentrate.

Actual production figures are for the period January 1, 2023 through September 30, 2023, and no production occurred during the third quarter of 2023 due to the suspension of operations resulting from a strike action on June 7, 2023.

Estimated production figures are not available as 2023 production guidance was withdrawn by Newmont on July 20, 2023, due to the suspension of operations

Results of Operations

Year Ended December 31, 2023, Compared with Year Ended December 31, 2022 (In thousands, except share data)

Costs and expenses

Cost of sales (excludes depreciation, depletion and amortization)

General and administrative

Production taxes

Depreciation, depletion and amortization

Impairment of royalty interests

Total costs and expenses

Operating income

Fair value changes in equity securities

Interest and other income

Interest and other expense

Income before income taxes

Income tax expense

Net income and comprehensive income

Net (income) loss and comprehensive (income) loss attributable to non-controlling interests

Net income and comprehensive income attributable to Royal Gold common stockholders

Basic earnings per share

Basic weighted average shares outstanding

Diluted earnings per share

Diluted weighted average shares outstanding

Cash dividends declared per common share

For the year ended December 31, 2022, we recorded net income attributable to Royal Gold stockholders of $239.0 million, or $3.64 per basic share and $3.63 per diluted share, as compared to net income attributable to Royal Gold stockholders of $274.0 million, or $4.17 per basic and diluted share, for the year ended December 31, 2021.

The decrease in net income was primarily due to lower revenue and higher interest expense as a result of higher amounts outstanding under our revolving credit facility compared to the prior period.

This decrease was partially offset by a decrease in income tax expense as discussed in further detail below.

For the year ended December 31, 2022, we recognized total revenue of $603.2 million, which is comprised of stream revenue of $417.8 million and royalty revenue of $185.4 million, at an average gold price of $1,800 per ounce, an average silver price of $21.73 per ounce and an average copper price of $3.99 per pound, compared to total revenue of $653.6 million, which is comprised of stream revenue of $436.3 million and royalty revenue of $217.3 million, at an average gold price of $1,799 per ounce, an average silver price of $25.14 per ounce and an average copper price of $4.23 per pound, for the year ended December 31, 2021.

For the year ended December 31, 2023, we recorded net income attributable to Royal Gold stockholders of $239.4 million, or $3.64 per basic share and $3.63 per diluted share, as compared to net income attributable to Royal Gold stockholders of $239.0 million, or $3.64 per basic and $3.63 per diluted share, for the year ended December 31, 2022.

For the year ended December 31, 2023, we recognized total revenue of $605.7 million, which is comprised of stream revenue of $418.3 million and royalty revenue of $187.4 million, at an average gold price of $1,941 per ounce, an average

silver price of $23.35 per ounce and an average copper price of $3.85 per pound, compared to total revenue of $603.2 million, which is comprised of stream revenue of $417.8 million and royalty revenue of $185.4 million, at an average gold price of $1,800 per ounce, an average silver price of $21.73 per ounce and an average copper price of $3.99 per pound, for the year ended December 31, 2022.

Revenue and the corresponding production attributable to our stream and royalty interests, for the year ended December 31, 2023, compared to the year ended December 31, 2022, is as follows:

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Total revenue

(1) Reported production relates to the amount of metal sales, subject to our stream and royalty interests, for the year ended December 31, 2022 and 2021, and may differ from the operators’ public reporting.

(1) Reported production relates to the amount of stream metal sales and the metal sales attributable to our royalty interests for the years ended December 31, 2023 and 2022, and may differ from the operators’ public reporting due to a number of factors, including the timing of the operator’s concentrate shipments, the delivery of metal to us and our subsequent sale of the delivered metal.

(2) Refer to Item 2, Properties, for further discussion on our principal stream and royalty interests.

(3) Individually, with the exception of the Rainy River stream (5.3% for the year ended December 31, 2022 and 5.7% for the year ended December 31, 2021) and Wassa (5.2% for the year ended December 31, 2022), no stream or royalty included within the “Other” category contributed greater than 5% of our total revenue for either period.

The decrease in our total revenue for the year ended December 31, 2022, compared with year ended December 31, 2021, resulted primarily from lower gold sales at Andacollo, lower gold and silver sales at Pueblo Viejo and lower gold production at Cortez and Peñasquito.

These decreases were partially offset by an increase in gold sales at Mount Milligan and Xavantina, higher silver sales at Khoemac a u and $5.2 million of revenue from the newly acquired royalties at Cortez compared to the prior period.

(3) Individually, with the exception of the Rainy River stream (6.4% for the year ended December 31, 2023 and 5.3% for the year ended December 31, 2022) and Wassa (5.4% for the year ended December 31, 2023 and 5.2% for the year ended December 31, 2022), no stream or royalty included within the “Other” category contributed greater than 5% of our total revenue for either period.

The increase in our total revenue for the year ended December 31, 2023, compared with the year ended December 31, 2022, resulted primarily from higher gold production at the Cortez Legacy Zone, the new Cortez royalties acquired in 2022 and higher gold and silver prices when compared to the prior year.

These increases were partially offset by an approximate 4 month suspension of operations at Peñasquito commencing in June 2023 due to a strike by the Union and lower gold and copper sales at Mount Milligan compared to the prior year.

Gold and silver ounces and copper pounds purchased and sold during the year ended December 31, 2023 and 2022, as well as gold, silver and copper in inventory as of December 31, 2023 and 2022, for our stream interests were as follows:

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Cost of sales decreased to $90.5 million for the year ended December 31, 2023, from $94.6 million for the year ended December 31, 2022.

The decrease was primarily due to a decrease in gold sales at Andacollo and a decrease in gold and silver sales at Pueblo Viejo when compared to the prior period.

This decrease was partially offset by an increase in gold sales at Mount Milligan when compared to the prior period.

The decrease was primarily due to lower gold and copper sales at Mount Milligan and lower gold and silver sales at Pueblo Viejo when compared to the prior year.

This decrease was partially offset by higher silver sales at Khoemac a u when compared to the prior year.

Cost of sales, which excludes depreciation, depletion and amortization, is specific to our stream agreements and is the result of our purchase of gold, silver and copper for a cash payment.

The cash payment for gold from Mount Milligan is the lesser of $435 per ounce or the prevailing market price of gold when purchased, while the cash payment for our other streams is a set contractual percentage of the gold, silver or copper (Mount Milligan) spot price near the date of metal delivery.

General and administrative costs increased to $34.6 million for year ended December 31, 2022, from $29.3 million for the year ended December 31, 2021.

The increase was primarily due to higher employee related costs and non-cash stock compensation expense.

General and administrative costs increased to $39.8 million for the year ended December 31, 2023, from $34.6 million for the year ended December 31, 2022.

The increase was primarily due to higher corporate costs and an increase in non-cash stock compensation expense.

Depreciation, depletion and amortization decreased to $164.9 million for the year ended December 31, 2023, from $178.9 million for the year ended December 31, 2022.

The decrease was primarily due to lower depletion rates at Mount Milligan compared to the prior period.

Refer to Note 4 of our notes to consolidated financial statements for further discussion on the decrease in depletion rates at Mount Milligan.

This decrease was partially offset by additional depletion from Khoemac a u which produced first deliveries in the September 30, 2021 quarter.

The decrease was primarily due to lower depletion rates at Pueblo Viejo as a result of proven and probable mineral reserve increases when compared to the prior year.

The decrease was partially offset by higher depletion expense at Khoemac a u due to the ramp-up of production in 2023 and additional depletion from the newly acquired royalties at Cortez in 2022.

There were no impairment charges on any of our stream or royalty interests for the year ended December 31, 2023.

During the year ended December 31, 2022, we recognized an impairment loss of $4.3 million on the carrying value of a non-principal exploration stage royalty due to new legal information received.

Refer to Note 4 of our notes to consolidated financial statements for further discussion on the impairment.

We recognized a loss in fair value changes in equity securities of $1.5 million for the year ended December 31, 2022, compared to a gain in fair value changes in equity securities of $2.5 million for the year ended December 31, 2021.

The change was primarily due to a decrease in the fair value of marketable equity securities as discussed further in Note 5 of our notes to consolidated financial statements.

Interest and other expense increased to $30.9 million for the year ended December 31, 2023, from $17.2 million for the year ended December 31, 2022.

The increase in the current period was primarily attributable to higher interest expense as a

result of higher average amounts outstanding under our revolving credit facility and higher interest rates when compared to the prior period.

The increase in the current period was primarily attributable to higher interest expense as a result of higher interest rates when compared to the prior period.

The all-in interest rates as of December 31, 2023 and 2022, were 6.56% and 5.93%, respectively.

Refer to Note 5 of our notes to consolidated financial statements for further discussion on our debt.

Income tax expense was $32.9 million for the year ended December 31, 2022, as compared to $53.2 million for the year ended December 31, 2021, which resulted in an effective tax rate of 12.1% in the current period and 16.2% in the prior period.

The effective tax rate for the year ended December 31, 2022, was primarily impacted by the release of a valuation allowance on certain foreign deferred tax assets.

The effective tax rate for the year ended December 31, 2021, was impacted by the release of uncertain tax positions resulting from a settlement agreement with a foreign tax authority and a change in estimates, partially offset by a foreign tax rate adjustment resulting in a revaluation of certain deferred tax assets.

Income tax expense was $42.0 million for the year ended December 31, 2023, as compared to $32.9 million for the year ended December 31, 2022, which resulted in an effective tax rate of 14.9% in the current period and 12.1% in the prior

The effective tax rates for the years ended December 31, 2023 and 2022, were primarily impacted by the release of valuation allowances on certain foreign deferred tax assets.

Liquidity and Capital Resources

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This compares to working capital of $122.2 million, including $118.6 million of cash and equivalents at December 31, 2022.

The decrease in our working capital was primarily attributable to the acquisition of royalty and stream interests during the year ended December 31, 2022, which is discussed further below under “Summary of Cash Flows.”

The decrease in our working capital was primarily due to a decrease in our available cash, which resulted from increased debt repayments during the current period.

During the year ended December 31, 2023, liquidity needs were met from $415.8 million in net cash provided by operating activities and our available cash resources.

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Refer to Note 5 of our notes to consolidated financial statements and below (“Recent Liquidity and Capital Resource Developments”) for further discussion on our debt.

At year ended December 31, 2022, our contractual cash obligations are solely comprised of operating leases.

At December 31, 2023, our contractual cash obligations are solely comprised of operating leases.

We believe we will be able to fund all current cash obligations from net cash provided by operating activities.

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Recent Liquidity and Capital Resource Developments

Revolving Credit Facility Drawdown

On July 2, 2022, we borrowed $500 million under our revolving credit facility for the acquisition of the Rio Tinto Royalty, and on September 6, 2022, we repaid $50 million of the outstanding borrowings.

Refer to Note 3 of our notes to consolidated financial statements for further discussion on the Rio Tinto Royalty acquisition.

On December 6, 2022, we repaid $75 million of outstanding borrowings on our revolving credit facility, and on December 28, 2022 we borrowed $200 million for the acquisition of the Idaho Royalty.

Refer to Note 3 of our notes to consolidated financial statements for further discussion on the acquisition of the Idaho Royalty.

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

Revolving Credit Facility Repayment

On December 6, 2023, we made a $75 million principal payment towards the outstanding balance on the revolving credit facility leaving $750 million available as of December 31, 2023.

Dividend Increase

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We expect to pay our annual dividend using cash on hand.

Summary of Cash Flows (In thousands)

Cash flows from operating activities:

Net income and comprehensive income

Adjustments to reconcile net income and comprehensive income to net cash provided by operating activities:

Depreciation, depletion and amortization

Non-cash employee stock compensation expense

Fair value changes in equity securities

Deferred tax (benefit) expense

Impairment of royalty interests

Changes in assets and liabilities:

Royalty receivables

Stream inventory

Income tax receivable

Prepaid expenses and other assets

Accounts payable

Income tax payable

Uncertain tax positions

Other liabilities

Net cash provided by operating activities

Cash flows from investing activities:

Acquisition of stream and royalty interests

Khoemac a u subordinated debt facility

Proceeds from sale of equity securities

Net cash used in by investing activities

Cash flows from financing activities:

Repayment of debt

Borrowings from revolving credit facility

Net payments from issuance of common stock

Common stock dividends

Net cash provided by (used in) financing activities

Net decrease in cash and equivalents

Cash and equivalents at beginning of period

Cash and equivalents at end of period

Summary of Cash Flows

Operating Activities

Net cash provided by operating activities totaled $415.8 million for the year ended December 31, 2023, compared to $417.3 million for the year ended December 31, 2022.

The change was primarily due to a $35.9 million decrease in cash proceeds received from our stream and royalty interests, net of cost of sales, compared to the prior period.

The decrease was primarily due to higher interest paid on the outstanding revolving credit facility compared to the prior period.

This decrease was partially offset by higher proceeds received from our stream and royalty interests, net of cost of sales, compared to the prior period.

Investing Activities

Net cash used in investing activities totaled $2.8 million for the year ended December 31, 2023, compared to net cash used in investing activities of $922.9 million for the year ended December 31, 2022.

The increase over the prior period was primarily due to the GBR, Rio Tinto Royalty and Idaho Royalty acquisitions.

The decrease over the prior period was primarily due to the new royalty acquisitions during the year ended December 31, 2022.

Financing Activities

Net cash provided by financing activities totaled $480.6 million for the year ended December 31, 2022, compared to net cash used in financing activities of $283.2 million for the year ended December 31, 2021.

The change was primarily due to an increase in the debt outstanding for the year ended December 31, 2022 that was used to fund acquisitions of our new royalty interests at Cortez and the Great Bear Project compared to the prior period.

Net cash used in financing activities totaled $427.4 million for the year ended December 31, 2023, compared to net cash provided by financing activities of $480.6 million for the year ended December 31, 2022.

The change was primarily due to an increase in the debt outstanding for the year ended December 31, 2022 of $575 million that was used to fund acquisitions of our new royalty interests at Cortez and the Great Bear Project, and the repayment of $325 million of debt outstanding during the current period.

Critical Accounting Estimates

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The recoverability of the carrying value of stream and royalty interests in production and development stage mineral properties is evaluated based upon estimated future undiscounted net cash flows from each stream and royalty interest using estimates of proven and probable mineral reserves, mineral resources and other relevant information received from the operators.

We evaluate the recoverability of the carrying value of royalty interests in exploration stage mineral properties in the event of significant decreases in the price of gold, silver, copper and other metals, and whenever new information regarding the mineral properties is obtained from the operator indicating that production will not likely occur or may be reduced in the future, thus potentially affecting the future recoverability of our stream or royalty interests.

future recoverability of our stream or royalty interests.

Impairments in the carrying value of each property are measured and recorded to the extent that the carrying value in each property exceeds its estimated fair value, which is generally calculated using estimated future discounted cash flows.

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It is possible that changes could occur to these estimates, which could adversely affect the net cash flows expected to be generated from these stream and royalty interests.

Refer to Note 4 of our notes to consolidated financial statements for a discussion of the impairment assessment results for the year ended December 31, 2022.

Refer to Note 4 of our notes to consolidated financial statements for a discussion of the impairment assessment results for the years ended December 31, 2023 and 2022.

A performance obligation is a promise in a contract to transfer control of a distinct good or service (or integrated package of goods and/or services) to a customer.

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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 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.

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statements about our expected financial performance and outlook, including sale volume, revenue, expenses, tax rates, earnings or cash flow;

operators’ expected operating and financial performance, including production, deliveries, mine plans, estimates of mineral resources and mineral reserves, development, cash flows and liquidity, capital requirements and capital expenditures;

operators’ expected operating and financial performance, including production, deliveries, mine plans, environmental and feasibility studies, technical reports, estimates of mineral resources and mineral reserves, development, cash flows and liquidity, capital requirements and capital expenditures;

influence on our operators’ operations;

benefits from acquisitions;

receipt of metal deliveries;

receipt and timing of metal deliveries;

liquidity, capital resources, financing and stockholder returns;

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Factors that could cause actual results to differ materially from these forward-looking statements include, among others, the following:

a lower-price environment for gold, silver, copper, nickel or other metals;

operating activities or financial performance of properties on which we hold stream or royalty interests, including variations between actual and forecasted performance, operators’ ability to complete projects on schedule and as planned, operators’ changes to mine plans and mineral reserves and mineral resources (including updated mineral reserve and mineral resource information), liquidity needs, mining and environmental hazards, labor disputes, distribution and supply chain disruptions, permitting and licensing issues, contractual issues involving our stream or royalty agreements, or operational disruptions;

a lower-price environment for gold, silver, copper or other metals;

needs, mining and environmental hazards, labor disputes, distribution and supply chain disruptions, permitting and licensing issues, or operational disruptions;

contractual issues involving our stream or royalty agreements;

the timing of deliveries of metals from operators and our subsequent sales of metal;

risks associated with doing business in foreign countries;

increased competition for stream and royalty interests;

environmental risks, included those caused by climate change;

environmental risks, including those caused by climate change;

potential cyber-attacks, including ransomware;

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Most of these factors are beyond our ability to predict or control.

Other unpredictable or unknown factors not discussed in this report could also have material adverse effects on forward-looking statements.

Forward-looking statements speak only as of the date on which they are made.

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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 7. Management’s Discussion and Analysis