ROYAL GOLD INC, 10-Q filed on 11/7/2013
Quarterly Report
Document and Entity Information
3 Months Ended
Sep. 30, 2013
Oct. 31, 2013
Document and Entity Information
 
 
Entity Registrant Name
ROYAL GOLD INC 
 
Entity Central Index Key
0000085535 
 
Document Type
10-Q 
 
Document Period End Date
Sep. 30, 2013 
 
Amendment Flag
false 
 
Current Fiscal Year End Date
--06-30 
 
Entity Current Reporting Status
Yes 
 
Entity Filer Category
Large Accelerated Filer 
 
Entity Common Stock, Shares Outstanding
 
64,444,239 
Entity Exchangeable, Shares Outstanding
 
667,155 
Document Fiscal Year Focus
2014 
 
Document Fiscal Period Focus
Q1 
 
Consolidated Balance Sheets (USD $)
In Thousands, unless otherwise specified
Sep. 30, 2013
Jun. 30, 2013
ASSETS
 
 
Cash and equivalents
$ 637,899 
$ 664,035 
Royalty receivables
48,191 
50,385 
Income tax receivable
24,137 
15,158 
Prepaid expenses and other current assets
5,173 
14,919 
Total current assets
715,400 
744,497 
Royalty and stream interests, net (Note 3)
2,145,929 
2,120,268 
Available-for-sale securities (Note 4)
10,826 
9,695 
Other assets
30,338 
30,881 
Total assets
2,902,493 
2,905,341 
LIABILITIES
 
 
Accounts payable
2,254 
2,838 
Dividends payable
13,022 
13,009 
Foreign withholding taxes payable
7,262 
15,518 
Other current liabilities
5,509 
3,720 
Total current liabilities
28,047 
35,085 
Debt (Note 5)
304,604 
302,263 
Deferred tax liabilities
171,422 
174,267 
Uncertain tax positions (Note 8)
21,906 
21,166 
Other long-term liabilities
1,578 
1,924 
Total liabilities
527,557 
534,705 
Commitments and contingencies (Note 11)
   
   
EQUITY
 
 
Preferred stock, $.01 par value, authorized 10,000,000 shares authorized; and 0 shares issued
   
   
Common stock, $.01 par value, 100,000,000 shares authorized; and 64,200,607 and 64,184,036 shares outstanding, respectively
642 
642 
Exchangeable shares, no par value, 1,806,649 shares issued, less 1,139,494 and 1,139,420 redeemed shares, respectively
29,361 
29,365 
Additional paid-in capital
2,143,761 
2,142,173 
Accumulated other comprehensive loss
(3,441)
(4,572)
Accumulated earnings
183,453 
181,279 
Total Royal Gold stockholders' equity
2,353,776 
2,348,887 
Non-controlling interests
21,160 
21,749 
Total equity
2,374,936 
2,370,636 
Total liabilities and equity
$ 2,902,493 
$ 2,905,341 
Consolidated Balance Sheets (Parenthetical) (USD $)
Sep. 30, 2013
Jun. 30, 2013
Consolidated Balance Sheets
 
 
Preferred stock, par value (in dollars per share)
$ 0.01 
$ 0.01 
Preferred stock, shares authorized
10,000,000 
10,000,000 
Preferred stock, shares issued
Common stock, par value (in dollars per share)
$ 0.01 
$ 0.01 
Common stock, shares authorized
100,000,000 
100,000,000 
Common stock, shares outstanding
64,200,607 
64,184,036 
Exchangeable shares, par value (in dollars per share)
$ 0 
$ 0 
Exchangeable shares, shares issued
1,806,649 
1,806,649 
Exchangeable shares, shares redeemed
1,139,494 
1,139,420 
Consolidated Statements of Operations and Comprehensive Income (USD $)
In Thousands, except Share data, unless otherwise specified
3 Months Ended
Sep. 30, 2013
Sep. 30, 2012
Consolidated Statements of Operations and Comprehensive Income
 
 
Revenue
$ 56,487 
$ 77,862 
Costs and expenses
 
 
General and administrative
6,566 
6,238 
Production taxes
1,783 
2,478 
Depreciation, depletion and amortization
22,400 
21,500 
Total costs and expenses
30,749 
30,216 
Operating income
25,738 
47,646 
Interest and other income
152 
110 
Interest and other expense
(5,767)
(6,001)
Income before income taxes
20,123 
41,755 
Income tax expense
(4,842)
(16,461)
Net income
15,281 
25,294 
Net income attributable to non-controlling interests
(86)
(523)
Net income attributable to Royal Gold common stockholders
15,195 
24,771 
Net income
15,281 
25,294 
Adjustments to comprehensive income, net of tax
 
 
Unrealized change in market value of available-for-sale securities
1,131 
5,046 
Comprehensive income
16,412 
30,340 
Comprehensive income attributable to non-controlling interests
(86)
(523)
Comprehensive income attributable to Royal Gold stockholders
$ 16,326 
$ 29,817 
Net income per share available to Royal Gold common stockholders:
 
 
Basic earnings per share (in dollars per share)
$ 0.23 
$ 0.42 
Basic weighted average shares outstanding (in shares)
64,858,354 
59,435,867 
Diluted earnings per share (in dollars per share)
$ 0.23 
$ 0.41 
Diluted weighted average shares outstanding (in shares)
64,980,599 
59,679,807 
Cash dividends declared per common share (in dollars per share)
$ 0.20 
$ 0.15 
Consolidated Statements of Cash Flows (USD $)
In Thousands, unless otherwise specified
3 Months Ended
Sep. 30, 2013
Sep. 30, 2012
Cash flows from operating activities:
 
 
Net income
$ 15,281 
$ 25,294 
Adjustments to reconcile net income to net cash provided by operating activities:
 
 
Depreciation, depletion and amortization
22,400 
21,500 
Non-cash employee stock compensation expense
1,613 
2,095 
Gain on distribution to non-controlling interest
 
(88)
Amortization of debt discount
2,340 
2,192 
Tax expense (benefit) of stock-based compensation exercises
28 
(773)
Deferred tax (benefit) expense
(2,857)
1,746 
Changes in assets and liabilities:
 
 
Royalty receivables
2,193 
(10,789)
Prepaid expenses and other assets
10,297 
(249)
Accounts payable
(725)
53 
Foreign withholding taxes payable
(8,256)
Income taxes (receivable) payable
(9,010)
10,309 
Other liabilities
2,183 
2,250 
Net cash provided by operating activities
35,487 
53,542 
Cash flows from investing activities:
 
 
Acquisition of royalty and stream interests
(48,028)
(120,035)
Proceeds on sale of inventory - restricted
 
118 
Other
(24)
(17)
Net cash used in investing activities
(48,052)
(119,934)
Cash flows from financing activities:
 
 
Net proceeds from issuance of common stock
 
1,711 
Common stock dividends
(13,010)
(8,949)
Distribution to non-controlling interests
(533)
(562)
Tax expense (benefit) of stock-based compensation exercises
(28)
773 
Net cash used in financing activities
(13,571)
(7,027)
Net decrease in cash and equivalents
(26,136)
(73,419)
Cash and equivalents at beginning of period
664,035 
375,456 
Cash and equivalents at end of period
$ 637,899 
$ 302,037 
OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

1.                                      OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

Royal Gold, Inc. (“Royal Gold”, the “Company”, “we”, “us”, or “our”), together with its subsidiaries, is engaged in the business of acquiring and managing precious metals royalties, metal streams, and similar 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.  A metal stream is a purchase agreement that provides, in exchange for an upfront deposit payment, the right to purchase all or a portion of one or more metals produced from a mine, at a price determined for the life of the transaction by the purchase agreement.  We may use the term “royalty interest” in these notes to the consolidated financial statements to refer to royalties, gold, silver or other metal stream interests, and other similar interests.

 

Summary of Significant Accounting Policies

 

The accompanying unaudited consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X under the Securities Exchange Act of 1934, as amended.  Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for annual financial statements.  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 September 30, 2013, are not necessarily indicative of the results that may be expected for the fiscal year ending June 30, 2014.  These interim unaudited financial statements should be read in conjunction with the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2013 filed with the Securities and Exchange Commission on August 8, 2013 (“Fiscal 2013 10-K”).

ACQUISITION
ACQUISITION

2.                                      ACQUISITION

 

El Morro Royalty Acquisition

 

In August 2013, Royal Gold, through a wholly-owned Chilean subsidiary, acquired a 70% interest in a 2.0% net smelter return (“NSR”) royalty on certain portions of the El Morro copper gold project in Chile (“El Morro”), from Xstrata Copper Chile S.A., for $35 million.  Goldcorp Inc. holds 70% ownership of the El Morro project and is the operator, with the remaining 30% held by New Gold Inc.

 

The acquisition of the El Morro royalty interest has been accounted for as an asset acquisition.  The total purchase price of $35 million, plus direct transaction costs, has been recorded as a development stage royalty interest within Royalty and stream interests, net on our consolidated balance sheets.

ROYALTY AND STREAM INTERESTS, NET
ROYALTY AND STREAM INTERESTS, NET

3.                                      ROYALTY AND STREAM INTERESTS, NET

 

The following tables summarize the Company’s royalty and stream interests as of September 30, 2013 and June 30, 2013.

 

As of September 30, 2013
(Amounts in thousands):

 

Cost

 

Accumulated
Depletion

 

Net

 

Production stage royalty interests:

 

 

 

 

 

 

 

Andacollo

 

$

272,998

 

$

(48,479

)

$

224,519

 

Voisey’s Bay

 

150,138

 

(56,285

)

93,853

 

Peñasquito

 

99,172

 

(13,372

)

85,800

 

LasCruces

 

57,230

 

(13,065

)

44,165

 

Mulatos

 

48,092

 

(25,658

)

22,434

 

Wolverine

 

45,158

 

(9,079

)

36,079

 

Dolores

 

44,878

 

(8,883

)

35,995

 

Canadian Malartic

 

38,800

 

(7,190

)

31,610

 

Holt

 

34,612

 

(7,681

)

26,931

 

Gwalia Deeps

 

31,070

 

(7,967

)

23,103

 

Inata

 

24,871

 

(10,036

)

14,835

 

Ruby Hill

 

24,335

 

(5,826

)

18,509

 

Leeville

 

18,322

 

(15,586

)

2,736

 

Robinson

 

17,825

 

(11,403

)

6,422

 

Cortez

 

10,630

 

(9,718

)

912

 

Other

 

190,702

 

(123,578

)

67,124

 

 

 

1,108,833

 

(373,806

)

735,027

 

 

 

 

 

 

 

 

 

Development stage royalty interests:

 

 

 

 

 

 

 

Pascua-Lama

 

372,105

 

 

372,105

 

El Morro

 

35,074

 

 

35,074

 

Other

 

32,935

 

 

32,935

 

 

 

 

 

 

 

 

 

Development stage stream interests:

 

 

 

 

 

 

 

Mt. Milligan

 

783,046

 

 

783,046

 

Other

 

10,418

 

 

10,418

 

 

 

 

 

 

 

 

 

Development stage royalty and stream interests

 

1,233,578

 

 

1,233,578

 

 

 

 

 

 

 

 

 

Exploration stage royalty interests

 

177,324

 

 

177,324

 

Total royalty and stream interests

 

$

2,519,735

 

$

(373,806

)

$

2,145,929

 

 

As of June 30, 2013
(Amounts in thousands):

 

Cost

 

Accumulated
Depletion

 

Net

 

Production stage royalty interests:

 

 

 

 

 

 

 

Andacollo

 

$

272,998

 

$

(44,317

)

$

228,681

 

Voisey’s Bay

 

150,138

 

(51,881

)

98,257

 

Peñasquito

 

99,172

 

(12,393

)

86,779

 

Las Cruces

 

57,230

 

(11,713

)

45,517

 

Mulatos

 

48,092

 

(24,545

)

23,547

 

Wolverine

 

45,158

 

(7,891

)

37,267

 

Dolores

 

44,878

 

(8,186

)

36,692

 

Canadian Malartic

 

38,800

 

(6,320

)

32,480

 

Holt

 

34,612

 

(6,564

)

28,048

 

Gwalia Deeps

 

31,070

 

(7,194

)

23,876

 

Inata

 

24,871

 

(9,303

)

15,568

 

Ruby Hill

 

24,335

 

(3,054

)

21,281

 

Leeville

 

18,322

 

(15,484

)

2,838

 

Robinson

 

17,825

 

(11,224

)

6,601

 

Cortez

 

10,630

 

(9,716

)

914

 

Other

 

190,702

 

(121,654

)

69,048

 

 

 

1,108,833

 

(351,439

)

757,394

 

 

 

 

 

 

 

 

 

Development stage royalty interests:

 

 

 

 

 

 

 

Pascua-Lama

 

372,105

 

 

372,105

 

Other

 

32,934

 

 

32,934

 

 

 

 

 

 

 

 

 

Development stage stream interests:

 

 

 

 

 

 

 

Mt. Milligan

 

770,093

 

 

770,093

 

Other

 

10,418

 

 

10,418

 

 

 

 

 

 

 

 

 

Development stage royalty and stream interests

 

1,185,550

 

 

1,185,550

 

 

 

 

 

 

 

 

 

Exploration stage royalty interests

 

177,324

 

 

177,324

 

Total royalty and stream interests

 

$

2,471,707

 

$

(351,439

)

$

2,120,268

 

AVAILABLE-FOR-SALE SECURITIES
AVAILABLE-FOR-SALE SECURITIES

4.                                      AVAILABLE-FOR-SALE SECURITIES

 

The Company’s available-for-sale securities as of September 30, 2013 and June 30, 2013 consist of the following:

 

 

 

As of September 30, 2013

 

 

 

 

 

(Amounts in thousands)

 

 

 

 

 

 

 

Unrealized

 

 

 

 

 

Cost Basis

 

Gain

 

Loss

 

Fair Value

 

Non-current:

 

 

 

 

 

 

 

 

 

Seabridge

 

$

14,064

 

 

(3,315

)

$

10,749

 

Other

 

203

 

 

(126

)

77

 

 

 

$

14,267

 

$

 

$

(3,441

)

$

10,826

 

 

 

 

As of June 30, 2013

 

 

 

 

 

(Amounts in thousands)

 

 

 

 

 

 

 

Unrealized

 

 

 

 

 

Cost Basis

 

Gain

 

Loss

 

Fair Value

 

Non-current:

 

 

 

 

 

 

 

 

 

Seabridge

 

$

14,064

 

 

(4,509

)

$

9,555

 

Other

 

203

 

 

(63

)

140

 

 

 

$

14,267

 

$

 

$

(4,572

)

$

9,695

 

 

The most significant available-for-sale security is the investment in Seabridge Gold, Inc. (“Seabridge”) common stock, acquired in June 2011 and discussed in greater detail in our Fiscal 2013 10-K.  The Company’s policy for determining whether declines in fair value of available-for-sale securities are other than temporary includes a quarterly analysis of the investments and a review by management of all investments for which the cost exceeds the fair value.  Any temporary declines in fair value are recorded as a charge to other comprehensive income.  If such impairment is determined by the Company to be other than temporary, the investment’s cost basis is written down to fair value and recorded in net income during the period the Company determines such impairment to be other than temporary.  Based on the Company’s quarterly analysis of its investments and our ability and intent to hold these investments for a reasonable period of time, there were no write downs on our available-for-sale securities during the three months ended September 30, 2013.  The Company recognized a loss on available-for-sale securities of $12.1 million during the third quarter of our fiscal year ended June 30, 2013.  The Company will continue to evaluate its investment in Seabridge common stock considering additional facts and circumstances as they arise, including, but not limited to, the progress of development of Seabridge’s KSM project.

DEBT
DEBT

5.                                      DEBT

 

The Company’s non-current debt as of September 30, 2013 and June 30, 2013 consists of the following:

 

 

 

As of

 

As of

 

 

 

September 30, 2013

 

June 30, 2013

 

 

 

Non-current

 

Non-current

 

 

 

(Amounts in thousands)

 

Convertible notes due 2019, net

 

$

304,604

 

$

302,263

 

Total debt

 

$

304,604

 

$

302,263

 

 

Convertible Senior Notes Due 2019

 

In June 2012, the Company completed an offering of $370 million aggregate principal amount of 2.875% convertible senior notes due 2019 (“2019 Notes”).  The 2019 Notes bear interest at the rate of 2.875% per annum, and the Company is required to make semi-annual interest payments on the outstanding principal balance of the 2019 Notes on June 15 and December 15 of each year. The 2019 Notes mature on June 15, 2019.  Interest expense recognized on the 2019 Notes for the three months ended September 30, 2013 and 2012, was $5.3 million and $5.1 million, respectively, and included the contractual coupon interest, the accretion of the debt discount and amortization of the debt issuance costs.

 

Revolving credit facility

 

The Company maintains a $350 million revolving credit facility.  As of September 30, 2013, the Company had no amounts outstanding under the revolving credit facility.  As discussed in the Company’s Fiscal 2013 10-K, the Company has financial covenants associated with its revolving credit facility.  At September 30, 2013, the Company was in compliance with each financial covenant.

STOCK-BASED COMPENSATION
STOCK-BASED COMPENSATION

6.                                      STOCK-BASED COMPENSATION

 

The Company recognized stock-based compensation expense as follows:

 

 

 

For The Three Months Ended

 

 

 

September 30,

 

September 30,

 

 

 

2013

 

2012

 

 

 

(Amounts in thousands)

 

Stock options

 

$

129

 

$

127

 

Stock appreciation rights

 

306

 

392

 

Restricted stock

 

1,267

 

1,130

 

Performance stock

 

(89

)

446

 

Total stock-based compensation expense

 

$

1,613

 

$

2,095

 

 

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

 

There were 24,775 and 17,925 stock options granted during the three months ended September 30, 2013 and 2012, respectively.  As of September 30, 2013, there was $1.0 million of unrecognized compensation expense related to non-vested stock options, which is expected to be recognized over a weighted-average period of 2.3 years.

 

There were 84,125 and 54,400 stock-settled stock appreciation rights (“SSARs”) granted during the three months ended September 30, 2013 and 2012, respectively.  As of September 30, 2013, there was $2.6 million of unrecognized compensation expense related to non-vested SSARs, which is expected to be recognized over a weighted-average period of 2.4 years.

 

There were 66,150 and 40,850 shares of restricted stock granted during the three months ended September 30, 2013 and 2012, respectively.  As of September 30, 2013, there was $7.6 million of unrecognized compensation expense related to non-vested restricted stock, which is expected to be recognized over a weighted-average vesting period of 3.6 years.

 

There were 71,700 and 45,600 shares of performance stock granted during the three months ended September 30, 2013 and 2012, respectively.  As of September 30, 2013, there was $4.0 million of unrecognized compensation expense related to non-vested performance stock, which is expected to be recognized over a weighted-average vesting period of 2.0 years.

EARNINGS PER SHARE ("EPS")
EARNINGS PER SHARE ("EPS")

7.                                      EARNINGS PER SHARE (“EPS”)

 

Basic earnings per common share were computed using the weighted average number of shares of common stock outstanding during the period, considering the effect of participating securities.  Unvested stock-based compensation awards that contain non-forfeitable rights to dividends or dividend equivalents are considered participating securities and are included in the computation of earnings per share pursuant to the two-class method.  The Company’s unvested restricted stock awards contain non-forfeitable dividend rights and participate equally with common stock with respect to dividends issued or declared.  The Company’s unexercised stock options, unexercised SSARs and unvested performance stock do not contain rights to dividends.  Under the two-class method, the earnings used to determine basic earnings per common share are reduced by an amount allocated to participating securities.  Use of the two-class method has an immaterial impact on the calculation of basic and diluted earnings per common share.

 

The following tables summarize the effects of dilutive securities on diluted EPS for the period:

 

 

 

For The Three Months Ended

 

 

 

September 30,

 

September 30,

 

 

 

2013

 

2012

 

 

 

(in thousands, except per share data)

 

Net income available to Royal Gold common stockholders

 

$

15,195

 

$

24,771

 

Weighted-average shares for basic EPS

 

64,858,354

 

59,435,867

 

Effect of other dilutive securities

 

122,245

 

243,940

 

Weighted-average shares for diluted EPS

 

64,980,599

 

59,679,807

 

 

 

 

 

 

 

Basic earnings per share

 

$

0.23

 

$

0.42

 

 

 

 

 

 

 

Diluted earnings per share

 

$

0.23

 

$

0.41

 

 

The calculation of weighted average shares includes all of our outstanding stock: common stock and exchangeable shares.  Exchangeable shares are the equivalent of common shares in that they have the same dividend rights and share equitably in undistributed earnings and are exchangeable on a one-for-one basis for shares of our common stock.  The Company intends to settle the principal amount of the 2019 Notes in cash.  As a result, there will be no impact to diluted earnings per share unless the share price of the Company’s common stock exceeds the conversion price of $105.31.

INCOME TAXES
INCOME TAXES

8.             INCOME TAXES

 

 

 

For The Three Months Ended

 

 

 

September 30,

 

September 30,

 

 

 

2013

 

2012

 

 

 

(Amounts in thousands, except rate)

 

 

 

 

 

 

 

Income tax expense

 

$

4,842

 

$

16,461

 

Effective tax rate

 

24.1

%

39.4

%

 

The decrease in the effective tax rate for September 30, 2013 is primarily related to (i) a favorable tax rate associated with certain operations in lower-tax jurisdictions, (ii) a decrease in current year tax expense from a reduction of the accrual for uncertain tax positions, (iii) additional benefit from excess depletion, and (iv) a decrease in tax expense recognized in certain foreign subsidiaries without a foreign tax credit benefit.

 

During the quarter, and as a result of continued review of the June 30, 2012 tax return and financial statement impacts of the return results, we recorded a $1.7 million income tax benefit resulting from an identified error. In accordance with applicable U.S. GAAP, management quantitatively and qualitatively evaluated the materiality of the error and determined the error to be immaterial to our Fiscal 2012 consolidated financial statements.

 

During fiscal 2014, the Company intends to assert the indefinite reinvestment of certain foreign subsidiary earnings. As a result, the Company will not provide for U.S. income taxes applicable to the specific undistributed earnings.  The Company has the ability to indefinitely reinvest these foreign earnings based on revenue and cash projections of our other investments, current cash on hand, and availability under our revolving credit facility.

 

The Company or one of its subsidiaries files income tax returns in the U.S. federal jurisdiction, and various state and foreign jurisdictions. With few exceptions, the Company is no longer subject to U.S. Federal, state and local, and non-U.S. income tax examinations by tax authorities for fiscal years before 2009.

 

As of September 30, 2013 and June 30, 2013, the Company had $21.9 million and $21.2 million of total gross unrecognized tax benefits, respectively.  The increase in gross unrecognized tax benefits was primarily related to tax positions of International Royalty Corporation entities taken prior to or upon the acquisition by the Company during fiscal year 2010.  If recognized, these unrecognized tax benefits would positively impact the Company’s effective income tax rate.

 

The Company’s continuing practice is to recognize potential interest and/or penalties related to unrecognized tax benefits as part of its income tax expense. At September 30, 2013 and June 30, 2013, the amount of accrued income-tax-related interest and penalties was $4.8 million and $4.3 million, respectively.

 

As a result of (i) statutes of limitations that will begin to expire in the next 12 months in various jurisdictions, (ii) possible settlements of audit-related issues with taxing authorities in various jurisdictions with respect to which none of the issues are individually significant, and (iii) an additional accrual of exposure and interest on existing items, the Company believes that it is reasonably possible that the total amount of its net unrecognized income tax benefits will decrease between $5 million and $5.5 million in the next 12 months.

SEGMENT INFORMATION
SEGMENT INFORMATION

9.             SEGMENT INFORMATION

 

The Company manages its business under a single operating segment, consisting of the acquisition and management of royalty and stream interests.  Royal Gold’s royalty revenue and long-lived assets (royalty and stream interests, net) are geographically distributed as shown in the following table.

 

 

 

Revenue

 

Royalty and Stream Interests, net

 

 

 

Three Months Ended

 

 

 

 

 

 

 

September 30,

 

As of

 

As of

 

 

 

2013

 

2012

 

September 30, 2013

 

June 30, 2013

 

Chile

 

31

%

26

%

31

%

30

%

Canada

 

26

%

23

%

52

%

52

%

Mexico

 

18

%

22

%

7

%

7

%

United States

 

13

%

17

%

4

%

4

%

Australia

 

4

%

3

%

3

%

3

%

Africa

 

3

%

3

%

1

%

1

%

Other

 

5

%

6

%

2

%

3

%

FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS

10.          FAIR VALUE MEASUREMENTS

 

FASB Accounting Standards Codification (ASC) 820, Fair Value Measurements and Disclosures (“ASC 820”) establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value.  The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements).  The three levels of the fair value hierarchy under ASC 820 are described below:

 

Level 1:     Quoted prices for identical instruments in active markets;

 

Level 2:     Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets; and

 

Level 3:     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 the Company’s financial assets measured at fair value on a recurring basis (at least annually) by level within the fair value hierarchy.

 

 

 

At September 30, 2013

 

 

 

Carrying

 

Fair Value

 

 

 

Amount

 

Total

 

Level 1

 

Level 2

 

Level 3

 

Assets (In thousands):

 

 

 

 

 

 

 

 

 

 

 

United States treasury bills(1)

 

$

539,991

 

$

539,991

 

$

539,991

 

$

 

$

 

Marketable equity securities(2)

 

$

10,826

 

$

10,826

 

$

10,826

 

$

 

$

 

Total assets

 

 

 

$

550,817

 

$

550,817

 

$

 

$

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities (In thousands):

 

 

 

 

 

 

 

 

 

 

 

Debt(3)

 

$

370,000

 

$

356,203

 

$

356,203

 

$

 

$

 

Total liabilities

 

 

 

$

356,203

 

$

356,203

 

$

 

$

 

 

(1)  Included in Cash and equivalents in the Company’s consolidated balance sheets.

(2)  Included in Available for sale securities in the Company’s consolidated balance sheets.

(3)  Included in the carrying amount is the equity component of our 2019 Notes in the amount of $77 million, which is included within Additional paid-in capital in the Company’s consolidated balance sheets.

 

The Company invests primarily in United States treasury bills with maturities of 90 days or less, which are classified within Level 1 of the fair value hierarchy.  The Company’s marketable equity securities classified within Level 1 of the fair value hierarchy are valued using quoted market prices in active markets.  The fair value of the Level 1 marketable equity securities is calculated as the quoted market price of the marketable equity security multiplied by the quantity of shares held by the Company. The Company’s debt classified within Level 1 of the fair value hierarchy is valued using quoted prices in an active market.

 

As of September 30, 2013, the Company also had assets that, under certain conditions, are subject to measurement at fair value on a non-recurring basis like those associated with royalty and stream 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.  None of these assets were written down to fair value during the three months ended September 30, 2013.  If recognition of these assets at their fair value becomes necessary, such measurements will be determined utilizing Level 3 inputs.

COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES

11.          COMMITMENTS AND CONTINGENCIES

 

Mt. Milligan Gold Stream Acquisition

 

The Company’s final commitment payment of $12.9 million to Thompson Creek as part of the Mt. Milligan gold stream acquisition was made in September 2013.  As of September 30, 2013, the Company has no remaining commitment payments to Thompson Creek as part of the Mt. Milligan gold stream.

 

Tulsequah Chief Gold and Silver Stream Acquisition

 

As of September 30, 2013, the Company has a remaining commitment of $50 million as part of its Tulsequah Chief gold and silver stream acquisition in December 2011.

 

Voisey’s Bay

 

The Company owns a royalty on the Voisey’s Bay mine in Newfoundland and Labrador owned by Vale Newfoundland & Labrador Limited (“VNL”).  The royalty is owned by the Labrador Nickel Royalty Limited Partnership (“LNRLP”), in which the Company’s wholly-owned indirect subsidiary, Canadian Minerals Partnership, is the general partner and 89.99% owner.  The remaining interests in LNRLP are owned by Altius Investments Ltd. (10%), a company unrelated to Royal Gold, and the Company’s wholly-owned indirect subsidiary, Voisey’s Bay Holding Corporation (0.01%).

 

On October 16, 2009, LNRLP filed a claim in the Supreme Court of Newfoundland and Labrador Trial Division against Vale Inco Limited, now known as Vale Canada Limited (“Vale Canada”) and its wholly-owned subsidiaries, Vale Inco Atlantic Sales Limited and VNL, related to the calculation of the NSR on the sale of concentrates, including nickel concentrates, from the Voisey’s Bay mine to Vale Canada.  The claim asserts that Vale Canada is incorrectly calculating the NSR and requests an order in respect of the correct calculation of future payments.  The claim also requests specific damages for underpayment of past royalties to the date of the claim in an amount not less than $29 million, together with additional damages until the date of trial, interest, costs and other damages.  The litigation is in the discovery phase.

RELATED PARTY
RELATED PARTY

12.          RELATED PARTY

 

Crescent Valley Partners, L.P. (“CVP”) was formed as a limited partnership in April 1992.  It owns a 1.25% net value royalty on production of minerals from a portion of Cortez.  Denver Mining Finance Company, our wholly-owned subsidiary, is the general partner.  Royal Gold holds an aggregate 31.67% limited partner interest.  Our Chairman of the Board of Directors, the Chairman of our Audit Committee and one other member of our board of directors hold an aggregate 35.56% limited partner interest.  The general partner performs administrative services for CVP in receiving and processing the royalty payments from the operator, including the disbursement of royalty payments and record keeping for in-kind distributions to the limited partners.

 

CVP receives its royalty from the Cortez Joint Venture in-kind.  The Company, as well as certain other limited partners, sell their pro-rata shares of such gold immediately and receive distributions in cash, while CVP holds gold for certain other limited partners.  Such gold inventories, which totaled 9,840 and 9,742 ounces of gold as of September 30, 2013 and  June 30, 2013, respectively, are held by a third party refinery in Utah for the account of the limited partners of CVP.  The inventories are carried at historical cost and are classified within Other assets on the Company’s consolidated balance sheets.  The carrying value of the gold in inventory was approximately $6.3 million and $6.1 million as of September 30, 2013 and June 30, 2013, respectively, while the fair value of such ounces was approximately $13.1 million and $11.6 million as of September 30, 2013 and June 30, 2013, respectively.  None of the gold currently held in inventory as of September 30, 2013 and June 30, 2013, is attributed to Royal Gold, as the gold allocated to Royal Gold’s CVP partnership interest is typically sold within five days of receipt.

ROYALTY AND STREAM INTERESTS, NET (Tables)
Schedule of royalty and stream interests

 

As of September 30, 2013
(Amounts in thousands):

 

Cost

 

Accumulated
Depletion

 

Net

 

Production stage royalty interests:

 

 

 

 

 

 

 

Andacollo

 

$

272,998

 

$

(48,479

)

$

224,519

 

Voisey’s Bay

 

150,138

 

(56,285

)

93,853

 

Peñasquito

 

99,172

 

(13,372

)

85,800

 

LasCruces

 

57,230

 

(13,065

)

44,165

 

Mulatos

 

48,092

 

(25,658

)

22,434

 

Wolverine

 

45,158

 

(9,079

)

36,079

 

Dolores

 

44,878

 

(8,883

)

35,995

 

Canadian Malartic

 

38,800

 

(7,190

)

31,610

 

Holt

 

34,612

 

(7,681

)

26,931

 

Gwalia Deeps

 

31,070

 

(7,967

)

23,103

 

Inata

 

24,871

 

(10,036

)

14,835

 

Ruby Hill

 

24,335

 

(5,826

)

18,509

 

Leeville

 

18,322

 

(15,586

)

2,736

 

Robinson

 

17,825

 

(11,403

)

6,422

 

Cortez

 

10,630

 

(9,718

)

912

 

Other

 

190,702

 

(123,578

)

67,124

 

 

 

1,108,833

 

(373,806

)

735,027

 

 

 

 

 

 

 

 

 

Development stage royalty interests:

 

 

 

 

 

 

 

Pascua-Lama

 

372,105

 

 

372,105

 

El Morro

 

35,074

 

 

35,074

 

Other

 

32,935

 

 

32,935

 

 

 

 

 

 

 

 

 

Development stage stream interests:

 

 

 

 

 

 

 

Mt. Milligan

 

783,046

 

 

783,046

 

Other

 

10,418

 

 

10,418

 

 

 

 

 

 

 

 

 

Development stage royalty and stream interests

 

1,233,578

 

 

1,233,578

 

 

 

 

 

 

 

 

 

Exploration stage royalty interests

 

177,324

 

 

177,324

 

Total royalty and stream interests

 

$

2,519,735

 

$

(373,806

)

$

2,145,929

 

 

As of June 30, 2013
(Amounts in thousands):

 

Cost

 

Accumulated
Depletion

 

Net

 

Production stage royalty interests:

 

 

 

 

 

 

 

Andacollo

 

$

272,998

 

$

(44,317

)

$

228,681

 

Voisey’s Bay

 

150,138

 

(51,881

)

98,257

 

Peñasquito

 

99,172

 

(12,393

)

86,779

 

Las Cruces

 

57,230

 

(11,713

)

45,517

 

Mulatos

 

48,092

 

(24,545

)

23,547

 

Wolverine

 

45,158

 

(7,891

)

37,267

 

Dolores

 

44,878

 

(8,186

)

36,692

 

Canadian Malartic

 

38,800

 

(6,320

)

32,480

 

Holt

 

34,612

 

(6,564

)

28,048

 

Gwalia Deeps

 

31,070

 

(7,194

)

23,876

 

Inata

 

24,871

 

(9,303

)

15,568

 

Ruby Hill

 

24,335

 

(3,054

)

21,281

 

Leeville

 

18,322

 

(15,484

)

2,838

 

Robinson

 

17,825

 

(11,224

)

6,601

 

Cortez

 

10,630

 

(9,716

)

914

 

Other

 

190,702

 

(121,654

)

69,048

 

 

 

1,108,833

 

(351,439

)

757,394

 

 

 

 

 

 

 

 

 

Development stage royalty interests:

 

 

 

 

 

 

 

Pascua-Lama

 

372,105

 

 

372,105

 

Other

 

32,934

 

 

32,934

 

 

 

 

 

 

 

 

 

Development stage stream interests:

 

 

 

 

 

 

 

Mt. Milligan

 

770,093

 

 

770,093

 

Other

 

10,418

 

 

10,418

 

 

 

 

 

 

 

 

 

Development stage royalty and stream interests

 

1,185,550

 

 

1,185,550

 

 

 

 

 

 

 

 

 

Exploration stage royalty interests

 

177,324

 

 

177,324

 

Total royalty and stream interests

 

$

2,471,707

 

$

(351,439

)

$

2,120,268

 

AVAILABLE-FOR-SALE SECURITIES (Tables)
Schedule of available-for-sale securities

 

 

 

As of September 30, 2013

 

 

 

 

 

(Amounts in thousands)

 

 

 

 

 

 

 

Unrealized

 

 

 

 

 

Cost Basis

 

Gain

 

Loss

 

Fair Value

 

Non-current:

 

 

 

 

 

 

 

 

 

Seabridge

 

$

14,064

 

 

(3,315

)

$

10,749

 

Other

 

203

 

 

(126

)

77

 

 

 

$

14,267

 

$

 

$

(3,441

)

$

10,826

 

 

 

 

As of June 30, 2013

 

 

 

 

 

(Amounts in thousands)

 

 

 

 

 

 

 

Unrealized

 

 

 

 

 

Cost Basis

 

Gain

 

Loss

 

Fair Value

 

Non-current:

 

 

 

 

 

 

 

 

 

Seabridge

 

$

14,064

 

 

(4,509

)

$

9,555

 

Other

 

203

 

 

(63

)

140

 

 

 

$

14,267

 

$

 

$

(4,572

)

$

9,695

 

DEBT (Tables)
Schedule of the Company's non-current debt

 

 

 

As of

 

As of

 

 

 

September 30, 2013

 

June 30, 2013

 

 

 

Non-current

 

Non-current

 

 

 

(Amounts in thousands)

 

Convertible notes due 2019, net

 

$

304,604

 

$

302,263

 

Total debt

 

$

304,604

 

$

302,263

 

STOCK-BASED COMPENSATION (Tables)
Schedule of stock-based compensation expenses

 

 

 

For The Three Months Ended

 

 

 

September 30,

 

September 30,

 

 

 

2013

 

2012

 

 

 

(Amounts in thousands)

 

Stock options

 

$

129

 

$

127

 

Stock appreciation rights

 

306

 

392

 

Restricted stock

 

1,267

 

1,130

 

Performance stock

 

(89

)

446

 

Total stock-based compensation expense

 

$

1,613

 

$

2,095

 

EARNINGS PER SHARE ("EPS") (Tables)
Summary of the effects of dilutive securities on diluted EPS

 

 

 

For The Three Months Ended

 

 

 

September 30,

 

September 30,

 

 

 

2013

 

2012

 

 

 

(in thousands, except per share data)

 

Net income available to Royal Gold common stockholders

 

$

15,195

 

$

24,771

 

Weighted-average shares for basic EPS

 

64,858,354

 

59,435,867

 

Effect of other dilutive securities

 

122,245

 

243,940

 

Weighted-average shares for diluted EPS

 

64,980,599

 

59,679,807

 

 

 

 

 

 

 

Basic earnings per share

 

$

0.23

 

$

0.42

 

 

 

 

 

 

 

Diluted earnings per share

 

$

0.23

 

$

0.41

 

INCOME TAXES (Tables)
Schedule of income tax expense and effective tax rate

 

 

 

For The Three Months Ended

 

 

 

September 30,

 

September 30,

 

 

 

2013

 

2012

 

 

 

(Amounts in thousands, except rate)

 

 

 

 

 

 

 

Income tax expense

 

$

4,842

 

$

16,461

 

Effective tax rate

 

24.1

%

39.4

%

SEGMENT INFORMATION (Tables)
Geographic distribution of royalty revenue and long-lived assets (royalty and stream interests, net)

 

 

 

Revenue

 

Royalty and Stream Interests, net

 

 

 

Three Months Ended

 

 

 

 

 

 

 

September 30,

 

As of

 

As of

 

 

 

2013

 

2012

 

September 30, 2013

 

June 30, 2013

 

Chile

 

31

%

26

%

31

%

30

%

Canada

 

26

%

23

%

52

%

52

%

Mexico

 

18

%

22

%

7

%

7

%

United States

 

13

%

17

%

4

%

4

%

Australia

 

4

%

3

%

3

%

3

%

Africa

 

3

%

3

%

1

%

1

%

Other

 

5

%

6

%

2

%

3

%

FAIR VALUE MEASUREMENTS (Tables)
Schedule of financial assets measured at fair value on recurring basis

 

 

 

At September 30, 2013

 

 

 

Carrying

 

Fair Value

 

 

 

Amount

 

Total

 

Level 1

 

Level 2

 

Level 3

 

Assets (In thousands):

 

 

 

 

 

 

 

 

 

 

 

United States treasury bills(1)

 

$

539,991

 

$

539,991

 

$

539,991

 

$

 

$

 

Marketable equity securities(2)

 

$

10,826

 

$

10,826

 

$

10,826

 

$

 

$

 

Total assets

 

 

 

$

550,817

 

$

550,817

 

$

 

$

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities (In thousands):

 

 

 

 

 

 

 

 

 

 

 

Debt(3)

 

$

370,000

 

$

356,203

 

$

356,203

 

$

 

$

 

Total liabilities

 

 

 

$

356,203

 

$

356,203

 

$

 

$

 

 

(1)  Included in Cash and equivalents in the Company’s consolidated balance sheets.

(2)  Included in Available for sale securities in the Company’s consolidated balance sheets.

(3)  Included in the carrying amount is the equity component of our 2019 Notes in the amount of $77 million, which is included within Additional paid-in capital in the Company’s consolidated balance sheets.

OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details)
3 Months Ended
Sep. 30, 2013
item
OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 
Minimum number of metals produced from a mine of which right to purchase all or a portion available in exchange for upfront deposit
ACQUISITION (Details) (El Morro, USD $)
In Millions, unless otherwise specified
Aug. 31, 2013
Goldcorp Inc.
 
Acquisition of Royalty Interest in Mineral Properties
 
Percentage of Royalty Interests in Mineral Property
70.00% 
Chilean subsidiary
 
Acquisition of Royalty Interest in Mineral Properties
 
Percentage of royalty interests acquired
70.00% 
Percentage of Royalty Interests in Mineral Property
2.00% 
Total purchase amount
$ 35 
New Gold Inc.
 
Acquisition of Royalty Interest in Mineral Properties
 
Percentage of Royalty Interests in Mineral Property
30.00% 
ROYALTY AND STREAM INTERESTS, NET (Details) (USD $)
In Thousands, unless otherwise specified
Sep. 30, 2013
Jun. 30, 2013
Royalty and stream interests
 
 
Cost
$ 2,519,735 
$ 2,471,707 
Accumulated Depletion
(373,806)
(351,439)
Net
2,145,929 
2,120,268 
Production stage royalty interests
 
 
Royalty and stream interests
 
 
Cost
1,108,833 
1,108,833 
Accumulated Depletion
(373,806)
(351,439)
Net
735,027 
757,394 
Production stage royalty interests |
Andacollo
 
 
Royalty and stream interests
 
 
Cost
272,998 
272,998 
Accumulated Depletion
(48,479)
(44,317)
Net
224,519 
228,681 
Production stage royalty interests |
Voisey's Bay
 
 
Royalty and stream interests
 
 
Cost
150,138 
150,138 
Accumulated Depletion
(56,285)
(51,881)
Net
93,853 
98,257 
Production stage royalty interests |
Penasquito
 
 
Royalty and stream interests
 
 
Cost
99,172 
99,172 
Accumulated Depletion
(13,372)
(12,393)
Net
85,800 
86,779 
Production stage royalty interests |
Las Cruces
 
 
Royalty and stream interests
 
 
Cost
57,230 
57,230 
Accumulated Depletion
(13,065)
(11,713)
Net
44,165 
45,517 
Production stage royalty interests |
Mulatos
 
 
Royalty and stream interests
 
 
Cost
48,092 
48,092 
Accumulated Depletion
(25,658)
(24,545)
Net
22,434 
23,547 
Production stage royalty interests |
Wolverine
 
 
Royalty and stream interests
 
 
Cost
45,158 
45,158 
Accumulated Depletion
(9,079)
(7,891)
Net
36,079 
37,267 
Production stage royalty interests |
Dolores
 
 
Royalty and stream interests
 
 
Cost
44,878 
44,878 
Accumulated Depletion
(8,883)
(8,186)
Net
35,995 
36,692 
Production stage royalty interests |
Canadian Malartic
 
 
Royalty and stream interests
 
 
Cost
38,800 
38,800 
Accumulated Depletion
(7,190)
(6,320)
Net
31,610 
32,480 
Production stage royalty interests |
Holt
 
 
Royalty and stream interests
 
 
Cost
34,612 
34,612 
Accumulated Depletion
(7,681)
(6,564)
Net
26,931 
28,048 
Production stage royalty interests |
Gwalia Deeps
 
 
Royalty and stream interests
 
 
Cost
31,070 
31,070 
Accumulated Depletion
(7,967)
(7,194)
Net
23,103 
23,876 
Production stage royalty interests |
Inata
 
 
Royalty and stream interests
 
 
Cost
24,871 
24,871 
Accumulated Depletion
(10,036)
(9,303)
Net
14,835 
15,568 
Production stage royalty interests |
Ruby Hill
 
 
Royalty and stream interests
 
 
Cost
24,335 
24,335 
Accumulated Depletion
(5,826)
(3,054)
Net
18,509 
21,281 
Production stage royalty interests |
Leeville
 
 
Royalty and stream interests
 
 
Cost
18,322 
18,322 
Accumulated Depletion
(15,586)
(15,484)
Net
2,736 
2,838 
Production stage royalty interests |
Robinson
 
 
Royalty and stream interests
 
 
Cost
17,825 
17,825 
Accumulated Depletion
(11,403)
(11,224)
Net
6,422 
6,601 
Production stage royalty interests |
Cortez
 
 
Royalty and stream interests
 
 
Cost
10,630 
10,630 
Accumulated Depletion
(9,718)
(9,716)
Net
912 
914 
Production stage royalty interests |
Other
 
 
Royalty and stream interests
 
 
Cost
190,702 
190,702 
Accumulated Depletion
(123,578)
(121,654)
Net
67,124 
69,048 
Development stage royalty interests |
Pascua-Lama
 
 
Royalty and stream interests
 
 
Cost
372,105 
372,105 
Net
372,105 
372,105 
Development stage royalty interests |
El Morro
 
 
Royalty and stream interests
 
 
Cost
35,074 
 
Net
35,074 
 
Development stage royalty interests |
Other
 
 
Royalty and stream interests
 
 
Cost
32,935 
32,934 
Net
32,935 
32,934 
Development stage stream interests |
Mt. Milligan
 
 
Royalty and stream interests
 
 
Cost
783,046 
770,093 
Net
783,046 
770,093 
Development stage stream interests |
Other
 
 
Royalty and stream interests
 
 
Cost
10,418 
10,418 
Net
10,418 
10,418 
Development stage royalty and stream interests
 
 
Royalty and stream interests
 
 
Cost
1,233,578 
1,185,550 
Net
1,233,578 
1,185,550 
Exploration stage royalty interests
 
 
Royalty and stream interests
 
 
Cost
177,324 
177,324 
Net
$ 177,324 
$ 177,324 
AVAILABLE-FOR-SALE SECURITIES (Details) (USD $)
3 Months Ended
Sep. 30, 2013
Mar. 31, 2013
Jun. 30, 2013
Available-for-sale securities
 
 
 
Cost Basis
$ 14,267,000 
 
$ 14,267,000 
Unrealized Loss
(3,441,000)
 
(4,572,000)
Fair Value
10,826,000 
 
9,695,000 
Seabridge
 
 
 
Available-for-sale securities
 
 
 
Cost Basis
14,064,000 
 
14,064,000 
Unrealized Loss
(3,315,000)
 
(4,509,000)
Fair Value
10,749,000 
 
9,555,000 
Loss on available-for-sale securities due to impairment
12,100,000 
 
Other available for sale securities
 
 
 
Available-for-sale securities
 
 
 
Cost Basis
203,000 
 
203,000 
Unrealized Loss
(126,000)
 
(63,000)
Fair Value
$ 77,000 
 
$ 140,000 
DEBT (Details) (USD $)
3 Months Ended
Sep. 30, 2013
Sep. 30, 2012
Jun. 30, 2013
Jun. 30, 2012
Long-term debt disclosure
 
 
 
 
Total debt, non-current
$ 304,604,000 
 
$ 302,263,000 
 
Convertible notes due 2019, net
 
 
 
 
Long-term debt disclosure
 
 
 
 
Total debt, non-current
304,604,000 
 
302,263,000 
 
Aggregate principal amount of convertible senior notes issued
 
 
 
370,000,000 
Interest rate on convertible senior notes (as a percent)
2.875% 
 
 
 
Interest expense recognized
5,300,000 
5,100,000 
 
 
Revolving credit facility
 
 
 
 
Long-term debt disclosure
 
 
 
 
Maximum availability under the revolving credit facility
350,000,000 
 
 
 
Outstanding amount under credit facility
$ 0 
 
 
 
STOCK-BASED COMPENSATION (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended
Sep. 30, 2013
Sep. 30, 2012
Stock-based compensation expense
 
 
Stock-based compensation expense
$ 1,613 
$ 2,095 
Stock Options
 
 
Stock-based compensation expense
 
 
Stock-based compensation expense
129 
127 
Stock Appreciation Rights
 
 
Stock-based compensation expense
 
 
Stock-based compensation expense
306 
392 
Restricted Stock
 
 
Stock-based compensation expense
 
 
Stock-based compensation expense
1,267 
1,130 
Performance Shares
 
 
Stock-based compensation expense
 
 
Stock-based compensation expense
$ (89)
$ 446 
STOCK-BASED COMPENSATION (Details 2) (USD $)
In Millions, except Share data, unless otherwise specified
3 Months Ended
Sep. 30, 2013
Sep. 30, 2012
Stock Options
 
 
Stock options, number of shares
 
 
Granted (in shares)
24,775 
17,925 
Unrecognized stock-based compensation expense
 
 
Unrecognized stock-based compensation expense related to non-vested awards
$ 1.0 
 
Weighted-average period of recognition of unrecognized stock-based compensation expenses of non-vested awards
2 years 3 months 18 days 
 
Stock Appreciation Rights
 
 
Other than stock options, number of shares
 
 
Granted (in shares)
84,125 
54,400 
Unrecognized stock-based compensation expense
 
 
Unrecognized stock-based compensation expense related to non-vested awards
2.6 
 
Weighted-average period of recognition of unrecognized stock-based compensation expenses of non-vested awards
2 years 4 months 24 days 
 
Restricted Stock
 
 
Other than stock options, number of shares
 
 
Granted (in shares)
66,150 
40,850 
Unrecognized stock-based compensation expense
 
 
Unrecognized stock-based compensation expense related to non-vested awards
7.6 
 
Weighted-average period of recognition of unrecognized stock-based compensation expenses of non-vested awards
3 years 7 months 6 days 
 
Performance Shares
 
 
Other than stock options, number of shares
 
 
Granted (in shares)
71,700 
45,600 
Unrecognized stock-based compensation expense
 
 
Unrecognized stock-based compensation expense related to non-vested awards
$ 4.0 
 
Weighted-average period of recognition of unrecognized stock-based compensation expenses of non-vested awards
2 years 
 
EARNINGS PER SHARE ("EPS") (Details) (USD $)
In Thousands, except Share data, unless otherwise specified
3 Months Ended
Sep. 30, 2013
Sep. 30, 2012
EARNINGS PER SHARE ("EPS")
 
 
Net income available to Royal Gold common stockholders (in dollars)
$ 15,195 
$ 24,771 
Weighted-average shares for basic EPS
64,858,354 
59,435,867 
Effect of other dilutive securities (in shares)
122,245 
243,940 
Weighted-average shares for diluted EPS
64,980,599 
59,679,807 
Basic earnings per share (in dollars per share)
$ 0.23 
$ 0.42 
Diluted earnings per share (in dollars per share)
$ 0.23 
$ 0.41 
Exchange ratio for conversion of exchangeable shares of RG Exchangeco into shares of Royal Gold common stock
 
Impact on diluted earnings per share (in dollars per share)
$ 0 
 
2019 Conversion Notes, Initial conversion price per share of common stock (in dollars per share)
$ 105 
 
INCOME TAXES (Details) (USD $)
3 Months Ended
Sep. 30, 2013
Sep. 30, 2012
Jun. 30, 2013
INCOME TAXES
 
 
 
Income tax expense
$ 4,842,000 
$ 16,461,000 
 
Effective tax rate (as a percent)
24.10% 
39.40% 
 
Income tax benefit resulting from an error identified as part of the annual provision-to-return true-up process
1,700,000 
 
 
Total gross unrecognized tax benefits
21,900,000 
 
21,200,000 
Accrued income-tax-related interest and penalties
4,800,000 
 
4,300,000 
Expiration period of statute of limitations for income tax examinations
12 months 
 
 
Decrease in net unrecognized income tax benefits, reasonably possible in the next 12 months, lower bound
5,000,000 
 
 
Decrease in net unrecognized income tax benefits, reasonably possible in the next 12 months, upper bound
$ 5,500,000 
 
 
SEGMENT INFORMATION (Details)
3 Months Ended
Sep. 30, 2013
Sep. 30, 2012
Jun. 30, 2013
Chile
 
 
 
Geographic distribution of royalty revenue and long-lived assets (royalty interests in mineral properties, net)
 
 
 
Revenue (as a percent)
31.00% 
26.00% 
 
Royalty and stream interests, net (as a percent)
31.00% 
 
30.00% 
Canada
 
 
 
Geographic distribution of royalty revenue and long-lived assets (royalty interests in mineral properties, net)
 
 
 
Revenue (as a percent)
26.00% 
23.00% 
 
Royalty and stream interests, net (as a percent)
52.00% 
 
52.00% 
Mexico
 
 
 
Geographic distribution of royalty revenue and long-lived assets (royalty interests in mineral properties, net)
 
 
 
Revenue (as a percent)
18.00% 
22.00% 
 
Royalty and stream interests, net (as a percent)
7.00% 
 
7.00% 
United States
 
 
 
Geographic distribution of royalty revenue and long-lived assets (royalty interests in mineral properties, net)
 
 
 
Revenue (as a percent)
13.00% 
17.00% 
 
Royalty and stream interests, net (as a percent)
4.00% 
 
4.00% 
Australia
 
 
 
Geographic distribution of royalty revenue and long-lived assets (royalty interests in mineral properties, net)
 
 
 
Revenue (as a percent)
4.00% 
3.00% 
 
Royalty and stream interests, net (as a percent)
3.00% 
 
3.00% 
Africa
 
 
 
Geographic distribution of royalty revenue and long-lived assets (royalty interests in mineral properties, net)
 
 
 
Revenue (as a percent)
3.00% 
3.00% 
 
Royalty and stream interests, net (as a percent)
1.00% 
 
1.00% 
Other
 
 
 
Geographic distribution of royalty revenue and long-lived assets (royalty interests in mineral properties, net)
 
 
 
Revenue (as a percent)
5.00% 
6.00% 
 
Royalty and stream interests, net (as a percent)
2.00% 
 
3.00% 
FAIR VALUE MEASUREMENTS (Details) (USD $)
Sep. 30, 2013
Jun. 30, 2013
Assets:
 
 
Marketable equity securities
$ 10,826,000 
$ 9,695,000 
Recurring basis |
Carrying Amount
 
 
Assets:
 
 
United States treasury bills
539,991,000 
 
Marketable equity securities
10,826,000 
 
Liabilities:
 
 
Debt
370,000,000 
 
Amount of equity component of convertible notes
77,000,000 
 
Recurring basis |
Fair value
 
 
Assets:
 
 
United States treasury bills
539,991,000 
 
Marketable equity securities
10,826,000 
 
Total assets
550,817,000 
 
Liabilities:
 
 
Debt
356,203,000 
 
Total liabilities
356,203,000 
 
Recurring basis |
Level 1
 
 
Assets:
 
 
United States treasury bills
539,991,000 
 
Marketable equity securities
10,826,000 
 
Total assets
550,817,000 
 
Liabilities:
 
 
Debt
356,203,000 
 
Total liabilities
$ 356,203,000 
 
COMMITMENTS AND CONTINGENCIES (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended 0 Months Ended 3 Months Ended 1 Months Ended 3 Months Ended
Sep. 30, 2013
Canadian Minerals Partnership
Sep. 30, 2013
Altius
Oct. 16, 2009
Voisey's Bay Holding Corporation
Sep. 30, 2013
Voisey's Bay Holding Corporation
Sep. 30, 2013
Mt. Milligan
Sep. 30, 2013
Mt. Milligan
Sep. 30, 2013
Tulsequah
Commitments and Contingencies
 
 
 
 
 
 
 
Final commitment payment made
 
 
 
 
$ 12.9 
 
 
Remaining commitment amount
 
 
 
 
 
50 
Percentage of ownership interest held in Labrador Nickel Royalty Limited Partnership ("LNRLP")
89.99% 
10.00% 
 
0.01% 
 
 
 
Minimum damage amount claimed by Labrador Nickel Royalty Limited Partnership ("LNRLP")
 
 
$ 29 
 
 
 
 
RELATED PARTY (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended
Sep. 30, 2013
oz
item
Jun. 30, 2013
oz
Related party
 
 
Maximum period of days gold inventory allocated to Royal Gold in an in-kind distribution will be held before sale
5 days 
 
Crescent Valley Partners, L.P. ("CVP")
 
 
Related party
 
 
Percentage of royalty interests acquired
1.25% 
 
Aggregate partner ownership percentage held by Royal Gold
31.67% 
 
Number of board of director members holding limited partner interests
 
Aggregate percentage of limited partner interests held by certain Royal Gold executives
35.56% 
 
Quantity of gold inventories (in ounces)
9,840 
9,742 
Carrying value of the gold in inventory
$ 6.3 
$ 6.1 
Fair value of the gold in inventory
$ 13.1 
$ 11.6