ROYAL GOLD INC, 10-Q filed on 10/30/2014
Quarterly Report
Document and Entity Information
3 Months Ended
Sep. 30, 2014
Oct. 22, 2014
Common Stock
Oct. 22, 2014
Exchangeable Stock
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, 2014 
 
 
Amendment Flag
false 
 
 
Current Fiscal Year End Date
--06-30 
 
 
Entity Current Reporting Status
Yes 
 
 
Entity Filer Category
Large Accelerated Filer 
 
 
Entity Shares Outstanding
 
64,814,621 
380,205 
Document Fiscal Year Focus
2015 
 
 
Document Fiscal Period Focus
Q1 
 
 
Consolidated Balance Sheets (USD $)
In Thousands, unless otherwise specified
Sep. 30, 2014
Jun. 30, 2014
ASSETS
 
 
Cash and equivalents
$ 691,411 
$ 659,536 
Royalty receivables
43,227 
46,654 
Income tax receivable
16,271 
21,947 
Prepaid expenses and other
6,469 
7,840 
Total current assets
757,378 
735,977 
Royalty and stream interests, net (Note 3)
2,091,323 
2,109,067 
Available-for-sale securities (Note 4)
8,268 
9,608 
Other assets
35,894 
36,892 
Total assets
2,892,863 
2,891,544 
LIABILITIES
 
 
Accounts payable
2,311 
3,897 
Dividends payable
13,691 
13,678 
Foreign withholding taxes payable
879 
2,199 
Other current liabilities
3,904 
2,730 
Total current liabilities
20,785 
22,504 
Debt (Note 5)
314,333 
311,860 
Deferred tax liabilities
164,490 
169,865 
Uncertain tax positions (Note 9)
14,208 
13,725 
Other long-term liabilities
707 
1,033 
Total liabilities
514,523 
518,987 
Commitments and contingencies (Note 12)
   
   
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 64,594,419 and 64,578,401 shares outstanding, respectively
646 
646 
Exchangeable shares, no par value, 1,806,649 shares issued, less 1,426,792 and 1,426,792 redeemed shares, respectively
16,718 
16,718 
Additional paid-in capital
2,149,996 
2,147,650 
Accumulated other comprehensive loss
(1,500)
(160)
Accumulated earnings
194,859 
189,871 
Total Royal Gold stockholders' equity
2,360,719 
2,354,725 
Non-controlling interests
17,621 
17,832 
Total equity
2,378,340 
2,372,557 
Total liabilities and equity
$ 2,892,863 
$ 2,891,544 
Consolidated Balance Sheets (Parenthetical) (USD $)
Sep. 30, 2014
Jun. 30, 2014
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
64,594,419 
64,578,401 
Exchangeable shares, par value (in dollars per share)
$ 0 
$ 0 
Exchangeable shares, shares issued
1,806,649 
1,806,649 
Exchangeable shares, shares redeemed
1,426,792 
1,426,792 
Consolidated Statements of Operations and Comprehensive Income (USD $)
In Thousands, except Share data, unless otherwise specified
3 Months Ended
Sep. 30, 2014
Sep. 30, 2013
Consolidated Statements of Operations and Comprehensive Income
 
 
Revenue
$ 69,026 
$ 56,487 
Costs and expenses
 
 
Cost of sales
6,674 
 
General and administrative
7,142 
6,566 
Production taxes
1,690 
1,783 
Depreciation, depletion and amortization
22,212 
22,400 
Impairment of mining assets
1,769 
 
Total costs and expenses
39,487 
30,749 
Operating income
29,539 
25,738 
Interest and other income
51 
194 
Interest and other expense
(6,712)
(5,809)
Income before income taxes
22,878 
20,123 
Income tax expense
(3,959)
(4,842)
Net income
18,919 
15,281 
Net income attributable to non-controlling interests
(239)
(86)
Net income attributable to Royal Gold common stockholders
18,680 
15,195 
Net income
18,919 
15,281 
Adjustments to comprehensive income, net of tax
 
 
Unrealized change in market value of available-for-sale securities
(1,340)
1,131 
Comprehensive income
17,579 
16,412 
Comprehensive income attributable to non-controlling interests
(239)
(86)
Comprehensive income attributable to Royal Gold stockholders
$ 17,340 
$ 16,326 
Net income per share available to Royal Gold common stockholders:
 
 
Basic earnings per share (in dollars per share)
$ 0.29 
$ 0.23 
Basic weighted average shares outstanding (in shares)
64,962,883 
64,858,354 
Diluted earnings per share (in dollars per share)
$ 0.29 
$ 0.23 
Diluted weighted average shares outstanding (in shares)
65,107,481 
64,980,599 
Cash dividends declared per common share (in dollars per share)
$ 0.21 
$ 0.20 
Consolidated Statements of Cash Flows (USD $)
In Thousands, unless otherwise specified
3 Months Ended
Sep. 30, 2014
Sep. 30, 2013
Cash flows from operating activities:
 
 
Net income
$ 18,919 
$ 15,281 
Adjustments to reconcile net income to net cash provided by operating activities:
 
 
Depreciation, depletion and amortization
22,212 
22,400 
Non-cash employee stock compensation expense
2,449 
1,613 
Amortization of debt discount
2,473 
2,340 
Impairment of mining assets
1,769 
 
Tax expense of stock-based compensation exercises
303 
28 
Deferred tax benefit
(5,374)
(2,857)
Changes in assets and liabilities:
 
 
Royalty receivables
3,427 
2,193 
Prepaid expenses and other assets
2,147 
10,297 
Accounts payable
(1,570)
(725)
Foreign withholding taxes payable
(1,320)
(8,256)
Income taxes (receivable) payable
5,373 
(9,010)
Other liabilities
1,650 
2,183 
Net cash provided by operating activities
52,458 
35,487 
Cash flows from investing activities:
 
 
Acquisition of royalty and stream interests
(6,209)
(48,028)
Other
(127)
(24)
Net cash used in investing activities
(6,336)
(48,052)
Cash flows from financing activities:
 
 
Net proceeds from issuance of common stock
199 
 
Common stock dividends
(13,678)
(13,010)
Distribution to non-controlling interests
(465)
(533)
Tax benefit of stock-based compensation exercises
(303)
(28)
Net cash used in financing activities
(14,247)
(13,571)
Net decrease in cash and equivalents
31,875 
(26,136)
Cash and equivalents at beginning of period
659,536 
664,035 
Cash and equivalents at end of period
$ 691,411 
$ 637,899 
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.  Certain amounts in the prior period financial statements have been reclassified for comparative purposes to conform with the presentation in the current period financial statements.  Operating results for the three months ended September 30, 2014, are not necessarily indicative of the results that may be expected for the fiscal year ending June 30, 2015.  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, 2014 filed with the Securities and Exchange Commission on August 7, 2014 (“Fiscal 2014 10-K”).

 

Asset Impairment

 

We evaluate long-lived assets for impairment whenever events or changes in circumstances indicate that the related carrying amounts of an asset or group of assets may not be recoverable.  The recoverability of the carrying value of royalty interests in production and development stage mineral properties is evaluated based upon estimated future undiscounted net cash flows from each royalty interest property using estimates of proven and probable reserves 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, nickel 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 affecting the future recoverability of our 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.

 

Our estimates of gold, silver, copper, nickel and other metal prices, operator’s estimates of proven and probable reserves related to our royalty or streaming properties, and operator’s estimates of operating, capital and reclamation costs are subject to certain risks and uncertainties which may affect the recoverability of our investment in these royalty interests in mineral properties.  Although we have made our best assessment of these factors based on current market conditions, it is possible that changes could occur, which could adversely affect the net cash flows expected to be generated from these royalty interests.  As part of the Company’s regular asset impairment analysis, the Company determined that one production stage royalty interest and one exploration stage royalty interest should be written down to zero for a total impairment of $1.8 million as of September 30, 2014.

ACQUISITION
ACQUISITION

2.ACQUISITION

 

Tetlin Royalty Acquisitions

 

On September 30, 2014, Royal Gold acquired a 2.0% net smelter return (“NSR”) royalty and a 3.0% NSR royalty held by private parties over areas comprising Contango ORE, Inc.’s Tetlin mining project located near Tok, Alaska, for total consideration of $6.0 million.  The acquisition of the Tetlin royalties has been accounted for as an asset acquisition.  The total purchase price of $6.0 million, plus direct transaction costs, has been recorded as an exploration 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 principal royalty and stream interests as of September 30, 2014 and June 30, 2014.                                                                                                                                                                           

As of September 30, 2014
(Amounts in thousands):

 

Cost

 

Accumulated
Depletion

 

Net

 

Production stage royalty interests:

 

 

 

 

 

 

 

Andacollo

 

$

272,998

 

$

(58,569

)

$

214,429

 

Voisey’s Bay

 

150,138

 

(70,012

)

80,126

 

Peñasquito

 

99,172

 

(19,377

)

79,795

 

Mulatos

 

48,092

 

(29,305

)

18,787

 

Holt

 

34,612

 

(11,344

)

23,268

 

Robinson

 

17,825

 

(12,119

)

5,706

 

Cortez

 

10,630

 

(9,805

)

825

 

Other

 

489,689

 

(240,505

)

249,184

 

Total production stage royalty interests

 

1,123,156

 

(451,036

)

672,120

 

 

 

 

 

 

 

 

 

Production stage stream interests:

 

 

 

 

 

 

 

Mt. Milligan

 

783,046

 

(13,427

)

769,619

 

Total production stage royalty and stream interests

 

1,906,202

 

(464,463

)

1,441,739

 

 

 

 

 

 

 

 

 

Development stage royalty interests:

 

 

 

 

 

 

 

Pascua-Lama

 

372,105

 

 

372,105

 

Other

 

69,489

 

 

69,489

 

Total development stage royalty interests

 

441,594

 

 

441,594

 

Total development stage stream interests

 

41,282

 

 

41,282

 

Total development stage royalty and stream interests

 

482,876

 

 

482,876

 

 

 

 

 

 

 

 

 

Exploration stage royalty interests

 

166,708

 

 

166,708

 

Total royalty and stream interests

 

$

2,555,786

 

$

(464,463

)

$

2,091,323

 

 

As of June 30, 2014 (Amounts in thousands):

 

Cost

 

Accumulated
Depletion

 

Net

 

Production stage royalty interests:

 

 

 

 

 

 

 

Andacollo

 

$

272,998

 

$

(56,147

)

$

216,851

 

Voisey’s Bay

 

150,138

 

(67,377

)

82,761

 

Peñasquito

 

99,172

 

(17,801

)

81,371

 

Mulatos

 

48,092

 

(28,548

)

19,544

 

Holt

 

34,612

 

(10,474

)

24,138

 

Robinson

 

17,825

 

(11,887

)

5,938

 

Cortez

 

10,630

 

(9,772

)

858

 

Other

 

488,309

 

(232,913

)

255,396

 

Total production stage royalty interests

 

1,121,776

 

(434,919

)

686,857

 

 

 

 

 

 

 

 

 

Production stage stream interests:

 

 

 

 

 

 

 

Mt. Milligan

 

783,046

 

(7,741

)

775,305

 

Total production stage royalty and stream interests

 

1,904,822

 

(442,660

)

1,462,162

 

 

 

 

 

 

 

 

 

Development stage royalty interests:

 

 

 

 

 

 

 

Pascua-Lama

 

372,105

 

 

372,105

 

Other

 

69,488

 

 

69,488

 

Total development stage royalty interests

 

441,593

 

 

441,593

 

Total development stage stream interests

 

41,103

 

 

41,103

 

Total development stage royalty and stream interests

 

482,696

 

 

482,696

 

 

 

 

 

 

 

 

 

Exploration stage royalty interests

 

164,209

 

 

164,209

 

Total royalty and stream interests

 

$

2,551,727

 

$

(442,660

)

$

2,109,067

 

 

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

4.AVAILABLE-FOR-SALE SECURITIES

 

The Company’s available-for-sale securities as of September 30, 2014 and June 30, 2014 consist of the following:

 

 

 

As of September 30, 2014

 

 

 

 

 

(Amounts in thousands)

 

 

 

 

 

 

 

Unrealized

 

 

 

 

 

Cost Basis

 

Gain

 

Loss

 

Fair Value

 

Non-current:

 

 

 

 

 

 

 

 

 

Seabridge

 

$

9,565

 

 

(1,338

)

$

8,227

 

Other

 

203

 

 

(162

)

41

 

 

 

$

9,768

 

$

 

$

(1,500

)

$

8,268

 

 

 

 

As of June 30, 2014

 

 

 

 

 

(Amounts in thousands)

 

 

 

 

 

 

 

Unrealized

 

 

 

 

 

Cost Basis

 

Gain

 

Loss

 

Fair Value

 

Non-current:

 

 

 

 

 

 

 

 

 

Seabridge

 

$

9,565

 

 

 

$

9,565

 

Other

 

203

 

 

(160

)

43

 

 

 

$

9,768

 

$

 

$

(160

)

$

9,608

 

 

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 2014 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, 2014.  The Company recognized a loss on available-for-sale securities of $4.5 million during the fourth quarter of our fiscal year ended June 30, 2014.  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, 2014 and June 30, 2014 consists of the following:

 

 

 

As of

 

As of

 

 

 

September 30, 2014

 

June 30, 2014

 

 

 

Non-current

 

Non-current

 

 

 

(Amounts in thousands)

 

Convertible notes due 2019, net

 

$

314,333 

 

$

311,860 

 

Total debt

 

$

314,333 

 

$

311,860 

 

 

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, 2014 and 2013, was $5.4 million and $5.3 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 $450 million revolving credit facility.  As of September 30, 2014, the Company had no amounts outstanding under the revolving credit facility.  As discussed in Note 6 to the notes to consolidated financial statements in the Company’s Fiscal 2014 10-K, the Company has financial covenants associated with its revolving credit facility.  At September 30, 2014, the Company was in compliance with each financial covenant.

REVENUE
REVENUE

6.REVENUE

 

Revenue is comprised of the following:                                                                                                                           

 

 

For The Three Months Ended

 

 

 

September 30,

 

September 30,

 

 

 

2014

 

2013

 

 

 

(Amounts in thousands)

 

Royalty interests

 

$

49,369 

 

$

56,487 

 

Stream interests

 

19,657 

 

 

Total revenue

 

$

69,026 

 

$

56,487 

 

 

STOCK-BASED COMPENSATION
STOCK-BASED COMPENSATION

7.STOCK-BASED COMPENSATION

 

The Company recognized stock-based compensation expense as follows:

 

 

 

For The Three Months Ended

 

 

 

September 30,

 

September 30,

 

 

 

2014

 

2013

 

 

 

(Amounts in thousands)

 

Stock options

 

$

112

 

$

129

 

Stock appreciation rights

 

355

 

306

 

Restricted stock

 

1,170

 

1,267

 

Performance stock

 

812

 

(89

)

Total stock-based compensation expense

 

$

2,449

 

$

1,613

 

 

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

 

There were 19,760 and 24,775 stock options granted during the three months ended September 30, 2014 and 2013, respectively.  As of September 30, 2014, there was $0.9 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 87,890 and 84,125 stock-settled stock appreciation rights (“SSARs”) granted during the three months ended September 30, 2014 and 2013, respectively.  As of September 30, 2014, there was $3.3 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 55,589 and 66,150 shares of restricted stock granted during the three months ended September 30, 2014 and 2013, respectively.  As of September 30, 2014, there was $7.9 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 46,800 and 71,700 shares of performance stock granted during the three months ended September 30, 2014 and 2013, respectively.  As of September 30, 2014, 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 based on management’s current estimate of the performance award criteria being achieved.

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

8.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,

 

 

 

2014

 

2013

 

 

 

(in thousands, except per share data)

 

 

 

 

 

Net income available to Royal Gold common stockholders

 

$

18,680 

 

$

15,195 

 

Weighted-average shares for basic EPS

 

64,962,883 

 

64,858,354 

 

Effect of other dilutive securities

 

144,598 

 

122,245 

 

Weighted-average shares for diluted EPS

 

65,107,481 

 

64,980,599 

 

 

 

 

 

 

 

Basic earnings per share

 

$

0.29 

 

$

0.23 

 

 

 

 

 

 

 

Diluted earnings per share

 

$

0.29 

 

$

0.23 

 

 

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

9.INCOME TAXES

 

 

 

For The Three Months Ended

 

 

 

September 30,

 

September 30,

 

 

 

2014

 

2013

 

 

 

(Amounts in thousands, except rate)

 

 

 

 

 

 

 

Income tax expense

 

$

3,959 

 

$

4,842 

 

Effective tax rate

 

17.3 

%

24.1 

%

 

The decrease in the effective tax rate for the quarter ended September 30, 2014 is primarily related to (i) a favorable tax rate associated with certain operations in lower-tax jurisdictions, and (ii) a decrease in tax expense due to the Chilean tax legislation enacted in the quarter and the re-measurement of the Chilean long term deferred tax asset to the higher corporate income tax rate.  The decrease in tax expense was partially offset by an increase in current year tax expense due to accrual for uncertain tax positions.

 

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 a result of (i) statute of limitations that will begin to expire within 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) 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 not decrease in the next 12 months.

 

As of September 30, 2014 and June 30, 2014, the Company had $14.2 million and $13.7 million of total gross unrecognized tax benefits, respectively.  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, 2014 and June 30, 2014, the amount of accrued income-tax-related interest and penalties was $5.9 million and $5.4 million, respectively.

SEGMENT INFORMATION
SEGMENT INFORMATION

10.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

 

 

 

2014

 

2013

 

September 30, 2014

 

June 30, 2014

 

Canada

 

45%

 

26%

 

53%

 

53%

 

Chile

 

16%

 

31%

 

32%

 

31%

 

United States

 

16%

 

13%

 

3%

 

3%

 

Mexico

 

14%

 

18%

 

7%

 

7%

 

Australia

 

3%

 

4%

 

3%

 

3%

 

Africa

 

2%

 

3%

 

1%

 

1%

 

Other

 

4%

 

5%

 

1%

 

2%

 

 

FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS

11.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, 2014

 

 

 

Carrying

 

Fair Value

 

 

 

Amount

 

Total

 

Level 1

 

Level 2

 

Level 3

 

Assets (In thousands):

 

 

 

 

 

 

 

 

 

 

 

United States treasury bills(1)

 

$

499,991 

 

$

499,991 

 

$

499,991 

 

$

 

$

 

Marketable equity securities(2)

 

$

8,268 

 

$

8,268 

 

$

8,268 

 

$

 

$

 

Total assets

 

 

 

$

508,259 

 

$

508,259 

 

$

 

$

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities (In thousands):

 

 

 

 

 

 

 

 

 

 

 

Debt(3)

 

$

391,333 

 

$

387,575 

 

$

387,575 

 

$

 

$

 

Total liabilities

 

 

 

$

387,575 

 

$

387,575 

 

$

 

$

 

 

(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, 2014, 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 interests in mineral properties, 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.  As discussed in Note 1, two of these assets were written down to fair value (or $0) during the three months ended September 30, 2014.  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

12.COMMITMENTS AND CONTINGENCIES

 

Phoenix Gold Project Stream Acquisition

 

As of September 30, 2014, the Company has a remaining commitment of $45 million as part of its Phoenix Gold Project stream acquisition in February 2014.  The Company made a $17 million payment as part of this commitment on October 3, 2014.

 

Tulsequah Chief Gold and Silver Stream Acquisition

 

As of September 30, 2014, the Company has a remaining commitment of $45 million as part of its Tulsequah Chief gold and silver stream acquisition in December 2011, as amended in July 2014, payment of which is subject to satisfaction of certain conditions precedent.

 

Voisey’s Bay

 

The Company indirectly owns a royalty on the Voisey’s Bay mine in Newfoundland and Labrador owned by Vale Newfoundland & Labrador Limited (“VNL”).  The royalty is directly 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.

SUBSEQUENT EVENT
SUBSEQUENT EVENT

13.SUBSEQUENT EVENT

 

Acquisition of Gold Stream on Euromax’s Ilovitza Project

 

On October 20, 2014, RGLD Gold AG (“RGLD Gold”), a wholly owned subsidiary of the Company, entered into a $175.0 million gold stream transaction with Euromax Resources Ltd (“Euromax”) that will finance a definitive feasibility study, permitting work, early stage engineering and a significant portion of the construction at Euromax’s Ilovitza gold-copper project located in southeast Macedonia, approximately nine miles west of the Bulgarian border.  RGLD Gold will make two advance deposit payments to Euromax totaling $15.0 million, which will be used for completion of the definitive feasibility study and permitting of the project, followed by payments aggregating $160 million towards project construction, in each case subject to certain conditions.  Payment of the first $7.5 million deposit is conditioned upon Euromax raising an additional $5 million in equity.  Royal Gold’s decision to proceed with the second $7.5 million deposit and the construction payments is conditioned upon, among other things, its satisfaction with the definitive feasibility study and environmental evaluations, demonstrated project viability, and sufficient project financing and permits to construct and operate the mine. The construction payments would be paid pro-rata with the balance of the project funding.  In exchange, Euromax will deliver physical gold equal to 25% of gold produced from the Ilovitza project until 525,000 ounces have been delivered, and 12.5% thereafter (in each case subject to adjustment).  RGLD Gold’s purchase price per ounce will be 25% of the spot price at time of delivery.

OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)
Asset Impairment

Asset Impairment

 

We evaluate long-lived assets for impairment whenever events or changes in circumstances indicate that the related carrying amounts of an asset or group of assets may not be recoverable.  The recoverability of the carrying value of royalty interests in production and development stage mineral properties is evaluated based upon estimated future undiscounted net cash flows from each royalty interest property using estimates of proven and probable reserves 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, nickel 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 affecting the future recoverability of our 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.

 

Our estimates of gold, silver, copper, nickel and other metal prices, operator’s estimates of proven and probable reserves related to our royalty or streaming properties, and operator’s estimates of operating, capital and reclamation costs are subject to certain risks and uncertainties which may affect the recoverability of our investment in these royalty interests in mineral properties.  Although we have made our best assessment of these factors based on current market conditions, it is possible that changes could occur, which could adversely affect the net cash flows expected to be generated from these royalty interests.  As part of the Company’s regular asset impairment analysis, the Company determined that one production stage royalty interest and one exploration stage royalty interest should be written down to zero for a total impairment of $1.8 million as of September 30, 2014.

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

                  

As of September 30, 2014
(Amounts in thousands):

 

Cost

 

Accumulated
Depletion

 

Net

 

Production stage royalty interests:

 

 

 

 

 

 

 

Andacollo

 

$

272,998

 

$

(58,569

)

$

214,429

 

Voisey’s Bay

 

150,138

 

(70,012

)

80,126

 

Peñasquito

 

99,172

 

(19,377

)

79,795

 

Mulatos

 

48,092

 

(29,305

)

18,787

 

Holt

 

34,612

 

(11,344

)

23,268

 

Robinson

 

17,825

 

(12,119

)

5,706

 

Cortez

 

10,630

 

(9,805

)

825

 

Other

 

489,689

 

(240,505

)

249,184

 

Total production stage royalty interests

 

1,123,156

 

(451,036

)

672,120

 

 

 

 

 

 

 

 

 

Production stage stream interests:

 

 

 

 

 

 

 

Mt. Milligan

 

783,046

 

(13,427

)

769,619

 

Total production stage royalty and stream interests

 

1,906,202

 

(464,463

)

1,441,739

 

 

 

 

 

 

 

 

 

Development stage royalty interests:

 

 

 

 

 

 

 

Pascua-Lama

 

372,105

 

 

372,105

 

Other

 

69,489

 

 

69,489

 

Total development stage royalty interests

 

441,594

 

 

441,594

 

Total development stage stream interests

 

41,282

 

 

41,282

 

Total development stage royalty and stream interests

 

482,876

 

 

482,876

 

 

 

 

 

 

 

 

 

Exploration stage royalty interests

 

166,708

 

 

166,708

 

Total royalty and stream interests

 

$

2,555,786

 

$

(464,463

)

$

2,091,323

 

As of June 30, 2014 (Amounts in thousands):

 

Cost

 

Accumulated
Depletion

 

Net

 

Production stage royalty interests:

 

 

 

 

 

 

 

Andacollo

 

$

272,998

 

$

(56,147

)

$

216,851

 

Voisey’s Bay

 

150,138

 

(67,377

)

82,761

 

Peñasquito

 

99,172

 

(17,801

)

81,371

 

Mulatos

 

48,092

 

(28,548

)

19,544

 

Holt

 

34,612

 

(10,474

)

24,138

 

Robinson

 

17,825

 

(11,887

)

5,938

 

Cortez

 

10,630

 

(9,772

)

858

 

Other

 

488,309

 

(232,913

)

255,396

 

Total production stage royalty interests

 

1,121,776

 

(434,919

)

686,857

 

 

 

 

 

 

 

 

 

Production stage stream interests:

 

 

 

 

 

 

 

Mt. Milligan

 

783,046

 

(7,741

)

775,305

 

Total production stage royalty and stream interests

 

1,904,822

 

(442,660

)

1,462,162

 

 

 

 

 

 

 

 

 

Development stage royalty interests:

 

 

 

 

 

 

 

Pascua-Lama

 

372,105

 

 

372,105

 

Other

 

69,488

 

 

69,488

 

Total development stage royalty interests

 

441,593

 

 

441,593

 

Total development stage stream interests

 

41,103

 

 

41,103

 

Total development stage royalty and stream interests

 

482,696

 

 

482,696

 

 

 

 

 

 

 

 

 

Exploration stage royalty interests

 

164,209

 

 

164,209

 

Total royalty and stream interests

 

$

2,551,727

 

$

(442,660

)

$

2,109,067

 

 

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

 

 

As of September 30, 2014

 

 

 

 

 

(Amounts in thousands)

 

 

 

 

 

 

 

Unrealized

 

 

 

 

 

Cost Basis

 

Gain

 

Loss

 

Fair Value

 

Non-current:

 

 

 

 

 

 

 

 

 

Seabridge

 

$

9,565

 

 

(1,338

)

$

8,227

 

Other

 

203

 

 

(162

)

41

 

 

 

$

9,768

 

$

 

$

(1,500

)

$

8,268

 

 

 

As of June 30, 2014

 

 

 

 

 

(Amounts in thousands)

 

 

 

 

 

 

 

Unrealized

 

 

 

 

 

Cost Basis

 

Gain

 

Loss

 

Fair Value

 

Non-current:

 

 

 

 

 

 

 

 

 

Seabridge

 

$

9,565

 

 

 

$

9,565

 

Other

 

203

 

 

(160

)

43

 

 

 

$

9,768

 

$

 

$

(160

)

$

9,608

 

 

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

 

 

As of

 

As of

 

 

 

September 30, 2014

 

June 30, 2014

 

 

 

Non-current

 

Non-current

 

 

 

(Amounts in thousands)

 

Convertible notes due 2019, net

 

$

314,333 

 

$

311,860 

 

Total debt

 

$

314,333 

 

$

311,860 

 

 

REVENUE (Tables)
Schedule of revenue

 

 

For The Three Months Ended

 

 

 

September 30,

 

September 30,

 

 

 

2014

 

2013

 

 

 

(Amounts in thousands)

 

Royalty interests

 

$

49,369 

 

$

56,487 

 

Stream interests

 

19,657 

 

 

Total revenue

 

$

69,026 

 

$

56,487 

 

 

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

 

 

For The Three Months Ended

 

 

 

September 30,

 

September 30,

 

 

 

2014

 

2013

 

 

 

(Amounts in thousands)

 

Stock options

 

$

112

 

$

129

 

Stock appreciation rights

 

355

 

306

 

Restricted stock

 

1,170

 

1,267

 

Performance stock

 

812

 

(89

)

Total stock-based compensation expense

 

$

2,449

 

$

1,613

 

 

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

 

 

For The Three Months Ended

 

 

 

September 30,

 

September 30,

 

 

 

2014

 

2013

 

 

 

(in thousands, except per share data)

 

 

 

 

 

Net income available to Royal Gold common stockholders

 

$

18,680 

 

$

15,195 

 

Weighted-average shares for basic EPS

 

64,962,883 

 

64,858,354 

 

Effect of other dilutive securities

 

144,598 

 

122,245 

 

Weighted-average shares for diluted EPS

 

65,107,481 

 

64,980,599 

 

 

 

 

 

 

 

Basic earnings per share

 

$

0.29 

 

$

0.23 

 

 

 

 

 

 

 

Diluted earnings per share

 

$

0.29 

 

$

0.23 

 

 

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

 

 

For The Three Months Ended

 

 

 

September 30,

 

September 30,

 

 

 

2014

 

2013

 

 

 

(Amounts in thousands, except rate)

 

 

 

 

 

 

 

Income tax expense

 

$

3,959 

 

$

4,842 

 

Effective tax rate

 

17.3 

%

24.1 

%

 

SEGMENT INFORMATION (Tables)
Geographic distribution of 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

 

 

 

2014

 

2013

 

September 30, 2014

 

June 30, 2014

 

Canada

 

45%

 

26%

 

53%

 

53%

 

Chile

 

16%

 

31%

 

32%

 

31%

 

United States

 

16%

 

13%

 

3%

 

3%

 

Mexico

 

14%

 

18%

 

7%

 

7%

 

Australia

 

3%

 

4%

 

3%

 

3%

 

Africa

 

2%

 

3%

 

1%

 

1%

 

Other

 

4%

 

5%

 

1%

 

2%

 

 

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

 

 

At September 30, 2014

 

 

 

Carrying

 

Fair Value

 

 

 

Amount

 

Total

 

Level 1

 

Level 2

 

Level 3

 

Assets (In thousands):

 

 

 

 

 

 

 

 

 

 

 

United States treasury bills(1)

 

$

499,991 

 

$

499,991 

 

$

499,991 

 

$

 

$

 

Marketable equity securities(2)

 

$

8,268 

 

$

8,268 

 

$

8,268 

 

$

 

$

 

Total assets

 

 

 

$

508,259 

 

$

508,259 

 

$

 

$

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities (In thousands):

 

 

 

 

 

 

 

 

 

 

 

Debt(3)

 

$

391,333 

 

$

387,575 

 

$

387,575 

 

$

 

$

 

Total liabilities

 

 

 

$

387,575 

 

$

387,575 

 

$

 

$

 

 

(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) (USD $)
3 Months Ended
Sep. 30, 2014
item
Jun. 30, 2014
Minimum number of metals produced from a mine of which right to purchase all or a portion available in exchange for upfront deposit
 
Carrying value
$ 2,091,323,000 
$ 2,109,067,000 
Impairment of mining assets
1,769,000 
 
Impaired mining asset
 
 
Carrying value
 
Impairment of mining assets
1,800,000 
 
Production Stage Royalty Interest
 
 
Carrying value
672,120,000 
686,857,000 
Production Stage Royalty Interest |
Impaired mining asset
 
 
Number of properties
 
Exploration Stage Royalty Interest
 
 
Carrying value
166,708,000 
164,209,000 
Exploration Stage Royalty Interest |
Impaired mining asset
 
 
Number of properties
$ 1 
 
ACQUISITION (Details) (Tetlin, USD $)
In Millions, unless otherwise specified
Sep. 30, 2014
Acquisition of Royalty Interest in Mineral Properties
 
Total purchase amount
$ 6.0 
NSR Royalty 1
 
Acquisition of Royalty Interest in Mineral Properties
 
Percentage of royalty interests acquired
2.00% 
NSR Royalty 2
 
Acquisition of Royalty Interest in Mineral Properties
 
Percentage of royalty interests acquired
3.00% 
ROYALTY AND STREAM INTERESTS (Details) (USD $)
In Thousands, unless otherwise specified
Sep. 30, 2014
Jun. 30, 2014
Royalty and stream interests
 
 
Cost
$ 2,555,786 
$ 2,551,727 
Accumulated Depletion
(464,463)
(442,660)
Net
2,091,323 
2,109,067 
Production Stage Royalty Interest
 
 
Royalty and stream interests
 
 
Cost
1,123,156 
1,121,776 
Accumulated Depletion
(451,036)
(434,919)
Net
672,120 
686,857 
Production Stage Royalty Interest |
Andacollo
 
 
Royalty and stream interests
 
 
Cost
272,998 
272,998 
Accumulated Depletion
(58,569)
(56,147)
Net
214,429 
216,851 
Production Stage Royalty Interest |
Voiseys Bay
 
 
Royalty and stream interests
 
 
Cost
150,138 
150,138 
Accumulated Depletion
(70,012)
(67,377)
Net
80,126 
82,761 
Production Stage Royalty Interest |
Penasquito
 
 
Royalty and stream interests
 
 
Cost
99,172 
99,172 
Accumulated Depletion
(19,377)
(17,801)
Net
79,795 
81,371 
Production Stage Royalty Interest |
Mulatos
 
 
Royalty and stream interests
 
 
Cost
48,092 
48,092 
Accumulated Depletion
(29,305)
(28,548)
Net
18,787 
19,544 
Production Stage Royalty Interest |
Holt
 
 
Royalty and stream interests
 
 
Cost
34,612 
34,612 
Accumulated Depletion
(11,344)
(10,474)
Net
23,268 
24,138 
Production Stage Royalty Interest |
Robinson
 
 
Royalty and stream interests
 
 
Cost
17,825 
17,825 
Accumulated Depletion
(12,119)
(11,887)
Net
5,706 
5,938 
Production Stage Royalty Interest |
Cortez
 
 
Royalty and stream interests
 
 
Cost
10,630 
10,630 
Accumulated Depletion
(9,805)
(9,772)
Net
825 
858 
Production Stage Royalty Interest |
Other Mines
 
 
Royalty and stream interests
 
 
Cost
489,689 
488,309 
Accumulated Depletion
(240,505)
(232,913)
Net
249,184 
255,396 
Production Stage Stream Interests |
Mt. Milligan
 
 
Royalty and stream interests
 
 
Cost
783,046 
783,046 
Accumulated Depletion
(13,427)
(7,741)
Net
769,619 
775,305 
Production Stage Royalty and Stream Interests
 
 
Royalty and stream interests
 
 
Cost
1,906,202 
1,904,822 
Accumulated Depletion
(464,463)
(442,660)
Net
1,441,739 
1,462,162 
Development Stage Royalty Interest
 
 
Royalty and stream interests
 
 
Cost
441,594 
441,593 
Net
441,594 
441,593 
Development Stage Royalty Interest |
Pascua Lama
 
 
Royalty and stream interests
 
 
Cost
372,105 
372,105 
Net
372,105 
372,105 
Development Stage Royalty Interest |
Other Mines
 
 
Royalty and stream interests
 
 
Cost
69,489 
69,488 
Net
69,489 
69,488 
Development Stage Stream Interest
 
 
Royalty and stream interests
 
 
Cost
41,282 
 
Net
41,282 
 
Development Stage Stream Interest |
Phoenix Gold Project
 
 
Royalty and stream interests
 
 
Cost
 
30,620 
Net
 
30,620 
Development Stage Stream Interest |
Other Mines
 
 
Royalty and stream interests
 
 
Cost
 
10,483 
Net
 
10,483 
Development Stage Royalty and Stream Interest
 
 
Royalty and stream interests
 
 
Cost
482,876 
41,103 
Net
482,876 
41,103 
Exploration Stage Royalty Interest
 
 
Royalty and stream interests
 
 
Cost
166,708 
164,209 
Net
$ 166,708 
$ 164,209 
AVAILABLE-FOR-SALE SECURITIES (Details) (USD $)
3 Months Ended
Sep. 30, 2014
Jun. 30, 2014
Available-for-sale securities
 
 
Cost Basis
$ 9,768,000 
$ 9,768,000 
Unrealized Loss
(1,500,000)
(160,000)
Fair Value
8,268,000 
9,608,000 
Seabridge Gold Inc
 
 
Available-for-sale securities
 
 
Cost Basis
9,565,000 
9,565,000 
Unrealized Loss
(1,338,000)
 
Fair Value
8,227,000 
9,565,000 
Loss on available-for-sale securities due to impairment
4,500,000 
Other investments
 
 
Available-for-sale securities
 
 
Cost Basis
203,000 
203,000 
Unrealized Loss
(162,000)
(160,000)
Fair Value
$ 41,000 
$ 43,000 
DEBT (Details) (USD $)
3 Months Ended
Sep. 30, 2014
Sep. 30, 2013
Jun. 30, 2014
Jun. 30, 2012
Long-term debt disclosure
 
 
 
 
Total debt, non-current
$ 314,333,000 
 
$ 311,860,000 
 
Convertible notes due 2019, net
 
 
 
 
Long-term debt disclosure
 
 
 
 
Total debt, non-current
314,333,000 
 
311,860,000 
 
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
5,400,000 
5,300,000 
 
 
Revolving credit facility
 
 
 
 
Long-term debt disclosure
 
 
 
 
Maximum availability under the revolving credit facility
450,000,000 
 
 
 
Outstanding amount under credit facility
$ 0 
 
 
 
REVENUE (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended
Sep. 30, 2014
Sep. 30, 2013
REVENUE
 
 
Royalty interests
$ 49,369 
$ 56,487 
Stream interests
19,657 
 
Total revenue
$ 69,026 
$ 56,487 
STOCK-BASED COMPENSATION (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended
Sep. 30, 2014
Sep. 30, 2013
Stock-based compensation expense
 
 
Stock-based compensation expense
$ 2,449 
$ 1,613 
Stock Options
 
 
Stock-based compensation expense
 
 
Stock-based compensation expense
112 
129 
Stock Appreciation Rights
 
 
Stock-based compensation expense
 
 
Stock-based compensation expense
355 
306 
Restricted Stock
 
 
Stock-based compensation expense
 
 
Stock-based compensation expense
1,170 
1,267 
Performance Stock
 
 
Stock-based compensation expense
 
 
Stock-based compensation expense
$ 812 
$ (89)
STOCK-BASED COMPENSATION (Details 2) (USD $)
In Millions, except Share data, unless otherwise specified
3 Months Ended
Sep. 30, 2014
Sep. 30, 2013
Stock Options
 
 
Stock options, number of shares
 
 
Granted (in shares)
19,760 
24,775 
Unrecognized stock-based compensation expense
 
 
Unrecognized stock-based compensation expense related to non-vested awards
$ 0.9 
 
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)
87,890 
84,125 
Unrecognized stock-based compensation expense
 
 
Unrecognized stock-based compensation expense related to non-vested awards
3.3 
 
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)
55,589 
66,150 
Unrecognized stock-based compensation expense
 
 
Unrecognized stock-based compensation expense related to non-vested awards
7.9 
 
Weighted-average period of recognition of unrecognized stock-based compensation expenses of non-vested awards
3 years 7 months 6 days 
 
Performance Stock
 
 
Other than stock options, number of shares
 
 
Granted (in shares)
46,800 
71,700 
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, 2014
Sep. 30, 2013
EARNINGS PER SHARE ("EPS")
 
 
Net income available to Royal Gold common stockholders (in dollars)
$ 18,680 
$ 15,195 
Weighted-average shares for basic EPS
64,962,883 
64,858,354 
Effect of other dilutive securities (in shares)
144,598 
122,245 
Weighted-average shares for diluted EPS
65,107,481 
64,980,599 
Basic earnings per share (in dollars per share)
$ 0.29 
$ 0.23 
Diluted earnings per share (in dollars per share)
$ 0.29 
$ 0.23 
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, 2014
Sep. 30, 2013
INCOME TAXES
 
 
Income tax expense
$ 3,959,000 
$ 4,842,000 
Effective tax rate (as a percent)
17.30% 
24.10% 
Expiration period of statute of limitations for income tax examinations
12 months 
 
Total gross unrecognized tax benefits
14,200,000 
13,700,000 
Accrued income-tax-related interest and penalties
$ 5,900,000 
$ 5,400,000 
SEGMENT INFORMATION (Details)
3 Months Ended
Sep. 30, 2014
Sep. 30, 2013
Jun. 30, 2014
CANADA
 
 
 
Geographic distribution of royalty revenue and long-lived assets (royalty interests in mineral properties, net)
 
 
 
Revenue (as a percent)
45.00% 
26.00% 
 
Royalty and stream interests, net (as a percent)
53.00% 
 
53.00% 
CHILE
 
 
 
Geographic distribution of royalty revenue and long-lived assets (royalty interests in mineral properties, net)
 
 
 
Revenue (as a percent)
16.00% 
31.00% 
 
Royalty and stream interests, net (as a percent)
32.00% 
 
31.00% 
UNITED STATES
 
 
 
Geographic distribution of royalty revenue and long-lived assets (royalty interests in mineral properties, net)
 
 
 
Revenue (as a percent)
16.00% 
13.00% 
 
Royalty and stream interests, net (as a percent)
3.00% 
 
3.00% 
MEXICO
 
 
 
Geographic distribution of royalty revenue and long-lived assets (royalty interests in mineral properties, net)
 
 
 
Revenue (as a percent)
14.00% 
18.00% 
 
Royalty and stream interests, net (as a percent)
7.00% 
 
7.00% 
AUSTRALIA
 
 
 
Geographic distribution of royalty revenue and long-lived assets (royalty interests in mineral properties, net)
 
 
 
Revenue (as a percent)
3.00% 
4.00% 
 
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)
2.00% 
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)
4.00% 
5.00% 
 
Royalty and stream interests, net (as a percent)
1.00% 
 
2.00% 
FAIR VALUE MEASUREMENTS (Details) (USD $)
3 Months Ended
Sep. 30, 2014
Recurring basis |
Carrying Amount
 
Assets:
 
United States treasury bills
$ 499,991,000 
Marketable equity securities
8,268,000 
Liabilities:
 
Debt
391,333,000 
Amount of equity component of convertible notes
77,000,000 
Recurring basis |
Fair Value
 
Assets:
 
United States treasury bills
499,991,000 
Marketable equity securities
8,268,000 
Total assets
508,259,000 
Liabilities:
 
Debt
387,575,000 
Total liabilities
387,575,000 
Recurring basis |
Level 1
 
Assets:
 
United States treasury bills
499,991,000 
Marketable equity securities
8,268,000 
Total assets
508,259,000 
Liabilities:
 
Debt
387,575,000 
Total liabilities
387,575,000 
Impaired mining asset |
Non-recurring basis |
Fair Value
 
Assets:
 
Total assets
Number of properties
$ 2 
COMMITMENTS AND CONTINGENCIES (Details) (USD $)
In Millions, unless otherwise specified
0 Months Ended 3 Months Ended 0 Months Ended 3 Months Ended
Oct. 3, 2014
Phoenix Gold Project
Sep. 30, 2014
Phoenix Gold Project
Sep. 30, 2014
Tulsequah
Oct. 16, 2009
Voiseys Bay
VNRLP Litigation
Sep. 30, 2014
Voiseys Bay
Canadian Minerals Partnership
Sep. 30, 2014
Voiseys Bay
Altius
Sep. 30, 2014
Voiseys Bay
Voiseys Bay Holding Corporation
Commitments and Contingencies
 
 
 
 
 
 
 
Remaining commitment amount
 
$ 45 
$ 45 
 
 
 
 
Payment made
17 
 
 
 
 
 
 
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 
 
 
 
SUBSEQUENT EVENT (Details) (Subsequent Events, RGLD Gold AG, USD $)
In Millions, unless otherwise specified
0 Months Ended
Oct. 20, 2014
item
mi
Oct. 20, 2014
Subsequent event
 
 
Total purchase amount
 
$ 175.0 
Distance of mining property from Cortez mine
 
Number of installments
 
Feasibility costs
15.0 
 
Construction costs
160 
 
Purchase price per ounce of gold as percentage of spot price at the time of delivery
25.00% 
 
First Conditions
 
 
Subsequent event
 
 
Feasibility costs
7.5 
 
Euromax required contribution
 
Second Conditions
 
 
Subsequent event
 
 
Feasibility costs
$ 7.5 
 
Initial Royalty
 
 
Subsequent event
 
 
Percentage of royalty interests acquired
 
25.00% 
Gold delivered (in ounces)
525,000 
 
Subsequent Royalty
 
 
Subsequent event
 
 
Percentage of royalty interests acquired
12.50% 
12.50%