ROYAL GOLD INC, 10-Q filed on 11/5/2015
Quarterly Report
Document and Entity Information
3 Months Ended
Sep. 30, 2015
Oct. 28, 2015
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, 2015 
 
Amendment Flag
false 
 
Current Fiscal Year End Date
--06-30 
 
Entity Current Reporting Status
Yes 
 
Entity Filer Category
Large Accelerated Filer 
 
Entity Shares Outstanding
 
65,259,789 
Document Fiscal Year Focus
2016 
 
Document Fiscal Period Focus
Q1 
 
Consolidated Balance Sheets (USD $)
In Thousands, unless otherwise specified
Sep. 30, 2015
Jun. 30, 2015
ASSETS
 
 
Cash and equivalents
$ 104,310 
$ 742,849 
Royalty receivables
24,539 
37,681 
Income tax receivable
13,550 
6,422 
Prepaid expenses and other
9,912 
3,798 
Total current assets
152,311 
790,750 
Royalty and stream interests, net (Note 3)
3,012,952 
2,083,608 
Available-for-sale securities (Note 4)
5,824 
6,273 
Other assets
57,608 
44,801 
Total assets
3,228,695 
2,925,432 
LIABILITIES
 
 
Accounts payable
8,383 
4,911 
Dividends payable
14,357 
14,341 
Foreign withholding taxes payable
 
199 
Other current liabilities
4,380 
5,522 
Total current liabilities
27,120 
24,973 
Debt (Note 5)
674,780 
322,110 
Deferred tax liabilities
145,256 
146,603 
Uncertain tax positions (Note 9)
15,207 
15,130 
Other long-term liabilities
6,510 
689 
Total liabilities
868,873 
509,505 
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 65,065,461 and 65,033,547 shares outstanding, respectively
651 
650 
Additional paid-in capital
2,174,720 
2,170,643 
Accumulated other comprehensive loss
(3,741)
(3,292)
Accumulated earnings
125,717 
185,121 
Total Royal Gold stockholders' equity
2,297,347 
2,353,122 
Non-controlling interests
62,475 
62,805 
Total equity
2,359,822 
2,415,927 
Total liabilities and equity
$ 3,228,695 
$ 2,925,432 
Consolidated Balance Sheets (Parenthetical) (USD $)
Sep. 30, 2015
Jun. 30, 2015
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
65,065,461 
65,033,547 
Consolidated Statements of Operations and Comprehensive (Loss) Income (USD $)
In Thousands, except Share data, unless otherwise specified
3 Months Ended
Sep. 30, 2015
Sep. 30, 2014
Consolidated Statements of Operations and Comprehensive (Loss) Income
 
 
Revenue
$ 74,056 
$ 69,026 
Costs and expenses
 
 
Cost of sales
11,466 
6,674 
General and administrative
9,510 
7,142 
Production taxes
1,592 
1,690 
Exploration costs
3,156 
 
Depreciation, depletion and amortization
27,147 
22,212 
Impairment of royalty and stream interests
 
1,769 
Total costs and expenses
52,871 
39,487 
Operating income
21,185 
29,539 
Interest and other income
265 
51 
Interest and other expense
(7,214)
(6,712)
Income before income taxes
14,236 
22,878 
Income tax expense
(59,177)
(3,959)
Net (loss) income
(44,941)
18,919 
Net income attributable to non-controlling interests
(105)
(239)
Net (loss) income attributable to Royal Gold common stockholders
(45,046)
18,680 
Net (loss) income
(44,941)
18,919 
Adjustments to comprehensive (loss) income, net of tax
 
 
Unrealized change in market value of available-for-sale securities
(449)
(1,340)
Comprehensive (loss) income
(45,390)
17,579 
Comprehensive income attributable to non-controlling interests
(105)
(239)
Comprehensive (loss) income attributable to Royal Gold stockholders
$ (45,495)
$ 17,340 
Net (loss) income per share available to Royal Gold common stockholders:
 
 
Basic (loss) earnings per share (in dollars per share)
$ (0.69)
$ 0.29 
Basic weighted average shares outstanding (in shares)
65,048,439 
64,962,883 
Diluted (loss) earnings per share (in dollars per share)
$ (0.69)
$ 0.29 
Diluted weighted average shares outstanding (in shares)
65,048,439 
65,107,481 
Cash dividends declared per common share (in dollars per share)
$ 0.22 
$ 0.21 
Consolidated Statements of Cash Flows (USD $)
In Thousands, unless otherwise specified
3 Months Ended
Sep. 30, 2015
Sep. 30, 2014
Cash flows from operating activities:
 
 
Net (loss) income
$ (44,941)
$ 18,919 
Adjustments to reconcile net (loss) income to net cash provided by operating activities:
 
 
Depreciation, depletion and amortization
27,147 
22,212 
Non-cash employee stock compensation expense
4,227 
2,449 
Amortization of debt discount
2,670 
2,473 
Impairment of royalty and stream interests
 
1,769 
Tax benefit of stock-based compensation exercises
150 
303 
Deferred tax expense (benefit)
11,767 
(5,374)
Other
(390)
 
Changes in assets and liabilities:
 
 
Royalty receivables
13,142 
3,427 
Prepaid expenses and other assets
(4,136)
2,147 
Accounts payable
3,266 
(1,570)
Foreign withholding taxes payable
(199)
(1,320)
Income taxes receivable
(17,192)
5,373 
Uncertain tax positions
77 
483 
Other liabilities
6,903 
1,167 
Net cash provided by operating activities
2,491 
52,458 
Cash flows from investing activities:
 
 
Acquisition of royalty and stream interests
(1,300,881)
(6,209)
Andacollo royalty sale
345,000 
 
Golden Star term loan
(20,000)
 
Other
(228)
(127)
Net cash used in investing activities
(976,109)
(6,336)
Cash flows from financing activities:
 
 
Borrowings from revolving credit facility
350,000 
 
Net proceeds from issuance of common stock
 
199 
Common stock dividends
(14,341)
(13,678)
Distribution to non-controlling interests
(422)
(465)
Tax expense of stock-based compensation exercises
(150)
(303)
Other
(8)
 
Net cash provided by (used in) financing activities
335,079 
(14,247)
Net (decrease) increase in cash and equivalents
(638,539)
31,875 
Cash and equivalents at beginning of period
742,849 
659,536 
Cash and equivalents at end of period
$ 104,310 
$ 691,411 
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.

 

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, 2015, are not necessarily indicative of the results that may be expected for the fiscal year ending June 30, 2016.  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, 2015 filed with the Securities and Exchange Commission on August 6, 2015 (“Fiscal 2015 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 and stream interests in production and development stage mineral properties is evaluated based upon estimated future undiscounted net cash flows from each royalty and stream 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.

 

Estimates of gold, silver, copper, nickel and other metal prices, operators’ estimates of proven and probable reserves related to our royalty or streaming properties, and operators’ estimates of operating and capital costs are subject to certain risks and uncertainties which may affect the recoverability of our investment in these royalty and stream interests in mineral properties.  It is possible that changes could occur to these estimates, which could adversely affect the net cash flows expected to be generated from these royalty and stream interests.

 

ACQUISITIONS
ACQUISITIONS

 

2.ACQUISITIONS

 

Acquisition of Gold and Silver Stream at Pueblo Viejo

 

On September 29, 2015, RGLD Gold AG (“RGLD Gold”), a wholly-owned subsidiary of the Company, closed its previously announced Precious Metals Purchase and Sale Agreement with Barrick Gold Corporation (“Barrick”) and its wholly-owned subsidiary, BGC Holdings Ltd. (“BGC”) for a percentage of the gold and silver production attributable to Barrick’s 60% interest in the Pueblo Viejo mine located in the Dominican Republic.  Pursuant to the Precious Metals Purchase and Sale Agreement, RGLD Gold made a single advance payment of $610 million to BGC as part of the closing.  The transaction is effective as of July 1, 2015 for the gold stream and January 1, 2016 for the silver stream.

 

BGC will deliver gold to RGLD Gold in amounts equal to 7.50% of Barrick’s interest in the gold produced at the Pueblo Viejo mine from July 1, 2015 until 990,000 ounces of gold have been delivered, and 3.75% of Barrick’s interest in gold produced thereafter.  RGLD Gold will pay BGC 30% of the spot price per ounce of gold delivered until 550,000 ounces of gold have been delivered, and 60% of the spot price per ounce delivered thereafter.

 

BGC will deliver silver to RGLD Gold in amounts equal to 75% of Barrick’s interest in the silver produced at the Pueblo Viejo mine beginning on January 1, 2016 until 50 million ounces of silver have been delivered, and 37.50% of Barrick’s interest in silver produced thereafter.  RGLD Gold will pay BGC 30% of the spot price per ounce of silver delivered until 23.10 million ounces of silver have been delivered, and 60% of the spot price per ounce of silver delivered thereafter.

 

The Pueblo Viejo gold and silver stream acquisition has been accounted for as an asset acquisition.  The advance payment of $610 million, plus direct transaction costs, have been recorded as a production stage stream interest within Royalty and stream interests, net on our consolidated balance sheets.

 

Acquisition of Gold Stream on Wassa, Bogoso and Prestea

 

On July 28, 2015, RGLD Gold closed its previously announced $130 million gold stream transaction with a wholly-owned subsidiary of Golden Star Resources Ltd. (together “Golden Star”), pursuant to which RGLD Gold will advance financing to Golden Star, subject to certain conditions, for development projects at certain mines in Ghana, and in return for which Golden Star will sell and deliver gold to RGLD Gold.

 

Also on July 28, 2015 and separate from the stream transaction, the Company also funded a previously announced $20 million, 4-year term loan to Golden Star and received warrants to purchase 5 million shares of Golden Star common stock, with a grant date fair value of approximately $0.8 million.  Interest under the term loan will be due quarterly at a rate equal to 62.5% of the average daily gold price for the relevant quarter divided by 10,000, but not to exceed 11.5%.  The warrants have a term of four years and an exercise price of $0.27.

 

Pursuant to the stream transaction and subject to certain conditions, RGLD Gold will make $130 million in advance payments to Golden Star in stages, including the $40 million upfront payment made in connection with closing, $15 million paid in September 2015, and the balance on a pro rata basis with spending on the Wassa and Prestea underground projects, which RGLD Gold expects to make in four quarterly payments as follows: (i) $30 million on December 1, 2015, and (ii) $15 million on each of March 1, 2016, June 1, 2016 and September 1, 2016.  Golden Star will deliver to RGLD Gold 8.5% of gold produced from the Wassa, Bogoso and Prestea projects, until 185,000 ounces have been delivered, 5.0% until an additional 22,500 ounces have been delivered, and 3.0% thereafter.  RGLD Gold will pay Golden Star a cash price equal to 20% of the spot price for each ounce delivered at the time of delivery until 207,500 ounces have been delivered, which cash price shall increase to 30% of the spot price for each ounce delivered thereafter.

 

The Wassa, Bogoso and Prestea gold stream acquisition has been accounted for as an asset acquisition.  The $55 million paid as part of the aggregate advance payments of $130 million, plus direct acquisition costs, has been recorded as separate components of Royalty and stream interests, net on our consolidated balance sheets.  Accordingly, approximately $46.1 million and $10.1 million was allocated to production stage and exploration stage stream interest, respectively, as of September 30, 2015.  Future advance payments, plus any direct acquisition costs incurred, will be recorded as a production stage or an exploration stream interest accordingly.  The acquisition costs of the production stage stream interest will be depleted using the units of production method, which is estimated using aggregate proven and probable reserves for Wassa, Bogoso and Prestea, as provided by Golden Star.

 

The $20 million four-year term loan and the received warrants have been recorded within Other assets on our consolidated balance sheets.  The warrants have been classified as a financial asset instrument and are recorded at fair value at each reporting period using the Black-Scholes model.  Any change in the fair value of the warrants at subsequent reporting periods will be recorded within Interest and other on our consolidated statements of operations and comprehensive income.

 

Acquisition of Gold and Silver Stream at Rainy River

 

On July 20, 2015, RGLD Gold entered into a $175 million Purchase and Sale Agreement with New Gold, Inc. (“New Gold”), for a percentage of the gold and silver production from the Rainy River Project located in Ontario, Canada (“Rainy River”).  Pursuant to the Purchase and Sale Agreement, RGLD Gold will make two advance payments to New Gold, consisting of $100 million, which was paid at closing on July 20, 2015, and $75 million once capital spending at Rainy River is 60% complete (currently expected by mid-calendar 2016).  Also under the Purchase and Sale Agreement, New Gold will deliver to RGLD Gold 6.50% of the gold produced at Rainy River until 230,000 gold ounces have been delivered, and 3.25% thereafter.  New Gold also will deliver 60% of the silver produced at Rainy River until 3.10 million silver ounces have been delivered, and 30% thereafter.  RGLD Gold will pay New Gold 25% of the spot price per ounce of gold and silver at the time of delivery.

 

The Rainy River gold and silver stream acquisition has been accounted for as an asset acquisition.  The $100 million paid as part of the aggregate advance payments of $175 million, plus direct transaction costs, have been recorded as a development stage stream interest within Royalty and stream interests, net on our consolidated balance sheets.

 

Acquisition of an Additional Gold Royalty Interest at Pascua-Lama

 

On July 10, 2015, the Company entered into an assignment of rights agreement with a private Chilean citizen whereby Royal Gold acquired an additional 0.22% net smelter return (“NSR”) sliding-scale royalty interest on the Pascua-Lama project, which is owned and operated by Barrick and located on the border between Argentina and Chile.  The Company paid $8.0 million for the additional interest at closing and will pay an additional $2.0 million if the project comes into production by the end of calendar 2018 or an additional $1.0 million if the project enters production in calendar 2019.  Upon the July 10, 2015 closing, Royal Gold’s total gold NSR royalty interest in the Pascua-Lama project increased to 5.45% at gold prices above $800 per ounce, while the additional gold equivalent royalty on proceeds from copper produced from the Chilean portion of the project, increased to 1.09%.

 

The additional gold royalty interest acquired on Pascua-Lama has been accounted for as an asset acquisition.  The $8.0 million paid for the additional interest at closing, plus direct transaction costs, have been recorded as development stage royalty interest within Royalty and stream interests, net on our consolidated balance sheets.

 

Acquisition of Gold Stream at Carmen de Andacollo

 

On July 9, 2015, RGLD Gold entered into a Long Term Offtake Agreement (the “Andacollo Stream Agreement”) with Compañía Minera Teck Carmen de Andacollo (“CMCA”), a 90% owned subsidiary of Teck Resources Limited (“Teck”).  Pursuant to the Andacollo Stream Agreement, CMCA will sell and deliver to RGLD Gold 100% of payable gold from the Carmen de Andacollo (“Andacollo”) copper-gold mine until 900,000 ounces have been delivered, and 50% thereafter, subject to a fixed payable percentage of 89%. RGLD Gold made a $525 million advance payment in cash to CMCA upon entry into the Andacollo Stream Agreement, and RGLD Gold will also pay CMCA 15% of the monthly average gold price for the month preceding the delivery date for all gold purchased under the Andacollo Stream Agreement.

 

The transaction will encompass certain of CMCA’s presently owned mining concessions on the Andacollo mine, as well as any other mining concessions presently owned or acquired by CMCA or any of its affiliates within a 1.5 kilometer area of interest, and certain other mining concessions that CMCA or its affiliates may acquire. The Andacollo Stream Agreement is effective July 1, 2015, and applies to all final settlements of gold received on or after that date.  Deliveries to RGLD Gold will be made monthly, and RGLD Gold began receiving gold deliveries during the quarter ended September 30, 2015.

 

The Company accounted for the acquisition of the stream interest at Andacollo as an asset acquisition.  For US GAAP financial reporting purposes, the Company’s new consolidated carrying value in its stream interest at Andacollo is approximately $388.2 million, which includes direct acquisition costs, and is recorded as production stage stream interest within Royalty and stream interests, net on our consolidated balance sheets.

 

Termination of Royalty Interest at Carmen de Andacollo

 

On July 9, 2015, Royal Gold Chile Limitada (“RG Chile”), a wholly owned subsidiary of the Company, entered into a Royalty Termination Agreement with CMCA. The Royalty Termination Agreement terminated an amended Royalty Agreement originally dated January 12, 2010, which provided RG Chile with a royalty equivalent to 75% of the gold produced from the sulfide portion of the Andacollo mine until 910,000 payable ounces have been produced, and 50% of the gold produced thereafter.  CMCA paid total consideration of $345 million to RG Chile in connection with the Royalty Termination Agreement.  The net carrying value of the Andacollo royalty on the date of termination was approximately $207.5 million.  The royalty termination transaction will be taxable in Chile and the United States.

 

ROYALTY AND STREAM INTERESTS
ROYALTY AND STREAM INTERESTS

 

3.ROYALTY AND STREAM INTERESTS

 

The following tables summarize the Company’s royalty and stream interests as of September 30, 2015 and June 30, 2015.

 

As of September 30, 2015 (Amounts in thousands):

 

Cost

 

Accumulated
Depletion

 

Net

 

Production stage royalty interests:

 

 

 

 

 

 

 

Voisey’s Bay

 

$

150,138

 

$

(79,989

)

$

70,149

 

Peñasquito

 

99,172

 

(26,579

)

72,593

 

Holt

 

34,612

 

(14,837

)

19,775

 

Cortez

 

10,630

 

(9,955

)

675

 

Other

 

531,734

 

(314,405

)

217,329

 

 

 

 

 

 

 

 

 

Total production stage royalty interests

 

826,286

 

(445,765

)

380,521

 

 

 

 

 

 

 

 

 

Production stage stream interests:

 

 

 

 

 

 

 

Mount Milligan

 

783,046

 

(42,498

)

740,548

 

Pueblo Viejo

 

610,367

 

 

610,367

 

Andacollo

 

388,181

 

(4,215

)

383,966

 

Wassa/Bogoso/Prestea

 

46,069

 

(990

)

45,079

 

Other

 

75,853

 

(26

)

75,827

 

 

 

 

 

 

 

 

 

Total production stage stream interests

 

1,903,516

 

(47,729

)

1,855,787

 

 

 

 

 

 

 

 

 

Production stage royalty and stream interests

 

2,729,802

 

(493,494

)

2,236,308

 

 

 

 

 

 

 

 

 

Development stage royalty interests:

 

 

 

 

 

 

 

Pascua-Lama

 

380,657

 

 

380,657

 

Other

 

66,414

 

 

66,414

 

 

 

 

 

 

 

 

 

Total development stage royalty interests

 

447,071

 

 

447,071

 

 

 

 

 

 

 

 

 

Development stage stream interests:

 

 

 

 

 

 

 

Rainy River

 

100,673

 

 

100,673

 

Other

 

8,203

 

 

8,203

 

 

 

 

 

 

 

 

 

Total development stage stream interests

 

108,876

 

 

108,876

 

 

 

 

 

 

 

 

 

Development stage royalty and stream interests

 

555,947

 

 

555,947

 

 

 

 

 

 

 

 

 

Exploration stage royalty interests

 

210,584

 

 

210,584

 

Exploration stage stream interests

 

10,113

 

 

10,113

 

 

 

 

 

 

 

 

 

Total royalty and stream interests

 

$

3,506,446

 

$

(493,494

)

$

3,012,952

 

 

 

 

 

 

 

 

 

 

 

 

 

As of June 30, 2015 (Amounts in thousands):

 

Cost

 

Accumulated
Depletion

 

Impairments

 

Net

 

Production stage royalty interests:

 

 

 

 

 

 

 

 

 

Andacollo

 

$

272,998

 

$

(65,467

)

$

 

$

207,531

 

Voisey’s Bay

 

150,138

 

(76,141

)

 

73,997

 

Peñasquito

 

99,172

 

(24,555

)

 

74,617

 

Mulatos

 

48,092

 

(32,313

)

 

15,779

 

Holt

 

34,612

 

(13,950

)

 

20,662

 

Robinson

 

17,825

 

(12,748

)

 

5,077

 

Cortez

 

10,630

 

(9,933

)

 

697

 

Other

 

495,763

 

(265,727

)

(27,586

)

202,450

 

 

 

 

 

 

 

 

 

 

 

Total production stage royalty interests

 

1,129,230

 

(500,834

)

(27,586

)

600,810

 

 

 

 

 

 

 

 

 

 

 

Production stage stream interests:

 

 

 

 

 

 

 

 

 

Mount Milligan

 

783,046

 

(35,195

)

 

747,851

 

 

 

 

 

 

 

 

 

 

 

Production stage royalty and stream interests

 

1,912,276

 

(536,029

)

(27,586

)

1,348,661

 

 

 

 

 

 

 

 

 

 

 

Development stage royalty interests:

 

 

 

 

 

 

 

 

 

Pascua-Lama

 

372,105

 

 

 

372,105

 

Other

 

67,017

 

 

 

67,017

 

 

 

 

 

 

 

 

 

 

 

Total development stage royalty interests

 

439,122

 

 

 

439,122

 

 

 

 

 

 

 

 

 

 

 

Development stage stream interests:

 

 

 

 

 

 

 

 

 

Phoenix Gold

 

75,843

 

 

 

75,843

 

Other

 

8,183

 

 

(603

)

7,580

 

 

 

 

 

 

 

 

 

 

 

Total development stage stream interests

 

84,026

 

 

(603

)

83,423

 

 

 

 

 

 

 

 

 

 

 

Development stage royalty and stream interests

 

523,148

 

 

(603

)

522,545

 

 

 

 

 

 

 

 

 

 

 

Exploration stage royalty interests

 

212,552

 

 

(150

)

212,402

 

 

 

 

 

 

 

 

 

 

 

Total royalty and stream interests

 

$

2,647,976

 

$

(536,029

)

$

(28,339

)

$

2,083,608

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

4.AVAILABLE-FOR-SALE SECURITIES

 

The Company’s available-for-sale securities as of September 30, 2015 and June 30, 2015 consist of the following:

 

 

 

As of September 30, 2015

 

 

 

 

 

(Amounts in thousands)

 

 

 

 

 

 

 

Unrealized

 

 

 

 

 

Cost Basis

 

Gain

 

Loss

 

Fair Value

 

Non-current:

 

 

 

 

 

 

 

 

 

Seabridge

 

$

9,565

 

 

(3,741

)

$

5,824

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$

9,565

 

$

 

$

(3,741

)

$

5,824

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

As of June 30, 2015

 

 

 

 

 

(Amounts in thousands)

 

 

 

 

 

 

 

Unrealized

 

 

 

 

 

Cost Basis

 

Gain

 

Loss

 

Fair Value

 

Non-current:

 

 

 

 

 

 

 

 

 

Seabridge

 

$

9,565

 

 

(3,292

)

$

6,273

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$

9,565

 

$

 

$

(3,292

)

$

6,273

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Our only available-for-sale security is the investment in Seabridge Gold, Inc. (“Seabridge”) common stock, acquired in June 2011.  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, 2015. 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, 2015 and June 30, 2015 consists of the following:

 

 

 

As of

 

As of

 

 

 

September 30, 2015

 

June 30, 2015

 

 

 

Non-current

 

Non-current

 

 

 

(Amounts in thousands)

 

Convertible notes due 2019, net

 

$

324,780 

 

$

322,110 

 

Revolving credit facility

 

350,000 

 

 

 

 

 

 

 

 

Total debt

 

$

674,780 

 

$

322,110 

 

 

 

 

 

 

 

 

 

 

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, beginning December 15, 2012. The 2019 Notes mature on June 15, 2019.  Interest expense recognized on the 2019 Notes for the three months ended September 30, 2015, was $5.6 million compared to $5.4 million for the three months ended September 30, 2014, 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 $650 million revolving credit facility.  As of September 30, 2015, the Company had $350.0 million outstanding and $300.0 million available under the revolving credit facility.  Borrowings under the revolving credit facility bear interest at a floating rate of LIBOR plus a margin of 1.25% to 3.00%, based on Royal Gold’s defined leverage ratio.  As of September 30, 2015, the interest rate on borrowings under the revolving credit facility was LIBOR plus 1.25% for an all-in rate of 1.46%. Royal Gold may repay borrowings under the revolving credit facility at any time without premium or penalty.

 

As discussed in Note 6 to the notes to consolidated financial statements in the Company’s Fiscal 2015 10-K, the Company has financial covenants associated with its revolving credit facility.  At September 30, 2015, 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,

 

 

 

2015

 

2014

 

 

 

(Amounts in thousands)

 

Stream interests

 

$

37,857 

 

$

19,657 

 

Royalty interests

 

36,199 

 

49,369 

 

 

 

 

 

 

 

Total revenue

 

$

74,056 

 

$

69,026 

 

 

 

 

 

 

 

 

 

 

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,

 

 

 

2015

 

2014

 

 

 

(Amounts in thousands)

 

Stock options

 

$

109 

 

$

112 

 

Stock appreciation rights

 

392 

 

355 

 

Restricted stock

 

1,370 

 

1,170 

 

Performance stock

 

2,356 

 

812 

 

 

 

 

 

 

 

Total stock-based compensation expense

 

$

4,227 

 

$

2,449 

 

 

 

 

 

 

 

 

 

 

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

 

During the three months ended September 30, 2015 and 2014, the Company granted the following stock-based compensation awards:

 

 

 

For The Three Months Ended

 

 

 

September 30,

 

September 30,

 

 

 

2015

 

2014

 

 

 

(Number of shares)

 

Stock options

 

24,312 

 

19,760 

 

Stock appreciation rights

 

97,817 

 

87,890 

 

Restricted stock

 

72,062 

 

55,589 

 

Performance stock

 

47,297 

 

46,800 

 

 

 

 

 

 

 

Total equity awards granted

 

241,488 

 

210,039 

 

 

 

 

 

 

 

 

As of September 30, 2015, unrecognized compensation expense (expressed in thousands below) and weighted-average vesting period for each of our stock-based compensation awards was as follows:

 

 

 

Unrecognized
compensation
expense

 

Weighted-
average vesting
period (years)

 

Stock options

 

$

831 

 

2.2 

 

Stock appreciation rights

 

3,085 

 

2.2 

 

Restricted stock

 

7,450 

 

3.4 

 

Performance stock

 

4,707 

 

1.3 

 

 

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

 

8.EARNINGS PER SHARE (“EPS”)

 

Basic earnings (loss) 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 (loss) used to determine basic earnings (loss) 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 (loss) 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,

 

 

 

2015

 

2014

 

 

 

(in thousands, except per share data)

 

Net (loss) income available to Royal Gold common stockholders

 

$

(45,046

)

$

18,680

 

 

 

 

 

 

 

 

 

Weighted-average shares for basic EPS

 

65,048,439

 

64,962,883

 

Effect of other dilutive securities

 

 

144,598

 

 

 

 

 

 

 

Weighted-average shares for diluted EPS

 

65,048,439

 

65,107,481

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic (loss) earnings per share

 

$

(0.69

)

$

0.29

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted (loss) earnings per share

 

$

(0.69

)

$

0.29

 

 

 

 

 

 

 

 

 

 

The calculation of weighted average shares includes all of our outstanding 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,

 

 

 

2015

 

2014

 

 

 

(Amounts in thousands, except rate)

 

 

 

 

 

 

 

Income tax expense

 

$

59,177 

 

$

3,959 

 

Effective tax rate

 

415.7 

%

17.3 

%

 

The increase in the effective tax rate for the three months ended September 30, 2015 is primarily related to the discrete tax impacts attributable to the Company’s Andacollo transactions (Note 2) and the planned liquidation of our Chilean subsidiary.

 

As of September 30, 2015 and June 30, 2015, the Company had $15.2 million and $15.1 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, 2015 and June 30, 2015, the amount of accrued income-tax-related interest and penalties was $5.0 million and $4.6 million, respectively.

 

SEGMENT INFORMATION
SEGMENT INFORMATION

 

10.SEGMENT INFORMATION

 

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

 

 

 

As of September 30, 2015

 

 

 

Royalty interest

 

Stream interest

 

Total royalty and stream
interests, net

 

Canada

 

$

245,229 

 

$

917,049 

 

$

1,162,278 

 

Chile

 

453,629 

 

383,966 

 

$

837,595 

 

Dominican Republic

 

 

610,367 

 

$

610,367 

 

Mexico

 

127,962 

 

 

$

127,962 

 

United States

 

109,772 

 

 

$

109,772 

 

Australia

 

48,330 

 

 

$

48,330 

 

Africa

 

12,748 

 

55,191 

 

$

67,939 

 

Other

 

40,506 

 

8,203 

 

$

48,709 

 

 

 

 

 

 

 

 

 

 

Total

 

$

1,038,176 

 

$

1,974,776 

 

$

3,012,952 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

As of June 30, 2015

 

 

 

Royalty interest

 

Stream interest

 

Total royalty and stream
interests, net

 

Canada

 

$

251,688 

 

$

823,091 

 

$

1,074,779 

 

Chile

 

653,019 

 

 

$

653,019 

 

Mexico

 

131,742 

 

 

$

131,742 

 

United States

 

110,286 

 

 

$

110,286 

 

Australia

 

50,119 

 

 

$

50,119 

 

Africa

 

12,760 

 

 

$

12,760 

 

Other

 

42,720 

 

8,183 

 

$

50,903 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total

 

$

1,252,334 

 

$

831,274 

 

$

2,083,608 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The Company’s revenue, cost of sales and net revenue by reportable segment for our three months ended September 30, 2015 and 2014, is geographically distributed as shown in the following table:

 

 

 

For The Three Months Ended September 30, 2015

 

 

 

Revenue

 

Cost of sales

 

Net revenue

 

Royalties:

 

 

 

 

 

 

 

Mexico

 

$

10,805 

 

$

 

$

10,805 

 

Canada

 

10,401 

 

 

10,401 

 

United States

 

10,213 

 

 

10,213 

 

Australia

 

2,451 

 

 

2,451 

 

Africa

 

257 

 

 

257 

 

Other

 

2,072 

 

 

2,072 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total royalties

 

$

36,199 

 

$

 

$

36,199 

 

 

 

 

 

 

 

 

 

Streams:

 

 

 

 

 

 

 

Canada

 

$

23,518 

 

$

9,128 

 

$

14,390 

 

Chile

 

10,715 

 

1,604 

 

9,111 

 

Africa

 

3,624 

 

734 

 

2,890 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total streams

 

$

37,857 

 

$

11,466 

 

$

26,391 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total royalties and streams

 

$

74,056 

 

$

11,466 

 

$

62,590 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For The Three Months Ended September 30, 2014

 

 

 

Revenue

 

Cost of sales

 

Net revenue

 

Royalties:

 

 

 

 

 

 

 

Canada

 

$

11,326 

 

$

 

$

11,326 

 

Chile

 

11,233 

 

 

11,233 

 

United States

 

11,183 

 

 

11,183 

 

Mexico

 

10,004 

 

 

10,004 

 

Australia

 

1,892 

 

 

1,892 

 

Africa

 

1,311 

 

 

1,311 

 

Other

 

2,420 

 

 

2,420 

 

 

 

 

 

 

 

 

 

Total royalties

 

$

49,369 

 

$

 

$

49,369 

 

 

 

 

 

 

 

 

 

Streams:

 

 

 

 

 

 

 

Canada

 

$

19,657 

 

$

6,674 

 

$

12,983 

 

 

 

 

 

 

 

 

 

 

 

 

Total royalties and streams

 

$

69,026 

 

$

6,674 

 

$

62,352 

 

 

 

 

 

 

 

 

 

 

 

 

 

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, 2015

 

 

 

Carrying

 

Fair Value

 

 

 

Amount

 

Total

 

Level 1

 

Level 2

 

Level 3

 

Assets (In thousands):

 

 

 

 

 

 

 

 

 

 

 

Marketable equity securities(1)

 

$

5,824 

 

$

5,824 

 

$

5,824 

 

$

 

$

 

Warrants(2)

 

$

541 

 

$

541 

 

$

 

$

541 

 

$

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total assets

 

 

 

$

6,365 

 

$

5,824 

 

$

541 

 

$

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities (In thousands):

 

 

 

 

 

 

 

 

 

 

 

Debt(3)

 

$

401,780 

 

$

354,094 

 

$

354,094 

 

$

 

$

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total liabilities

 

 

 

$

354,094 

 

$

354,094 

 

$

 

$

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1)

Included in Available for sale securities on the Company’s consolidated balance sheets.

(2)

Included in Other assets on 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 on the Company’s consolidated balance sheets.

 

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.  During the three months ended September 30, 2015, the warrants issued by Golden Star (Note 2) were added to the Level 2 fair value hierarchy.

 

As of September 30, 2015, 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.  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

 

Rainy River Gold and Silver Stream Acquisition

 

As of September 30, 2015, the Company has a remaining commitment, subject to certain conditions, of $75.0 million as part of its Rainy River gold and silver stream acquisition in August 2015 (Note 2).

 

Wassa, Bogoso and Prestea Gold Stream Acquisition

 

As of September 30, 2015, the Company has a remaining commitment, subject to certain conditions, of $75.0 million as part of its Wassa, Bogoso and Prestea gold stream acquisition in July 2015 (Note 2).

 

Ilovica Gold Stream Acquisition

 

As of September 30, 2015, the Company has a remaining commitment, subject to certain conditions, of $167.5 million as part of its Ilovica gold stream acquisition in October 2014.

 

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 December 5, 2014, LNRLP filed amendments to its October 16, 2009 Statement of 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 calculation of the NSR on the sale of concentrates, including nickel concentrates, from the Voisey’s Bay mine.  LNRLP asserts that the defendants have incorrectly calculated the NSR since production at Voisey’s Bay began in late 2005, have indicated an intention to calculate the NSR in a manner LNRLP believes will violate the royalty agreement when Voisey’s Bay concentrates are processed at Vale’s new Long Harbour processing facility, and have breached their contractual duties of good faith and honest performance in several ways.  LNRLP requests an order in respect of the correct calculation of future payments, and unspecified damages for non-payment and underpayment of past royalties to the date of the claim, together with additional damages until the date of trial, interest, costs and other damages.  The litigation is in the discovery phase.

 

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 and stream interests in production and development stage mineral properties is evaluated based upon estimated future undiscounted net cash flows from each royalty and stream 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.

 

Estimates of gold, silver, copper, nickel and other metal prices, operators’ estimates of proven and probable reserves related to our royalty or streaming properties, and operators’ estimates of operating and capital costs are subject to certain risks and uncertainties which may affect the recoverability of our investment in these royalty and stream interests in mineral properties.  It is possible that changes could occur to these estimates, which could adversely affect the net cash flows expected to be generated from these royalty and stream interests.

 

 

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

 

As of September 30, 2015 (Amounts in thousands):

 

Cost

 

Accumulated
Depletion

 

Net

 

Production stage royalty interests:

 

 

 

 

 

 

 

Voisey’s Bay

 

$

150,138

 

$

(79,989

)

$

70,149

 

Peñasquito

 

99,172

 

(26,579

)

72,593

 

Holt

 

34,612

 

(14,837

)

19,775

 

Cortez

 

10,630

 

(9,955

)

675

 

Other

 

531,734

 

(314,405

)

217,329

 

 

 

 

 

 

 

 

 

Total production stage royalty interests

 

826,286

 

(445,765

)

380,521

 

 

 

 

 

 

 

 

 

Production stage stream interests:

 

 

 

 

 

 

 

Mount Milligan

 

783,046

 

(42,498

)

740,548

 

Pueblo Viejo

 

610,367

 

 

610,367

 

Andacollo

 

388,181

 

(4,215

)

383,966

 

Wassa/Bogoso/Prestea

 

46,069

 

(990

)

45,079

 

Other

 

75,853

 

(26

)

75,827

 

 

 

 

 

 

 

 

 

Total production stage stream interests

 

1,903,516

 

(47,729

)

1,855,787

 

 

 

 

 

 

 

 

 

Production stage royalty and stream interests

 

2,729,802

 

(493,494

)

2,236,308

 

 

 

 

 

 

 

 

 

Development stage royalty interests:

 

 

 

 

 

 

 

Pascua-Lama

 

380,657

 

 

380,657

 

Other

 

66,414

 

 

66,414

 

 

 

 

 

 

 

 

 

Total development stage royalty interests

 

447,071

 

 

447,071

 

 

 

 

 

 

 

 

 

Development stage stream interests:

 

 

 

 

 

 

 

Rainy River

 

100,673

 

 

100,673

 

Other

 

8,203

 

 

8,203

 

 

 

 

 

 

 

 

 

Total development stage stream interests

 

108,876

 

 

108,876

 

 

 

 

 

 

 

 

 

Development stage royalty and stream interests

 

555,947

 

 

555,947

 

 

 

 

 

 

 

 

 

Exploration stage royalty interests

 

210,584

 

 

210,584

 

Exploration stage stream interests

 

10,113

 

 

10,113

 

 

 

 

 

 

 

 

 

Total royalty and stream interests

 

$

3,506,446

 

$

(493,494

)

$

3,012,952

 

 

 

 

 

 

 

 

 

 

 

 

 

As of June 30, 2015 (Amounts in thousands):

 

Cost

 

Accumulated
Depletion

 

Impairments

 

Net

 

Production stage royalty interests:

 

 

 

 

 

 

 

 

 

Andacollo

 

$

272,998

 

$

(65,467

)

$

 

$

207,531

 

Voisey’s Bay

 

150,138

 

(76,141

)

 

73,997

 

Peñasquito

 

99,172

 

(24,555

)

 

74,617

 

Mulatos

 

48,092

 

(32,313

)

 

15,779

 

Holt

 

34,612

 

(13,950

)

 

20,662

 

Robinson

 

17,825

 

(12,748

)

 

5,077

 

Cortez

 

10,630

 

(9,933

)

 

697

 

Other

 

495,763

 

(265,727

)

(27,586

)

202,450

 

 

 

 

 

 

 

 

 

 

 

Total production stage royalty interests

 

1,129,230

 

(500,834

)

(27,586

)

600,810

 

 

 

 

 

 

 

 

 

 

 

Production stage stream interests:

 

 

 

 

 

 

 

 

 

Mount Milligan

 

783,046

 

(35,195

)

 

747,851

 

 

 

 

 

 

 

 

 

 

 

Production stage royalty and stream interests

 

1,912,276

 

(536,029

)

(27,586

)

1,348,661

 

 

 

 

 

 

 

 

 

 

 

Development stage royalty interests:

 

 

 

 

 

 

 

 

 

Pascua-Lama

 

372,105

 

 

 

372,105

 

Other

 

67,017

 

 

 

67,017

 

 

 

 

 

 

 

 

 

 

 

Total development stage royalty interests

 

439,122

 

 

 

439,122

 

 

 

 

 

 

 

 

 

 

 

Development stage stream interests:

 

 

 

 

 

 

 

 

 

Phoenix Gold

 

75,843

 

 

 

75,843

 

Other

 

8,183

 

 

(603

)

7,580

 

 

 

 

 

 

 

 

 

 

 

Total development stage stream interests

 

84,026

 

 

(603

)

83,423

 

 

 

 

 

 

 

 

 

 

 

Development stage royalty and stream interests

 

523,148

 

 

(603

)

522,545

 

 

 

 

 

 

 

 

 

 

 

Exploration stage royalty interests

 

212,552

 

 

(150

)

212,402

 

 

 

 

 

 

 

 

 

 

 

Total royalty and stream interests

 

$

2,647,976

 

$

(536,029

)

$

(28,339

)

$

2,083,608

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

 

As of September 30, 2015

 

 

 

 

 

(Amounts in thousands)

 

 

 

 

 

 

 

Unrealized

 

 

 

 

 

Cost Basis

 

Gain

 

Loss

 

Fair Value

 

Non-current:

 

 

 

 

 

 

 

 

 

Seabridge

 

$

9,565

 

 

(3,741

)

$

5,824

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$

9,565

 

$

 

$

(3,741

)

$

5,824

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

As of June 30, 2015

 

 

 

 

 

(Amounts in thousands)

 

 

 

 

 

 

 

Unrealized

 

 

 

 

 

Cost Basis

 

Gain

 

Loss

 

Fair Value

 

Non-current:

 

 

 

 

 

 

 

 

 

Seabridge

 

$

9,565

 

 

(3,292

)

$

6,273

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$

9,565

 

$

 

$

(3,292

)

$

6,273

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

DEBT (Tables)
Schedule of debt

 

 

 

As of

 

As of

 

 

 

September 30, 2015

 

June 30, 2015

 

 

 

Non-current

 

Non-current

 

 

 

(Amounts in thousands)

 

Convertible notes due 2019, net

 

$

324,780 

 

$

322,110 

 

Revolving credit facility

 

350,000 

 

 

 

 

 

 

 

 

Total debt

 

$

674,780 

 

$

322,110 

 

 

 

 

 

 

 

 

 

 

REVENUE (Tables)
Schedule of revenue

 

 

 

For The Three Months Ended

 

 

 

September 30,

 

September 30,

 

 

 

2015

 

2014

 

 

 

(Amounts in thousands)

 

Stream interests

 

$

37,857 

 

$

19,657 

 

Royalty interests

 

36,199 

 

49,369 

 

 

 

 

 

 

 

Total revenue

 

$

74,056 

 

$

69,026 

 

 

 

 

 

 

 

 

 

 

STOCK-BASED COMPENSATION (Tables)

 

 

 

For The Three Months Ended

 

 

 

September 30,

 

September 30,

 

 

 

2015

 

2014

 

 

 

(Amounts in thousands)

 

Stock options

 

$

109 

 

$

112 

 

Stock appreciation rights

 

392 

 

355 

 

Restricted stock

 

1,370 

 

1,170 

 

Performance stock

 

2,356 

 

812 

 

 

 

 

 

 

 

Total stock-based compensation expense

 

$

4,227 

 

$

2,449 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For The Three Months Ended

 

 

 

September 30,

 

September 30,

 

 

 

2015

 

2014

 

 

 

(Number of shares)

 

Stock options

 

24,312 

 

19,760 

 

Stock appreciation rights

 

97,817 

 

87,890 

 

Restricted stock

 

72,062 

 

55,589 

 

Performance stock

 

47,297 

 

46,800 

 

 

 

 

 

 

 

Total equity awards granted

 

241,488 

 

210,039 

 

 

 

 

 

 

 

 

As of September 30, 2015, unrecognized compensation expense (expressed in thousands below) and weighted-average vesting period for each of our stock-based compensation awards was as follows:

 

 

 

Unrecognized
compensation
expense

 

Weighted-
average vesting
period (years)

 

Stock options

 

$

831 

 

2.2 

 

Stock appreciation rights

 

3,085 

 

2.2 

 

Restricted stock

 

7,450 

 

3.4 

 

Performance stock

 

4,707 

 

1.3 

 

 

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

 

 

For The Three Months Ended

 

 

 

September 30,

 

September 30,

 

 

 

2015

 

2014

 

 

 

(in thousands, except per share data)

 

Net (loss) income available to Royal Gold common stockholders

 

$

(45,046

)

$

18,680

 

 

 

 

 

 

 

 

 

Weighted-average shares for basic EPS

 

65,048,439

 

64,962,883

 

Effect of other dilutive securities

 

 

144,598

 

 

 

 

 

 

 

Weighted-average shares for diluted EPS

 

65,048,439

 

65,107,481

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic (loss) earnings per share

 

$

(0.69

)

$

0.29

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted (loss) earnings per share

 

$

(0.69

)

$

0.29

 

 

 

 

 

 

 

 

 

 

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

 

 

 

For The Three Months Ended

 

 

 

September 30,

 

September 30,

 

 

 

2015

 

2014

 

 

 

(Amounts in thousands, except rate)

 

 

 

 

 

 

 

Income tax expense

 

$

59,177 

 

$

3,959 

 

Effective tax rate

 

415.7 

%

17.3 

%

 

SEGMENT INFORMATION (Tables)

 

 

As of September 30, 2015

 

 

 

Royalty interest

 

Stream interest

 

Total royalty and stream
interests, net

 

Canada

 

$

245,229 

 

$

917,049 

 

$

1,162,278 

 

Chile

 

453,629 

 

383,966 

 

$

837,595 

 

Dominican Republic

 

 

610,367 

 

$

610,367 

 

Mexico

 

127,962 

 

 

$

127,962 

 

United States

 

109,772 

 

 

$

109,772 

 

Australia

 

48,330 

 

 

$

48,330 

 

Africa

 

12,748 

 

55,191 

 

$

67,939 

 

Other

 

40,506 

 

8,203 

 

$

48,709 

 

 

 

 

 

 

 

 

 

 

Total

 

$

1,038,176 

 

$

1,974,776 

 

$

3,012,952 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

As of June 30, 2015

 

 

 

Royalty interest

 

Stream interest

 

Total royalty and stream
interests, net

 

Canada

 

$

251,688 

 

$

823,091 

 

$

1,074,779 

 

Chile

 

653,019 

 

 

$

653,019 

 

Mexico

 

131,742 

 

 

$

131,742 

 

United States

 

110,286 

 

 

$

110,286 

 

Australia

 

50,119 

 

 

$

50,119 

 

Africa

 

12,760 

 

 

$

12,760 

 

Other

 

42,720 

 

8,183 

 

$

50,903 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total

 

$

1,252,334 

 

$

831,274 

 

$

2,083,608 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For The Three Months Ended September 30, 2015

 

 

 

Revenue

 

Cost of sales

 

Net revenue

 

Royalties:

 

 

 

 

 

 

 

Mexico

 

$

10,805 

 

$

 

$

10,805 

 

Canada

 

10,401 

 

 

10,401 

 

United States

 

10,213 

 

 

10,213 

 

Australia

 

2,451 

 

 

2,451 

 

Africa

 

257 

 

 

257 

 

Other

 

2,072 

 

 

2,072 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total royalties

 

$

36,199 

 

$

 

$

36,199 

 

 

 

 

 

 

 

 

 

Streams:

 

 

 

 

 

 

 

Canada

 

$

23,518 

 

$

9,128 

 

$

14,390 

 

Chile

 

10,715 

 

1,604 

 

9,111 

 

Africa

 

3,624 

 

734 

 

2,890 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total streams

 

$

37,857 

 

$

11,466 

 

$

26,391 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total royalties and streams

 

$

74,056 

 

$

11,466 

 

$

62,590 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For The Three Months Ended September 30, 2014

 

 

 

Revenue

 

Cost of sales

 

Net revenue

 

Royalties:

 

 

 

 

 

 

 

Canada

 

$

11,326 

 

$

 

$

11,326 

 

Chile

 

11,233 

 

 

11,233 

 

United States

 

11,183 

 

 

11,183 

 

Mexico

 

10,004 

 

 

10,004 

 

Australia

 

1,892 

 

 

1,892 

 

Africa

 

1,311 

 

 

1,311 

 

Other

 

2,420 

 

 

2,420 

 

 

 

 

 

 

 

 

 

Total royalties

 

$

49,369 

 

$

 

$

49,369 

 

 

 

 

 

 

 

 

 

Streams:

 

 

 

 

 

 

 

Canada

 

$

19,657 

 

$

6,674 

 

$

12,983 

 

 

 

 

 

 

 

 

 

 

 

 

Total royalties and streams

 

$

69,026 

 

$

6,674 

 

$

62,352 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

At September 30, 2015

 

 

 

Carrying

 

Fair Value

 

 

 

Amount

 

Total

 

Level 1

 

Level 2

 

Level 3

 

Assets (In thousands):

 

 

 

 

 

 

 

 

 

 

 

Marketable equity securities(1)

 

$

5,824 

 

$

5,824 

 

$

5,824 

 

$

 

$

 

Warrants(2)

 

$

541 

 

$

541 

 

$

 

$

541 

 

$

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total assets

 

 

 

$

6,365 

 

$

5,824 

 

$

541 

 

$

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities (In thousands):

 

 

 

 

 

 

 

 

 

 

 

Debt(3)

 

$

401,780 

 

$

354,094 

 

$

354,094 

 

$

 

$

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total liabilities

 

 

 

$

354,094 

 

$

354,094 

 

$

 

$

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1)

Included in Available for sale securities on the Company’s consolidated balance sheets.

(2)

Included in Other assets on 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 on the Company’s consolidated balance sheets.

 

OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details)
3 Months Ended
Sep. 30, 2015
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) (USD $)
Share data in Millions, except Per Share data, unless otherwise specified
3 Months Ended 0 Months Ended 0 Months Ended 0 Months Ended 0 Months Ended 3 Months Ended 0 Months Ended 3 Months Ended 0 Months Ended 0 Months Ended 1 Months Ended 3 Months Ended 0 Months Ended 0 Months Ended 0 Months Ended 3 Months Ended 0 Months Ended 0 Months Ended 0 Months Ended 0 Months Ended 0 Months Ended
Sep. 30, 2015
Sep. 30, 2014
Jun. 30, 2015
Sep. 30, 2015
Chile
Jun. 30, 2015
Chile
Sep. 29, 2015
BGC
Pueblo Viejo
Initial Royalty
oz
Jul. 10, 2015
BGC
Pascua Lama
Chile
Jul. 28, 2015
Golden Star
Jul. 28, 2015
Golden Star
Jul. 28, 2015
Golden Star
Maximum
Jul. 28, 2015
Golden Star
Other assets
Jul. 10, 2015
Barrick Gold
Pascua Lama
Jul. 10, 2015
Barrick Gold
Pascua Lama
Sep. 30, 2015
Barrick Gold
Pascua Lama
Royalty and stream interests, net
Jul. 10, 2015
Barrick Gold
Pascua Lama
First Condition
Jul. 10, 2015
Barrick Gold
Pascua Lama
Second Condition
Jul. 9, 2015
RGLD Gold
Carmen de Andacollo
Royalty and stream interests, net
Sep. 29, 2015
RGLD Gold
BGC
Pueblo Viejo
Sep. 29, 2015
RGLD Gold
BGC
Pueblo Viejo
Sep. 30, 2015
RGLD Gold
BGC
Pueblo Viejo
Royalty and stream interests, net
Sep. 29, 2015
RGLD Gold
BGC
Pueblo Viejo
First Condition
oz
Sep. 29, 2015
RGLD Gold
BGC
Pueblo Viejo
First Condition
oz
Sep. 29, 2015
RGLD Gold
BGC
Pueblo Viejo
Initial Royalty
oz
Sep. 29, 2015
RGLD Gold
BGC
Pueblo Viejo
Subsequent Royalty
Jul. 28, 2015
RGLD Gold
Golden Star
Ghana Mines
item
Sep. 30, 2015
RGLD Gold
Golden Star
Ghana Mines
Jul. 28, 2015
RGLD Gold
Golden Star
Ghana Mines
Sep. 30, 2015
RGLD Gold
Golden Star
Ghana Mines
Royalty and stream interests, net
Jul. 28, 2015
RGLD Gold
Golden Star
Ghana Mines
First Condition
oz
Jul. 28, 2015
RGLD Gold
Golden Star
Ghana Mines
Initial Royalty
oz
Jul. 28, 2015
RGLD Gold
Golden Star
Ghana Mines
Initial Royalty
Jul. 28, 2015
RGLD Gold
Golden Star
Ghana Mines
Subsequent Royalty
oz
Jul. 28, 2015
RGLD Gold
Golden Star
Ghana Mines
Subsequent Royalty
Jul. 28, 2015
RGLD Gold
Golden Star
Ghana Mines
Subsequent Two Royalty
Jul. 20, 2015
RGLD Gold
New Gold Inc
Rainy River
payment
Jul. 20, 2015
RGLD Gold
New Gold Inc
Rainy River
Sep. 30, 2015
RGLD Gold
New Gold Inc
Rainy River
Royalty and stream interests, net
Jul. 20, 2015
RGLD Gold
New Gold Inc
Rainy River
Initial Royalty
oz
Jul. 20, 2015
RGLD Gold
New Gold Inc
Rainy River
Initial Royalty
oz
Jul. 20, 2015
RGLD Gold
New Gold Inc
Rainy River
Subsequent Royalty
Jul. 20, 2015
RGLD Gold
New Gold Inc
Rainy River
Subsequent Royalty
Jul. 9, 2015
RGLD Gold
CMCA
Carmen de Andacollo
Jul. 9, 2015
RGLD Gold
CMCA
Carmen de Andacollo
oz
Jul. 9, 2015
RGLD Gold
CMCA
Carmen de Andacollo
Maximum
km
Jul. 9, 2015
RG Chile
Carmen de Andacollo
Jul. 9, 2015
RG Chile
CMCA
Carmen de Andacollo
Dec. 1, 2010
RG Chile
CMCA
Carmen de Andacollo
Initial Royalty
oz
Dec. 1, 2010
RG Chile
CMCA
Carmen de Andacollo
Initial Royalty
Dec. 1, 2010
RG Chile
CMCA
Carmen de Andacollo
Subsequent Royalty
Jul. 9, 2015
Teck
CMCA
Acquisition of Royalty Interest in Mineral Properties
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Ownership interest (as a percent)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
60.00% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
90.00% 
Total purchase amount
 
 
 
 
 
 
 
 
 
 
 
 
 
$ 8,000,000 
 
 
 
$ 610,000,000 
 
$ 610,000,000 
 
 
 
 
$ 130,000,000 
 
 
$ 55,000,000 
 
 
 
 
 
 
$ 175,000,000 
 
$ 100,000,000 
 
 
 
 
 
 
 
 
$ 345,000,000 
 
 
 
 
Number of installments
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Percentage of royalty interests acquired
 
 
 
 
 
 
1.09% 
 
 
 
 
 
0.22% 
 
 
 
 
 
 
 
 
 
7.50% 
3.75% 
 
 
 
 
 
 
8.50% 
 
5.00% 
3.00% 
 
 
 
 
6.50% 
 
3.25% 
 
 
 
 
 
 
75.00% 
50.00% 
 
Percentage of silver royalty interests acquired
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
75.00% 
37.50% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
60.00% 
 
 
 
 
 
 
 
 
 
 
 
Maximum quantity of silver with specified purchase price (in ounces)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
23,100,000 
50,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
3,100,000 
 
 
 
 
 
 
 
 
 
 
 
Purchase price per ounce of the commodities as percentage of spot price at the time of delivery
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
60.00% 
 
 
30.00% 
 
 
 
30.00% 
 
 
 
20.00% 
 
 
 
 
 
 
 
 
 
 
25.00% 
 
 
 
 
 
 
 
 
 
 
Gold delivered (in ounces)
 
 
 
 
 
990,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
550,000 
 
 
 
 
 
 
 
207,500 
185,000 
 
22,500 
 
 
 
 
 
230,000 
 
 
 
 
 
 
 
 
910,000 
 
 
 
Gross loans
 
 
 
 
 
 
 
 
20,000,000 
 
20,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Term of loan
 
 
 
 
 
 
 
4 years 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Quarterly interest rate based on average gold rate divided by 10,000
 
 
 
 
 
 
 
62.50% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Denominator used in calculation of quarterly interest rate
 
 
 
 
 
 
 
10,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest rate (as a percent)
 
 
 
 
 
 
 
 
 
11.50% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Number of shares of common stock that can be purchased by the warrants
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Grant date fair value on exercise of warrants
 
 
 
 
 
 
 
 
800,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Term of warrants
 
 
 
 
 
 
 
4 years 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Exercise price of warrants
 
 
 
 
 
 
 
 
$ 0.27 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Allocation to production stage steam interest
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
46,100,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Allocation to exploration stage steam interest
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
10,100,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
First installment
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
30,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Second, third and fourth scheduled payment
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
15,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Royalty interests in Mineral Property, net (as a percent)
 
 
 
 
 
 
 
 
 
 
 
 
5.45% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Installment payable upon meeting capital spending requirement
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
75,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Capital spending requirement (as a percent)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
60.00% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Percentage of produced payable gold to be purchased until 48,000 ounces have been delivered
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
100.00% 
 
 
 
 
 
 
 
Maximum quantity of gold with specified purchase price (in ounces)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
900,000 
 
 
 
 
 
 
 
Fixed percentage of produced gold payable (as a percent)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
89.00% 
 
 
 
 
 
 
 
Purchase price per ounce as a percentage of monthly average gold price for the month preceding the delivery date
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
15.00% 
 
 
 
 
 
 
 
Cash paid for acquisition of royalty interests
 
 
 
 
 
 
 
 
 
 
 
8,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
40,000,000 
15,000,000 
 
 
 
 
 
 
 
 
100,000,000 
 
 
 
 
 
 
525,000,000 
 
 
 
 
 
 
 
 
Percentage of produced payable gold to be purchased after 48,000 ounces have been delivered
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
50.00% 
 
 
 
 
 
 
 
Percentage of silver royalty interests acquired
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
30.00% 
 
 
 
 
 
 
 
 
 
Remaining consideration payable
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2,000,000 
1,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Area of mining to be eligible for concessions
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
1.5 
 
 
 
 
 
 
Gold price (in dollars per ounce)
 
 
 
 
 
 
 
 
 
 
 
 
800 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Royalty Revenue.
74,056,000 
69,026,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Carrying value
3,506,446,000 
 
2,647,976,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
388,200,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Royalty and stream interests, net
$ 3,012,952,000 
 
$ 2,083,608,000 
$ 837,595,000 
$ 653,019,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$ 207,500,000 
 
 
 
 
 
ROYALTY AND STREAM INTERESTS (Details) (USD $)
In Thousands, unless otherwise specified
Sep. 30, 2015
Jun. 30, 2015
Royalty and stream interests
 
 
Cost
$ 3,506,446 
$ 2,647,976 
Accumulated Depletion
(493,494)
(536,029)
Impairments
 
(28,339)
Net
3,012,952 
2,083,608 
Production Stage Royalty Interest
 
 
Royalty and stream interests
 
 
Cost
826,286 
1,129,230 
Accumulated Depletion
(445,765)
(500,834)
Impairments
 
(27,586)
Net
380,521 
600,810 
Production Stage Royalty Interest |
Andacollo
 
 
Royalty and stream interests
 
 
Cost
 
272,998 
Accumulated Depletion
 
(65,467)
Net
 
207,531 
Production Stage Royalty Interest |
Voisey's Bay
 
 
Royalty and stream interests
 
 
Cost
150,138 
150,138 
Accumulated Depletion
(79,989)
(76,141)
Net
70,149 
73,997 
Production Stage Royalty Interest |
Penasquito
 
 
Royalty and stream interests
 
 
Cost
99,172 
99,172 
Accumulated Depletion
(26,579)
(24,555)
Net
72,593 
74,617 
Production Stage Royalty Interest |
Mulatos
 
 
Royalty and stream interests
 
 
Cost
 
48,092 
Accumulated Depletion
 
(32,313)
Net
 
15,779 
Production Stage Royalty Interest |
Holt
 
 
Royalty and stream interests
 
 
Cost
34,612 
34,612 
Accumulated Depletion
(14,837)
(13,950)
Net
19,775 
20,662 
Production Stage Royalty Interest |
Robinson
 
 
Royalty and stream interests
 
 
Cost
 
17,825 
Accumulated Depletion
 
(12,748)
Net
 
5,077 
Production Stage Royalty Interest |
Cortez
 
 
Royalty and stream interests
 
 
Cost
10,630 
10,630 
Accumulated Depletion
(9,955)
(9,933)
Net
675 
697 
Production Stage Royalty Interest |
Other
 
 
Royalty and stream interests
 
 
Cost
531,734 
495,763 
Accumulated Depletion
(314,405)
(265,727)
Impairments
 
(27,586)
Net
217,329 
202,450 
Production Stage Stream Interests
 
 
Royalty and stream interests
 
 
Cost
1,903,516 
 
Accumulated Depletion
(47,729)
 
Net
1,855,787 
 
Production Stage Stream Interests |
Andacollo
 
 
Royalty and stream interests
 
 
Cost
388,181 
 
Accumulated Depletion
(4,215)
 
Net
383,966 
 
Production Stage Stream Interests |
Mt. Milligan
 
 
Royalty and stream interests
 
 
Cost
783,046 
783,046 
Accumulated Depletion
(42,498)
(35,195)
Net
740,548 
747,851 
Production Stage Stream Interests |
Pueblo Viejo
 
 
Royalty and stream interests
 
 
Cost
610,367 
 
Net
610,367 
 
Production Stage Stream Interests |
Wassa, Bogoso and Prestea
 
 
Royalty and stream interests
 
 
Cost
46,069 
 
Accumulated Depletion
(990)
 
Net
45,079 
 
Production Stage Stream Interests |
Other
 
 
Royalty and stream interests
 
 
Cost
75,853 
 
Accumulated Depletion
(26)
 
Net
75,827 
 
Production Stage Royalty and Stream Interests
 
 
Royalty and stream interests
 
 
Cost
2,729,802 
1,912,276 
Accumulated Depletion
(493,494)
(536,029)
Impairments
 
(27,586)
Net
2,236,308 
1,348,661 
Development Stage Royalty Interest
 
 
Royalty and stream interests
 
 
Cost
447,071 
439,122 
Net
447,071 
439,122 
Development Stage Royalty Interest |
Pascua Lama
 
 
Royalty and stream interests
 
 
Cost
380,657 
372,105 
Net
380,657 
372,105 
Development Stage Royalty Interest |
Other
 
 
Royalty and stream interests
 
 
Cost
66,414 
67,017 
Net
66,414 
67,017 
Development Stage Stream Interest
 
 
Royalty and stream interests
 
 
Cost
108,876 
84,026 
Impairments
 
(603)
Net
108,876 
83,423 
Development Stage Stream Interest |
Phoenix Gold
 
 
Royalty and stream interests
 
 
Cost
 
75,843 
Net
 
75,843 
Development Stage Stream Interest |
Rainy River
 
 
Royalty and stream interests
 
 
Cost
100,673 
 
Net
100,673 
 
Development Stage Stream Interest |
Other
 
 
Royalty and stream interests
 
 
Cost
8,203 
8,183 
Impairments
 
(603)
Net
8,203 
7,580 
Development Stage Royalty and Stream Interest
 
 
Royalty and stream interests
 
 
Cost
555,947 
523,148 
Impairments
 
(603)
Net
555,947 
522,545 
Exploration Stage Royalty Interest
 
 
Royalty and stream interests
 
 
Cost
210,584 
212,552 
Impairments
 
(150)
Net
210,584 
212,402 
Exploration Stage Stream Interest Member
 
 
Royalty and stream interests
 
 
Cost
10,113 
 
Net
$ 10,113 
 
AVAILABLE-FOR-SALE SECURITIES (Details) (USD $)
3 Months Ended
Sep. 30, 2015
Jun. 30, 2015
Available-for-sale securities
 
 
Cost Basis
$ 9,565,000 
$ 9,565,000 
Unrealized Loss
(3,741,000)
(3,292,000)
Fair Value
5,824,000 
6,273,000 
Seabridge
 
 
Available-for-sale securities
 
 
Cost Basis
9,565,000 
9,565,000 
Unrealized Loss
(3,741,000)
(3,292,000)
Fair Value
5,824,000 
6,273,000 
Loss on available-for-sale securities due to impairment
$ 0 
 
DEBT (Details) (USD $)
3 Months Ended
Sep. 30, 2015
Sep. 30, 2014
Jun. 30, 2015
Jun. 30, 2012
Long-term debt disclosure
 
 
 
 
Total debt
$ 674,780,000 
 
$ 322,110,000 
 
Convertible notes due 2019, net
 
 
 
 
Long-term debt disclosure
 
 
 
 
Total debt
324,780,000 
 
322,110,000 
 
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
5,600,000 
5,400,000 
 
 
Revolving credit facility
 
 
 
 
Long-term debt disclosure
 
 
 
 
Total debt
350,000,000 
 
 
 
Maximum availability under the revolving credit facility
650,000,000 
 
 
 
Available under the revolving credit facility
300,000,000 
 
 
 
Outstanding amount under credit facility
$ 350,000,000 
 
 
 
Revolving credit facility |
LIBOR
 
 
 
 
Long-term debt disclosure
 
 
 
 
Effective interest rate (as percent)
1.46% 
 
 
 
Revolving credit facility |
Minimum |
LIBOR
 
 
 
 
Long-term debt disclosure
 
 
 
 
Revolving credit facility, basis spread on interest rate (as a percent)
1.25% 
 
 
 
Revolving credit facility |
Maximum |
LIBOR
 
 
 
 
Long-term debt disclosure
 
 
 
 
Revolving credit facility, basis spread on interest rate (as a percent)
3.00% 
 
 
 
REVENUE (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended
Sep. 30, 2015
Sep. 30, 2014
REVENUE
 
 
Stream interests
$ 37,857 
$ 19,657 
Royalty interests
36,199 
49,369 
Total revenue
$ 74,056 
$ 69,026 
STOCK-BASED COMPENSATION (Details) (USD $)
In Thousands, except Share data, unless otherwise specified
3 Months Ended
Sep. 30, 2015
Sep. 30, 2014
Stock-based compensation
 
 
Stock-based compensation expense
$ 4,227 
$ 2,449 
Stock-based compensation awards granted:
 
 
Total equity awards granted
241,488 
210,039 
Stock options
 
 
Stock-based compensation
 
 
Stock-based compensation expense
109 
112 
Stock-based compensation awards granted:
 
 
Stock options
24,312 
19,760 
Stock appreciation rights
 
 
Stock-based compensation
 
 
Stock-based compensation expense
392 
355 
Stock-based compensation awards granted:
 
 
Granted (in shares)
97,817 
87,890 
Restricted stock
 
 
Stock-based compensation
 
 
Stock-based compensation expense
1,370 
1,170 
Stock-based compensation awards granted:
 
 
Granted (in shares)
72,062 
55,589 
Performance stock
 
 
Stock-based compensation
 
 
Stock-based compensation expense
$ 2,356 
$ 812 
Stock-based compensation awards granted:
 
 
Granted (in shares)
47,297 
46,800 
STOCK-BASED COMPENSATION (Details 2) (USD $)
In Thousands, unless otherwise specified
3 Months Ended
Sep. 30, 2015
Stock options
 
Unrecognized stock-based compensation expense
 
Unrecognized compensation expense
$ 831 
Weighted-average vesting period (years)
2 years 2 months 12 days 
Stock appreciation rights
 
Unrecognized stock-based compensation expense
 
Unrecognized compensation expense
3,085 
Weighted-average vesting period (years)
2 years 2 months 12 days 
Restricted stock
 
Unrecognized stock-based compensation expense
 
Unrecognized compensation expense
7,450 
Weighted-average vesting period (years)
3 years 4 months 24 days 
Performance stock
 
Unrecognized stock-based compensation expense
 
Unrecognized compensation expense
$ 4,707 
Weighted-average vesting period (years)
1 year 3 months 18 days 
EARNINGS PER SHARE ("EPS") (Details) (USD $)
In Thousands, except Share data, unless otherwise specified
3 Months Ended
Sep. 30, 2015
Sep. 30, 2014
EARNINGS PER SHARE ("EPS")
 
 
Net (loss) income available to Royal Gold common stockholder(in dollars)
$ (45,046)
$ 18,680 
Weighted-average shares for basic EPS
65,048,439 
64,962,883 
Effect of other dilutive securities (in shares)
 
144,598 
Weighted-average shares for diluted EPS
65,048,439 
65,107,481 
Basic (loss) earnings per share (in dollars per share)
$ (0.69)
$ 0.29 
Diluted (loss) earnings per share (in dollars per share)
$ (0.69)
$ 0.29 
Impact on diluted earnings per share (in dollars per share)
$ 0.00 
 
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, 2015
Sep. 30, 2014
Jun. 30, 2015
INCOME TAXES
 
 
 
Income tax expense
$ 59,177,000 
$ 3,959,000 
 
Effective tax rate (as a percent)
415.70% 
17.30% 
 
Total gross unrecognized tax benefits
15,200,000 
 
15,100,000 
Accrued income-tax-related interest and penalties
$ 5,000,000 
 
$ 4,600,000 
SEGMENT INFORMATION (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended
Sep. 30, 2015
segment
Sep. 30, 2014
Jun. 30, 2015
Long Lived Assets and Pre-Tax Income by Geographical Information
 
 
 
Number of reportable segments
 
 
Total royalty and stream interest, net
$ 3,012,952 
 
$ 2,083,608 
Revenue
74,056 
69,026 
 
Cost of sales
11,466 
6,674 
 
Net Revenue
62,590 
62,352 
 
Canada
 
 
 
Long Lived Assets and Pre-Tax Income by Geographical Information
 
 
 
Total royalty and stream interest, net
1,162,278 
 
1,074,779 
Chile
 
 
 
Long Lived Assets and Pre-Tax Income by Geographical Information
 
 
 
Total royalty and stream interest, net
837,595 
 
653,019 
Dominican Republic
 
 
 
Long Lived Assets and Pre-Tax Income by Geographical Information
 
 
 
Total royalty and stream interest, net
610,367 
 
 
Mexico
 
 
 
Long Lived Assets and Pre-Tax Income by Geographical Information
 
 
 
Total royalty and stream interest, net
127,962 
 
131,742 
United States
 
 
 
Long Lived Assets and Pre-Tax Income by Geographical Information
 
 
 
Total royalty and stream interest, net
109,772 
 
110,286 
Australia
 
 
 
Long Lived Assets and Pre-Tax Income by Geographical Information
 
 
 
Total royalty and stream interest, net
48,330 
 
50,119 
Africa
 
 
 
Long Lived Assets and Pre-Tax Income by Geographical Information
 
 
 
Total royalty and stream interest, net
67,939 
 
12,760 
Other.
 
 
 
Long Lived Assets and Pre-Tax Income by Geographical Information
 
 
 
Total royalty and stream interest, net
48,709 
 
50,903 
Royalty Interest
 
 
 
Long Lived Assets and Pre-Tax Income by Geographical Information
 
 
 
Total royalty and stream interest, net
1,038,176 
 
1,252,334 
Revenue
36,199 
49,369 
 
Net Revenue
36,199 
49,369 
 
Royalty Interest |
Canada
 
 
 
Long Lived Assets and Pre-Tax Income by Geographical Information
 
 
 
Total royalty and stream interest, net
245,229 
 
251,688 
Revenue
10,401 
11,326 
 
Net Revenue
10,401 
11,326 
 
Royalty Interest |
Chile
 
 
 
Long Lived Assets and Pre-Tax Income by Geographical Information
 
 
 
Total royalty and stream interest, net
453,629 
 
653,019 
Revenue
 
11,233 
 
Net Revenue
 
11,233 
 
Royalty Interest |
Mexico
 
 
 
Long Lived Assets and Pre-Tax Income by Geographical Information
 
 
 
Total royalty and stream interest, net
127,962 
 
131,742 
Revenue
10,805 
10,004 
 
Net Revenue
10,805 
10,004 
 
Royalty Interest |
United States
 
 
 
Long Lived Assets and Pre-Tax Income by Geographical Information
 
 
 
Total royalty and stream interest, net
109,772 
 
110,286 
Revenue
10,213 
11,183 
 
Net Revenue
10,213 
11,183 
 
Royalty Interest |
Australia
 
 
 
Long Lived Assets and Pre-Tax Income by Geographical Information
 
 
 
Total royalty and stream interest, net
48,330 
 
50,119 
Revenue
2,451 
1,892 
 
Net Revenue
2,451 
1,892 
 
Royalty Interest |
Africa
 
 
 
Long Lived Assets and Pre-Tax Income by Geographical Information
 
 
 
Total royalty and stream interest, net
12,748 
 
12,760 
Revenue
257 
1,311 
 
Net Revenue
257 
1,311 
 
Royalty Interest |
Other.
 
 
 
Long Lived Assets and Pre-Tax Income by Geographical Information
 
 
 
Total royalty and stream interest, net
40,506 
 
42,720 
Revenue
2,072 
2,420 
 
Net Revenue
2,072 
2,420 
 
Stream Interest
 
 
 
Long Lived Assets and Pre-Tax Income by Geographical Information
 
 
 
Total royalty and stream interest, net
1,974,776 
 
831,274 
Revenue
37,857 
 
 
Cost of sales
11,466 
 
 
Net Revenue
26,391 
 
 
Stream Interest |
Canada
 
 
 
Long Lived Assets and Pre-Tax Income by Geographical Information
 
 
 
Total royalty and stream interest, net
917,049 
 
823,091 
Revenue
23,518 
19,657 
 
Cost of sales
9,128 
6,674 
 
Net Revenue
14,390 
12,983 
 
Stream Interest |
Chile
 
 
 
Long Lived Assets and Pre-Tax Income by Geographical Information
 
 
 
Total royalty and stream interest, net
383,966 
 
 
Revenue
10,715 
 
 
Cost of sales
1,604 
 
 
Net Revenue
9,111 
 
 
Stream Interest |
Dominican Republic
 
 
 
Long Lived Assets and Pre-Tax Income by Geographical Information
 
 
 
Total royalty and stream interest, net
610,367 
 
 
Stream Interest |
Africa
 
 
 
Long Lived Assets and Pre-Tax Income by Geographical Information
 
 
 
Total royalty and stream interest, net
55,191 
 
 
Revenue
3,624 
 
 
Cost of sales
734 
 
 
Net Revenue
2,890 
 
 
Stream Interest |
Other.
 
 
 
Long Lived Assets and Pre-Tax Income by Geographical Information
 
 
 
Total royalty and stream interest, net
$ 8,203 
 
$ 8,183 
FAIR VALUE MEASUREMENTS (Details) (USD $)
Sep. 30, 2015
Jun. 30, 2015
Assets:
 
 
Marketable equity securities
$ 5,824,000 
$ 6,273,000 
Recurring basis |
Carrying Amount
 
 
Liabilities:
 
 
Debt
401,780,000 
 
Amount of equity component of convertible notes
77,000,000 
 
Recurring basis |
Fair Value
 
 
Assets:
 
 
Total assets
6,365,000 
 
Liabilities:
 
 
Debt
354,094,000 
 
Total liabilities
354,094,000 
 
Recurring basis |
Level 1
 
 
Assets:
 
 
Total assets
5,824,000 
 
Liabilities:
 
 
Debt
354,094,000 
 
Total liabilities
354,094,000 
 
Recurring basis |
Level 2
 
 
Assets:
 
 
Total assets
541,000 
 
Recurring basis |
Marketable equity Securities |
Carrying Amount
 
 
Assets:
 
 
Marketable equity securities
5,824,000 
 
Recurring basis |
Marketable equity Securities |
Fair Value
 
 
Assets:
 
 
Marketable equity securities
5,824,000 
 
Recurring basis |
Marketable equity Securities |
Level 1
 
 
Assets:
 
 
Marketable equity securities
5,824,000 
 
Recurring basis |
Warrants |
Carrying Amount
 
 
Assets:
 
 
Warrants
541,000 
 
Recurring basis |
Warrants |
Fair Value
 
 
Assets:
 
 
Warrants
541,000 
 
Recurring basis |
Warrants |
Level 2
 
 
Assets:
 
 
Warrants
$ 541,000 
 
COMMITMENTS AND CONTINGENCIES (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended
Sep. 30, 2015
Rainy River
 
Commitments and Contingencies
 
Remaining commitment amount
$ 75.0 
Wassa, Bogoso and Prestea
 
Commitments and Contingencies
 
Remaining commitment amount
75.0 
Ilovitza
 
Commitments and Contingencies
 
Remaining commitment amount
$ 167.5 
Voisey's Bay |
Canadian Minerals Partnership
 
Commitments and Contingencies
 
Percentage of ownership interest held in Labrador Nickel Royalty Limited Partnership ("LNRLP")
89.99% 
Voisey's Bay |
Altius
 
Commitments and Contingencies
 
Percentage of ownership interest held in Labrador Nickel Royalty Limited Partnership ("LNRLP")
10.00% 
Voisey's Bay |
Voiseys Bay Holding Corporation
 
Commitments and Contingencies
 
Percentage of ownership interest held in Labrador Nickel Royalty Limited Partnership ("LNRLP")
0.01%