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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.
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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 $207.5 million. The royalty termination transaction will be taxable in Chile and the United States.
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3.ROYALTY AND STREAM INTERESTS
The following tables summarize the Company’s royalty and stream interests as of September 30, 2015 and June 30, 2015.
As of September 30, 2015 (Amounts in thousands): |
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Cost |
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Accumulated |
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Net |
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Production stage royalty interests: |
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Voisey’s Bay |
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$ |
150,138 |
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$ |
(79,989 |
) |
$ |
70,149 |
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Peñasquito |
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99,172 |
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(26,579 |
) |
72,593 |
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Holt |
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34,612 |
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(14,837 |
) |
19,775 |
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Cortez |
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10,630 |
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(9,955 |
) |
675 |
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Other |
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531,734 |
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(314,405 |
) |
217,329 |
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|
|
|
|
|
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Total production stage royalty interests |
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826,286 |
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(445,765 |
) |
380,521 |
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|
|
|
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Production stage stream interests: |
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|
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Mount Milligan |
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783,046 |
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(42,498 |
) |
740,548 |
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Pueblo Viejo |
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610,367 |
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— |
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610,367 |
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Andacollo |
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388,181 |
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(4,215 |
) |
383,966 |
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Wassa/Bogoso/Prestea |
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46,069 |
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(990 |
) |
45,079 |
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Other |
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75,853 |
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(26 |
) |
75,827 |
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Total production stage stream interests |
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1,903,516 |
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(47,729 |
) |
1,855,787 |
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Production stage royalty and stream interests |
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2,729,802 |
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(493,494 |
) |
2,236,308 |
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|
|
|
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Development stage royalty interests: |
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|
|
|
|
|
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Pascua-Lama |
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380,657 |
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— |
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380,657 |
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Other |
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66,414 |
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— |
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66,414 |
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|||
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|
|
|
|
|
|
|
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Total development stage royalty interests |
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447,071 |
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— |
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447,071 |
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Development stage stream interests: |
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|
|
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Rainy River |
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100,673 |
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— |
|
100,673 |
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Other |
|
8,203 |
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— |
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8,203 |
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|||
|
|
|
|
|
|
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|
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Total development stage stream interests |
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108,876 |
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— |
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108,876 |
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|||
|
|
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|
|
|
|
|
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Development stage royalty and stream interests |
|
555,947 |
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— |
|
555,947 |
|
|||
|
|
|
|
|
|
|
|
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Exploration stage royalty interests |
|
210,584 |
|
— |
|
210,584 |
|
|||
Exploration stage stream interests |
|
10,113 |
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— |
|
10,113 |
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|||
|
|
|
|
|
|
|
|
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Total royalty and stream interests |
|
$ |
3,506,446 |
|
$ |
(493,494 |
) |
$ |
3,012,952 |
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|
|
|
|
|
|
|
|
|
|
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As of June 30, 2015 (Amounts in thousands): |
|
Cost |
|
Accumulated |
|
Impairments |
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Net |
|
||||
Production stage royalty interests: |
|
|
|
|
|
|
|
|
|
||||
Andacollo |
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$ |
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 |
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1,129,230 |
|
(500,834 |
) |
(27,586 |
) |
600,810 |
|
||||
|
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|
|
|
|
|
|
|
|
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Production stage stream interests: |
|
|
|
|
|
|
|
|
|
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Mount Milligan |
|
783,046 |
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(35,195 |
) |
— |
|
747,851 |
|
||||
|
|
|
|
|
|
|
|
|
|
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Production stage royalty and stream interests |
|
1,912,276 |
|
(536,029 |
) |
(27,586 |
) |
1,348,661 |
|
||||
|
|
|
|
|
|
|
|
|
|
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Development stage royalty interests: |
|
|
|
|
|
|
|
|
|
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Pascua-Lama |
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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 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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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.
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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.
|
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 |
|
|
|
|
|
|
|
|
|
|
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 |
|
Weighted- |
|
|
Stock options |
|
$ |
831 |
|
2.2 |
|
Stock appreciation rights |
|
3,085 |
|
2.2 |
|
|
Restricted stock |
|
7,450 |
|
3.4 |
|
|
Performance stock |
|
4,707 |
|
1.3 |
|
|
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.
|
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.
|
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 |
|
|||
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 |
|
|||
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 |
|
|
|
|
|
|
|
|
|
|
|
|
|
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.
|
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.
|
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.
|
As of September 30, 2015 (Amounts in thousands): |
|
Cost |
|
Accumulated |
|
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 |
|
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 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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 |
|
|
|
|
|
|
|
|
|
|
|
|
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 |
|
|
|
|
|
|
|
|
|
|
|
|
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 |
|
Weighted- |
|
|
Stock options |
|
$ |
831 |
|
2.2 |
|
Stock appreciation rights |
|
3,085 |
|
2.2 |
|
|
Restricted stock |
|
7,450 |
|
3.4 |
|
|
Performance stock |
|
4,707 |
|
1.3 |
|
|
|
|
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 |
|
|
|
|
|
|
|
|
|
|
|
|
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 |
% |
|
|
|
As of September 30, 2015 |
|
|||||||
|
|
Royalty interest |
|
Stream interest |
|
Total royalty and stream |
|
|||
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 |
|
|||
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 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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. |
|
|
|
|
|
|
|
|
|
|
|
|
|