Company Quick10K Filing
Royal Gold
Price125.59 EPS2
Shares66 P/E55
MCap8,241 P/FCF37
Net Debt48 EBIT139
TEV8,289 TEV/EBIT60
TTM 2019-09-30, in MM, except price, ratios
10-Q 2020-03-31 Filed 2020-05-07
10-Q 2019-12-31 Filed 2020-02-06
10-Q 2019-09-30 Filed 2019-11-07
10-K 2019-06-30 Filed 2019-08-08
10-Q 2019-03-31 Filed 2019-05-02
10-Q 2018-12-31 Filed 2019-02-07
10-Q 2018-09-30 Filed 2018-11-01
10-K 2018-06-30 Filed 2018-08-09
10-Q 2018-03-31 Filed 2018-05-03
10-Q 2017-12-31 Filed 2018-02-08
10-Q 2017-09-30 Filed 2017-11-02
10-K 2017-06-30 Filed 2017-08-10
10-Q 2017-03-31 Filed 2017-05-10
10-Q 2016-12-31 Filed 2017-02-02
10-Q 2016-09-30 Filed 2016-11-03
10-K 2016-06-30 Filed 2016-08-11
10-Q 2016-03-31 Filed 2016-04-28
10-Q 2015-12-31 Filed 2016-02-04
10-Q 2015-09-30 Filed 2015-11-05
10-K 2015-06-30 Filed 2015-08-06
10-Q 2015-03-31 Filed 2015-04-30
10-Q 2014-12-31 Filed 2015-01-29
10-Q 2014-09-30 Filed 2014-10-30
10-K 2014-06-30 Filed 2014-08-07
10-Q 2014-03-31 Filed 2014-05-01
10-Q 2013-12-31 Filed 2014-01-30
10-Q 2013-09-30 Filed 2013-11-07
10-K 2013-06-30 Filed 2013-08-08
10-Q 2013-03-31 Filed 2013-05-02
10-K 2012-06-30 Filed 2012-08-09
10-Q 2012-03-31 Filed 2012-05-03
10-Q 2011-09-30 Filed 2011-11-03
10-K 2011-06-30 Filed 2011-08-18
10-Q 2011-03-31 Filed 2011-05-06
10-Q 2010-12-31 Filed 2011-02-04
10-Q 2010-09-30 Filed 2010-11-05
10-K 2010-06-30 Filed 2010-08-26
10-Q 2010-03-31 Filed 2010-05-07
10-Q 2009-12-31 Filed 2010-02-05
8-K 2020-05-06
8-K 2020-04-09
8-K 2020-02-05
8-K 2019-12-05
8-K 2019-11-20
8-K 2019-11-06
8-K 2019-10-30
8-K 2019-10-11
8-K 2019-09-26
8-K 2019-08-07
8-K 2019-06-11
8-K 2019-06-03
8-K 2019-05-30
8-K 2019-05-01
8-K 2019-02-25
8-K 2019-02-14
8-K 2019-02-06
8-K 2019-01-01
8-K 2018-11-14
8-K 2018-10-31
8-K 2018-09-19
8-K 2018-08-08
8-K 2018-06-18
8-K 2018-05-30
8-K 2018-05-02
8-K 2018-02-07

RGLD 10Q Quarterly Report

Item 1. Financial Statements
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Item 4. Controls and Procedures
Part II. Other Information
Item 1. Legal Proceedings
Item 1A. Risk Factors
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Item 3. Defaults Upon Senior Securities
Item 4. Mine Safety Disclosure
Item 5. Other Information
Item 6. Exhibits
EX-31.1 rgld-20200331xex31d1.htm
EX-31.2 rgld-20200331xex31d2.htm
EX-32.1 rgld-20200331xex32d1.htm
EX-32.2 rgld-20200331xex32d2.htm

Royal Gold Earnings 2020-03-31

Balance SheetIncome StatementCash Flow
3.32.62.01.30.70.02012201420172020
Assets, Equity
0.20.10.10.0-0.0-0.12013201520172020
Rev, G Profit, Net Income
0.50.2-0.1-0.4-0.7-1.02012201420172020
Ops, Inv, Fin

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Table of Contents

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period Ended March 31, 2020

or

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from        to        

Commission File Number: 001-13357

Royal Gold, Inc.

(Exact Name of Registrant as Specified in Its Charter)

Delaware

    

84-0835164

(State or Other Jurisdiction of

(I.R.S. Employer

Incorporation)

Identification No.)

1144 15th Street, Suite 2500

Denver, Colorado

80202

(Address of Principal Executive Offices)

(Zip Code)

Registrant’s telephone number, including area code (303) 573-1660

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class

    

Trading Symbol

    

Name of the Exchange on which Registered

Common Stock, $0.01 par value

RGLD

Nasdaq Global Select Market

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes      No 

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files)  Yes     No 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer 

Accelerated filer 

Non-accelerated filer  

Smaller reporting company 

Emerging growth company 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.    

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes   No 

There were 65,581,083 shares of the Company’s common stock, par value $0.01 per share, outstanding as of April 30, 2020.

Table of Contents

INDEX

    

    

PAGE

PART I

FINANCIAL INFORMATION

Item 1.

Financial Statements (Unaudited)

Consolidated Balance Sheets

3

Consolidated Statements of Operations and Comprehensive Income

4

Consolidated Statements of Changes in Stockholders’ Equity

5

Consolidated Statements of Cash Flows

6

Notes to Consolidated Financial Statements

7

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

21

Item 3.

Quantitative and Qualitative Disclosures about Market Risk

34

Item 4.

Controls and Procedures

35

PART II

OTHER INFORMATION

Item 1.

Legal Proceedings

35

Item 1A.

Risk Factors

35

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

36

Item 3.

Defaults Upon Senior Securities

36

Item 4.

Mine Safety Disclosure

36

Item 5.

Other Information

36

Item 6.

Exhibits

37

SIGNATURES

39

2

ITEM 1.     FINANCIAL STATEMENTS

ROYAL GOLD, INC.

Consolidated Balance Sheets

(Unaudited, amounts in thousands except share data)

    

March 31, 

    

June 30, 

    

2020

2019

ASSETS

Cash and equivalents

$

93,715

$

119,475

Royalty receivables

32,322

20,733

Income tax receivable

11,361

2,702

Stream inventory

11,947

11,380

Prepaid expenses and other

1,232

389

Total current assets

150,577

154,679

Stream and royalty interests, net (Note 3)

2,317,413

2,339,316

Other assets

81,874

50,156

Total assets

$

2,549,864

$

2,544,151

LIABILITIES

Accounts payable

$

1,501

$

2,890

Dividends payable

18,359

17,372

Income tax payable

21,027

6,974

Other current liabilities

8,943

6,374

Total current liabilities

49,830

33,610

Debt (Note 5)

100,154

214,554

Deferred tax liabilities

86,776

88,961

Uncertain tax positions

36,441

36,573

Other long-term liabilities

6,128

-

Total liabilities

279,329

373,698

Commitments and contingencies (Note 12)

EQUITY

Preferred stock, $.01 par value, 10,000,000 shares authorized; and 0 shares issued

Common stock, $.01 par value, 200,000,000 shares authorized; and 65,512,248 and 65,440,492 shares outstanding, respectively

655

655

Additional paid-in capital

2,209,098

2,201,773

Accumulated earnings (losses)

30,483

(65,747)

Total Royal Gold stockholders’ equity

2,240,236

2,136,681

Non-controlling interests

30,299

33,772

Total equity

2,270,535

2,170,453

Total liabilities and equity

$

2,549,864

$

2,544,151

The accompanying notes are an integral part of these consolidated financial statements.

3

ROYAL GOLD, INC.

Consolidated Statements of Operations and Comprehensive Income

(Unaudited, amounts in thousands except share data)

Three Months Ended

Nine Months Ended

March 31, 

March 31, 

March 31, 

March 31, 

    

2020

    

2019

    

2020

    

2019

Revenue (Note 6)

$

136,437

$

109,778

$

378,853

$

307,362

Costs and expenses

Cost of sales (excludes depreciation, depletion and amortization)

21,961

19,075

63,149

53,764

General and administrative

9,551

6,798

23,658

24,147

Production taxes

851

1,006

2,934

3,206

Exploration costs

565

330

4,705

5,534

Depreciation, depletion and amortization

51,228

39,368

130,038

120,726

Total costs and expenses

84,156

66,577

224,484

207,377

Operating income

52,281

43,201

154,369

99,985

Fair value changes in equity securities

(3,819)

1,781

(4,972)

(3,318)

Interest and other income

620

499

1,621

1,089

Interest and other expense

(2,088)

(7,499)

(7,139)

(22,786)

Income before income taxes

46,994

37,982

143,879

74,970

Income tax (expense) benefit

(8,702)

(9,388)

3,700

(11,355)

Net income and comprehensive income

38,292

28,594

147,579

63,615

Net loss and comprehensive loss attributable to non-controlling interests

262

178

2,750

3,753

Net income and comprehensive income attributable to Royal Gold common stockholders

$

38,554

$

28,772

$

150,329

$

67,368

Net income per share available to Royal Gold common stockholders:

Basic earnings per share

$

0.59

$

0.44

$

2.30

$

1.03

Basic weighted average shares outstanding

65,511,878

65,398,369

65,501,678

65,389,499

Diluted earnings per share

$

0.59

$

0.44

$

2.29

$

1.03

Diluted weighted average shares outstanding

65,600,770

65,515,234

65,626,400

65,494,902

Cash dividends declared per common share

$

0.28

$

0.265

$

0.825

$

0.78

The accompanying notes are an integral part of these consolidated financial statements.

4

ROYAL GOLD, INC.

Consolidated Statements of Changes in Stockholders’ Equity

(unaudited, amounts in thousands except share data)

Royal Gold Stockholders

Accumulated

Additional

Other

Common Shares

Paid-In

Comprehensive

Accumulated

Non-controlling

Total

Shares

Amount

Capital

Income (Loss)

(Losses) Earnings

Interests

Equity

Balance at December 31, 2019

 

65,496,004

$

655

 

$

2,205,364

$

$

10,290

$

30,905

$

2,247,214

Stock-based compensation and related share issuances

 

16,244

 

 

 

3,134

 

 

 

 

3,134

Distributions from (to) non-controlling interests

 

 

 

600

 

 

 

(344)

 

256

Net income and comprehensive income

 

 

 

 

 

 

38,554

 

(262)

 

38,292

Dividends declared

 

 

 

 

 

 

(18,361)

 

 

(18,361)

Balance at March 31, 2020

 

65,512,248

$

655

 

$

2,209,098

$

$

30,483

$

30,299

$

2,270,535

Royal Gold Stockholders

Accumulated

Additional

Other

Common Shares

Paid-In

Comprehensive

Accumulated

Non-controlling

Total

Shares

Amount

Capital

Income (Loss)

(Losses) Earnings

Interests

Equity

Balance at December 31, 2018

 

65,396,339

$

654

 

$

2,197,254

$

$

(86,238)

$

35,300

$

2,146,970

Stock-based compensation and related share issuances

 

3,965

 

 

 

1,675

 

 

 

 

1,675

Distributions from (to) non-controlling interests

 

 

 

420

 

 

 

(201)

 

219

Net income and comprehensive income

 

 

 

 

 

 

28,772

 

(178)

 

28,594

Other

 

 

 

 

 

 

266

 

 

266

Dividends declared

 

 

 

 

 

 

(17,363)

 

 

(17,363)

Balance at March 31, 2019

 

65,400,304

$

654

 

$

2,199,349

$

$

(74,563)

$

34,921

$

2,160,361

Royal Gold Stockholders

Accumulated

Additional

Other

Common Shares

Paid-In

Comprehensive

Accumulated

Non-controlling

Total

Shares

Amount

Capital

Income (Loss)

(Losses) Earnings

Interests

Equity

Balance at June 30, 2019

 

65,440,492

$

655

 

$

2,201,773

$

$

(65,747)

$

33,772

$

2,170,453

Stock-based compensation and related share issuances

 

71,756

 

 

 

4,025

 

 

 

 

4,025

Distributions from (to) non-controlling interests

 

 

 

3,300

 

 

 

(723)

 

2,577

Net income and comprehensive income

 

 

 

 

 

 

150,329

 

(2,750)

 

147,579

Dividends declared

 

 

 

 

 

 

(54,099)

 

 

(54,099)

Balance at March 31, 2020

 

65,512,248

$

655

 

$

2,209,098

$

$

30,483

$

30,299

$

2,270,535

Royal Gold Stockholders

Accumulated

Additional

Other

Common Shares

Paid-In

Comprehensive

Accumulated

Non-controlling

Total

Shares

Amount

Capital

Income (Loss)

(Losses) Earnings

Interests

Equity

Balance at June 30, 2018

 

65,360,041

$

654

 

$

2,192,612

$

(1,201)

$

(89,898)

$

39,102

$

2,141,269

Stock-based compensation and related share issuances

 

40,263

 

 

 

3,527

 

 

 

 

3,527

Distributions from (to) non-controlling interests

 

 

 

3,210

 

 

 

(428)

 

2,782

Net income and comprehensive income

 

 

 

 

 

 

67,368

 

(3,753)

 

63,615

Other comprehensive income (loss)

 

 

 

 

 

1,201

 

(1,201)

 

 

Other

 

 

 

 

 

266

 

 

266

Dividends declared

 

 

 

 

 

 

(51,098)

 

 

(51,098)

Balance at March 31, 2019

 

65,400,304

$

654

 

$

2,199,349

$

$

(74,563)

$

34,921

$

2,160,361

The accompanying notes are an integral part of these consolidated financial statements.

5

ROYAL GOLD, INC.

Consolidated Statements of Cash Flows

(Unaudited, amounts in thousands)

Nine Months Ended

March 31, 

March 31, 

    

2020

    

2019

Cash flows from operating activities:

Net income and comprehensive income

$

147,579

$

63,615

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

Depreciation, depletion and amortization

130,038

120,726

Amortization of debt discount and issuance costs

851

11,882

Non-cash employee stock compensation expense

8,283

5,510

Fair value changes in equity securities

4,972

3,318

Deferred tax benefit

(37,117)

(5,329)

Other

(148)

Changes in assets and liabilities:

Royalty receivables

(11,589)

(1,198)

Stream inventory

(567)

(3,102)

Income tax receivable

(8,658)

(8,750)

Prepaid expenses and other assets

(5,771)

2,474

Accounts payable

(1,295)

(4,326)

Income tax payable

14,054

(2,002)

Uncertain tax positions

(132)

3,130

Other liabilities

8,695

(5,039)

Net cash provided by operating activities

$

249,195

$

180,909

Cash flows from investing activities:

Acquisition of stream and royalty interests

(107,855)

(1,055)

Purchase of equity securities

(461)

(3,573)

Other

3,227

(157)

Net cash used in investing activities

$

(105,089)

$

(4,785)

Cash flows from financing activities:

Repayment of debt

(115,000)

Net payments from issuance of common stock

(4,257)

(1,982)

Common stock dividends

(53,111)

(50,114)

Contributions from non-controlling interest

3,300

3,210

Other

(798)

8

Net cash used in financing activities

$

(169,866)

$

(48,878)

Net (decrease) increase in cash and equivalents

(25,760)

127,246

Cash and equivalents at beginning of period

119,475

88,750

Cash and equivalents at end of period

$

93,715

$

215,996

The accompanying notes are an integral part of these consolidated financial statements.

6

ROYAL GOLD, INC.

Notes to Consolidated Financial Statements

(Unaudited)

1.    OPERATIONS, SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND RECENTLY ADOPTED AND RECENTLY ISSUED ACCOUNTING STANDARDS

Royal Gold, Inc. (“Royal Gold”, the “Company”, “we”, “us”, or “our”), together with its subsidiaries, is engaged in the business of acquiring and managing metal streams, royalties and similar interests. We seek to acquire existing stream and royalty interests or to finance mining projects that are in production or in the development stage in exchange for stream or royalty interests. 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. A royalty is a non-operating interest in a mining project that provides the right to revenue or metals produced from the project after deducting contractually specified costs, if any.  

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 and nine months ended March 31, 2020 are not necessarily indicative of the results that may be expected for the fiscal year ending June 30, 2020. 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, 2019 filed with the Securities and Exchange Commission on August 8, 2019 (“Fiscal 2019 10-K”).

Certain amounts in the prior period consolidated balance sheet have been reclassified for comparative purposes to conform with the presentation in the current period balance sheet. Reclassified amounts were not material.  

Recently Adopted Accounting Standards

Leases

In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-02, Leases (Topic 842), which requires recognition of right-of-use assets and lease payment liabilities on the balance sheet by lessees for all leases with terms greater than twelve months. Classification of leases as either a finance or operating lease will determine the recognition, measurement and presentation of expenses. ASU 2016-02 also requires certain quantitative and qualitative disclosures about material leasing arrangements.

Subsequently, in July 2018, the FASB issued ASU No. 2018-11, Leases (Topic 842): Targeted Improvements (“ASU 2018-11”). ASU 2018-11 provides an additional modified retrospective transition method for adopting ASU 2016-02, which eliminates the need for adjusting prior period comparable financial statements prepared under legacy lease accounting guidance.

ASU 2016-02, together with ASU 2018-11, was effective for the Company July 1, 2019. The Company adopted the new guidance using the modified retrospective approach set forth in ASU 2018-11, with the date of initial application on July 1, 2019. Comparative reporting periods were not adjusted upon adoption.

As permitted under the transition guidance, the Company has elected to use the following practical expedients at transition:

To not reassess whether any expired or existing contracts were or contained leases; and
To not reassess the lease classification for any expired or existing leases.

7

ROYAL GOLD, INC.

Notes to Consolidated Financial Statements

(Unaudited)

In addition, the Company has elected to use the following practical expedients at and subsequent to adoption in accordance with ASU 2016-02:

Not to separate non-lease from lease components, and instead account for each lease component and any associated non-lease components as a single lease component; and
Not to recognize right-of-use assets and associated liabilities for short-term contracts with lease terms of 12 months or less.

The Company’s significant lease arrangements relate to its office spaces. These arrangements are for leases of assets such as corporate office space and office equipment. Through the implementation process, the Company evaluated its lease arrangements, which included an analysis of contracts, and updating the internal controls and processes that are necessary to track and calculate the additional accounting and disclosure requirements as required upon adoption of ASU 2016-02.

The Company leases office space and office equipment under operating leases expiring at various dates through the fiscal year ending June 30, 2030. The following amounts were recorded in the consolidated balance sheets at March 31, 2020 (amounts in thousands):

Classification

March 31, 2020

Operating Leases

Right-of-use assets - current

    

Prepaid expenses and other

    

$

608

Right-of-use assets - non-current

Other assets

5,065

Total right-of-use assets

$

5,673

Lease liabilities - current

Other current liabilities

$

549

Lease liabilities - non-current

Other long-term liabilities

6,128

Total operating lease liabilities

$

6,677

Maturities of operating lease liabilities at March 31, 2020 were as follows (amounts in thousands):

Fiscal Years:

Operating Leases

2020

$

93

2021

826

2022

823

2023

811

2024

822

Thereafter

4,149

Total lease payments

$

7,524

Less imputed interest

(847)

Total

$

6,677

Other information pertaining to leases consist of the following:

March 31, 2020

Operating Lease Term and Discount Rate

Weighted average remaining lease term in years

9

Weighted average discount rate

2.5%

The Company did not have any finance leases as of March 31, 2020. The adoption of ASU 2016-02 did not impact accumulated earnings (losses), our consolidated statements of operations and comprehensive income, or our consolidated statements of cash flows.

8

ROYAL GOLD, INC.

Notes to Consolidated Financial Statements

(Unaudited)

Recently Issued Accounting Standards

Current Expected Credit Loss

In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses of Financial Instruments, which, together with subsequent amendments, changes how an entity will record credit losses from an “incurred loss” approach to an “expected loss” approach. This update is effective for annual periods beginning after December 15, 2019 (i.e. July 1, 2020 for the Company) and interim financial statement periods within those years, with early adoption permitted. The Company is currently undergoing its assessment of the new guidance and the impact it will have on our consolidated financial statements and related disclosures. Based on procedures performed as of March 31, 2020, the Company does not expect the adoption to have a material impact on the Company’s consolidated financial statements. The Company will adopt the new guidance effective July 1, 2020.

2.    ACQUISITIONS

Alturas royalty acquisition

On January 29, 2020, a wholly-owned subsidiary of the Company entered into an agreement with various private individuals for the acquisition of a net smelter return (“NSR”) royalty of up to 1.06% (gold) and up to 1.59% (copper) on mining concessions included as part of the Alturas project, which is located within the Coquimbo Region of Chile and held by a subsidiary of Barrick Gold Corporation (“Barrick”), Compañia Minera Salitrales Limitada. Total consideration for the royalty is up to $41 million, of which $11 million was paid on January 29, 2020.  The $11 million paid as part of the funding schedule, plus direct acquisition costs, have been recorded as an exploration stage royalty interest within Stream and royalty interests, net on our consolidated balance sheets. A future payment of up to $20 million is conditional based on a project construction decision by Barrick and the size of the minable mineralized material on the date of the construction decision. A further future payment of up to $10 million will be made to the private individuals upon first production from the mining concessions.

Castelo de Sonhos royalty acquisition

In August 2019, a subsidiary of the Company entered into an agreement with TriStar Gold Inc. and its subsidiaries (together “TriStar”) to acquire (i) up to a 1.5% NSR royalty on the Castelo de Sonhos gold project (“CDS”), located in Brazil, and (ii) warrants to purchase up to 19,640,000 common shares of TriStar. Total consideration is $7.5 million and is payable over three payments, of which $4.5 million was paid in August 2019, $1.5 million was paid in November 2019, and the final payment of $1.5 million was paid on March 30, 2020.

The CDS royalty acquisition has been accounted for as an asset acquisition. The $7.5 million paid as part of the aggregate funding schedule, plus direct acquisition costs, have been recorded as an exploration stage royalty interest within Stream and royalty interests, net on our consolidated balance sheets.

The warrants have been recorded within Other assets on our consolidated balance sheets and have a carrying value of approximately $0.3 million as of March 31, 2020. The warrants have been classified as a financial asset instrument and are recorded at fair value at each reporting date using the Black-Scholes model. Any change in fair value of the warrants at subsequent reporting periods will be recorded within Fair value changes in equity securities on our consolidated statements of operations and comprehensive income. As of March 31, 2020, the Company holds 19,640,000 warrants at an exercise price of C$0.25 per common share with a term of approximately five years.

9

ROYAL GOLD, INC.

Notes to Consolidated Financial Statements

(Unaudited)

3.    STREAM AND ROYALTY INTERESTS, NET

The following tables summarize the Company’s stream and royalty interests, net as of March 31, 2020 and June 30, 2019.

As of March 31, 2020 (Amounts in thousands):

    

Cost

    

Accumulated Depletion

    

Net

Production stage stream interests:

Mount Milligan