ROYAL GOLD INC, 10-Q filed on 5/10/2017
Quarterly Report
Document and Entity Information
9 Months Ended
Mar. 31, 2017
May 2, 2017
Document and Entity Information
 
 
Entity Registrant Name
ROYAL GOLD INC 
 
Entity Central Index Key
0000085535 
 
Document Type
10-Q 
 
Document Period End Date
Mar. 31, 2017 
 
Amendment Flag
false 
 
Current Fiscal Year End Date
--06-30 
 
Entity Current Reporting Status
Yes 
 
Entity Filer Category
Large Accelerated Filer 
 
Entity Shares Outstanding
 
65,338,813 
Document Fiscal Year Focus
2017 
 
Document Fiscal Period Focus
Q3 
 
Consolidated Balance Sheets (USD $)
In Thousands, unless otherwise specified
Mar. 31, 2017
Jun. 30, 2016
ASSETS
 
 
Cash and equivalents
$ 88,090 
$ 116,633 
Royalty receivables
22,791 
17,990 
Income tax receivable
16,006 
20,043 
Stream inventory
6,624 
9,489 
Prepaid expenses and other
663 
614 
Total current assets
134,174 
164,769 
Stream and royalty interests, net (Note 3)
2,932,087 
2,848,087 
Other assets
62,521 
53,696 
Total assets
3,128,782 
3,066,552 
LIABILITIES
 
 
Accounts payable
2,474 
4,114 
Dividends payable
15,681 
15,012 
Other current liabilities
6,622 
3,554 
Total current liabilities
24,777 
22,680 
Debt (Note 4)
635,881 
600,685 
Deferred tax liabilities
120,895 
133,867 
Uncertain tax positions
24,337 
16,996 
Other long-term liabilities
6,391 
6,439 
Total liabilities
812,281 
780,667 
Commitments and contingencies (Note 11)
   
   
EQUITY
 
 
Preferred stock, $.01 par value, authorized 10,000,000 shares authorized; and 0 shares issued
   
   
Common stock, $.01 par value, 200,000,000 shares authorized; and 65,173,796 and 65,093,950 shares outstanding, respectively
652 
651 
Additional paid-in capital
2,182,496 
2,179,781 
Accumulated other comprehensive income
1,183 
 
Accumulated earnings
83,710 
48,584 
Total Royal Gold stockholders' equity
2,268,041 
2,229,016 
Non-controlling interests
48,460 
56,869 
Total equity
2,316,501 
2,285,885 
Total liabilities and equity
$ 3,128,782 
$ 3,066,552 
Consolidated Balance Sheets (Parenthetical) (USD $)
Mar. 31, 2017
Jun. 30, 2016
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
200,000,000 
200,000,000 
Common stock, shares outstanding
65,173,796 
65,093,950 
Consolidated Statements of Operations and Comprehensive Income (Loss) (USD $)
In Thousands, except Share data, unless otherwise specified
3 Months Ended 9 Months Ended
Mar. 31, 2017
Mar. 31, 2016
Mar. 31, 2017
Mar. 31, 2016
Consolidated Statements of Operations and Comprehensive Income (Loss)
 
 
 
 
Revenue
$ 106,972 
$ 93,487 
$ 331,880 
$ 265,660 
Costs and expenses
 
 
 
 
Cost of sales
22,419 
17,921 
67,582 
51,960 
General and administrative
5,402 
7,679 
23,447 
23,416 
Production taxes
389 
958 
1,331 
3,546 
Exploration costs
2,647 
1,851 
8,411 
6,135 
Depreciation, depletion and amortization
40,164 
38,163 
119,785 
105,717 
Impairments of stream and royalty interests and royalty receivables
 
98,973 
 
98,588 
Total costs and expenses
71,021 
165,545 
220,556 
289,362 
Operating income (loss)
35,951 
(72,058)
111,324 
(23,702)
Interest and other income
1,326 
3,060 
10,056 
2,804 
Interest and other expense
(9,254)
(8,762)
(27,068)
(23,968)
Income (loss) before income taxes
28,023 
(77,760)
94,312 
(44,866)
Income tax (expense) benefit
(6,492)
8,262 
(18,724)
(55,655)
Net income (loss)
21,531 
(69,498)
75,588 
(100,521)
Net loss attributable to non-controlling interests
2,130 
1,842 
5,921 
2,932 
Net income (loss) attributable to Royal Gold common stockholders
23,661 
(67,656)
81,509 
(97,589)
Net income (loss)
21,531 
(69,498)
75,588 
(100,521)
Adjustments to comprehensive income (loss), net of tax
 
 
 
 
Unrealized change in market value of available-for-sale securities
360 
2,383 
1,182 
4,521 
Reclassification adjustment for gains included in net income
 
(675)
 
(675)
Comprehensive income (loss)
21,891 
(67,790)
76,770 
(96,675)
Comprehensive loss income attributable to non-controlling interests
2,130 
1,842 
5,921 
2,932 
Comprehensive income (loss) attributable to Royal Gold stockholders
$ 24,021 
$ (65,948)
$ 82,691 
$ (93,743)
Net income (loss) per share available to Royal Gold common stockholders:
 
 
 
 
Basic earnings (loss) per share (in dollars per share)
$ 0.36 
$ (1.04)
$ 1.25 
$ (1.50)
Basic weighted average shares outstanding (in shares)
65,169,883 
65,085,225 
65,145,183 
65,069,056 
Diluted earnings (loss) per share (in dollars per share)
$ 0.36 
$ (1.04)
$ 1.25 
$ (1.50)
Diluted weighted average shares outstanding (in shares)
65,274,926 
65,085,225 
65,267,201 
65,069,056 
Cash dividends declared per common share (in dollars per share)
$ 0.24 
$ 0.23 
$ 0.71 
$ 0.68 
Consolidated Statements of Cash Flows (USD $)
In Thousands, unless otherwise specified
9 Months Ended
Mar. 31, 2017
Mar. 31, 2016
Cash flows from operating activities:
 
 
Net income (loss)
$ 75,588 
$ (100,521)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
 
 
Depreciation, depletion and amortization
119,785 
105,717 
Amortization of debt discount and issuance costs
10,202 
9,687 
Non-cash employee stock compensation expense
6,758 
7,789 
Impairments of stream and royalty interests and royalty receivables
 
98,588 
Tax (benefit) expense of stock-based compensation exercises
(38)
247 
Deferred tax benefit
(6,266)
(17,246)
Other
(4,638)
(1,065)
Changes in assets and liabilities:
 
 
Royalty receivables
(4,801)
14,976 
Stream inventory
2,865 
(3,115)
Income taxes receivable
(6,539)
(2,996)
Prepaid expenses and other assets
(743)
85 
Accounts payable
(1,641)
(1,533)
Uncertain tax positions
7,341 
1,950 
Other liabilities
3,021 
8,084 
Net cash provided by operating activities
200,894 
120,647 
Cash flows from investing activities:
 
 
Acquisition of stream and royalty interests
(203,721)
(1,326,256)
Andacollo royalty termination
 
345,000 
Golden Star term loan
 
(20,000)
Proceeds from sale of available-for-sale securities
 
6,933 
Other
1,503 
(302)
Net cash used in investing activities
(202,218)
(994,625)
Cash flows from financing activities:
 
 
Borrowings from revolving credit facility
70,000 
350,000 
Repayment of revolving credit facility
(45,000)
(50,000)
Net payments from issuance of common stock
(2,618)
(174)
Common stock dividends
(45,715)
(43,709)
Purchase of additional royalty interest from non-controlling interest
(1,462)
 
Tax (benefit) expense of stock-based compensation exercises
38 
(247)
Other
(2,462)
(1,878)
Net cash (used in) provided by financing activities
(27,219)
253,992 
Net decrease in cash and equivalents
(28,543)
(619,986)
Cash and equivalents at beginning of period
116,633 
742,849 
Cash and equivalents at end of period
$ 88,090 
$ 122,863 
OPERATIONS, SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND RECENTLY ISSUED ACCOUNTING STANDARDS
OPERATIONS, SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND RECENTLY ISSUED ACCOUNTING STANDARDS

1.    OPERATIONS, SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 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 precious metals streams, royalties and similar interests.  We seek to acquire existing stream and royalty interests or to finance 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.  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. 

 

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, 2017, are not necessarily indicative of the results that may be expected for the fiscal year ending June 30, 2017.  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, 2016 filed with the Securities and Exchange Commission on August 11, 2016 (“Fiscal 2016 10-K”).

 

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

 

Recently Issued or Adopted Accounting Standards

 

In March 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) guidance to simplify several aspects of accounting for share-based payment transactions, including income tax consequences, classification of awards as either equity or liabilities, an option to recognize gross stock compensation with actual forfeitures as they occur, as well as certain classifications on the statement of cash flows.  The new guidance is effective for the Company’s fiscal year beginning July 1, 2017.  Early adoption is permitted, as long as all of the amendments are adopted in the same period.  We are currently evaluating the impact this guidance will have on our consolidated financial statements and footnote disclosures. 

 

In August 2014, the FASB issued ASU guidance for disclosure of uncertainties about an entity’s ability to continue as a going concern.  The new guidance requires management of the Company to evaluate whether there is substantial doubt about the Company’s ability to continue as a going concern.  The new guidance was effective, and the Company adopted this standard, effective January 1, 2017.  

 

In May 2014, the FASB issued ASU guidance for the recognition of revenue from contracts with customers.  Subsequent to the issuance of this ASU guidance, the FASB issued additional related ASU’s on revenue recognition.  The effective date and transition requirements for all of these ASU’s are the same.  Specifically, the guidance under these ASU’s is to be applied using a full retrospective method or a modified retrospective method, as described in the guidance, and is effective for the Company’s fiscal year beginning July 1, 2018.  The Company is currently evaluating the level of effort needed to implement the guidance, evaluating the provisions of each new guidance, and assessing their impact on the Company’s consolidated financial statements and disclosures, as well as which transitions method we intend to use.

ACQUISITION
ACQUISITION

2.    ACQUISITION

 

Acquisition of Additional Royalty Interests at Cortez

 

On September 19, 2016, Royal Gold, through its wholly-owned subsidiary, Denver Mining Finance Company, Inc., acquired a 3.75% Net Value Royalty (“NVR”) covering a significant area of Barrick Gold Corporation’s (“Barrick”) Cortez mine, including the Crossroads deposit, from a private party seller for total consideration of $70 million.  Giving effect to this acquisition, Royal Gold’s interests at Cortez Crossroads comprise a 4.46% NVR and a 5% sliding-scale Gross Smelter Return (“GSR”) royalty at current gold prices.  Royal Gold’s interests on production from the Pipeline and South Pipeline deposits as well as portions of the Gap deposit are comprised of a 4.85% NVR and a 5.71% GSR royalty at current gold prices.

 

The acquisition of the additional royalty interests at Cortez has been accounted for as an asset acquisition.  The portion of the acquisition, plus direct transaction costs, attributable to the Pipeline and South Pipeline deposits as well as portions of the Gap deposit ($10.2 million) has been recorded as a production stage royalty interest while the portion of the acquisition attributable to the Crossroads deposit ($59.8 million) has been recorded as a development stage royalty interest.  Both are included within Stream and royalty interests, net, on our consolidated balance sheets.

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

3.    STREAM AND ROYALTY INTERESTS, NET

 

The following tables summarize the Company’s royalty and stream interests as of March 31, 2017 and June 30, 2016.

 

 

 

 

 

 

 

 

 

 

 

As of March 31, 2017 (Amounts in thousands):

    

Cost

    

Accumulated Depletion

    

Net

Production stage stream interests:

 

 

 

 

 

 

 

 

 

Mount Milligan

 

$

790,635

 

$

(104,770)

 

$

685,865

Pueblo Viejo

 

 

610,404

 

 

(57,255)

 

 

553,149

Andacollo

 

 

388,182

 

 

(32,753)

 

 

355,429

Wassa and Prestea

 

 

146,475

 

 

(17,354)

 

 

129,121

Total production stage stream interests

 

 

1,935,696

 

 

(212,132)

 

 

1,723,564

Production stage royalty interests:

 

 

 

 

 

 

 

 

 

Voisey's Bay

 

 

205,724

 

 

(85,671)

 

 

120,053

Peñasquito

 

 

99,172

 

 

(33,542)

 

 

65,630

Holt

 

 

34,612

 

 

(19,228)

 

 

15,384

Cortez

 

 

20,873

 

 

(10,530)

 

 

10,343

Other

 

 

483,643

 

 

(331,305)

 

 

152,338

Total production stage royalty interests

 

 

844,024

 

 

(480,276)

 

 

363,748

Total production stage stream and royalty interests

 

 

2,779,720

 

 

(692,408)

 

 

2,087,312

 

 

 

 

 

 

 

 

 

 

Development stage stream interests:

 

 

 

 

 

 

 

 

 

Rainy River

 

 

175,727

 

 

 -

 

 

175,727

Other

 

 

12,031

 

 

 -

 

 

12,031

Total development stage stream interests

 

 

187,758

 

 

 -

 

 

187,758

 

 

 

 

 

 

 

 

 

 

Development stage royalty interests:

 

 

 

 

 

 

 

 

 

Pascua-Lama

 

 

380,657

 

 

 -

 

 

380,657

Cortez

 

 

59,803

 

 

 -

 

 

59,803

Other

 

 

63,811

 

 

 -

 

 

63,811

Total development stage royalty interests

 

 

504,271

 

 

 -

 

 

504,271

Total development stage stream and royalty interests

 

 

692,029

 

 

 -

 

 

692,029

Total exploration stage royalty interests

 

 

152,746

 

 

 -

 

 

152,746

Total stream and royalty interests

 

$

3,624,495

 

$

(692,408)

 

$

2,932,087

 

 

 

 

 

 

 

 

 

 

 

 

 

 

As of June 30, 2016 (Amounts in thousands):

    

Cost

    

Accumulated Depletion

    

Impairments

    

Net

Production stage stream interests:

 

 

 

 

 

 

 

 

 

 

 

 

Mount Milligan

 

$

783,046

 

$

(74,060)

 

$

 -

 

$

708,986

Pueblo Viejo

 

 

610,404

 

 

(21,902)

 

 

 -

 

 

588,502

Andacollo

 

 

388,182

 

 

(18,286)

 

 

 -

 

 

369,896

Wassa and Prestea

 

 

96,413

 

 

(7,816)

 

 

 -

 

 

88,597

Total production stage stream interests

 

 

1,878,045

 

 

(122,064)

 

 

 -

 

 

1,755,981

Production stage royalty interests:

 

 

 

 

 

 

 

 

 

 

 

 

Voisey's Bay

 

 

205,724

 

 

(85,671)

 

 

 -

 

 

120,053

Peñasquito

 

 

99,172

 

 

(29,898)

 

 

 -

 

 

69,274

Holt

 

 

34,612

 

 

(17,124)

 

 

 -

 

 

17,488

Cortez

 

 

10,630

 

 

(10,000)

 

 

 -

 

 

630

Other

 

 

531,735

 

 

(342,460)

 

 

(18,605)

 

 

170,670

Total production stage royalty interests

 

 

881,873

 

 

(485,153)

 

 

(18,605)

 

 

378,115

Total production stage stream and royalty interests

 

 

2,759,918

 

 

(607,217)

 

 

(18,605)

 

 

2,134,096

Development stage stream interests:

 

 

 

 

 

 

 

 

 

 

 

 

Rainy River

 

 

100,706

 

 

 -

 

 

 -

 

 

100,706

Other

 

 

87,883

 

 

(153)

 

 

(75,702)

 

 

12,028

Total development stage stream interests

 

 

188,589

 

 

(153)

 

 

(75,702)

 

 

112,734

Development stage royalty interests:

 

 

 

 

 

 

 

 

 

 

 

 

Pascua-Lama

 

 

380,657

 

 

 -

 

 

 -

 

 

380,657

Other

 

 

66,414

 

 

 -

 

 

 -

 

 

66,414

Total development stage royalty interests

 

 

447,071

 

 

 -

 

 

 -

 

 

447,071

Total development stage stream and royalty interests

 

 

635,660

 

 

(153)

 

 

(75,702)

 

 

559,805

Total exploration stage royalty interests

 

 

155,997

 

 

 -

 

 

(1,811)

 

 

154,186

Total stream and royalty interests

 

$

3,551,575

 

$

(607,370)

 

$

(96,118)

 

$

2,848,087

 

Phoenix Gold

 

On December 20, 2016, the operator of the Phoenix Gold Project, Rubicon Minerals Corporation (“Rubicon”), announced a restructuring transaction under Canadian regulations.  As part of the restructuring transaction, RGLD Gold AG’s (“RGLD Gold”) gold stream was terminated.  As discussed further in our Fiscal 2016 10-K, the Company’s stream interest on the Phoenix Gold Project was written down to zero during the quarter ended March 31, 2016.  In exchange for the termination of the gold stream, RGLD Gold received approximately three million common shares of Rubicon and three Net Smelter Return (“NSR”) royalties on properties owned by Rubicon, including a 1.0% NSR on the Phoenix Gold Project.

 

The fair value of the Rubicon common shares upon exchange was $3.4 million and is recorded within Other assets on our consolidated balance sheets and is accounted for under our available-for-sale accounting policy, which is also discussed in our Fiscal 2016 10-K.  The Company also recognized a corresponding gain on the fair value of the Rubicon common shares received upon exchange.  The gain is recorded within Interest and other income on our consolidated statements of operations and comprehensive income (loss). 

 

The Company did not recognize any value for the 1.0% NSR on the Phoenix Gold Project received upon exchange as our interest on the Phoenix Gold Project was previously fully impaired.  No value was assigned to the other royalties received upon exchange as no mineralization is attributable to the area subject to the royalty interests at the time of the exchange.

 

Amendment to Mount Milligan

 

On October 20, 2016, Centerra Gold Inc. (“Centerra”) and Thompson Creek Metals Company Inc. (“Thompson Creek”) completed the Plan of Arrangement (the “Arrangement”) previously announced on July 5, 2016, pursuant to which Centerra acquired all of the issued and outstanding common shares of Thompson Creek.  RGLD Gold’s streaming interest at Mount Milligan was amended (the “amendment”) concurrently with the closing of the Arrangement. 

 

Under the terms of the amendment, RGLD Gold’s 52.25% gold stream at Mount Milligan was amended to a 35% gold stream and an 18.75% copper stream.  RGLD Gold will continue to pay $435 per ounce of gold delivered and will pay 15% of the spot price per metric tonne of copper delivered.  Mount Milligan gold in concentrate in transit prior to October 20, 2016, will be delivered to RGLD Gold under the current 52.25% stream.  Under the terms of both the original and amended agreements, there is a maximum of five months between concentrate shipment and final settlement, and RGLD Gold began receiving gold and copper deliveries reflecting the amended stream agreement in April 2017. The Company incurred approximately $7.7 million in direct transaction costs associated with the amendment.  These direct transaction costs have been capitalized as part of the Mount Milligan streaming interest within Stream and royalty interests, net on our consolidated balance sheets.

DEBT
DEBT

4.    DEBT

 

The Company’s non-current debt as of March 31, 2017 and June 30, 2016 consists of the following:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

As of March 31, 2017

 

As of June 30, 2016

 

   

Principal

   

Unamortized Discount

   

Debt Issuance Costs

   

Total

   

Principal

   

Unamortized Discount

   

Debt Issuance Costs

   

Total

 

 

 

(Amounts in thousands)

 

 

(Amounts in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Convertible notes due 2019

 

$

370,000

 

$

(28,246)

 

$

(2,972)

 

$

338,782

 

$

370,000

 

$

(36,943)

 

$

(3,934)

 

$

329,123

Revolving credit facility

 

 

300,000

 

 

 -

 

 

(2,901)

 

 

297,099

 

 

275,000

 

 

 -

 

 

(3,438)

 

 

271,562

Total debt

 

$

670,000

 

$

(28,246)

 

$

(5,873)

 

$

635,881

 

$

645,000

 

$

(36,943)

 

$

(7,372)

 

$

600,685

 

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 and nine months ended March 31, 2017, was $5.9 million and $17.6 million, respectively, compared to $5.7 million and $17.1 million, respectively, for the three and nine months ended March 31, 2016, 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.  The acquisition of additional royalty interests at Cortez discussed in Note 2 was funded from our revolving credit facility during the quarter ended September 30, 2016.  As of March 31, 2017, the Company had $300 million outstanding and $350 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 March 31, 2017, the interest rate on borrowings under the revolving credit facility was LIBOR plus 2.25% for an all-in rate of 3.41%.  During the three months ended March 31, 2017, the Company repaid $45.0 million of the outstanding borrowings under the revolving credit facility.  Royal Gold may repay borrowings under the revolving credit facility at any time without premium or penalty.  Interest expense recognized on the revolving credit facility for the three and nine months ended March 31, 2017, was $2.9 million and $7.2 million, respectively, compared to $2.6 million and $5.6 million, respectively, for the three and nine months ended March 31, 2016, and included interest on the outstanding borrowings and the amortization of the debt issuance costs.

 

As discussed in Note 6 to the notes to consolidated financial statements in the Company’s Fiscal 2016 10-K, the Company has financial covenants associated with its revolving credit facility.  As of March 31, 2017, the Company was in compliance with each financial covenant.

REVENUE
REVENUE

5.    REVENUE

 

Revenue is comprised of the following:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Nine Months Ended

 

 

March 31, 

 

March 31, 

 

March 31, 

 

March 31, 

 

    

2017

    

2016

    

2017

    

2016

 

 

 

(Amounts in thousands)

 

 

(Amounts in thousands)

Stream interests

 

$

76,597

 

$

63,439

 

$

236,108

 

$

168,607

Royalty interests

 

 

30,375

 

 

30,048

 

 

95,772

 

 

97,053

Total revenue

 

$

106,972

 

$

93,487

 

$

331,880

 

$

265,660

 

STOCK-BASED COMPENSATION
STOCK-BASED COMPENSATION

6.    STOCK-BASED COMPENSATION

 

The Company recognized stock-based compensation expense as follows:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Nine Months Ended

 

 

March 31, 

 

March 31, 

 

March 31, 

 

March 31, 

 

    

2017

    

2016

    

2017

    

2016

 

 

 

(Amounts in thousands)

 

 

(Amounts in thousands)

Stock options

 

$

94

 

$

116

 

$

297

 

$

339

Stock appreciation rights

 

 

456

 

 

430

 

 

1,378

 

 

1,246

Restricted stock

 

 

800

 

 

747

 

 

3,004

 

 

2,892

Performance stock

 

 

(1,036)

 

 

1,047

 

 

2,079

 

 

3,312

Total stock-based compensation expense

 

$

314

 

$

2,340

 

$

6,758

 

$

7,789

 

Stock-based compensation expense is included within General and administrative expense in the consolidated statements of operations and comprehensive income (loss).

 

As of March 31, 2017, 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-

 

 

compensation

 

average vesting

 

 

expense

 

period (years)

Stock options

 

$

430

 

 

1.6

Stock appreciation rights

 

 

2,394

 

 

1.9

Restricted stock

 

 

6,107

 

 

3.1

Performance stock

 

 

2,215

 

 

1.4

 

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

7.    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:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Nine Months Ended

 

 

March 31, 

 

March 31, 

 

March 31, 

 

March 31, 

 

    

2017

    

2016

    

2017

    

2016

 

 

 

(in thousands, except per share data)

 

 

(in thousands, except per share data)

Net income (loss) available to Royal Gold common stockholders

 

$

23,661

 

$

(67,656)

 

$

81,509

 

$

(97,589)

Weighted-average shares for basic EPS

 

 

65,169,883

 

 

65,085,225

 

 

65,145,183

 

 

65,069,056

Effect of other dilutive securities

 

 

105,043

 

 

 -

 

 

122,018

 

 

 -

Weighted-average shares for diluted EPS

 

 

65,274,926

 

 

65,085,225

 

 

65,267,201

 

 

65,069,056

Basic earnings (loss) per share

 

$

0.36

 

$

(1.04)

 

$

1.25

 

$

(1.50)

Diluted earnings (loss) per share

 

$

0.36

 

$

(1.04)

 

$

1.25

 

$

(1.50)

 

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 $103.14.

INCOME TAXES
INCOME TAXES

8.    INCOME TAXES

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Nine Months Ended

 

 

March 31, 

 

March 31, 

 

March 31, 

 

March 31, 

 

    

2017

    

2016

    

2017

    

2016

 

 

(Amounts in thousands, except rate)

 

(Amounts in thousands, except rate)

Income tax (expense) benefit

 

$

(6,492)

 

$

8,262

 

$

(18,724)

 

$

(55,655)

Effective tax rate

 

 

23.2%

 

 

10.6%

 

 

19.9%

 

 

124.0%

 

The lower effective tax rate for the three months ended March 31, 2016, is primarily due to the effects of the impairment charges recorded in the prior year quarter.  The lower effective tax rate for the nine months ended March 31, 2017, is primarily related to the discrete tax impacts attributable to the Company’s Andacollo transactions and the liquidation of our Chilean subsidiary in the prior year.

SEGMENT INFORMATION
SEGMENT INFORMATION

9.    SEGMENT INFORMATION

 

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

As of March 31, 2017

 

As of June 30, 2016

 

    

Stream interest

    

Royalty interest

    

Total stream
and royalty
interests, net

    

Stream interest

    

Royalty
interest

    

Total stream
and royalty
interests, net

Canada

 

$

861,592

 

$

223,096

 

$

1,084,688

 

$

809,692

 

$

228,566

 

$

1,038,258

Dominican Republic

 

 

553,149

 

 

 -

 

 

553,149

 

 

588,502

 

 

 -

 

 

588,502

Chile

 

 

355,429

 

 

453,459

 

 

808,888

 

 

369,896

 

 

453,629

 

 

823,525

Africa

 

 

129,121

 

 

606

 

 

129,727

 

 

88,596

 

 

697

 

 

89,293

Mexico

 

 

 -

 

 

109,017

 

 

109,017

 

 

 -

 

 

118,899

 

 

118,899

United States

 

 

 -

 

 

169,127

 

 

169,127

 

 

 -

 

 

102,385

 

 

102,385

Australia

 

 

 -

 

 

38,623

 

 

38,623

 

 

 -

 

 

42,547

 

 

42,547

Other

 

 

12,031

 

 

26,837

 

 

38,868

 

 

12,029

 

 

32,649

 

 

44,678

Total

 

$

1,911,322

 

$

1,020,765

 

$

2,932,087

 

$

1,868,715

 

$

979,372

 

$

2,848,087

 

The Company’s revenue, cost of sales and net revenue by reportable segment for the three and nine months ended March 31, 2017 and 2016, is geographically distributed as shown in the following table:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended March 31, 2017

 

Three Months Ended March 31, 2016

 

    

Revenue

    

Cost of sales

    

Net revenue

    

Revenue

    

Cost of sales

    

Net revenue

Streams:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Canada

 

$

35,112

 

$

12,583

 

$

22,529

 

$

29,946

 

$

11,095

 

$

18,851

Dominican Republic

 

 

24,524

 

 

7,054

 

 

17,470

 

 

13,608

 

 

3,787

 

 

9,821

Chile

 

 

10,398

 

 

1,499

 

 

8,899

 

 

15,730

 

 

2,255

 

 

13,475

Africa

 

 

6,563

 

 

1,283

 

 

5,280

 

 

4,155

 

 

784

 

 

3,371

Total streams

 

$

76,597

 

$

22,419

 

$

54,178

 

$

63,439

 

$

17,921

 

$

45,518

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Royalties:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mexico

 

$

10,446

 

$

 -

 

$

10,446

 

$

8,353

 

$

 -

 

$

8,353

United States

 

 

7,899

 

 

 -

 

 

7,899

 

 

8,522

 

 

 -

 

 

8,522

Canada

 

 

5,535

 

 

 -

 

 

5,535

 

 

8,029

 

 

 -

 

 

8,029

Australia

 

 

3,174

 

 

 -

 

 

3,174

 

 

2,834

 

 

 -

 

 

2,834

Africa

 

 

672

 

 

 -

 

 

672

 

 

570

 

 

 -

 

 

570

Other

 

 

2,649

 

 

 -

 

 

2,649

 

 

1,740

 

 

 -

 

 

1,740

Total royalties

 

$

30,375

 

$

 -

 

$

30,375

 

$

30,048

 

$

 -

 

$

30,048

Total streams and royalties

 

$

106,972

 

$

22,419

 

$

84,553

 

$

93,487

 

$

17,921

 

$

75,566

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nine Months Ended March 31, 2017

 

Nine Months Ended March 31, 2016

 

    

Revenue

    

Cost of sales

    

Net revenue

    

Revenue

    

Cost of sales

    

Net revenue

Streams:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Canada

 

$

105,161

 

$

36,341

 

$

68,820

 

$

95,881

 

$

37,084

 

$

58,797

Dominican Republic

 

 

71,911

 

 

21,497

 

 

50,414

 

 

23,008

 

 

6,619

 

 

16,389

Chile

 

 

41,552

 

 

6,243

 

 

35,309

 

 

32,163

 

 

4,751

 

 

27,412

Africa

 

 

17,484

 

 

3,501

 

 

13,983

 

 

17,555

 

 

3,506

 

 

14,049

Total streams

 

$

236,108

 

$

67,582

 

$

168,526

 

$

168,607

 

$

51,960

 

$

116,647

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Royalties:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mexico

 

$

31,573

 

$

 -

 

$

31,573

 

$

29,446

 

$

 -

 

$

29,446

United States

 

 

27,012

 

 

 -

 

 

27,012

 

 

27,220

 

 

 -

 

 

27,220

Canada

 

 

17,405

 

 

 -

 

 

17,405

 

 

25,635

 

 

 -

 

 

25,635

Australia

 

 

9,867

 

 

 -

 

 

9,867

 

 

7,610

 

 

 -

 

 

7,610

Africa

 

 

2,260

 

 

 -

 

 

2,260

 

 

1,301

 

 

 -

 

 

1,301

Chile

 

 

1,333

 

 

 -

 

 

1,333

 

 

 -

 

 

 -

 

 

 -

Other

 

 

6,322

 

 

 -

 

 

6,322

 

 

5,841

 

 

 -

 

 

5,841

Total royalties

 

$

95,772

 

$

 -

 

$

95,772

 

$

97,053

 

$

 -

 

$

97,053

Total streams and royalties

 

$

331,880

 

$

67,582

 

$

264,298

 

$

265,660

 

$

51,960

 

$

213,700

 

FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS

10.    FAIR VALUE MEASUREMENTS

 

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

 

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

 

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

 

Level 3:   Prices or valuation techniques requiring inputs that are both significant to the fair value measurement and unobservable (supported by little or no market activity).

 

The following table sets forth the Company’s financial assets measured at fair value on a recurring basis (at least annually) by level within the fair value hierarchy.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

As of March 31, 2017

 

 

Carrying

 

Fair Value

 

    

Amount

    

Total

    

Level 1

    

Level 2

    

Level 3

Assets (In thousands):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Marketable equity securities(1)

 

$

4,152

 

$

4,152

 

$

4,152

 

$

 -

 

$

 -

Warrants(1)

 

$

3,212

 

$

3,212

 

$

 -

 

$

3,212

 

$

 -

Total assets

 

 

 

 

$

7,364

 

$

4,152

 

$

3,212

 

$

 -

Liabilities (In thousands):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Debt(2)

 

$

418,753

 

$

390,472

 

$

390,472

 

$

 -

 

$

 -

Total liabilities

 

 

 

 

$

390,472

 

$

390,472

 

$

 -

 

$

 -


(1)

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

(2)

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 warrants classified within Level 2 of the fair value hierarchy are valued at each reporting period using the Black-Scholes model.  The warrants are part of the term loan funded to Golden Star Resources Ltd. in July 2015 and have been classified as a financial asset instrument.  Any change in the fair value of the warrants at subsequent reporting periods will be recorded within Interest and other income on our consolidated statements of operations and comprehensive income (loss).  The Company’s debt classified within Level 1 of the fair value hierarchy is valued using quoted prices in an active market.  The carrying value of the Company’s revolving credit facility (Note 4) approximates fair value as of March 31, 2017.

 

As of March 31, 2017, 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 stream and royalty 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

11.COMMITMENTS AND CONTINGENCIES

 

Rainy River Gold and Silver Stream Acquisition

 

The Company’s final scheduled payment of $75.0 million as part of its Rainy River gold and silver stream acquisition was made in November 2016.  The Company has no further upfront payments associated with the Rainy River gold and silver stream. 

 

Wassa and Prestea Gold Stream Acquisition and Amendment

 

The Company’s final scheduled payment of $10.0 million as part of its Wassa and Prestea gold stream acquisition (July 2015) and amendment (December 2015) was made in January 2017.  The Company has no remaining upfront payments associated with the Wassa and Prestea gold stream. 

 

Ilovica Gold Stream Acquisition

 

As of March 31, 2017, the Company’s conditional funding schedule for $163.75 million related to its Ilovica gold stream acquisition made in October 2014 remains subject to certain conditions.

 

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, Voisey’s Bay Holding Corporation, is the general partner and 90% owner.  The remaining 10% interest in LNRLP is owned by Altius Royalty Corporation, a company unrelated to Royal Gold.

 

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 as 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, and trial is expected to commence in the second half of calendar 2018. 

 

OPERATIONS, SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND RECENTLY ISSUED ACCOUNTING STANDARDS (Policies)
Recently Issued or Adopted Accounting Standards

Recently Issued or Adopted Accounting Standards

 

In March 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) guidance to simplify several aspects of accounting for share-based payment transactions, including income tax consequences, classification of awards as either equity or liabilities, an option to recognize gross stock compensation with actual forfeitures as they occur, as well as certain classifications on the statement of cash flows.  The new guidance is effective for the Company’s fiscal year beginning July 1, 2017.  Early adoption is permitted, as long as all of the amendments are adopted in the same period.  We are currently evaluating the impact this guidance will have on our consolidated financial statements and footnote disclosures. 

 

In August 2014, the FASB issued ASU guidance for disclosure of uncertainties about an entity’s ability to continue as a going concern.  The new guidance requires management of the Company to evaluate whether there is substantial doubt about the Company’s ability to continue as a going concern.  The new guidance was effective, and the Company adopted this standard, effective January 1, 2017.  

 

In May 2014, the FASB issued ASU guidance for the recognition of revenue from contracts with customers.  Subsequent to the issuance of this ASU guidance, the FASB issued additional related ASU’s on revenue recognition.  The effective date and transition requirements for all of these ASU’s are the same.  Specifically, the guidance under these ASU’s is to be applied using a full retrospective method or a modified retrospective method, as described in the guidance, and is effective for the Company’s fiscal year beginning July 1, 2018.  The Company is currently evaluating the level of effort needed to implement the guidance, evaluating the provisions of each new guidance, and assessing their impact on the Company’s consolidated financial statements and disclosures, as well as which transitions method we intend to use.

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

 

 

 

 

 

 

 

 

 

 

As of March 31, 2017 (Amounts in thousands):

    

Cost

    

Accumulated Depletion

    

Net

Production stage stream interests:

 

 

 

 

 

 

 

 

 

Mount Milligan

 

$

790,635

 

$

(104,770)

 

$

685,865

Pueblo Viejo

 

 

610,404

 

 

(57,255)

 

 

553,149

Andacollo

 

 

388,182

 

 

(32,753)

 

 

355,429

Wassa and Prestea

 

 

146,475

 

 

(17,354)

 

 

129,121

Total production stage stream interests

 

 

1,935,696

 

 

(212,132)

 

 

1,723,564

Production stage royalty interests:

 

 

 

 

 

 

 

 

 

Voisey's Bay

 

 

205,724

 

 

(85,671)

 

 

120,053

Peñasquito

 

 

99,172

 

 

(33,542)

 

 

65,630

Holt

 

 

34,612

 

 

(19,228)

 

 

15,384

Cortez

 

 

20,873

 

 

(10,530)

 

 

10,343

Other

 

 

483,643

 

 

(331,305)

 

 

152,338

Total production stage royalty interests

 

 

844,024

 

 

(480,276)

 

 

363,748

Total production stage stream and royalty interests

 

 

2,779,720

 

 

(692,408)

 

 

2,087,312

 

 

 

 

 

 

 

 

 

 

Development stage stream interests:

 

 

 

 

 

 

 

 

 

Rainy River

 

 

175,727

 

 

 -

 

 

175,727

Other

 

 

12,031

 

 

 -

 

 

12,031

Total development stage stream interests

 

 

187,758

 

 

 -

 

 

187,758

 

 

 

 

 

 

 

 

 

 

Development stage royalty interests:

 

 

 

 

 

 

 

 

 

Pascua-Lama

 

 

380,657

 

 

 -

 

 

380,657

Cortez

 

 

59,803

 

 

 -

 

 

59,803

Other

 

 

63,811

 

 

 -

 

 

63,811

Total development stage royalty interests

 

 

504,271

 

 

 -

 

 

504,271

Total development stage stream and royalty interests

 

 

692,029

 

 

 -

 

 

692,029

Total exploration stage royalty interests

 

 

152,746

 

 

 -

 

 

152,746

Total stream and royalty interests

 

$

3,624,495

 

$

(692,408)

 

$

2,932,087

 

 

 

 

 

 

 

 

 

 

 

 

 

 

As of June 30, 2016 (Amounts in thousands):

    

Cost

    

Accumulated Depletion

    

Impairments

    

Net

Production stage stream interests:

 

 

 

 

 

 

 

 

 

 

 

 

Mount Milligan

 

$

783,046

 

$

(74,060)

 

$

 -

 

$

708,986

Pueblo Viejo

 

 

610,404

 

 

(21,902)

 

 

 -

 

 

588,502

Andacollo

 

 

388,182

 

 

(18,286)

 

 

 -

 

 

369,896

Wassa and Prestea

 

 

96,413

 

 

(7,816)

 

 

 -

 

 

88,597

Total production stage stream interests

 

 

1,878,045

 

 

(122,064)

 

 

 -

 

 

1,755,981

Production stage royalty interests:

 

 

 

 

 

 

 

 

 

 

 

 

Voisey's Bay

 

 

205,724

 

 

(85,671)

 

 

 -

 

 

120,053

Peñasquito

 

 

99,172

 

 

(29,898)

 

 

 -

 

 

69,274

Holt

 

 

34,612

 

 

(17,124)

 

 

 -

 

 

17,488

Cortez

 

 

10,630

 

 

(10,000)

 

 

 -

 

 

630

Other

 

 

531,735

 

 

(342,460)

 

 

(18,605)

 

 

170,670

Total production stage royalty interests

 

 

881,873

 

 

(485,153)

 

 

(18,605)

 

 

378,115

Total production stage stream and royalty interests

 

 

2,759,918

 

 

(607,217)

 

 

(18,605)

 

 

2,134,096

Development stage stream interests:

 

 

 

 

 

 

 

 

 

 

 

 

Rainy River

 

 

100,706

 

 

 -

 

 

 -

 

 

100,706

Other

 

 

87,883

 

 

(153)

 

 

(75,702)

 

 

12,028

Total development stage stream interests

 

 

188,589

 

 

(153)

 

 

(75,702)

 

 

112,734

Development stage royalty interests:

 

 

 

 

 

 

 

 

 

 

 

 

Pascua-Lama

 

 

380,657

 

 

 -

 

 

 -

 

 

380,657

Other

 

 

66,414

 

 

 -

 

 

 -

 

 

66,414

Total development stage royalty interests

 

 

447,071

 

 

 -

 

 

 -

 

 

447,071

Total development stage stream and royalty interests

 

 

635,660

 

 

(153)

 

 

(75,702)

 

 

559,805

Total exploration stage royalty interests

 

 

155,997

 

 

 -

 

 

(1,811)

 

 

154,186

Total stream and royalty interests

 

$

3,551,575

 

$

(607,370)

 

$

(96,118)

 

$

2,848,087

 

DEBT (Tables)
Schedule of non-current debt

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

As of March 31, 2017

 

As of June 30, 2016

 

   

Principal

   

Unamortized Discount

   

Debt Issuance Costs

   

Total

   

Principal

   

Unamortized Discount

   

Debt Issuance Costs

   

Total

 

 

 

(Amounts in thousands)

 

 

(Amounts in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Convertible notes due 2019

 

$

370,000

 

$

(28,246)

 

$

(2,972)

 

$

338,782

 

$

370,000

 

$

(36,943)

 

$

(3,934)

 

$

329,123

Revolving credit facility

 

 

300,000

 

 

 -

 

 

(2,901)

 

 

297,099

 

 

275,000

 

 

 -

 

 

(3,438)

 

 

271,562

Total debt

 

$

670,000

 

$

(28,246)

 

$

(5,873)

 

$

635,881

 

$

645,000

 

$

(36,943)

 

$

(7,372)

 

$

600,685

 

REVENUE (Tables)
Schedule of revenue

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Nine Months Ended

 

 

March 31, 

 

March 31, 

 

March 31, 

 

March 31, 

 

    

2017

    

2016

    

2017

    

2016

 

 

 

(Amounts in thousands)

 

 

(Amounts in thousands)

Stream interests

 

$

76,597

 

$

63,439

 

$

236,108

 

$

168,607

Royalty interests

 

 

30,375

 

 

30,048

 

 

95,772

 

 

97,053

Total revenue

 

$

106,972

 

$

93,487

 

$

331,880

 

$

265,660

 

STOCK-BASED COMPENSATION (Tables)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Nine Months Ended

 

 

March 31, 

 

March 31, 

 

March 31, 

 

March 31, 

 

    

2017

    

2016

    

2017

    

2016

 

 

 

(Amounts in thousands)

 

 

(Amounts in thousands)

Stock options

 

$

94

 

$

116

 

$

297

 

$

339

Stock appreciation rights

 

 

456

 

 

430

 

 

1,378

 

 

1,246

Restricted stock

 

 

800

 

 

747

 

 

3,004

 

 

2,892

Performance stock

 

 

(1,036)

 

 

1,047

 

 

2,079

 

 

3,312

Total stock-based compensation expense

 

$

314

 

$

2,340

 

$

6,758

 

$

7,789

 

As of March 31, 2017, 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-

 

 

compensation

 

average vesting

 

 

expense

 

period (years)

Stock options

 

$

430

 

 

1.6

Stock appreciation rights

 

 

2,394

 

 

1.9

Restricted stock

 

 

6,107

 

 

3.1

Performance stock

 

 

2,215

 

 

1.4

 

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Nine Months Ended

 

 

March 31, 

 

March 31, 

 

March 31, 

 

March 31, 

 

    

2017

    

2016

    

2017

    

2016

 

 

 

(in thousands, except per share data)

 

 

(in thousands, except per share data)

Net income (loss) available to Royal Gold common stockholders

 

$

23,661

 

$

(67,656)

 

$

81,509

 

$

(97,589)

Weighted-average shares for basic EPS

 

 

65,169,883

 

 

65,085,225

 

 

65,145,183

 

 

65,069,056

Effect of other dilutive securities

 

 

105,043

 

 

 -

 

 

122,018

 

 

 -

Weighted-average shares for diluted EPS

 

 

65,274,926

 

 

65,085,225

 

 

65,267,201

 

 

65,069,056

Basic earnings (loss) per share

 

$

0.36

 

$

(1.04)

 

$

1.25

 

$

(1.50)

Diluted earnings (loss) per share

 

$

0.36

 

$

(1.04)

 

$

1.25

 

$

(1.50)

 

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Nine Months Ended

 

 

March 31, 

 

March 31, 

 

March 31, 

 

March 31, 

 

    

2017

    

2016

    

2017

    

2016

 

 

(Amounts in thousands, except rate)

 

(Amounts in thousands, except rate)

Income tax (expense) benefit

 

$

(6,492)

 

$

8,262

 

$

(18,724)

 

$

(55,655)

Effective tax rate

 

 

23.2%

 

 

10.6%

 

 

19.9%

 

 

124.0%

 

SEGMENT INFORMATION (Tables)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

As of March 31, 2017

 

As of June 30, 2016

 

    

Stream interest

    

Royalty interest

    

Total stream
and royalty
interests, net

    

Stream interest

    

Royalty
interest

    

Total stream
and royalty
interests, net

Canada

 

$

861,592

 

$

223,096

 

$

1,084,688

 

$

809,692

 

$

228,566

 

$

1,038,258

Dominican Republic

 

 

553,149

 

 

 -

 

 

553,149

 

 

588,502

 

 

 -

 

 

588,502

Chile

 

 

355,429

 

 

453,459

 

 

808,888

 

 

369,896

 

 

453,629

 

 

823,525

Africa

 

 

129,121

 

 

606

 

 

129,727

 

 

88,596

 

 

697

 

 

89,293

Mexico

 

 

 -

 

 

109,017

 

 

109,017

 

 

 -

 

 

118,899

 

 

118,899

United States

 

 

 -

 

 

169,127

 

 

169,127

 

 

 -

 

 

102,385

 

 

102,385

Australia

 

 

 -

 

 

38,623

 

 

38,623

 

 

 -

 

 

42,547

 

 

42,547

Other

 

 

12,031

 

 

26,837

 

 

38,868

 

 

12,029

 

 

32,649

 

 

44,678

Total

 

$

1,911,322

 

$

1,020,765

 

$

2,932,087

 

$

1,868,715

 

$

979,372

 

$

2,848,087

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended March 31, 2017

 

Three Months Ended March 31, 2016

 

    

Revenue

    

Cost of sales

    

Net revenue

    

Revenue

    

Cost of sales

    

Net revenue

Streams:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Canada

 

$

35,112

 

$

12,583

 

$

22,529

 

$

29,946

 

$

11,095

 

$

18,851

Dominican Republic

 

 

24,524

 

 

7,054

 

 

17,470

 

 

13,608

 

 

3,787

 

 

9,821

Chile

 

 

10,398

 

 

1,499

 

 

8,899

 

 

15,730

 

 

2,255

 

 

13,475

Africa

 

 

6,563

 

 

1,283

 

 

5,280

 

 

4,155

 

 

784

 

 

3,371

Total streams

 

$

76,597

 

$

22,419

 

$

54,178

 

$

63,439

 

$

17,921

 

$

45,518

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Royalties:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mexico

 

$

10,446

 

$

 -

 

$

10,446

 

$

8,353

 

$

 -

 

$

8,353

United States

 

 

7,899

 

 

 -

 

 

7,899

 

 

8,522

 

 

 -

 

 

8,522

Canada

 

 

5,535

 

 

 -

 

 

5,535

 

 

8,029

 

 

 -

 

 

8,029

Australia

 

 

3,174

 

 

 -

 

 

3,174

 

 

2,834

 

 

 -

 

 

2,834

Africa

 

 

672

 

 

 -

 

 

672

 

 

570

 

 

 -

 

 

570

Other

 

 

2,649

 

 

 -

 

 

2,649

 

 

1,740

 

 

 -

 

 

1,740

Total royalties

 

$

30,375

 

$

 -

 

$

30,375

 

$

30,048

 

$

 -

 

$

30,048

Total streams and royalties

 

$

106,972

 

$

22,419

 

$

84,553

 

$

93,487

 

$

17,921

 

$

75,566

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nine Months Ended March 31, 2017

 

Nine Months Ended March 31, 2016

 

    

Revenue

    

Cost of sales

    

Net revenue

    

Revenue

    

Cost of sales

    

Net revenue

Streams:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Canada

 

$

105,161

 

$

36,341

 

$

68,820

 

$

95,881

 

$

37,084

 

$

58,797

Dominican Republic

 

 

71,911

 

 

21,497

 

 

50,414

 

 

23,008

 

 

6,619

 

 

16,389

Chile

 

 

41,552

 

 

6,243

 

 

35,309

 

 

32,163

 

 

4,751

 

 

27,412

Africa

 

 

17,484

 

 

3,501

 

 

13,983

 

 

17,555

 

 

3,506

 

 

14,049

Total streams

 

$

236,108

 

$

67,582

 

$

168,526

 

$

168,607

 

$

51,960

 

$

116,647

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Royalties:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mexico

 

$

31,573

 

$

 -

 

$

31,573

 

$

29,446

 

$

 -

 

$

29,446

United States

 

 

27,012

 

 

 -

 

 

27,012

 

 

27,220

 

 

 -

 

 

27,220

Canada

 

 

17,405

 

 

 -

 

 

17,405

 

 

25,635

 

 

 -

 

 

25,635

Australia

 

 

9,867

 

 

 -

 

 

9,867

 

 

7,610

 

 

 -

 

 

7,610

Africa

 

 

2,260

 

 

 -

 

 

2,260

 

 

1,301

 

 

 -

 

 

1,301

Chile

 

 

1,333

 

 

 -

 

 

1,333

 

 

 -

 

 

 -

 

 

 -

Other

 

 

6,322

 

 

 -

 

 

6,322

 

 

5,841

 

 

 -

 

 

5,841

Total royalties

 

$

95,772

 

$

 -

 

$

95,772

 

$

97,053

 

$

 -

 

$

97,053

Total streams and royalties

 

$

331,880

 

$

67,582

 

$

264,298

 

$

265,660

 

$

51,960

 

$

213,700

 

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

As of March 31, 2017

 

 

Carrying

 

Fair Value

 

    

Amount

    

Total

    

Level 1

    

Level 2

    

Level 3

Assets (In thousands):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Marketable equity securities(1)

 

$

4,152

 

$

4,152

 

$

4,152

 

$

 -

 

$

 -

Warrants(1)

 

$

3,212

 

$

3,212

 

$

 -

 

$

3,212

 

$

 -

Total assets

 

 

 

 

$

7,364

 

$

4,152

 

$

3,212

 

$

 -

Liabilities (In thousands):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Debt(2)

 

$

418,753

 

$

390,472

 

$

390,472

 

$

 -

 

$

 -

Total liabilities

 

 

 

 

$

390,472

 

$

390,472

 

$

 -

 

$

 -


(1)

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

(2)

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, SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND RECENTLY ISSUED ACCOUNTING STANDARDS (Details)
9 Months Ended
Mar. 31, 2017
item
OPERATIONS, SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND RECENTLY ISSUED ACCOUNTING STANDARDS
 
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 $)
In Millions, unless otherwise specified
0 Months Ended
Sep. 19, 2016
Sep. 19, 2016
“Barrick” Cortez mine |
Production stage royalty interests
 
 
ACQUISITION
 
 
Royalty interest
$ 10.2 
$ 10.2 
“Barrick” Cortez mine |
Development stage royalty interests
 
 
ACQUISITION
 
 
Royalty interest
59.8 
59.8 
NVR |
“Barrick” Cortez mine
 
 
ACQUISITION
 
 
Percentage of royalty acquired
 
3.75% 
Total consideration for royalty interest
$ 70 
 
NVR |
Cortez Crossroads
 
 
ACQUISITION
 
 
Ownership interests after acquisition (as a percent)
4.46% 
 
NVR |
Gap deposits
 
 
ACQUISITION
 
 
Ownership interests after acquisition (as a percent)
4.85% 
 
GSR |
Cortez Crossroads
 
 
ACQUISITION
 
 
Ownership interests after acquisition (as a percent)
5.00% 
 
GSR |
Gap deposits
 
 
ACQUISITION
 
 
Ownership interests after acquisition (as a percent)
5.71% 
 
STREAM AND ROYALTY INTERESTS, NET (Details)
Share data in Millions, unless otherwise specified
0 Months Ended 0 Months Ended
Mar. 31, 2017
USD ($)
Jun. 30, 2016
USD ($)
Mar. 31, 2016
Phoenix Gold
Restructuring transaction under Canadian regulations
CAD ($)
Dec. 20, 2016
Phoenix Gold
Restructuring transaction under Canadian regulations
Rubicon Minerals Corporation
USD ($)
item
Dec. 20, 2016
Phoenix Gold
Restructuring transaction under Canadian regulations
Rubicon Minerals Corporation
USD ($)
Mar. 31, 2017
Production stage stream interests:
USD ($)
Jun. 30, 2016
Production stage stream interests:
USD ($)
Mar. 31, 2017
Production stage stream interests:
Mount Milligan
USD ($)
Jun. 30, 2016
Production stage stream interests:
Mount Milligan
USD ($)
Mar. 31, 2017
Production stage stream interests:
Pueblo Viejo
USD ($)
Jun. 30, 2016
Production stage stream interests:
Pueblo Viejo
USD ($)
Mar. 31, 2017
Production stage stream interests:
Andacollo
USD ($)
Jun. 30, 2016
Production stage stream interests:
Andacollo
USD ($)
Mar. 31, 2017
Production stage stream interests:
Wassa and Prestea
USD ($)
Jun. 30, 2016
Production stage stream interests:
Wassa and Prestea
USD ($)
Mar. 31, 2017
Production stage royalty interests
USD ($)
Jun. 30, 2016
Production stage royalty interests
USD ($)
Mar. 31, 2017
Production stage royalty interests
Voisey's Bay
USD ($)
Jun. 30, 2016
Production stage royalty interests
Voisey's Bay
USD ($)
Mar. 31, 2017
Production stage royalty interests
Penasquito
USD ($)
Jun. 30, 2016
Production stage royalty interests
Penasquito
USD ($)
Mar. 31, 2017
Production stage royalty interests
Holt
USD ($)
Jun. 30, 2016
Production stage royalty interests
Holt
USD ($)
Mar. 31, 2017
Production stage royalty interests
Cortez
USD ($)
Jun. 30, 2016
Production stage royalty interests
Cortez
USD ($)
Mar. 31, 2017
Production stage royalty interests
Other
USD ($)
Jun. 30, 2016
Production stage royalty interests
Other
USD ($)
Mar. 31, 2017
Total production stage stream and royalty interests
USD ($)
Jun. 30, 2016
Total production stage stream and royalty interests
USD ($)
Mar. 31, 2017
Development stage stream interests
USD ($)
Jun. 30, 2016
Development stage stream interests
USD ($)
Mar. 31, 2017
Development stage stream interests
Rainy River
USD ($)
Jun. 30, 2016
Development stage stream interests
Rainy River
USD ($)
Mar. 31, 2017
Development stage stream interests
Other
USD ($)
Jun. 30, 2016
Development stage stream interests
Other
USD ($)
Mar. 31, 2017
Development stage royalty interests
USD ($)
Jun. 30, 2016
Development stage royalty interests
USD ($)
Mar. 31, 2017
Development stage royalty interests
Pascua-Lama
USD ($)
Jun. 30, 2016
Development stage royalty interests
Pascua-Lama
USD ($)
Mar. 31, 2017
Development stage royalty interests
Cortez
USD ($)
Mar. 31, 2017
Development stage royalty interests
Other
USD ($)
Jun. 30, 2016
Development stage royalty interests
Other
USD ($)
Mar. 31, 2017
Total development stage stream and royalty interests
USD ($)
Jun. 30, 2016
Total development stage stream and royalty interests
USD ($)
Mar. 31, 2017
Total exploration stage royalty interests
USD ($)
Jun. 30, 2016
Total exploration stage royalty interests
USD ($)
Oct. 20, 2016
Thompson Creek
Mount Milligan streaming agreement
Centerra
USD ($)
Oct. 19, 2016
Thompson Creek
Mount Milligan streaming agreement
Centerra
Oct. 20, 2016
Thompson Creek
Mount Milligan streaming agreement
Centerra
Stream and royalty interests
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cost
$ 3,624,495,000 
$ 3,551,575,000 
 
 
 
$ 1,935,696,000 
$ 1,878,045,000 
$ 790,635,000 
$ 783,046,000 
$ 610,404,000 
$ 610,404,000 
$ 388,182,000 
$ 388,182,000 
$ 146,475,000 
$ 96,413,000 
$ 844,024,000 
$ 881,873,000 
$ 205,724,000 
$ 205,724,000 
$ 99,172,000 
$ 99,172,000 
$ 34,612,000 
$ 34,612,000 
$ 20,873,000 
$ 10,630,000 
$ 483,643,000 
$ 531,735,000 
$ 2,779,720,000 
$ 2,759,918,000 
$ 187,758,000 
$ 188,589,000 
$ 175,727,000 
$ 100,706,000 
$ 12,031,000 
$ 87,883,000 
$ 504,271,000 
$ 447,071,000 
$ 380,657,000 
$ 380,657,000 
$ 59,803,000 
$ 63,811,000 
$ 66,414,000 
$ 692,029,000 
$ 635,660,000 
$ 152,746,000 
$ 155,997,000 
 
 
 
Accumulated Depletion
(692,408,000)
(607,370,000)
 
 
 
(212,132,000)
(122,064,000)
(104,770,000)
(74,060,000)
(57,255,000)
(21,902,000)
(32,753,000)
(18,286,000)
(17,354,000)
(7,816,000)
(480,276,000)
(485,153,000)
(85,671,000)
(85,671,000)
(33,542,000)
(29,898,000)
(19,228,000)
(17,124,000)
(10,530,000)
(10,000,000)
(331,305,000)
(342,460,000)
(692,408,000)
(607,217,000)
 
(153,000)
 
 
 
(153,000)
 
 
 
 
 
 
 
 
(153,000)
 
 
 
 
 
Impairments
 
(96,118,000)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(18,605,000)
 
 
 
 
 
 
 
 
 
(18,605,000)
 
(18,605,000)
 
(75,702,000)
 
 
 
(75,702,000)
 
 
 
 
 
 
 
 
(75,702,000)
 
(1,811,000)
 
 
 
Net
2,932,087,000 
2,848,087,000 
 
 
1,723,564,000 
1,755,981,000 
685,865,000 
708,986,000 
553,149,000 
588,502,000 
355,429,000 
369,896,000 
129,121,000 
88,597,000 
363,748,000 
378,115,000 
120,053,000 
120,053,000 
65,630,000 
69,274,000 
15,384,000 
17,488,000 
10,343,000 
630,000 
152,338,000 
170,670,000 
2,087,312,000 
2,134,096,000 
187,758,000 
112,734,000 
175,727,000 
100,706,000 
12,031,000 
12,028,000 
504,271,000 
447,071,000 
380,657,000 
380,657,000 
59,803,000 
63,811,000 
66,414,000 
692,029,000 
559,805,000 
152,746,000 
154,186,000 
 
 
 
Gold streaming interest
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
35.00% 
52.25% 
 
Number of common shares of Rubicon received
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Number of NSR royalties received
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net Smelter Return (“NSR”) (as a percent)
 
 
 
1.00% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Fair value of the Rubicon common shares upon exchange
 
 
 
 
3,400,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Other royalties received upon exchange
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Copper streaming interest
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
18.75% 
 
 
Cash payment for each ounce of gold (in dollars per ounce)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
435 
Percentage of spot price per metric tonne of copper delivered
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
15.00% 
Maximum period between concentrate shipment and final settlement
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
5 months 
 
 
Direct transaction costs associated with the amendment
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$ 7,700,000 
 
 
DEBT (Details) (USD $)
3 Months Ended 9 Months Ended
Mar. 31, 2017
Mar. 31, 2016
Mar. 31, 2017
Mar. 31, 2016
Jun. 30, 2016
Jun. 30, 2012
Long-term debt disclosure
 
 
 
 
 
 
Principal
$ 670,000,000 
 
$ 670,000,000 
 
$ 645,000,000 
 
Unamortized Discount
(28,246,000)
 
(28,246,000)
 
(36,943,000)
 
Debt Issuance Costs
(5,873,000)
 
(5,873,000)
 
(7,372,000)
 
Total debt
635,881,000 
 
635,881,000 
 
600,685,000 
 
Repayment of revolving credit facility
 
 
45,000,000 
50,000,000 
 
 
Convertible notes due 2019
 
 
 
 
 
 
Long-term debt disclosure
 
 
 
 
 
 
Principal
370,000,000 
 
370,000,000 
 
370,000,000 
 
Unamortized Discount
(28,246,000)
 
(28,246,000)
 
(36,943,000)
 
Debt Issuance Costs
(2,972,000)
 
(2,972,000)
 
(3,934,000)
 
Total debt
338,782,000 
 
338,782,000 
 
329,123,000 
 
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
5,900,000 
5,700,000 
17,600,000 
17,100,000 
 
 
Revolving credit facility
 
 
 
 
 
 
Long-term debt disclosure
 
 
 
 
 
 
Principal
300,000,000 
 
300,000,000 
 
275,000,000 
 
Debt Issuance Costs
(2,901,000)
 
(2,901,000)
 
(3,438,000)
 
Total debt
297,099,000 
 
297,099,000 
 
271,562,000 
 
Interest expense recognized
2,900,000 
2,600,000 
7,200,000 
5,600,000 
 
 
Maximum availability under the revolving credit facility
650,000,000 
 
650,000,000 
 
 
 
Outstanding amount under credit facility
300,000,000 
 
300,000,000 
 
 
 
Available under the revolving credit facility
350,000,000 
 
350,000,000 
 
 
 
Repayment of revolving credit facility
$ 45,000,000 
 
 
 
 
 
Revolving credit facility |
LIBOR
 
 
 
 
 
 
Long-term debt disclosure
 
 
 
 
 
 
Revolving credit facility, basis spread on interest rate (as a percent)
 
 
2.25% 
 
 
 
Effective interest rate (as percent)
3.41% 
 
3.41% 
 
 
 
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 9 Months Ended
Mar. 31, 2017
Mar. 31, 2016
Mar. 31, 2017
Mar. 31, 2016
REVENUE
 
 
 
 
Stream interests
$ 76,597 
$ 63,439 
$ 236,108 
$ 168,607 
Royalty interests
30,375 
30,048 
95,772 
97,053 
Total revenue
$ 106,972 
$ 93,487 
$ 331,880 
$ 265,660 
STOCK-BASED COMPENSATION (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 9 Months Ended
Mar. 31, 2017
Mar. 31, 2016
Mar. 31, 2017
Mar. 31, 2016
Stock-based compensation
 
 
 
 
Stock-based compensation expense
$ 314 
$ 2,340 
$ 6,758 
$ 7,789 
Stock options
 
 
 
 
Stock-based compensation
 
 
 
 
Stock-based compensation expense
94 
116 
297 
339 
Stock appreciation rights
 
 
 
 
Stock-based compensation
 
 
 
 
Stock-based compensation expense
456 
430 
1,378 
1,246 
Restricted stock
 
 
 
 
Stock-based compensation
 
 
 
 
Stock-based compensation expense
800 
747 
3,004 
2,892 
Performance stock
 
 
 
 
Stock-based compensation
 
 
 
 
Stock-based compensation expense
$ (1,036)
$ 1,047 
$ 2,079 
$ 3,312 
STOCK-BASED COMPENSATION - UNRECOGNIZED COMPENSATION EXPENSE (Details) (USD $)
In Thousands, unless otherwise specified
9 Months Ended
Mar. 31, 2017
Stock options
 
Unrecognized stock-based compensation expense
 
Unrecognized compensation expense
$ 430 
Weighted-average vesting period (years)
1 year 7 months 6 days 
Stock appreciation rights
 
Unrecognized stock-based compensation expense
 
Unrecognized compensation expense
2,394 
Weighted-average vesting period (years)
1 year 10 months 24 days 
Restricted stock
 
Unrecognized stock-based compensation expense
 
Unrecognized compensation expense
6,107 
Weighted-average vesting period (years)
3 years 1 month 6 days 
Performance stock
 
Unrecognized stock-based compensation expense
 
Unrecognized compensation expense
$ 2,215 
Weighted-average vesting period (years)
1 year 4 months 24 days 
EARNINGS PER SHARE ("EPS") (Details) (USD $)
In Thousands, except Share data, unless otherwise specified
3 Months Ended 9 Months Ended
Mar. 31, 2017
Mar. 31, 2016
Mar. 31, 2017
Mar. 31, 2016
EARNINGS PER SHARE ("EPS")
 
 
 
 
Net income (loss) available to Royal Gold common stockholders
$ 23,661 
$ (67,656)
$ 81,509 
$ (97,589)
Weighted-average shares for basic EPS
65,169,883 
65,085,225 
65,145,183 
65,069,056 
Effect of other dilutive securities (in shares)
105,043 
 
122,018 
 
Weighted-average shares for diluted EPS
65,274,926 
65,085,225 
65,267,201 
65,069,056 
Basic earnings (loss) per share (in dollars per share)
$ 0.36 
$ (1.04)
$ 1.25 
$ (1.50)
Diluted earnings (loss) per share (in dollars per share)
$ 0.36 
$ (1.04)
$ 1.25 
$ (1.50)
2019 Conversion Notes, Initial conversion price per share of common stock (in dollars per share)
$ 103 
 
$ 103 
 
INCOME TAXES (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 9 Months Ended
Mar. 31, 2017
Mar. 31, 2016
Mar. 31, 2017
Mar. 31, 2016
INCOME TAXES
 
 
 
 
Income tax (expense) benefit
$ (6,492)
$ 8,262 
$ (18,724)
$ (55,655)
Effective tax rate (as a percent)
23.20% 
10.60% 
19.90% 
124.00% 
SEGMENT INFORMATION (Details) (USD $)
3 Months Ended 9 Months Ended
Mar. 31, 2017
Mar. 31, 2016
Mar. 31, 2017
segment
Mar. 31, 2016
Jun. 30, 2016
Long Lived Assets and Pre-Tax Income by Geographical Information
 
 
 
 
 
Number of reportable segments
 
 
 
 
Revenue
$ 106,972,000 
$ 93,487,000 
$ 331,880,000 
$ 265,660,000 
 
Cost of sales
22,419,000 
17,921,000 
67,582,000 
51,960,000 
 
Net revenue
84,553,000 
75,566,000 
264,298,000 
213,700,000 
 
Total stream and royalty interests, net
2,932,087,000 
 
2,932,087,000 
 
2,848,087,000 
Canada
 
 
 
 
 
Long Lived Assets and Pre-Tax Income by Geographical Information
 
 
 
 
 
Total stream and royalty interests, net
1,084,688,000 
 
1,084,688,000 
 
1,038,258,000 
Dominican Republic
 
 
 
 
 
Long Lived Assets and Pre-Tax Income by Geographical Information
 
 
 
 
 
Total stream and royalty interests, net
553,149,000 
 
553,149,000 
 
588,502,000 
Chile
 
 
 
 
 
Long Lived Assets and Pre-Tax Income by Geographical Information
 
 
 
 
 
Total stream and royalty interests, net
808,888,000 
 
808,888,000 
 
823,525,000 
Africa
 
 
 
 
 
Long Lived Assets and Pre-Tax Income by Geographical Information
 
 
 
 
 
Total stream and royalty interests, net
129,727,000 
 
129,727,000 
 
89,293,000 
Mexico
 
 
 
 
 
Long Lived Assets and Pre-Tax Income by Geographical Information
 
 
 
 
 
Total stream and royalty interests, net
109,017,000 
 
109,017,000 
 
118,899,000 
United States
 
 
 
 
 
Long Lived Assets and Pre-Tax Income by Geographical Information
 
 
 
 
 
Total stream and royalty interests, net
169,127,000 
 
169,127,000 
 
102,385,000 
Australia
 
 
 
 
 
Long Lived Assets and Pre-Tax Income by Geographical Information
 
 
 
 
 
Total stream and royalty interests, net
38,623,000 
 
38,623,000 
 
42,547,000 
Other
 
 
 
 
 
Long Lived Assets and Pre-Tax Income by Geographical Information
 
 
 
 
 
Total stream and royalty interests, net
38,868,000 
 
38,868,000 
 
44,678,000 
Stream interest
 
 
 
 
 
Long Lived Assets and Pre-Tax Income by Geographical Information
 
 
 
 
 
Revenue
76,597,000 
63,439,000 
236,108,000 
168,607,000 
 
Cost of sales
22,419,000 
17,921,000 
67,582,000 
51,960,000 
 
Net revenue
54,178,000 
45,518,000 
168,526,000 
116,647,000 
 
Total stream and royalty interests, net
1,911,322,000 
 
1,911,322,000 
 
1,868,715,000 
Stream interest |
Canada
 
 
 
 
 
Long Lived Assets and Pre-Tax Income by Geographical Information
 
 
 
 
 
Revenue
35,112,000 
29,946,000 
105,161,000 
95,881,000 
 
Cost of sales
12,583,000 
11,095,000 
36,341,000 
37,084,000 
 
Net revenue
22,529,000 
18,851,000 
68,820,000 
58,797,000 
 
Total stream and royalty interests, net
861,592,000 
 
861,592,000 
 
809,692,000 
Stream interest |
Dominican Republic
 
 
 
 
 
Long Lived Assets and Pre-Tax Income by Geographical Information
 
 
 
 
 
Revenue
24,524,000 
13,608,000 
71,911,000 
23,008,000 
 
Cost of sales
7,054,000 
3,787,000 
21,497,000 
6,619,000 
 
Net revenue
17,470,000 
9,821,000 
50,414,000 
16,389,000 
 
Total stream and royalty interests, net
553,149,000 
 
553,149,000 
 
588,502,000 
Stream interest |
Chile
 
 
 
 
 
Long Lived Assets and Pre-Tax Income by Geographical Information
 
 
 
 
 
Revenue
10,398,000 
15,730,000 
41,552,000 
32,163,000 
 
Cost of sales
1,499,000 
2,255,000 
6,243,000 
4,751,000 
 
Net revenue
8,899,000 
13,475,000 
35,309,000 
27,412,000 
 
Total stream and royalty interests, net
355,429,000 
 
355,429,000 
 
369,896,000 
Stream interest |
Africa
 
 
 
 
 
Long Lived Assets and Pre-Tax Income by Geographical Information
 
 
 
 
 
Revenue
6,563,000 
4,155,000 
17,484,000 
17,555,000 
 
Cost of sales
1,283,000 
784,000 
3,501,000 
3,506,000 
 
Net revenue
5,280,000 
3,371,000 
13,983,000 
14,049,000 
 
Total stream and royalty interests, net
129,121,000 
 
129,121,000 
 
88,596,000 
Stream interest |
Other
 
 
 
 
 
Long Lived Assets and Pre-Tax Income by Geographical Information
 
 
 
 
 
Total stream and royalty interests, net
12,031,000 
 
12,031,000 
 
12,029,000 
Royalty interest
 
 
 
 
 
Long Lived Assets and Pre-Tax Income by Geographical Information
 
 
 
 
 
Revenue
30,375,000 
30,048,000 
95,772,000 
97,053,000 
 
Net revenue
30,375,000 
30,048,000 
95,772,000 
97,053,000 
 
Total stream and royalty interests, net
1,020,765,000 
 
1,020,765,000 
 
979,372,000 
Royalty interest |
Canada
 
 
 
 
 
Long Lived Assets and Pre-Tax Income by Geographical Information
 
 
 
 
 
Revenue
5,535,000 
8,029,000 
17,405,000 
25,635,000 
 
Net revenue
5,535,000 
8,029,000 
17,405,000 
25,635,000 
 
Total stream and royalty interests, net
223,096,000 
 
223,096,000 
 
228,566,000 
Royalty interest |
Chile
 
 
 
 
 
Long Lived Assets and Pre-Tax Income by Geographical Information
 
 
 
 
 
Revenue
 
 
1,333,000 
 
 
Net revenue
 
 
1,333,000 
 
 
Total stream and royalty interests, net
453,459,000 
 
453,459,000 
 
453,629,000 
Royalty interest |
Africa
 
 
 
 
 
Long Lived Assets and Pre-Tax Income by Geographical Information
 
 
 
 
 
Revenue
672,000 
570,000 
2,260,000 
1,301,000 
 
Net revenue
672,000 
570,000 
2,260,000 
1,301,000 
 
Total stream and royalty interests, net
606,000 
 
606,000 
 
697,000 
Royalty interest |
Mexico
 
 
 
 
 
Long Lived Assets and Pre-Tax Income by Geographical Information
 
 
 
 
 
Revenue
10,446,000 
8,353,000 
31,573,000 
29,446,000 
 
Net revenue
10,446,000 
8,353,000 
31,573,000 
29,446,000 
 
Total stream and royalty interests, net
109,017,000 
 
109,017,000 
 
118,899,000 
Royalty interest |
United States
 
 
 
 
 
Long Lived Assets and Pre-Tax Income by Geographical Information
 
 
 
 
 
Revenue
7,899,000 
8,522,000 
27,012,000 
27,220,000 
 
Net revenue
7,899,000 
8,522,000 
27,012,000 
27,220,000 
 
Total stream and royalty interests, net
169,127,000 
 
169,127,000 
 
102,385,000 
Royalty interest |
Australia
 
 
 
 
 
Long Lived Assets and Pre-Tax Income by Geographical Information
 
 
 
 
 
Revenue
3,174,000 
2,834,000 
9,867,000 
7,610,000 
 
Net revenue
3,174,000 
2,834,000 
9,867,000 
7,610,000 
 
Total stream and royalty interests, net
38,623,000 
 
38,623,000 
 
42,547,000 
Royalty interest |
Other
 
 
 
 
 
Long Lived Assets and Pre-Tax Income by Geographical Information
 
 
 
 
 
Revenue
2,649,000 
1,740,000 
6,322,000 
5,841,000 
 
Net revenue
2,649,000 
1,740,000 
6,322,000 
5,841,000 
 
Total stream and royalty interests, net
$ 26,837,000 
 
$ 26,837,000 
 
$ 32,649,000 
FAIR VALUE MEASUREMENTS (Details) (Recurring basis, USD $)
Mar. 31, 2017
Carrying Amount
 
Liabilities:
 
Debt
$ 418,753,000 
Amount of equity component of convertible notes
77,000,000 
Fair Value
 
Assets:
 
Total assets
7,364,000 
Liabilities:
 
Debt
390,472,000 
Total liabilities
390,472,000 
Level 1
 
Assets:
 
Total assets
4,152,000 
Liabilities:
 
Debt
390,472,000 
Total liabilities
390,472,000 
Level 2
 
Assets:
 
Total assets
3,212,000 
Marketable equity Securities |
Carrying Amount
 
Assets:
 
Marketable equity securities
4,152,000 
Marketable equity Securities |
Fair Value
 
Assets:
 
Marketable equity securities
4,152,000 
Marketable equity Securities |
Level 1
 
Assets:
 
Marketable equity securities
4,152,000 
Warrants |
Carrying Amount
 
Assets:
 
Warrants
3,212,000 
Warrants |
Fair Value
 
Assets:
 
Warrants
3,212,000 
Warrants |
Level 2
 
Assets:
 
Warrants
$ 3,212,000 
COMMITMENTS AND CONTINGENCIES (Details) (USD $)
In Millions, unless otherwise specified
1 Months Ended 9 Months Ended 1 Months Ended 9 Months Ended
Nov. 30, 2016
Rainy River
Mar. 31, 2017
Rainy River
Jan. 31, 2017
Wassa and Prestea
Mar. 31, 2017
Ilovica
Mar. 31, 2017
Voisey's Bay
Voisey's Bay Holding Corporation
Mar. 31, 2017
Voisey's Bay
Altius
Commitments and Contingencies
 
 
 
 
 
 
Scheduled payment amount
$ 75.00 
$ 0 
$ 0 
$ 163.75 
 
 
Final scheduled payment
 
 
$ 10.0 
 
 
 
Percentage of ownership interest held in Labrador Nickel Royalty Limited Partnership ("LNRLP")
 
 
 
 
90.00% 
10.00%