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MOUNT MILLIGAN DEFERRED LIABILITY
 9 Months Ended
Sep. 30, 2024
Revenue from Contract with Customer [Abstract]  
MOUNT MILLIGAN DEFERRED LIABILITY MOUNT MILLIGAN DEFERRED LIABILITY
On February 13, 2024, RGLD Gold AG, a subsidiary of the Company, entered into a Processing Cost Support Agreement (the "Mount Milligan Cost Support Agreement") with Centerra Gold Inc. ("Centerra") with respect to the Mount Milligan Mine ("Mount Milligan") for cash consideration of $24.5 million, 50,000 ounces ("Deferred Gold Consideration") of gold to be delivered in the future and a free cash flow interest. The cost support allowed for the extension of the mine from 2032 to 2035 and the potential to extend the mine life beyond 2035.
The value of the cash consideration and free cash flow interest received from Centerra is recorded as a deferred liability in our consolidated balance sheets as of September 30, 2024. This amount will be amortized as we provide future cost support to Centerra under the Mount Milligan Cost Support Agreement on a units of production basis over the Mount Milligan mine life beginning with the first cost support payment made after the First Threshold (defined below) is met.
The key features of the Mount Milligan Cost Support Agreement are discussed below.
Deferred Gold Consideration
The Deferred Gold Consideration will be delivered in equal installments of 2,500 ounces for a period of 20 quarters commencing on the earlier of June 30, 2030, or the delivery of 375,000 ounces of gold or 30,000 tonnes of copper from metal deliveries referenced by the Mount Milligan Cost Support Agreement with a bill of lading date on or after January 1, 2024. As part of the Deferred Gold Consideration, we are entitled to receive three tranches of 11,111 ounces each (the "Greenstone Deliveries"), with the last delivery expected before year end 2027. Each of the Greenstone Deliveries received shall reduce the number of ounces in any remaining Deferred Gold Consideration delivery on a pro-rata basis. The Deferred Gold Consideration deliveries require no cash payment from the Company, and will be made irrespective of the operating status of Mount Milligan as long as we comply with the terms of the Mount Milligan Cost Support Agreement and existing stream agreement. Each of the Greenstone Deliveries will be delivered to Royal Gold within 30 days of such delivery to Centerra.
When the Deferred Gold Consideration is received and subsequently sold, we anticipate the value of the gold ounces sold will be recorded as a deferred liability and amortized on a units of production basis over the mine life of Mount Milligan as we provide future cost support.
Cost Support
Metal deliveries referenced in the Mount Milligan Cost Support Agreement are those with a bill of lading date on or after January 1, 2024 (the "Reference Date"). Delivery thresholds used to define the periods of cost support are the earlier deliveries of:
a.375,000 ounces of gold or 30,000 tonnes of copper from the Reference Date (the “First Threshold”).
b.665,000 ounces of gold or 60,000 tonnes of copper from the Reference Date (the “Second Threshold”).
Near-Term Cost Support Through Approximately 2029
At Centerra’s request, in the event that both the gold price is at or below $1,600 per ounce and the copper price is at or below $3.50 per pound, for each delivery under the existing Mount Milligan stream agreement, we will pay the lower of either $415 per ounce of gold, or 66% of the spot gold price less $435 per ounce, and 35% of the spot copper price for each pound of copper delivered (the “Pre-Threshold Support”). This near-term cost support will be made available from the Reference Date through to the First Threshold, which is expected to be through approximately 2029.
Any Pre-Threshold Support we provide will be recoverable from any cost support calculated after the First Threshold at metal prices above $1,600 per ounce of gold and $3.50 per pound of copper. For gold, any cost support payment will be reduced by the difference between the gold price and $1,600 per ounce. For copper, any cost support payment will be reduced by the difference between the copper price and $3.50 per pound.
Cost Support from Approximately 2030 Through Approximately 2035
We will provide Centerra cost support payments from the First Threshold until the Second Threshold as follows:
a.With respect to gold, the lower of either $415 per ounce, or 50% of the spot gold price less $435 per ounce, for each ounce of gold delivered under the existing Mount Milligan stream agreement.
b.With respect to copper, 35% of the spot copper price for each pound of copper delivered under the existing Mount Milligan stream agreement.
Cost Support After Approximately 2036
We will provide Centerra cost support payments after the Second Threshold as follows:
a.With respect to gold, the lower of either $615 per ounce, or 66% of the spot gold price less $435 per ounce, for each ounce of gold delivered under the existing Mount Milligan stream agreement.
b.With respect to copper, 51% of the spot copper price, for each pound of copper delivered.
Suspension of Cost Support
Our obligation to make long-term cost support payments will be suspended if (and for so long as) Centerra discloses reserve tonnage which, when combined with mining depletion from the Reference Date to the date of such disclosure, is less than the current reserves expected to be processed through to 2035. Suspension of cost support payments will not impact the Deferred Gold Consideration and free cash flow interest, and the cash consideration is not refundable as long as we comply with the terms of the Mount Milligan Cost Support Agreement and the existing stream agreement.
Nothing in the Mount Milligan Cost Support Agreement modifies the existing stream agreement, including the payment of $435 for each gold ounce delivered and 15% of the spot price for each pound of copper delivered.
REVENUE
Revenue Recognition
A performance obligation is a promise in a contract to transfer control of a distinct good or service (or integrated package of goods and/or services) to a customer. A contract’s transaction price is allocated to each distinct performance obligation
and recognized as revenue when, or as, a performance obligation is satisfied. In accordance with this guidance, revenue attributable to our stream interests and royalty interests is generally recognized at the point in time that control of the related metal production transfers to our customers. The amount of revenue we recognize further reflects the consideration to which we are entitled under the respective stream or royalty agreement. A more detailed summary of our revenue recognition policies for our stream and royalty interests is discussed below.
Stream Interests
A metal stream is a purchase agreement that provides, in exchange for an upfront deposit payment, the right and obligation to purchase all or a portion of one or more of the metals produced from a mine, at a price determined for the life of the transaction by the purchase agreement. Gold, silver and copper received under our metal streaming agreements are taken into inventory, and then sold primarily at cash average or spot market prices. The sales price for the averaging contracts is determined by the average daily gold, silver or copper spot prices during the term of the contract, typically a consecutive period between ten days and three months (depending on the frequency of deliveries under the respective streaming agreement and our sales policy in effect at the time), commencing shortly after receipt and purchase of the metal. We settle both averaging and spot sales contracts via physical delivery of the metal to the purchaser (our customer) on the settlement date specified in the contract. Under our sales contracts, there is a single performance obligation to sell a contractually specified volume of metal to the purchaser, and we satisfy this obligation at the point in time of physical delivery. Accordingly, revenue from our metal sales is recognized on the date of settlement, which is the date that control, custody and title to the metal transfer to the purchaser.
Royalty Interests
Royalties are non-operating interests in mining projects that provide the right to a percentage of revenue or metals produced from the project after deducting specified costs, if any. We are entitled to payment for our royalty interest in a mining project based on a contractually specified commodity price (for example, a monthly or quarterly average spot price) for the period in which metal production occurs. As a royalty holder, we act as a passive entity in the production and operations of the mining project, and the third-party operator of the mining project is responsible for all mining activities, including subsequent marketing and delivery of all metal production to their ultimate customer. In all of our material royalty interest arrangements, we have concluded that we transfer control of our interest in the metal production to the operator at the point at which production occurs, and thus, the operator is our customer. We have further determined that the transfer of each unit of metal production comprising our royalty interest to the operator represents a separate performance obligation under the contract, and each performance obligation is satisfied at the point in time of metal production by the operator. Accordingly, we recognize revenue attributable to our royalty interests in the period in which metal production occurs at the specified commodity price per the agreement, net of any contractually allowable costs.
Royalty Revenue Estimates
For a small number of our royalty interests, we may not receive, or be entitled to receive, payment information, including production information from the operator, for the period in which metal production occurred prior to issuance of our financial statements for that period. As a result, we may estimate revenue for these royalties based on available information, including public information, from the operator. If adequate information is not available from the operator or from other public sources before we issue our financial statements, we will recognize royalty revenue during the period in which the necessary payment information is received. Differences between estimates and actual amounts could differ significantly and are recorded in the period that the actual amounts are known. Please also refer to our “Use of Estimates” accounting policy discussed in our 2023 10-K. For the three months ended September 30, 2024, royalty revenue that was estimated or was attributable to metal production for a period prior to September 30, 2024, was not material.
Disaggregation of Revenue
We have identified two material revenue sources in our business: stream interests and royalty interests. These identified revenue sources are consistent with our reportable segments as discussed in Note 10.
Revenue by metal type attributable to each of our revenue sources is disaggregated as follows (amounts in thousands):
Three Months Ended Nine Months Ended
September 30,
2024		September 30,
2023		September 30,
2024		September 30,
2023
Stream revenue:
Gold$100,126 $72,540 $270,000 $231,396 
Silver20,026 14,419 51,653 51,958 
Copper12,900 12,019 36,878 36,628 
Total stream revenue$133,052 $98,978 $358,531 $319,982 
Royalty revenue:
Gold$46,837 $35,993 $117,504 $109,030 
Silver3,674 441 12,981 6,108 
Copper4,808 1,524 12,077 8,154 
Other5,466 1,681 15,742 9,777 
Total royalty revenue$60,785 $39,639 $158,304 $133,069 
Total revenue$193,837 $138,617 $516,835 $453,051 
Revenue attributable to our principal stream and royalty interests is disaggregated as follows (amounts in thousands):
Three Months Ended Nine Months Ended
Metal(s)September 30,
2024		September 30,
2023		September 30,
2024		September 30,
2023
Stream revenue:
Mount MilliganGold & Copper$56,570 $33,876 $143,704 $121,739 
Pueblo ViejoGold & Silver26,585 16,688 64,147 62,586 
AndacolloGold9,652 14,644 31,949 35,401 
Khoemacau
Silver7,996 9,047 24,148 27,082 
OtherGold & Silver32,249 24,723 94,583 73,174 
Total stream revenue$133,052 $98,978 $358,531 $319,982 
Royalty revenue:
Cortez Legacy ZoneGold$13,047 $19,668 $41,610 $57,062 
Cortez CC ZoneGold2,739 2,948 7,713 9,674 
PeñasquitoGold, Silver, Lead & Zinc9,356 — 29,863 13,538 
OtherVarious35,643 17,023 79,118 52,795 
Total royalty revenue$60,785 $39,639 $158,304 $133,069 
Total revenue$193,837 $138,617 $516,835 $453,051 

Peñasquito Revenue

During the three months ended September 30, 2023, no royalty revenue from Peñasquito was recognized due to the suspension of operations resulting from a strike action on June 7, 2023, by the National Union of Mine and Metal Workers of the Mexican Republic (the "Union"). Newmont Corporation and the Union reached a definitive agreement on October 13, 2023 and Peñasquito's operations reached full operating capacity by the end of the fourth quarter of 2023.

Please refer to Note 10 for the geographical distribution of our revenue by reportable segment.