STREAM AND ROYALTY INTERESTS, NET

6 Months Ended

Dec. 31, 2021

STREAM AND ROYALTY INTERESTS, NET

STREAM AND ROYALTY INTERESTS, NET

4. STREAM AND ROYALTY INTERESTS, NET

The following summarizes our stream and royalty interests as of December 31, 2021, June 30, 2021 and 2020:

As of December 31, 2021 (Amounts in thousands):	Cost		Accumulated Depletion		Net
Production stage stream interests:
Mount Milligan	$	790,635	$	(336,921)	$	453,714
Pueblo Viejo		610,405		(260,321)		350,084
Andacollo		388,182		(139,035)		249,147
Khoemacau		239,411		(3,402)		236,009
Rainy River		175,727		(50,115)		125,612
Wassa		146,475		(84,915)		61,560
Other		69,101		(4,193)		64,908
Total production stage stream interests		2,419,936		(878,902)		1,541,034
Production stage royalty interests:
Voisey's Bay		205,724		(113,602)		92,122
Red Chris		116,187		—		116,187
Peñasquito		99,172		(53,022)		46,150
Cortez		80,681		(23,225)		57,456
Other		447,799		(387,364)		60,435
Total production stage royalty interests		949,563		(577,213)		372,350
Total production stage stream and royalty interests		3,369,499		(1,456,115)		1,913,384
Development stage stream interests:
Other		12,037		—		12,037
Development stage royalty interests:
Côté		45,421		—		45,421
Other		54,755		—		54,755
Total development stage stream and royalty interests		112,213		—		112,213
Exploration stage stream interests:
NX Gold		30,974		—		30,974
Exploration stage royalty interests:
Pascua-Lama		177,690		—		177,690
Red Chris		48,895		—		48,895
Côté		29,610				29,610
Other		130,986		—		130,986
Total exploration stage stream and royalty interests		418,155		—		418,155
Total stream and royalty interests, net	$	3,899,867	$	(1,456,115)	$	2,443,752

As of June 30, 2021 (Amounts in thousands):	Cost		Accumulated Depletion		Net
Production stage stream interests:
Mount Milligan	$	790,635	$	(300,378)	$	490,257
Pueblo Viejo		610,404		(243,706)		366,698
Andacollo		388,182		(131,578)		256,604
Rainy River		175,727		(41,772)		133,955
Wassa		146,475		(78,865)		67,610
Total production stage stream interests		2,111,423		(796,299)		1,315,124
Production stage royalty interests:
Voisey's Bay		205,724		(109,850)		95,874
Peñasquito		99,172		(50,176)		48,996
Cortez		80,681		(19,128)		61,553
Other		442,871		(381,191)		61,680
Total production stage royalty interests		828,448		(560,345)		268,103
Total production stage stream and royalty interests		2,939,871		(1,356,644)		1,583,227
Development stage stream interests:
Khoemacau		223,502		—		223,502
Other		12,037		—		12,037
Development stage royalty interests:
Côté		45,423		—		45,423
Other		54,755		—		54,755
Total development stage stream and royalty interests		335,717		—		335,717
Exploration stage royalty interests:
Pascua-Lama		177,690		—		177,690
Côté		29,610		—		29,610
Other		135,914		—		135,914
Total exploration stage royalty interests		343,214		—		343,214
Total stream and royalty interests, net	$	3,618,802	$	(1,356,644)	$	2,262,158

As of June 30, 2020 (Amounts in thousands):	Cost		Accumulated Depletion		Impairments		Net
Production stage stream interests:
Mount Milligan	$	790,635	$	(236,352)	$	—	$	554,283
Pueblo Viejo		610,404		(203,935)		—		406,469
Andacollo		388,182		(110,521)		—		277,661
Rainy River		175,727		(27,278)		—		148,449
Wassa		146,475		(67,619)		—		78,856
Total production stage stream interests		2,111,423		(645,705)		—		1,465,718
Production stage royalty interests:
Voisey's Bay		205,724		(101,381)		—		104,343
Peñasquito		99,172		(44,614)		—		54,558
Cortez		80,681		(15,065)		—		65,616
Other		521,837		(426,931)		(1,341)		93,565
Total production stage royalty interests		907,414		(587,991)		(1,341)		318,082
Total production stage stream and royalty interests		3,018,837		(1,233,696)		(1,341)		1,783,800
Development stage stream interests:
Khoemacau		136,608		—		—		136,608
Other		12,037		—		—		12,037
Development stage royalty interests:
Other		70,952		—		—		70,952
Total development stage stream and royalty interests		219,597		—		—		219,597
Exploration stage royalty interests:
Pascua-Lama		177,690		—		—		177,690
Other		137,826		—		—		137,826
Total exploration stage royalty interests		315,516		—		—		315,516
Total stream and royalty interests, net	$	3,553,950	$	(1,233,696)	$	(1,341)	$	2,318,913

Separation of the Wassa and Prestea and Bogoso Stream Agreement

On October 1, 2020, we announced the separation of the Wassa gold stream and the Prestea and Bogoso gold streams into two separate stream agreements effective September 30, 2020. This separation was completed to facilitate the sale by Golden Star Resources Ltd. (“Golden Star”) of the Prestea and Bogoso mines to Future Global Resources (“FGR”).

The Wassa stream agreement, which remains with Chifeng, continues to provide us the right to purchase 10.5% of the gold payable from the Wassa mine until the delivery of 240,000 ounces, after which the stream percentage will decrease to 5.5%. The cash purchase price for gold remains at 20% of the spot price per ounce delivered until the delivery of 240,000 ounces, and 30% of the spot price per ounce delivered thereafter. As of December 31, 2021, approximately 104,000 ounces remain to be delivered from the Wassa mine until the 240,000 ounce delivery threshold is reached.

The Prestea and Bogoso stream agreement with FGR provides us the right to purchase 5.5% of the gold payable from the Prestea and Bogoso mines in return for a cash purchase price of 30% of the spot price per ounce delivered.

The material terms of both the Wassa stream agreement and the Prestea and Bogoso stream agreement, including security and the rights and obligations of both Royal Gold and Chifeng, remain substantially consistent with those terms in the original agreement. The Wassa stream is recorded as a production stage stream interest within Stream and royalty interests,

net on our consolidated balance sheets and has a carrying value of $61.6 million as of December 31, 2021. The Prestea and Bogoso stream has a carrying value of $0 as of December 31, 2021.

COVID-19 Pandemic

At times since early 2020, several of our operating counterparties instituted temporary operational curtailments due to the ongoing COVID-19 pandemic. In addition, the pandemic and resulting economic and societal impacts have made it difficult for operators to forecast expected production amounts and, at times, operators have had to withdraw or revise previously disclosed guidance. COVID-19 impacts were particularly significant at Khoemacau in December 2021 when COVID-19 protocols caused absences to peak at approximately 25% of the planned operator workforce, including approximately 40% of the highly-skilled operators, which affected 40% of mining shifts and reduced planned production considerably. For the most part, our results of operations and financial condition were not materially impacted by these measures. However, the effects of the pandemic will ultimately depend on many factors that are outside of our control, including the severity and duration of the pandemic, including the emergence of variant strains of the virus, government and operator actions in response to the pandemic, and the development, availability, and public acceptance of effective treatments and vaccines. As a result, we are currently unable to predict the nature or extent of any future impact on our results of operations and financial condition. We continue to monitor the impact of developments associated with the pandemic on stream and royalty interests as part of our regular asset impairment analysis.

Impairment

In accordance with our impairment accounting policy discussed in Note 2, impairments in the carrying value of each stream and royalty interest is measured and recorded to the extent that the carrying value in each stream and royalty interest exceeds its estimated fair value, which is generally calculated using estimated future discounted cash-flows.

During the quarter ended June 30, 2019, we were made aware of insolvency proceedings at one of our non-principal producing properties (El Toqui). During the quarter ended June 30, 2020, we obtained new information regarding the insolvency proceedings and determined our carrying value for El Toqui was not recoverable and an impairment of $1.3 million was necessary. At December 31, 2021 our carrying value for El Toqui was zero.

We did not take any additional impairment charges on any of our stream and royalty interests for the six months ended December 31, 2021, or for the years ended June 30, 2021 and 2020.