ACQUISITIONS AND DISPOSITIONS	6 Months Ended
Dec. 31, 2021
ACQUISITIONS AND DISPOSITIONS.
ACQUISITIONS AND DISPOSITIONS	3. ACQUISITIONS AND DISPOSITIONS Red Chris Royalty Acquisition On August 11, 2021, we acquired a 1.0% net smelter return royalty covering approximately 5,100 hectares, which includes the currently known mineralization and prospective exploration areas of the Red Chris Mine in British Columbia, Canada. We paid $165 million in cash consideration for the royalty to Glencore Canada Corporation, a wholly owned subsidiary of Glencore International AG. The Red Chris Mine is an operating open pit mine producing gold, copper and silver, and is located on the northern edge of the Skeena Mountains. The mine is owned and operated by a joint venture (the “Red Chris JV”), which is owned 70% by Newcrest Mining Ltd. (“Newcrest”) and 30% by Imperial Metals Corporation, in which Newcrest is the operator. The Red Chris royalty acquisition has been accounted for as an asset acquisition. The $165 million cash consideration, plus direct acquisition costs, have been recorded and allocated between production and exploration stage royalty interests (Note 4) within Stream and royalty interests, net on our consolidated balance sheets. On the date of acquisition, $116.2 million and $48.9 million was allocated to production stage and exploration stage royalty interests, respectively. The acquisition cost of the production stage Red Chris royalty will be depleted using the units of production method, which is estimated using aggregate proven and probable reserves, as provided by Newcrest. NX Gold Mine Gold Stream Acquisition On June 30, 2021, we announced that we entered into a precious metals purchase agreement for gold produced from the operating underground NX Gold Mine in Brazil (“NX Gold Stream”) with Ero Gold Corporation, a wholly owned subsidiary of Ero Copper Corporation, and certain of its affiliates (together, “Ero”). On August 6, 2021, we made an advance payment of $100 million upon closing the transaction. In exchange for the consideration provided, we will receive 25% of the gold produced from the NX Gold Mine until the delivery of 93,000 ounces, and 10% thereafter. We will pay 20% of the spot gold price for each ounce delivered until the delivery of 49,000 ounces, and 40% of the spot gold price thereafter. Per the purchase agreement, we may make up to an additional $10 million of advance payments from the beginning of calendar 2022 through the end of calendar 2024 based on Ero meeting success-based targets related to regional exploration and mineral resource additions. The NX Gold Stream has been accounted for as an asset acquisition. The $100 million advance payment, plus direct acquisition costs, have been recorded and allocated between production and exploration stage stream interests (Note 4) within Stream and royalty interests, net on our consolidated balance sheets. On the date of acquisition, $54.9 million and $45.1 million was allocated to production stage and exploration stage royalty interests, respectively. The acquisition cost of the production stage NX Gold Stream will be depleted using the units of production method, which is estimated using aggregate proven and probable reserves, as provided by Ero. Côté Royalty Acquisition On June 7, 2021, we acquired a 1.0% net smelter return royalty (“NSR”) on certain claims covering the Côté Gold Project in Northern Ontario, Canada. The Côté Gold Project is owned 92.5% by the Côté Gold Joint Venture (a joint venture owned 70% by IAMGOLD Corporation and 30% by Sumitomo Metal Mining Co., Ltd.), and 7.5% by a third party. The royalty covers the Chester 3 claims, which in turn cover approximately 70% of the current reserves of the Côté Gold Project, as well as other areas outside the current project area. We acquired the royalty from a third-party royalty holder for $75 million in cash consideration. The Côté royalty acquisition has been accounted for as an asset acquisition. The $75 million paid, plus direct acquisition costs, have been recorded and allocated between development and exploration stage royalty interest (Note 4) within Stream and royalty interest, net on our consolidated balance sheets. Sale of Peak Gold JV Interest On September 30, 2020, we entered into an agreement with an affiliate of Kinross Gold Corporation to sell our 40% membership interest in the Manh Choh Project (formerly known as the Peak Gold Project) for cash consideration of $49.2 million and to sell our 809,744 common shares in Contango Ore, Inc. (“Contango”), our partner in Peak Gold, LLC, the owner of the Manh Choh Project, for cash consideration of $12.1 million. In addition to the total cash consideration of $61.3 million, we received the following royalty interests: ● An incremental 28% NSR royalty on silver produced from an area of interest which includes the current Manh Choh Project resource area. Peak Gold, LLC retains the right to acquire 50% of this royalty for consideration of $4.0 million; and ● An incremental 1% NSR royalty on certain State of Alaska mining claims acquired by a wholly owned subsidiary of Contango in the transaction, increasing our royalty on this area from 2% to 3%. The royalties are recorded as exploration stage royalty interests in Stream and royalty interests, net in our consolidated balance sheet as of December 31, 2021 and have a combined value of approximately $4.4 million. We recorded a gain of $33.9 million on the sale of our 40% membership interest in the Manh Choh Project during the three months ended September 30, 2020. The mark-to-market increase of $3.6 million on the sale of our 809,744 common shares in Contango is included in Fair value changes in equity securities on our consolidated statements of operations and comprehensive income and was recognized during the three months ended September 30, 2020. Alturas Royalty Acquisition On January 29, 2020, we entered into an agreement with various private individuals for the acquisition of a NSR royalty of up to 1.06% (gold) and up to 1.59% (copper) on mining concessions included as part of the Alturas project, which is located within the Coquimbo Region of Chile and held by Compañia Minera Salitrales Limitada, a subsidiary of Barrick Gold Corporation (“Barrick”). Total consideration for the royalty is up to $41 million, of which $11 million was paid on January 29, 2020. The $11 million paid as part of the funding schedule, plus direct acquisition costs, have been recorded as an exploration stage royalty interest (Note 4) within Stream and royalty interests, net on our consolidated balance sheets. A future payment of up to $20 million is conditioned based on a project construction decision by Barrick and the size of the mineral reserve on the date of the construction decision. A further future payment of up to $10 million will be made upon first production from the mining concessions. Castelo de Sonhos Royalty Acquisition In August 2019, we entered into an agreement with TriStar Gold Inc. and its subsidiaries (together “TriStar”) to acquire (i) up to a 1.5% NSR royalty on the Castelo de Sonhos gold project (“CDS”), located in Brazil, and (ii) warrants to purchase up to 19,640,000 common shares of TriStar. Total consideration is $7.5 million and is payable over three payments, of which $4.5 million was paid in August 2019, $1.5 million was paid in November 2019, and the final payment of $1.5 million was paid on March 30, 2020. The CDS royalty acquisition has been accounted for as an asset acquisition. The $7.5 million paid as part of the aggregate funding schedule, plus direct acquisition costs, have been recorded as an exploration stage royalty interest (Note 4) within Stream and royalty interests, net on our consolidated balance sheets. The warrants have been recorded within Other assets on our consolidated balance sheets and have a carrying value of approximately $1.7 million as of December 31, 2021. The warrants have been classified as a financial asset instrument and are recorded at fair value at each reporting date using the Black-Scholes model (see Note 13). As of December 31, 2021, we hold 19,640,000 warrants at an exercise price of C$0.25 per common share with a remaining term of approximately three years. Acquisition of Silver Stream on Khoemacau Copper Project On February 25, 2019, we entered into a silver stream with Khoemacau Copper Mining (Pty.) Limited (“KCM”) for the purchase of silver produced from the Khoemacau Project (“Khoemacau”). Between November 2019 and January 2021, we completed a total of $212 million in advanced payments required to earn the base silver stream (“Silver Stream”) of 80% of payable silver produced from Khoemacau, until the delivery of 32.0 million ounces, and 40% thereafter. On April 7, 2021, and October 8, 2021, we made advance payments of $10.6 million and $15.9 million, respectively, toward the option silver stream (“Option Stream”) which increased our right to receive payable silver produced from Khoemacau to 90% until the delivery of approximately 36.0 million silver ounces, and 45% thereafter. We will pay a cash price equal to 20% of the spot silver price for each ounce delivered; however, if KCM achieves mill expansion throughput levels above 14,300 tons per day (30% above current mill design capacity), we will pay a higher ongoing cash price for silver ounces delivered in excess of specific annual thresholds. We have accounted for the base Silver Stream and initial funding towards the Option Stream as an asset acquisition, consistent with the treatment of our other acquired streams. The $212 million in advance payments for the base Silver Stream made during our fiscal year 2021 and 2020 and the $26.5 million toward the Option Stream, plus direct transaction costs, are recorded as a production stage stream interest within Stream and royalty interests, net on our consolidated balance sheets as of December 31, 2021. Any further advance payments made under the Option Stream (if exercised by KCM) will be recorded as a production stage interest within Stream and royalty interests, net on our consolidated balance sheets during the period the advance payment occurs. We have $26.5 million of committed funding remaining as of December 31, 2021. Separate from the Silver Stream and Option Stream, and subject to various conditions, we made up to $25 million available to KCM under a subordinated debt facility. Any amounts drawn by KCM under the debt facility will carry interest at LIBOR + 11% and have a term of seven years. We have the right to force repayment of the debt facility upon certain events. As of December 31, 2021, $25.0 million of the subordinated debt facility, and $1.9 million of accrued interest remains outstanding and is recorded under Other Assets on our consolidated balance sheets.

ACQUISITIONS AND DISPOSITIONS

6 Months Ended

Dec. 31, 2021

3. ACQUISITIONS AND DISPOSITIONS

Red Chris Royalty Acquisition

On August 11, 2021, we acquired a 1.0% net smelter return royalty covering approximately 5,100 hectares, which includes the currently known mineralization and prospective exploration areas of the Red Chris Mine in British Columbia, Canada. We paid $165 million in cash consideration for the royalty to Glencore Canada Corporation, a wholly owned subsidiary of Glencore International AG.

The Red Chris Mine is an operating open pit mine producing gold, copper and silver, and is located on the northern edge of the Skeena Mountains. The mine is owned and operated by a joint venture (the “Red Chris JV”), which is owned 70% by Newcrest Mining Ltd. (“Newcrest”) and 30% by Imperial Metals Corporation, in which Newcrest is the operator.

The Red Chris royalty acquisition has been accounted for as an asset acquisition. The $165 million cash consideration, plus direct acquisition costs, have been recorded and allocated between production and exploration stage royalty interests (Note 4) within Stream and royalty interests, net on our consolidated balance sheets. On the date of acquisition, $116.2 million and $48.9 million was allocated to production stage and exploration stage royalty interests, respectively. The acquisition cost of the production stage Red Chris royalty will be depleted using the units of production method, which is estimated using aggregate proven and probable reserves, as provided by Newcrest.

NX Gold Mine Gold Stream Acquisition

On June 30, 2021, we announced that we entered into a precious metals purchase agreement for gold produced from the operating underground NX Gold Mine in Brazil (“NX Gold Stream”) with Ero Gold Corporation, a wholly owned subsidiary of Ero Copper Corporation, and certain of its affiliates (together, “Ero”).

On August 6, 2021, we made an advance payment of $100 million upon closing the transaction. In exchange for the consideration provided, we will receive 25% of the gold produced from the NX Gold Mine until the delivery of 93,000 ounces, and 10% thereafter. We will pay 20% of the spot gold price for each ounce delivered until the delivery of 49,000 ounces, and 40% of the spot gold price thereafter. Per the purchase agreement, we may make up to an additional $10 million of advance payments from the beginning of calendar 2022 through the end of calendar 2024 based on Ero meeting success-based targets related to regional exploration and mineral resource additions.

The NX Gold Stream has been accounted for as an asset acquisition. The $100 million advance payment, plus direct acquisition costs, have been recorded and allocated between production and exploration stage stream interests (Note 4) within Stream and royalty interests, net on our consolidated balance sheets. On the date of acquisition, $54.9 million and $45.1 million was allocated to production stage and exploration stage royalty interests, respectively. The acquisition cost of the production stage NX Gold Stream will be depleted using the units of production method, which is estimated using aggregate proven and probable reserves, as provided by Ero.

Côté Royalty Acquisition

On June 7, 2021, we acquired a 1.0% net smelter return royalty (“NSR”) on certain claims covering the Côté Gold Project in Northern Ontario, Canada. The Côté Gold Project is owned 92.5% by the Côté Gold Joint Venture (a joint venture owned 70% by IAMGOLD Corporation and 30% by Sumitomo Metal Mining Co., Ltd.), and 7.5% by a third party. The royalty covers the Chester 3 claims, which in turn cover approximately 70% of the current reserves of the Côté Gold Project, as well as other areas outside the current project area. We acquired the royalty from a third-party royalty holder for $75 million in cash consideration.

The Côté royalty acquisition has been accounted for as an asset acquisition. The $75 million paid, plus direct acquisition costs, have been recorded and allocated between development and exploration stage royalty interest (Note 4) within Stream and royalty interest, net on our consolidated balance sheets.

Sale of Peak Gold JV Interest

On September 30, 2020, we entered into an agreement with an affiliate of Kinross Gold Corporation to sell our 40% membership interest in the Manh Choh Project (formerly known as the Peak Gold Project) for cash consideration of $49.2 million and to sell our 809,744 common shares in Contango Ore, Inc. (“Contango”), our partner in Peak Gold, LLC, the owner of the Manh Choh Project, for cash consideration of $12.1 million.

In addition to the total cash consideration of $61.3 million, we received the following royalty interests:

● An incremental 28% NSR royalty on silver produced from an area of interest which includes the current Manh Choh Project resource area. Peak Gold, LLC retains the right to acquire 50% of this royalty for consideration of $4.0 million; and

● An incremental 1% NSR royalty on certain State of Alaska mining claims acquired by a wholly owned subsidiary of Contango in the transaction, increasing our royalty on this area from 2% to 3%.

The royalties are recorded as exploration stage royalty interests in Stream and royalty interests, net in our consolidated balance sheet as of December 31, 2021 and have a combined value of approximately $4.4 million. We recorded a gain of $33.9 million on the sale of our 40% membership interest in the Manh Choh Project during the three months ended September 30, 2020. The mark-to-market increase of $3.6 million on the sale of our 809,744 common shares in Contango is included in Fair value changes in equity securities on our consolidated statements of operations and comprehensive income and was recognized during the three months ended September 30, 2020.

Alturas Royalty Acquisition

On January 29, 2020, we entered into an agreement with various private individuals for the acquisition of a NSR royalty of up to 1.06% (gold) and up to 1.59% (copper) on mining concessions included as part of the Alturas project, which is located within the Coquimbo Region of Chile and held by Compañia Minera Salitrales Limitada, a subsidiary of Barrick Gold Corporation (“Barrick”). Total consideration for the royalty is up to $41 million, of which $11 million was paid on January 29, 2020. The $11 million paid as part of the funding schedule, plus direct acquisition costs, have been recorded as an exploration stage royalty interest (Note 4) within Stream and royalty interests, net on our consolidated balance sheets. A future payment of up to $20 million is conditioned based on a project construction decision by Barrick and the size of the mineral reserve on the date of the construction decision. A further future payment of up to $10 million will be made upon first production from the mining concessions.

Castelo de Sonhos Royalty Acquisition

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

The CDS royalty acquisition has been accounted for as an asset acquisition. The $7.5 million paid as part of the aggregate funding schedule, plus direct acquisition costs, have been recorded as an exploration stage royalty interest (Note 4) within Stream and royalty interests, net on our consolidated balance sheets.

The warrants have been recorded within Other assets on our consolidated balance sheets and have a carrying value of approximately $1.7 million as of December 31, 2021. The warrants have been classified as a financial asset instrument and are recorded at fair value at each reporting date using the Black-Scholes model (see Note 13). As of December 31, 2021, we hold 19,640,000 warrants at an exercise price of C$0.25 per common share with a remaining term of approximately three years.

Acquisition of Silver Stream on Khoemacau Copper Project

On February 25, 2019, we entered into a silver stream with Khoemacau Copper Mining (Pty.) Limited (“KCM”) for the purchase of silver produced from the Khoemacau Project (“Khoemacau”). Between November 2019 and January 2021, we completed a total of $212 million in advanced payments required to earn the base silver stream (“Silver Stream”) of 80% of payable silver produced from Khoemacau, until the delivery of 32.0 million ounces, and 40% thereafter. On April 7, 2021, and October 8, 2021, we made advance payments of $10.6 million and $15.9 million, respectively, toward the option silver stream (“Option Stream”) which increased our right to receive payable silver produced from Khoemacau to 90% until the delivery of approximately 36.0 million silver ounces, and 45% thereafter. We will pay a cash price equal to 20% of the spot silver price for each ounce delivered; however, if KCM achieves mill expansion throughput levels above 14,300 tons per day (30% above current mill design capacity), we will pay a higher ongoing cash price for silver ounces delivered in excess of specific annual thresholds.

We have accounted for the base Silver Stream and initial funding towards the Option Stream as an asset acquisition, consistent with the treatment of our other acquired streams. The $212 million in advance payments for the base Silver Stream made during our fiscal year 2021 and 2020 and the $26.5 million toward the Option Stream, plus direct transaction costs, are recorded as a production stage stream interest within Stream and royalty interests, net on our consolidated balance sheets as of December 31, 2021. Any further advance payments made under the Option Stream (if exercised by KCM) will be recorded as a production stage interest within Stream and royalty interests, net on our consolidated balance sheets during the period the advance payment occurs. We have $26.5 million of committed funding remaining as of December 31, 2021.

Separate from the Silver Stream and Option Stream, and subject to various conditions, we made up to $25 million available to KCM under a subordinated debt facility. Any amounts drawn by KCM under the debt facility will carry interest at LIBOR + 11% and have a term of seven years. We have the right to force repayment of the debt facility upon certain events. As of December 31, 2021, $25.0 million of the subordinated debt facility, and $1.9 million of accrued interest remains outstanding and is recorded under Other Assets on our consolidated balance sheets.