4. STREAM AND ROYALTY INTERESTS, NET

The following summarizes the Company’s stream and royalty interests as of June 30, 2018 and 2017:


As of June 30, 2018 (Amounts in thousands):	Cost		Accumulated Depletion		Impairments		Net
Production stage stream interests:
Mount Milligan	$	790,635	$	(152,833)	$	—	$	637,802
Pueblo Viejo		610,404		(114,944)		—		495,460
Andacollo		388,182		(59,851)		—		328,331
Wassa and Prestea		146,475		(41,601)		—		104,874
Rainy River		175,727		(4,028)		—		171,699
Total production stage stream interests		2,111,423		(373,257)		—		1,738,166
Production stage royalty interests:
Voisey's Bay		205,724		(86,933)		—		118,791
Peñasquito		99,172		(38,426)		—		60,746
Holt		34,612		(21,173)		—		13,439
Cortez		20,878		(11,241)		—		9,637
Other		483,795		(364,795)		—		119,000
Total production stage royalty interests		844,181		(522,568)		—		321,613
Total production stage stream and royalty interests		2,955,604		(895,825)		—		2,059,779

Development stage stream interests:
Other		12,038		—		—		12,038

Development stage royalty interests:
Cortez		59,803		—		—		59,803
Other		74,610		—		(284)		74,326
Total development stage royalty interests		134,413		—		(284)		134,129
Total development stage stream and royalty interests		146,451		—		(284)		146,167

Exploration stage royalty interests:
Pascua-Lama		416,770		—		(239,080)		177,690
Other		117,481		—		-		117,481
Total exploration stage royalty interests		534,251		—		(239,080)		295,171
Total stream and royalty interests, net	$	3,636,306	$	(895,825)	$	(239,364)	$	2,501,117


As of June 30, 2017 (Amounts in thousands):	Cost		Accumulated Depletion		Impairments		Net
Production stage stream interests:
Mount Milligan	$	790,635	$	(114,327)	$	—	$	676,308
Pueblo Viejo		610,404		(67,149)		—		543,255
Andacollo		388,182		(39,404)		—		348,778
Wassa and Prestea		146,475		(22,715)		—		123,760
Total production stage stream interests		1,935,696		(243,595)		—		1,692,101
Production stage royalty interests:
Voisey's Bay		205,724		(85,671)		—		120,053
Peñasquito		99,172		(34,713)		—		64,459
Holt		34,612		(19,669)		—		14,943
Cortez		20,873		(10,633)		—		10,240
Other		483,643		(337,958)		—		145,685
Total production stage royalty interests		844,024		(488,644)		—		355,380
Total production stage stream and royalty interests		2,779,720		(732,239)		—		2,047,481
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, net	$	3,624,495	$	(732,239)	$	—	$	2,892,256

Impairment of stream and royalty interests and royalty receivables

In accordance with our impairment accounting policy discussed in Note 1, impairments in the carrying value of each stream or royalty interest are measured and recorded to the extent that the carrying value in each stream or royalty interest exceeds its estimated fair value, which is generally calculated using estimated future discounted cash‑flows. As part of the Company’s regular asset impairment analysis, the Company determined the presence of impairment indicators and recorded impairment charges for the fiscal years ended June 30, 2018 and 2016 as summarized in the following table and discussed in detail below:


	Fiscal Year Ended June 30,
	2018		2017		2016
		(Amounts in thousands)
Stream:
Phoenix Gold	$	—	$	—	$	75,702
Royalty:
Pascua-Lama		239,080		—		—
Inata		—		—		11,982
Wolverine		—		—		5,307
Other		284		—		3,127
Total impairment of stream and royalty interests	$	239,364	$	—	$	96,118
Inata royalty receivable				—		2,855
Wolverine royalty receivable				—		(385)
Total impairment of stream and royalty interests and royalty receivables	$	239,364	$	—	$	98,588

Pascua-Lama

We own a 0.78% to 5.45% sliding‑scale NSR royalty on gold and silver on the Chilean portion of the Pascua‑Lama project, which straddles the border between Argentina and Chile, and is owned by Barrick. The Company owns an additional royalty equivalent to 1.09% of proceeds from copper produced from the Chilean portion of the project, net of allowable deductions, sold on or after January 1, 2017.

On January 18, 2018, Barrick reported that it is analyzing a revised sanction related to the Pascua-Lama project issued by Chile’s Superintendencia del Medio Ambiente (“SMA”) on January 17, 2018. The sanction is part of a re-evaluation process ordered by Chile’s Environmental Court in 2014 and relates to historical compliance matters at the Pascua-Lama project. According to Barrick, the SMA has not revoked Pascua-Lama’s environmental permit, but has ordered the closure of existing facilities on the Chilean side of the project, in addition to certain monitoring activities.

On February 6, 2018, in light of the SMA order to close surface facilities in Chile, and earlier plans to evaluate an underground mine, Barrick announced it reclassified Pascua-Lama’s proven and probable reserves, which are based on an open pit mine plan, as mineralized material. Barrick reported further details in its year-end results on February 14, 2018 and an update on the Pascua-Lama project at its February 22, 2018 Investor Day. A significant reduction in reserves or mineralized material are indicators of impairment.

On April 23, 2018, Barrick announced that work performed to-date on the prefeasibility study for a potential underground project has been suspended, and they will focus on adjusting the project closure plan for surface infrastructure on the Chilean side of the project. Barrick will continue to evaluate opportunities to de-risk the project while maintaining Pascua-Lama as an option for development in the future if economics improve and related risks can be mitigated.

As part of the impairment determination, the fair value for Pascua-Lama was estimated by calculating the net present value of the estimated future cash-flows, subject to our royalty interest, expected to be generated by the mining of the Pascua-Lama deposits. The Company applied a probability factor to its fair value calculation that Barrick will either proceed with an open-pit mine or an underground mine at Pascua. The estimates of future cash flows were derived from open-pit and underground mine models developed by the Company using various information reported by Barrick. The metal price assumptions used in the Company’s model were supported by consensus price estimates obtained by a number of industry analysts. The future cash flows were discounted using a discount rate which reflects specific market risk factors the Company associates with the Pascua-Lama royalty interest. Following the impairment charge during the three months ended March 31, 2018, the Pascua-Lama royalty interest has a remaining carrying value of $177.7 million as of June 30, 2018. As a result of Barrick’s reclassification of Pascua-Lama’s reserves to mineralized material, our Pascu-Lama royalty interest was reclassified to exploration stage from development stage during our fiscal year ended June 30, 2018.

Phoenix Gold

RGLD Gold previously owned the right to purchase 6.30% of any gold produced from the Phoenix Gold Project until 135,000 ounces were delivered, and 3.15% thereafter. The Phoenix Gold Project is located in Red Lake, Ontario, Canada, and owned by Rubicon Minerals Corporation (“Rubicon”). On January 11, 2016, Rubicon provided an updated geologic model and mineralized material statement for the Phoenix Gold Project, which included a significant reduction in mineralized material compared to previous statements provided by Rubicon. Rubicon also announced that they were evaluating strategic alternatives, including merger and divestiture opportunities either at the corporate or asset level, obtaining new financing or capital restructurings. A significant reduction in mineralized material, along with recent decreases in the long‑term metal price assumptions used by the industry, are indicators of impairment.

During the quarter ended March 31, 2016, the Company independently evaluated the updated geologic model and mineralized material statement in an effort to properly assess the recoverability of our carrying value. The Company’s technical evaluation was completed by internal and external personnel and included an economic analysis of the Phoenix Gold Project and a detailed review of the geological model and mineralized material statement. Based upon the results of the Company’s review of the updated geological model and mineralized material statement, and other factors, it was determined that our stream interest at the Phoenix Gold Project should be written down to zero as of March 31, 2016, resulting in an impairment charge of $77.7 million.

Inata

The Company owns a 2.5% gross smelter return royalty on all gold and silver produced from the Inata mine, located in Burkina Faso, West Africa. The Company’s carrying value for its royalty interest at Inata was approximately $12.0 million as of December 31, 2015. As part of the Company’s impairment assessment for the three months ended March 31, 2016, the Company was notified of an updated mine plan at Inata, which included a significant reduction in the life of the mine. Based upon our review of the updated mine plan, our royalty interest was written down to zero as of March 31, 2016.

The Company also had a royalty receivable of approximately $2.8 million associated with past due royalty payments on the Inata interest. As a result of the operator’s financial and operational difficulties and our review of the updated mine plan at Inata, the Company believes payment of the receivable is uncertain and provided for an allowance against the entire royalty receivable as of March 31, 2016. The Company continues to pursue collection of all past due payments.

Wolverine

The Company owns a 0.00% to 9.445% sliding‑scale NSR royalty on all gold and silver produced from the Wolverine underground mine and milling operation located in Yukon Territory, Canada, and operated by Yukon Zinc Corporation (“Yukon Zinc”). Prior to our fiscal year ended June 30, 2016, the Company recognized an impairment at Wolverine. During the quarter ended March 31, 2016, we were made aware of Yukon Zinc’s intentions to no longer recommission the mine. Based upon the updated developments and limited remaining mineralized material at Wolverine, the Company wrote down the remaining carrying value at Wolverine to zero as of March 31, 2016.

Phoenix Gold Stream Termination

On December 20, 2016, the owner of the Phoenix Gold Project, Rubicon, announced a restructuring transaction under Canadian regulations. As part of the restructuring transaction, RGLD Gold’s gold stream interest was terminated. In exchange for termination of the gold stream, RGLD Gold received approximately three million common shares of Rubicon and three 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 Note 2. 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 (loss) income.

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 the lesser of $435 per ounce of gold delivered or the prevailing market price when purchased 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, was delivered to RGLD Gold under the previous 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. Accordingly, 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.