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Table of Contents

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period Ended September 30, 2020

or

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from        to        

Commission File Number: 001-13357

Royal Gold, Inc.

(Exact Name of Registrant as Specified in Its Charter)

Delaware

    

84-0835164

(State or Other Jurisdiction of

(I.R.S. Employer

Incorporation)

Identification No.)

1144 15th Street, Suite 2500

Denver, Colorado

80202

(Address of Principal Executive Offices)

(Zip Code)

Registrant’s telephone number, including area code (303) 573-1660

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class

    

Trading Symbol

    

Name of the Exchange on which Registered

Common Stock, $0.01 par value

RGLD

Nasdaq Global Select Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes      No 

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files)  Yes     No 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer 

Accelerated filer 

Non-accelerated filer  

Smaller reporting company 

Emerging growth company 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.    

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes   No 

There were 65,604,624 shares of the Company’s common stock, par value $0.01 per share, outstanding as of October 29, 2020.

Table of Contents

In this Quarterly Report on Form 10-Q, Royal Gold, Inc., together with its subsidiaries, is collectively referred to as “Royal Gold,” “we,” “us,” or “our.”

INDEX

    

    

PAGE

PART I

FINANCIAL INFORMATION

Item 1.

Financial Statements (Unaudited)

Consolidated Balance Sheets

3

Consolidated Statements of Operations and Comprehensive Income

4

Consolidated Statements of Changes in Stockholders’ Equity

5

Consolidated Statements of Cash Flows

6

Notes to Consolidated Financial Statements

7

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

18

Item 3.

Quantitative and Qualitative Disclosures about Market Risk

27

Item 4.

Controls and Procedures

28

PART II

OTHER INFORMATION

Item 1.

Legal Proceedings

28

Item 1A.

Risk Factors

28

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

28

Item 3.

Defaults Upon Senior Securities

28

Item 4.

Mine Safety Disclosure

28

Item 5.

Other Information

29

Item 6.

Exhibits

29

SIGNATURES

30

2

ITEM 1.     FINANCIAL STATEMENTS

ROYAL GOLD, INC.

Consolidated Balance Sheets

(Unaudited, amounts in thousands except share data)

    

September 30, 

    

June 30, 

    

2020

2020

ASSETS

Cash and equivalents

$

413,116

$

319,128

Royalty receivables

33,573

27,689

Income tax receivable

4,298

2,435

Stream inventory

17,159

11,671

Prepaid expenses and other

1,679

1,227

Total current assets

469,825

362,150

Stream and royalty interests, net (Note 3)

2,242,314

2,318,913

Other assets

85,048

85,224

Total assets

$

2,797,187

$

2,766,287

LIABILITIES

Accounts payable

$

2,901

$

2,484

Dividends payable

18,368

18,364

Income tax payable

25,730

13,323

Other current liabilities

9,140

9,384

Total current liabilities

56,139

43,555

Debt (Note 5)

270,696

300,439

Deferred tax liabilities

85,784

86,439

Uncertain tax positions

13,230

25,427

Other long-term liabilities

8,117

8,308

Total liabilities

433,966

464,168

Commitments and contingencies (Note 13)

EQUITY

Preferred stock, $.01 par value, 10,000,000 shares authorized; and 0 shares issued

Common stock, $.01 par value, 200,000,000 shares authorized; and 65,545,606 and 65,531,288 shares outstanding, respectively

656

655

Additional paid-in capital

2,199,705

2,210,429

Accumulated earnings

149,702

61,133

Total Royal Gold stockholders’ equity

2,350,063

2,272,217

Non-controlling interests

13,158

29,902

Total equity

2,363,221

2,302,119

Total liabilities and equity

$

2,797,187

$

2,766,287

The accompanying notes are an integral part of these consolidated financial statements.

3

ROYAL GOLD, INC.

Consolidated Statements of Operations and Comprehensive Income

(Unaudited, amounts in thousands except share data)

Three Months Ended

September 30, 

September 30, 

    

2020

    

2019

Revenue (Note 7)

$

146,880

$

118,774

Costs and expenses

Cost of sales (excludes depreciation, depletion and amortization)

21,902

20,111

General and administrative

7,454

7,443

Production taxes

1,355

1,099

Exploration costs

563

2,626

Depreciation, depletion and amortization

46,300

38,714

Total costs and expenses

77,574

69,993

Gain on sale of Peak Gold JV interest

33,906

Operating income

103,212

48,781

Fair value changes in equity securities

2,539

(1,375)

Interest and other income

421

775

Interest and other expense

(1,875)

(2,834)

Income before income taxes

104,297

45,347

Income tax benefit

2,377

23,525

Net income and comprehensive income

106,674

68,872

Net loss and comprehensive loss attributable to non-controlling interests

265

1,581

Net income and comprehensive income attributable to Royal Gold common stockholders

$

106,939

$

70,453

Net income per share attributable to Royal Gold common stockholders:

Basic earnings per share

$

1.63

$

1.07

Basic weighted average shares outstanding

65,537,714

65,465,611

Diluted earnings per share

$

1.63

$

1.07

Diluted weighted average shares outstanding

65,632,689

65,615,926

Cash dividends declared per common share

$

0.280

$

0.265

The accompanying notes are an integral part of these consolidated financial statements.

4

ROYAL GOLD, INC.

Consolidated Statements of Changes in Stockholders’ Equity

(unaudited, amounts in thousands except share data)

Royal Gold Stockholders

Additional

Common Shares

Paid-In

Accumulated

Non-controlling

Total

Shares

Amount

Capital

(Losses) Earnings

Interests

Equity

Balance at June 30, 2020

 

65,531,288

$

655

 

$

2,210,429

$

61,133

$

29,902

$

2,302,119

Stock-based compensation and related share issuances

 

14,318

 

1

 

 

105

 

 

 

106

Sale of Peak Gold JV interest

(10,829)

(16,218)

(27,047)

Distributions to non-controlling interests

 

 

 

 

 

(261)

 

(261)

Net income (loss) and comprehensive income (loss)

 

 

 

 

 

106,939

 

(265)

 

106,674

Dividends declared

 

 

 

 

 

(18,370)

 

 

(18,370)

Balance at September 30, 2020

 

65,545,606

$

656

 

$

2,199,705

$

149,702

$

13,158

$

2,363,221

Royal Gold Stockholders

Additional

Common Shares

Paid-In

Accumulated

Non-controlling

Total

Shares

Amount

Capital

(Losses) Earnings

Interests

Equity

Balance at June 30, 2019

 

65,440,492

$

655

 

$

2,201,773

$

(65,747)

$

33,772

$

2,170,453

Stock-based compensation and related share issuances

 

55,295

 

 

 

(323)

 

 

 

(323)

Distributions from (to) non-controlling interests

 

 

 

900

 

 

(192)

 

708

Net income (loss) and comprehensive income (loss)

 

 

 

 

 

70,453

 

(1,581)

 

68,872

Dividends declared

 

 

 

 

 

(17,382)

 

 

(17,382)

Balance at September 30, 2019

 

65,495,787

$

655

 

$

2,202,350

$

(12,676)

$

31,999

$

2,222,328

The accompanying notes are an integral part of these consolidated financial statements.

5

ROYAL GOLD, INC.

Consolidated Statements of Cash Flows

(Unaudited, amounts in thousands)

Three Months Ended

September 30, 

September 30, 

    

2020

    

2019

Cash flows from operating activities:

Net income and comprehensive income

$

106,674

$

68,872

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation, depletion and amortization

46,300

38,714

Gain on sale of Peak Gold JV interest

(33,906)

Non-cash employee stock compensation expense

1,493

2,101

Fair value changes in equity securities

(2,539)

1,375

Deferred tax benefit

(10,545)

(33,139)

Other

111

281

Changes in assets and liabilities:

Royalty receivables

(5,884)

(5,902)

Stream inventory

(5,488)

608

Income tax receivable

(1,864)

(995)

Prepaid expenses and other assets

260

(3,197)

Accounts payable

(235)

517

Income tax payable

12,408

(1,426)

Uncertain tax positions

(12,196)

1,748

Other liabilities

(437)

1,682

Net cash provided by operating activities

$

94,152

$

71,239

Cash flows from investing activities:

Acquisition of stream and royalty interests

(11,304)

(4,362)

Proceeds from sale of Peak Gold JV interest

49,154

Proceeds from sale of Contango shares

12,146

Other

(339)

4,858

Net cash provided by investing activities

$

49,657

$

496

Cash flows from financing activities:

Repayment of debt

(30,000)

(50,000)

Net payments from issuance of common stock

(1,389)

(2,423)

Common stock dividends

(18,365)

(17,373)

Other

(67)

556

Net cash used in financing activities

$

(49,821)

$

(69,240)

Net increase in cash and equivalents

93,988

2,495

Cash and equivalents at beginning of period

319,128

119,475

Cash and equivalents at end of period

$

413,116

$

121,970

The accompanying notes are an integral part of these consolidated financial statements.

6

ROYAL GOLD, INC.

Notes to Consolidated Financial Statements

(Unaudited)

1.    OPERATIONS, SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND RECENTLY ADOPTED ACCOUNTING STANDARDS

Royal Gold 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 a mining project that provide the right to revenue or metals produced from the project after deducting contractually 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 months ended September 30, 2020 are not necessarily indicative of the results that may be expected for the fiscal year ending June 30, 2021. These interim unaudited financial statements should be read in conjunction with our Annual Report on Form 10-K for the fiscal year ended June 30, 2020 filed with the Securities and Exchange Commission on August 6, 2020 (“Fiscal 2020 10-K”).

Recently Adopted Accounting Standards

Current Expected Credit Loss

In June 2016, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses of Financial Instruments, which, together with subsequent amendments, changes how an entity will record credit losses from an “incurred loss” approach to an “expected loss” approach. This update is effective for annual periods beginning after December 15, 2019 and interim financial statement periods within those years, with early adoption permitted. On July 1, 2020, we adopted the new guidance and, based on our assessment, the adoption of the new guidance did not have any impact on our consolidated financial statements.

2.    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 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, 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% net smelter royalty on silver produced from an area of interest which includes the current Peak Gold Project resource area, in respect of which Peak Gold, LLC retains the right to acquire 50% of this royalty; and
An incremental 1% net smelter return royalty on certain State of Alaska mining claims, 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 sheets at September 30, 2020 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 Peak Gold Project. 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.

7

ROYAL GOLD, INC.

Notes to Consolidated Financial Statements

(Unaudited)

3.    STREAM AND ROYALTY INTERESTS, NET

The following tables summarize our stream and royalty interests, net as of September 30, 2020 and June 30, 2020.

As of September 30, 2020 (Amounts in thousands):

    

Cost

    

Accumulated Depletion

    

Net

Production stage stream interests:

Mount Milligan

$

790,635

$

(251,423)

$

539,212

Pueblo Viejo

610,404

(215,824)

394,580

Andacollo

388,182

(116,328)

271,854

Rainy River

175,727

(30,480)

145,247

Wassa

146,475

(70,677)

75,798

Total production stage stream interests

2,111,423

(684,732)

1,426,691

Production stage royalty interests:

Voisey's Bay

205,724

(103,271)

102,453

Peñasquito

99,172

(45,741)

53,431

Holt

34,612

(23,867)

10,745

Cortez

80,681

(15,657)

65,024

Other

485,504

(406,226)

79,278

Total production stage royalty interests

905,693

(594,762)

310,931

Total production stage stream and royalty interests

3,017,116

(1,279,494)

1,737,622

Development stage stream interests:

Khoemacau

147,718

147,718

Other

12,037

12,037

Development stage royalty interests:

Other

70,952

70,952

Total development stage stream and royalty interests

230,707

230,707

Exploration stage royalty interests:

Pascua-Lama

177,690

177,690

Other

96,295

96,295

Total exploration stage royalty interests

273,985

273,985

Total stream and royalty interests, net

$

3,521,808

$

(1,279,494)

$

2,242,314

8

ROYAL GOLD, INC.

Notes to Consolidated Financial Statements

(Unaudited)

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

Holt

34,612

(23,851)

10,761

Cortez

80,681

(15,065)

65,616

Other

487,225

(403,080)

(1,341)

82,804

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 royalty interests

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, and Prestea and Bogoso gold stream agreements into 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 Golden Star, provides us the right to purchase 10.5% of the gold produced 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 is 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.

The Prestea and Bogoso stream agreement with FGR provides us the right to purchase 5.5% of the gold produced 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/Bogoso stream agreement, including security and the rights and obligations of both Royal Gold and Golden Star, remain substantially consistent with those terms in the original agreement. The Wassa, and Prestea and Bogoso streams are recorded as a production stage stream interest within Stream and royalty interests, net on our consolidated balance sheets and have a carrying value of $75.9 million as of September 30, 2020.

9

ROYAL GOLD, INC.

Notes to Consolidated Financial Statements

(Unaudited)

COVID-19 and current economic environment

Earlier in calendar 2020, several of our operating counterparties announced temporary operational curtailments or the withdrawal or review of disclosed guidance due to the ongoing COVID-19 pandemic. The economic and societal impacts associated with COVID-19 remain fluid and continue to change rapidly. We continue to monitor any developments that the COVID-19 pandemic may have on our stream or royalty interests as part of our regular asset impairment analysis.

4.  MARKETABLE EQUITY SECURITIES

As of September 30, 2020, our marketable equity securities include 3,949,575 common shares of Battle North Gold Corporation, and warrants to purchase up to 19,640,000 common shares of TriStar Gold Inc. (“TriStar”). Our marketable equity securities are measured at fair value (Note 12) each reporting period with any changes in fair value recognized in net income.

As discussed in Note 2, on September 30, 2020, we sold 809,744 common shares of Contango for total consideration of $12.1 million and recorded a mark-to-market increase of $3.6 million on the sale, which is included in Fair value changes in equity securities in our consolidated statement of operations and comprehensive income.

The fair value of our marketable equity securities increased $2.5 million and decreased $1.4 million for the three months ended September 30, 2020 and 2019, respectively, and are included in Fair value changes in equity securities on our consolidated statements of operations and comprehensive income. The carrying value of our marketable equity securities as of September 30, 2020 and June 30, 2020 was $8.3 million and $17.9 million, respectively, and is included in Other assets on our consolidated balance sheets.

5.    DEBT

Our debt as of September 30, 2020 and June 30, 2020 consists of the following:

As of September 30, 2020

As of June 30, 2020

   

Principal

   

Debt Issuance Costs

   

Total

   

Principal

   

Debt Issuance Costs

   

Total

(Amounts in thousands)

(Amounts in thousands)

Revolving credit facility

$

275,000

$

(4,304)

$

270,696

$

305,000

$

(4,561)

$

300,439

Total debt

$

275,000

$

(4,304)

$

270,696

$

305,000

$

(4,561)

$

300,439

Revolving credit facility

As of September 30, 2020, we had $275 million outstanding and $725 million available under our revolving credit facility. As of September 30, 2020, the interest rate on borrowings under our revolving credit facility was LIBOR plus 1.10% for an all-in rate of 1.40%. Interest expense, which includes interest on outstanding borrowings and amortization of debt issuance costs, was $1.3 million and $2.2 million for the three months ended September 30, 2020, and 2019, respectively. As discussed in Note 6 to the consolidated financial statements in our Fiscal 2020 10-K, we have financial covenants associated with our revolving credit facility. As of September 30, 2020, we were in compliance with each financial covenant.

On October 2, 2020, we repaid $75 million of the outstanding borrowings under our revolving credit facility. This increased the amount available under our revolving credit facility to $800 million and decreased the amount outstanding to $200 million.

Royal Gold may repay any borrowings under our revolving credit facility at any time without premium or penalty. Our revolving credit facility matures on June 3, 2024.

6.    LEASES

Our significant lease arrangements relate to our office spaces. These arrangements are for leases of assets such as corporate office space and office equipment. We lease office space and office equipment under operating leases expiring at various

10

ROYAL GOLD, INC.

Notes to Consolidated Financial Statements

(Unaudited)

dates through the fiscal year ending June 30, 2030. The following amounts were recorded in the consolidated balance sheets at September 30, 2020 (amounts in thousands):

Classification

September 30, 2020

Operating Leases

Right-of-use assets - current

    

Prepaid expenses and other

    

$

829

Right-of-use assets - non-current

Other assets

6,878

Total right-of-use assets

$

7,707

Lease liabilities - current

Other current liabilities

$

918

Lease liabilities - non-current

Other long-term liabilities

8,118

Total operating lease liabilities

$

9,036

Maturities of operating lease liabilities at September 30, 2020 were as follows (amounts in thousands):

Fiscal Years:

Operating Leases

2021

$

847

2022

1,127

2023

1,114

2024

1,125

2025

1,097

Thereafter

4,815

Total lease payments

$

10,125

Less imputed interest

(1,089)

Total

$

9,036

Other information pertaining to leases consist of the following:

September 30, 2020

Operating Lease Term and Discount Rate

Weighted average remaining lease term in years

9

Weighted average discount rate

2.5%

We did not have any finance leases as of September 30, 2020.

7.    REVENUE

Revenue Recognition

Under U.S. GAAP guidance, 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 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 using average spot rate gold, silver and copper forward contracts. The sales price for these average spot rate forward contracts is determined by the average daily gold, silver or copper spot prices during the term of the contract, typically a consecutive number of trading days 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

11

ROYAL GOLD, INC.

Notes to Consolidated Financial Statements

(Unaudited)

receipt and purchase of the metal. We settle our forward sales contracts via physical delivery of the metal to the purchaser (our customer) on the settlement date specified in the contract. Under our forward 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 offsite treatment, refining, transportation and, if applicable, mining 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 Fiscal 2020 10-K. For the three months ended September 30, 2020, royalty revenue that was estimated or was attributable to metal production for a period prior to September 30, 2020, 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 11.

Revenue by metal type attributable to each of our revenue sources is disaggregated as follows (amounts in thousands):

Three Months Ended

September 30, 

September 30, 

2020

2019

Stream revenue:

    Gold

$

83,597

$

72,224

    Silver

10,898

8,436

    Copper

12,008

6,321

         Total stream revenue

$

106,503

$

86,981

Royalty revenue:

    Gold

$

26,904

$

21,757

    Silver

3,441

1,829

    Copper

4,060

2,980

    Other

5,972

5,227

         Total royalty revenue

$

40,377

$

31,793

Total revenue

$

146,880

$

118,774

12

ROYAL GOLD, INC.

Notes to Consolidated Financial Statements

(Unaudited)

Revenue attributable to our principal stream and royalty interests is disaggregated as follows (amounts in thousands):

Three Months Ended

September 30, 

September 30, 

Metal(s)

2020

2019

Stream revenue:

    Mount Milligan

Gold & Copper

$

34,620

$

30,497

    Pueblo Viejo

Gold & Silver

31,270

21,618

    Andacollo

Gold

23,509

20,604

    Wassa

Gold

9,108

5,319

    Other

Gold & Silver

7,996

8,943

         Total stream revenue

$

106,503

$

86,981

Royalty revenue:

    Peñasquito

Gold, Silver, Lead & Zinc

$

10,209

$

4,420

    Cortez

Gold

5,684

4,417

    Other

Various

24,484

22,956

         Total royalty revenue

$

40,377

$

31,793

Total revenue

$

146,880

$

118,774

Please refer to Note 11 for the geographical distribution of our revenue by reportable segment.

8.    STOCK-BASED COMPENSATION

We recognized stock-based compensation expense as follows:

Three Months Ended

September 30, 

September 30, 

    

2020

    

2019