REVENUE

9 Months Ended

Sep. 30, 2023

REVENUE

REVENUE

4.    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 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 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 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 2022 10-K. For the three months ended September 30, 2023, royalty revenue that was estimated or was attributable to metal production for a period prior to September 30, 2023, 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 8.

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,		September 30,		September 30,		September 30,
	2023		2022		2023		2022
Stream revenue:
Gold	$	72,540	$	76,833	$	231,396	$	229,661
Silver		14,419		12,063		51,958		36,393
Copper		12,019		9,836		36,628		42,809
Total stream revenue	$	98,978	$	98,732	$	319,982	$	308,863
Royalty revenue:
Gold	$	35,993	$	23,163	$	109,030	$	90,054
Silver		441		2,648		6,108		10,477
Copper		1,524		1,285		8,154		11,271
Other		1,681		5,601		9,777		19,561
Total royalty revenue	$	39,639	$	32,697	$	133,069	$	131,363
Total revenue	$	138,617	$	131,429	$	453,051	$	440,226

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

		Three Months Ended				Nine Months Ended
		September 30,		September 30,		September 30,		September 30,
	Metal(s)	2023		2022		2023		2022
Stream revenue:
Mount Milligan	Gold & Copper	$	33,876	$	41,553	$	121,739	$	129,596
Pueblo Viejo	Gold & Silver		16,688		21,156		62,586		64,232
Andacollo	Gold		14,644		12,170		35,401		39,565
Khoemacau	Silver		9,047		5,050		27,082		12,641
Other	Gold & Silver		24,723		18,803		73,174		62,829
Total stream revenue		$	98,978	$	98,732	$	319,982	$	308,863
Royalty revenue:
Cortez Legacy Zone	Gold	$	19,668	$	4,562	$	57,062	$	29,413
Cortez CC Zone	Gold		2,948		N/A		9,674		N/A
Peñasquito	Gold, Silver, Lead & Zinc		—		9,010		13,538		31,768
Other	Various		17,023		19,125		52,795		70,182
Total royalty revenue		$	39,639	$	32,697	$	133,069	$	131,363
Total revenue		$	138,617	$	131,429	$	453,051	$	440,226

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"). According to Newmont Corporation (“Newmont”), on October 13, 2023, a definitive agreement was reached between Newmont and the Union that also received approval from the Mexican Labor Court, ramp-up of operations has since commenced, and operations at Peñasquito are expected to reach full operating capacity by the end of the fourth quarter of 2023.

Please refer to Note 8 for the geographical distribution of our revenue by reportable segment.