Core Insights - Royal Gold, Inc. (RGLD) reported adjusted earnings per share (EPS) of $1.81 for Q2 2025, exceeding the Zacks Consensus Estimate of $1.70, marking a 45% year-over-year increase [1][6] - The company achieved record revenues of $210 million, a 20.4% increase year-over-year, driven by higher metal prices and gold production from Peñasquito and Manh Choh, despite lower gold sales from Xavantina [2][6] - Adjusted EBITDA rose 24.5% to $175 million, with an adjusted EBITDA margin of 83.8%, up from 81% in the prior year [3][6] Financial Performance - The cost of sales remained flat at $24 million year-over-year, while general and administrative expenses decreased by 2.3% to $10 million [3] - Net cash from operating activities was $153 million, up from $113.5 million in the prior year, with cash and cash equivalents at approximately $248 million compared to $195 million at the end of 2024 [4] Stock Performance - Over the past year, RGLD shares have increased by 27.6%, while the industry has seen a growth of 57.9% [5] Peer Comparisons - Kinross Gold Corporation (KGC) reported adjusted earnings of $0.44 per share, a significant increase from $0.14 in the prior year, with revenues rising 41.7% year-over-year to $1,728.5 million [9] - Agnico Eagle Mines Limited (AEM) reported adjusted earnings of $1.94 per share, up from $1.07, with revenues of $2,816.1 million, a 35.6% increase year-over-year [10] - Newmont Corporation (NEM) reported adjusted earnings of $1.43 per share, up from $0.72, with revenues of $5,317 million, a 20.8% increase from the prior year [11]

Second Quarter 2025 Results August 7, 2025 Cautionary Statements Important Additional Information and Where to Find It: In connection with the proposed transactions, Royal Gold, Sandstorm and Horizon intend to file materials with the SEC and on SEDAR+, as applicable. Royal Gold plans to file proxy materials with the SEC in connection with the solicitation of proxies for Royal Gold's special meeting of shareholders (the "Royal Gold Special Meeting"). Prior to the Royal Gold Special Meeting, Royal Gold will f ...

PART I FINANCIAL INFORMATION [Item 1. Financial Statements (Unaudited)](index=3&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) This section presents the unaudited consolidated financial statements for Q2 and H1 2025, showing significant growth in revenue and net income driven by higher metal prices and new acquisitions Consolidated Balance Sheet Highlights (as of June 30, 2025) | Account | June 30, 2025 ($ thousands) | December 31, 2024 ($ thousands) | | :--- | :--- | :--- | | **Total current assets** | 342,013 | 275,287 | | **Total assets** | 3,572,453 | 3,392,130 | | **Total current liabilities** | 76,101 | 85,151 | | **Total liabilities** | 253,494 | 260,924 | | **Total equity** | 3,318,959 | 3,131,206 | Consolidated Statement of Operations Highlights | Metric | Q2 2025 ($ thousands) | Q2 2024 ($ thousands) | Six Months 2025 ($ thousands) | Six Months 2024 ($ thousands) | | :--- | :--- | :--- | :--- | :--- | | **Revenue** | 209,643 | 174,096 | 403,080 | 322,999 | | **Operating income** | 141,840 | 102,083 | 264,952 | 177,609 | | **Net income attributable to Royal Gold** | 132,349 | 81,208 | 245,847 | 128,372 | | **Diluted EPS** | $2.01 | $1.23 | $3.73 | $1.95 | Consolidated Statement of Cash Flows Highlights (Six Months Ended June 30) | Cash Flow Activity | 2025 ($ thousands) | 2024 ($ thousands) | | :--- | :--- | :--- | | **Net cash provided by operating activities** | 289,171 | 251,799 | | **Net cash used in investing activities** | (171,049) | (27,341) | | **Net cash used in financing activities** | (65,440) | (254,393) | | **Net increase (decrease) in cash** | 52,682 | (29,935) | Notes to Consolidated Financial Statements Notes detail accounting policies and financial line items, disclosing recent acquisitions and credit facility amendments - In Q2 2025, the company entered into a **$200 million** stream and royalty agreement for the Warintza Project, with **$100 million** paid at closing and the remainder conditional[20](index=20&type=chunk) - The company's revolving credit facility was amended on June 26, 2025, extending the maturity to 2030 and increasing the accordion feature to **$400 million**. As of June 30, 2025, no amount was outstanding[35](index=35&type=chunk)[37](index=37&type=chunk) - Subsequent to the quarter end, the company acquired a **$1.0 billion** gold stream on the Kansanshi mine, funded by cash and an **$825 million** draw on its credit facility. It also entered into agreements to acquire Sandstorm Gold and Horizon Copper[72](index=72&type=chunk)[74](index=74&type=chunk)[75](index=75&type=chunk) Revenue by Segment (Six Months Ended June 30, 2025) | Segment | Revenue ($ thousands) | | :--- | :--- | | Stream interests | 255,673 | | Royalty interests | 147,407 | | **Total** | **403,080** | [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=20&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management analyzes Q2 and H1 2025 financial results, highlighting revenue growth from higher metal prices, recent acquisitions, and liquidity - The company's business is divided into two segments: Acquisition and Management of Stream Interests (**63% of H1 2025 revenue**) and Acquisition and Management of Royalty Interests (**37% of H1 2025 revenue**)[87](index=87&type=chunk) - Recent strategic developments include the **$1.0 billion** Kansanshi gold stream acquisition, agreements to acquire Sandstorm Gold and Horizon Copper, and the **$200 million** Warintza project stream and royalty agreement[91](index=91&type=chunk)[98](index=98&type=chunk)[100](index=100&type=chunk) Q2 2025 vs Q2 2024 Performance | Metric | Q2 2025 | Q2 2024 | Change Driver | | :--- | :--- | :--- | :--- | | **Total Revenue** | $209.6M | $174.1M | Higher average gold and silver prices | | **Net Income** | $132.3M | $81.2M | Higher revenue and lower tax expense | | **Average Gold Price** | $3,280/oz | $2,338/oz | Market conditions | - As of June 30, 2025, the company had working capital of **$265.9 million** and total liquidity of approximately **$1.3 billion**. Subsequent to the quarter, the credit facility was increased to **$1.4 billion**, and **$825 million** was drawn for the Kansanshi acquisition[142](index=142&type=chunk)[143](index=143&type=chunk)[148](index=148&type=chunk) [Quantitative and Qualitative Disclosures about Market Risk](index=31&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) This section outlines the company's primary market risk from metal price volatility, providing a sensitivity analysis on revenue impact - The company's earnings and cash flows are significantly impacted by fluctuations in the market prices of gold, silver, and copper[158](index=158&type=chunk) Revenue Sensitivity to 10% Metal Price Change (H1 2025) | Metal | Percentage of Total Revenue | Impact on Revenue ($) | | :--- | :--- | :--- | | Gold | 77% | $31.4 million | | Silver | 12% | $4.7 million | | Copper | 8% | $3.6 million | [Controls and Procedures](index=31&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective, with no material changes in internal controls during the quarter - Based on an evaluation as of June 30, 2025, the CEO and CFO concluded that the company's disclosure controls and procedures were effective[160](index=160&type=chunk) - No changes in internal control over financial reporting occurred during the quarter that materially affected, or are reasonably likely to materially affect, these controls[161](index=161&type=chunk) PART II OTHER INFORMATION [Legal Proceedings](index=32&type=section&id=Item%201.%20Legal%20Proceedings) The company reported no legal proceedings for the period - The company reported no legal proceedings[163](index=163&type=chunk) [Risk Factors](index=32&type=section&id=Item%201A.%20Risk%20Factors) This section updates risk factors, highlighting increased indebtedness, acquisition integration challenges, stock dilution, and joint venture risks - Increased indebtedness following the Kansanshi acquisition and planned draws for the Sandstorm and Horizon transactions could adversely affect financial condition and limit operational flexibility[165](index=165&type=chunk)[167](index=167&type=chunk) - The proposed acquisition of Sandstorm Gold will involve issuing a significant number of new shares, which could create a "market overhang" and depress the stock price. Current Royal Gold stockholders' ownership will be diluted to approximately **77%** of the combined company[169](index=169&type=chunk)[181](index=181&type=chunk) - The Sandstorm and Horizon transactions are subject to significant closing conditions and risks, including the potential inability to successfully integrate the businesses or realize anticipated synergies[171](index=171&type=chunk)[175](index=175&type=chunk) - The acquisition of Horizon includes a **30%** interest in the Hod Maden project, subjecting the company to joint venture risks where it is not the operator and has limited control over strategic decisions[178](index=178&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=35&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company reported no unregistered sales of equity securities or related use of proceeds during the period - None reported[184](index=184&type=chunk) [Defaults Upon Senior Securities](index=35&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) The company reported no defaults upon its senior securities - None reported[185](index=185&type=chunk) [Mine Safety Disclosures](index=35&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to Royal Gold's business model - Not applicable[186](index=186&type=chunk) [Other Information](index=35&type=section&id=Item%205.%20Other%20Information) This section discloses no Rule 10b5-1 trading plan changes and details post-quarter financing activities, including a **$825 million** borrowing and credit facility increase - On August 1, 2025, the company borrowed **$825 million** under its revolving credit facility to fund the Kansanshi stream acquisition[188](index=188&type=chunk) - On August 5, 2025, the company exercised a **$400 million** accordion feature, increasing its total committed revolving credit facility to **$1.4 billion**, with **$575 million** remaining available after the Kansanshi borrowing[188](index=188&type=chunk) [Exhibits](index=37&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed with the Form 10-Q, including acquisition agreements, credit facility amendments, and certifications - Key exhibits filed include the arrangement agreements for the Sandstorm and Horizon acquisitions, dated July 6, 2025[191](index=191&type=chunk) - The Sixth Amendment to the Revolving Facility Credit Agreement and the Incremental Joinder to the agreement are filed as exhibits[191](index=191&type=chunk)

Core Insights - Royal Gold reported record GAAP net income of $132.3 million for Q2 2025, with operating cash flow reaching $152.8 million, although GAAP revenue fell short of analyst expectations at $209.6 million [1][5][9] Financial Performance - Non-GAAP EPS was $1.81, exceeding estimates of $1.69 and up 44.8% from $1.25 in Q2 2024 [2] - GAAP revenue of $209.6 million represented a 20.4% increase year-over-year from $174.1 million [2] - Adjusted EBITDA margin improved to 84%, up 3 percentage points from 81% in the previous year [2] - Free cash flow decreased to $40.1 million, down 35.7% from $62.4 million in Q2 2024 [2] - Operating cash flow increased by 34.7% year-over-year, from $113.5 million [2] Business Model and Strategy - Royal Gold operates by acquiring and managing streams and royalties from various metal mining operations, generating income without direct mining costs [3] - The company focuses on expanding its portfolio and maintaining a competitive edge through strategic acquisitions and prudent capital management [4] Market Dynamics - The financial results were significantly influenced by higher realized prices for gold at $3,280 per ounce and silver at $33.68 per ounce, despite volume challenges at certain mines [6] - Gold accounted for 78% of total revenue, highlighting the company's sensitivity to commodity price fluctuations [4] Acquisitions and Growth - Royal Gold announced acquisitions of Sandstorm Gold and Horizon Copper for approximately $3.5 billion and $196 million, respectively, which will enhance its portfolio to 393 streams and royalties [7][12] - A new $1 billion gold stream was secured on the Kansanshi mine in Zambia, financed mainly through a revolving credit facility [7] Operational Challenges - Some partner operations faced setbacks, including Mount Milligan lowering its gold production forecast and Mara Rosa pausing processing due to heavy rains [8][13] - Despite these challenges, strong contributions from assets like Peñasquito and Pueblo Viejo helped mitigate the impact [8] Financial Position - The company ended the quarter with $248.2 million in cash and access to a $1.25 billion liquidity pool, with a significant portion drawn for acquisitions [9] - The board increased the quarterly dividend by 12.5% to $0.45 per share, extending the maturity of the revolving credit facility to 2030 [10] Revenue Composition - Royalties contributed 36.5% of total revenue, with major streams from Mount Milligan, Pueblo Viejo, and Khoemacau [11] - The portfolio is expected to become broader and more diverse with the completion of the Sandstorm and Horizon acquisitions [12] Future Outlook - The company anticipates that sales at several properties will be more heavily weighted toward the second half of fiscal 2025, which may impact financial results [15] - Royal Gold expects the Sandstorm Gold and Horizon Copper transactions to close in Q4 2025, with a focus on monitoring leverage and free cash flow trends [16]

Summary of Royal Gold (RGLD) M&A Announcement Company and Industry - **Company**: Royal Gold (RGLD) - **Industry**: Mining, specifically gold and copper production Core Points and Arguments 1. **Acquisition Announcement**: Royal Gold announced the acquisition of a $1 billion life of mine gold stream from First Quantum's Kansanshi mine in Zambia [4][2][1] 2. **Strategic Rationale**: The acquisition aligns with Royal Gold's strategic investment criteria, emphasizing First Quantum's strong operational history and Zambia's supportive mining jurisdiction [4][5][2] 3. **Zambia's Mining Contribution**: In 2023, mining was the second largest contributor to Zambia's GDP, with government strategies launched in 2024 to further support the sector [5][4][2] 4. **Kansanshi Mine Overview**: The mine is a large-scale copper producer with significant gold byproduct credits, currently undergoing a major expansion to increase production [5][4][2] 5. **Gold Stream Details**: The agreement includes a tiered gold stream rate starting at 75 ounces of gold per million pounds of copper produced, with adjustments based on cumulative deliveries [6][7][2] 6. **Expected Deliveries**: Royal Gold anticipates receiving approximately 12,500 ounces of gold in the first year, with average annual deliveries projected at 35,000 to 40,000 ounces over the next decade [7][6][2] 7. **Support for Local Programs**: Royal Gold committed to supporting First Quantum's local social programs throughout the mine's life [7][6][2] 8. **Acceleration Options**: First Quantum has options to accelerate gold deliveries, potentially reducing stream rates by up to 30% based on financial performance metrics [8][9][2] 9. **Cash Payment Structure**: The cash payment per ounce will be 20% of the spot price, increasing to 35% if certain conditions are met [11][10][2] 10. **Financing Strategy**: Royal Gold extended its revolving credit facility to $1.4 billion and utilized $825 million to fund the acquisition, maintaining a net debt to EBITDA ratio of 1.2x post-acquisition [13][14][2] 11. **Debt Repayment Plans**: The company expects to repay outstanding debt within two years after closing additional acquisitions, while maintaining dividend commitments [14][15][2] 12. **Long-term Growth Strategy**: The acquisition is part of Royal Gold's strategy to grow through high-quality, long-life precious metals assets in mining-friendly jurisdictions [17][16][2] Other Important Content 1. **Market Conditions**: The acquisition timing was described as a good opportunity that arose while Royal Gold was engaged in other major transactions [15][17][2] 2. **Portfolio Impact**: The Kansanshi Goldstream acquisition is expected to enhance Royal Gold's portfolio, increasing gold weighting to approximately 80% of NAV [16][15][2] 3. **Risk Assessment**: Royal Gold conducted a thorough risk assessment of First Quantum's overall model, considering extreme scenarios to ensure financial stability [22][21][2]

Group 1 - The Federal Reserve has maintained interest rates unchanged for the fifth consecutive time, impacting market performance [1] - Major U.S. stock indices showed mixed results, with the Dow Jones down 0.38%, the Nasdaq up 0.15%, and the S&P 500 down 0.12% [1] - Popular technology stocks experienced varied movements, with Nvidia rising over 2% and Apple declining more than 1% [1] Group 2 - Precious metals and copper-related stocks faced significant declines, with Freeport-McMoRan Copper & Gold down over 9% and Southern Copper down over 6% [1] - The Nasdaq China Golden Dragon Index fell by 1.82%, with most popular Chinese concept stocks declining, including NIO and New Oriental down over 4% [1] - Other notable declines included Li Auto down over 3%, Pinduoduo and Xpeng down over 2%, and Alibaba and JD down over 1% [1]

Core Insights - Royal Gold (RGLD) has a strong track record of exceeding earnings estimates, particularly in the last two quarters, with an average surprise of 9.81% [1][2] - The company reported earnings of $1.51 per share in the last quarter, surpassing the Zacks Consensus Estimate of $1.37 per share by 10.22% [2] - Royal Gold's positive Earnings ESP of +6.85% indicates bullish sentiment among analysts regarding its earnings prospects [8] Earnings Performance - In the previous quarter, Royal Gold's earnings were $1.63 per share against an expected $1.49, resulting in a surprise of 9.40% [2] - The company has consistently shown a pattern of beating earnings estimates, which is a positive indicator for future performance [1][2] Analyst Sentiment - Recent estimates for Royal Gold have been trending upward, reflecting increased analyst confidence [5] - The combination of a positive Earnings ESP and a Zacks Rank of 1 (Strong Buy) suggests a high likelihood of another earnings beat in the upcoming report [8] Earnings ESP Explanation - The Zacks Earnings ESP compares the Most Accurate Estimate to the Zacks Consensus Estimate, with the Most Accurate Estimate being more reflective of recent analyst revisions [7] - Stocks with a positive Earnings ESP and a Zacks Rank of 3 or better have a nearly 70% chance of producing a positive surprise [6]

Core Viewpoint - Royal Gold (RGLD) has experienced a significant downtrend, with a 13.6% decline over the past four weeks, but it is now in oversold territory, suggesting a potential turnaround due to improved earnings expectations from analysts [1]. Group 1: Technical Indicators - The Relative Strength Index (RSI) is a key technical indicator used to identify oversold conditions, with a reading below 30 indicating that a stock may be oversold [2]. - RGLD's current RSI reading is 28.19, indicating that the heavy selling pressure may be exhausting, which could lead to a price rebound [5]. - The RSI helps investors identify potential entry points for stocks that have fallen below their fair value due to excessive selling [3]. Group 2: Fundamental Indicators - There is a strong consensus among sell-side analysts regarding RGLD, with a 2.4% increase in the consensus EPS estimate over the last 30 days, indicating positive earnings revisions [7]. - An upward trend in earnings estimate revisions typically correlates with price appreciation in the near term [7]. - RGLD holds a Zacks Rank 1 (Strong Buy), placing it in the top 5% of over 4,000 ranked stocks, further supporting the potential for a near-term turnaround [8].

Core Insights - The article compares two gold stocks, Iamgold (IAG) and Royal Gold (RGLD), to determine which offers better value for investors [1] Group 1: Zacks Rank and Value Metrics - Both IAG and RGLD currently hold a Zacks Rank of 1 (Strong Buy), indicating positive earnings estimate revisions and improving earnings outlooks [3] - Value investors typically utilize traditional metrics such as P/E ratio, P/S ratio, earnings yield, and cash flow per share to identify undervalued stocks [4] Group 2: Valuation Comparisons - IAG has a forward P/E ratio of 8.90, while RGLD has a forward P/E of 20.57, suggesting IAG may be undervalued [5] - IAG's PEG ratio is 0.34, indicating a favorable growth outlook compared to RGLD's PEG ratio of 1.09 [5] - IAG's P/B ratio is 1.17, contrasting with RGLD's P/B of 3.17, further supporting IAG's superior value proposition [6] - Based on these valuation metrics, IAG is rated with a Value grade of A, while RGLD has a Value grade of D, highlighting IAG as the better value option [6]

Industry Overview - Gold prices are on the rise, currently around $3,342/oz, reflecting a 37% increase year to date, driven by supply constraints and strong demand from central banks [4][5] - The World Gold Council indicates a scarcity of gold mining deposits, which is expected to sustain the upward momentum in gold prices [1] - Central banks, particularly in emerging economies, are increasing their gold reserves due to rising global debt levels and geopolitical risks, which supports demand for gold [3] Investment Opportunities - It is recommended to invest in gold mining stocks with a favorable Zacks Rank, specifically those rated 1 (Strong Buy), including Franco-Nevada Corp. (FNV), Royal Gold Inc. (RGLD), Kinross Gold Corp. (KGC), AngloGold Ashanti plc (AU), and Agnico Eagle Mines Ltd. (AEM) [2] - All five selected stocks exhibit strong growth estimates and recent upward earnings revisions for the current year [9] Company Highlights Franco-Nevada Corp. (FNV) - FNV is expected to achieve revenue and earnings growth rates of 34.6% and 43.9%, respectively, for the current year, with a recent earnings estimate improvement of 0.2% [12] - The company has a debt-free balance sheet and focuses on expanding its portfolio and paying dividends, benefiting from rising gold prices [11] Royal Gold Inc. (RGLD) - RGLD anticipates revenue and earnings growth rates of 28.8% and 42%, respectively, for the current year, with a 4.5% improvement in earnings estimates over the last 30 days [14] - The company maintains high margins despite inflationary pressures and is focused on allocating cash flow towards dividends and debt reduction [13] Kinross Gold Corp. (KGC) - KGC is projected to have revenue and earnings growth rates of 17.9% and 72.1%, respectively, for the current year, with a 5.4% increase in earnings estimates recently [17] - The company is enhancing production through its Tasiast mine expansion and has promising projects like the Great Bear project in Ontario [15][16] AngloGold Ashanti plc (AU) - AU expects revenue and earnings growth rates of 52.8% and over 100%, respectively, for the current year, with a 1.6% improvement in earnings estimates [19] - The company operates in multiple regions and focuses on gold exploration and production, with a flagship mine in Tanzania [18] Agnico Eagle Mines Ltd. (AEM) - AEM is projected to achieve revenue and earnings growth rates of 26.6% and 52.5%, respectively, for the current year, with a 7% increase in earnings estimates [22] - The company is advancing key projects and has strengthened its market position through strategic acquisitions and mergers [20][21]