Royal Gold(US:RGLD)2022-11-02 16:00Revenue Composition - As of September 30, 2022, stream interests accounted for approximately 75% and 70% of total revenue for the three and nine months ended, respectively, compared to 66% for the same periods in 2021[79]. - Royalty interests represented 25% and 30% of total revenue for the three and nine months ended September 30, 2022, down from 34% for the same periods in 2021[79]. - Total revenue for Q3 2022 was $131.4 million, down from $174.4 million in Q3 2021, a decrease of 24.6%[119]. - Total revenue for the nine months ended September 30, 2022, was $440.2 million, a decrease of 9.2% from $485.0 million in the same period of 2021[131]. Gold and Silver Prices - Average gold price for the three months ended September 30, 2022, was $1,729 per ounce, contributing 76% of total revenue, compared to $1,790 per ounce and 73% in the same period of 2021[83]. - The average gold price during this period was $1,824 per ounce, silver was $21.92 per ounce, and copper was $4.11 per pound[175]. - A 10% increase in the average gold price would have increased total reported revenue by $32.8 million, representing 73% of total revenue[175]. - A 10% increase in the average copper price would have increased total reported revenue by $9.7 million, representing 12% of total revenue[175]. - A 10% increase in the average silver price would have increased total reported revenue by $2.5 million, representing 11% of total revenue[175]. Production and Deliveries - Silver stream deliveries from Khoemacau were approximately 290,700 ounces for the three months ended September 30, 2022, compared to 105,800 ounces in the same period of 2021[98]. - Gold stream deliveries from Andacollo were approximately 3,200 ounces for the three months ended September 30, 2022, down from 6,400 ounces in the same period of 2021[95]. - Gold stream deliveries from Mount Milligan were approximately 18,400 ounces for Q3 2022, up from 10,800 ounces in Q3 2021, reflecting a 70.4% increase[101]. - Copper stream deliveries from Mount Milligan were approximately 4.5 million pounds in Q3 2022, compared to 2.6 million pounds in Q3 2021, representing a 73.1% increase[102]. - Gold stream deliveries from Pueblo Viejo were approximately 8,900 ounces in Q3 2022, slightly down from 9,200 ounces in Q3 2021[109]. - Silver stream deliveries from Pueblo Viejo were approximately 319,100 ounces in Q3 2022, down from 396,500 ounces in Q3 2021, with 530,000 ounces remaining deferred[112]. Acquisitions and Investments - The acquisition of Great Bear Royalties Corporation was completed for approximately C$199.6 million (US$151.7 million), with the asset being a 2.0% net smelter return royalty on the Great Bear Project[84]. - A sliding scale gross royalty on the Cortez Complex was acquired for $525 million, with a royalty rate increasing from 0% at gold prices below $400 per ounce to 3% at prices above $900 per ounce[86]. - The acquisition of the Cortez Complex Royalty resulted in over a 300% increase in gold mineral reserves and over a 1200% increase in measured and indicated gold mineral resources[116]. - The acquisition of the Cortez Complex Royalty resulted in a 380% increase in gold mineral reserves and a 1230% increase in measured and indicated gold mineral resources attributable to the company's royalty interests at Cortez[159]. Financial Performance - Net income for Q3 2022 was $45.8 million, or $0.70 per share, compared to $70.2 million, or $1.07 per share in Q3 2021, a decline of 34.9%[118]. - Net income for the nine months ended September 30, 2022, was $182.6 million, or $2.78 per share, down from $205.9 million, or $3.14 per share, in the prior year[130]. - Cost of sales for the nine months ended September 30, 2022, decreased to $69.7 million from $73.4 million in the same period of 2021[136]. - General and administrative costs increased to $25.8 million for the nine months ended September 30, 2022, compared to $21.3 million in the prior year[139]. - Interest and other expenses rose to $8.8 million for the three months ended September 30, 2022, from $1.9 million in the prior year, primarily due to higher interest expenses[128]. - Interest and other expenses increased to $11.1 million for the nine months ended September 30, 2022, from $4.9 million in the prior year, mainly due to a $500 million draw on the revolving credit facility[141]. - Income tax expense totaled $20.3 million for the nine months ended September 30, 2022, compared to $39.2 million for the same period in 2021, resulting in an effective tax rate of 10.0%[142]. Cash Flow and Liquidity - Net cash provided by operating activities totaled $316.3 million for the nine months ended September 30, 2022, compared to $343.0 million for the same period in 2021[150]. - Net cash used in investing activities was $716.5 million for the nine months ended September 30, 2022, compared to $401.6 million in the prior year, primarily due to higher acquisitions of royalty interests[151]. - Net cash provided by financing activities totaled $378.9 million for the nine months ended September 30, 2022, compared to net cash used of $163.1 million in the prior year[153]. - As of September 30, 2022, the company had $550 million available and $450 million outstanding under its revolving credit facility, resulting in approximately $667 million of total liquidity[146]. - The company believes its current financial resources will be adequate to cover anticipated expenditures for debt service, general and administrative expenses, and capital expenditures for the foreseeable future[147]. Production Outlook - The current life of mine for Andacollo is expected to continue until 2035, with a transition to higher grade ore anticipated after 2023[97]. - Centerra expects to extend Mount Milligan's mine life by over four years to 2033, with an increase of more than 800,000 ounces of payable gold and 191 million pounds of copper from 2022 onwards[106]. - Average annual production at Mount Milligan is projected to be 175,000 ounces of gold and 68 million pounds of copper[106]. - Khoemacau is expected to produce approximately 60,000 to 65,000 tonnes of payable copper and 1.8 to 2.0 million ounces of payable silver per year at full production[100]. Inventory and Purchases - Gold inventory as of September 30, 2022, was 22,700 ounces, an increase from 18,700 ounces as of December 31, 2021[125]. - For the three months ended September 30, 2022, total gold purchases were 42,400 ounces, an increase of 10.5% compared to 38,200 ounces in the same period of 2021[125]. - Silver purchases for the same period reached 674,100 ounces, up 10.0% from 612,000 ounces in the prior year[131]. - Copper purchases for the nine months ended September 30, 2022, totaled 11.2 million pounds, consistent with the same amount in the prior year[139]. Metal Price Risks - The company's earnings and cash flows are significantly impacted by fluctuations in metal prices, including gold, silver, and copper[174]. - Factors affecting metal prices include demand, production levels, economic policies, and geopolitical events[174]. - The company faces risks associated with metal price volatility, which could negatively affect its results of operations or cash flow[174].