PART I FINANCIAL INFORMATION Item 1. Financial Statements (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 conditional20 - 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 outstanding3537 - Subsequent to the quarter end, the company acquired a $1.0 billion gold stream on the Kansanshi mine, funded by cash and an $825 million draw on its credit facility. It also entered into agreements to acquire Sandstorm Gold and Horizon Copper727475 Revenue by Segment (Six Months Ended June 30, 2025) | Segment | Revenue ($ thousands) | | :--- | :--- | | Stream interests | 255,673 | | Royalty interests | 147,407 | | Total | 403,080 | Management's Discussion and Analysis of Financial Condition and Results of Operations 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 - 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 agreement9198100 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 $825 million was drawn for the Kansanshi acquisition142143148 Quantitative and Qualitative Disclosures about Market Risk This section outlines the company's primary market risk from metal price volatility, providing a sensitivity analysis on revenue impact - The company's earnings and cash flows are significantly impacted by fluctuations in the market prices of gold, silver, and copper158 Revenue Sensitivity to 10% Metal Price Change (H1 2025) | Metal | Percentage of Total Revenue | Impact on Revenue ($) | | :--- | :--- | :--- | | Gold | 77% | $31.4 million | | Silver | 12% | $4.7 million | | Copper | 8% | $3.6 million | Controls and Procedures 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 effective160 - No changes in internal control over financial reporting occurred during the quarter that materially affected, or are reasonably likely to materially affect, these controls161 PART II OTHER INFORMATION Legal Proceedings The company reported no legal proceedings for the period - The company reported no legal proceedings163 Risk Factors 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 flexibility165167 - 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 company169181 - 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 synergies171175 - 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 decisions178 Unregistered Sales of Equity Securities and Use of Proceeds The company reported no unregistered sales of equity securities or related use of proceeds during the period - None reported184 Defaults Upon Senior Securities The company reported no defaults upon its senior securities - None reported185 Mine Safety Disclosures This item is not applicable to Royal Gold's business model - Not applicable186 Other Information 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 acquisition188 - 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 borrowing188 Exhibits 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, 2025191 - The Sixth Amendment to the Revolving Facility Credit Agreement and the Incremental Joinder to the agreement are filed as exhibits191
Royal Gold(RGLD) - 2025 Q2 - Quarterly Report