Earnings call transcript: Royal Gold beats EPS, misses revenue in Q2 2025

Royal Gold Inc. reported its earnings for the second quarter of 2025, showcasing a mixed performance. The company exceeded earnings per share (EPS) expectations but fell short on revenue forecasts. The EPS came in at $1.81, surpassing the forecast of $1.74, while revenue was $209.6 million, below the expected $226.31 million. Despite the revenue miss, the stock price reacted positively, rising 2.5% to $161.33 in after-hours trading. According to InvestingPro analysis, Royal Gold appears undervalued based on its Fair Value metrics, with the stock showing impressive YTD returns of 26.47%.

Key Takeaways

• Royal Gold reported an EPS of $1.81, beating the forecast by 4.02%.
• Revenue fell short of expectations, coming in at $209.6 million.
• The company achieved record operating cash flow of $153 million.
• Gold remains the dominant revenue driver, accounting for 78% of total revenue.
• The stock price rose 2.5% in after-hours trading.

Company Performance

Royal Gold’s performance in Q2 2025 was marked by record revenue of $210 million, reflecting a 20% increase year-over-year. The company reported net income of $132.3 million, or $2.10 per share, and an adjusted net income of $118.8 million. InvestingPro data reveals an impressive gross profit margin of 87.34% and a strong financial health score of "GREAT," highlighting the company’s operational efficiency. The company’s focus on gold continues to pay off, with gold accounting for the majority of its revenue. The acquisition of new streams and royalties in Zambia, Ecuador, and British Columbia further solidified its market position.

Financial Highlights

• Revenue: $209.6 million, up 20% year-over-year
• Earnings per share: $1.81, surpassing the forecast of $1.74
• Net income: $132.3 million ($2.10 per share)
• Operating cash flow: $153 million, a record for the company
• Adjusted EBITDA margin: 84%

Earnings vs. Forecast

Royal Gold’s EPS of $1.81 exceeded analysts’ expectations by 4.02%, marking a positive surprise for investors. However, revenue fell short by 7.38%, as the company reported $209.6 million against the forecasted $226.31 million. This mixed result reflects the challenges in meeting revenue targets despite strong earnings performance.

Market Reaction

Following the earnings announcement, Royal Gold’s stock price increased by 2.5% in after-hours trading to $161.33. This positive movement suggests that investors were encouraged by the company’s earnings beat and strong cash flow, despite the revenue miss. The stock’s performance is noteworthy given its 52-week range, with a high of $191.78 and a low of $127.31. InvestingPro subscribers have access to additional insights, including 8 more ProTips and comprehensive valuation metrics that help explain the market’s positive reaction. The company has maintained dividend payments for 26 consecutive years and boasts a PEG ratio of 0.28, indicating attractive valuation relative to growth.

Outlook & Guidance

Royal Gold maintained its guidance for 2025, focusing on metal sales and strategic acquisitions. The company expects to close its transactions with Sandstorm Gold and Horizon Copper in Q4 2025. Looking ahead, Royal Gold anticipates receiving its first deferred gold ounces from the Mount Milligan mine in Q3 or Q4.

Executive Commentary

CEO Bill Heisenbuttel emphasized the company’s commitment to growth and maintaining a strong balance sheet. "We remain focused on growth in precious metals, maintaining a strong balance sheet and liquidity, and increasing our dividend," he stated. He also highlighted the company’s strategic acquisitions and the progress in regulatory approvals.

Risks and Challenges

• Potential fluctuations in gold prices could impact revenue.
• Delays in closing strategic acquisitions may affect growth plans.
• Market volatility and economic uncertainties pose challenges to investor sentiment.
• Currency exchange rate fluctuations could impact financial results.
• Regulatory hurdles in international markets may delay project developments.

Q&A

During the earnings call, analysts inquired about Royal Gold’s deleveraging strategy following recent acquisitions. The company confirmed its focus on debt repayment and highlighted its robust guidance preparation process. Additionally, executives discussed their openness to investments in Africa and ruled out share buybacks in favor of debt reduction.

Full transcript - Royal Gold Inc (RGLD) Q2 2025:

Operator: Hello all, and thank you for joining us on today’s Royal Gold twenty twenty five Second Quarter Conference Call. My name is Drew, and I’ll be the operator today. With that, it’s my pleasure to hand over to Alastair Baker, Senior Vice President, Investor Relations and Business Development to begin. Please go ahead when you’re ready.

Alastair Baker, Senior Vice President, Investor Relations and Business Development, Royal Gold: Thank you, operator. Good morning, and welcome to our discussion of Royal Gold’s Second Quarter twenty twenty five Results. This event is being webcast live, and a replay of this call will be available on our website. Speaking on the call today are Bill Heisenbuttel, President and CEO Paul Libner, Senior Vice President and CFO and Martin Raffield, Senior Vice President of Operations. Other members of the management team are also available for questions.

During today’s call, we will make forward looking statements, including statements about our projections and expectations for the future. These statements are subject to risks and uncertainties that could cause actual results to differ materially from These risks and uncertainties are discussed in yesterday’s press release and our filings with the SEC. We will also refer to certain non GAAP financial measures, including adjusted net income, adjusted net income per share, adjusted EBITDA and cash G and A. Reconciliations of these measures to the most directly comparable GAAP measures are available in yesterday’s press release, which can be found on our website. Phil will start with an overview of the quarter and recent events.

Mark will give some commentary on the portfolio and Paul will provide a financial update. After the formal remarks, we’ll open the lines for a Q and A session. I will now turn the call over to Bill.

Bill Heisenbuttel, President and CEO, Royal Gold: Good morning, and thank you for joining the call. I’ll begin on Slide five. Our second quarter was another excellent quarter for Royal Gold with new records for revenue, earnings and cash flow. Earnings for the quarter were $132,000,000 or $2.1 per share. We recognized a couple of discrete tax items that Paul will describe in more detail.

And after adjusting for these items, earnings were a strong $119,000,000 or $1.81 per share. Gold remained the largest contributor to revenue for the quarter at about 78% of total. And the strong gold price combined with our low and stable cash G and A increased our adjusted EBITDA margin to 84% for the quarter. We were debt free at the end of the quarter and we paid our quarterly dividend of $0.45 per share. We also achieved the full offset of the Pueblo Viejo advanced stream deposit during the quarter despite the recent silver recovery shortfalls.

We made our investment at Pueblo Viejo in 2015, and we expect to see further revenue into the mid-2040s as Barrick continues to work on an extension to the mine life. On the strategic front, we have taken steps to position Royal Gold as a premier growth company with the Sandstorm Gold and Horizon Copper acquisitions. These transactions will significantly add to our scale, growth and diversification, and the portfolios are uniquely complementary when you consider how our producing heavy portfolio fits with the development heavy Sandstorm and Horizon portfolios. We also think there will be additional benefits, including sector leading asset diversification with no asset accounting for more than about 12% of NAV, simplification of the Sandstorm and Horizon relationship and elimination of a complex intercompany structure. Additional appeal to investors have a larger and more diversified company with the potential for increased investment from passive funds and stronger cash flows from the combined portfolios, which should allow us to continue our record of increasing the dividend, quickly repaying borrowings and continuing to compete for the best opportunities in our sector.

It is important to note that these transactions do not shift our strategic focus. We remain focused on growth in precious metals, maintaining a strong balance sheet and liquidity and increasing our dividend. While we have been working on these transactions, we have also continued to add assets to the portfolio that meet our criteria for upside in precious metals, and we have completed three recent transactions. Earlier this week, we acquired a gold stream on a world class Kansanshi mine operated by First Quantum in Zambia. The economic effective date is August 5, and we expect gold deliveries of approximately 12,500 ounces this year.

This is a mine with a twenty year production history and the potential to operate for a further twenty plus years, and it will be a cornerstone asset in our portfolio. This asset acquisition further enhances our portfolio diversification, and as I mentioned, no single asset will contribute more than 12% of net asset value on a pro form a basis with the Sandstorm and Horizon transactions. In May, we acquired a stream and royalty interest on the Wurinza project in Ecuador. This is a large scale copper gold moly project that has world class potential production in the early 2030s. And finally, we acquired a royalty on the Lawyers Ranch development project in British Columbia.

This transaction adds to our royalty exposure in an emerging gold camp and is an example of how we can identify early stage but high potential opportunities. Finally, I would like to welcome Marcus Stowe to our board of directors. Mark’s institutional knowledge with Royal Gold and broad technical background and experience are a welcome addition to the Board, and I look forward to benefiting from his guidance for many years to come. I’ll now turn the call over to Martin.

Martin Raffield, Senior Vice President of Operations, Royal Gold: Thanks, Bill. Turning to Slide six, I’ll give some comments on second quarter revenue. Overall revenue was a record $210,000,000 with volume of 63,900 GEOs. Royalty revenue was up by about 50% from the prior year quarter to $77,000,000 We saw another strong quarter from Penasquito and Mancho with additional strong contributions from Bellevue and Wharf. Revenue from our Stream segment was $133,000,000 up by about 8% from last year with increased sales from Mount Milligan, Pueblo Viejo and Comical, partially offset by lower sales from Zavancino, Wassa and Rainy River.

I’ll turn to Slide seven and give some comments on notable developments within the portfolio. At Mount Milligan, Centerra reported yesterday that they had encountered lower than expected gold grades from areas they were mining in the second quarter. They’ve started an infill and grade control program to address this issue and reduce their 2025 gold production guidance to 145,000 to 165,000 ounces. There is no change to the previous copper production guidance of 50,000,000 to 60,000,000 pounds. Fintera expects production of both metals to be weighted towards the second half of the year.

Fintera also reported that the pre feasibility study for the mine life extension project remains on track for completion in the third quarter. We expect this will be a positive catalyst for Royal Gold and look forward to seeing the results. At Andacollo, Teck reported that the SAG mill successfully restarted in late June and production has now resumed to full rates after a mechanical issue caused a maintenance shutdown of the SAG mill in early June. Teck also reported that twenty twenty five copper production guidance is unchanged from the previous range of 45 to 55,000 tonnes. Teck does not provide gold production guidance, but we expect the gold deliveries in the fourth quarter of this year will be lower due to the month long shutdown.

Given the normal course delay between production and sales, we do not expect this shutdown to impact our 2025 sales. Teck also reported that both unions at Andacollo had ratified three year labor contracts in June and July. At Pueblo Viejo, we achieved the full offset of the stream advance payment. We acquired our interest in mid-twenty fifteen, and we are looking forward to further contributions through the mid-2040s as Barrick advances the mine life extension project. We also had some updates at a handful of our smaller assets.

At Back River, B2Gold announced the first gold pour on June 30, and they expect to ramp up to commercial production in the third quarter. At Cote, Ion Gold reported in June that the processing plant operated at nameplate capacity on average for over thirty consecutive days. At Mararosa, Hochschild reported that mining activity is continuing, but operation of the processing plant was temporarily suspended in June after heavier than usual rainfall as well as contracted performance issues. At Rainy River, New Gold reported record monthly production in June. Production is expected to continue to increase in the third quarter, and the 2025 guidance range of 265,000 to 295,000 ounces is unchanged.

At Zavancina, Iro revised gold production guidance down to 50,000 to 60,000 ounces for 2025 due to temporary impacts from the transition to mechanized mining. IRO expects this transition to drive higher production with a step change in mining rates in the 2025. Additionally, stream deliveries from Zaventina reached the 49,000 ounce threshold in July, and our cash payment per ounce increased from 25% to 40% of the spot price. And finally, at Cactus, Arizona Sonoran announced it will buy back 45% of our 2.5% MSR royalty to $7,000,000 The buyback was expected and was factored into our initial valuation when the royalty was acquired in late twenty twenty four. I’ll now turn the call over to Paul.

Paul Libner, Senior Vice President and CFO, Royal Gold: Thanks, Martin. I will turn to Slide eight and give an overview of the financial results for the quarter. For this discussion, I’ll be comparing the quarter ended 06/30/2025 to the prior year quarter. Revenue for the quarter was up strongly by 20 to $210,000,000 which was another record for the company. Metal prices were a primary driver for the revenue increase with gold up 40%, silver up 17% and copper down slightly by 2% over the prior year.

Gold remains our dominant revenue driver making up 78% of our total revenue for the quarter followed by silver at 11% and copper at 7%. Royal gold has the highest gold revenue percentage when compared to our major peers in the royalty and streaming sector. Turning to Slide nine, I’ll provide a bit more detail on certain financial line items for the quarter. G and A expense was $10,300,000 and was in line with the prior year. Excluding non cash stock compensation expense, our cash G and A was up from 4% for the quarter.

Our DD and A expense decreased to $31,000,000 from $36,000,000 in the prior year. The lower overall depletion expense was primarily due to lower depletion rates in our stream segment as well as lower gold sales from Zaventina during the quarter. These decreases were partially offset by higher production at Voisey’s Bay and Mancho compared to the prior year. On a unit basis, this expense was $487 per GEO for the quarter compared to $480 per GEO in the prior year. Tax expense for the quarter was $10,500,000 compared to $19,000,000 in the prior year.

The lower income tax expense in the current period included two discrete tax benefits. First, a $9,000,000 benefit related to a withholding tax refund on a foreign royalty and second, a $4,000,000 benefit for the release of a valuation allowance. Excluding all discrete tax benefits, our effective tax rate for the quarter was 17.9%. Net income for the quarter increased significantly over the prior year to a record $132,300,000 or $2.1 per share. The increase in net income was primarily due to higher revenue and lower tax expense.

After adjusting for the discrete tax benefits I just mentioned, adjusted net income was a record $118,800,000 or $1.81 per share. Our operating cash flow this quarter was also a record at $153,000,000 up significantly from $114,000,000 in the prior period. The increase was primarily due to higher net cash proceeds received from our stream and royalty interest, lower income tax expense and lower interest expense on our debt when compared to the prior year period. Finally, we are maintaining our 2025 guidance ranges for metal sales, DD and A and tax rate. I will end on Slide 10 and provide a brief summary of our financial position as of 06/30/2025.

We remain debt free at the end of the quarter and our total liquidity grew to just over $1,250,000,000 which includes the fully undrawn and available $1,000,000,000 revolving credit facility and nearly $270,000,000 of working capital. Our recent business development successes have prompted us to make use of our available liquidity to finance recent acquisitions. As we detailed on Tuesday with the Kansanshi transaction, we amended our revolver in late June and extended the maturity by two years to 2030 and increased the accordion feature from $250,000,000 to $400,000,000 We recently exercised the accordion feature and now have a total committed revolver capacity of $1,400,000,000 We view our credit facility as a key strategic financing tool, and I would like to again thank each banking partner within our syndication for the continued and growing support. Also, as we detailed on Tuesday’s consent transaction call, we drew $825,000,000 on the revolver and used $175,000,000 of our available cash to fund the acquisition. The current all in borrowing rate on the recent draw is approximately 5.5%.

Upon this draw and the exercise of the accordion feature, we now have $575,000,000 available under our credit facility. As part of the Warrens acquisition in May, dollars 100,000,000 of funding remains outstanding. We expect to fund the remaining commitment in $250,000,000 tranches, with the first tranche expected in the third quarter twenty twenty five and the second in May 2026. And with respect to the Sandstorm and Horizon transactions, we expect a further draw on the credit facility upon closing, which should occur in the fourth quarter. Finally, we anticipate receiving the first delivery of deferred gold consideration from the Mount Milligan cost support agreement in the latter part of third quarter or early in the fourth quarter.

As a reminder, as partial consideration for this agreement, Centerra will deliver 50,000 gold ounces in the future. The first deliveries will be in tranches of 11,111 ounces each and relate to production thresholds reached at Equinox Gold’s Greenstone mine. The first of those thresholds should occur during the third quarter and we expect to receive this delivery within sixty days of the threshold being reached. To remind you of the accounting, when we receive the deferred gold ounces, the Mount Milliken deferred support liability on our balance sheet will increase by the fair market value of the gold on the date the deferred gold is received. We expect to sell the deferred gold ounces within a few days or a week after they If the price we sell the gold at is higher or lower than the fair market value when we receive the gold, the mark to market difference will go through our earnings.

Understanding there are some accounting related complexities for the deferred gold ounces we will receive and sell, I will provide another explanation of the accounting treatment at our next quarterly call. You should also remember that these deferred gold ounces are not included in our 2025 sales guidance and the sales will not be reflected in our calculation of GEOs. That concludes my comments on our financial performance for the quarter. And I’ll now turn the call back to Bill for closing comments.

Bill Heisenbuttel, President and CEO, Royal Gold: Thanks, Paul. I want to finish with a brief update on the Sandstorm and Horizon transactions. Since the announcement on July 7, we have had constructive engagement with many investors and shareholders, and we believe there is widespread support for the transactions. Investors appreciate the logic of combining complementary portfolios to create a larger portfolio with growth, diversification, and scale. And we believe that Royal Gold will have the size to attract more generalist investors who like to reduce single asset risk.

We are feeling confident in our ability to close on the timeline we put forward. We have received approval under the Canadian Competition Act and reviews under the Investment Canada Act and South Africa Competition Act are underway. We expect to file the preliminary proxy with the SEC shortly, and we remain confident that the required approvals will be obtained in order to close in the fourth quarter. Operator, that concludes our prepared remarks. I’ll now open the line for questions.

Operator: Thank you. We’ll now start today’s Q and A session. Our first question today comes from Fahad Tariq from Jefferies. Your line is now open. Please go ahead with your question.

Fahad Tariq, Analyst, Jefferies: Hi, thanks for taking my question. Could you maybe talk through the deleveraging goal pro form a after these transactions are complete? I think the revolver will be somewhere around 1,200,000,000.0 Maybe just talk through how you’re thinking about deleveraging going forward. Thanks.

Bill Heisenbuttel, President and CEO, Royal Gold: Yeah. Thanks for the question. I think if you followed our history, you’ve seen us take advances under the revolving credit and then pay that off over time. That would that would still be the the plan. I think Paul mentioned that if we didn’t do anything on the business development front, that would that we would expect it to take a couple years.

But we have to balance that with re other investment opportunities that that might come up. So the the plan, as it always is, is to take excess cash flow, each quarter and pay down the revolver. And at some point, we might get it back to zero.

Fahad Tariq, Analyst, Jefferies: Okay. Thank you.

Operator: Our next question comes from Lawson Winder from Bank of America. Your line is now open. Please proceed.

Paul Libner, Senior Vice President and CFO, Royal Gold: Thank you very much, operator,

Lawson Winder, Analyst, Bank of America: and hello, gentlemen. Thank you for today’s update. Can I ask about Milligan and their reduction in their 2025 gold production guidance? So Royal Gold has reiterated their volume production guidance range or volume sales guidance range for 2025 despite that. And so that’s also in light of Anticoya underperforming and then Zaventina also underperforming year to date.

Could you maybe walk us through what some of the assets are in the portfolio that are offsetting, what you’re seeing in weakness in those sort of key assets allowing you to remain comfortable with the 2025 guidance range?

Bill Heisenbuttel, President and CEO, Royal Gold: Yes. Lawson, thanks for the question. I think what I might do is turn it over to Martin and let him walk you through how we come up with our guidance ranges, maybe that will help answer the question. So over to you, Martin.

Martin Raffield, Senior Vice President of Operations, Royal Gold: Yes. Thanks, Lawson. So we don’t disclose our guidance based on individual operations. So I’m not really able to give much specific comment in terms of your question about which ones are going to be offsetting this. What I will say is that at the start of each year, we do carry out a rigorous risk adjusted budgeting and guidance preparation process.

We don’t take the guidance ranges supplied by the operators and just use those and come up with our guidance. We receive monthly budget data from the stream partners. We forecast each asset based on historical performance and based on our specific knowledge of that operation. We build in timing adjustments between production deliveries and sales. And in the case of concentrate producing operations like Milligan and Andacollo, those can be up to five to six months where you include port transport, ocean shipping and smelting, etcetera.

And that’s a pretty inexact process, especially in the ocean shipping side because and you’ll often see in our press releases that we referenced earlier or late deliveries compared to our expectation during the quarter. So some variability in there. For the royalty assets, we generally have lower information rights. And on those, we tend to rely on historic performance and public disclosures for our risk adjustment process. So as I said at the beginning, we don’t just take the numbers provided by the operations.

We put a lot of risk adjustment into those. Those come out with the numbers. Given that, are comfortable with maintaining our 2025 guidance range at this stage in the year, even though those have been offset somewhat by Milligan underperformance in Zavancino guidance reduction.

Lawson Winder, Analyst, Bank of America: Okay. No. That’s That’s that’s very clear explanations. Can I ask about Kansanshi as well? I’m sure you’re very pleased to have gotten that asset.

I mean, it’s a fabulous asset. So congratulations on achieving this deal. What I wanted to ask about though with respect to this deal is exposure to Africa. And, you know, Zambia relative to other African jurisdictions has, you know, proven to be, one of the better quality jurisdictions in Africa. But without question, there’s a lot of political volatility in the country.

And you do have Comacao and Botswana, there’s been a recent political change there with a new president. Where you are today, like assuming Kinsanshi is in the portfolio, are you at a point now where you’re maxed out on African exposure? Or are you still comfortable adding additional exposure in Africa?

Bill Heisenbuttel, President and CEO, Royal Gold: Lawson, it’s not so much a continent approach that we would take. We’re very comfortable in the in the three countries where we have interest. So it’s more of a a country by country, and I certainly wouldn’t wanna sit here today and and rule out further investments in a country where we have found that, our investments have done well. You know, I I think Botswana, in in particular, stands out a little bit. I wouldn’t I wouldn’t wanna take Africa off the, off the table because we have other investments.

We’re if we’re comfortable with the country, we would consider, additional investments. And and, you know, I have to tell you, there’s political uncertainty all over the world and in even in countries that, you know, we we tend to think of as stable. So and that’s one of the reasons we really like the Sandstorm and Horizon transactions. The diversification in the portfolio, I think, is really helpful, for us.

Lawson Winder, Analyst, Bank of America: Okay. Well said on global political risk. If I could just ask one more question on capital allocation. The shares, without question, have underperformed since you announced the Sandstorm transaction. I think there are some folks wondering whether or not there’s any consideration for Royal Gold to implement a buyback as a result.

Fully acknowledge that you’ve been, reluctant to do that historically, but just in light of the current situation, is there any consideration to that?

Bill Heisenbuttel, President and CEO, Royal Gold: At this point, I don’t think you know, I think what we’re gonna do with with excess cash flow at this point is pay down, the debt that we are going to take on, with the with these transactions. To the extent we can find business development opportunities, we’ll we’ll look at those as well. But debt repayment, I think, is going to be a key focus before we ever get to consideration of a buyback.

Lawson Winder, Analyst, Bank of America: Excellent. Thank you very much, Phil. Thanks,

Operator: Our next question comes from Josh Wolfson from RBC. Your line is now open. Please go ahead.

Fahad Tariq, Analyst, Jefferies: Yes. Thanks very much. Just a couple of quick ones. On the Sandstorm transaction, is there any more information you can provide on the timing of the circular filing and when the shareholder votes are scheduled?

Bill Heisenbuttel, President and CEO, Royal Gold: Josh, I really can’t. I I’m sort of focused on on our side of things, and and I I don’t honestly have the timetable straight in my head. But we’re we’re going to shortly file the preliminary proxy with the SEC. And I think what once we know whether we’re gonna get comments, whether we have to respond to comments, the timing of it then will play out once we have that. So there there’s there’s nothing we see that that makes us think the fourth quarter isn’t a good target, but I don’t think I can provide much more in the way of a detailed timetable at this point.

Fahad Tariq, Analyst, Jefferies: Okay. Thanks. And then with this transaction, are there going to

Lawson Winder, Analyst, Bank of America: be any additional

Fahad Tariq, Analyst, Jefferies: disclosures or documentation, I guess, specifically for the 301s? I know historically, sometimes these transactions would require some some disclosures on on a key asset either for the target companies or or yourselves.

Bill Heisenbuttel, President and CEO, Royal Gold: Just actually, let me, Martin, do you have a view on on what we might see in terms of, forty three one zero one or similar technical reports?

Martin Raffield, Senior Vice President of Operations, Royal Gold: Josh, are you asking whether we would be putting out forty three one o ones, or are you talking about operator forty three one o ones that we expect?

Fahad Tariq, Analyst, Jefferies: It would be your filing of the forty three one zero ones for your underlying stream related operations or same store or Horizon filing any of these documents, if you’re if you’re aware of that.

Martin Raffield, Senior Vice President of Operations, Royal Gold: Yeah. We’re we’re not, we’re not planning on filing any documents for the for the or any forty three one zero one documents for these properties at the moment. No.

Fahad Tariq, Analyst, Jefferies: Okay. And then last question just on related to some of the accounting that was commented out with the mantle again ounces in the third or fourth quarter. Could you remind us what the guess what booked value was of those ounces?

Bill Heisenbuttel, President and CEO, Royal Gold: Hi, Josh. This is Thanks

Paul Libner, Senior Vice President and CFO, Royal Gold: for your question.

Bill Heisenbuttel, President and CEO, Royal Gold: Go ahead, Paul.

Paul Libner, Senior Vice President and CFO, Royal Gold: Oh, sorry, Bill. Yeah. No.

Bill Heisenbuttel, President and CEO, Royal Gold: Go ahead, Paul.

Paul Libner, Senior Vice President and CFO, Royal Gold: No. Can can you hear me okay?

Fahad Tariq, Analyst, Jefferies: Yep. Loud and clear.

Paul Libner, Senior Vice President and CFO, Royal Gold: Hello? Okay. Sorry. If

Bill Heisenbuttel, President and CEO, Royal Gold: you recall

Paul Libner, Senior Vice President and CFO, Royal Gold: in the transaction, back in, 2024, we did receive some cash and also that free cash flow interest and then also these deferred gold ounces. The only thing that was booked at the time of transaction was was is part of this deferred support liability that we have on the balance sheet was that cash, the 25,000,000. So we have no basis in those ounces yet. So once we receive those ounces, again that deferred liability will go up by the fair market value of those ounces received and then we’ll subsequently sell those ounces in the market within a few days afterwards of receipt. And then that deferred liability will go up by that the fair market value of those ounces received.

Fahad Tariq, Analyst, Jefferies: Okay. So just to clarify, your comments on the you know, the the accounting impact is is the difference of when you book that, income in the third quarter versus the sale price in the fourth quarter, not related to what it stands in the book today. Okay.

Paul Libner, Senior Vice President and CFO, Royal Gold: Correct. Yeah. More more of a mark to market. Just wanna make you aware of it. But more importantly, just as I said also in those prepared remarks is that, again, those ounces will not be part of our, you know, or they’re not part of our 2025 sales guidance, and and they’re not gonna be reflected in our in our GEO calculations.

Fahad Tariq, Analyst, Jefferies: Got it. Okay. That’s very helpful. Thank you.

Bill Heisenbuttel, President and CEO, Royal Gold: Thanks, Jeff.

Operator: With that, we have no further questions at this time. So I’ll hand back over to Bill Heisenbuttel for some closing comments.

Bill Heisenbuttel, President and CEO, Royal Gold: Well, thank you for taking the time to join us today. We we certainly appreciate your your interest. We look forward to updating you on our progress during our next quarterly call. Take care.

Operator: That concludes today’s call. You may now disconnect your line.

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