ROYAL GOLD, INC. A discussion of the changes in our financial condition and results of operations for the fiscal years endedJune 30, 2019 , and 2018, has been omitted from this Annual Report, but may be found in Item 7, MD&A, of our Annual Report on Form 10-K for the year endedJune 30, 2019 , filed with theSEC onAugust 8, 2019 , which is available free of charge on theSEC's website at www.sec.gov and our website at www.royalgold.com.
Overview
We acquire and manage precious metal streams, royalties, and similar interests. We seek to acquire existing stream and royalty interests or to finance projects that are in production or in the development stage in exchange for stream or royalty interests.
We manage our business under two segments:
Acquisition and Management of 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 metals produced from a mine, at a price determined for the life of the transaction by the purchase agreement. As ofJune 30, 2020 , we owned seven stream interests, which are on six producing properties and two development stage properties. Our stream interests accounted for approximately 72% of our total revenue for each of the fiscal years endedJune 30, 2020 , and 2019. We expect stream interests to continue representing a significant portion of our total revenue. Acquisition and Management of 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. As ofJune 30, 2020 , we owned royalty interests on 35 producing properties, 15 development stage properties and 129 exploration stage properties, of which we consider 48 to be evaluation stage projects. We use "evaluation stage" to describe exploration stage properties that contain mineralized material and on which operators are engaged in the search for reserves. Royalties accounted for approximately 28% of our total revenue for each of the fiscal years endedJune 30, 2020 , and 2019. We do not conduct mining operations on the properties in which we hold stream and royalty interests. Except for our interest in the Peak Gold JV, we are not required to contribute to capital costs, exploration costs, environmental costs, or other operating costs on those properties. In the ordinary course of business, we engage in a continual review of opportunities to acquire existing stream and royalty interests, to establish new streams and royalties on operating mines, to create new stream and royalty interests through the financing of mine development or exploration, or to acquire companies that hold stream and royalty interests. We currently, and generally at any time, have acquisition opportunities in various stages of active review, including, for example, our engagement of consultants and advisors to analyze particular opportunities, our analysis of technical, financial, legal and other confidential information of particular opportunities, submission of indications of interest and term sheets, participation in preliminary discussions and negotiations and involvement as a bidder in competitive processes. 29 Table of Contents Our financial results are primarily tied to the price of gold and, to a lesser extent, the prices of silver and copper, together with the amounts of production from our producing stage stream and royalty interests. For the fiscal years endedJune 30, 2020 and 2019, gold, silver, and copper price averages and percentage of revenue by metal were as follows: Fiscal Year ended June 30, 2020 June 30, 2019 Average Average Percentage Metal Price Percentage of Revenue Price of Revenue Gold ($/ounce)$ 1,560 79%$ 1,263 78% Silver ($/ounce)$ 16.90 9%$ 15.00 9% Copper ($/pound)$ 2.57 9%$ 2.79 9% Other N/A 3% N/A 4%
Operators' Production Estimates by Stream and Royalty Interest for Calendar 2020
We received annual production estimates from many of the operators of our producing mines during the first calendar quarter of 2020. In some instances, an operator may revise its original calendar year guidance throughout the year. The following table shows such production estimates for our principal producing properties for calendar 2020 as well as the actual production reported to us by the various operators throughJune 30, 2020 . The estimates and production reports are prepared by the operators. We do not participate in the preparation or calculation of the operators' estimates or production reports and have not independently assessed or verified, and disclaim all responsibility for, the accuracy of such information. Please refer to Part I, Item 2, Properties, of this report for further discussion on any updates at our principal producing properties. Operators' Estimated and Actual Production by Stream and Royalty Interest for Calendar 2020Principal Producing Properties Calendar 2020 Operator's Production
Calendar 2020 Operator's Production
Estimate(1) Actual(2)
Gold Silver Base Metals Gold Silver Base Metals
Stream/Royalty (oz.) (oz.) (lbs.) (oz.) (oz.) (lbs.)
Stream:
Andacollo(3) 53,000 27,500
140,000 -
Mount Milligan(4) 160,000 69,300
Copper 80 - 90 Million 39.1 Million
530,000 -
Pueblo Viejo(5) 580,000 N/A 254,000 N/A
165,000 -
Wassa(6) 170,000 85,100
Royalty:
Cortez GSR1 66,500 61,800
Cortez GSR2 109,000 48,300
Cortez GSR3 145,700 52,400
Cortez NVR1 113,200 88,700
Cortez NVR1C 29,900 400
Peñasquito(7) 510,000 28 million 185,000 13.1 Million Lead 190 million 84 Million Zinc 360 million 178 Million
(1) Production estimates received from our operators are for calendar 2020.
There can be no assurance that production estimates received from our
operators will be achieved. Please also refer to our cautionary language
regarding forward-looking statements following this MD&A, as well as the Risk
Factors identified in Part I, Item 1A, of this report for information
regarding factors that could affect actual results.
(2) Actual production figures shown are from our operators and cover the period
this table.
(3) The estimated and actual production figures shown for Andacollo are contained
gold in concentrate.
(4) The estimated and actual production figures shown for
payable gold and copper in concentrate.
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(5) The estimated and actual production figures shown for Pueblo Viejo are
payable gold in doré and represent Barrick's 60% interest in Pueblo Viejo.
The operator did not provide estimated or actual silver production.
(6) The estimated and actual production figures shown for Wassa is payable gold
in doré.
(7) The estimated and actual gold and silver production figures shown for
Peñasquito are payable gold and silver in concentrate and doré. The
estimated and actual lead and zinc production figures shown are payable lead
and zinc in concentrate.
COVID-19 and current economic environment
Several of our operating counterparties announced temporary operational
curtailments or the withdrawal or review of previously disclosed guidance due to
the ongoing COVID-19 pandemic. The economic and societal impacts associated with
COVID-19 are fluid and changing rapidly, and we are currently unable to predict
the nature or extent of any impact on our results of operations and financial
condition. We will continue to monitor any further developments that the
COVID-19 pandemic may have on stream or royalty interests as part of our regular
asset impairment analysis.
Historical Production
The following table discloses historical production for the past two
fiscal years for the principal producing properties that are subject to our
stream and royalty interests, as reported to us by the operators of the mines.
We do not participate in the preparation or calculation of the operators'
production reports and have not independently assessed or verified, and disclaim
all responsibility for, the accuracy of such information.
Historical Production(1) by Stream and Royalty Interest
Principal Producing Properties
For the Fiscal Years Ended June 30, 2020 and 2019
Stream/Royalty Metal 2020 2019
Stream:
Mount Milligan Gold 63,700 oz. 61,700 oz.
Copper 12.7 Mlbs. 8.3 Mlbs.
Andacollo Gold 48,100 oz. 55,000 oz.
Pueblo Viejo Gold 43,300 oz. 41,000 oz.
Silver 1.8 Moz. 2.1 Moz.
Wassa Gold 15,000 oz. 17,500 oz.
Royalty:
Peñasquito Gold 312,200 oz. 158,800 oz.
Silver 27.8 Moz. 16.4 Moz.
Lead 182.3 Mlbs. 117.4 Mlbs.
Zinc 393.9 Mlbs. 216.2 Mlbs.
Cortez GSR1 Gold 91,300 oz. 84,600 oz.
Cortez GSR2 Gold 82,000 oz. 12,100 oz.
Cortez GSR3 Gold 171,800 oz. 96,700 oz.
Cortez NVR1 Gold 146,500 oz. 77,400 oz.
(1) Historical production for our stream interests relates to the amount of
stream metal sales for each fiscal year presented and may differ from stream
deliveries discussed in Item 2, Properties, or from the operators' public
reporting. For our royalty interests, historical production relates to the
payable metal amounts as reported to us by the operators of the mines subject
to our royalty rate for each fiscal year presented.
Critical Accounting Policies
Listed below are the accounting policies we believe are critical to our
financial statements due to the degree of uncertainty regarding the estimates or
assumptions involved and the magnitude of the asset, liability, revenue or
expense being reported. Please also refer to Note 2 of the notes to consolidated
financial statements for a discussion on recently adopted and issued accounting
pronouncements.
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Use of Estimates
The preparation of our financial statements, in conformity with U.S. generally
accepted accounting principles ("U.S. GAAP"), requires management to make
estimates and assumptions. These estimates and assumptions affect the reported
amounts of assets and liabilities, at the date of the financial statements, as
well as the reported amounts of revenues and expenses during the reporting
period.
We rely on reserve estimates reported by the operators of the properties on
which we hold stream and royalty interests. These estimates and the underlying
assumptions affect the potential impairments of long-lived assets and the
ability to realize income tax benefits associated with deferred tax assets.
These estimates and assumptions also affect the rate at which we recognize
revenue or charge depreciation, depletion and amortization to earnings. On an
ongoing basis, management evaluates these estimates and assumptions; however,
actual amounts could differ from these estimates and assumptions. Differences
between estimates and actual amounts are adjusted and recorded in the period
that the actual amounts are known.
Stream and Royalty Interests in
Stream and royalty interests include acquired stream and royalty interests in production, development and exploration stage properties. The costs of acquired stream and royalty interests are capitalized as tangible assets as such interests do not meet the definition of a financial asset underU.S. GAAP. Production stage stream and royalty interests are depleted using the units of production method over the life of the mineral property (as stream sales occur or royalty payments are recognized), which are estimated using proven and probable reserves as provided by the operator. Development stage mineral properties, which are not yet in production, are not depleted until the property begins production. Exploration stage mineral properties, where there are no proven and probable reserves, are not depleted. At such time as the associated exploration stage mineral interests are converted to proven and probable reserves, the mineral property is depleted over its life, using proven and probable reserves. Exploration costs are expensed when incurred.
Asset Impairment
We evaluate long-lived assets for impairment whenever events or changes in circumstances indicate that the related carrying amounts of an asset or group of assets may not be recoverable. The recoverability of the carrying value of stream and royalty interests in production and development stage mineral properties is evaluated based upon estimated future undiscounted net cash flows from each stream and royalty interest using estimates of proven and probable reserves and other relevant information received from the operators. We evaluate the recoverability of the carrying value of royalty interests in exploration stage mineral properties in the event of significant decreases in the price of gold, silver, copper and other metals, and whenever new information regarding the mineral properties is obtained from the operator indicating that production will not likely occur or may be reduced in the future, thus potentially affecting the future recoverability of our stream or royalty interests. Impairments in the carrying value of each property are measured and recorded to the extent that the carrying value in each property exceeds its estimated fair value, which is generally calculated using estimated future discounted cash flows. Estimates of gold, silver, copper, and other metal prices, and operators' estimates of proven and probable reserves or mineralized material related to our stream or royalty properties are subject to certain risks and uncertainties which may affect the recoverability of our investment in these stream and royalty interests in mineral properties. It is possible that changes could occur to these estimates, which could adversely affect the net cash flows expected to be generated from these stream and royalty interests. Refer to Note 4 to consolidated financial statements for a discussion of the impairment assessment results for the fiscal year endedJune 30, 2020 .
Revenue
UnderU.S. GAAP, 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 32 Table of Contents
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 occurred. 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 offsite treatment, refining, transportation and, if applicable, mining costs.
Metal Sales
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 10 days and three months (depending on the frequency of deliveries under the respective streaming agreement and our sales activity in effect at the time) commencing shortly after receipt and purchase of the metal. Temporary modifications may be made to our metal sales guidelines from time to time as required to meet our needs. Revenue from gold, silver and copper sales is recognized on the date of the settlement, which is also the date that title to the metal passes to the purchaser.
Cost of Sales
Cost of sales, which excludes depreciation, depletion and amortization, is specific to our stream agreements and is the result of our purchase of gold, silver and copper for a cash payment. The cash payment for gold fromMount Milligan is the lesser of$435 per ounce or the prevailing market price of gold when purchased, while the cash payment for our other streams is a set contractual percentage of the gold, silver or copper spot price near the date of metal delivery. 33 Table of Contents Exploration Costs
Exploration costs are specific to our Peak Gold JV for exploration and advancement of the Peak Gold project as discussed further in Note 2 to consolidated financial statements. Exploration costs associated with the exploration and advancement of Peak Gold are expensed when incurred.
Income Taxes
Our annual tax rate is based on income, statutory tax rates in effect and tax planning opportunities available to us in the various jurisdictions in which the Company operates. Significant judgment is required in determining the annual tax expense, current tax assets and liabilities, deferred tax assets and liabilities, and our future taxable income, both as a whole and in various tax jurisdictions, for purposes of assessing our ability to realize future benefit from our deferred tax assets. Actual income taxes could vary from these estimates due to future changes in income tax law, significant changes in the jurisdictions in which we operate or unpredicted results from the final determination of each year's liability by taxing authorities. Our deferred income taxes reflect the impact of temporary differences between the reported amounts of assets and liabilities for financial reporting purposes and such amounts measured by tax laws and regulations. In evaluating the realizability of the deferred tax assets, management considers both positive and negative evidence that may exist, such as earnings history, reversal of taxable temporary differences, forecasted operating earnings and available tax planning strategies in each tax jurisdiction. A valuation allowance may be established to reduce our deferred tax assets to the amount that is considered more likely than not to be realized through the generation of future taxable income and other tax planning strategies. Our operations may involve dealing with uncertainties and judgments in the application of complex tax regulations in multiple jurisdictions. The final taxes paid are dependent upon many factors, including negotiations with taxing authorities in various jurisdictions and resolution of disputes arising from federal, state, and international tax audits. We recognize potential liabilities and record tax liabilities for anticipated tax audit issues inthe United States and other tax jurisdictions based on our estimate of whether, and the extent to which, additional taxes will be due. We adjust these reserves in light of changing facts and circumstances, such as the progress of a tax audit; however, due to the complexity of some of these uncertainties, the ultimate resolution could result in a payment that is materially different from our current estimate of the tax liabilities. These differences will be reflected as increases or decreases to income tax expense in the period which they are determined. We recognize interest and penalties, if any, related to unrecognized tax benefits in income tax expense.
Liquidity and Capital Resources
Overview
AtJune 30, 2020 , we had current assets of$362.2 million compared to current liabilities of$43.6 million resulting in working capital of$318.6 million and a current ratio of 8 to 1. This compares to current assets of$154.7 million and current liabilities of$33.6 million atJune 30, 2019 , resulting in working capital of$121.1 million and a current ratio of approximately 5 to 1. The increase in our current ratio was primarily attributable to an increase in our cash and equivalents, which is discussed further below under "Summary of Cash Flows." During the fiscal year endedJune 30, 2020 , liquidity needs were met from$340.8 million in net cash provided by operating activities and our available cash resources. As ofJune 30, 2020 , we had$695 million available and$305 million outstanding under our revolving credit facility. Working capital, combined with available capacity under our revolving credit facility, resulted in approximately$1 billion of total liquidity atJune 30, 2020 . Refer to Note 6 of our notes to consolidated financial statements and below ("Recent Liquidity and Capital Resource Developments") for further discussion on our debt. OnJuly 2, 2020 , we repaid$30 million of the outstanding borrowings under the credit facility. This payment increased the amount available under our revolving credit facility to$725 million and decreased the amount outstanding to$275 million . 34 Table of Contents We believe that our current financial resources and funds generated from operations will be adequate to cover anticipated expenditures for debt service, general and administrative expense costs and capital expenditures for the foreseeable future. Our current financial resources are also available to fund dividends and for acquisitions of stream and royalty interests, including the remaining conditional funding schedule in connection with the Khoemacau silver stream acquisition. Our long-term capital requirements are primarily affected by our ongoing acquisition activities. We currently, and generally at any time, have acquisition opportunities in various stages of active review. In the event of one or more substantial stream or royalty interest or other acquisitions, we may seek additional debt or equity financing as necessary.
Please refer to our risk factors included in Part I, Item 1A of this report for a discussion of certain risks that may impact our liquidity and capital resources.
Recent Liquidity and Capital Resource Developments
Revolving Credit Facility Drawdown
OnApril 3, 2020 , we drew an additional$200 million on our revolving credit facility. There is no immediate requirement for the additional funds. However, due to the uncertain environment caused by the COVID-19 pandemic, and the impact on certain operations where we hold a stream or royalty interest, we believe the drawdown was a prudent precautionary measure to help ensure cash is readily available to support continued business activities. We remain committed to reducing our debt, and absent the requirement to fund any new business opportunities, we expect to further manage our debt levels once the operating environment returns to normal.
Dividend Increase
OnNovember 19, 2019 , we announced an increase in our annual dividend for calendar 2020 from$1.06 to$1.12 , payable on a quarterly basis of$0.28 per share. The newly declared dividend is 6% higher than the dividend paid during calendar 2019. We have steadily increased our annual dividend since calendar 2001.
Revolving Credit Facility Amendment
OnSeptember 20, 2019 , we entered into a third amendment to our revolving credit facility dated as ofJune 2, 2017 . Under the amendment, our Swiss subsidiary RGLD Gold was added as a co-borrower and joint and several obligor, certain of the Company's Canadian subsidiaries were added as guarantors, and certain equity pledges that previously had been granted in favor of the lenders to support the facility were released, with the result that the facility is now unsecured.
Summary of Cash Flows
Operating Activities
Net cash provided by operating activities totaled$340.8 million for the fiscal year endedJune 30, 2020 , compared to$253.2 million for the fiscal year endedJune 30, 2019 . The increase was primarily due to an increase in proceeds received from our stream interests, net of cost of sales, of approximately$49.5 million and lower income taxes paid of$12.9 million .
Investing Activities
Net cash used in investing activities totaled$152.9 million for the fiscal year endedJune 30, 2020 , compared to cash used in investing activities of$5.6 million for the fiscal year endedJune 30, 2019 . The increase in cash used
in
investing
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activities was due to an increase in acquisitions of stream and royalty
interests. During the fiscal year ended
Financing Activities
Net cash provided by financing activities totaled$11.8 million for the fiscal year endedJune 30, 2020 , compared to cash used in financing activities of$216.9 million for the fiscal year endedJune 30, 2019 . The decrease in cash used in financing activities is primarily due to a decrease in debt repayments (net of borrowings) when compared to the prior fiscal year.
Contractual Obligations
Our contractual obligations as of
Payments Due by Period (in thousands)
Less than More thanContractual Obligations Total 1 Year 1 - 3 Years 3 - 5 Years 5 Years Revolving credit facility(1)$ 325,972 $ 4,258 $ 12,775
$ 308,939 $ - Operating leases$ 9,210 $ 901 $ 1,854 $ 1,931 $ 4,524 Total$ 335,182 $ 5,159 $ 14,629 $ 310,870 $ 4,524
(1) Amounts represent principal (
(
For information on our revolving credit facility, see Note 6 to consolidated financial statements. The above table does not include stream commitments as discussed in Note 15 to consolidated financial statements. We believe we will be able to fund all current obligations from net cash provided by operating activities.
Off-Balance Sheet Arrangements
We do not have any off-balance sheet arrangements.
Results of Operations
Fiscal Year Ended
For the fiscal year endedJune 30, 2020 , we recorded net income attributable toRoyal Gold stockholders of$199.3 million , or$3.04 per basic share and$3.03 per diluted share, as compared to net income attributable toRoyal Gold stockholders of$93.8 million , or$1.43 per basic and diluted share, for the fiscal year endedJune 30, 2019 . The increase in our earnings per share was primarily attributable to (i) an increase in revenue, (ii) a decrease in our interest expense and (iii) discrete income tax benefits recognized, primarily attributable to recent Swiss tax reform during the quarter endedSeptember 30, 2019 and the release of an uncertain tax liability resulting from a settlement agreement with a foreign tax authority. Each are discussed further below. For the fiscal year endedJune 30, 2020 , we recognized total revenue of$498.8 million , which is comprised of stream revenue of$359.9 million and royalty revenue of$138.9 million , at an average gold price of$1,560 per ounce, an average silver price of$16.90 per ounce and an average copper price of$2.57 per pound, compared to total revenue of$423.1 million , which is comprised of stream revenue of$305.8 million and royalty revenue of$117.2 million , at an average gold price of$1,263 per ounce, an average silver price of$15.00 per ounce and an average copper price of$2.79 per pound, for the fiscal year endedJune 30, 2019 . 36 Table of Contents Revenue and the corresponding production, attributable to our stream and royalty interests, for the fiscal year endedJune 30, 2020 compared to the fiscal year endedJune 30, 2019 is as follows:
Revenue and Reported Production Subject to our Stream and Royalty Interests
Fiscal Years Ended June 30, 2020 and 2019
(In thousands, except reported production in ozs. and lbs.)
Year Ended Year Ended
June 30, 2020 June 30, 2019
Reported Reported
Stream/Royalty Metal(s) Revenue Production(1) Revenue Production(1)
Stream(2):
Mount Milligan $ 131,425 $ 101,010
Gold 63,700 oz. 61,700 oz.
Copper 12.7 Mlbs. 8.3 Mlbs.
Pueblo Viejo $ 96,978 $ 82,844
Gold 43,300 oz. 41,000 oz.
Silver 1.8 Moz. 2.1 Moz.
Andacollo Gold $ 74,219 48,100 oz. $ 69,264 55,000 oz.
Wassa Gold $ 23,203 15,000 oz. $ 22,098 17,500 oz.
Other(3) $ 34,043 $ 30,608
Gold 20,300 oz. 22,600 oz.
Silver 188,800 oz. 144,700 oz.
Total stream revenue $ 359,868 $ 305,824
Royalty(2):
Peñasquito $ 25,498 $ 13,865
Gold 312,200 oz. 158,800 oz.
Silver 27.8 Moz. 16.4 Moz.
Lead 182.3 Mlbs. 117.4 Mlbs.
Zinc 393.9 Mlbs. 216.2 Mlbs.
Cortez Gold $ 22,342 173,300 oz. $ 11,383 96,700 oz.
Other(3) Various $ 91,111 N/A $ 91,984 N/A
Total royalty revenue $ 138,951 $ 117,232
Total revenue $ 498,819 $ 423,056 (1) Reported production relates to the amount of metal sales, subject to our
stream and royalty interests, for the fiscal years ended
2019, and may differ from the operators' public reporting.
(2) Refer to Item 2, Properties, for further discussion on our principal stream
and royalty interests.
(3) Individually, with the exception of the
year 2020 and 5.2% in fiscal year 2019), no stream or royalty included within
the "Other" category contributed greater than 5% of our total revenue for
either period.
The increase in our total revenue for the fiscal year endedJune 30, 2020 , compared with the fiscal year endedJune 30, 2019 , resulted primarily from an increase in our stream revenue and an increase in the average gold and silver prices. The increase in our stream revenue was primarily attributable to an increase in gold and copper sales atMount Milligan and gold sales at Pueblo Viejo. These increases were partially offset by lower gold sales at Andacollo which was due to a decrease in deliveries resulting from a temporary suspension of operations during theDecember 2019 quarter due to a worker's strike. 37
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Gold and silver ounces and copper pounds purchased and sold during the fiscal years endedJune 30, 2020 and 2019, as well as gold, silver and copper in inventory as ofJune 30, 2020 and 2019, for our stream interests were as follows: Year Ended Year Ended As of As of June 30, 2020 June 30, 2019 June 30, 2020 June 30, 2019 Gold Stream Purchases (oz.) Sales (oz.) Purchases (oz.) Sales (oz.) Inventory (oz.) Inventory (oz.) Mount Milligan 59,900 63,700 68,500 61,700 3,300 7,100 Andacollo 43,900 48,100 51,900 55,000 100 4,300 Pueblo Viejo 45,000 43,300 41,200 41,000 11,100 9,500 Wassa 16,500 15,000 16,600 17,500 2,900 1,500 Other 19,500 20,300 22,500 22,600 1,500 2,200 Total 184,800 190,400 200,700 197,800 18,900 24,600 Year Ended Year Ended As of As of June 30, 2020 June 30, 2019 June 30, 2020 June 30, 2019 Silver Stream Purchases (oz.) Sales (oz.) Purchases (oz.) Sales (oz.) Inventory (oz.) Inventory (oz.) Pueblo Viejo 1,726,100 1,750,400 2,007,000 2,071,700 451,200 475,600 Other 175,700 188,800 148,900 144,700 23,400 36,500 Total 1,901,800 1,939,200 2,155,900 2,216,400 474,600 512,100 Year Ended Year Ended As of As of June 30, 2020 June 30, 2019 June 30, 2020 June 30, 2019 Copper Stream Purchases (Mlbs.) Sales (Mlbs.) Purchases
(Mlbs.) Sales (Mlbs.) Inventory (Mlbs.) Inventory (Mlbs.) Mount Milligan 12.6 12.7 9.1 8.3 0.8 0.8 Our royalty revenue increased during the fiscal year endedJune 30, 2020 , compared with the fiscal year endedJune 30, 2019 , primarily due to an increase in production at Peñasquito and Cortez and an increase in the average gold and silver prices. Refer to Part I, Item 2, Properties, for discussion and any updates on our principal producing properties. Cost of sales increased to$83.9 million for the fiscal year endedJune 30, 2020 , from$77.5 million for the fiscal year endedJune 30, 2019 . The increase was primarily due to increased gold and copper sales fromMount Milligan and an increase in gold sales from Pueblo Viejo, partially offset by a decrease in silver sales from Pueblo Viejo. Cost of sales, which excludes depreciation, depletion and amortization, is specific to our stream agreements and is the result of RGLD Gold's purchase of gold, silver and copper for a cash payment. The cash payment for gold fromMount Milligan is the lesser of$435 per ounce or the prevailing market price of gold when purchased, while the cash payment for our other streams is a set contractual percentage of the gold, silver or copper spot price near the date of metal delivery. Depreciation, depletion and amortization increased to$175.4 million for the fiscal year endedJune 30, 2020 , from$163.1 million for the fiscal year endedJune 30, 2019 . The increase was primarily attributable to higher gold and copper sales atMount Milligan and an increase in gold sales at Pueblo Viejo. An increase in depletion rates atMount Milligan as a result of updated reserves, as discussed in Part I, Item 2, Properties, also contributed to the increase in our depletion expense during the current period. We recognized a gain in fair value changes in equity securities of$1.4 million for the fiscal year endedJune 30, 2020 , compared to a loss in fair value changes in equity securities of$6.8 million for the fiscal year endedJune 30, 2019 . The change was primarily due to an increase in the fair value of marketable equity securities as discussed further in Note 5 to the consolidated financial statements. Interest and other expense decreased to$9.8 million for the fiscal year endedJune 30, 2020 , from$29.7 million for the fiscal year endedJune 30, 2019 . The decrease was primarily attributable to lower interest expense as a result of a decrease in average debt amounts outstanding during the current period when compared to the prior period. During the prior period, we settled the$370 million aggregate principal amount due under our convertible senior notes that matured inJune 2019 . Refer to Note 6 of our notes to consolidated financial statements for further discussion on our outstanding debt. During the fiscal year endedJune 30, 2020 , we recognized an income tax benefit totaling$3.7 million compared with an expense of$17.5 million during the fiscal year endedJune 30, 2019 . This resulted in an effective tax rate of (1.9%) during the current period, compared with 16.4% in the prior period. The effective tax rate for the fiscal year endedJune 30, 2020 38
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was primarily impacted by a net step-up of tax assets due to the enactment of the Federal Act on Tax Reform and AHV Financing inSwitzerland and the release of an uncertain tax liability resulting from a settlement agreement with a foreign tax authority. The effective tax rate for the fiscal year endedJune 30, 2019 was primarily impacted by true-ups related to the Tax Cuts and Jobs Act partially offset by the implementation of the global intangible low-taxed income tax regime. Forward-Looking Statements This report and our other public communications include "forward-looking statements" within the meaning ofU.S. federal securities laws. Forward-looking statements are any statements other than statements of historical fact. Forward-looking statements are not guarantees of future performance, and actual results may differ materially from these statements. Forward-looking statements are often identified by words like "will," "may," "could," "should," "would," "believe," "estimate," "expect," "anticipate," "plan," "forecast," "potential," "intend," "continue," "project," or negatives of these words or similar expressions. Forward-looking statements include, among others, the following: statements about our expected financial performance, including revenue, expenses, earnings or cash flow; operators' expected operating and financial performance, including production, deliveries, mine plans and reserves, development, cash flows and capital expenditures; planned and potential acquisitions or dispositions, including funding schedules and conditions; liquidity, financing and dividends; our overall investment portfolio; macroeconomic and market conditions including the impacts of COVID-19; prices for gold, silver, copper, nickel and other metals; potential impairments; or tax changes. Factors that could cause actual results to differ materially from these forward-looking statements include, among others, the following: a low-price environment for gold, silver, copper, nickel or other metals; operating activities or financial performance of properties on which we hold stream or royalty interests, including variations between actual and forecasted performance, operators' ability to complete projects on schedule and as planned, changes to mine plans and reserves, liquidity needs, mining and environmental hazards, labor disputes, distribution and supply chain disruptions, permitting and licensing issues, contractual issues involving our stream or royalty agreements, or operational disruptions due to COVID-19; risks associated with doing business in foreign countries; our ability to identify, finance, value and complete acquisitions; adverse economic and market conditions; changes in laws or regulations governing us, operators or operating properties; changes in management and key employees; and other factors described elsewhere in this report. Most of these factors are beyond our ability to predict or control.
Forward-looking statements speak only as of the date on which they are made. We disclaim any obligation to update any forward-looking statements, except as required by law. Readers are cautioned not to put undue reliance on forward-looking statements.
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