ROYAL GOLD, INC. General Presentation
This Management's Discussion and Analysis of Financial Condition and Results of
Operations ("MD&A") is intended to provide information to assist you in better
understanding and evaluating our financial condition and results of operations.
You should read this MD&A in conjunction with our consolidated financial
statements included in Item 1 of this Quarterly Report on Form 10-Q, as well as
our Annual Report on Form 10-K for the fiscal year ended June 30, 2020 , filed
with the Securities and Exchange Commission (the "SEC") on August 6, 2020
("Fiscal 2020 10-K").
This MD&A contains forward-looking information. You should review our important note about forward-looking statements following this MD&A.
We do not own, develop, or mine the properties on which we hold stream or royalty interests. Certain information provided in this Quarterly Report on Form 10-Q about operating properties in which we hold interests, including information about reserves, historical production, production estimates, property descriptions, and property developments, was provided to us by the operators of those properties or is publicly available information filed by these operators with applicable securities regulatory bodies, including theSEC . We have not verified, and are not in a position to verify, and expressly disclaim any responsibility for the accuracy, completeness, or fairness of, this third-party information and refer the reader to the public reports filed by the operators for information regarding those properties. We refer to "GSR," "NSR," "NVR," "metal stream (or "stream")" and other types of royalty or similar interests throughout this MD&A. These terms are defined
in our Fiscal 2020 10-K. Overview of Our Business We acquire and manage precious metal streams, royalties, and similar interests. We seek to acquire existing stream and royalty interests or 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
? of
producing properties and two development stage properties. Stream interests
accounted for 73% of our total revenue for the three months endedSeptember 30, 2020 . 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 revenue or metals
produced from the project after deducting specified costs, if any. As of
? development stage properties and 131 exploration stage properties, of which we
consider 49 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
27% of our total revenue for the three months endedSeptember 30, 2020 We do not conduct mining operations on the properties in which we hold stream and royalty interests, and we generally are not required to contribute to capital costs, exploration costs, environmental costs or other operating costs on those properties. We are continually reviewing opportunities to grow our portfolio, whether through the creation or acquisition of new or existing stream or royalty interests or other acquisition activity. We generally have acquisition opportunities in various stages of review. Our review process may include, for example, engaging consultants and advisors to analyze an opportunity; analysis of technical, financial, legal, and other confidential information of an opportunity; submission of 18
indications of interest and term sheets; participation in preliminary discussions and negotiations; and involvement as a bidder in competitive processes.
Business Trends and Uncertainties
Metal Prices Our financial results are primarily tied to the price of gold, silver, copper, and other metals. Metal prices have fluctuated widely in recent years and we expect this volatility to continue. The marketability and the price of metals are influenced by numerous factors beyond our control, and significant changes in metal prices can have a material effect on our revenue.
For the three months ended
Fiscal Three months ended
September 30, 2020 September 30, 2019
Average Average Percentage
Metal Price Percentage of Revenue Price of Revenue
Gold ($/ounce) $ 1,909 75% $ 1,472 79%
Silver ($/ounce) $ 24.26 10% $ 16.98 9%
Copper ($/pound) $ 2.96 11% $ 2.63 8%
Other N/A 4% N/A 4%
COVID-19 and the Current Economic Environment
Since the beginning of calendar year 2020, several of our operating counterparties have instituted temporary operational curtailments due to the ongoing COVID-19 pandemic. The pandemic and resulting economic and societal impacts have also made it difficult for operators to forecast expected production amounts and, at times, operators have had to withdraw or revise previously disclosed guidance. In turn, our revenue and the value of our investments may be similarly impacted. The effects of the pandemic 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 continue to monitor the impact of developments associated with the pandemic on stream and royalty interests as part of our regular asset impairment analysis. Sale of Peak Gold JV Interest OnSeptember 30, 2020 , we announced we had entered into an agreement with Kinross Gold Corporation to sell our interest in thePeak Gold Project and our common share position in Contango Ore, Inc. ("Contango"), our partner inPeak Gold, LLC , the owner of thePeak Gold Project . Consideration received for the sale of these interests included cash of$61.3 million , an incremental 28% net smelter return royalty on silver produced from an area of interest which includes the currentPeak Gold Project resource area, and an incremental 1% net smelter return royalty on certainState of Alaska mining claims acquired by a wholly owned subsidiary of Contango in the transaction.Peak Gold, LLC , retains the right to acquire 50% of the incremental 28% net smelter return royalty
on silver for$4 million .
After this transaction, our interests in the
Separation of the Wassa and Prestea and Bogoso Stream Agreement
OnOctober 1, 2020 , we announced the separation of the Wassa and Prestea and Bogoso gold stream agreement into separate stream agreements effectiveSeptember 30, 2020 . This separation was completed to facilitate the sale by Golden Star Resources Ltd. ("Golden Star ") of the Prestea and Bogoso mines to Future Global Resources ("FGR").
The Wassa stream agreement, which remains withGolden Star , provides us the right to purchase 10.5% of the gold produced from the Wassa mine until the delivery of 240,000 ounces, after which the stream percentage will decrease to 5.5%. The cash purchase price for gold is 20% of the spot price per ounce delivered until the delivery of 240,000 ounces, and 30% of the spot price per ounce delivered thereafter. As ofOctober 1, 2020 , approximately 124,800 ounces remain to be delivered from the Wassa mine until the 240,000 ounce delivery
threshold is reached.
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The Prestea and Bogoso stream agreement with FGR provides us the right to purchase 5.5% of the gold produced from the Prestea and Bogoso mines in return for a cash purchase price of 30% of the spot price per ounce delivered.
Operators' Production Estimates by Stream and Royalty Interest for Calendar 2020
We generally receive annual production estimates from many of the operators of our producing mines during the first quarter of each calendar year. In some instances, an operator may revise its original calendar year guidance throughout the year. The following table shows current production estimates for calendar 2020, as well as actual production throughSeptember 30, 2020 , for our principal properties as reported to us by the operators. Operators' Estimated and Actual Production by Stream and Royalty Interest for Calendar 2020 Principal 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 37,200 Mount Milligan(4) 140,000 - 160,000 119,200 Copper 80 - 90 Million 62.4 Million Pueblo Viejo(5) 530,000 - 580,000 N/A 383,000 N/A Wassa(6) 165,000 - 170,000 126,700 Royalty: Cortez GSR1 66,900 88,000 Cortez GSR2 109,600 59,900 Cortez GSR3 146,300 143,100 Cortez NVR1 113,500 112,100 Cortez NVR1C 30,100 4,800 Peñasquito(7) 510,000 28 million 343,000 20.4 Million Lead 190 million 130 Million Zinc 360 million 281 Million
(1) Production estimates received from our operators are for calendar 2020,
unless otherwise noted in footnotes to this table. There can be no assurance
that operators will achieve their production estimates.
(2) Actual production figures are provided by our operators and cover the period
from
footnotes to 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.
(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 are 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.
Property Developments
This section provides recent updates for our principal properties as reported by the operators, either directly to us or in their publicly available documents.
Stream Interests Andacollo Gold stream deliveries from Andacollo were approximately 9,500 ounces of gold for the three months endedSeptember 30, 2020 , compared to approximately 9,700 ounces of gold for the three months endedSeptember 30, 2019 . 20 Teck reported that Andacollo production in theSeptember 2020 quarter was lower than the prior year quarter due to lower ore grades and mill recoveries as well as reduced mill throughput. According to Teck, a higher proportion of ore processed from stockpiles due to blasting constraints impacted copper grades and mill recoveries. In addition, mill throughput was impacted by several longer than planned maintenance shutdowns, which were performed by local contractors to comply with COVID-19 travel restrictions. Impacts to our gold stream deliveries are realized approximately six months after site production. Teck expects grades to continue to decline towards reserve grades in calendar year 2020 and future years. The current life of mine for Andacollo is expected to continue until calendar year 2035. According to Teck, additional permits or permit amendments will be required to execute the life of mine plan. Khoemacau According toKhoemacau Copper Mining (Pty.) Limited ("KCM"), progress continued at theKhoemacau Project ("Khoemacau") during theSeptember 2020 quarter, and the project reached approximately 70% of construction completion as ofSeptember 30, 2020 , with 87% of the capital committed. According to KCM, activities are focused on refurbishment and upgrading of the Boseto mill, underground development, completion of accommodation, power and water infrastructure at Zone 5 and completion of haul road construction between Zone 5 and the Boseto mill.
Also, according to KCM, underground development has cumulatively advanced 5,045 meters in the three mines.
The six-month state of emergency declared by the Government ofBotswana inMarch 2020 to help prevent the spread of COVID-19 was extended onSeptember 28, 2020 , for an additional six months throughMarch 2021 . Mining remains designated as an "essential service" and KCM reports that general development activity at Khoemacau is continuing. However, due to the impacts experienced from prior lockdowns and travel restrictions, KCM reports that some activities, largely related to the process plant refurbishment and upgrade, have been impacted or rescheduled. Barring any potential further impacts caused by COVID-19 considerations, KCM continues to expect the first shipment of concentrate to occur late in the third calendar quarter of 2021. OnOctober 5, 2020 , we made our fifth advance payment of$32.5 million , which brings the total contribution to$179.3 million . We expect to commit the remaining$32.7 million in calendar year 2021 for the BaseSilver Stream and$85.7 million should KCM elect to fully exercise the OptionSilver Stream . Further payments are subject to certain conditions and are scheduled to be made on a quarterly basis using an agreed formula and certification process as project spending progresses.Mount Milligan
Gold stream deliveries fromMount Milligan were approximately 19,600 ounces for the three months endedSeptember 30, 2020 , compared to approximately 14,000 ounces for the three months endedSeptember 30, 2019 . Increased deliveries resulted from differences in the timing of shipments and settlements during
the periods.
Copper stream deliveries fromMount Milligan were approximately 5.8 million pounds for the three months endedSeptember 30, 2020 , compared to approximately 2.4 million pounds for the three months endedSeptember 30, 2019 . Increased deliveries resulted from differences in the timing of shipments and settlements during the periods.
On
Pueblo Viejo Gold stream deliveries from Pueblo Viejo were approximately 9,400 ounces for the three months endedSeptember 30, 2020 , compared to approximately 10,500 ounces for the three months endedSeptember 30, 2019 . Silver stream deliveries were approximately 408,600 ounces for the three months endedSeptember 30, 2020 , compared to 462,500 ounces for the three months endedSeptember 30, 2019 . The decrease in deliveries resulted from lower gold and silver production in addition to differences in the timing of refinery settlements. 21
Barrick reports that it continues to advance work on the project to expand the process plant and tailings storage facilities that could extend the mine life at Pueblo Viejo beyond calendar 2040. Barrick estimates that the process plant and tailings expansion project could significantly increase throughput and allow the mine to maintain average annual gold production of approximately 800,000 ounces after calendar 2022 (on a 100% basis), and that the increase in tailings storage capacity has the potential to convert approximately 11 million ounces of mineralized material to reserves (on a 100% basis). Barrick reported during the quarter that the environmental impact assessment for the plant has been submitted to the authorities, and orders have been placed for long lead items. Barrick also reported that field work for the baseline environmental assessment of the additional tailings capacity has started and constructive discussions with the authorities regarding permitting are well underway. Barrick expects the proportion of lower grade stockpile ore in the feed blend to steadily increase until the mine expansion pits are fully developed as part of the decision on the proposed plant and tailings expansion project. For calendar year 2020, Barrick indicated gold production attributable to its interest (60% basis) at Pueblo Viejo is expected to be between 530,000 and 580,000 ounces. Wassa Gold stream deliveries from Wassa were approximately 4,000 ounces for the three months endedSeptember 30, 2020 , compared to approximately 2,900 ounces for the three months endedSeptember 30, 2019 . We entered into a stream agreement withGolden Star onMay 6, 2015 , as amended (the "Original Stream Agreement"), which provided for the right to purchase 10.5% of the gold produced fromGolden Star's Wassa, and Prestea and Bogoso mines until an aggregate delivery of 240,000 ounces, after which the stream percentage would decrease to 5.5%. The cash purchase price for gold was 20% of the spot price per ounce delivered until the aggregate delivery of 240,000 ounces, and 30% of the spot price per ounce delivered thereafter. EffectiveSeptember 30, 2020 , the Wassa, and Prestea and Bogoso stream agreements were separated into two stream agreements to facilitate the sale byGolden Star of the Prestea and Bogoso mines. The gold stream rates and cash purchase prices for the separated Wassa stream agreement remain consistent with the Original Stream Agreement, and the gold delivery threshold of 240,000 ounces will apply to the Wassa mine only.
From
On
OnOctober 28, 2020 ,Golden Star reported the underground operation had produced ore at a record average rate of 4,960 tonnes per day during the quarter and confirmed the capacity of the current ramp system to support a 5,000 tonnes per day rate. The underground mining rate has now exceeded 4,000 tonnes per day for five consecutive quarters. The ore processing rate exceeded an average of 6,000 tonnes per day with the addition of low-grade stockpiled material.
According toGolden Star , work on a preliminary economic assessment on the development of the Southern Extension of the Wassa ore body commenced during Q3 2020. The study is intended to lay out a roadmap for the infrastructure and investment required for the potential expansion of the mining operation into the inferred resource areas. The study is expected to be completed later this year for announcement to the market in early 2021. 22 Royalty Interests Cortez
Production attributable to our royalty interest at Cortez was approximately 37,600 ounces of gold for the three months endedSeptember 30, 2020 , compared to approximately 35,100 ounces of gold for the three months endedSeptember 30, 2019 .
Barrick expects production to increase from calendar year 2020 to calendar year 2021 primarily due to higher contribution from the Crossroads deposit, which is expected to ramp up through calendar year 2023 and offset declining production from the other royalty regions. Peñasquito
Gold, silver and zinc production attributable to our royalty interest at Peñasquito increased approximately 269%, 38% and 40%, respectively, when compared to the prior year quarter, while lead production decreased 9% when compared to the prior year quarter.
According to Newmont, the increase in production was attributable to higher mill throughput and higher recoveries, partially offset by lower grades, with the exception of a higher gold grade. Mill throughput was negatively impacted by the suspension of operations in theSeptember 2019 quarter. Newmont reported positive improvements in mill throughput from their full potential program, which has focused on the front end of the milling operation. Blast fragmentation in the open pit is also receiving focus from the full potential program, which Newmont expects to contribute to improved throughput. OnJuly 30 , Newmont provided full year 2020 production guidance for Peñasquito of 510,000 ounces of gold, 28 million ounces of silver, 360 million pounds of zinc, and 190 million pounds of lead. Results of Operations
Quarter Ended
For the quarter endedSeptember 30, 2020 , we recorded net income of$106.9 million , or$1.63 per basic and diluted share, as compared to net income of$70.5 million , or$1.07 per basic and diluted share, for the quarter endedSeptember 30, 2019 . The increase in net income was primarily attributable to an increase in revenue, a one-time gain attributable to the sale of our Peak Gold JV interest and various discrete income tax benefits, each discussed below. These increases were partially offset by an increase in our cost of sales and an increase in depreciation, depletion and amortization expense, each discussed below. For the quarter endedSeptember 30, 2020 , we recognized total revenue of$146.9 million , comprised of stream revenue of$106.5 million and royalty revenue of$40.4 million at an average gold price of$1,909 per ounce, an average silver price of$24.26 per ounce and an average copper price of$2.96 per pound. This is compared to total revenue of$118.8 million for the three months endedSeptember 30, 2019 , comprised of stream revenue of$87.0 million and royalty revenue of$31.8 million , at an average gold price of$1,472 per ounce, an average silver price of$16.98 per ounce and an average copper price of$2.63 per pound. Revenue and the corresponding production attributable to our stream and royalty interests for the quarter endedSeptember 30, 2020 , compared to the quarter endedSeptember 30, 2019 , are as follows: 23
Revenue and Reported Production Subject to Our Stream and Royalty Interests
Quarter Ended September 30, 2020 and 2019
(Amounts in thousands, except reported production ozs. and lbs.)
Three Months Ended Three Months Ended
September 30, 2020 September 30, 2019
Reported Reported
Stream/Royalty Metal(s) Revenue Production(1) Revenue Production(1)
Stream(2):
Mount Milligan $ 34,620 $ 30,497
Gold 11,800 oz. 16,600 oz.
Copper 4.1 Mlbs. 2.4 Mlbs.
Pueblo Viejo $ 31,270 $ 21,618
Gold 11,100 oz. 9,500 oz.
Silver 451,200 oz. 475,600 oz.
Andacollo Gold $ 23,509 12,200 oz. $ 20,604 14,000 oz.
Wassa Gold $ 9,108 4,900 oz. $ 5,319 3,600 oz.
Other(3) $ 7,996 $ 8,943
Gold 4,000 oz. 5,800 oz.
Silver 23,200 oz. 34,500 oz.
Total stream revenue $ 106,503 $ 86,981
Royalty(2):
Peñasquito $ 10,209 $ 4,420
Gold 130,700 oz. 35,500 oz.
Silver 6.4 Moz. 4.6 Moz.
Lead 41.7 Mlbs. 29.7 Mlbs.
Zinc 98.0 Mlbs. 107.1 Mlbs.
Cortez Gold $ 5,684 37,600 oz. $ 4,417 35,100 oz.
Other(3) Various $ 24,484 N/A $ 22,956 N/A
Total royalty revenue $ 40,377 $ 31,793
Total Revenue $ 146,880 $ 118,774 (1) Reported production relates to the amount of metal sales subject to our
stream and royalty interests for the three months ended
and 2019, and may differ from the operators' public reporting.
(2) Refer to "Property Developments" above for a discussion of recent
developments at principal properties.
(3) Individually, except for
for the three months ended
within the "Other" category contributed greater than 5% of our total revenue
for either period.
The increase in our total revenue resulted primarily from an increase in the average gold, silver and copper prices compared to the prior period.
24
Gold and silver ounces and copper pounds purchased and sold during the three
months ended September 30, 2020 and 2019, and gold and silver ounces and copper
pounds in inventory as of September 30, 2020 , and June 30, 2020 , for our
streaming interests were as follows:
Three Months Ended Three Months Ended As of As of
September 30, 2020 September 30, 2019 September 30, 2020 June 30, 2020
Gold Stream Purchases (oz.) Sales (oz.) Purchases (oz.) Sales (oz.) Inventory (oz.) Inventory (oz.)
Mount Milligan 19,600 11,800 14,000 16,600 11,000 3,300
Pueblo Viejo 9,400 11,100 10,500 9,500 9,400 100
Andacollo 13,700 12,200 9,700 14,000 1,600 11,100
Wassa 4,000 4,900 2,900 3,600 2,000 2,900
Other 4,400 4,000 5,800 5,800 1,900 1,500
Total 51,100 44,000 42,900 49,500 25,900 18,900
Three Months Ended Three Months Ended As of As of
September 30, 2020 September 30, 2019 September 30, 2020 June 30, 2020
Silver Stream Purchases (oz.) Sales (oz.) Purchases (oz.) Sales (oz.) Inventory (oz.) Inventory (oz.)
Pueblo Viejo 408,600 451,200 462,500 475,600 408,600 451,200
Other 52,700 23,200 49,400 34,500 52,900 23,400
Total 461,300 474,400 511,900 510,100 461,500 474,600
Three Months Ended Three Months Ended As of As of
September 30, 2020 September 30, 2019 September 30, 2020 June 30, 2020
Copper Stream Purchases (Mlbs.) Sales (Mlbs.) Purchases (Mlbs.) Sales (Mlbs.) Inventory (Mlbs.) Inventory (Mlbs.)
Mount Milligan 5.8 4.1 2.4 2.4 2.5 0.8
Cost of sales, which excludes depreciation, depletion and amortization,
increased to $21.9 million for the three months ended September 30, 2020 from
$20.1 million for the three months ended September 30, 2019 . The increase was
primarily due to an increase in the gold, silver and copper prices when compared
to the prior period. Cost of sales 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 from Mount 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
(Mount Milligan ) spot price near the date of metal delivery.
Explorations costs decreased to $0.6 million for the three months ended
September 30, 2020 , from $2.6 million for the three months ended September 30,
2019 . Exploration costs were specific to the exploration and advancement of the
Peak Gold JV. Due to COVID-19, exploration activities and corresponding costs
decreased compared to the prior period. On September 30, 2020 , we sold our Peak
Gold JV interest which is discussed earlier in this MD&A and Note 2 of our notes
to consolidated financial statements.
Depreciation, depletion and amortization increased to $46.3 million for the
three months ended September 30, 2020 from $38.7 million for the three months
ended September 30, 2019 . The increase was primarily due to higher copper sales
at Mount Milligan and higher gold sales at Pueblo Viejo. An increase in
depletions rates at Mount Milligan, as previously discussed in our FY 2020 10-K,
also contributed to the increase. The increase was partially offset by a
decrease in gold sales at Andacollo when compared to the prior period.
We recognized an increase in fair value changes in equity securities of $2.5
million for the three months ended September 30, 2020 , compared to a decrease of
$1.4 million for the three months ended September 30, 2019 . The increase was
primarily due to a $3.6 million mark-to-market increase on the sale of 809,744
Contango common shares as part of the sale of our interest in the Peak Gold JV.
Refer to Note 4 of our notes to consolidated financial statements for further
discussion on our marketable equity securities.
Interest and other expense decreased to $1.9 million for the three months ended
September 30, 2020 , from $2.8 million for the three months ended
September 30, 2019 . The decrease was primarily attributable to lower interest
expense as a result of lower interest rates on our outstanding debt when
compared to the prior period. Refer to Note 5 of our notes to consolidated
financial statements for further discussion on our outstanding debt.
During the three months ended September 30, 2020 , we recorded an income tax
benefit totaling $(2.4) million , compared with an income tax benefit of $(23.5)
million during the three months ended September 30, 2019 . The income tax benefit
resulted in an effective tax rate of (2.3%) in the current period, compared with
(51.9%) in the quarter ended September
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30, 2019. The three months ended September 30, 2020 effective tax rate included
income tax benefits ($24.5 million ) resulting primarily from the release of an
uncertain tax position due to a settlement agreement with a foreign tax
authority and a change to the realizability of certain deferred tax assets.The
three months endedSeptember 30, 2019 effective tax rate included an income tax benefit ($32.3 million ) primarily related to the enactment of the Federal Act on Tax Reform and AHV Financing inSwitzerland (Swiss Tax Reform).
Liquidity and Capital Resources
Overview
AtSeptember 30, 2020 , we had current assets of$469.8 million compared to current liabilities of$56.1 million resulting in working capital of$413.6 million and a current ratio of 8 to 1. This compares to current assets of$362.2 million and current liabilities of$43.6 million atJune 30, 2020 , resulting in working capital of$318.6 million and a current ratio of approximately 8 to 1. The increase in working capital was primarily due to proceeds from the sale of our Peak Gold JV interest and increased revenue. During the three months endedSeptember 30, 2020 , liquidity needs were met from$94.2 million in net cash provided by operating activities and our available cash resources. As ofSeptember 30, 2020 , we had$725 million available and$275 million outstanding under our revolving credit facility. Working capital, combined with available capacity under our revolving credit facility, resulted in approximately$1.1 billion of total liquidity atSeptember 30, 2020 . We were in compliance with each financial covenant under the revolving credit facility as ofSeptember 30, 2020 . Refer to Note 5 of our notes to consolidated financial statements for further discussion on our outstanding debt. OnOctober 2, 2020 , we repaid$75 million of the outstanding borrowings under the credit facility. This increased the amount available under our revolving credit facility to$800 million and decreased the amount outstanding to$200 million . 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 conditional funding schedule in connection with the Khoemacau silver stream. 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. We occasionally borrow and repay amounts under our revolving credit facility and may do so in the future. Please refer to our risk factors included in Part 1, Item 1A of our Fiscal 2020 10-K for a discussion of certain risks that may impact our liquidity and capital resources. Cash Flows Operating Activities Net cash provided by operating activities totaled$94.2 million for the three months endedSeptember 30, 2020 , compared to$71.2 million for the three months endedSeptember 30, 2019 . The increase was primarily due to an increase in proceeds received from our stream and royalty interests, net of cost of sales and production taxes, of approximately$20.1 million . Investing Activities Net cash provided by investing activities totaled$49.7 million for the three months endedSeptember 30, 2020 , compared to net cash provided by investing activities of$0.5 million for the three months endedSeptember 30, 2019 . The increase was primarily due to$49.2 million received for the sale of our Peak Gold JV investment and$12.1 million for the sale of our Contango shares. This increase was partially offset by an advance payment of$11.1 million for the Khoemacau silver stream acquisition during the current period. Financing Activities Net cash used in financing activities totaled$49.8 million for the three months endedSeptember 30, 2020 , compared to$69.2 million for the three months endedSeptember 30, 2019 . The decrease was primarily due to a decrease in repayments 26
on our revolving credit facility. We repaid
Recently Adopted Accounting Standards and Critical Accounting Policies
Refer to Note 1 of our notes to consolidated financial statements for further discussion on any recently adopted accounting standards. Refer to our Fiscal 2020 10-K for discussion on our critical accounting policies. 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 lower-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 in Item 1A. Risk Factors of our Fiscal 2020 10-K. 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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