Royal Gold : 2021 Annual Report

ABOUT US

Royal Gold is a leading precious metals streaming and royalty company, owning interests on several of the world's most attractive mines. Collectively managed by a team possessing a specialized skillset and extensive experience in the mining industry, we have built a reputation for quality, diligence and professionalism.

We enjoy unique attributes in the precious metals business compared to mining operators, including:

Upside Optionality

Our transactions are structured to give us exposure to potential higher metal prices, future production expansion and resource conversion.

0Ǐ˛ƧǞƵȁƧɯ

Our business model is scalable and allows us to operate effectively with only a fraction of the employees of a producing mining company.

Limited Downside

Our investments are less exposed to operating and capital cost risks.

Versatility

The royalty and streaming business can perform throughout the commodity cycle, and allows us to invest counter-cyclically in attractive acquisition opportunities during downturns, while enjoying leverage to higher commodity prices during upturns.

A MESSAGE FROM THE

PRESIDENT & CEO

"Our capital allocation priorities remain consistent, and include paying a growing and sustainable dividend, maintaining a strong balance sheet, and investing in the portfolio."

William Heissenbuttel

DEAR FELLOW SHAREHOLDER,

Fiscal year 2021 was an excellent year for Royal Gold. Despite continued challenges caused by the COVID-19 pandemic, our discipline and commitment to our long-term strategy allowed us to provide record financial results, make quality acquisitions that enhance our portfolio, and complete numerous corporate initiatives that served to strengthen the company during the year.

RECORD FINANCIAL RESULTS

Fiscal year 2021 was another year of exceptional financial performance. We set records for revenue of $615.9 million, operating cash flow of $407.2 million, and earnings of $302.5 million, each up over the previous year by 23%, 19%, and 52%, respectively. This growth was accretive to shareholders as we continued to use non-dilutive sources of financing to fund our business.

Our financial results were driven by a combination of solid portfolio performance and higher metal prices. We recognized approximately 333,100 gold equivalent ounces1 with steady contributions from across the portfolio. Revenue was derived approximately 74% from gold and 10% from silver, in line with our strategic focus on precious metals. Our royalty segment performed especially well, and we saw increased contributions from assets that have been long-standing core contributors to the company, like Cortez and Peñasquito, highlighting the potential for organic growth throughout the portfolio.

New records for revenue of $615.9 million, operating cash flow

of $407.2 million, and earnings of $302.5 million.

1 See page A-2 at the end of this document for additional information about gold equivalent ounces.

INVESTMENT IN NEW GROWTH
OPPORTUNITIES	I am confident that
We continued to evaluate business development opportunities and	each of our newest
acquisitions will provide
remained disciplined with respect to our strategic focus, which is to
shareholders exposure
provide shareholders growth in precious metals through production
to high quality assets
and exploration upside. Highlighted below are three acquisitions
with long-term growth
advanced during the year, one of which closed before the fiscal year
and optionality.
end and two of which closed shortly after year end:

• The 1% net smelter return royalty on the Chester 3 claims comprising a portion of IAMGOLD's Côté Gold Project in Ontario provides exposure to future production from a large and long-life gold mine in an excellent jurisdiction.
• The gold stream on Ero Copper's producing NX Gold Mine in Brazil provides immediate cash flow and the potential for exploration upside on a large, underexplored and highly prospective land package.
• The 1% net smelter return royalty on the operating Red Chris Mine in British Columbia provides immediate cash flow and participation in the development of a world-class resource being advanced by a global leader in the industry, Newcrest.

During the year we also continued funding contributions to Khoemacau, our most significant development project. As of June 30, 2021, we had funded a total of $222.6 million in stream advance payments, providing us with the right to purchase 84% of the payable silver production. We began funding development of Khoemacau in early 2019 at the beginning of construction, and I would like to congratulate the Khoemacau Copper Mining team for achieving production of first concentrate on June 30. We look forward to receiving regular silver deliveries from this long-life and high-quality project as the project ramps up to full production in early calendar 2022.

CONTINUED FOCUS ON CAPITAL ALLOCATION

We invested in these growth opportunities while keeping a disciplined eye on our other long-standing strategic objectives, which include returning capital to shareholders, maintaining a strong balance sheet and avoiding shareholder dilution.

Our commitment to paying a growing and sustainable dividend remained paramount and we raised it in November for the 20th consecutive year. This long record of dividend growth makes us unique in the precious metals sector and I intend to continue our commitment to returning capital to shareholders.

Our strong operating cash flow allowed us to steadily reduce debt during the year, and we ended the year debt-free, with net cash2 of $222 million and access to liquidity of over $1.2 billion. We ensured continued access to liquidity for new business opportunities by extending the maturity of our $1 billion credit facility to July 2026. While we drew $100 million on our revolving credit facility after year end to fund our growth investments, our balance sheet remains strong.

2 Net cash is a non-GAAP financial measure. See page A-1 of this document for additional information.

We remain committed to disciplined growth in precious metals and the streaming and royalty business model.

STRENGTHENING THE COMPANY

We had success on several other fronts during the year, all of which build on Royal Gold's strengths:

• We sharpened the focus on our core business with the divestment of our interests in the Manh Choh (formerly Peak Gold) Project in return for cash and incremental royalty interests. The transaction we completed with Kinross transforms a joint venture interest into our traditional investment structure and we look forward to receiving royalty revenue in the future. While our investment return on the project was positive, I believe that we can provide the best outcome for shareholders by maintaining our strategic focus on our core streaming and royalty business.

• We welcomed Fabiana Chubbs as a new member of our Board of Directors. Fabiana brings a wealth of expertise from her previous executive roles in the gold mining industry, and I am pleased to be able to draw on her international background and experience as we address challenges and consider new opportunities.
• We increased our commitment to ESG and found ways to work with our counterparties at several of the operations where we hold interests. We believe our initiatives to fund sustainability efforts at Wassa with Golden Star, at
  Pueblo Viejo with the Pueblo Viejo Joint Venture, and at the NX Gold Mine with Ero Copper will help our partners continue to provide benefits to their local stakeholders, which will in turn benefit the operations and ultimately our investments.
• And finally, this was our last fiscal year ending on June 30 as we move to a December 31 year end, in keeping with most of the precious metals sector. We think it is important for stockholders and prospective investors to be able to easily evaluate Royal Gold's performance against our peers, and this change will make that comparison easier.

We continue to prefer non-dilutive forms of capital to finance growth, while avoiding dilutive equity issuances.

In closing, fiscal year 2021 was another great year for Royal Gold. Our business model and approach to managing the company continued to prove successful in a challenging environment. While our portfolio drives our revenue, it is the commitment, creativity and enthusiasm of our employees who drive our success, and I would like to thank them for their dedication and effort in a demanding year.

As I look forward, I think we are in an excellent position to build on the achievements of 2021, and I remain confident in our ability to deliver further successes in the future. Thank you for your continued support.

William Heissenbuttel

President and Chief Executive Officer