UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-K

(Mark One)

þ		ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

o		TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File Number 001-13357

Royal Gold, Inc.

(Exact Name of Registrant as Specified in Its Charter)

Delaware		84-0835164
(State or Other Jurisdiction of Incorporation or Organization)		(I.R.S. Employer Identification No.)
1660 Wynkoop Street, Suite 1000
Denver, Colorado		80202
(Address of Principal Executive Offices)		(Zip Code)

Title of Each Class		Name of Each Exchange on Which Registered
Common stock, $0.01 par value		NASDAQ Global Select Market

Securities registered pursuant to Section 12(g) of the Act:
None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

     Yes þ No o

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Exchange Act.
     Yes o No þ

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þ No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes o No o

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definition of “accelerated filer”, “large accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer þ		Accelerated filer o		Non-accelerated filer o (Do not check if a smaller reporting company)		Smaller reporting company o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No þ

Aggregate market value of the voting stock held by non-affiliates of the registrant, based upon the closing sale price of Royal Gold on December 31, 2008, as reported on the NASDAQ Global Select Market was $1,517,565,636. As of August 14, 2009, there were 40,763,195 shares of the registrant’s common stock, $0.01 par value, issued and outstanding.

Portions of the Proxy Statement for the 2009 Annual Meeting of Stockholders scheduled to be held on November 18, 2009, and to be filed within 120 days after June 30, 2009, are incorporated by reference into Part III, Items 10, 11, 12, 13 and 14 of this Annual Report on
Form 10-K.

 

 

INDEX

				PAGE
PART I.
ITEM 1.		Business			2
ITEM 1A.		Risk Factors			9
ITEM 1B.		Unresolved Staff Comments			19
ITEM 2.		Properties			19
ITEM 3.		Legal Proceedings			42
ITEM 4.		Submission of Matters to a Vote of Security Holders			42
PART II.
ITEM 5.		Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities			43
ITEM 6.		Selected Financial Data			44
ITEM 7.		Management’s Discussion and Analysis of Consolidated Financial Condition and Results of Operations			45
ITEM 7A.		Quantitative and Qualitative Disclosures About Market Risk			63
ITEM 8.		Financial Statements and Supplementary Data			64
ITEM 9.		Changes In and Disagreements with Accountants on Accounting and Financial Disclosure			97
ITEM 9A.		Controls and Procedures			97
ITEM 9B.		Other Information			98
PART III.
ITEM 10.		Directors, Executive Officers and Corporate Governance			98
ITEM 11.		Executive Compensation			98
ITEM 12.		Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters			99
ITEM 13.		Certain Relationships and Related Transactions and Director Independence			99
ITEM 14.		Principal Accountant Fees and Services			99
PART IV.
ITEM 15.		Exhibits and Financial Statement Schedules			99
SIGNATURES					100
EXHIBIT INDEX					101
EX-10.46
EX-21.1
EX-23.1
EX-31.1
EX-31.2
EX-32.1
EX-32.2

This document (including information incorporated herein by reference) contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, which involve a degree of risk and uncertainty due to various factors affecting Royal Gold, Inc. and its subsidiaries. For a discussion of some of these factors, see the discussion in Item 1A, Risk Factors, of this report. In addition, please see our note about forward-looking statements included in Item 7, Management’s Discussion and Analysis of Consolidated Financial Condition and Results of Operations (“MD&A”), of this report.

PART I

ITEM 1.		BUSINESS

Overview

Royal Gold, Inc. (“Royal Gold”, the “Company”, “we”, “us”, or “our”), together with its subsidiaries, is engaged in the business of acquiring and managing precious metals royalties. Royalties are passive (non-operating) interests in mining projects that provide the right to revenue or production from the project after deducting specified costs, if any. We seek to acquire existing royalties or to finance projects that are in production or in development stage in exchange for royalty interests. We are engaged in a continual review of opportunities to acquire existing royalties, to create new royalties through the financing of mine development or exploration, or to acquire companies that hold royalties. 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, analysis of technical, financial, legal and other confidential information, submission of indications of interest, participation in preliminary discussions and involvement as a bidder in competitive auctions.

During the fiscal year 2009, the Company received royalty revenue from 23 producing properties. In addition, we own royalty interests on 10 development stage properties and over 80 exploration stage properties, of which the Company considers 25 to be evaluation stage projects. The Company uses “evaluation stage” to describe exploration stage properties that contain mineralized material and on which operators are engaged in the search for reserves. We do not conduct mining operations nor are we required to contribute to capital costs, exploration costs, environmental compliance costs or other operating costs on the properties in which we hold royalty interests. During the fiscal year ended June 30, 2009, we focused on the management of our existing royalty interests, the acquisition of royalty interests, and the creation of royalty interests through financing and strategic exploration alliances.

As discussed in further detail throughout this report, some significant developments to our business during fiscal year 2009 were as follows:

	(1)		Our royalty revenues increased 11% to $73.8 million, compared with $66.3 million during fiscal year 2008;
	(2)		On October 1, 2008, we completed the acquisition of 72 royalties from Barrick Gold Corporation (“Barrick”) for cash of approximately $181.3 million, including a restructuring of the Company’s GSR2, GSR3 and NVR1 royalties, valued at $31.5 million, for net cash of approximately $150 million. The royalty portfolio acquired from Barrick has generated approximately $12.2 million in royalty revenue to the Company from the completion of the acquisition on October 1, 2008 to June 30, 2009;
	(3)		In October 2008, the Company increased its existing credit facility from $80 million to $125 million and extended the maturity date to October 30, 2013;
	(4)		In April 2009, we entered into a definitive agreement with a Chilean subsidiary of Teck Resources Limited (“Teck”), Compañía Minera Teck Carmen de Andacollo (“CDA”), to acquire

			an interest in the gold produced from the sulfide portion of the Andacollo project in Chile. We refer to this transaction throughout this report as the “Teck Transaction;”
	(5)		In April 2009, we sold 6,500,000 shares of our common stock, at a price of $38.00 per share, resulting in net proceeds to us of approximately $235.3 million; and
	(6)		We increased our calendar year dividend to $0.32 per basic share, which is paid in quarterly installments throughout calendar year 2009. This represents a 14% increase compared with the dividend paid during calendar year 2008.

Certain Definitions

Additional Mineralized Material: Additional mineralized material is that part of a mineral system that has potential economic significance but cannot be included in the proven and probable ore reserve estimates until further drilling and metallurgical work is completed, and until other economic and technical feasibility factors based upon such work have been resolved. The Securities and Exchange Commission (the “SEC”) does not recognize this term. Investors are cautioned not to assume that any part or all of the mineral deposits in these categories will ever be converted into reserves.

Gross Proceeds Royalty (GPR): A royalty in which payments are made on contained ounces rather than recovered ounces.

Gross Smelter Return (GSR) Royalty: A defined percentage of the gross revenue from a resource extraction operation, in certain cases reduced by certain contract-defined costs paid by or charged to the operator.

g/t: A unit representing grams per tonne.

Net Smelter Return (NSR) Royalty: A defined percentage of the gross revenue from a resource extraction operation, less a proportionate share of incidental transportation, insurance, refining and smelting costs.

Net Value Royalty (NVR): A defined percentage of the gross revenue from a resource extraction operation, less certain contract-defined transportation costs, milling costs and taxes.

Proven (Measured) Reserves: Reserves for which (a) quantity is computed from dimensions revealed in outcrops, trenches, workings or drill holes, and the grade is computed from the results of detailed sampling, and (b) the sites for inspection, sampling and measurement are spaced so closely and the geologic character is so well defined that the size, shape, depth and mineral content of the reserves are well established.

Probable (Indicated) Reserves: Reserves for which the quantity and grade are computed from information similar to that used for proven (measured) reserves, but the sites for inspection, sampling and measurement are farther apart or are otherwise less adequately spaced. The degree of assurance of probable (indicated) reserves, although lower than that for proven (measured) reserves, is high enough to assume geological continuity between points of observation.

Payable Metal: Ounces or pounds of metal in concentrate payable to the operator after deduction of a percentage of metal in concentrate that is paid to a third-party smelter pursuant to smelting contracts.

Reserve: That part of a mineral deposit which could be economically and legally extracted or produced at the time of the reserve determination.

Royalty: The right to receive a percentage or other denomination of mineral production from a resource extraction operation.

Ton: A unit of weight equal to 2,000 pounds or 907.2 kilograms.

Tonne: A unit of weight equal to 2,204.6 pounds or 1,000 kilograms.

Our Producing Royalty Interests

Our producing royalty interests on mines that were in production and generated revenue to the Company during all or part of fiscal year 2009 are shown in the following table. The number of properties listed here as production stage could change periodically due to developments at the properties. Please see Item 2, Properties, of this report for further discussion of our principal producing royalty interests.

						Royalty
Mine		Location		Operator		(Gold unless otherwise stated)
Cortez		Nevada, USA		Barrick		GSR1: sliding- GSR2(1): sliding- GSR3(1): NVR1(1):		0.40%-5.0% scale GSR 0.40%-5.0% scale GSR 0.71% GSR 0.39% NVR
Robinson		Nevada, USA		Quadra Mining Ltd. (“Quadra”)		3.0% NSR (copper, gold, silver, molybdenum)
Leeville		Nevada, USA		Newmont Mining Corporation (“Newmont”)		1.8% NSR
Goldstrike		Nevada, USA		Barrick		0.9% NSR
Bald Mountain		Nevada, USA		Barrick		1.75%-3.5% sliding-scale NSR
Twin Creeks(2)		Nevada, USA		Newmont		2.0% GPR
Wharf(2)		South Dakota, USA		Goldcorp Inc. (“Goldcorp”)		0.0%-2.0% sliding-scale NSR
Troy(3)		Montana, USA		Revett Minerals, Inc. (“Revett”)		7.0% GSR (silver and copper)
Peñasquito (oxide)(4)		Zacatecas, Mexico		Goldcorp		2.0% NSR (gold and silver)
Mulatos(5)		Sonora, Mexico		Alamos Gold, Inc. (“Alamos”)		1.0%-5.0% sliding-scale NSR
El Chanate(6)		Sonora, Mexico		Capital Gold, Inc.		2.0%-4.0% sliding-scale NSR
Dolores(7)		Chihuahua, Mexico		Minefinders Corporation, Ltd. (“Minefinders”)		1.25% NSR; 2.0% NSR (gold and silver)
Taparko(8)		Burkina Faso, West Africa		High River Gold Mines Ltd. (“High River”)		15% GSR (TB-GSR1); 0%-10% sliding-scale GSR (TB-GSR2)
Siguiri(2,9)		Guinea, West Africa		AngloGold		0.0%-1.875% sliding-scale NSR
Benso(10)		Republic of Ghana, West Africa		Golden Star Resources Ltd. (“Golden Star”)		1.5% NSR
Martha		Santa Cruz Province, Argentina		Coeur d’Alene Mines Corporation		2.0% NSR (silver)
Don Mario (Lower Mineralized Zone)		Chiquitos Province, Bolivia		Orvana Minerals Corp. (“Orvana”)		3.0% NSR
El Toqui(2)		Region XI, Chile		Breakwater Resources		1.0%-3.0% sliding-scale NSR (gold and zinc)
Williams		Ontario, Canada		Barrick		0.72% NSR
Allan(2)		Saskatchewan, Canada		Potash Corporation of Saskatchewan		$0.36-$1.44 per ton sliding scale; $0.25 per ton (potash)
El Limon		El Limon, Nicaragua		B2Gold Corp. (95%) and Inversiones Mineras S.A. (5%)		3.0% NSR
Balcooma(2)		Queensland, Australia		Kagara Zinc		1.5% NSR (copper and zinc)
Mt. Goode (Cosmos South)(2)		Western Australia, Australia		Xstrata		1.50% NSR (nickel)

Our Development Stage Royalty Interests

We own royalty interests that are currently in development stage as they are either not yet in production or not yet generating revenue to the Company. Please see Item 2, Properties, of this report for further discussion on our principal development stage royalty interests.

The following royalty interests are currently in development stage as they have not yet provided revenue to the Company but are associated with a property currently in production.

						Royalty
Mine		Location		Operator		(Gold unless otherwise stated)
Marigold(1)		Nevada, USA		Goldcorp		2.0% NSR
Troy		Montana, USA		Revett		6.1% GSR (silver and copper) 2.0% GSR (silver and copper)
Peñasquito (sulfide)		Zacatecas, Mexico		Goldcorp		2.0% NSR (gold, silver, lead and zinc)
Taparko		Burkina Faso, West Africa		High River		2.0% GSR (TB — GSR3); 0.75% milling royalty (TB —MR1)
Don Mario (Upper Mineralized Zone)		Chiquitos Province, Bolivia		Orvana		3.0% NSR (gold, silver and copper)
Reedy’s Burnakura(2,3)		Western Austrailia, Australia		ATW Gold Corp.		1.5%-2.5% NSR
Koolanooka(3)		Western Austrailia, Australia		Sinosteel Midwest Corporation Ltd.		AUD$0.25 per ton (iron ore)

The following royalty interests are currently in development stage as they are not yet in production.

						Royalty
Mine		Location		Operator		(Gold unless otherwise stated)
Gold Hill		Nevada, USA		Kinross Gold Corporation (50%), Barrick (50%)		1.0%-2.0% sliding-scale NSR
Relief Canyon		Nevada, USA		Firstgold Incorporated		3.0% NSR and 1.0% NSR
Pascua-Lama		Region III, Chile		Barrick		0.16%-1.08% sliding-scale NSR 0.22% fixed rate royalty (copper)
Meekatharra (Paddy’s Flat)(1)		Western Australia, Australia		Mercator Gold		A$10.00 per gold ounce produced
Canadian Malartic(1)		Quebec, Canada		Osisko Mining Corporation (“Osisko”)		2.0%-3.0% sliding-scale NSR
Holt(1,2)		Ontario, Canada		St Andrew Goldfields Ltd. (“St Andrew”)		0.00013 x quarterly average gold price
Pine Cove(1)		Newfoundland, Canada		New Island Resources (70%), Anaconda Gold (30%)		7.5% NPI
Lluvia deOro(3)		Sonora, Mexico		NWM Mining Corp.		4.0% NSR

Our Exploration Stage Royalty Interests

We own royalty interests on over 80 exploration stage projects on six continents. None of our exploration stage projects contain proven and probable reserves as of December 31, 2008, as determined by the owner or operator.

Our Operational Information

Financial Information about Geographic Areas

Royal Gold’s royalty revenue and long-lived assets (royalty interests in mineral properties, net) are geographically distributed as shown in the following table. Please refer to Item 2, Properties, for further discussion on our significant royalty interests on producing mineral properties.

														Royalty Interests in
		Royalty Revenue												Mineral Properties, net
		2009				2008				2007				2009				2008				2007
United States			56	%			79	%			97	%			13	%			18	%			25	%
Mexico			15	%			4	%			2	%			45	%			55	%			49	%
Canada			2	%			1	%			—				19	%			1	%			—
Africa(1)			21	%			11	%			—				8	%			12	%			16	%
Chile			1	%			—				—				6	%			7	%			10	%
Other(2)			5	%			5	%			1	%			9	%			7	%			—

Our financial results are primarily tied to the price of gold and other metals, as well as production from our producing stage royalty interests. For the fiscal years ended June 30, 2009, 2008 and 2007, the price of gold averaged $874, $821 and $638 per ounce, respectively, the price of silver averaged $12.91, $15.40 and $12.74 per ounce, respectively, and the price of copper averaged $2.25, $3.53 and $3.22 per pound, respectively. For the fiscal years ended June 30, 2009, 2008 and 2007, Royal Gold derived 84%, 74% and 71%, respectively, of its total royalty revenue from gold royalties; 3%, 3% and 2%, respectively, of its total royalty revenue was derived from silver royalties; while 11%, 23%. 27%, respectively, of its total royalty revenue was derived from copper royalties, and 2%, 0% and 0%, respectively, of its total revenue was derived from other metal royalties.

In each of fiscal years 2009, 2008 and 2007, we recognized approximately $22.2 million, $27.7 million and $28.2 million, respectively, of our total royalty revenue from the same operator, Barrick, but not from the same mine.

Our financial results are discussed in further detail within Part II, Item 7, MD&A, and within our audited consolidated financial statements which are included in Part II, Item 8, Financial Statements and Supplementary Data. The risks associated with the operations of our royalty interests in various geographic regions are discussed in Part 1A, Risk Factors.

Competition

The mining industry in general and the royalty segment in particular are competitive. We compete with other royalty companies, mine operators and financial buyers in efforts to acquire existing royalties and with the lenders and investors providing debt and equity financing to operators of mineral properties in our efforts to create new royalties. Many of our competitors in the lending and mining business are larger than we are and have greater access to capital than we have. Key competitive factors in the royalty acquisition and financing business include price, structure and access to capital.

Regulation

Like all mining operations in the United States, the operators of the mines that are subject to our royalties must comply with environmental laws and regulations promulgated by federal, state and local governments including, but not limited to, the National Environmental Policy Act; the Comprehensive Environmental Response, Compensation and Liability Act; the Clean Air Act; the Clean Water Act; the Hazardous Materials Transportation Act; and the Toxic Substances Control Act. Mines located on public lands are subject to the General Mining Law of 1872 and are subject to comprehensive regulation by either the United States Bureau of Land Management (an agency of the United States Department of the Interior) or the United States Forest Service (an agency of the United States Department of Agriculture). The mines also are subject to regulations of the United States Environmental Protection Agency (“EPA”), the United States Mine Safety and Health Administration and similar state and local agencies. Operators of mines that are subject to our royalties in other countries are obligated to comply with similar laws and regulations in those jurisdictions. Although we are not responsible as a royalty owner for ensuring compliance with these regulations, failure by the operators of the mines on which we have royalties to comply with applicable laws, regulations and permits can result in injunctive action, damages and civil and criminal penalties on the operators which could reduce or eliminate production from the mines and thereby reduce or eliminate the royalties we receive and negatively affect our financial condition.

Corporate Information

We were incorporated under the laws of the State of Delaware on January 5, 1981. Our executive offices are located at 1660 Wynkoop Street, Suite 1000, Denver, Colorado 80202; our telephone number is (303) 573-1660.

Available Information

Royal Gold maintains an internet website at www.royalgold.com. Royal Gold makes available, free of charge, through the Investor Relations section of the website, its Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and all amendments to those reports, as soon as reasonably practicable after such material is electronically filed with the SEC. Our SEC filings are available from the SEC’s internet site at www.sec.gov which contains reports, proxy and information statements and other information regarding issuers that file electronically. These reports, proxy statements and other information may also be inspected and copied at the public reference facilities maintained by the SEC at 100 F Street, NE, Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for further information on the operation of the public reference facilities. The charters of Royal Gold’s key committees of the Board of Directors and Royal Gold’s Code of Business Conduct and Ethics are also available on the Company’s website. Any of the foregoing information is available in print to any stockholder who requests it by contacting Royal Gold’s Investor Relations Department at (303) 573-1660.

Company Personnel

We currently have 17 employees, all of whom are located in Denver, Colorado. Our employees are not subject to a labor contract or a collective bargaining agreement. We consider our employee relations to be good.

Consulting services, relating primarily to geologic and geophysical interpretations and also relating to such metallurgical, engineering, and other technical matters as may be deemed useful in the operation of our business, are primarily provided by independent contractors.

ITEM 1A.		RISK FACTORS

An investment in our common stock involves a high degree of risk. You should carefully consider the risks described below before making an investment decision. Our business, financial condition, results of operations and cash flows could be materially adversely affected by any of these risks. The market or trading price of our securities could decline due to any of these risks. In addition, please see our note about forward-looking statements included in Part II, Item 7, MD&A, of this report. Please note that additional risks not presently known to us or that we currently deem immaterial may also impair our business and operations.

Risks Related to Our Business

We received significant revenue in fiscal year 2009 from Cortez, and this maturing mine is likely to experience production declines.

Approximately 22%, and 33% of our revenues were derived from Cortez in fiscal years 2009 and 2008, respectively. We expect that revenue from our royalties at Cortez will continue to be a significant contributor to our revenue in future periods. However, as Cortez and other mines on which we have royalties mature, we can expect overall declines in production over the years unless operators are able to replace reserves that are mined through mine expansion or successful new exploration. There can be no assurance that the operators of Cortez or our other properties will be able to maintain or increase production or replace reserves as they are mined.

We own passive interests in mining properties, and it is difficult or impossible for us to ensure properties are operated in our best interest.

All of our current revenue is derived from royalties on properties operated by third parties. The holder of a royalty interest typically has no authority regarding the development or operation of a mineral property. Therefore, we are not in control of decisions regarding development or operation of any of the properties on which we hold a royalty interest, and we have limited or no legal rights to influence those decisions.

Our strategy of having others operate properties on which we retain a royalty or other passive interest puts us generally at risk to the decisions of others regarding all operating matters, including permitting, feasibility analysis, mine design and operation, processing, plant and equipment matters and temporary or permanent suspension of operations, among others. These decisions are likely to be motivated by the best interests of the operator rather than to maximize royalties. Although we attempt to secure contractual rights, such as audit or access rights when we create new royalties, that will permit us to protect our interests, there can be no assurance that such rights will always be available or sufficient, or that our efforts will be successful in achieving timely or favorable results or in affecting the operation of the properties in which we have royalty interests in ways that would be beneficial to our stockholders.

Volatility in gold, silver, copper and other metal prices may have an adverse impact on the value of our royalty interests and reduce our royalty revenues.

The profitability of our royalty interests is directly related to the market price of gold, silver, copper and other metal prices. The market price of each metal may fluctuate widely and is affected by numerous factors beyond the control of any mining company. These factors include metal supply, industrial and jewelry fabrication and investment demand, expectations with respect to the rate of inflation, the relative strength of the U.S. dollar and other currencies, interest rates, gold sales and loans by central banks, forward sales by metal producers, global or regional political, economic or banking crises and a number of other factors. If the market price of gold, copper or certain other metals should drop, then our royalty revenues could also drop. Our sliding-scale royalties at Cortez, Taparko and other properties amplify this effect.

When the gold price falls below a certain mark in a sliding-scale royalty, we receive a lower royalty rate on production. Furthermore, if gold, copper and certain other metal prices drop dramatically, we might not be able to recover our initial investment in royalty interests or properties. In addition, certain royalty agreements, such as that in place for our interest at Robinson, provide that royalty payments to us are subject to subsequent adjustment based on commodity prices at a later date, three to four months in the case of Robinson, which can result in adjustments to our royalty revenue in later periods. Hence, we may experience positive or negative adjustments to recognized royalty revenues based on changes in commodity prices. Moreover, the selection of a royalty investment or of a property for exploration or development, the determination to construct a mine and place it into production, and the dedication of funds necessary to achieve such purposes are decisions that must be made long before the first revenues from production will be received. Price fluctuations between the time that decisions about exploration, development and construction are made and the commencement of production can have a material adverse effect on the economics of a mine and can eliminate or have a material adverse impact on the value of royalty interests.

The volatility in gold prices is illustrated by the following table, which sets forth, for the periods indicated (calendar year), the high and low prices in U.S. dollars per ounce of gold, based on the London P.M. fix.

Gold Price Per Ounce ($)

Year		High				Low
2000			312				263
2001			293				256
2002			349				278
2003			416				320
2004			454				375
2005			537				411
2006			725				525
2007			841				608
2008			1,011				713
2009 (through August 14, 2009)			989				810

The volatility in silver prices is illustrated by the following table which sets forth, for the periods indicated (calendar year), the high and low prices in U.S. dollars per ounce of silver, based on the London daily fix.

Silver Price Per Ounce ($)

Year		High				Low
2000			5.45				4.57
2001			4.82				4.07
2002			5.10				4.24
2003			5.97				4.37
2004			8.29				5.50
2005			9.23				6.39
2006			14.94				8.83
2007			15.82				11.67
2008			20.92				8.88
2009 (through August 14, 2009)			15.97				10.51

The volatility in copper prices is illustrated by the following table, which sets forth, for the periods indicated (calendar year), the high and low prices in U.S. dollars per pound of copper, based on the London Metal Exchange cash settlement price for copper Grade A.

Copper Price Per Pound ($)

Year		High			Low
2000			0.89				0.76
2001			0.81				0.62
2002			0.75				0.67
2003			1.00				0.72
2004			1.43				1.10
2005			2.08				1.44
2006			3.65				2.15
2007			3.77				2.37
2008			4.08				1.26
2009 (through August 14, 2009)			2.90				1.38

Our revenues are subject to operational and other risks faced by operators of our mining properties.

Although we are not required to pay capital costs or operating costs, our financial results are subject to hazards and risks normally associated with developing and operating mining properties, both for the properties where we may conduct exploration or indirectly for properties operated by others where we hold royalty interests. These risks include:

	•		insufficient ore reserves;
	•		fluctuations in production costs incurred by operators or third parties that may make mining of ore uneconomical or impact the amount of reserves;
	•		declines in the price of gold and other metals;
	•		mine operating and ore processing facility problems;
	•		economic downturns and operators’ insufficient financing;
	•		significant environmental and other regulatory permitting requirements and restrictions;
	•		challenges by non-mining interests to existing permits and mining rights, and to applications for permits and mining rights;
	•		community unrest and labor disputes;
	•		geological problems;
	•		pit wall or tailings dam failures;
	•		natural catastrophes such as floods or earthquakes; and
	•		the risk of injury to persons, property or the environment.

Operating cost increases can have a negative effect on the value of and income from our royalty interests by potentially causing an operator to curtail, delay or close operations at a mine site.

We depend on our operators for the calculation of royalty payments, and we may not be able to detect errors, or payment calculations may call for retroactive adjustments.

Our royalty payments are calculated by the operators of the properties on which we have royalties based on their reported production. Each operator’s calculation of our royalty payments is subject to and dependent upon the adequacy of its production and accounting functions, and errors may occur from time

to time in the calculations made by an operator. For example, the complex nature of mining and ownership of mining interests can result in errors regarding allocation of production, such as those that occurred in connection with our restatement of our consolidated financial statements for fiscal 2008. Certain royalty agreements require the operators to provide us with production and operating information that may, depending on the completeness and accuracy of such information, enable us to detect errors in the calculation of royalty payments that we receive. We do not, however, have the contractual right to receive production information for all of our royalty interests. As a result, our ability to detect royalty payment errors through our royalty monitoring program and its associated internal controls and procedures is limited, and the possibility exists that we will need to make retroactive royalty revenue adjustments. Some of our royalty contracts provide us the right to audit the operational calculations and production data for the associated royalty payments; however, such audits may occur many months following our recognition of the royalty revenue and may require us to adjust our royalty revenue in later periods. In addition, certain royalty agreements, such as our royalty agreement for the Robinson mine, provide that royalty payments to us are subject to subsequent adjustment based on commodity prices at a later date, three to four months in the case of Robinson, which can result in adjustments to our royalty revenue in later periods. Hence, audits of payments with these terms may result in the recognition by us of retroactive changes to previously disclosed royalty revenues.

Our disclosure controls and internal control over our financial reporting are subject to inherent limitations.

Management has concluded that as of the period ended June 30, 2009, our disclosure controls and procedures and our internal control over financial reporting were effective. Such controls and procedures, however, may not be adequate to prevent or identify existing or future internal control weaknesses due to inherent limitations that are beyond our control, including, but not limited to, our dependence on operators for the calculations of royalty payments as discussed in the above risk factor. As an example, we concluded that we had a material weakness in our internal control over financial reporting as of the fiscal year ended June 30, 2008, because we were not able to timely detect an operator’s incorrect calculation of a certain royalty payment. As a result, we restated our consolidated financial statements for the fiscal year ended June 30, 2008 (please see Item 9A of our Form 10-K/A, filed on November 6, 2008, and Item 4 of Part I of our Form 10-Q filed on November 10, 2008, for further discussion of the material weakness and restatement). While we believe we have remedied such material weakness in our internal control over financial reporting, inherent limitations that are beyond our control remain and there is a risk that material misstatements in results of operations and financial condition may not be prevented or detected on a timely basis by our internal controls over financial reporting and may require us to restate our financial statements. This could, in turn, adversely affect the trading price of our common stock and there is a risk that repeated restatements could result in an investigation by the SEC.

If the current economic downturn, challenging credit markets and depressed prices of certain commodities is prolonged, it may affect the ability of the operators of the properties on which we have royalties to meet liquidity needs or operate profitably, which in turn could have material adverse effects on the value of and revenue from our royalty interests. In addition, the current economic downturn may adversely affect our ability to obtain financing for additional royalty acquisitions.

The value of and revenue from our royalty interests may be materially adversely affected if commodity prices for the various metals on which we have royalties or which are the primary production at mines on which we have royalties decline significantly, as occurred with respect to copper during the second half of calendar 2008. For example, the decline in prices for copper negatively impacted our revenue for the three-month period ended December 31, 2008 by approximately $3.3 million, in comparison to our total revenue for such period of approximately $14.6 million. In addition, our royalty interests and revenues may be materially adversely affected if operators of the properties on which we have royalties do not have, in light of prevailing economic conditions, the financial strength or sufficient credit or other financing capability to cover the costs of operating or developing a mine, causing an operator to curtail, delay or close operations at a mine site. Further disruption and volatility of financial markets could also

limit operators’ access to the financing needed for operations. For example, High River, the operator of the Taparko mine, is in breach of its funding agreement with Royal Gold, and recently announced that its ability to continue as a going concern depends on, among other things, its ongoing discussions with its lenders and obtaining additional financing. For these or other reasons, it is possible the operators could delay or cease making royalty payments to us. If any of the operators of the properties on which we have royalties suffer these material adverse effects, enter into bankruptcy or liquidation, or undergo a change of control, then our royalty interests and the value of and revenue from our royalty interests may be materially adversely affected. In addition, a continued economic downturn or credit crisis could adversely affect our ability to obtain debt or equity financing for additional royalty acquisitions.

We may enter into acquisitions or other material royalty transactions at any time.

We are engaged in a continual review of opportunities to acquire existing royalties, to create new royalties through the financing of mining projects or to acquire companies that hold royalty assets. 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, analysis of technical, financial and other confidential information, submission of indications of interest, obtaining debt commitments for acquisition financing, participation in preliminary discussions, and involvement as a bidder in competitive auctions. Any such acquisition could be material to us and could significantly increase the size and scope of our business. In such event, we could issue substantial amounts of common stock or incur substantial additional indebtedness to fund the acquisition. Issuances of common stock would dilute the ownership of our existing stockholders and could reduce our earnings per share.

In addition, we may consider opportunities to restructure our royalties where we believe such restructuring would provide a long-term benefit to the Company, though such restructuring may reduce near-term revenues. For example, we restructured our royalties at Cortez in connection with the Barrick royalty portfolio acquisition, which reduced our royalty revenue from Cortez during the fiscal year ended June 30, 2009 by approximately $1.1 million. We could enter into one or more acquisition or restructuring transactions at any time.

We may incur substantial indebtedness that could have adverse effects on our business.

We may incur substantial indebtedness in the future in connection with financing acquisitions, strategic transactions or for other purposes. If we were to incur substantial additional indebtedness, it may become difficult for us to satisfy our debt obligations, increase our vulnerability to general adverse economic and industry conditions, require us to dedicate a substantial portion of our cash flow from operations and proceeds of any equity issuances to payments on our indebtedness, thereby reducing the availability of cash flow to fund acquisitions and dividends and other general corporate purposes, which may place us at a competitive disadvantage to our competitors that have less debt or have other adverse effects on us.

We may be unable to successfully acquire additional royalty interests.

Our future success depends upon our ability to acquire royalty interests at appropriate valuations, including through corporate acquisitions, to replace depleting reserves and to diversify our royalty portfolio. We anticipate that most of our revenues will be derived from royalty interests that we acquire or finance, rather than through exploration and development of properties. There can be no assurance that we will be able to identify and complete the acquisition of such royalty interests, or businesses that own desired royalty interests, at reasonable prices or on favorable terms. In addition, we face competition in the acquisition of royalty interests. If we are unable to successfully acquire additional royalties, the reserves subject to our royalties will decline as the producing properties on which we have royalties are mined. We may also experience negative reactions from the financial markets or operators of properties on which we seek royalties if we are unable to successfully complete acquisitions of royalty interests or

businesses that own desired royalty interests. Each of these factors may adversely affect the trading price of our common stock or our financial condition or results of operations.

Acquired royalty interests, particularly on development stage properties, are subject to the risk that they may not produce anticipated royalty revenues.

The royalty interests we acquire may not produce the anticipated royalty revenues. Royalty interests acquired on development stage properties are particularly sensitive to this risk. The success of our royalty acquisitions is based on our ability to make accurate assumptions regarding the valuation, timing and amount of royalty payments, particularly with respect to acquisitions of royalties on development stage properties. If the operator does not bring the property into production and operate in accordance with feasibility studies or other plans, then acquired royalty interests may not yield sufficient royalty revenues to be profitable. Furthermore, operators of development stage properties must obtain all necessary environmental permits and access to water, power and other raw materials needed for operations in order to begin production, and there can be no assurance operators will be able to do so. The Taparko project in Burkina Faso, which began production, the Peñasquito and Dolores mines in Mexico, both ramping up production, Pascua-Lama in Chile, and the Canadian Malartic and Holloway-Holt mining projects in Canada, are among our principal development stage royalty acquisitions to date. In addition, the Andacollo Production Interest that we expect to acquire from CDA is in the development stage and will not produce royalty revenue unless CDA is able to complete permitting and construction and successfully produce copper, as well as gold by-product, from the sulfide portions of the deposit and to operate the project at full capacity. See “Recent Developments — Proposed Acquisition of Andacollo Production Interest” within Item 7, MD&A, of this report. The failure of any of these projects to produce anticipated royalty revenues may materially and adversely affect our financial condition and results of operations.

Estimates of reserves and mineralization by the operators of mines in which we have royalty interests are subject to significant revision.

There are numerous uncertainties inherent in estimating proven and probable reserves and mineralization, including many factors beyond our control and the control of the operators of mineral properties on which we have a royalty interest. Reserve estimates on our royalty interests are prepared by the operators of the mining properties. We do not participate in the preparation or verification of such reports and have not independently assessed or verified the accuracy of such information. The estimation of reserves and of other mineralized material is a subjective process, and the accuracy of any such estimates is a function of the quality of available data and of engineering and geological interpretation and judgment. Results of drilling, metallurgical testing and production, and the evaluation of mine plans subsequent to the date of any estimate, may cause a revision of such estimates. The volume and grade of reserves recovered and rates of production may be less than anticipated. Assumptions about gold and other precious metal prices are subject to great uncertainty, and such prices have fluctuated widely in the past. Declines in the market price of gold or other precious metals also may render reserves or mineralized material containing relatively lower grades of ore uneconomical to exploit. Changes in operating and capital costs and other factors including short-term operating factors, such as the need for sequential development of ore bodies and the processing of new or different ore grades, may materially and adversely affect reserves. Finally, it is important to note that our royalties give us only small percentage interests in the production from any reserve, and those percentage interests vary widely based on the individual royalty documents.

Estimates of production by the operators of mines in which we have royalty interests are subject to change, and actual production may vary materially from such estimates.

Production estimates are prepared by the operators of mining properties. There are numerous uncertainties inherent in estimating anticipated production attributable to our royalty interests, including many factors beyond our control and the control of the operators of properties in which we have royalty interests. We do not participate in the preparation or verification of production estimates and have not independently assessed or verified the accuracy of such information. The estimation of anticipated production is a

subjective process and the accuracy of any such estimates is a function of the quality of available data, reliability of production history, variability in grade encountered, mechanical or other problems encountered, engineering and geological interpretation and operator judgment. Rates of production may be less than expected. Results of drilling, metallurgical testing and production, changes in commodity prices, and the evaluation of mine plans subsequent to the date of any estimate may cause actual production to vary materially from such estimates.

If title to properties is not properly maintained by the operators, our royalty revenues could decline.

The validity of unpatented mining claims, which constitute a significant portion of the properties on which we hold royalties in the United States, is often uncertain and such validity is always subject to contest. Unpatented mining claims are generally considered subject to greater title risk than patented mining claims, or real property interests that are held by absolute title to the land (fee simple). Because unpatented mining claims are self-initiated and self-maintained, they possess some unique vulnerabilities not associated with other types of property interests. It is impossible to ascertain the validity of unpatented mining claims from public real property records, and therefore it can be difficult or impossible to confirm that all of the requisite steps have been followed for location and maintenance of an unpatented mining claim. If title to unpatented mining claims subject to our royalty interests has not been properly established or is not properly maintained, our royalty revenues could be adversely affected.

Royalty interests are subject to contest by operators of mining projects and holders of mining rights.

Our business includes the risk that operators of mining projects and holders of mining claims, tenements, concessions, mining licenses or other interests in land and mining rights may contest the existence or geographic extent of our royalty interests. While Royal Gold seeks to confirm the existence, validity and enforceability of the royalties it acquires, there can be no assurance that such disputes will not arise. As a general matter, royalty interests in mining projects or properties are subject to uncertainties and complexities arising from the application of contract and property laws governing private parties and/or local or national governments in the jurisdiction where mining projects are located.

Anticipated federal legislation could decrease our royalty revenues.

In recent years, the United States Congress has considered a number of proposed major revisions to the General Mining Law of 1872 (the “General Mining Law”), which governs the creation, maintenance and possession of mining claims and related activities on federal public lands in the United States. Three such proposals are currently pending. Bills H.R. 699, S. 796 and H.R. 3201 were introduced in the Congress in January, April and July 2009, respectively. H.R. 699 would, if enacted, impose a royalty payable to the U.S. Government on existing and future production of minerals from unpatented mining claims in the United States, render certain federal lands unavailable for the location of unpatented mining claims, afford greater public involvement and regulatory discretion in the mine permitting process, provide for citizen suits against miners operating on federal lands, and impose new and stringent environmental operating standards and mined land reclamation requirements in addition to those already in effect.

If enacted, S. 796 would, among other things, impose a royalty on production of minerals from unpatented mining claims (except that production from permitted operations producing in commercial quantities on the date of enactment would be grandfathered), impose a land use fee on all federal lands included in mining permits, impose an abandoned mine land reclamation fee on all hardrock mining operations, afford greater public involvement and regulatory discretion in the mine permitting process and in determining appropriate financial assurance for completion of reclamation obligations, render certain federal lands unavailable for the location of unpatented mining claims, and impose new mined land reclamation requirements in addition to those already in effect.

H.R. 3201 would, if enacted, impose a royalty on production of minerals from unpatented mining claims located after the date of enactment, and impose an abandoned locatable mine land fee on production from unpatented mining claims.

If enacted, legislation such as H.R. 699, S. 796 and H.R. 3201 could adversely affect the development of new mines and the expansion of existing mines, as well as increase the cost of all mining operations on federal lands, perhaps materially and adversely affecting mine operators and, therefore, our royalty revenue.

The effect of any revision of the General Mining Law on our royalty interests in the United States cannot be determined conclusively until such revision, if any, is enacted and challenges to the legislation, if any, have been finally resolved. In addition, a number of the properties on which we have royalties are located on U.S. federal lands that are subject to federal mining and other public land laws. Changes in such laws or regulations promulgated under such laws could affect mine development and expansion and significantly increase regulatory obligations and compliance costs with respect to mine development and mine operations, which could adversely affect our royalty revenue from such properties. By way of example, if a royalty, assessment, production tax, or other levy imposed on and measured by production is charged to the operator at Cortez, which is largely located on U.S. federal lands, the amount of that charge would be deducted from gross proceeds for calculation of our GSR1, GSR2 and GSR3 royalties, which would reduce our royalty revenues from these royalty interests.

Foreign operations and operation by foreign operators are subject to many risks.

We derived approximately 44% of our revenues from foreign sources during fiscal 2009, compared to 21% in fiscal 2008. We currently have interests in mines and projects outside of the United States in Argentina, Australia, Bolivia, Burkina Faso, Canada, Chile, Colombia, Finland, Honduras, Mexico, Nicaragua, the Republic of Guinea and Russia. We also evaluate precious metal royalty acquisitions or development opportunities in other parts of the world, including Central America, Europe, Republics of the former Soviet Union, Asia, Africa and South America. Our foreign activities are subject to the risks normally associated with conducting business in foreign countries. These risks include, depending on the country, such things as volatile exchange controls and currency fluctuations, inflation, limitations on repatriation of earnings, foreign taxation, foreign real estate, contract and environmental laws and enforcement, expropriation or nationalization of property, labor practices and disputes and uncertain political and economic environments. There are also risks of war and civil disturbances, as well as other risks that could cause exploration or development difficulties or stoppages of operations, restrict the movement of funds or result in the deprivation or loss of contract or real property rights or the taking of property by nationalization or expropriation. Exploration licenses granted by some foreign countries do not include the right to mine, and in some jurisdictions the right to convert an exploration license into mining rights may not be automatic. Each country has discretion in determining whether to grant a license to mine. If an operator cannot secure a mining license following exploration of a property, or were to lose such a license, then the value of our royalty interest would be negatively affected or its validity undermined. Foreign operations also could be adversely impacted by laws and policies of the United States affecting foreign trade, investment and taxation. Furthermore, many of our operators are organized outside of the United States. Our royalty interests may be subject to the application of foreign laws to our operators, and their stockholders, including laws relating to corporate transactions, creditors’ rights, bankruptcy and liquidation.

The mining industry is subject to significant environmental risks.

Mining is subject to potential risks and liabilities associated with pollution of the environment and the disposal of waste products occurring as a result of mineral exploration and production. Laws and regulations in the United States and abroad intended to ensure the protection of the environment are constantly changing and generally are becoming more restrictive and costly. Insurance against environmental risks (including potential liability for pollution or other hazards as a result of the disposal of waste products occurring from exploration and production) is not generally available to companies

within the mining industry, such as the operators of the mines in which we hold a royalty interest, at a reasonable price. Furthermore, mining may be subject to significant environmental and other permitting requirements regarding the use of raw materials, particularly water, needed for operations. If an operator is forced to incur significant costs to comply with environmental regulations or becomes subject to environmental restrictions that limit its ability to continue or expand operations, or if an operator were to lose its right to use or access water or other raw materials necessary to operate a mine, our royalty revenues could be reduced, delayed, or eliminated. These risks are most salient with regard to our development stage royalty properties where permitting may not be complete, but can also lead to significant cost burdens, interruptions or stoppage of operations at operating mines. Further, to the extent that we become subject to environmental liabilities for the time period during which we were operating properties, the satisfaction of any liabilities would reduce funds otherwise available to us and could have a material adverse effect on our financial condition, results of operations and cash flows.

We depend on the services of our President and Chief Executive Officer and other key employees and on the participation of our Chairman.

We believe that our success depends on the continued service of our key executive management personnel. Currently, Tony Jensen is serving as our President and Chief Executive Officer. Mr. Jensen’s extensive commercial experience, mine operations background and industry contacts give us an important competitive advantage. Furthermore, our Chairman, Stanley Dempsey, who served as our Executive Chairman until his retirement in January 2009, remains closely involved with us. Mr. Dempsey’s knowledge of the royalty business and long-standing relationship with the mining industry are important to our success. The loss of the services of Mr. Jensen or other key employees could jeopardize our ability to maintain our competitive position in the industry. We currently do not have key person life insurance for any of our officers or directors.

Additional risks that Royal Gold may face as a result of the Teck Transaction are set forth below.

The closing of the Teck Transaction is subject to closing conditions, and there can be no assurance the closing conditions will be met.

There is no assurance that the Teck Transaction will be completed. The closing of the Teck Transaction is subject to satisfaction or waiver of certain conditions, including the condition that the operator, CDA, enter into certain concentrate marketing of its production from the Andacollo project and a condition in both Royal Gold’s and CDA’s favor that CDA’s material governmental approvals are not withdrawn or challenged (or such action threatened). CDA will be precluded from exercising the condition regarding governmental approvals if Royal Gold waives the condition and waives its rights to indemnification from CDA with respect to such governmental approvals. Teck/CDA has recently announced that they have encountered challenges to the previously granted permits for the process water supply, which may result in a delay in the start-up of the sulfide milling operations, and to accommodate the potential delay, Royal Gold has agreed to extend the outside closing date of the Teck Transaction. As such, either party may terminate the definitive agreement if closing conditions are not satisfied or waived by January 29, 2010.

Even if the Teck Transaction is completed, the Andacollo Production Interest may not produce the anticipated royalty revenue.

Even if the Teck Transaction is completed, there can be no assurance that the production interest we acquire on the Andacollo project will produce the anticipated royalty revenue. The success of the Andacollo project depends upon, among other factors, the ability of the operator to complete the construction of the mine and mill facilities for the sulfide portion of the deposit at the project, the ability of the operator to bring the project into production, the price of copper, the availability of resources necessary to construct and operate the project, including adequate water and power supplies and rights of way, and receipt and maintenance of necessary environmental and other permits to operate the project. While we understand that CDA holds the required air, water and other environmental permits, CDA has announced that challenges to previously granted permits for the water supply arrangements may result in delays to project start-up. There can be no assurance that developments in the political, regulatory or social environment will not require CDA to take further action, and incur additional costs, to maintain its permits or obtain other permits in order to complete development or to operate the project. The failure to

maintain or obtain such permits could materially and adversely affect the anticipated benefits of the Teck Transaction.

The Andacollo project is a copper mine with gold produced as a by-product. Our production interest, once acquired, will cover only the gold produced from the sulfide portion of the Andacollo project. Consequently, if the price of copper drops, the operator may curtail or delay construction of the sulfide portion or may close operations at the mine site.

If the Teck Transaction is completed, the failure of the Andacollo project to produce anticipated royalty revenues may materially and adversely affect our financial condition, results of operations, cash flows and the other benefits we expect to achieve from the Teck Transaction.

Risks Related to Our Common Stock

Our stock price may continue to be volatile and could decline.

The market price of our common stock has fluctuated and may decline in the future. The high and low sale prices of our common stock were $37.50 and $23.25 in the fiscal year ended June 30, 2007, $35.42 and $23.85 for the fiscal year ended June 30, 2008 and $49.81 and $22.75 for the fiscal year ended June 30, 2009. The fluctuation of the market price of our common stock has been affected by many factors that are beyond our control, including:

	•		market prices of gold and other metals;
	•		interest rates;
	•		expectations regarding inflation;
	•		ability of operators to produce precious metals and develop new reserves;
	•		currency values;
	•		credit market conditions;
	•		general stock market conditions; and
	•		global and regional political and economic conditions.

Additional issuances of equity securities by us would dilute the ownership of our existing stockholders and could reduce our earnings per share.

We may issue equity in the future in connection with acquisitions, strategic transactions or for other purposes. Any such acquisition could be material to us and could significantly increase the size and scope of our business. To the extent we issue additional equity securities, the ownership of our existing stockholders could be diluted and our earnings per share would be reduced.

If a large number of shares of our common stock is sold in the public market, the sales could reduce the trading price of our common stock and impede our ability to raise future capital.

We cannot predict what effect, if any, future issuances by us of our common stock or of other equity will have on the market price of our common stock. In addition, the shares of common stock that we issue in connection with an acquisition may not be subject to resale restrictions. We may issue substantial additional shares of common stock or other securities in connection with other acquisition transactions. The market price of our common stock could decline if certain large holders of our common stock, or recipients of our common stock in connection with an acquisition, sell all or a significant portion of their shares of common stock or are perceived by the market as intending to sell these shares other than in an orderly manner. In addition, these sales could also impair our ability to raise capital through the sale of additional common stock in the capital markets.

We may change our practice of paying dividends.

We have paid a cash dividend on our common stock for each fiscal year beginning in fiscal year 2000. Our board of directors has discretion in determining whether to declare a dividend based on a number of factors, including prevailing gold prices, economic market conditions and funding requirements for future opportunities or operations. If our board of directors declines to declare dividends in the future or reduces the current dividend level, then our stock price could fall, and the success of an investment in our common stock would depend solely upon any future stock price appreciation. We have increased our dividends in prior years. There can be no assurance, however, that we will continue to do so. For example, if we were to materially increase our borrowings to conduct a material acquisition, our board of directors could elect to modify our practice of paying dividends and potentially reduce or eliminate dividends on common stock.

Certain anti-takeover provisions could delay or prevent a third party from acquiring us.

Provisions in our restated certificate of incorporation may make it more difficult for third parties to acquire control of us or to remove our management. Some of these provisions:

	•		permit our board of directors to issue preferred stock that has rights senior to the common stock without stockholder approval; and
	•		provide for three classes of directors serving staggered, three-year terms.

We are also subject to the business combination provisions of Delaware law that could delay, deter or prevent a change in control. In addition, we have adopted a stockholder’s rights plan that imposes significant penalties upon a person or group that acquires 15% or more of our outstanding common stock without the approval of the board of directors. Any of these measures could prevent a third party from pursuing an acquisition of Royal Gold, even if stockholders believe the acquisition is in their best interests.

ITEM 1B.		UNRESOLVED STAFF COMMENTS

None.

ITEM 2.		PROPERTIES

We do not operate the properties in which we have royalty interests and therefore much of the information disclosed in this Form 10-K regarding these properties is provided to us by the operators. For example, the operators of the various properties provide us information regarding metals production, estimates of mineral reserves and additional mineralized material. Reserves are summarized below in this report in Item 2, Properties, Reserve Information. Our rights to information from the operators under our royalty agreements vary by royalty and by operator and we may not be entitled to information regarding certain properties. We do not participate in the preparation or calculation of the operators’ estimates, production reports or reserve calculations and have not independently assessed or verified the accuracy of such information.

There is more information available to the public regarding the properties in which we have royalties, including reports filed with the SEC by the operators Barrick, Newmont, Coeur d’Alene, Capital Gold and Goldcorp. For risks to our business associated with operations of mining properties by third parties see generally the risks described under Part I, Item 1A, “Risk Factors.” For risks associated with the operators’ reserve estimates, please see Part I, Item 1A, “Risk Factors — Estimates of reserves and

mineralization by the operators of mines in which we have royalty interests are subject to significant revision” of this report for further detail.

The description of our principal royalties set forth in this Item 2, Properties, includes the location, operator, reserves and our royalty rate and interests. The descriptions do not include material current developments at each property. Material current developments announced by the operators are discussed in Item 7, MD&A, of this report.

Principal Royalties on Producing Properties

Recent activities and further information for each of the principal producing properties in which we have a royalty interest are described in the following pages. The Company considers both historical and future potential revenues in determining which royalties in our portfolio are principal to our business. Estimated future potential royalty revenues from both producing and development properties are based on a number of factors, including reserves subject to our royalty interests, production estimates, feasibility studies, metal price assumptions, mine life, legal status and other factors and assumptions, any of which could change and could cause Royal Gold to conclude that one or more of such royalties are no longer principal to our business. Reserves for our producing properties are summarized in this report in Item 2, Properties, Reserve Information.

Cortez Pipeline Mining Complex (Nevada, USA)

Cortez is a large open pit; mill and heap leach operation located approximately 60 air miles southwest of Elko, Nevada, in Lander County. The site is reached by driving west from Elko on Interstate 80 approximately 46 miles, and proceeding south on State Highway 306 approximately 23 miles. Cortez includes the Pipeline, South Pipeline, Gap and Crossroads deposits and is operated by subsidiaries of Barrick.

The royalty interests we hold at Cortez include:

	(a)		Reserve Claims (“GSR1”). This is a sliding-scale GSR royalty for all gold produced from an area originally known as the “Reserve Claims,” which includes the majority of the Pipeline and South Pipeline deposits. As defined in our royalty agreement with Cortez, our GSR royalty applies to revenues attributed to products mined and removed, with no deduction for any costs paid by or charged to Cortez, except for deductions for refining and transportation of doré and Mining Law reform costs. Mining Law reform costs include all amounts paid by or charged to Cortez for any royalty, assessment, production tax or other levy imposed on and measured by production, to the extent that any such levy is hereafter imposed by the United States, in connection with reform of the General Mining Law or otherwise. As defined, no such Mining Law reform costs are currently deducted since no such reform has occurred. The revenues attributed to Cortez are determined on a deemed market value basis of total production for each calendar quarter outturned to Cortez’s account at the refiner. The GSR royalty rate on the Reserve Claims is tied to the gold price as shown in the table below and does not include indexing for inflation or deflation.
	(b)		GAS Claims (“GSR2”). This is a sliding-scale GSR royalty for all gold produced from an area outside of the Reserve Claims, originally known as the “GAS Claims,” which encompasses approximately 50% of the GAP deposit and all of the Crossroads deposit. The GSR royalty rate on the GAS Claims, as shown in the table below, is tied to the gold price, without indexing for inflation or deflation, and applies to revenues attributed to products mined and removed, with no deduction of costs, except for refining and transportation of doré and Mining Law reform costs, if any. The GSR2 royalty, which was restructured as part of the Barrick acquisition, as discussed in more detail within Item 7, MD&A, of this report, will continue to apply to the mining claims that comprise the Crossroads deposit and approximately 50% of the GAP deposit.

	(c)		Reserve and GAS Claims Fixed Royalty (“GSR3”). The GSR3 royalty is a fixed rate GSR royalty of 0.7125% and originally covered the same cumulative area as is covered by our two sliding-scale GSR royalties, GSR1 and GSR2. However, as part of the Barrick acquisition, discussed in more detail within Item 7, MD&A, of this report, our GSR3 interest no longer covers the mining claims that comprise the undeveloped Crossroads deposit.
	(d)		Net Value Royalty (“NVR1”). This is a fixed 1.25% NVR on production from the GAS Claims located on a portion of Cortez that excludes the Pipeline open pit. The Company owns 31.6% of the 1.25% NVR (or 0.39%) while limited partners (including certain directors of the Company) in the partnership that we consolidate own the remaining portion of the 1.25% NVR. This NVR1 royalty is calculated by deducting contract defined processing-related and associated capital costs, but not mining costs, from the revenue received by the operator for production from the area covered by the royalty. As part of the Barrick acquisition, as discussed in more detail within Item 7, MD&A, of this report, our 0.39% portion of the NVR1 royalty no longer covers the mining claims that comprise the undeveloped Crossroads deposit.

We also own three other royalties in the Cortez area where there is currently no production and no reserves attributed to these royalty interests.

The following shows the current sliding-scale GSR1 and GSR2 royalty rates under our royalty agreement with Cortez, as restructured as part of the Barrick transaction which is discussed in more detail within Item 7, MD&A, of this report:

London PM Quarterly Average										GSR1 and GSR2
Price of Gold Per Ounce ($U.S.)										Royalty Percentage
Below						$	210.00				0.40	%
$	210.00			—		$	229.99				0.50	%
$	230.00			—		$	249.99				0.75	%
$	250.00			—		$	269.99				1.30	%
$	270.00			—		$	309.99				2.25	%
$	310.00			—		$	329.99				2.60	%
$	330.00			—		$	349.99				3.00	%
$	350.00			—		$	369.99				3.40	%
$	370.00			—		$	389.99				3.75	%
$	390.00			—		$	409.99				4.00	%
$	410.00			—		$	429.99				4.25	%
$	430.00			—		$	449.99				4.50	%
$	450.00			—		$	469.99				4.75	%
$	470.00			—		and above					5.00	%

Under certain circumstances we would be entitled to delayed production payments (i.e., payments not recoupable by Cortez) of $400,000 per year.

Barrick estimated that at a $725 gold price, proven and probable reserves related to our royalty interests at Cortez includes 110.9 million tons of ore, at an average grade of 0.038 ounces per ton, containing approximately 4.261 million ounces of gold as of December 31, 2008. In addition, Barrick has reported additional mineralized material at Cortez totaling 59.9 million tons, at an average grade of 0.017 ounces of gold per ton.

The following illustration depicts the area subject to our royalty interests at Cortez:

Taparko (Burkina Faso, West Africa)

We own a 15.0% GSR royalty (TB-GSR1) and a sliding-scale GSR royalty (TB-GSR2), ranging from 0% to 10.0% depending on the price of gold, on all gold produced from the Taparko open pit gold mine. The Taparko mine is located in Burkina Faso, West Africa, and is operated by Somita, a subsidiary of High River. The Taparko mine is accessible by paved roads and is approximately 125 miles northeast of Ouagadougou, the capital of Burkina Faso.

TB-GSR1 will remain in effect until cumulative production of 804,420 ounces of gold is achieved or until cumulative payments of $35 million have been made to Royal Gold, whichever is earlier. TB-GSR2 will remain in effect until the termination of TB-GSR1. Production at the Taparko mine commenced during our first fiscal quarter of 2008. As of June 30, 2009, we have recognized royalty revenue associated with the TB-GSR1 royalty totaling $11.2 million, which is attributable to cumulative production of approximately 84,000 ounces of gold.

We also own a perpetual 2.0% GSR royalty (TB-GSR3) on all gold produced from the Taparko mine that applies to production following the termination of TB-GSR1 and TB-GSR2 royalties. A portion of the TB-GSR3 royalty is associated with existing proven and probable reserves and has been classified as a development stage royalty interest. The remaining portion of the TB-GSR3 royalty, which is not

currently associated with proven and probable reserves, is classified as an exploration stage royalty interest.

In addition, we own a 0.75% milling fee royalty (TB-MR1) on all gold processed through the Taparko mine processing facilities that is mined from any area outside of the Taparko mine area, subject to a maximum of 1.1 million tons per year. There currently are no proven and probable reserves associated with TB-MR1 and this royalty is classified as an exploration stage royalty interest.

As of December 31, 2008, High River estimated that at an $800 gold price, proven and probable reserves include 3.1 million tons of ore, at an average grade of 0.085 ounces per ton, containing 0.262 million ounces of gold, which reflects the remaining portion under the $35 million cap as of December 31, 2008, on the TB-GSR1 royalty.

Please refer to Item 7, MD&A, of this report for further discussion on recent developments at Taparko.

The following map depicts the area subject to our royalty interests at the Taparko mine:

Robinson Mine (Nevada, USA)

We own a 3.0% NSR royalty on all mineral production from the Robinson open pit mine operated by a subsidiary of Quadra. The Robinson mine produces two flotation concentrates for sale to third party smelters. One concentrate contains copper, gold and silver. The second is a molybdenum concentrate. Access to the property is via Nevada State Highway 50, 6.5 miles west of Ely, Nevada, in White Pine County.

As of December 31, 2008, Quadra informed us that the copper and gold reserves were 134.1 million tons, at an average grade of 0.007 ounces per ton of gold, containing 0.905 million ounces of gold and a copper grade of 0.54% containing 1,455 million pounds of copper. The reserves were calculated at $2.00 per pound of copper and $800 per ounce of gold. Silver and molybdenum reserves were not reported but are produced and sold as by-products. In addition, Quadra reports additional mineralized material totaling 719.7 million tons at an average grade of 0.004 ounces per ton of gold and a copper grade of 0.41% inclusive of proven and probable reserves.

Please refer to “Recent Developments, Property Developments” within Item 7, MD&A, of this report for further discussion on developments at Robinson.

All of the ground within the “permit boundary,” as labeled in the following map, is subject to our royalty interest at the Robinson mine:

Leeville (Nevada, USA)

We own a carried working interest, equal to a 1.8% NSR royalty, which covers the majority of the Leeville property, in Eureka County, Nevada. The Leeville property is approximately 19 air miles northwest of Carlin, Nevada, and is operated by a subsidiary of Newmont. The property is accessed by driving north from Carlin on Nevada State Highway 766 for 19 miles and then on an improved gravel road for two miles.

At the Leeville Mining Complex, proven and probable reserves, at a $725 gold price, include 7.7 million tons of ore, at an average grade of 0.328 ounces per ton, containing 2.518 million ounces of gold as of

December 31, 2008. In addition, Newmont has reported additional mineralized material totaling 0.8 million tons, at an average grade of 0.392 ounces of gold per ton, at Leeville as of December 31, 2008.

The following map depicts the area subject to our royalty interest at Leeville:

Mulatos (Sonora, Mexico)

As a result of the Barrick transaction, which is discussed further within Item 7, MD&A, of this report, our sliding-scale NSR royalty on the Mulatos open pit mine in southeastern Sonora, Mexico, increased to 1.0% to 5.0% from 0.30% to 1.5%. The Mulatos mine is located approximately 137 miles east of the city of Hermosillo and 186 miles south of the border with the United States and is operated by Alamos. Access to the mine from the city of Hermosillo can be made via private chartered flight or paved and gravel road.

The Mulatos royalty is capped at 2.0 million gold ounces of production. As of June 30, 2009, approximately 416,000 cumulative ounces of gold have been produced.

As of December 31, 2008, based upon a gold price of $700 per ounce, Alamos has reported proven and probable reserves of 52.5 million tons, at an average grade of 0.039 ounces per ton, containing 2.046 million ounces of gold. Additional mineralized material is reported as 58.0 million tons of ore at 0.029 ounces per ton as of December 31, 2008.

All of the ground within the shaded area on the following map depicts the area subject to our royalty interests at the Mulatos mine:

Goldstrike (Nevada, USA)

We own a 0.9% NSR royalty on the Goldstrike property located in Eureka County, Nevada, and operated by a subsidiary of Barrick. Specifically, our royalty is on the SJ Claims that cover a portion of the Betze-Post open pit mine. The Goldstrike property lies approximately 24 air miles northwest of Carlin, Nevada. The property is accessed by driving north from Carlin on Nevada State Highway 766 for 19 miles and then on an improved gravel road for five miles.

Barrick estimated that at a $725 gold price, proven and probable reserves related to our royalty interest at Goldstrike include 47.8 million tons of ore, at an average grade of 0.121 ounces per ton, containing approximately 5.768 million ounces of gold as of December 31, 2008. In addition, Barrick reported mineralized material of 3.7 million tons, at a grade of 0.056 ounces per ton, as of December 31, 2008.

The following map depicts the area subject to our royalty interest at Goldstrike:

Siguiri (Guinea, West Africa)

As part of the Barrick transaction, discussed within Item 7, MD&A, of this report, we own a sliding-scale NSR royalty currently paying 1.875% on the Siguiri gold mine, located in the Republic of Guinea, West Africa, and operated by AngloGold. The Siguiri gold mine is located within the Siguiri District in the northeast of the Republic of Guinea, West Africa, approximately 500 miles from the capital city of Conakry. Access to the Siguiri mine from Conakry, via Kankan province, is the Tamac road.

The Company has recognized approximately $3.9 million in royalty revenue since acquisition of the Siguiri royalty from Barrick. The Siguiri royalty is capped on a dollar basis at approximately $12.0 million and approximately $7.9 remains under the cap as of June 30, 2009.

As of December 31, 2008, AngloGold estimated that at a $720 gold price proven and probable reserves include 135.9 million tons of ore, at an average grade of 0.024 ounces per ton, containing 3.3 million ounces of gold. At a $720 gold price, approximately 580,000 ounces of gold production remains as of June 30, 2009 to reach the $7.9 million remaining cap on the Siguiri royalty.

The following map depicts the location of the Siguiri mine:

Peñasquito Project (Zacatecas, Mexico)

We own a production payment equivalent to a 2.0% NSR royalty on all metal production from the Peñasquito project, located in the State of Zacatecas, Mexico, and operated by Goldcorp. The Peñasquito project is located approximately 17 miles west of the town of Concepción del Oro, Zacatecas, Mexico. The project, composed of two main deposits called Peñasco and Chile Colorado, hosts large silver, gold, zinc and lead reserves. The deposits contain both oxide and sulfide material. Access to the site is via either paved or cobbled roads west out of Concepcion del Oro nine miles to the town of Mazapil and then further approximately seven miles west of Mazapil.

Goldcorp estimates that at a gold price of $725 per ounce and a silver price of $12 per ounce proven and probable oxide reserves as of December 31, 2008 will total 201.1 million tons of oxide ore at an average gold grade of 0.004 ounces per ton containing 0.800 million ounces of gold, and at an average silver grade of 0.36 ounces per ton containing 72.1 million ounces of silver. Estimates for the sulfide reserves use the same gold and silver prices as the oxide reserve and include lead and zinc reserve estimates at a reserve price of $0.50 per pound for lead and $0.80 per pound for zinc. Proven and probable sulfide reserves as of December 31, 2008 include 1,112.2 million tons of sulfide ore at an average gold grade of 0.015 ounces per ton, a silver grade of 0.88 ounces per ton, a lead grade of 0.32% and a zinc grade of 0.69%

yielding contained metal of 16.630 million ounces of gold, 973.6 million ounces of silver, 7,070 million pounds of lead and 15,364 million pounds of zinc. The carrying value of the sulfide portion is classified as development stage of the Company’s Consolidated Balance Sheets as of June 30, 2009.

In addition, Goldcorp reported as of December 31, 2008 oxide mineralized material, at an $850 gold price and $14 per ounce silver price, totaled 39.9 million tons of oxide ore at an average grade of 0.002 ounces per ton gold and 0.143 ounces per ton silver while sulfide mineralized material, for the same period using the same gold and silver prices as the oxide material along with a lead price of $0.60 per pound and a zinc price of $1.00 per pound, totals 677.9 million tons of sulfide ore at an average grade of 0.007 ounces per ton gold, 0.54 ounces per ton silver, 0.19% lead and 0.55% zinc.

Please refer to Item 7, MD&A, of this report for further discussion on recent developments at Peñasquito.

The following illustration depicts the location of the Peñasquito project:

Dolores (Chihuahua, Mexico)

We own a 1.25% NSR royalty on gold and a 2.0% NSR royalty on both gold and silver from the Dolores project located in Chihuahua, Mexico, and operated by Minefinders. The Dolores project is located approximately 155 miles west of the city of Chihuahua, Mexico. The property can be accessed by approximately 56 miles of recently upgraded access road from Yepachi, Chihuahua, to the mine site. Access to the property can also be achieved by light aircraft landing on a dirt strip located about five miles from the mine site.

As of December 31, 2008, based upon a gold price of $600 per ounce, Minefinders has reported proven and probable gold reserves of 109.5 million tons, at an average grade of 0.022 ounces per ton, containing 2.444 million ounces of gold. Additional mineralized material is reported as 7.7 million tons at 0.090 ounces of gold per ton. Based upon an average silver price of $10 per ounce, Minefinders reported

proven and probable silver reserves of 109.5 million tons, at an average grade of 1.16 ounces per ton, containing 126.6 million ounces of silver. Additional mineralized material is reported as 7.7 million tons at 2.868 ounces of silver per ton as of December 31, 2008.

Please refer to Item 7, MD&A, of this report for further discussion on recent developments at Dolores.

The following map depicts the area subject to our royalty interests at Dolores:

Principal Royalties on Development Stage Properties

The following is a description of our principal royalty interests on development stage properties. There are proven and probable reserves associated with these properties as indicated below. These development stage royalty interests are not currently in production. Reserves for our development stage properties are summarized below in this report in Item 2, Properties — Reserve Information.

Pascua-Lama Project (Region III, Chile)

We own a 0.16% to 1.08% sliding-scale NSR royalty on the Pascua-Lama project located on both sides of the border between Argentina and Chile, and operated by Barrick. The Pascua-Lama project is located within 7 miles of Barrick’s Veladero project. Access to the project is from the city of Vallenar, III Region, Chile, via secondary roads C-485 to Alto del Carmen, Chile, and C-489 from Alto del Carmen, Chile, to El Corral, Chile.

The sliding-scale NSR royalty is based upon the gold prices as shown in the following table.

London PM Monthly Average										NSR
Price of Gold Per Ounce ($U.S.)										Royalty Percentage
Below						$	325.00				0.16	%
$	325.01			—		$	350.00				0.22	%
$	350.01			—		$	375.00				0.27	%
$	375.01			—		$	400.00				0.32	%
$	400.01			—		$	500.00				0.56	%
$	500.01			—		$	600.00				0.73	%
$	600.01			—		$	800.00				0.91	%
$	800.01			—		and above					1.08	%

When the average quarterly gold price is between any two price ranges above, the royalty rate is proportional to the change in gold price.

Our royalty interest is applicable to all gold production from the portion of the Pascua-Lama project lying on the Chilean side of the border. The Company owns an additional royalty equivalent to 0.216% of proceeds from copper produced from the Chilean portion of the project, net of allowable deductions, sold on or after January 1, 2017.

As of December 31, 2008, Barrick estimated that at a $725 gold price, proven and probable reserves include 324.7 million tons, at an average of 0.045 ounces per ton, containing 14.615 million ounces of gold. Additional mineralized material is reported as 78.9 million tons at 0.037 ounces of gold per ton, as of December 31, 2008.

Please refer to Item 7, MD&A, of this report for further discussion on recent developments at Pascua-Lama.

Canadian Malartic (Quebec, Canada)

As part of the Barrick acquisition, as discussed within Item 7, MD&A, of this report, we own a 2.0%-3.0% sliding-scale NSR royalty on the Canadian Malartic gold project located in Quebec, Canada, and owned by Osisko. The Canadian Malartic gold property is located in the Abitibi Gold Belt in Quebec, Canada, immediately south of the town of Malartic, Quebec, approximately 12 miles west of the town of Val d’Or. The northern extents of the Canadian Malartic property can be accessed directly from the Trans Canadian Highway 117. A paved road running north-south from the town of Malartic towards Lake Mourier cuts through the central area of the Canadian Malartic property.

Osisko announced the completion of a positive feasibility study resulting in proven and probable reserves at a $775 gold price of 202.0 million tons of ore, at a grade of 0.031 ounces per ton, and containing 6.28 million ounces of gold, of which 4.7 million ounces are subject to our royalty interest. Osisko estimated that gold production over the life of the mine will be approximately 591,000 ounces annually. The royalty is subject to a buy-down right for $1.0 to $1.5 million. If the buy down right is exercised by

Osisko, the sliding-scale NSR royalty would be reduced to a range between 1.0% and 1.5%. There is no expiration date on the buy down right.

Holt (Ontario, Canada)

As part of the Barrick acquisition, as discussed within Item 7, MD&A, of this report, we own a sliding-scale NSR royalty on the Holt portion of the Holloway-Holt mining project located in Ontario, Canada and owned 100% by St Andrew. The Holloway-Holt project straddles Ontario Provincial Highway 101 for approximately 25 miles beginning east of Matheson, Ontario, Canada and extending to the Quebec, Canada border. The sliding-scale NSR royalty rate on gold produced from the Holt portion of the mining project is calculated by multiplying 0.00013 by the quarterly average gold price. For example, at a quarterly average gold price of $950 per ounce, the effective royalty rate payable would be 12.35%.

St Andrew is currently redeveloping the Holloway mine under a staged investment plan and has announced that it expects to begin production at the Holt mine in the second half of calendar year 2010. According to St Andrew’s public filings in Canada from June 2008, proven and probable reserves subject to Royal Gold’s royalty equal 3.0 million tons at a grade of 0.165 ounces per ton, containing 0.486 million ounces of gold.

Please refer to Item 7, MD&A, of this report for further discussion on recent developments on our Holt royalty.

Reserve Information

Table 1 below summarizes proven and probable reserves for gold, silver, copper, zinc and lead that have been reported to us by the operators of our royalty interests as of December 31, 2008. Properties are currently in production unless noted as development (“DEV”) within the table. Properties for which we did not receive certain reserve breakdowns or information are noted as “DNR” within the table. Please refer to pages 39–41 for the footnotes to Table 1.

TABLE 1

Proven and Probable Gold Reserves ^1,2,3
As of December 31, 2008 ^4,5

																												PROVEN + PROBABLE
				PROVEN RESERVES												PROBABLE RESERVES												RESERVES
								Avg.				Gold								Avg.				Gold								Avg.				Gold
				Tons of				Gold				Contained				Tons of				Gold				Contained				Tons of				Gold				Contained
				Ore				Grade				Ozs 6				Ore				Grade				Ozs 6				Ore				Grade				Ozs 6
PROPERTY		OPERATOR		(millions)				(oz/ton)				(millions)				(millions)				(oz/ton)				(millions)				(millions)				(oz/ton)				(millions)
Bald Mountain 7		Barrick		DNR				DNR				DNR				DNR				DNR				DNR					27.45				0.026				0.720
Cortez (Pipeline) GSR1		Barrick			3.80				0.095				0.360				24.14				0.051				1.227				27.94				0.057				1.587	8
Cortez (Pipeline) GSR2		Barrick			8.29				0.038				0.312				74.65				0.032				2.362				82.95				0.032				2.674	8
Cortez (Pipeline) GSR3		Barrick			5.48				0.076				0.414				41.32				0.039				1.619				46.79				0.043				2.033	8
Cortez (Pipeline) NVR1		Barrick			3.69				0.047				0.173				38.46				0.037				1.419				42.15				0.038				1.592	8
Gold Hill (DEV)		Kinross/Barrick			0.28				0.013				0.004				31.08				0.015				0.459				31.37				0.015				0.463
Goldstrike 7		Barrick		DNR				DNR				DNR				DNR				DNR				DNR					47.82				0.121				5.768
(SJ Claims)
Leeville 7		Newmont		DNR				DNR				DNR				DNR				DNR				DNR					7.68				0.328				2.518
Marigold 9 (DEV)		Goldcorp/Barrick			11.75				0.021				0.251				23.89				0.018				0.433				35.63				0.019				0.683
Robinson		Quadra			130.04				0.007				0.884				4.10				0.005				0.021				134.14				0.007				0.905
Twin Creeks 7		Newmont		DNR				DNR				DNR				DNR				DNR				DNR				DNR				DNR					0.080
Wharf 10		Goldcorp			11.61				0.023				0.270				1.39				0.022				0.030				13.00				0.023				0.300
Canadian Malartic 7,11 (DEV)		Osisko Mining		DNR				DNR				DNR				DNR				DNR				DNR					150.56				0.031				4.727
Holt 12 (DEV)		St Andrew Goldfields			0.11				0.187				0.021				2.84				0.164				0.466				2.95				0.165				0.486
Pine Cove (DEV)		New Island Resources/ Anaconda Mining			0.00				0.000				0.000				2.57				0.081				0.207				2.57				0.081				0.207
Williams		Barrick			7.78				0.073				0.567				1.80				0.103				0.185				9.57				0.079				0.752

TABLE 1 (Continued)

Proven and Probable Gold Reserves ^1,2,3
As of December 31, 2008 ^4,5

																										PROVEN + PROBABLE
				PROVEN RESERVES										PROBABLE RESERVES												RESERVES
						Avg.				Gold								Avg.				Gold								Avg.				Gold
				Tons of		Gold				Contained				Tons of				Gold				Contained				Tons of				Gold				Contained
				Ore		Grade				Ozs 6				Ore				Grade				Ozs 6				Ore				Grade				Ozs 6
PROPERTY		OPERATOR		(millions)		(oz/ton)				(millions)				(millions)				(oz/ton)				(millions)				(millions)				(oz/ton)				(millions)
Dolores 13		Minefinders		62.42			0.023				1.454				47.04				0.021				0.990				109.46				0.022				2.444
El Chanate 14		Capital Gold		23.03			0.023				0.519				24.52				0.020				0.395				47.55				0.022				0.913
Mulatos 15		Alamos		13.01			0.050				0.649				39.52				0.035				1.397				52.53				0.039				2.046
Peñasquito 16 (Oxide)		Goldcorp		63.71			0.006				0.360				137.40				0.003				0.430				201.11				0.004				0.800
Peñasquito 16 (Sulfide) (DEV)		Goldcorp		618.62			0.018				11.390				493.53				0.011				5.250				1,112.15				0.015				16.630
Don Mario 7,17 (LMZ)		Orvana		DNR		DNR				DNR				DNR				DNR				DNR					0.21				0.290				0.060
El Limon		B2Gold		0.08			0.157				0.012				1.20				0.135				0.162				1.28				0.136				0.174
El Toqui 18		Breakwater		0.73			0.105				0.077				2.95				0.070				0.207				3.68				0.077				0.284
Martha		Coeur d’Alene		0.02			0.07				0.001				0.06				0.04				0.002				0.08				0.04				0.003
Pascua-Lama 19 (DEV)		Barrick		36.10			0.053				1.917				288.60				0.044				12.698				324.70				0.045				14.615
Balcooma 20		Kagara		0.35			0.020				0.007				2.44				0.008				0.019				2.79				0.009				0.026
Meekatharra 21 (Paddy’s Flat) (DEV)		Mercator Gold		0.00			0.000				0.000				2.19				0.140				0.308				2.19				0.140				0.308
Siguiri 22		Anglogold Ashanti		61.87			0.016				1.010				73.98				0.030				2.240				135.85				0.024				3.250
Taparko 23 TB-GSR1 and TB-GSR2		High River		DNR		DNR				DNR				DNR				DNR				DNR					3.09				0.085				0.262	24,25
Taparko 23 TB-GSR3		High River		DNR		DNR				DNR				DNR				DNR				DNR					6.42				0.085				0.544

TABLE 1 (Continued)

Proven and Probable Silver Reserves ^1,2,3
As of December 31, 2008 ^5,26

																												PROVEN + PROBABLE
				PROVEN RESERVES												PROBABLE RESERVES												RESERVES
								Avg.				Silver								Avg.				Silver								Avg.				Silver
				Tons of				Silver				Contained				Tons of				Silver				Contained				Tons of				Silver				Contained
				Ore				Grade				Ozs 6				Ore				Grade				Ozs 6				Ore				Grade				Ozs 6
PROPERTY		OPERATOR		(millions)				(oz/ton)				(millions)				(millions)				(oz/ton)				(millions)				(millions)				(oz/ton)				(millions)
Troy 7.0% GSR 23		Revett			—				—				—				—				—				—				0.48				1.19				0.569	27
6.1% GSR																													1.72				1.19				2.046
2.0% GSR																													0.98				1.19				1.164
Dolores 13		Minefinders			62.42				1.18				73.415				47.04				1.13				53.230				109.46				1.16				126.645
Peñasquito 16 (Oxide )		Goldcorp			63.71				0.54				34.300				137.40				0.28				37.800				201.11				0.36				72.100
Peñasquito 16 (Sulfide) (DEV)		Goldcorp			618.62				0.99				611.500				493.53				0.73				362.100				1,112.15				0.88				973.600
El Toqui 18		Breakwater			0.73				0.15				0.106				2.95				0.38				1.121				3.68				0.33				1.227
Martha		Coeur d’Alene			0.02				55.86				0.992				0.06				31.22				1.817				0.08				36.99				2.809
Balcooma 20		Kagara			0.35				1.87				0.654				2.44				0.41				1.003				2.79				0.59				1.657

TABLE 1 (Continued)

Proven and Probable Base Metal and Other Reserves ^1,2,3
As of December 31, 2008 ⁵

COPPER ²⁸

																												PROVEN + PROBABLE
				PROVEN RESERVES												PROBABLE RESERVES												RESERVES
								Avg.				Copper								Avg.				Copper								Avg.				Copper
				Tons of				Copper				Contained				Tons of				Copper				Contained				Tons of				Copper				Contained
				Ore				Grade				Lbs 6				Ore				Grade				Lbs 6				Ore				Grade				Lbs 6
PROPERTY		OPERATOR		(millions)				(% Cu)				(millions)				(millions)				(% Cu)				(millions)				(millions)				(% Cu)				(millions)
Robinson		Quadra			130.04				0.55				1,420				4.10				0.42				35				134.14				0.54				1,455
Troy 7% GSR 23		Revett		DNR				DNR				DNR				DNR				DNR				DNR					0.44				0.57				5	27
6.1% GSR																													1.50				0.57				17
2.0% GSR																													2.38				0.57				27
El Toqui 18		Breakwater			0.00				0.00				0				2.95				0.10				6				2.95				0.10				6
Balcooma 20		Kagara			0.35				1.30				9				2.44				3.05				149				2.79				2.83				158

ZINC ²⁹

PROVEN + PROBABLE

PROVEN RESERVES

PROBABLE RESERVES

RESERVES

Avg.

Zinc

Avg.

Zinc

Avg.

Zinc

Tons of

Zinc

Contained

Tons of

Zinc

Contained

Tons of

Zinc

Contained

Ore

Grade

Lbs 6

Ore

Grade

Lbs 6

Ore

Grade

Lbs 6

PROPERTY

OPERATOR

(millions)

(% Zn)

(millions)

(millions)

(% Zn)

(millions)

(millions)

(% Zn)

(millions)

Peñasquito 16 (Sulfide) (DEV)

Goldcorp

618.62

0.77

9,587

493.53

0.59

5,776

1,112.15

0.69

15,364

El Toqui 18

Breakwater

0.73

7.30

106

2.95

7.10

419

3.68

7.14

525

Balcooma 20

Kagara

0.35

7.20

50

2.44

0.43

21

2.79

1.28

71

LEAD ³⁰

PROVEN + PROBABLE

PROVEN RESERVES

PROBABLE RESERVES

RESERVES

Avg.

Lead

Avg.

Lead

Avg.

Lead

Tons of

Lead

Contained

Tons of

Lead

Contained

Tons of

Lead

Contained

Ore

Grade

Lbs 6

Ore

Grade

Lbs 6

Ore

Grade

Lbs 6

PROPERTY

OPERATOR

(millions)

(% Pb)

(millions)

(millions)

(% Pb)

(millions)

(millions)

(% Pb)

(millions)

Peñasquito 16 (Sulfide) (DEV)

Goldcorp

618.62

0.36

4,437

493.53

0.27

2,633

1,112.15

0.32

7,070

El Toqui 18

Breakwater

0.73

0.20

3

2.95

0.50

30

3.68

0.44

33

Balcooma 20

Kagara

0.35

2.60

18

2.44

0.19

9

2.79

0.49

27

TABLE 1 (Continued)

Proven and Probable Base Metal and Other Reserves ^1,2,3
As of December 31, 2008 ⁵

NICKEL ³¹

PROVEN + PROBABLE

PROVEN RESERVES

PROBABLE RESERVES

RESERVES

Avg.

Nickel

Avg.

Nickel

Avg.

Nickel

Tons of

Nickel

Contained

Tons of

Nickel

Contained

Tons of

Nickel

Contained

Ore

Grade

Lbs 6

Ore

Grade

Lbs 6

Ore

Grade

Lbs 6

PROPERTY

OPERATOR

(millions)

(% Ni)

(millions)

(millions)

(% Ni)

(millions)

(millions)

(% Ni)

(millions)

Mt. Goode 7 (Cosmos)

Xstrata

DNR

DNR

DNR

DNR

DNR

DNR

1.21

4.12

101

POTASH ³²

PROVEN + PROBABLE

PROVEN RESERVES

PROBABLE RESERVES

RESERVES

Finished

Finished

Finished

Product

Product

Product

Tons of

Avg.

Contained

Tons of

Avg.

Contained

Tons of

Avg.

Contained

Ore

K20

Tons 6

Ore

K20

Tons 6

Ore

K20

Tons 6

PROPERTY

OPERATOR

(millions)

Grade

(millions)

(millions)

Grade

(millions)

(millions)

Grade

(millions)

Allan 7,33,34

Potash Corporation

DNR

DNR

DNR

DNR

DNR

DNR

361.55

25.90

DNR

of Saskatchewan

FOOTNOTES TO TABLE 1

FOOTNOTES TO TABLE 1 (Continued)

FOOTNOTES TO TABLE 1 (Continued)

ITEM 3. LEGAL PROCEEDINGS

Casmalia Resources Hazardous Waste Disposal Site

On March 24, 2000, the United States Environmental Protection Agency (“EPA”) notified Royal Gold and 92 other entities that they were considered potentially responsible parties (“PRPs”) under the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, as amended (“Superfund”), at the Casmalia Resources Hazardous Waste Disposal Site (the “Site”) in Santa Barbara County, California. EPA’s allegation that Royal Gold was a PRP was based on the disposal of allegedly hazardous petroleum exploration wastes at the Site by Royal Gold’s predecessor, Royal Resources, Inc., during 1983 and 1984.

After extensive negotiations, on September 23, 2002, Royal Gold, along with 35 members of the PRP group targeted by EPA, entered into a Partial Consent Decree with EPA and the United States Department of Justice intending to settle their liability for past and future clean-up costs incurred or expected to be incurred at the Site by the federal government. The United States District Court for the Central District of California entered the Partial Consent Decree on August 14, 2003. Based on the minimal volume of allegedly hazardous substances that Royal Resources, Inc. disposed of at the Site, which was characterized in volume as de minimis, our share of the $25.3 million settlement amount was approximately $0.1 million, which we deposited into the escrow account that the PRP group set up for that purpose in January 2002. The funds were paid to the United States Treasury on May 9, 2003 and the Partial Consent Decree was executed. As a result of the settlement, the United States of America may only pursue Royal Gold and the other PRPs for additional clean-up costs if the United States’ total clean-up costs at the Site significantly exceed the expected cost of approximately $272 million.

Royal Gold also executed a de minimis party Administrative Order on Consent (“AOC”) with the State of California on January 15, 2009. The AOC will become effective after notice from the California Attorney General that the required 30-day public comment period has closed and that comments received, if any, do not require modifications to or withdrawal of the AOC by the State of California. It is not anticipated at this date that any such modifications or withdrawals will occur.

Under the terms of the federal Partial Consent Decree and the state AOC, we believe our potential liability to the United States of America, the State of California, and third parties to be effectively settled and any further exposure related to the Casmalia site to be a remote possibility.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

No matters were submitted to a vote of our security holders during the quarter ended June 30, 2009. Results from our annual meeting will be described in Part II, Item 4 of our report that will be filed on Form 10-Q for the quarter ending December 31, 2009.

PART II

Market Information and Current Stockholders

Our common stock is traded on the NASDAQ Global Select Market (“NASDAQ”) under the symbol “RGLD” and on the Toronto Stock Exchange under the symbol “RGL.” The following table sets forth, for each of the quarterly periods indicated, the range of high and low sales prices, in U.S. dollars, for the common stock on NASDAQ, for each quarter since July 1, 2006.

						Sales Prices
Fiscal Year:						High				Low
	2007			First Quarter (July, Aug., Sept. — 2006)		$	31.82			$	25.67
				Second Quarter (Oct., Nov., Dec. — 2006)		$	37.50			$	24.12
				Third Quarter (Jan., Feb., March — 2007)		$	36.50			$	29.31
				Fourth Quarter (April, May, June — 2007)		$	30.87			$	23.25
	2008			First Quarter (July, Aug., Sept. — 2007)		$	34.36			$	23.85
				Second Quarter (Oct., Nov., Dec. — 2007)		$	35.39			$	26.54
				Third Quarter (Jan., Feb., March — 2008)		$	35.42			$	27.51
				Fourth Quarter (April, May, June — 2008)		$	32.93			$	26.87
	2009			First Quarter (July, Aug., Sept. — 2008)		$	39.50			$	26.88
				Second Quarter (Oct., Nov., Dec. — 2008)		$	49.45			$	22.75
				Third Quarter (Jan., Feb., March — 2009)		$	49.81			$	35.76
				Fourth Quarter (April, May, June — 2009)		$	48.69			$	34.16

As of August 14, 2009, there were 1,068 shareholders of record of our common stock.

Dividends

We have paid a cash dividend on our common stock for each calendar year beginning in calendar year 2000. Our board of directors has discretion in determining whether to declare a dividend based on a number of factors including prevailing gold prices, economic market conditions and funding requirements for future opportunities or operations.

For calendar year 2009, we announced an annual dividend of $0.32 per share of common stock, payable in four quarterly payments of $0.08 each. The first payment of $0.08 per share was made on January 16, 2009, to shareholders of record at close of business on January 2, 2009. The second payment of $0.08 per share was made on April 17, 2009, to shareholders of record at the close of business on April 3, 2009. The third payment of $0.08 per share was made on July 17, 2009, to shareholders of record at the close of business on July 2, 2009. We anticipate paying the fourth payment of $0.08 per share on October 16, 2009, to shareholders of record at the close of business on October 2, 2009.

For calendar year 2008, we announced an annual dividend of $0.28 per share of common stock, payable in four quarterly payments of $0.07 each. The first payment of $0.07 per share was made on

January 18, 2008, to shareholders of record at close of business on January 4, 2008. The second payment of $0.07 per share was made on April 18, 2008, to shareholders of record at the close of business on April 4, 2008. The third payment of $0.07 per share was made on July 18, 2008, to shareholders of record at the close of business on July 3, 2008. We paid the fourth payment of $0.07 per share on October 17, 2008, to shareholders of record at the close of business on October 3, 2008.

For calendar year 2007, we paid an annual dividend of $0.26 per share of common stock, in four quarterly payments of $0.065 each. We paid the first payment of $0.065 per share on January 19, 2007, to shareholders of record at the close of business on January 5, 2007. We paid the second payment of $0.065 per share on April 20, 2007, to shareholders of record at the close of business on April 5, 2007. We paid the third payment of $0.065 per share on July 20, 2007 to shareholders of record at the close of business on July 6, 2007. We paid the fourth payment of $0.065 per share on October 19, 2007, to shareholders of record at the close of business on October 5, 2007.

We currently plan to pay dividends on a calendar year basis, subject to the discretion of our board of directors. However, our board of directors may determine not to declare a dividend based on a number of factors including the gold price, economic and market conditions and the financial needs of opportunities that might arise in the future.

Sales of Unregistered Securities

We did not make any unregistered sales of our securities during the fiscal year ended June 30, 2009.