sv3asr
As filed with the Securities and
Exchange Commission on December 19, 2008
Registration
No. 333-
UNITED STATES SECURITIES AND
EXCHANGE COMMISSION
Washington, D.C.
20549
Form S-3
REGISTRATION
STATEMENT
UNDER
THE SECURITIES ACT OF
1933
Royal Gold, Inc.
(Exact name of registrant as
specified in its charter)
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Delaware
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84-0835164
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(State or other jurisdiction
of
incorporation or organization)
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(I.R.S. Employer
Identification Number)
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1660 Wynkoop Street
Suite 1000
Denver, Colorado 80202
(303) 573-1660
(Address, including zip code,
and telephone number, including area code of registrants
principal executive offices)
Tony Jensen
Royal Gold, Inc.
1660 Wynkoop Street, Suite 1000
Denver, Colorado 80202
(303) 573-1660
(Name, address, including zip
code, and telephone number, including area code, of agent for
service)
Copies to:
Paul Hilton, Esq.
Hogan & Hartson L.L.P.
1200 Seventeenth Street, Suite 1500
Denver, Colorado 80202
(303) 899-7300
Approximate date of commencement of proposed sale to the
public: From time to time after this registration
statement becomes effective.
If the only securities being registered on this Form are being
offered pursuant to dividend or interest reinvestment plans,
please check the following
box: o
If any of the securities being registered on this Form are to be
offered on a delayed or continuous basis pursuant to
Rule 415 under the Securities Act of 1933, other than
securities offered only in connection with dividend or interest
reinvestment plans, check the following
box: þ
If this Form is filed to register additional securities for an
offering pursuant to Rule 462(b) under the Securities Act,
please check the following box and list the Securities Act
registration statement number of the earlier effective
registration statement for the same
offering: o
If this Form is a post-effective amendment filed pursuant to
Rule 462(c) under the Securities Act, check the following
box and list the Securities Act registration statement number of
the earlier effective registration statement for the same
offering: o
If this Form is a registration statement pursuant to General
Instruction I.D. or a post-effective amendment thereto that
shall become effective upon filing with the Commission pursuant
to Rule 462(e) under the Securities Act, check the
following
box: þ
If this Form is a post-effective amendment to a registration
statement filed pursuant to General Instruction I.D. filed to
register additional securities or additional classes of
securities pursuant to Rule 413(b) under the Securities
Act, check the following
box: 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 the definitions of
large accelerated filer, accelerated
filer and smaller reporting company in Rule
12b-2 of the
Exchange Act. (Check one):
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Large
accelerated
filer þ
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Accelerated
filer o
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Non-accelerated
filer o
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Smaller reporting
company o
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(Do not check if a smaller
reporting company)
CALCULATION OF REGISTRATION
FEE
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Title of Each Class of
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Amount to be
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Amount of
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Securities to be Registered
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Registered (1)(2)
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Registration Fee (3)
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Debt Securities
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Common Stock, par value $0.01 per share (4)
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Preferred Stock, par value $0.01 per share
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Warrants
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Depositary Shares
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(1)
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An indeterminate aggregate initial
offering price or number of the securities of each identified
class is being registered as may from time to time be issued at
indeterminate prices. Separate consideration may not be received
for registered securities that are issuable on exercise,
conversion or exchange of other securities.
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(2)
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Omitted pursuant to General
Instruction II.E of Form S-3 under the Securities Act.
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(3)
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In accordance with Rule 456(b)
and Rule 457(r), the registrant is deferring payment of the
registration fees required in connection with this registration
statement and fees will be paid on a pay-as-you-go basis.
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(4)
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Includes rights to purchase
Series A Junior Participating Preferred Stock which are
referred to as Rights. Prior to the occurrence of
certain events, the Rights will not be exercisable or evidenced
separately from the registrants common stock, will be
transferred with and only with such common stock, and will have
no value except as reflected in the market price of the shares
of common stock to which they are attached.
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PROSPECTUS
Debt Securities
Preferred Stock
Common Stock
Warrants
Depositary Shares
Royal Gold, Inc. may, in one or more offerings, offer and sell
from time to time:
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debt securities consisting of senior or subordinated notes and
debentures and which may include terms by which they may be
converted or exchanged for common stock, preferred stock or
other securities;
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shares of common stock, par value $0.01 per share;
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shares of preferred stock, par value $0.01, in one or more
series, which may include terms by which they may be converted
into or exchanged for debt securities or common stock;
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warrants to purchase debt securities, preferred stock, common
stock or other securities; or
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depositary shares.
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In addition, this prospectus may be used by selling
securityholders to offer these securities. This prospectus
describes only the general terms of these securities and the
general manner in which we will offer the securities. We, or the
selling securityholders, will provide you with the specific
terms of the particular securities being offered in supplements
to this prospectus. Any prospectus supplement may also add,
update, or change information contained in this prospectus. You
should read this prospectus and each related prospectus
supplement carefully before you make an investment decision.
This prospectus may not be used to sell securities unless
accompanied by a prospectus supplement.
The securities may be offered and sold by us or the selling
securityholders through one or more underwriters, dealers or
agents or directly to purchasers on a continuous or delayed
basis. See Plan of Distribution beginning on page 24
of this prospectus.
Royal Golds common stock is traded on the NASDAQ Global
Select Market under the symbol RGLD and on the
Toronto Stock Exchange under the symbol RGL. The
mailing address of our principal executive offices is 1660
Wynkoop Street, Suite 1000, Denver, Colorado 80202 and our
telephone number is
(303) 573-1660.
Investing in our securities involves risks. See Risk
Factors beginning on page 5 of this prospectus and in
documents Royal Gold files with the Securities and Exchange
Commission that are incorporated in this prospectus by reference
for certain risks and uncertainties relating to an investment in
our securities.
Neither the Securities and Exchange Commission nor any state
securities commission has approved or disapproved of these
securities or passed upon the adequacy or accuracy of this
prospectus. Any representation to the contrary is a criminal
offense.
This prospectus is dated December 19, 2008.
ABOUT
THIS PROSPECTUS
This prospectus is part of a registration statement that we have
filed with the Securities and Exchange Commission, or SEC,
utilizing a shelf registration process. Under this
shelf process, we may sell different types of securities
described in this prospectus in one or more offerings. This
prospectus provides you with a general description of the
securities we may offer. Each time we sell securities, we will
provide a prospectus supplement that will contain specific
information about the terms of that offering and the securities
offered by us in that offering. The prospectus supplement may
also add, update or change information in this prospectus. You
should read both this prospectus and any prospectus supplement
together with additional information described under the
headings Where You Can Find More Information and
Incorporation by Reference.
This prospectus contains summaries of certain provisions
contained in some of the documents described herein, but
reference is made to the actual documents for complete
information. All of the summaries are qualified in their
entirety by reference to the actual documents. Copies of some of
the documents referred to herein have been filed or will be
filed or incorporated by reference as exhibits to the
registration statement of which this prospectus is a part, and
you may obtain copies of those documents as described below in
the section entitled Where You Can Find More
Information.
Unless we otherwise indicate or unless the context requires, all
references in this prospectus to:
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Royal Gold, the Company, we,
us and our refer to Royal Gold, Inc.,
except where the context otherwise requires or as otherwise
indicated in this prospectus;
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common stock means our common stock, par value $0.01
per share; and
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securities means the debt securities, common stock,
preferred stock, warrants and depositary shares described in
this prospectus.
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The information contained in this prospectus is not complete and
may be changed. You should rely only on the information provided
in or incorporated by reference in this prospectus, any
prospectus supplement, or documents to which we otherwise refer
you. We have not authorized anyone else to provide you with
different information. We are not making an offer of any
securities in any jurisdiction where the offer is not permitted.
You should not assume that the information in this prospectus,
any prospectus supplement or any document incorporated by
reference is accurate as of any date other than the date of the
document in which such information is contained or such other
date referred to in such document, regardless of the time of any
sale or issuance of a security.
WHERE YOU
CAN FIND MORE INFORMATION
We have filed with the SEC a shelf registration
statement on
Form S-3
relating to the securities that may be offered by this
prospectus. This prospectus is part of the registration
statement and does not contain all the information in the
registration statement. You will find additional information
about us in the registration statement. In addition, we file
annual, quarterly and current reports, proxy statements and
other information with the SEC. You may inspect without charge
any documents filed by us at the SECs Public Reference
Room at 100 F Street, N.E., Washington, D.C.
20549. You may obtain copies of all or any part of these
materials from the SEC upon the payment of certain fees
prescribed by the SEC. Please call the SEC at
1-800-732-0330
for further information on the Public Reference Room. The SEC
also maintains an Internet site that contains reports, proxy and
information statements and other information regarding issuers
that file electronically with the SEC. Our filings with the SEC
are available to the public through the SECs website at
http://www.sec.gov
and through our website at
http://www.royalgold.com.
You may also read and copy our SEC filings and other information
at the offices of the NASDAQ Global Select Market,
1735 K Street, N.W., Washington, D.C. 20006.
INCORPORATION
OF CERTAIN DOCUMENTS BY REFERENCE
The SEC allows us to incorporate by reference
information into this document. This means that we can disclose
important information to you by referring you to another
document filed separately with the SEC. The information
incorporated by reference is considered to be part of this
prospectus, and information that we file later
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with the SEC will automatically update and supersede the
previously filed information and the information contained in
this prospectus. We incorporate by reference the documents
listed below and any future filings made by us with the SEC
pursuant to Sections 13(a), 13(c), 14 or 15(d) of the
Exchange Act of 1934, as amended (the Exchange Act),
other than any portions of the respective filings that were
furnished, rather than filed, pursuant to Item 2.02 or
Item 7.01 of Current Reports on
Form 8-K
(including exhibits related thereto) or other applicable SEC
rules, prior to the termination or completion of the offerings
under this prospectus:
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The Registrants Annual Report on
Form 10-K/A
filed on November 6, 2008;
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The Registrants Quarterly Report on
Form 10-Q
for the quarter ended September 30, 2008, filed
November 10, 2008;
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The Registrants Current Reports on
Form 8-K
as filed August 5, 2008, September 2, 2008,
September 17, 2008, September 19, 2008,
September 25, 2008, October 7, 2008, October 31,
2008, November 4, 2008, November 6, 2008 and
November 7, 2008;
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The description of the Registrants Preferred Stock
Purchase Rights contained in the Registrants Registration
Statement on
Form 8-A
under the Exchanged Act filed on September 12, 1997, as
amended by the Registrants Registration Statement on
Form 8-A/A
filed September 10, 2007, together with any amendment or
report filed with the Commission for the purpose of updating
such description.
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We make available free of charge through our Internet website at
http://www.royalgold.com
our annual reports on
Form 10-K,
quarterly reports on
Form 10-Q,
current reports on
Form 8-K
and amendment to those reports filed or furnished pursuant to
Section 13(a) or 15(d) of the Exchange Act as soon as
reasonably practicable after we electronically file such
material with, or furnish it to, the SEC. Information contained
on our Internet website is not a part of this prospectus or any
prospectus supplement. We will provide a copy of the documents
we incorporate by reference, at no cost, to any person who
receives this prospectus. You may request a copy of these
filings by writing or telephoning us at:
Royal Gold, Inc.
1660 Wynkoop Street, Suite 1000
Denver, CO 80202
Attn: Stockholder Relations
Telephone:
(303) 573-1660
SPECIAL
NOTE ABOUT FORWARD-LOOKING STATEMENTS
This prospectus, any prospectus supplement and the documents
incorporated herein by reference contain or will contain certain
references to future expectations, projections of production,
reserve estimates and other forward-looking statements and
information relating to us or to properties operated by others
that are based on our beliefs and assumptions or those of
management of the companies who operate properties on which we
have royalties, as well as information currently available to
management. Additional written or oral forward-looking
statements may be made by the Company from time to time in
filings with the SEC or otherwise. Words such as
may, could, should,
would, believe, estimate,
expect, anticipate, plan,
forecast, potential, intend,
continue, project and variations of
these words, comparable words and similar expressions generally
indicate forward-looking statements. Forward-looking statements
inherently involve risks and uncertainties. Accordingly, actual
results may differ materially from those expressed or implied by
these forward-looking statements. Factors that could cause
actual results to differ materially from these forward-looking
statements include, among others:
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changes in gold and other metals prices;
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the production at or performance of our producing royalty
properties;
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decisions and activities of the operators of our royalty
properties;
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the ability of operators to bring projects into production and
operate in accordance with feasibility studies;
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unanticipated grade and geological, metallurgical, processing or
other problems at the properties;
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changes in project parameters as plans of the operators are
refined;
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changes in estimates of reserves and mineralization by the
operators of our royalty properties;
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economic and market conditions;
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future financial needs;
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federal, state and foreign legislation governing us or the
operators;
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the availability of royalties for acquisition or other
acquisition opportunities and the availability of debt or equity
financing necessary to complete such acquisitions;
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our ability to make accurate assumptions regarding the valuation
and timing and amount of royalty payments when making
acquisitions;
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risks associated with conducting business in foreign countries,
including application of foreign laws to contract and other
disputes, environmental laws and enforcement and uncertain
political and economic environments;
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liquidity or other problems our operators may encounter, such as
those that recently occurred at High River Gold Mines Ltd.
(High River) with respect to the Taparko project;
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risks associated with issuances of substantial additional common
stock in connection with acquisitions or otherwise; and
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risks associated with the incurrence of substantial additional
indebtedness if we take such actions in connection with
acquisitions or otherwise;
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as well as other factors described elsewhere in our Annual
Report on
Form 10-K/A
(filed on November 6, 2008) for the fiscal year ended
June 30, 2008, our Quarterly Report on
Form 10-Q
for the period ended September 30, 2008 and in future
filings we make with the SEC. Most of these factors are beyond
our ability to predict or control. Future events and actual
results could differ materially from those set forth in,
contemplated by or underlying the forward-looking statements.
Forward-looking statements speak only as of the date on which
they are made. We disclaim any obligation to update any
forward-looking statement made herein. Readers are cautioned not
to put undue reliance on forward-looking statements.
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THE
COMPANY
We, together with our subsidiaries, are 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 near production in exchange for
royalty interests. We also fund exploration on properties
thought to contain precious metals and seek to obtain royalties
and other carried ownership interests in such properties through
the subsequent transfer of operating interests to other mining
companies. Substantially all of our revenues are and will be
expected to be derived from royalty interests. We do not conduct
mining operations at this time. We focused on the management of
our existing royalty interests, the acquisition of royalty
interests through asset and corporate transactions, and the
creation of royalty interests through financing and strategic
exploration alliances.
Our principal producing royalty interests are as follows:
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four royalty interests at the Cortez Pipeline Mining Complex
(Cortez) located in Nevada and operated by the
Cortez Joint Venture, a joint venture between Barrick Cortez
Inc. and Barrick Gold Finance Inc., both affiliates of Barrick
Gold Corporation (Barrick);
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one royalty interest on the Robinson mine, located in eastern
Nevada and operated by a subsidiary of Quadra Mining Ltd.;
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one royalty interest on the Leeville Mining Complex, located in
Nevada and operated by a subsidiary of Newmont Mining
Corporation;
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one royalty interest on the SJ Claims, covering portions of the
Betze-Post mine located in Nevada and operated by a subsidiary
of Barrick;
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one royalty on the Peñasquito mine located in Zacatecas,
Mexico and operated by a subsidiary of Goldcorp;
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one royalty interest on the Mulatos mine, located in Sonora,
Mexico and operated by a subsidiary of Alamos Gold, Inc.;
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two royalty interests on the Taparko mine, located in Burkina
Faso and operated by a subsidiary of High River;
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one royalty interest on the Siguiri mine located in the Republic
of Guinea and operated by Anglogold Ashanti;
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two royalty interests on the Dolores mine located in Chihuahua,
Mexico and operated by a subsidiary of Minefinders Corporation,
Ltd.;
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one royalty interest on the Mt. Goode Cosmos South mine located
in Western Australia and operated by Xtrata.
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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, and our
telephone number is
(303) 573-1660.
We maintain a website at
http://www.royalgold.com
where general information about us is available, although we are
not incorporating the contents of our website into this
prospectus.
4
RISK
FACTORS
Our business, financial condition, results of operations and
cash flows could be materially adversely affected by any of the
following risks. The market or trading price of our securities
could decline due to any of these risks. In addition, please
read Special Note About Forward-Looking Statements
in this prospectus, where we describe additional uncertainties
associated with our business and the forward-looking statements
included or incorporated by reference in this prospectus. Please
note that additional risks not presently known to us or that we
currently deem immaterial may also impair our business and
operations. Additional risks, including those that relate to any
particular securities that we offer, will be included in the
applicable prospectus supplement.
Risks
Related to Our Business
We
received a majority of our revenues in fiscal year 2008 from two
properties and maturing mines are likely to experience
production declines.
In fiscal year 2008, approximately 33% and 24% of our revenues
were derived from our royalties at Cortez and the Robinson mine,
respectively, compared to approximately 44% and 26% in fiscal
year 2007, respectively. We expect that revenue from our
royalties at Cortez and Robinson will continue to be a
significant, though less dominant, contributor to our revenue in
future periods. Furthermore, 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 by mine expansion or successful new
exploration. There can be no assurance that the operators of
Cortez or the 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 development or
operation of a mineral property. Therefore, we are not in
control of basic decisions regarding development or operation of
any of the properties in 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 in which we
retain a royalty or other passive interest puts us generally at
risk to the decisions of others regarding all basic 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 may be motivated by the best interests of the
operator rather than to maximize royalties. Although we attempt
to secure contractual rights 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 operations of the properties in which we have
royalty interests in ways that would be beneficial to our
stockholders.
Volatility
in gold, 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 and, to a lesser degree, copper and
other metal prices. The market price of each metal fluctuates
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, our
royalty revenues would also drop. Our sliding-scale royalties at
Cortez, Taparko and other properties amplifies this. When the
gold price falls below the steps in a sliding-scale royalty, we
receive a lower royalty rate on production. In addition, 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. 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
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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 Bullion Market Association P.M. fix.
Gold
Price Per Ounce ($)
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Year
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High
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Low
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1999
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326
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253
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2000
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312
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263
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2001
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293
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256
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2002
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349
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278
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2003
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416
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320
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2004
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454
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375
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2005
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537
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411
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2006
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725
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525
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2007
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841
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608
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2008 (through December 11, 2008)
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1,011
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713
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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 Bullion Market Association P.M. fix.
Silver
Price Per Ounce ($)
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Year
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High
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Low
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1999
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5.75
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4.88
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2000
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5.45
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4.57
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2001
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4.82
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4.07
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2002
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5.10
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4.24
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2003
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5.97
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4.37
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2004
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8.29
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5.50
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2005
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9.23
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6.39
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2006
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14.94
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8.83
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2007
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15.82
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11.67
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2008 (through December 11, 2008)
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20.92
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8.88
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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 ($)
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Year
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High
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Low
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1999
|
|
|
0.80
|
|
|
|
0.63
|
|
2000
|
|
|
0.89
|
|
|
|
0.76
|
|
2001
|
|
|
0.81
|
|
|
|
0.62
|
|
2002
|
|
|
0.75
|
|
|
|
0.67
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|
2003
|
|
|
1.00
|
|
|
|
0.72
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|
2004
|
|
|
1.43
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|
|
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1.10
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|
2005
|
|
|
2.08
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|
|
|
1.44
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|
2006
|
|
|
3.65
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|
|
|
2.15
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|
2007
|
|
|
3.77
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|
|
|
2.37
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|
2008 (through December 11, 2008)
|
|
|
4.08
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|
|
|
1.38
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|
We
depend on the services of our President and Chief Executive
Officer, our Executive Chairman and other key
employees.
We believe that our success depends on the continued service of
our key executive management personnel. Currently, Tony Jensen
is serving as President and Chief Executive Officer and Stanley
Dempsey is serving as our Executive Chairman.
Mr. Jensens extensive commercial experience, mine
operations background and industry contacts give us an important
competitive advantage. Mr. Dempseys knowledge of the
royalty business and long- term standing relationship with the
mining industry are important to the Companys success.
Loss of the services of Mr. Jensen, Mr. Dempsey 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.
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 most
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:
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insufficient ore reserves;
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fluctuations in production costs by the operators or third
parties that may make mining of ore uneconomical or impact the
amount of reserves;
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declines in the price of gold and other metal prices;
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economic downturns and operators insufficient financing;
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significant environmental and other regulatory restrictions;
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labor disputes;
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geological problems;
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pit wall or tailings dam failures;
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natural catastrophes such as floods or earthquakes; and
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the risk of injury to persons, property or the environment.
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7
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.
In addition, the mining operators calculation of our
royalty payments is subject to and dependent upon the adequacy
of their production and accounting functions, and errors may
occur from time to time in the calculations of the 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
year 2008. We are provided with production information by the
mining operator in certain royalty contracts that may enable us
to detect errors in the royalty payments that we receive from
certain royalty interests given our royalty monitoring program
and its associated internal controls and procedures. We do not,
however, receive production information for all royalty
interests. As a result, our ability to detect royalty payment
errors is limited and the possibility exists that we will need
to make retroactive royalty revenue adjustments. Further, in
some royalty contracts we have the right to audit the
operational calculations and production data for the associated
royalty payments and, when exercised, such audits may occur many
months following our recognition of the royalty revenue. In
addition, certain royalty agreements, such as 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, these royalty audits
may result in the recognition by us of retroactive changes in
previously disclosed royalty revenues.
A
significant or prolonged economic downturn may affect the
ability of our operators to meet operating costs and could have
material adverse effects on the value of and revenue from our
royalty interests.
The value of and revenue from our royalty interests may be
materially negatively affected if commodity prices for metals on
which we have royalties or which are the primary production at
mines on which we have royalties decline significantly, as has
occurred with respect to copper during 2008. In addition, our
royalty interests and revenues may be materially negatively
affected if our operators do not have the financial strength or
sufficient financing to cover the costs of operating or
developing a mine, causing an operator to curtail, delay or
close operations at a mine site. Our operators financial
strength or ability to secure financing is affected by the
regional and global conditions in which they operate. Many
economists claim that the U.S. economy, and possibly the
global economy, has entered into a recession as a result of the
recent deterioration in the credit markets and the related
financial crisis, as well as a variety of other factors. A
significant economic slowdown may negatively affect many
commodity prices and our operators financial strength, and
in turn, their ability to meet the costs of operating or
developing the mines on which we have royalty interests.
Furthermore, disruption and volatility of financial markets
could also limit our operators access to financing needed
for operations. If any of our operators enter into bankruptcy or
liquidation, or undergo a change of control, our royalty
interests and the value of and income from our royalty interests
may be materially negatively affected.
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 or the control of the operators of mineral
properties in 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
mineralization 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 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
mineralization containing relatively lower grades of ore
uneconomical to exploit. Changes in operating and capital costs
and other factors including short-term
8
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.
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 the mining
properties. There are numerous uncertainties inherent in
estimating anticipated production attributable to our royalty
interests, including many factors beyond our control or the
control of the operators of mineral 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
anticipated. Results of drilling, metallurgical testing and
production, and the evaluation of mine plans subsequent to the
date of any estimate may cause actual production to vary
materially from such estimates.
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. Any such acquisition could be material to
us and could significantly increase the size and scope of our
business. If we were to incur substantial additional
indebtedness, it may make it 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 other general corporate purposes and place
us at a competitive disadvantage to our competitors that have
less debt or have other adverse effects on us. Furthermore, if
future debt financing is not available to us when required or is
not available on acceptable terms, we may be unable to grow our
business, take advantage of opportunities to acquire additional
royalties, or respond to competitive pressures or refinance
maturing debt, any of which could have a material adverse effect
on our operating results and financial condition.
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 on
properties currently covered by our royalties will decline as
existing reserves are mined. Furthermore, we may experience
negative reactions from the financial markets, our collaborative
partners and employees 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 financial results and
operations.
Acquired
royalty interests may not produce anticipated royalty
revenues.
The royalty interests we acquire may not produce the anticipated
royalty revenues. The success of our royalty acquisitions is
based on our ability to make accurate assumptions regarding the
valuation and timing and amount of royalty payments,
particularly 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, acquired royalty interests may not yield sufficient
royalty revenues to be profitable. The Taparko project, which
recently began production in Burkina Faso, and the
Peñasquito project and Dolores project, both in initial
production in Mexico, are among our largest development stage
royalty acquisitions to date. In addition, our Pascua-Lama
royalty acquisition in Chile and the Malartic royalty in Canada
are in pre-production stage. The failure of these projects to
9
produce anticipated royalty revenues may materially and
adversely affect our financial condition, results of operations
and cash flows.
We may
experience operational and other difficulties if we complete one
or more significant acquisitions.
As part of our business model and growth strategy, we are
engaged in a continual review of opportunities to acquire
existing royalties, including acquiring companies that hold
royalties. When we acquire a company, we may experience the need
to hire additional personnel, difficulties in integrating the
acquired company, increases in our general and administrative
expenses and other related problems. Furthermore, as part of the
acquisition of a company or a group of royalties, we may acquire
operating or working interests and other assets outside of our
core focus of precious metal royalties. In the event we
experience these difficulties in connection with one or more
acquisitions, our business or financial results may be adversely
affected.
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 and possession of mining claims and related activities
on federal public lands in the United States. Several proposals
introduced in the past, such as Bill H.R. 2262, introduced in
the Congress in May 2007, if enacted, would have imposed a
royalty payable to the U.S. Government on existing and
future production of minerals from unpatented mining claims in
the United States. If enacted, such legislation could,
among other provisions, render certain federal lands unavailable
for the location of unpatented mining claims, afford greater
public involvement in the mine permitting process, provide for
citizen suits against miners operating on federal lands, and
impose new and stringent environmental operating standards as
well as new mined land reclamation requirements. If enacted,
such legislation 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 royalties.
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 the companies within
the mining industry, such as the operators of the mines in which
we hold a royalty interest, at a reasonable price. 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, it could reduce our royalty revenues. 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.
10
If
title to properties are not properly maintained by the
operators, our royalty revenues may be decreased.
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 owned in 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
included among our royalty properties 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.
Foreign
operations and operation by foreign operators are subject to
many risks.
We derived approximately 21% of our revenues from foreign
sources in fiscal year 2008. Our foreign activities are subject
to the risks normally associated with conducting business in
foreign countries. This includes exchange controls and currency
fluctuations, 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, 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, without fair compensation.
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, 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, bankruptcy and liquidation.
We currently have interests in projects in Australia, Argentina,
Bolivia, Burkina Faso, Canada, Chile, Colombia, Finland, Ghana,
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.
We are also subject to the risks of operating in Burkina Faso,
Ghana and the Republic of Guinea. Countries in the region have
historically experienced periods of political uncertainty,
exchange rate fluctuations, balance of payments and trade
difficulties and problems associated with extreme poverty and
unemployment, and laws regarding the ownership, operation and
taxation of mining projects in these countries are subject to
change. Any of these economic or political risks could adversely
affect the Taparko, Siguiri or Benso projects.
Our operations in Mexico are subject to risks such as the
effects of political developments and local unrest, and communal
property issues. In the past, Mexico has experienced prolonged
periods of weak economic conditions characterized by exchange
rate instability, increased inflation and negative economic
growth, all of which could
11
occur again in the future. Any of these risks could adversely
affect the Peñasquito and Dolores projects, as well as the
Mulatos and El Chanate mines.
Our Martha royalty is subject to risks relating to operating in
Argentina. Argentina, while currently economically and
politically stable, has experienced political instability,
currency fluctuations and changes in banking regulations in
recent years. Future instability, currency value fluctuations or
regulation changes could adversely affect our revenues from the
Martha mine.
Our Don Mario royalty is subject to risks relating to operating
in Bolivia. Bolivia has experienced political and social
instability, corruption, regulation and tax law changes, an
abundance of administrative procedures and the potential for
nationalization of foreign business interests that could
materially adversely affect the Don Mario mine.
We hold a royalty interest in an exploration property that is
subject to the risks of operating in Russia. The economy of the
Russian Federation continues to display characteristics of an
emerging market, including extensive currency controls and
potentially high inflation. The prospects for future economic
stability in the Russian Federation are largely dependent upon
the effectiveness of economic measures undertaken by the
government, together with legal, regulatory and political
developments. Russian laws, licenses and permits have been in a
state of change and new laws may be given a retroactive effect.
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 $41.66 and $18.74 in the fiscal year ended
June 30, 2006, $37.50 and $23.25 for the fiscal year ended
June 30, 2007, $35.42 and $23.85 for the fiscal year ended
June 30, 2008, and $46.68 and $22.75 for the period from
July 1, 2008 through December 18, 2008. The
fluctuation of the market price of our common stock has been
affected by many factors that are beyond our control, including:
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market prices of gold and other metals;
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interest rates;
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expectations regarding inflation;
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ability of operators to produce precious metals and develop new
reserves;
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currency values;
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general stock market conditions; and
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global and regional political and economic conditions.
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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 could 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 other equity will have on the market price
of our common stock. In addition, our shares of common stock
that we issue in connection with an acquisition may not be
subject to resale restrictions. We issued approximately
1.14 million shares of our common stock in connection with
the acquisition of Battle Mountain, which closed on
October 24, 2007 and 3.98 million shares in connection
with the conversion of all of our issued and outstanding
Preferred Stock on March 10, 2008. We may issue substantial
additional shares of common stock or other securities in
connection with other acquisition
12
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, 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 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:
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permit our board of directors to issue preferred stock that has
rights senior to the common stock without stockholder
approval; and
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provide for three classes of directors serving staggered,
three-year terms.
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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 stockholders
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.
We
have identified a material weakness in internal control over our
financial reporting and as a result we were required to restate
our financial results for the fiscal year ended June 30,
2008.
In connection with the restatement and our reassessment of our
internal control over financial reporting pursuant to the rules
promulgated by the SEC Section 404 of the Sarbanes-Oxley
Act of 2002 and Item 308 of
Regulation S-K,
management has concluded that as of fiscal year ended
June 30, 2008, our disclosure controls and procedures were
not effective and that we had a material weakness in our
internal control over financial reporting. Please refer to
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
ineffectiveness of and material weakness in our controls as of
June 30, 2008 and September 30, 2008. While we have
made efforts to remediate such material weakness promptly and
effectively, any additional material weaknesses or significant
deficiencies could have a material adverse effect on our results
of operations and financial condition, as well as impair our
ability to meet our quarterly, annual, and other reporting
requirements under the Securities Exchange Act of 1934, as
amended, in a timely manner. These effects could in turn
adversely affect the trading price of our common stock and could
result in a material misstatement in consolidated financial
statements and require a further restatement of our financial
statements. Therefore, even if we are successful in
strengthening our internal controls and procedures, such
controls and procedures may not be adequate to prevent or
identify existing or future internal control weaknesses.
Internal control over financial reporting cannot provide
absolute assurance of achieving financial reporting objectives
because of its known inherent limitations (such limitations are
further discussed in 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). Because of such inherent
limitations, 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.
13
We may
face risks related to an SEC investigation and securities
litigation in connection with the restatement of our financial
statements.
We are not aware that the SEC has begun any formal or informal
investigation in connection with accounting errors requiring
restatement of the fiscal year ended June 30, 2008. If the
SEC makes a determination, however, that in its view the Company
has violated Federal securities laws, then the Company may face
sanctions, including, but not limited to, monetary penalties and
injunctive relief, which could adversely affect our business. In
addition, the Company may in the future be subject to class
action suits, other litigation, or regulatory proceedings or
actions arising in relation to the restatement of our
consolidated financial statements for the fiscal year ended
June 30, 3008. We are unable to estimate what our liability
might be in connection with such potential litigation or
regulatory proceeding or action and any expenses not covered by
available insurance or any adverse resolution of this potential
litigation or regulatory proceeding or action, which could have
a material adverse effect on our business, results of
operations, cash flows, or financial condition. Further, any
litigation, regulatory proceeding or action may be time
consuming, and it may distract our management from the conduct
of our business.
USE OF
PROCEEDS
Unless we specify otherwise in a prospectus supplement, the net
proceeds from the sale of securities offered from time to time
using this prospectus will be used for our general corporate
purposes, which may include repayment or refinancing of debt,
acquisitions, working capital, capital expenditures and
repurchases and redemptions of securities. We will not receive
proceeds from sales of selling securityholders except as
otherwise specified in an applicable prospectus supplement.
RATIO OF
EARNINGS TO FIXED CHARGES AND PREFERRED STOCK
DIVIDENDS
The following table sets forth the ratio of earnings to fixed
charges and preferred stock dividends of Royal Gold for the
periods indicated.
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Three Months
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Ended
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September 30,
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Fiscal Year Ended June 30
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2008
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2008
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2007
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2006
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2005
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2004
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Ratio of earnings to fixed charges (unaudited)
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26.72
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41.10
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23.28
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77.89
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112.64
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80.91
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Ratio of earnings to fixed charges and preferred stock dividends
(unaudited)
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26.72
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11.13
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23.28
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77.89
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112.64
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80.91
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For the purpose of computing the ratio of earnings to fixed
charges, earnings consist of income from continuing operations
before income taxes, minority interest and losses or earnings
from equity investments plus fixed charges. Fixed charges
consist of interest expensed and capitalized, amortization of
debt issuance costs and that portion of rental expense we
believe to be representative of interest. We issued
1,150,000 shares of 7.25% Mandatory Convertible Preferred
Stock on November 9, 2007. On March 10, 2008, all of
the shares of the 7.25% Mandatory Convertible Preferred Stock
were converted into shares of common stock. For the purpose of
computing the ratio of earnings to fixed charges and preferred
stock dividends, earnings consist of income from continuing
operations before income taxes, minority interests and losses or
earnings from equity investments plus fixed charges and
preferred stock dividends. Preferred stock dividends consist of
dividends paid as part of the 7.25% Mandatory Convertible
Preferred Stock issuance. As of the date of this prospectus, we
no longer have any shares of preferred stock outstanding.
DESCRIPTION
OF THE DEBT SECURITIES
The debt securities will rank either as senior debt or
subordinated debt, and may be issued as convertible debt
securities. The senior debt securities will be issued under an
indenture between us and a trustee chosen by us. The
subordinated debt securities will be issued under an indenture
between us and a trustee chosen by us. In this prospectus, we
may refer to the senior debt indenture and the subordinated debt
indenture as the indentures and the senior debt
trustee and the subordinated debt trustee as the
trustees. The following description summarizes the
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expected terms and provisions of the indentures and the debt
securities, and is not complete. For more information, you
should read the indentures, copies of which will be filed as
exhibits to amendments to the registration statement which
contains this prospectus or exhibits to a report filed pursuant
to Section 13(a) or 15(d) of the Exchange Act that is
incorporated into this prospectus. Further terms of the debt
securities will be set forth in one or more prospectus
supplements.
General
The debt securities are expected to be our direct unsecured
obligations. The indentures are not expected to limit the
aggregate principal amount of debt securities that may be
issued. The debt securities may be issued from time to time in
one or more series as authorized from time to time by our board
of directors or by any of our authorized officers. The
particular terms of the debt securities and any changes or
additions to the general terms of the debt securities will be
described in the prospectus supplement relating to the debt
securities. The prospectus supplement will include the following:
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the title of the debt securities;
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the aggregate principal amount of the debt securities;
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the price of the debt securities;
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the date or dates on which the debt securities will mature and
the right, if any, to extend such date or dates;
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the rate or rates at which the debt securities will bear
interest, if any, or the method by which such rate or rates
shall be determined;
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the date or dates from which interest shall accrue or the method
by which such date or dates shall be determined, the interest
payment dates on which interest shall be payable, the record
dates for the determination of holders to whom interest is
payable and, in the case of floating rate debt securities, the
notice, if any, to holders regarding the determination of
interest and the manner of giving such notice;
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the place or places (other than the corporate trust office of
the applicable trustee) where principal, premium or interest on
the debt securities shall be payable, and the manner in which
any such principal, premium or interest will be paid;
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any mandatory or optional sinking fund or purchase fund or
similar provisions;
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the terms and conditions upon which, including when and at what
price, the debt securities may be redeemed pursuant to any
optional or mandatory redemption provisions;
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any terms pursuant to which the debt securities may be
convertible into equity or other securities;
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whether the debt securities are to be issued in whole or in part
in the form of one or more global securities and, if so, the
depositary or any common depositary for such global securities;
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the terms and conditions, if any, upon which any global
securities may be exchanged in whole or in part for definitive
debt securities;
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any index used to determine the amount of payment of principal
or any premium or interest on the debt securities;
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the application of any defeasance provisions to the debt
securities;
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whether the debt securities of a series are to be issued as
original issue discount securities and the amount of discount at
which they may be issued, and the portion of the principal
amount of the debt securities which shall be payable upon
declaration of acceleration of the maturity upon an event of
default (if different than the principal amount);
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if other than U.S. dollars, the currency or currency units
in which the debt securities shall be denominated or in which
payment of principal, premium and interest on the debt
securities may be made;
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any applicable U.S. federal income tax considerations;
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the date of any series of debt securities; and
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any other relevant terms of the debt securities.
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The indentures relating to the senior debt securities and the
subordinated debt securities are expected to contain certain
usual and customary restrictive covenants pertaining to, among
other things, incurrence of additional debt, creation of liens
and limitations on certain transactions. It also is expected
that the indentures will contain provisions relating to the
modification and waiver of the indentures, discharge of
obligations, legal defeasance and covenant defeasance.
All of the debt securities of a series need not be issued at the
same time, and may vary as to interest rate, maturity and other
provisions. Unless otherwise provided, a series may be reopened
for issuance of additional debt securities of such series.
The indentures are not expected to contain provisions to afford
you protection if there is a highly leveraged transaction or a
change of control of Royal Gold, except as may be otherwise
described in this prospectus or in any applicable prospectus
supplement.
Senior
Debt Securities
Senior debt securities will rank equally with all of our other
unsecured debt other than subordinated debt securities or other
indebtedness which by its terms is subordinated to our senior
debt securities.
Subordinated
Debt Securities
Subordinated debt securities will be subordinate and junior in
the right of payment to all of our present or future senior
indebtedness. Senior indebtedness is:
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indebtedness for borrowed money, including senior debt
securities, and
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renewals, extensions, and modifications of such borrowed money,
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unless it is specifically provided that such borrowed money or
renewal, extension or modification is not senior indebtedness.
If we or our selling securityholders are offering subordinated
debt securities, the accompanying prospectus supplement or the
information incorporated therein by reference will set forth the
approximate amount of senior indebtedness outstanding as of a
recent date.
Upon any distribution of our assets upon our dissolution,
winding up, liquidation or reorganization, the payment of
principal, premium and interest on our subordinated debt
securities will be subordinated in right of payment to the prior
payment in full of all of our senior indebtedness. By reason of
such subordination, in the event of a distribution of assets
upon insolvency, our general creditors may recover ratably more
than holders of our subordinated debt securities. However,
subordination shall not apply to money and securities held in
trust to satisfy and discharge any subordinated debt securities
by legal defeasance.
Convertible
Debt Securities
Debt securities issued under either of the indentures may
provide for a right of conversion into equity securities. The
terms and conditions governing any such conversion will be set
forth in the prospectus supplement relating to the convertible
debt securities, including:
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the designation of the equity securities into which such debt
securities are convertible;
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the conversion price;
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the conversion period;
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whether conversion will be at our option or at the option of the
holder of the convertible debt securities;
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the events requiring an adjustment of the conversion
price; and
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the provisions affecting conversion in the event of the
redemption of such debt securities.
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Form,
Exchange, Payment and Transfer
Unless otherwise specified in a prospectus supplement, we expect
to issue the debt securities in fully registered form without
coupons and in denominations of $1,000 (or multiples of $1,000).
We will not impose a service charge for any transfer or exchange
of the debt securities, but we or the trustee may require you to
make a payment to cover any associated tax or other government
charge.
If we issue debt securities in bearer form, the applicable
prospectus supplement will describe the special restrictions and
considerations, including special offering restrictions and
special U.S. federal income tax considerations, applicable
to those debt securities and to payment on and transfer and
exchange of those debt securities. Bearer debt securities will
be transferable by delivery.
Unless otherwise provided in a prospectus supplement, we expect
to pay principal, premium or interest, and you may surrender for
payment or transfer the debt securities, at the offices of the
trustee. Alternatively, we may pay interest by check mailed to
you at your address as it appears in the security register. We
will make payment on debt securities in bearer form at such
non-U.S. paying
agencies as we may choose.
Book-Entry
We may issue the debt securities of a series in whole or in part
in the form of one or more global securities that will be
deposited with, or on behalf of, a global depositary, or its
nominee, identified in the prospectus supplement. In this case,
we will issue global securities in a denomination equal to the
portion of the aggregate principal amount of outstanding debt
securities of the series to be represented by such global
security or securities. Unless and until it is exchanged in
whole or in part for debt securities in definitive registered
form, a global security may not be registered for transfer or
exchange except by the global depositary to a nominee for that
global depositary and except in the circumstances described in
the prospectus supplement.
A prospectus supplement will provide the specific terms of the
depositary arrangement concerning any portion of a series of
debt securities to be represented by a global security and a
description of a global depositary.
Consolidation,
Merger and Sale
Nothing contained in either indenture or any of the debt
securities is expected to prevent our consolidation or merger
with or into any other corporation or any sale or conveyance of
all or substantially all of our property to any other
corporation; provided that upon any such transaction,
other than a consolidation or merger in which we are the
continuing corporation, the payment of principal, premium and
interest on all of the debt securities, and the performance and
observance of all of the covenants and conditions of the
indenture to be performed by us, is expressly assumed by the
corporation formed by such consolidation or into which we shall
have been merged, or by the corporation which shall have
acquired such property.
Events of
Default
The following are expected events of default under each
indenture with respect to debt securities of any series issued
thereunder:
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a failure to pay principal or premium on any debt security of
that series when due;
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a failure to pay for a specified period, any interest on any
debt security of that series when due;
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certain events of bankruptcy, insolvency or
reorganization; and
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any other event of default provided with respect to debt
securities of a series.
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In general, if an event of default with respect to debt
securities of any series occurs and is continuing, either the
trustee or the holders of a specified percentage in aggregate
principal amount outstanding of the debt securities of that
series may declare the principal amount of all the debt
securities of that series to be due and payable immediately. At
any time after such a declaration of acceleration has been made,
but before a judgment or decree based on acceleration has been
obtained, the holders of a majority in aggregate principal
amount of outstanding debt securities of that series may rescind
and annul such acceleration.
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Each indenture is expected to provide that, subject to the duty
of the applicable trustee during a default to act with the
required standard of care, the trustee will be under no
obligation to exercise any of its rights or powers under the
indenture at the request or direction of any holder unless such
holder shall have offered the trustee reasonable indemnity.
Subject to such indemnification provisions, the holders of a
majority in aggregate principal amount of outstanding debt
securities of any series will have the right to direct the time,
method and place of conducting any proceeding for any remedy
available to the trustee, or to exercise any trust or power
conferred on the trustee, with respect to the debt securities of
that series.
Each indenture is expected to require us to furnish to the
applicable trustee annually a statement as to the performance by
us of our obligations under each indenture and as to any default
in such performance.
Regarding
the Trustees
We may maintain deposit accounts and conduct other banking
transactions with one or more of the trustees, including
borrowing in the ordinary course of business.
DESCRIPTION
OF CAPITAL STOCK
General
The following description of our capital stock, together with
the additional information in any applicable prospectus
supplement, summarizes the material terms and provisions of our
capital stock and various provisions of our restated certificate
of incorporation, which we also refer to as our certificate of
incorporation, and amended and restated bylaws, which we also
refer to as our bylaws. For additional information about the
terms of our capital stock, please refer to our restated
certificate of incorporation, amended and restated bylaws, and
amended and restated stockholder rights agreement that are
incorporated by reference into the registration statement of
which this prospectus is a part. The terms of these securities
may also be affected by the general corporation law of the state
of Delaware. The summary below is not intended to be complete
and is qualified by reference to the provisions of applicable
law and our restated certificate of incorporation, amended and
restated bylaws and amended and restated stockholder rights
agreement.
Our authorized capital stock consists of 100,000,000 shares
of common stock, par value $0.01 per share and
10,000,000 shares of preferred stock, par value $0.01 per
share. As of December 19, 2008, there were approximately
34,007,184 issued and outstanding shares of common stock and no
shares of preferred stock issued or outstanding. Rights to
purchase Series A Junior Participating Preferred Stock,
$0.01 par value per share (the Series A
Preferred Stock) have been distributed to holders of our
common stock under our amended and restated rights agreement. A
maximum of 500,000 shares of Series A Preferred Stock
is currently authorized for issuance upon exercise of these
rights.
Common
Stock
Holders of common stock are entitled to one vote for each share
held in the election of directors and on all other matters
submitted to a vote of stockholders and do not have any
cumulative voting rights. Holders of common stock are entitled
to receive ratably such dividends, if any, when, as and if
declared by the board of directors, out of funds legally
available therefor, subject to any preferential dividend rights
of any outstanding preferred stock.
Upon the liquidation, dissolution, or winding up of our company,
the holders of common stock are entitled to receive ratably the
net assets of the company available after payment of all debts
and other liabilities, subject to the prior rights of any
outstanding preferred stock. Holders of common stock have no
preemptive, subscription, redemption, or conversion rights other
than the right, when exercisable, to purchase one one-thousandth
of a share of our Series A Junior Participating Preferred
Stock as described further below. The outstanding shares of
common stock are, and the shares offered by us by any prospectus
supplement accompanying this prospectus will be, when issued and
paid for, fully paid and non-assessable.
18
Preferred
Stock
As of the date of this prospectus, we had no outstanding shares
of preferred stock. Rights to purchase Series A Preferred
Stock have been distributed to holders of our common stock under
a rights agreement, and a maximum of 500,000 shares of
Series A Preferred Stock are authorized for issuance on
exercise of rights. Our preferred stock may be issued from time
to time in one or more series, without stockholder approval.
Subject to limitations prescribed by law, the board of directors
is authorized to determine the voting powers (if any),
designations, preferences and relative, participating, optional
or other special rights, and qualifications, limitations or
restrictions thereof, for each series of preferred stock that
may be issued, and to fix the number of shares of each such
series. Thus, the board of directors, without stockholder
approval, could authorize the issuance of preferred stock with
voting, conversion and other rights that could adversely affect
the voting power and other rights of holders of common stock or
other series of preferred stock or that could have the effect of
delaying, deferring or preventing a change in control of our
company.
Preferred stock will be issued under a certificate of
designations relating to each series of preferred stock, subject
to our certificate of incorporation. When a particular series of
preferred stock is offered, the prospectus supplement will
describe the specific terms of the securities, including:
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the title and stated value of the preferred stock;
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the number of shares of the preferred stock offered, the
dividend and liquidation preference per share and the offering
price of the preferred stock;
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the dividend rate(s), period(s)
and/or
payment date(s) or method(s) of calculation of such rates,
periods or dates applicable to the preferred stock;
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whether the preferred stock will have preemptive rights;
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the procedures for auction and remarketing, if any, of the
preferred stock;
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the sinking fund provisions, if applicable, for the preferred
stock;
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the redemption provisions, if applicable, for the preferred
stock;
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whether the preferred stock will be convertible into or
exchangeable for other securities and, if so, the terms and
conditions of conversion or exchange, including the conversion
price or exchange ratio and the conversion or exchange period
(or the method of determining the same);
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whether the preferred stock will have voting rights and the
terms of the voting rights, if any;
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whether the preferred stock will be listed on any securities
exchange;
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the transfer agent for the preferred stock;
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whether the preferred stock will be issued with any other
securities and, if so, the amount and terms of such
securities; and
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any other specific terms, preferences or rights of, or
limitations or restrictions on, the preferred stock.
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Anti-Takeover
Effects of Certain Provisions of Delaware Law and Our Restated
Certificate of Incorporation and Amended and Restated
Bylaws
Effect of Delaware Anti-takeover Statute. We
are subject to Section 203 of the Delaware General
Corporation Law, an anti-takeover law. In general,
Section 203 prohibits a Delaware corporation from engaging
in any business combination with any interested stockholder for
a period of three years following the date that the stockholder
became an interested stockholder, unless:
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prior to that date, the board of directors of the corporation
approved either the business combination or the transaction that
resulted in the stockholder becoming an interested stockholder;
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upon consummation of the transaction that resulted in the
stockholder becoming an interested stockholder, the interested
stockholder owned at least 85% of the voting stock of the
corporation outstanding at the time
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the transaction commenced, excluding for purposes of determining
the number of shares of voting stock outstanding (but not the
voting stock owned by the interested stockholder) those shares
owned by persons who are directors and also officers and
excluding employee stock plans in which employee participants do
not have the right to determine confidentially whether shares
held subject to the plan will be tendered in a tender or
exchange offer; or
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on or subsequent to that date, the business combination is
approved by the board of directors of the corporation and
authorized at an annual or special meeting of stockholders, and
not by written consent, by the affirmative vote of at least
662/3%
of the outstanding voting stock that is not owned by the
interested stockholder.
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Section 203 defines business combination to
include the following:
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any merger or consolidation involving the corporation and the
interested stockholder;
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any sale, transfer, pledge or other disposition of 10% or more
of the assets of the corporation involving the interested
stockholder;
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subject to certain exceptions, any transaction that results in
the issuance or transfer by the corporation of any stock of the
corporation to the interested stockholder;
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any transaction involving the corporation that has the effect of
increasing the proportionate share of the stock of any class or
series of the corporation beneficially owned by the interested
stockholder; or
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the receipt by the interested stockholder of the benefit of any
loans, advances, guarantees, pledges or other financial benefits
provided by or through the corporation.
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In general, Section 203 defines an interested stockholder
as any entity or person beneficially owning 15% or more of the
outstanding voting stock of the corporation, or who beneficially
owns 15% or more of the outstanding voting stock of the
corporation at any time within a three year period immediately
prior to the date of determining whether such person is an
interested stockholder, and any entity or person affiliated
with, controlling, or controlled by any of these entities or
persons.
Restated Certificate of Incorporation and Amended and
Restated Bylaws Provisions. Our restated
certificate of incorporation and amended and restated bylaws
include provisions that may have the effect of discouraging,
delaying or preventing a change in control or an unsolicited
acquisition proposal that a stockholder might consider
favorable, including a proposal that might result in the payment
of a premium over the market price for the shares held by
stockholders. These provisions are summarized in the following
paragraphs.
Classified Board of Directors. Our restated
certificate of incorporation provides for our board to be
divided into three classes of directors serving staggered three
year terms. The classification of the board has the effect of
requiring at least two annual stockholder meetings, instead of
one, to replace a majority of the members of the board of
directors.
Authorized but Unissued or Undesignated Capital
Stock. Our authorized capital stock consists of
100,000,000 shares of common stock and
10,000,000 shares of preferred stock. The authorized but
unissued (and in the case of preferred stock, undesignated)
stock may be issued by the board of directors in one or more
transactions. In this regard, our restated certificate of
incorporation grants the board of directors broad power to
establish the rights and preferences of authorized and unissued
preferred stock. The issuance of shares of preferred stock
pursuant to the board of directors authority described
above could decrease the amount of earnings and assets available
for distribution to holders of common stock and adversely affect
the rights and powers, including voting rights, of such holders
and may have the effect of delaying, deferring or preventing a
change in control. The board of directors does not currently
intend to seek stockholder approval prior to any issuance of
preferred stock, unless otherwise required by law.
Special Meetings of Stockholders. Our amended
and restated bylaws provide that special meetings of our
stockholders may be called only by our chairman, chief executive
officer, president or board of directors. Stockholders do not
have the right to call special meetings or to bring business
before special meetings.
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Stockholder Action by Written Consent. Under
Delaware law, unless otherwise provided in a corporations
certificate of incorporation, any action that may be taken at a
meeting of stockholders may be taken without a meeting and
without prior notice if a written consent is signed by the
holders of the minimum number of votes necessary to authorize
the action at a meeting at which all shares entitled to vote
were present and voted. Our amended and restated bylaws provide
the same standard for written consent.
Notice Procedures. Our amended and restated
bylaws establish advance notice procedures with regard to all
stockholder proposals to be brought before meetings of our
stockholders, including proposals relating to the nomination of
candidates for election as directors, the removal of directors
and amendments to our amended and restated certificate of
incorporation or amended and restated bylaws. These procedures
provide that notice of such stockholder proposals must be timely
given in writing to our secretary prior to the meeting.
Generally, to be timely, a stockholder who intends to bring
matters before an annual meeting must provide advance notice of
such intended action not less than 90 days nor more than
120 days prior to the meeting; except if less than
100 days notice was given or public disclosure was made for
the meeting, advance notice of the matter is required to be
given not less than 10 days after notice or public
disclosure of the meeting, and notice as required by the
Exchange Act. The notice of the matter generally must contain a
brief description of the business desired to be brought before
the annual meeting and if regarding the nomination of a
director, all information required to be disclosed in
solicitation of proxies for election of directors under
Schedule 14A of the Exchange Act, the reasons for
conducting the business at the annual meeting, the name and
record address of such stockholder, the class and number of
shares of Royal Gold stock owned by such stockholder, a
description of any material interest of the stockholder in such
business and whether such stockholder intends to solicit proxies
from Royal Gold stockholders.
Stockholder
Rights Plan
Rights to purchase Series A Junior Participating Preferred
Stock, $0.01 par value per share (the Series A
Preferred Stock) have been distributed to holders of our
common stock under our amended and restated rights agreement. A
maximum of 500,000 shares of Series A Preferred Stock
is currently authorized for issuance upon exercise of these
rights. The rights agreement provides that attached to each
share of our common stock is one right that, when exercisable,
entitles the holder to purchase one one-thousandth of a share of
Series A Preferred Stock at a purchase price of $175,
subject to adjustment. In certain events, including when a
person or group becomes the owner of 15% or more of our
outstanding common stock (except by reason of share acquisitions
by the Company) or when a person or group commences a tender
offer or exchange offer for 15% of more of our outstanding
common stock, the rights become exercisable. Exercise of the
rights would entitle the holders of the rights (other than the
acquiring person or group) to receive that number of
one-thousandths of a share of Series A Preferred Stock with
a market value equal to two times the exercise price of the
rights. At any time after the rights become exercisable, but
before the acquiring person or group has obtained 50% or more of
our outstanding common stock, our board of directors, under
certain circumstances, may exchange each of the rights for a
share of common stock or one one-thousandth of a Series A
Preferred Share or the preferred stock equivalent. Accordingly,
exercise or exchange of the rights may cause substantial
dilution to a person or group that attempts to acquire our
company. The rights, which expire on September 10, 2017,
may be redeemed at a price of $.001 per right at any time until
the tenth day following an announcement that an individual,
corporation or other entity has acquired 15% or more of our
outstanding common stock, except as otherwise provided in the
rights agreement. The rights agreement makes the takeover of our
company much more difficult.
Limitation
of Director Liability
As permitted by provisions of the Delaware General Corporation
Law, our restated certificate of incorporation limits, in
certain circumstances, the monetary liability of our directors
for breaches of their fiduciary duties as directors. These
provisions do not eliminate the liability of a director:
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for a breach of the directors duty of loyalty to our
company or its stockholders;
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for acts or omissions by a director not in good faith or which
involve intentional misconduct or a knowing violation of law;
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arising under Section 174 of the Delaware General
Corporation Law (relating to the declaration of dividends and
purchase or redemption of shares in violation of the Delaware
General Corporation Law); or
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for any transaction from which the director derived an improper
personal benefit.
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In addition, these provisions do not limit our rights or the
rights of our stockholders, in appropriate circumstances, to
seek equitable remedies such as injunctive or other forms of
non monetary relief. Such remedies may not be
effective in all cases.
Indemnification
Arrangements
Our amended and restated bylaws provide that our company shall
indemnify our directors and officers to the full extent
permitted by Delaware law. Under such provisions any director or
officer, who, in his or her capacity as such, is made or
threatened to be made a party to any suit or proceeding, may be
indemnified if the board determines such director or officer
acted in good faith and in a manner he or she reasonably
believed to be in, or not opposed to, the best interest of the
company. The amended and restated bylaws and the Delaware
General Corporation Law further provide that such
indemnification is not exclusive of any other rights to which
such individuals may be entitled under the bylaws, any
agreement, any vote of stockholders or disinterested directors,
or otherwise.
We have entered into indemnification agreements with all of our
current directors and officers to assure them that they will be
indemnified to the extent permitted by our amended and restated
bylaws and the Delaware General Corporation Law. The
indemnification agreements provide our directors and officers
indemnification against, among other things, any and all
expenses, judgments, fines, penalties, and amounts paid in
settlement by the director or officer, provide for the
advancement of expenses incurred by the director or officer in
connection with any proceeding and obligate the director or
officer to reimburse Royal Gold for all amounts so advanced if
it is subsequently determined, as provided in the
indemnification agreements, that the director or officer is not
entitled to indemnification. The indemnification agreements also
provide certain methods and presumptions for determining whether
the director or officer is entitled to indemnification, among
other matters, as set forth in such agreement.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors,
officers or persons controlling Royal Gold pursuant to Royal
Golds restated certificate of incorporation, amended and
restated bylaws or any indemnification agreement, Royal Gold has
been informed that in the opinion of the SEC such
indemnification is against public policy as expressed under the
Securities Act of 1933 and is therefore unenforceable.
Transfer
Agent
The transfer agent for our common stock is Computershare
Trust Company, Golden, Colorado; and Computershare
Trust Company of Canada, Toronto, Ontario.
DESCRIPTION
OF DEPOSITARY SHARES
We may, at our option, elect to issue fractional shares of
preferred stock rather than full shares of preferred stock. If
we exercise this option, we will issue to the public receipts
for depositary shares, and each of these depositary shares will
represent a fraction (to be set forth in the applicable
prospectus supplement) of a share of a particular series of
preferred stock.
The shares of any series of preferred stock underlying the
depositary shares will be deposited under a deposit agreement
between us and a bank or trust company selected by us. The
depositary will have its principal office in the United States
and a combined capital and surplus of at least $50,000,000.
Subject to the terms of the deposit agreement, each owner of a
depositary share will be entitled, in proportion to the
applicable fraction of a share of preferred stock underlying the
depositary share, to all of the rights and preferences of the
preferred stock underlying that depositary share. Those rights
may include dividend, voting, redemption, conversion and
liquidation rights.
The depositary shares will be evidenced by depositary receipts
issued under a deposit agreement. Depositary receipts will be
distributed to those persons purchasing the fractional shares of
preferred stock underlying the depositary shares, in accordance
with the terms of the offering. The material terms of the
deposit agreement, the
22
depositary shares and the depositary receipts will be described
in a prospectus supplement relating to the depositary shares.
You should also refer to the forms of the deposit agreement and
depositary receipts that will be filed with the SEC in
connection with the offering of the specific depositary shares.
DESCRIPTION
OF WARRANTS
We may issue warrants, including warrants to purchase debt
securities, preferred stock or common stock. Warrants may be
issued independently or together with any equity or debt
securities and may be attached to or separate from such equity
or debt securities. Each series of warrants will be issued under
a separate warrant agreement to be entered into between Royal
Gold and a warrant agent. The warrant agent will act solely as
our agent in connection with the warrants of such series and
will not assume any obligation or relationship of agency or
trust for or with any holders or beneficial owners of warrants.
Terms of the warrants and the applicable warrant agreement will
be set forth in the applicable prospectus supplement, including:
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the title of the warrants;
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the aggregate principal amount of the warrants and the issue
price of the warrants;
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the number of securities for, and the price at, which the
warrants are exercisable and the period during which the
warrants may be exercised;
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the currency or currencies, including composite currencies, in
which the price of the warrants may be payable;
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in the case of warrants to purchase preferred stock, the
designation, number of shares, stated value and terms, such as
liquidation, dividend, conversion and voting rights, of the
series of preferred stock purchasable upon exercise of the
warrants, and the price at which you may purchase such number of
shares of preferred stock of such series upon such exercise;
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in the case of warrants to purchase debt securities, the
designation, aggregate principal amount, currencies,
denominations and terms of the series of debt securities
purchasable upon exercise of the warrants and the price at which
you may purchase the debt securities upon exercise;
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if applicable, the date on and after which the warrants and the
related securities will be separately transferable;
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any provision adjusting the securities that may be purchased on
exercise of the warrants, and the exercise price of the
warrants, to prevent dilution or otherwise; and
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any other terms of the warrants, including terms, procedures and
limitations relating to the exchange and exercise of the
warrants.
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SELLING
SECURITYHOLDERS
Selling securityholders may use this prospectus in connection
with the resale of securities from time to time. The applicable
prospectus supplement will identify the selling securityholders,
the terms of the securities and other information regarding the
transaction, such as the price of the securities, the names of
any underwriter or broker-dealer, if used, and the commissions
paid or discounts or concessions allowed to such underwriter or
broker-dealer, where applicable. The selling securityholders may
be deemed to be underwriters in connection with the securities
they resell and any profits on the sales may be deemed to be
underwriting discounts and commissions under the Securities Act.
The selling securityholders will receive all the proceeds from
their sale of securities. We will not receive any proceeds from
sales by selling securityholders except as otherwise specified
in an applicable prospectus supplement.
23
PLAN OF
DISTRIBUTION
The Company or the selling securityholders may sell securities
offered by means of this prospectus to one or more underwriters
for public offering and sale by them or may sell such securities
to investors directly or through agents. Any such underwriter or
agent involved in the offer and sale of such securities will be
named in the prospectus supplement relating to the securities.
The Company will bear all costs, fees and expenses incurred in
connection with the registration of the offering of securities
under this prospectus.
Underwriters may offer and sell securities offered by means of
this prospectus at a fixed price or prices, which may be
changed, at prices related to the prevailing market prices at
the time of sale or at negotiated prices. The Company or the
selling securityholders also may, from time to time, authorize
underwriters acting as the Companys agents to offer and
sell securities by means of this prospectus upon the terms and
conditions as are set forth in the prospectus supplement
relating to such securities. In connection with a sale of
securities offered by means of this prospectus, underwriters may
be deemed to have received compensation from the Company or the
selling securityholders in the form of underwriting discounts or
commissions and may also receive commissions from purchasers of
securities for whom they may act as agent. Underwriters may sell
securities offered by means of this prospectus to or through
dealers, and such dealers may receive compensation in the form
of discounts, concessions or commissions from the underwriters
and/or
commissions from the purchasers for whom they may act as agent.
Any underwriting compensation paid by the Company or the selling
securityholders to underwriters or agents in connection with the
offering of securities offered by means of this prospectus, and
any discounts, concessions or commissions allowed by
underwriters to participating dealers, will be set forth in the
applicable prospectus supplement. Underwriters, dealers and
agents participating in the distribution of the offered
securities may be deemed to be underwriters, and any discounts
or commissions received by them and any profit realized by them
upon the resale of the offered securities may be deemed to be
underwriting discounts and commissions, under the Securities
Act. Underwriters, dealers and agents may be entitled, under
agreements entered into with the Company or the selling
securityholders, to indemnification against and contribution
toward certain civil liabilities, including liabilities under
the Securities Act.
The Company or the selling securityholders may directly solicit
offers to purchase our securities, and may directly sell the
securities to institutional or other investors. The Company or
the selling securityholders will describe the terms of direct
sales in the prospectus supplement. The Company or the selling
securityholders may authorize their respective agents and
underwriters to solicit offers by certain institutions to
purchase the securities at the public offering price under
delayed delivery contracts. If the Company or the selling
securityholders use delayed delivery contracts, the Company or
the selling securityholders will disclose that they are using
them in the prospectus supplement and will tell you when they
will demand payment and delivery of the securities under the
delayed delivery contracts. These delayed delivery contracts
will be subject only to the conditions that the Company or the
selling securityholders set forth in the prospectus supplement.
The Company or the selling securityholders may agree to sell
securities to an underwriter for a delayed public offering and
may further agree to adjustments before the public offering to
the underwriters purchase price for the securities based
on changes in the market value of the securities. The prospectus
supplement relating to any such public offering will contain
information on the number of securities to be sold, the manner
of sale or other distribution, and other material facts relating
to the public offering.
The selling securityholders may also sell our securities in one
or more privately negotiated transactions exempt from the
registration requirements of the Securities Act pursuant to
Rule 144 under the Securities Act, Section 4(1) of the
Securities Act or other applicable exemptions, regardless of
whether the securities are covered by the registration statement
of which this prospectus forms a part. Such sales, if any, will
not form part of the plan of distribution described in this
prospectus. The selling securityholders will act independently
of us in making decisions with respect to the timing, manner and
size of each such sale.
Other than the common stock, all securities offered by this
prospectus will be a new issue of securities with no established
trading market. Any underwriter to whom securities are sold by
us or the selling securityholders for public offering and sale
may make a market in such securities, but such underwriters may
not be obligated to do so
24
and may discontinue any market making at any time without
notice. The securities may or may not be listed on a national
securities exchange or a foreign securities exchange, except for
the common stock which is currently listed and traded on the
NASDAQ Global Select Market and Toronto Stock Exchange. Any
common stock sold by this prospectus will be listed for trading
on the NASDAQ Global Select Market subject to official notice of
issuance. The Company cannot give you any assurance as to the
liquidity of the trading markets for any securities.
LEGAL
MATTERS
The validity of the securities being offered by this prospectus
will be passed upon for us by Hogan & Hartson LLP,
Denver, Colorado.
EXPERTS
The consolidated financial statements and managements
assessment of the effectiveness of internal control over
financial reporting (which is included in Managements
Report on Internal Control over Financial Reporting)
incorporated in this prospectus by reference to the Annual
Report on
Form 10-K/A
(filed on November 6, 2008) for the year ended
June 30, 2008 have been so incorporated in reliance on the
report (which contains an explanatory paragraph relating to the
Companys restatement of its consolidated financial
statements as described in Note 20A to the financial
statements and also contains an adverse opinion on the
effectiveness of internal control over financial reporting) of
PricewaterhouseCoopers LLP, an independent registered public
accounting firm, given on the authority of said firm as experts
in auditing and accounting.
25
PART II
INFORMATION
NOT REQUIRED IN PROSPECTUS
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Item 14.
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Other
Expenses of Issuance and Distribution.
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The expenses to be borne by us in connection with the issuance
and distribution of the securities being registered, other than
underwriting discounts and commissions, are set forth below. All
amounts are estimated except for the registration fee.
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Registration Fee-Securities and Exchange Commission
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$
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*
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Printing Expenses
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$
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**
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Accounting Fees and Expenses
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$
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**
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Legal Fees and Expenses
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$
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**
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Blue Sky Fees and Expenses (including Counsel Fees)
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$
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**
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Trustees Fees
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$
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**
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Rating Agency Fees
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$
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**
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Miscellaneous
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$
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**
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Total
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$
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**
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* |
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The registrant is deferring payment of the registration fee in
reliance on Rule 456(b) and Rule 457(r). |
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These fees are calculated based upon the number of issuances and
amount of securities offered and accordingly cannot be estimated
at this time. |
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Item 15.
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Indemnification
of Directors and Officers.
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Delaware
General Corporation Law
Under Section 145 of the Delaware General Corporation Law,
as amended (the Delaware Statute), a corporation may
indemnify its directors, officers, employees and agents and its
former directors, officers, employees and agents and those who
serve, at the corporations request, in such capacities
with another enterprise, against expenses (including
attorneys fees), as well as judgments, fines and
settlements in nonderivative lawsuits, actually and reasonably
incurred in connection with the defense of any action, suit or
proceeding in which they or any of them were or are made parties
or are threatened to be made parties by reason of their serving
or having served in such capacity. The Delaware Statute
provides, however, that such person must have acted in good
faith and in a manner he or she reasonably believed to be in (or
not opposed to) the best interest of the corporation and, in the
case of a criminal action, such person must have had no
reasonable cause to believe his or her conduct was unlawful. In
addition, the Delaware Statute does not permit indemnification
in an action or suit by or in the right of the corporation,
where such person has been adjudged liable to the corporation,
unless, and only to the extent that, a court determines that
such person fairly and reasonably is entitled to indemnity for
expenses the court deems proper in light of liability
adjudication. Indemnity is mandatory to the extent a claim,
issue or matter has been successfully defended. The Delaware
Statute provides that a corporation has the power to purchase
and maintain insurance on behalf of any person described above,
whether or not the corporation would have the power to indemnify
such person against such liability under the provisions of the
Delaware Statute.
Section 102 of the Delaware Statute allows a corporation to
eliminate the personal liability of directors of a corporation
to the corporation or its stockholders for monetary damages for
a breach of fiduciary duty as a director, except where the
director breached his duty of loyalty, failed to act in good
faith, engaged in intentional misconduct or knowingly violated a
law, authorized the payment of a dividend or approved a stock
repurchase in violation of Delaware law or obtained an improper
personal benefit.
Section 174 of the Delaware Statute provides, among other
things, that a director who willfully or negligently approves of
an unlawful payment of dividends or an unlawful stock purchase
or redemption may be held liable for such actions. A director
who was either absent when the unlawful actions were approved or
dissented at the time may avoid liability by causing his or her
dissent to such actions to be entered in the books containing
the minutes of
II-1
the meetings of the board of directors at the time such action
occurred or immediately after such absent director receives
notice of the unlawful acts.
Certificate
of Incorporation and Bylaws
Royal Golds restated certificate of incorporation and the
amended and restated bylaws provide for mandatory
indemnification or similar rights of directors, officers,
employees or agents generally to the same extent as is
authorized by the Delaware Statute. Under the bylaws, Royal Gold
must advance expenses incurred by an officer or director in
defending any such action if the director or officer undertakes
to repay such amount if it is ultimately determined that he or
she is not entitled to indemnification. The provisions of the
certificate of incorporation and bylaws do not preclude Royal
Gold from indemnifying other persons from similar or other
expenses and liabilities as the Board of Directors or the
stockholders may determine in a specific instance or by
resolution of general application.
The foregoing description of certain provisions of Royal
Golds certificate of incorporation and bylaws is qualified
in its entirety by the actual certificate of incorporation and
bylaws of Royal Gold respectively filed as Exhibit 3.1 to
Royal Golds Quarterly Report on
Form 10-Q
filed on February 8, 2008, and as Exhibit 3.1 to Royal
Golds Quarterly Report on
Form 10-Q
filed on May 1, 2008.
Indemnification
Agreements and Insurance
The Registrant has entered into indemnification agreements with
its current officers and directors. The indemnification
agreements provide such persons indemnification against, among
other things, any and all expenses, judgments, fines, penalties,
and amounts paid in settlement by the director or officer,
provide for the advancement of expenses incurred by the director
or officer in connection with any proceeding and obligate the
director or officer to reimburse the Registrant for all amounts
so advanced if it is subsequently determined, as provided in the
indemnification agreements, that the director or officer is not
entitled to indemnification. The indemnification agreements also
provide certain methods and presumptions for determining whether
the officer or director is entitled to indemnification, among
other matters, as set forth in such agreement.
The foregoing description of the indemnification agreements is
qualified in its entirety by the Form of Indemnification
Agreement with Directors and Officers of Royal Gold filed as
Exhibit 10.1 to the Registrants Current Report on
Form 8-K
on November 13, 2006, together with the Schedule of Certain
Officers Parties thereto (filed as Exhibit 99.2 to Royal
Golds Current Report on
Form 8-K
on September 4, 2007).
Royal Gold also maintains directors and officers
liability insurance.
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Exhibit
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No.
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Description
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1
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.1*
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Form of Underwriting Agreement (Debt Securities)
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1
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.2*
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Form of Underwriting Agreement (Equity Securities)
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3
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.1
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Restated Certificate of Incorporation, as amended (incorporated
by reference to Exhibit 3.1 to Royal Golds Quarterly
Report on
Form 10-Q
filed on February 8, 2008)
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3
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.2
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Amended and Restated Certificate of Designations of
Series A Junior Participating Preferred Stock of Royal
Gold, Inc. (incorporated by referenced to Exhibit 3.1 to
Royal Golds Current Report on
Form 8-K
filed on September 10, 2007)
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3
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.3
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Amended and Restated Bylaws (incorporated by reference to
Exhibit 3.1 to Royal Golds Quarterly Report on
Form 10-Q
filed on May 1, 2008)
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4
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.1
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Form of Common Stock Certificate (incorporated by reference to
Exhibit 4(b) to the Companys Registration Statement
on
Form S-l
(Registration
No. 2-84642),
filed on June 17, 1983)
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4
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.2
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First Amended and Restated Rights Agreement (incorporated by
reference to Exhibit 4.1 to the Companys
Form 8-A/A
(Amendment No. 1) filed on September 10, 2007)
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4
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.3*
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Form of Preferred Stock Certificate
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II-2
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Exhibit
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No.
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Description
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4
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.4*
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Form of Senior Indenture
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4
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.5*
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Form of Subordinated Indenture
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4
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.6*
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Form of Certificate of Designations
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4
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.7*
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Form of Warrant Certificate
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4
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.8*
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Form of Warrant Agreement
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4
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.9*
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Form of Depositary Receipt
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4
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.10*
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Form of Depositary Agreement
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5
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.1**
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Opinion of Hogan & Hartson LLP
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12
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.1**
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Statement of Computation of Ratios of Earnings to Fixed Charges
and Preferred Stock Dividends
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23
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.1**
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Consent of PricewaterhouseCoopers LLP
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23
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.2**
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Consent of Hogan & Hartson LLP (included in
Exhibit 5.1)
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24
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.1**
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Power of Attorney (included on signature page)
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25
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.1***
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Form T-1
Statement of Eligibility and Qualification respecting the Senior
Indenture
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25
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.2***
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Form T-1
Statement of Eligibility and Qualification respecting the
Subordinated Indenture
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* |
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To be filed, if necessary, as an exhibit to a post-effective
amendment to this registration statement or as an exhibit to a
report pursuant to Section 13(a) or 15(d) of the Exchange
Act and incorporated herein by reference. |
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Filed herewith. |
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To be filed in accordance with the Trust Indenture Act of
1939, as amended. |
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this registration
statement:
(i) To include any prospectus required by
Section 10(a)(3) of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the registration statement
(or the most recent post-effective amendment thereof) which,
individually or in the aggregate, represent a fundamental change
in the information set forth in the registration statement.
Notwithstanding the foregoing, any increase or decrease in
volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered)
and any deviation from the low or high end of the estimated
maximum offering range may be reflected in the form of
prospectus filed with the Commission pursuant to Rule 424(b) if,
in the aggregate, the changes in volume and price represent no
more than a 20 percent change in the maximum aggregate
offering price set forth in the Calculation of
Registration Fee table in the effective registration
statement; and
(iii) To include any material information with respect to
the plan of distribution not previously disclosed in the
registration statement or any material change to such
information in the registration statement;
provided, however, that paragraphs (a)(l)(i) and
(a)(l)(ii) of this section do not apply if the information
required to be included in a post-effective amendment by those
paragraphs is contained in reports filed with or furnished to
the Commission by the registrant pursuant to Section 13 or
Section 15(d) of the Securities Exchange Act of 1934 that
are incorporated by reference in the registration statement, or
is contained in a form of prospectus filed pursuant to
Rule 424(b) that is part of the registration statement.
(2) That, for the purpose of determining any liability
under the Securities Act of 1933, each such post-effective
amendment shall be deemed to be a new registration statement
relating to the securities offered
II-3
therein, and the offering of such securities at that time shall
be deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a
post-effective amendment any of the securities being registered
which remain unsold at the termination of the offering.
(4) That, for the purpose of determining liability under
the Securities Act of 1933 to any purchaser:
(i) Each prospectus filed by the registrant pursuant to
Rule 424(b)(3) shall be deemed to be part of this registration
statement as of the date the filed prospectus was deemed part of
and included in this registration statement; and
(ii) Each prospectus required to be filed pursuant to Rule
424(b)(2), (b)(5) or (b)(7) as part of a registration statement
in reliance on Rule 430B relating to an offering made
pursuant to Rule 415(a)(l)(i), (vii) or (x) for the
purpose of providing the information required by
Section 10(a) of the Securities Act of 1933 shall be deemed
to be part of and included in this registration statement as of
the earlier of the date such form of prospectus is first used
after effectiveness or the date of the first contract of sale of
securities in the offering described in the prospectus. As
provided in Rule 430B, for liability purposes of the issuer
and any person that is at that date an underwriter, such date
shall be deemed to be a new effective date of the registration
statement relating to the securities in the registration
statement to which the prospectus relates, and the offering of
such securities at that time shall be deemed to be the initial
bona fide offering thereof; provided, however, that no
statement made in a registration statement or prospectus that is
part of this registration statement or made in a document
incorporated or deemed incorporated by reference into this
registration statement or prospectus that is part of this
registration statement will, as to a purchaser with a time of
contract of sale prior to such effective date, supersede or
modify any statement that was made in this registration
statement or prospectus that was part of this registration
statement or made in any such document immediately prior to such
effective date.
(5) That, for the purpose of determining liability of the
registrant under the Securities Act of 1933 to any purchaser in
the initial distribution of the securities, the undersigned
registrant undertakes that in a primary offering of securities
of the undersigned registrant pursuant to this registration
statement, regardless of the underwriting method used to sell
the securities to the purchaser, if the securities are offered
or sold to such purchaser by means of any of the following
communications, the undersigned registrant will be a seller to
the purchaser and will be considered to offer or sell such
securities to such purchaser:
(i) Any preliminary prospectus or prospectus of the
undersigned registrant relating to the offering required to be
filed pursuant to Rule 424;
(ii) Any free writing prospectus relating to the offering
prepared by or on behalf of the undersigned registrant or used
or referred to by the undersigned registrant;
(iii) The portion of any other free writing prospectus
relating to the offering containing material information about
the undersigned registrant or its securities provided by or on
behalf of the undersigned registrant; and
(iv) Any other communication that is an offer in the
offering made by the undersigned registrant to the purchaser.
(b) The undersigned registrant hereby undertakes that, for
purposes of determining any liability under the Securities Act
of 1933, each filing of the registrants annual report
pursuant to Section 13(a) or 15(d) of the Securities
Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plans annual report pursuant to
Section 15(d) of the Securities Exchange Act of
1934) that is incorporated by reference in the registration
statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of
such securities at that time will be deemed to be the initial
bona fide offering thereof.
II-4
(c) Insofar as indemnification for liabilities arising
under the Securities Act of 1933 may be permitted to
directors, officers or persons controlling the registrant
pursuant to the provisions set forth or described in
Item 15 of this registration statement, or otherwise, the
registrant has been advised that in the opinion of the
Commission such indemnification is against public policy as
expressed in the Securities Act of 1933 and is therefore
unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer
or controlling person of the registrant in the successful
defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the
securities being registered, the registrant will, unless in the
opinion of its counsel the matter has been settled by
controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Securities Act of 1933
and will be governed by the final adjudication of such issue.
(d) The undersigned registrant hereby undertakes to file an
application for the purpose of determining the eligibility of
the trustee to act under subsection (a) of section 310
of the Trust Indenture Act (Act) in accordance
with the rules and regulations prescribed by the Commission
under section 305(b)2 of the Act.
II-5
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as
amended, the Registrant certifies that it has reasonable grounds
to believe that it meets all of the requirements for filing on
Form S-3
and has duly caused this registration statement to be signed on
its behalf by the undersigned, thereunto duly authorized, in the
City of Denver, State of Colorado, on December 19, 2008.
ROYAL GOLD, INC.
Name: Tony Jensen
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Title:
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President and Chief Executive Officer
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POWER OF
ATTORNEY
Each person whose signature appears below constitutes and
appoints Bruce C. Kirchhoff and Karen Gross and either of them,
his true and lawful attorney-in-fact and agent with full power
of substitution and resubstitution, for him in any and all
capacities, to sign any and all amendments (including
post-effective amendments) and supplements to this Registration
Statement, or any registration statement for the same offering
that is to be effective upon filing pursuant to Rule 462(b)
under the Securities Act of 1933, as amended (the
Securities Act), to file the same with all exhibits
thereto, and any and all instruments or documents in connection
therewith, with the Securities and Exchange Commission, and to
execute, deliver and file any other documents and instruments in
the undersigneds name or on the undersigneds behalf
which said attorneys-in-fact and agents, or either of them, may
determine to be necessary or advisable to comply with the
Securities Act and any rules or regulations promulgated
thereunder, and any such attorney-in-fact may make such changes
and additions to this Registration Statement or such other
documents or instruments as such attorney-in-fact may deem
necessary or appropriate, granting each of them, full power and
authority to do and perform each and every act and thing
requisite and necessary to be done in connection therewith, as
fully to all intents and purposes as he or she might or could do
in person and hereby ratifying and confirming all that said
attorneys-in-fact and agents, or any of them, or their or his
substitute or substitutes, may lawfully do or cause to be done
by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as
amended, this Registration Statement has been signed by the
following persons in the capacities and on the date indicated.
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Signature
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Title
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Date
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/s/ Tony
Jensen
Tony
Jensen
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Director, President and Chief Executive Officer (Principal
Executive Officer)
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December 19, 2008
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/s/ Stefan
Wenger
Stefan
Wenger
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Chief Financial Officer and Treasurer (Principal Financial
Officer)
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December 19, 2008
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/s/ Stanley
Dempsey
Stanley
Dempsey
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Executive Chairman
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December 19, 2008
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/s/ John
W. Goth
John
W. Goth
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Director
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December 19, 2008
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/s/ M.
Craig Haase
M.
Craig Haase
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Director
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December 19, 2008
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II-6
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Signature
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Title
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Date
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/s/ William
Hayes
William
Hayes
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Director
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December 19, 2008
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/s/ S.
Oden Howell, Jr.
S.
Oden Howell, Jr.
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Director
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December 19, 2008
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/s/ Merritt
E. Marcus
Merritt
E. Marcus
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Director
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December 19, 2008
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/s/ James
W. Stuckert
James
W. Stuckert
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Director
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December 19, 2008
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/s/ Donald
Worth
Donald
Worth
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Director
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December 19, 2008
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II-7
EXHIBIT INDEX
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Exhibit
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No.
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Description
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1
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.1*
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Form of Underwriting Agreement (Debt Securities)
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1
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.2*
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Form of Underwriting Agreement (Equity Securities)
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3
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.1
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Restated Certificate of Incorporation, as amended (incorporated
by reference to Exhibit 3.1 to Royal Golds Quarterly
Report on
Form 10-Q
filed on February 8, 2008)
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3
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.2
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Amended and Restated Certificate of Designations of
Series A Junior Participating Preferred Stock of Royal
Gold, Inc. (incorporated by referenced to Exhibit 3.1 to
Royal Golds Current Report on
Form 8-K
filed on September 10, 2007)
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3
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.3
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Amended and Restated Bylaws (incorporated by reference to
Exhibit 3.1 to Royal Golds Quarterly Report on
Form 10-Q
filed on May 1, 2008)
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4
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.1
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Form of Common Stock Certificate (incorporated by reference to
Exhibit 4(b) to the Companys Registration Statement
on
Form S-l
(Registration
No. 2-84642),
filed on June 17, 1983)
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4
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.2
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First Amended and Restated Rights Agreement (incorporated by
reference to Exhibit 4.1 to the Companys
Form 8-A/A
(Amendment No. 1) filed on September 10, 2007)
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4
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.3*
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Form of Preferred Stock Certificate
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4
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.4*
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Form of Senior Indenture
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4
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.5*
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Form of Subordinated Indenture
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4
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.6*
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Form of Certificate of Designations
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4
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.7*
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Form of Warrant Certificate
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4
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.8*
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Form of Warrant Agreement
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4
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.9*
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Form of Depositary Receipt
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4
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.10*
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Form of Depositary Agreement
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5
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.1**
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Opinion of Hogan & Hartson LLP
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12
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.1**
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Statement of Computation of Ratios of Earnings to Fixed Charges
and Preferred Stock Dividends
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23
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.1**
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Consent of PricewaterhouseCoopers LLP
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23
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.2**
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Consent of Hogan & Hartson LLP (included in
Exhibit 5.1)
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24
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.1**
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Power of Attorney (included on signature page)
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25
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.1***
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Form T-1
Statement of Eligibility and Qualification respecting the Senior
Indenture
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25
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.2***
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Form T-1
Statement of Eligibility and Qualification respecting the
Subordinated Indenture
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To be filed, if necessary, as an exhibit to a post-effective
amendment to this registration statement or as an exhibit to a
report pursuant to Section 13(a) or 15(d) of the Exchange
Act and incorporated herein by reference. |
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Filed herewith. |
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*** |
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To be filed in accordance with the Trust Indenture Act of
1939, as amended. |