Producing Property Footnotes Back to top

1

Reserves have been reported by the operators as of December 31, 2010, with the exception of the following properties: Don Mario – August 2010; West Westonia, Southern Cross, South Laverton, Pine Cove, Mt. Goode, Inata, Gwalia, Balcooma and Avebury – June 2010; El Chanate and Mt. Milligan – October 2009; Caber and Canadian Malartic – December 2008; Schaft Creek – September 2008; Soledad Mountain – December 2007; Meekatharra (Yaloginda) and Meekatharra (Paddy’s Flat) – September 2007.

2

Gold reserves were calculated by the operators at the following per ounce prices: $1,300 – Martha; A$1,350 – Kundip; $1,200 – El Limon and Dolores; A$1,250 – South Laverton and West Westonia; $1,000 – Inata, Bald Mountain, Cortez, Goldstrike, Holt, Kutcho Creek, Pascua-Lama, Robinson and Williams; $983 – Pine Cove; $950 – Leeville, Marigold, Peñasquito, Twin Creeks and Wharf; A$1,000 – Gwalia and Southern Cross; $900 – Gold Hill and Taparko; $875 – Mulatos; $870 – El Toqui; $825 – Canadian Malartic; $800 – El Chanate, Don Mario and Andacollo; $690 – Mt. Milligan; and $600 – Soledad Mountain. Schaft Creek is at a $5.05 net smelter return cut-off grade (metal price assumptions used by the operator were $658 per ounce gold; $10.00 per ounce silver; and $1.93 per pound copper). Wolverine is at an $80/tonne net smelter return cut-off grade (metal price assumptions used by the operator were $400 per ounce gold and $7.00 per ounce silver). No gold price was reported for Meekatharra (Paddy’s Flat), Meekatharra (Yaloginda), Avebury or Balcooma.

Silver reserves were calculated by the operators at the following prices per ounce: $23.00 – Dolores; $20.00 – Martha; $16.50 – Kutcho Creek; $15.00 – Peñasquito Sulfide; $14.90 – Troy; $14.42 – El Toqui; $14.00 – Gold Hill; $12.50 – Don Mario; $12.00 – Soledad Mountain. Shaft Creek is at a $5.05 net smelter return cut-off grade (metal price assumptions used by the operator were $658 per ounce gold; $10.00 per ounce silver; and $1.93 per pound copper). Wolverine is at an $80/tonne net smelter return cut-off grade (metal price assumptions used by the operator were $400 per ounce gold and $7.00 per ounce silver). No silver price is available for Balcooma.

Copper reserves were calculated by the operators at the following prices per pound: $3.02 – Troy; $2.97 – Voisey’s Bay; $2.75 – Kutcho Creek; $2.50 – Robinson and Caber; $2.25 – Las Cruces; $2.00 – Pascua-Lama and Don Mario; $1.90 – Andacollo; $1.60 – Mt. Milligan and $1.50 – Johnson Camp. Shaft Creek is at a $5.05 net smelter return cut-off grade (metal price assumptions used by the operator were $658 per ounce gold; $10.00 per ounce silver; and $1.93 per pound copper). No copper price is available for Balcooma.

Lead reserves were calculated by the operators at the following price per pound: $0.89 – El Toqui and $0.70 – Peñasquito and Caber. No lead price is available for Balcooma.

Zinc reserves were calculated by the operators at the following price per pound: $1.10 – El Toqui; $1.00 – Peñasquito; $0.95 – Kutcho Creek and $0.80 – Peñasquito. No zinc price is available for Balcooma or Caber.

Nickel reserve price was calculated by the operator at Voisey’s Bay mine at $8.71 or lower per pound. No nickel reserve price is available for Avebury or Mt. Goode.

Cobalt reserve price was calculated by the operator at $22.82 or lower per pound.

3

Royalty and metal stream definitions are included in the glossary on page 27 of this annual report.

4

Set forth below are the definitions of proven and probable reserves used by the U.S. Securities and Exchange Commission.

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

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

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

5

Royal Gold has disclosed a number of reserve estimates that are provided by royalty operators that are foreign issuers and are not based on the U.S. Securities and Exchange Commission’s definitions for proven and probable reserves. For Canadian issuers, definitions of “mineral reserve,” “proven mineral reserve,” and “probable mineral reserve” conform to the Canadian Institute of Mining, Metallurgy and Petroleum definitions of these terms as of the effective date of estimation as required by National Instrument 43-101 of the Canadian Securities Administrators. For Australian issuers, definitions of “mineral reserve,” “proven mineral reserve,” and “probable mineral reserve” conform with the Australasian Code for Reporting of Mineral Resources and Ore Reserves prepared by the Joint Ore Reserves Committee of the Australasian Institute of Mining and Metallurgy, Australian Institute of Geoscientists and Minerals Council of Australia, as amended (“JORC Code”). Royal Gold does not reconcile the reserve estimates provided by the operators with definitions of reserves used by the U.S. Securities and Exchange Commission.

6

The royalty rate is 75% until 910,000 payable ounces of gold have been produced; 50% thereafter. Gold is produced as a by-product of copper. There have been 46,000 cumulative payable ounces produced as of June 30, 2011.

7

Receipt of royalty revenue commenced in February 2010 for Voisey’s Bay, Inata, Gwalia Deeps, Las Cruces and Skyline. Revenue commenced in April 2010 for the Andacollo mine; December 2010 for the Holt and Wolverine mines; and May 2011 for the Canadian Malartic mine.

8

Revenue and production figures reflect partial operation of the mine and mill due to a labor strike that began on August 1, 2009 and ended in February 2010.

9

Operator reports reserves by material type. Reserves represent combined oxide and sulfide ores.

10

NSR sliding-scale schedule (price of gold per ounce – royalty rate): Below $210 – 0.40%; $210 to $229.99 – 0.50%; $230 to $249.99 – 0.75%; $250 to $269.99 – 1.30%; $270 to $309.99 – 2.25%; $310 to $329.99 – 2.60%; $330 to $349.00 – 3.00%; $350 to $369.99 – 3.75%; $390 to $409.99 – 4.0%; $410 to $429.99 – 4.25%; $430 to $449.99 – 4.50%; $450 to $469.99 – 4.75%; $470 and higher – 5.00%.

11

NVR1 and GSR3 reserves are subsets of the reserves and additional mineralized material covered by GSR1 and GSR2.

12

The 2.0% GSR royalty applies to gold production from defined portions of the Taparko-Bouroum project area. The Company also owns a 0.75% GSR milling royalty that applies to ore that is mined outside of the defined area of the Taparko-Bouroum project that is processed through the Taparko facilities up to a maximum of 1.1 million tons per year.

13

The Company’s royalty is subject to a 2.0 million ounce cap on gold production. There have been approximately 732,000 ounces of cumulative production, as of June 30, 2011. NSR sliding-scale schedule (price of gold per ounce – royalty rate): $0.00 to $299.99 – 1.0%; $300 to $324.99 – 1.50%; $325 to $349.99 – 2.0%; $350 to $374.99 – 3.0%; $375 to $399.99 – 4.0%; $400 or higher – 5.0%.

14

The operator does not report reserves by property in Australia. Therefore a portion of the reserves is not subject to Royal Gold’s royalty interest.

15

The NSR sliding-scale royalty is capped once payments of approximately $17 million have been received. As of June 30, 2011, payments of $8.2 million for the sliding-scale NSR royalty have been recognized. The sliding-scale royalty pays at a rate of 2.0% when the average gold price is below $300 per ounce; 3.0% when the gold price is between $300 and $350 per ounce; and 4.0% when the gold price is above $350 per ounce.

16

NSR sliding-scale schedule (price of zinc per pound - royalty rate): $0.50 to below $0.55 – 1.0%; $0.55 to below 0.60 – 2.0%; $0.60 or higher – 3.0%. Gold is produced as a by-product of zinc.

17

NSR sliding-scale schedule (price of gold per ounce - royalty rate): $0.00 to under $350 - 0.0%; $350 to under $400 - 0.5%; $400 to under $500 - 1.0%; $500 or higher - 2.0%.

18

The royalty applies to 40% of production. The royalty rate is $1.44 per ton for the first 600,000 tons on which the royalty is paid, reducing to $0.72 per ton on 600,000 to 800,000 tons and to $0.36 per ton above 800,000 tons, at a price above $23.00 per ton. A sliding-scale is applicable when the price of potash drops below $23.00 per ton. Given the current North American market price for potash, the complete sliding-scale schedule is not presented here. In addition, there is a $0.25 per ton royalty payable on certain production up to 600,000 tons.

19

By amendment dated June 2, 2011, but effective January 1, 2011, the royalty rate now ranges from 3.5% to 5.0%. NSR sliding-scale schedule (price of gold per ounce – royalty rate): Below $375 – 3.5%; >$375 to $400 – 4.0%; >$400 to $425 – 4.5%; >$425 and higher – 5.0%. All price points are stated in 1986 dollars and are subject to adjustment in accordance with a blended index comprised of labor, diesel fuel, industrial commodities and mining machinery.

20

NSR sliding-scale schedule (price of gold per ounce – royalty rate): $0.00 to $350 – 1.0%; above $350 – 1.5%.

21

Gold royalty rate is based on the price of silver, NSR sliding-scale schedule (price of silver per ounce - royalty rate): Below $5.00 - 0.0%; $5.00 to $7.50 - 3.778%; >$7.50 - 9.445%.

22

Figures reflect reserves associated with the entire property. The operator did not provide a detailed breakdown of the reserves and additional mineralized material subject to Royal Gold’s royalty interest. Therefore, a portion of the reserves is not subject to Royal Gold’s royalty interest.

23

The Company has not recognized revenue from this property since the acquisition of IRC in February 2010.

Development Property Footnotes Back to top

24

The operators at Avebury, Bundarra, Legacy, Rambler North, Reedys Burnakura, Relief Canyon and Tambor did not report reserve information.

25

Royalty pays 1.0% for the first 250,000 ounces of production and then 1.5% for production above 250,000 ounces.

26

The A$10 per ounce royalty applies on production above 50,000 ounces.

27

Reedys Burnakura sliding-scale royalty applies to cumulative production above 300,000 ounces. Once 300,000 ounces have been produced, the royalty rate is 1.5% NSR for the first 75,000 ounces per year and 2.5% NSR above 75,000 ounces per year.

28

25% of payable gold with a fixed cost of $400 per ounce until 550,000 ounces are delivered to Royal Gold; $450 thereafter.

29

Royalty applies to all gold production from an area of interest in Chile. Only that portion of the reserves pertaining to our royalty interest in Chile is reflected here. Approximately 20% of the royalty is limited to the first 14.0 million ounces of gold produced from the project. Also, 24% of the royalty can be extended beyond 14.0 million ounces produced for $4.4 million. In addition, a one-time payment totaling $8.4 million will be made if gold prices exceed $600 per ounce for any six-month period within the first 36 months of commercial production.

30

NSR sliding-scale schedule (price of gold per ounce - royalty rate): less than or equal to $325 – 0.78%; $400 – 1.57%; $500 – 2.72%; $600 – 3.56%; $700 – 4.39%; greater than or equal to $800 – 5.23%.

31

Royalty applies to all copper production from an area of interest in Chile. Only that portion of the reserves pertaining to our royalty interest in Chile is reflected here. This royalty will take effect after January 1, 2017.

32

Royal Gold has signed an agreement to sell its interests for $4.0 million. The final payment will be made in December 2011.

33

The sliding-scale NSR royalty will pay 2.0% when the price of gold is above $350 per ounce and 1.0% when the price of gold falls to $350 per ounce or below. The 0.9% NSR applies to the MACE claims.

34

Round Mountain, a joint venture between Kinross and Barrick, has the right, at any time, to purchase the royalty interest for $10.0 million less any royalty payments paid prior to the purchase option being exercised. The royalty is subject to a minimum royalty payment of $100,000 per year.

35

Royalty interest covers the majority of six sections of land, containing a number of open pits but does not cover the current mining in the Basalt/Antler area.

Evaluation Property Footnotes Back to top

36

Royal Gold considers and categorizes an exploration stage property to be an “evaluation stage” property if additional mineralized material has been identified on the property but reserves have yet to be identified. The U.S. Securities and Exchange Commission does not recognize the term “mineralized material.” Investors are cautioned not to assume that any part or all of the mineralized material identified on these properties will ever be converted into reserves.

37

Royalty applies to production above 40,000 ounces.

38

The sliding-scale royalty applies to cumulative production at both the Burnakura and Reedys Meekatharra properties above 300,000 ounces. Once 300,000 ounces have been produced, the royalty rate is 1.5% NSR for the first 75,000 ounces per year and 2.5% NSR above 75,000 ounces per year. The 1.0% NSR applies to the Rand area. The 1.5% fixed rate NSR does not apply to the Burnakura area.

39

Royalty calculation is 0.75 x AUD$Au price/AUD$470 x grade/2.5 g/t. Royal Gold’s share of the royalty is 44.85% of the calculated royalty figure. At an AUD$1000 per ounce gold price and 2 g/t grade, the royalty calculates to AUD$0.5726 per tonne.

40

Orezone has the right to buy back up to 2.0% of the royalty for US$2.0 million.

41

Royalty rate is 1.95% on Goose Lake and 2.35% on George Lake.

42

Royalty on George Lake applies to production above 800,000 ounces. Royalty on Goose Lake applies to production above 400,000 ounces.

43

For the first royalty, the 0.75% royalty applies to gold and silver and the 1.00% royalty applies to platinum group elements, copper and nickel. For the second royalty, the 0.5% NSR applies to gold, silver, platinum group elements, copper and nickel. For the third royalty, the 1.25% applies to gold and silver and the 1.5% royalty applies to platinum group elements, copper and nickel. These royalties become payable on commercial production once capital repayment has been made at the project.

44

A $325,000 payment is due upon production of the first 100,000 ounces. Once production reaches 200,000 ounces, the royalty begins paying at the following rate schedule (price of gold per ounce – royalty rate): $0.00 to $425 – 1.0%; $425 and above – 2.0%.

45

Royalty rate is 3.0% on Homestake and Emerald unpatented claims; 1.0% on Emerald patented claims.

46

Royalty is payable per pound of uranium produced above eight million pounds.

47

Royalty rate is 1.0% for each ton of ore at a NSR value of less than $115 per ton of ore; 2.0% for each ton of ore at a NSR value between $115 and $135 per ton of ore, and 3.0% for each ton of ore at a NSR value greater than $135 per ton of ore.

Exploration Property Footnotes Back to top

48

Royalty paid on dollars per tonne of ore above 50,000 tonnes up to 500,000 tonnes.

49

Royalty applies on production above 10,000 ounces.

50

Royalty rate is 2.0% for gold and 1.5% for all other metals.

51

Royalty rate is 4.0% for grades at 1.5 g/t or less and 2.5% at grades above 1.5 g/t.

52

Royalty applies to 15% of production until $1.76 million has been paid. The 2.0% NSR royalty applies to production thereafter.

53

The 2.0% NSR royalty applies to production from an area of the property referred to as the “GeoNova Properties” and the 3.0% NSR royalty applies to production from an area of the property referred to as the “Homestake Properties.”

54

Sliding-scale royalty only applies to gold production. The 2.0% NSR royalty applies to silver and copper.

55

The 1.0% to 3.0% NSR sliding-scale royalty only applies to gold production. The 2.0% NSR royalty applies to commercial production of all minerals excluding diamonds and industrial minerals. The 1.0% GV royalty applies to commercial production of all diamonds and industrial minerals.

56

Royal Gold acquired this property in the Battle Mountain transaction. The parties claiming interests in the mining concessions subject to this royalty have disputed any royalty obligation.

57

The 3.0% NSR applies to gold. The 10.0% NPI applies to all other minerals.