$59.79
$196.89
bear $59.79
base $126.91
bull $196.89
margin of safety $75.00
market price* $238.05
Royal Gold does not mine. It pays mining companies money up front in exchange for a share of a mine's future metal (a "stream", acquired at a fixed low price, typically 10-25% of spot) or a percentage of its revenue (a "royalty"). It has no mining costs and no capital spending at the mines, so roughly three-quarters of every revenue dollar becomes cash for the business. In 2025 its largest sources were Mount Milligan in British Columbia (22% of revenue), Pueblo Viejo in the Dominican Republic (13%), Andacollo in Chile (8%) and Cortez in Nevada (7%). In October 2025 it acquired Sandstorm Gold and Horizon Copper for $4.15 billion, mostly in shares (diluted shares rose from about 65.8 million to 85.1 million), and paid $1.0 billion for a gold stream on First Quantum's Kansanshi mine in Zambia. Revenue in the first half of 2026 was $920 million on 196,000 gold-equivalent ounces, against 131,500 ounces a year earlier. How we measured earnings. We start from operating cash flow, strip out working-capital timing swings and charge stock compensation as a real cost. Owner earnings per share were $4.02 in fiscal 2017, $5.18 in fiscal 2020, $6.08 in 2023, $7.39 in 2024 and $9.91 in 2025. Most of that rise came from the gold price, not from more ounces: Royal Gold delivered about 300,000 gold-equivalent ounces in both 2024 and 2025, with the gold price averaging $2,386 and $3,432 an ounce. We treated two items as timing rather than earnings: $25 million in 2024 and $44 million in 2025 that Centerra paid in exchange for Royal Gold's promise to support Mount Milligan's costs later. That money will be paid back over time. The key judgement: the money spent acquiring new streams is not treated as an annual running cost. A stream is used up as the mine runs out of ore. So the business we value is today's portfolio, and its output falls as the underlying mines are exhausted. We give no credit for acquisitions it has not yet made. The anchor. The older earnings record describes a smaller company. The Sandstorm, Horizon and Kansanshi deals added ounces in about the same proportion as they added shares: roughly 4.6 gold-equivalent ounces a year per share both before and after. So we anchor on the enlarged portfolio's run-rate of about 390,000 ounces a year, which is the first-half 2026 pace, and on cash per ounce at a range of gold prices the company has actually received. Across 2024, 2025 and early 2026 the business kept about 76% of the gold price as cash, less roughly $120 per ounce of overhead. Owner earnings per share grew 34% in 2025. Our middle case assumes first-year cash flow per share of $13.39, 31% above 2025's $10.19. That step-up is already secured, because the acquired assets now contribute for a full year: the first half of 2026 alone ran at about $16.70 a share annualised. After that, the middle case declines. Gold price. This is the biggest single driver. Gold averaged about $4,890 in the first quarter of 2026 and $4,506 in the second, and is about $4,200 today. So the early-2026 peak has already partly reversed. We do not build that peak into the normal level. Each case uses a price the business has actually received within the last two years. Bear case, about $60 a share. Gold eases from about $3,600 next year to $2,800 and then stays at $2,400, the 2024 average. Output falls from 375,000 ounces as contractual step-downs take effect: Andacollo's gold share halves after 900,000 ounces, Pueblo Viejo's after 990,000 ounces, and Kansanshi has similar thresholds. Volumes then decline 5% a year. Mount Milligan's extension to 2045 is not permitted, so it ends around 2035, and the portfolio runs off by about 2045. The business is worth about $5.35 billion. It owes about $264 million (the $400 million drawn on its revolving credit line at June 30, 2026, less $182 million of cash, plus $47 million belonging to minority partners), leaving $5.09 billion, or $59.79 a share. Base case, about $127 a share. Gold settles at $3,500, close to the 2025 average of $3,432, after a year near $4,000 and a year near $3,700. Output holds at about 390,000 ounces for five years. The contractual step-downs are offset by First Quantum's already-built S3 expansion at Kansanshi: the operator's plan lifts Royal Gold's gold deliveries there from 26,000-31,000 ounces in 2026 to 38,000-43,000 ounces in 2028. It then falls 3% a year to the early 2040s and about 6% a year as Mount Milligan (mine plan to 2045) and Pueblo Viejo (to 2048) wind down. Long-life royalty ground, mainly Barrick's Cortez/Fourmile district in Nevada, keeps a fading tail into the 2060s. The business is worth about $11.06 billion. Less $264 million of debt, that leaves $10.80 billion, or $126.91 a share. Bull case, about $197 a share. Gold stays near $4,300, close to today's price. Output rises to about 420,000 ounces, as the Kansanshi ramp-up delivers at the top of the operator's range and 2026 deliveries finish at the top of guidance (copper is already tracking there). Output stays there through the early 2030s and then declines slowly, with Mount Milligan running to 2045, Pueblo Viejo to 2048 and Cortez beyond. The business is worth about $17.01 billion, $16.75 billion after debt, or $196.89 a share. Debt does not drive this valuation. The revolving credit line matures June 30, 2030, carries a floating rate and was cut from $900 million at the end of 2025 to $325 million by mid-July 2026. Even the bear case covers the interest bill many times over. We did not count the cash earned since June 30, which would add a few dollars a share. Left out of every case: the 30% stake in the Hod Maden project in Turkey. It is about 25% built, Royal Gold must fund its share of construction, and it was restructured after June 2026 on terms not yet in a filing. Also left out: the Warintza stream and royalty in Ecuador ($200 million paid; an exploration-stage project with no reserves), exploration upside, and future acquisitions. Royal Gold has acquired new streams for decades, but in large one-off deals funded with debt and shares rather than small, repeatable steps, so we do not count on them. Mount Milligan's life beyond 2045 is also excluded. What would make this wrong. Gold is the main risk in both directions: every $500 an ounce on the long-run price moves the base value by roughly $16 a share, and a long-run gold price equal to today's $4,200 would lift it to about $149. On the downside, operators control the mines: a pit failure, a permit refusal at Mount Milligan, or political action in Zambia, the Dominican Republic or Chile would cut ounces that Royal Gold cannot replace without spending new capital. A few properties still dominate the revenue. Change since our previous analysis. In August we valued the shares at $62, $168 and $306. Then, earnings started lower: the middle case began at $9.50 a share. But they were assumed to grow every year with no end date. We now start higher, at $13.39 a share in the middle case, because a full year of Sandstorm and Kansanshi revenue is now in the reported numbers. The bigger change is that we no longer assume earnings last forever. Every mine in the portfolio has a finite reserve life and contractual step-downs, and we now let output decline as the mines are used up. That lowers the middle and upper cases. The lower case is roughly unchanged. Margin-of-safety price. The range runs from about $60 to about $197, and nearly all of that spread is the gold price, which no one can forecast. The margin-of-safety price is set where the middle case implies a 20% annual return even if it takes about three years for the value to be recognised, and where a gold price back at 2024 levels implies no more than a moderate loss. From $75, a move to the middle-case value over three years, plus the $1.90 annual dividend, implies a little over 20% a year. If gold falls to $2,400, the bear case implies a loss of about 20%. The margin-of-safety price is therefore $75, about 40% below the middle case. That is a steep discount, reflecting how much of the value depends on gold.