Royal Gold (RGLD) Q3 2026 earnings review
Royal Gold is now debt-free, but gold's price keeps falling
Royal Gold, which owns a share of other companies' mine output, collected record cash while the gold price eased. Sales reached $465 million, up 84% from a year ago, because interests it bought from Sandstorm and Horizon now pay. Excluding those, sales still grew about 45%, by our math.
| Sales excluding the interests bought last year | $366 million +45% from a year ago, by our math |
|---|---|
| Cash from operations | $344.4 million +98% from a year ago |
| Profit per share, excluding one-offs | $2.80 +36% from a year ago |
| Full-year outlook for other metals | Raised to $53–56M from $34–38M |
⚖️ Verdict: 🟢 Bullish
The case got better, because Royal Gold cleared its debt a year early and raised part of its outlook. It repaid the final $150 million in October and now holds more cash than borrowings. One caution: gold averaged less this quarter than in either of the two before it, and gold earns almost three-quarters of revenue.
The question now is what Royal Gold does with the cash it no longer owes lenders. Chief executive Bill Heissenbuttel puts new deals first, and says softer metal prices make one easier to agree. The other answer: buying near a price peak is how royalty companies overpay. The size of the next deal will settle it.
🐂 Bull Case
Royal Gold Has Repaid All Its Debt
Royal Gold borrowed $1.225 billion a year ago to buy Sandstorm Gold and Horizon Copper, two rivals that own the same kind of contracted interests in other companies' mines. Chief executive Bill Heissenbuttel said at the time that the group "initially expected to repay it within two years". It cleared $250 million during this quarter and the final $150 million soon after it ended.
- Cash from operations: $344.4 million, a record and almost double a year ago
- Debt at September 30: $150 million, against $900 million at the end of 2025
- Cash held: $184.5 million, so the group now carries more cash than borrowings
- Share buybacks: $49 million in the quarter at an average of $259.83, and $79 million since May
- Dividends paid: $40.3 million, at an annual rate of $1.90 a share
Interest no longer takes a meaningful bite, because the average borrowing rate came down to 4.9% on a balance half the size of last year's. "We are now debt-free," Heissenbuttel told investors, and the whole $1.4 billion credit line sits unused, with an uncommitted option to stretch it to $2 billion. That is why the group can bid for a large deal without issuing shares.
What to watch: the dividend decision. Heissenbuttel said the board reviews the payout every November, so the announcement arrives within weeks. A rise larger than this year's 6% would show that the cash freed from lenders is heading to shareholders rather than sitting on the balance sheet.
The Sandstorm Assets Earned $68 Million
A year ago Royal Gold bought the mine interests of Sandstorm Gold and Horizon Copper. Those contracts, which entitle the buyer to a slice of output from mines in Peru, Ecuador, Brazil, Chile and West Africa, brought in $68.1 million of sales this quarter. A separate stream on the Kansanshi copper mine in Zambia, bought in 2025, added $30.8 million more.
- Kansanshi, Zambia: $30.8 million, the single largest new contributor
- Fruta del Norte, Ecuador: $5.3 million; Lundin Gold poured its highest quarterly output yet
- Bonikro, Ivory Coast: $4.6 million, and $23.2 million over nine months
- Chapada, Brazil, and Caserones, Chile: $7.8 million between them
- Aurizona, Brazil, and Cerro Moro, Argentina: $5.8 million between them
Together these interests account for about a fifth of revenue. Strip them out and the rest of the portfolio still grew roughly 45% from a year ago, by our math, so the purchase added to a business that was already expanding on its own. Heissenbuttel called the Sandstorm portfolio "an absolute success", and operations chief Martin Raffield said Kansanshi's new concentrator ran above its design capacity.
What to watch: Platreef in South Africa, the newest stream, which made only an initial contribution here. Ivanhoe Mines ran the first concentrator at about 70% of design in October and is building a second for late 2027. Steady deliveries would show the acquired pipeline turning into revenue rather than promises.
Mount Milligan Deliveries Came Back
Mount Milligan in British Columbia is Royal Gold's single biggest earner: the group takes 35% of the mine's payable gold and 18.75% of its copper. Metal reaches Denver months after Centerra Gold digs it out, so revenue from the asset moves unevenly from one quarter to the next, and the delay has repeatedly held it back when the mine itself was running well.
This quarter the mine paid $82.8 million, against $61.1 million a year earlier. Centerra reported September-quarter gold output of 44,070 ounces and said the mine stays on track for its 2026 plan. Heissenbuttel described the lag plainly: "what we're going to get in the fourth quarter is sort of what they produced in the second quarter".
That lag cuts both ways. Centerra mined more gold in September than in June, and it is the June output that reaches the fourth-quarter sales line, so revenue from the asset can slip back even while the mine itself runs better. Heissenbuttel also noted that a late shipment can push a sale into 2027 altogether.
What to watch: revenue from this mine across the fourth quarter and the first quarter of 2027 taken together, which the company reports asset by asset. If the pair holds near the level booked here, the recovery is real rather than a quirk of shipping dates.
A Richer Royalty at Cortez Lifted Revenue
Royal Gold holds several overlapping royalties at the Cortez complex in Nevada, which Barrick Mining operates. They pay different rates depending on which part of the deposit the ore comes from. The older Legacy Zone carries "an approximate 9% gross royalty rate", while the newer CC Zone pays between 1.6% and 2.6%.
Barrick mined 198,700 ounces for Royal Gold's account, slightly fewer than a year ago. But 71,600 of those ounces came from the Legacy Zone, against 20,600 a year earlier. Revenue from Cortez therefore reached $37.7 million, more than double last year's, on a smaller number of ounces.
Mix, not volume, did the work here. Raffield said "our blended royalty rate for the quarter was 4.45%", above the range the group planned for the year, because mining has moved down towards the bottom of the Crossroads pit. He added that Royal Gold is "looking at a good year for Cortez next year", which would carry the effect into 2027.
What to watch: the blended royalty rate in the fourth quarter, and the 2027 plan due with the annual results. Heissenbuttel declined to get "too specific about what we expect in 2027", so that publication is the first firm reading. A rate back near 3.5% would show the richer ore running out faster than Raffield suggests.
🐻 Bear Case
Gold's Price Gain Keeps Narrowing
Royal Gold earns 73% of its revenue from gold, and it sells that metal at the market price. The London average was $4,262 an ounce in the quarter. That marks a third consecutive quarterly step down, from $4,873 in the first three months of the year and $4,506 in the second.
The gain against last year has narrowed with it, and revenue growth has followed the same path. This matters because the group pays a contracted share of the spot price for most stream metal and nothing at all for royalty ounces, so each dollar of price moves almost straight into profit at the 84% margin it earns before depletion and tax.
- Average gold price: $4,262 an ounce, after $4,873 in the first quarter
- Against a year ago: 23% higher, against a 42% gain across the first nine months
- Revenue growth: 84% from a year ago, after 143% in the first quarter
- Gold's share of revenue: 73%, with silver at 14% and copper at 10%
Heissenbuttel treats the softer market as a chance to buy, telling analysts that "prices getting closer to consensus sort of makes the valuation discussion a lot easier" when his team negotiates a new stream. That reading helps the next deal, but it works against the revenue the portfolio already owns, and it sits awkwardly beside a release headed by the word strong.
What to watch: the average gold price in the fourth quarter, which arrives with the annual results in February. Gold averaged $4,135 an ounce in the same quarter of 2025, so a price near today's level would wipe out almost all of the help the metal has given revenue for two years.
Operators Keep Trimming Their Own Plans
Royal Gold owns no mines. It collects a contracted share of what other companies dig up, so its revenue depends on those operators meeting the production plans they publish. Several of them cut or capped those plans during the quarter, and one stopped work at a mine altogether after a worker died.
- Antamina, Peru: Teck halted production on October 27 after a fatality, pending investigation; the interest paid $13.0 million in the quarter and $39.7 million over nine months
- Caserones, Chile: Lundin Mining cut 2026 copper output to 120,000–130,000 tonnes from 130,000–140,000 after storm damage
- Xavantina, Brazil: Ero Copper now plans 30,000–35,000 ounces of mined gold, down from the low end of a 40,000–50,000 range
- Andacollo, Chile: Teck sees copper at the low end of 45,000–55,000 tonnes after flooding closed the plant
- Côté and Manh Choh, Canada and Alaska: IAMGOLD and Contango both point to the lower end of their ranges
No single mine moves the group far, because only two assets brought in more than a tenth of revenue. But these land together, and they land on the recently bought interests: Antamina, Caserones and Xavantina all arrived with the Sandstorm portfolio. Teck said output at Andacollo was "significantly impacted by extreme weather conditions", and that mine alone paid $50.1 million.
What to watch: how long Antamina stays shut. Teck has not said when the mine restarts, and Raffield reported only that "production was suspended on October 27 due to a fatality". A stoppage running into 2027 would remove the largest of the newly acquired royalties from the revenue line.
Depletion Now Takes a Sixth of Sales
When Royal Gold buys a stream or a royalty, it writes that purchase price off against the metal it later receives. Accountants call the charge depletion, and it reached $82.0 million in the quarter. That is two and a half times the year-earlier figure, and it now absorbs 17.6% of revenue.
- Depletion and amortisation: 17.6% of revenue, against 13.1% a year ago
- Cost of sales, the metal Royal Gold buys from operators: 13.4% of revenue, 0.95 of a point more than last year
- Depletion per ounce-equivalent sold: $752, against $451 a year ago
- Revenue up 84% from a year ago; net income up 79%; profit per share up 40% on 29% more shares
The two expense lines together explain why profit lagged sales, and why profit per share lagged both. Depletion costs no cash, so the record operating cash flow the group collected stands untouched by it. But it does explain why reported earnings understate what this portfolio actually brings in, and why the gap will persist while the bought interests deplete.
What to watch: the depletion charge in the fourth quarter against this quarter's level. Royal Gold was still refining how it splits the Sandstorm purchase price between asset types at mid-year, and moving more value into depletable interests would push the charge up again, squeezing reported profit without touching cash.
Risks This Quarter Didn't Answer
Three standing concerns got no fresh figures in the release or on the call. Each sits outside the quarterly reporting pack, so a reader waits for the annual filing or for an operator to speak. None threatens this year's cash flow, but each shapes the years after it, and each has a specific disclosure that would move the argument.
- Pueblo Viejo deferred silver: Royal Gold stopped tabulating the balance after recovery stayed below the contract threshold. The annual report's stream note would show whether the owed ounces are still growing; silver inventory at that mine rose to 266,100 ounces from 254,000 at June 30.
- Hod Maden, Türkiye: the group owns 15% of a project about 30% built, on which $256 million has been spent, and starts paying its share of construction from mid-2027. The operator's updated schedule and budget would set the size of that bill.
- Country spread: the Sandstorm assets added Zambia, Botswana, Ecuador, Peru and Türkiye, yet revenue is still split across four broad regions. A country-level table in the annual report would show how much now comes from places the group did not operate in two years ago.
👓 Other Themes
Kinross Will Buy Back Part of a Royalty
Kinross Gold has told Royal Gold it will buy back a quarter of the royalty on the Great Bear project in Ontario, cutting the interest to 1.50% of net smelter returns in return for about $43 million in cash. Royal Gold granted that right when it bought the royalty, in exchange for information about the deposit. Raffield said "the buyback demonstrates the significant value of the Great Bear project".
💲 Other KPIs
Money operators owe for royalties already earned reached $138.0 million, from $69.7 million a year earlier. That 98% increase runs ahead of the 84% growth in sales. New royalty interests, rather than late payers, explain most of it, but this is the balance to check if an operator runs short of cash.
Metal delivered by operators but not yet sold fell to 23,300 ounces, from 27,400 at the end of June. Royal Gold sold 4,100 more gold ounces than it took in, worth roughly $17 million of revenue, by our math. A year ago the stock was building instead, so this quarter borrowed a little from the next.
Running costs before share awards came to $9.9 million, against $7.3 million a year ago, as the enlarged group took on staff and offices. Across twelve months the bill is $48.7 million. Finance chief Paul Libner expects total overheads to finish "near the upper end" of the $50 million to $60 million range.
🔮 Guidance
Unchanged. Royal Gold has sold 224,265 ounces through September. That leaves 65,700 to 95,700 ounces for the final quarter, by our math, and the middle of that gap sits close to what the group delivered in this one. Raffield placed the year "around the midpoint of our original guidance range".
Unchanged on paper, though the company now expects to reach or pass the top. Sales hit 2.6 million ounces through September, so the stated range leaves only 0.4 to 0.9 million for the fourth quarter, by our math. Newmont has warned that silver output at Peñasquito will halve from third-quarter levels.
Unchanged, and already overtaken: 21.3 million pounds through September sits above the bottom with a quarter still to run. Royal Gold now expects to reach or exceed the top. The range looked stale three months ago too, when the group said copper was trending around or above that top end and left the numbers alone.
Raised by about half, the only change in the outlook. Nine months brought $44 million, more than the whole of the old range, and Heissenbuttel said "we have raised our sales guidance for other metals". The new range leaves $9 million to $12 million for the fourth quarter, by our math. That sits below this quarter, because the payment from Antamina moves with the mine's own costs.
Unchanged. The charge reached $269 million through September. That leaves $70 million to $110 million for the final quarter, by our math, a little above the figure booked here. Royal Gold took $177 million across the whole of 2025, so a full year of the bought interests has roughly doubled the annual cost.
Unchanged. The rate for the first nine months was 20.1% before one-off tax items, and 20.2% in the quarter itself. Both readings sit in the upper half of the range, where they have stayed all year. Libner said the group continues "to expect the full year rate to be within the original guidance range of 17% to 22%".
❓ Key Questions
How much silver does Pueblo Viejo still owe?
Royal Gold stopped publishing the deferred balance once recovery stayed below the contract threshold. The ounces remain owed, and a reader cannot size them. The number belongs back in the annual report.
When does Antamina restart?
Teck halted the mine on October 27 after a death there. The interest paid $13.0 million in the third quarter. Royal Gold has given no estimate of the lost fourth-quarter revenue or the restart date.
How much depletion carries into 2027?
The charge has roughly doubled on the acquired interests. Royal Gold has not said whether the split of the Sandstorm purchase price between asset types is now final, and that split sets the 2027 cost.
What royalty rate will Cortez pay next year?
The blended rate hit 4.45% this quarter on richer Legacy Zone ore. Heissenbuttel declined to be specific about 2027. The answer decides whether a large chunk of this year's revenue repeats.
How large will the next acquisition be?
The group can draw $1.4 billion without asking shareholders, and Heissenbuttel puts new deals above buybacks. He has not said what price discipline looks like after metal prices doubled.