Cornerstone Properties2012 Interactive Annual Report

Royal Gold owns a net smelter return (“NSR”) royalty equal to 75% of all gold produced from the sulfide portion of the deposit until 910,000 payable ounces have been sold, and 50% of the payable gold thereafter.¹ The Andacollo operation is a surface copper mine operated by a subsidiary of Teck Resources Limited (“Teck”). Gold is produced as a by-product of copper production. The mine is located in Chile’s Region IV, approximately 34 miles southeast of La Serena and 221 miles north of Santiago.

Production Status: Teck reported that the recently completed pre-crushing plant will be ramped up in the third calendar quarter of 2012 allowing for increased plant throughput as they work toward reaching design capacity of 55,000 tonnes per day. Teck noted that evaluations will be undertaken based on the performance of the new pre-crushing circuit to consider the potential for a further expansion of the processing facility. They also plan to continue infill drilling to evaluate additional resource potential.

1. There have been approximately 98,000 cumulative payable ounces produced as of June 30, 2012. Gold is produced as a by-product of copper.
2. Reported production for fiscal 2012 relates to the amount of metal sales subject to our royalty interests as reported to us by the operator of the mine.
3. Reserves as of December 31, 2011.

Royal Gold holds a 2.7% NSR royalty on all metals from the Voisey’s Bay mine operated by Vale Inco (“Vale”). Voisey’s Bay is a surface nickel-copper-cobalt mine located in northern Labrador, 23 miles southwest of the town of Nain.

Production Status: Vale is constructing a hydrometallurgical facility at Long Harbour capable of producing 50,000 tonnes per year of nickel in concentrate from Voisey’s Bay. The facility is scheduled for completion during the first calendar quarter of 2013. The receipt of royalty revenue is based on a shipping schedule that includes two restricted shipping periods, from late April to late May and from early December to late January, where no shipments are allowed. This schedule results in seasonal variability of copper sales attributable to our account. Royalty revenue typically reflects a five-month lag from the time of shipment to the time of payment.

1. Revenues consist of provisional payments for concentrates produced during the current period and final settlements for prior production periods.
2. Reported production for fiscal 2012 relates to the amount of metal sales subject to our royalty interests as reported to us by the operator of the mine.
3. Reserves as of December 31, 2011.

Royal Gold owns a 2.0% NSR royalty on all metals at the Peñasquito mine. The surface mine, composed of two main deposits, Peñasco and Chile Colorado, hosts one of the world’s largest gold, silver and zinc reserves, while also containing large lead reserves. The project is operated by a subsidiary of Goldcorp Inc. (“Goldcorp”) and is located in Zacatecas, Mexico, approximately 17 miles west of the town of Concepcion del Oro.

Production Status: Goldcorp reported decreased production in the second quarter of calendar 2012 due to lower mill throughput resulting from an inadequate water supply in the month of June. The reduced water supply is a result of prolonged drought conditions in the region which they also expect will impact production in the second half of calendar 2012. The high pressure grinding roll supplemental ore feed system was successfully commissioned in the first quarter of calendar 2012, positioning the mine to achieve its design processing capacity of 130,000 tonnes per day after resolution of the water issues.

1. Reported production for fiscal 2012 relates to the amount of metal sales subject to our royalty interests as reported to us by the operator of the mine.
2. Reserves as of December 31, 2011.

Royal Gold owns a 0.78% to 5.23% sliding-scale NSR royalty¹ on the Pascua-Lama project which is operated by a subsidiary of Barrick Gold Corporation (“Barrick”). This royalty is applicable to all gold production from an area of interest in Chile. Royal Gold also holds a 1.05% NSR copper royalty which applies to all of the copper reserves in Chile within the area of interest, but does not take effect until after January 1, 2017. The Pascua-Lama project is being developed as a surface mine and is located on both sides of the border of Argentina and Chile, in the southeastern portion of the Atacama region of Chile, northeast of La Serena and approximately seven miles from Barrick’s Veladero mine.

Construction Status: Results of Barrick’s detailed capital cost and schedule review in the second quarter of calendar 2012 indicate that initial gold production is expected in mid-2014 instead of mid-2013. They also announced an estimated increase in capital costs from a range of $4.7 - $5.0 billion to $7.5 - $8.0 billion. Barrick estimates that annual production will average 800,000 to 850,000 ounces of gold for the first five years.

1. See footnotes 19 through 21 on page 23 of this report.
2. 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.
3. Reserves are as of December 31, 2011.

Royal Gold owns the right to 52.25% of the payable gold from the Mt. Milligan project which is owned by a subsidiary of Thompson Creek Metals Company (“Thompson Creek”). In addition to Royal Gold’s upfront payments to acquire this metal stream, the Company will make cash payments to Thompson Creek at a fixed price of $435 for each payable ounce of gold delivered to Royal Gold.¹ The Mt. Milligan copper-gold deposit is being developed as a surface mine and is located in central British Columbia, Canada, 96 miles northwest of Prince George.

Construction Status: As of June 30, 2012, Thompson Creek reported that overall progress was 69% complete after having invested $757 million, with an estimated maximum of $761 million in capital expenditures remaining through the end of calendar 2013. They also reported that Mt. Milligan remains on schedule, with commercial production expected in the fourth quarter of calendar 2013. Thompson Creek estimates that annual gold production will average 262,000 ounces over the first six years.

1. This is a metal stream whereby the purchase price for each gold ounce delivered is $435 or the prevailing market price of gold, if lower; no inflation adjustment.
2. Reserves as of October 2009.