Royal Gold’s Record Revenue Overshadowed by Acquisition Costs

Royal Gold delivered unprecedented third-quarter revenue figures, yet the celebration was muted by earnings that fell short of market projections. The precious metals royalty company faces the substantial challenge of integrating recent billion-dollar acquisitions while managing increased debt levels.

The company reported record quarterly revenue of $252.1 million, representing significant growth from the $193.8 million recorded during the same period last year. This expansion was fueled by stronger prices for gold, silver, and copper, combined with sales volume reaching 72,900 gold equivalent ounces. Operating cash flow also achieved a new peak at $174 million.

However, the positive revenue story was tempered by adjusted earnings of $2.06 per share, which came in below analyst expectations ranging between $2.19 and $2.30. Total revenue also missed consensus estimates. CEO Bill Heissenbuttel acknowledged that acquisition-related expenses of approximately $12.8 million impacted results, with additional costs anticipated in the current quarter.

Strategic Expansion Through Major Acquisitions

Behind the quarterly numbers lies a transformative corporate development: Royal Gold formally completed its acquisitions of Sandstorm Gold and Horizon Copper on October 20. This substantial transaction involved issuing 18.6 million shares alongside a cash payment of $380.9 million to settle Sandstorm's credit facilities.

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To finance this strategic expansion, the company drew an additional $450 million from its revolving credit facility. Total debt now stands at $1.225 billion, which management aims to repay by mid-2027. Meanwhile, the potential extension of Mount Milligan's mine life through 2045 provides long-term operational stability.

Market Reaction and Future Outlook

Despite the mixed quarterly performance, market analysts maintain their constructive view of the company. Raymond James raised its price target from $257 to $264 while reaffirming its "Outperform" rating. The investment bank cited Royal Gold's resilient business model and enhanced asset diversification following the recent acquisitions as key positive factors.

The company's shares currently trade well below their 52-week high, reflecting the downward trend observed in recent weeks. All eyes now turn to March 2026, when Royal Gold plans to issue formal guidance for the coming year. This announcement will reveal whether the substantial investments in Sandstorm and Horizon Copper deliver expected returns or if debt servicing requirements constrain future growth.