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ROYALTY AND STREAM INTERESTS | 6 Months Ended
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Dec. 31, 2014
ROYALTY AND STREAM INTERESTS |
ROYALTY AND STREAM INTERESTS | 3.ROYALTY AND STREAM INTERESTS The following tables summarize the Company’s royalty and stream interests as of December 31, 2014 and June 30, 2014.
As of December 31, 2014 (Amounts in thousands): |  | Cost |  | Accumulated Depletion |  | Impairments |  | Net |
Production stage royalty interests: |  |  |  |  |  |  |  |  |
Andacollo |  | $ | 272,998 |  | $ | (60,892 | ) | $ | — |  | $ | 212,106 |
Voisey’s Bay |  | 150,138 |  | (73,262 | ) | — |  | 76,876 |
Peñasquito |  | 99,172 |  | (20,716 | ) | — |  | 78,456 |
Mulatos |  | 48,092 |  | (30,226 | ) | — |  | 17,866 |
Holt |  | 34,612 |  | (12,184 | ) | — |  | 22,428 |
Robinson |  | 17,825 |  | (12,291 | ) | — |  | 5,534 |
Cortez |  | 10,630 |  | (9,844 | ) | — |  | 786 |
Other |  | 491,689 |  | (246,936 | ) | (27,586 | ) | 217,167 |
Total production stage royalty interests |  | 1,125,156 |  | (466,351 | ) | (27,586 | ) | 631,219 |
Production stage stream interests: |  |  |  |  |  |  |  |  |
Mount Milligan |  | 783,046 |  | (18,740 | ) | — |  | 764,306 |
Total production stage royalty and stream interests |  | 1,908,202 |  | (485,091 | ) | (27,586 | ) | 1,395,525 |
Development stage royalty interests: |  |  |  |  |  |  |  |  |
Pascua-Lama |  | 372,105 |  | — |  | — |  | 372,105 |
Other |  | 71,092 |  | — |  | — |  | 71,092 |
Total development stage royalty interests |  | 443,197 |  | — |  | — |  | 443,197 |
Total development stage stream interests |  | 63,331 |  | — |  | (603 | ) | 62,728 |
Total development stage royalty and stream interests |  | 506,528 |  | — |  | (603 | ) | 505,925 |
Exploration stage royalty interests |  | 165,852 |  | — |  | (150 | ) | 165,702 |
Total royalty and stream interests |  | $ | 2,580,582 |  | $ | (485,091 | ) | $ | (28,339 | ) | $ | 2,067,152 |
As of June 30, 2014 (Amounts in thousands): |  | Cost |  | Accumulated Depletion |  | Impairments |  | Net |
Production stage royalty interests: |  |  |  |  |  |  |  |  |
Andacollo |  | $ | 272,998 |  | $ | (56,147 | ) | $ | — |  | $ | 216,851 |
Voisey’s Bay |  | 150,138 |  | (67,377 | ) | — |  | 82,761 |
Peñasquito |  | 99,172 |  | (17,801 | ) | — |  | 81,371 |
Mulatos |  | 48,092 |  | (28,548 | ) |  |  | 19,544 |
Holt |  | 34,612 |  | (10,474 | ) | — |  | 24,138 |
Robinson |  | 17,825 |  | (11,887 | ) |  |  | 5,938 |
Cortez |  | 10,630 |  | (9,772 | ) | — |  | 858 |
Other |  | 488,309 |  | (232,913 | ) | — |  | 255,396 |
Total production stage royalty interests |  | 1,121,776 |  | (434,919 | ) | — |  | 686,857 |
Production stage stream interests: |  |  |  |  |  |  |  |  |
Mount Milligan |  | 783,046 |  | (7,741 | ) | — |  | 775,305 |
Total production stage royalty and stream interests |  | 1,904,822 |  | (442,660 | ) | — |  | 1,462,162 |
Development stage royalty interests: |  |  |  |  |  |  |  |  |
Pascua-Lama |  | 372,105 |  | — |  | — |  | 372,105 |
Other |  | 69,488 |  | — |  | — |  | 69,488 |
Total development stage royalty interests |  | 441,593 |  | — |  | — |  | 441,593 |
Total development stage stream interests |  | 41,103 |  | — |  | — |  | 41,103 |
Total development stage royalty and stream interests |  | 482,696 |  | — |  | — |  | 482,696 |
Exploration stage royalty interests |  | 164,209 |  | — |  | — |  | 164,209 |
Total royalty and stream interests |  | $ | 2,551,727 |  | $ | (442,660 | ) | $ | — |  | $ | 2,109,067 |
Impairment of royalty and stream interests In accordance with our impairment accounting policy discussed in Note 1, impairments in the carrying value of each royalty or stream interest are measured and recorded to the extent that the carrying value in each royalty or stream interest exceeds its estimated fair value, which is generally calculated using estimated future discounted cash-flows. As part of the Company’s regular asset impairment analysis, which included the presence of impairment indicators, the Company recorded impairment charges for the three and six months ended December 31, 2014 and 2013, as summarized in the following table:
|  | For The Three Months Ended |  | For The Six Months Ended |
|  | December 31, |  | December 31, |  | December 31, |  | December 31, |
|  | 2014 |  | 2013 |  | 2014 |  | 2013 |
|  | (Amounts in thousands) |  | (Amounts in thousands) |
Wolverine(1) |  | $ | 25,967 |  | $ | — |  | $ | 25,967 |  | $ | — |
Other |  | 603 |  | — |  | 2,372 |  | — |
Total impairment of royalty and stream interests |  | $ | 26,570 |  | $ | — |  | $ | 28,339 |  | $ | — |
| (1) |  | Included in Other production stage royalty interests in the above royalty and stream interests table.
Wolverine The Company owns a 0.00% to 9.445% sliding-scale NSR royalty on all gold and silver produced from the Wolverine underground mine and milling operation located in Yukon Territory, Canada, and operated by Yukon Zinc Corporation (“Yukon Zinc”). As part of the Company’s impairment assessment for the three months ended December 31, 2014, the Company was notified of an updated mine plan at Wolverine, which included a significant reduction in reserves and resources when compared to the previous mine plan. A significant reduction in reserves and resources, along with decreases in the long-term metal price assumptions used by the industry, are indicators of impairment. As part of the impairment determination, the fair value for Wolverine was estimated by calculating the net present value of the estimated future cash-flows expected to be generated by the mining of the Wolverine deposits subject to our royalty interest. The estimates of future cash-flows were derived from a life-of-mine model developed by the Company using Yukon Zinc’s updated mine plan information. The metal price assumptions used in the Company’s model were supported by consensus price estimates obtained from a number of industry analysts. The future cash-flows were discounted using a discount rate which reflects specific market risk factors the Company associates with the Wolverine royalty interest. Following the impairment charge during the three months ended December 31, 2014, the Wolverine royalty interest has a carrying value of $5.3 million. The Company has a royalty receivable of approximately $3.0 million associated with past due royalty payments on the Wolverine interest. As a result of recent financial and operational results experienced by Yukon Zinc and their decision to put the mine on care and maintenance, the Company believes payment of the receivable is uncertain and has provided for an allowance against the entire receivable as of December 31, 2014. The Company will continue to pursue collection of all past due payments. The expense associated with the allowance is recorded within General and administrative expense on the Company’s consolidated statements of operations and comprehensive income. The Company did not recognize revenue associated with the Wolverine royalty interest during the three months ended December 31, 2014. Other As part of the Company’s regular asset impairment analysis during the three months ended September 30, 2014, the Company determined that one production stage royalty interest and one exploration stage royalty interest should be written down to zero for a total impairment of $1.8 million. As part of the termination of the Tulsequah Chief gold and silver stream, as discussed below, the Company wrote-off approximately $0.6 million of direct acquisition costs during the three months ended December 31, 2014. Termination of the Tulsequah Chief Gold and Silver Stream On December 22, 2014, RGLD Gold terminated the Amended and Restated Gold and Silver Purchase and Sale Agreement (the “Agreement”), between RGLD Gold, the Company, Chieftain Metals Inc. and Chieftain Metals Corp. (together, “Chieftain”), relating to Chieftain’s Tulsequah Chief polymetallic mining project located in British Columbia, Canada. Pursuant to the terms of the Agreement, Chieftain repaid RGLD Gold’s original $10.0 million advance payment. As a result of the termination of the Agreement, the carrying value ($10.6 million) of the Tulsequah Chief gold and silver stream was reduced to zero during the three months ended December 31, 2014. As of December 31, 2014, the $10 million repayment is recorded within Prepaid expenses and other on the Company’s consolidated balance sheets as the repayment was received in January 2015.

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