85535--8/26/2010--ROYAL_GOLD

related topics

{gas, price, oil}

{interest, director, officer}

{loss, insurance, financial}

{stock, price, share}

{cost, regulation, environmental}

{operation, international, foreign}

{operation, natural, condition}

{debt, indebtedness, cash}

{control, financial, internal}

{provision, law, control}

{personnel, key, retain}

{stock, price, operating}

You should carefully consider the risks described below before making an investment decision. Our business, financial condition, results of operations and cash flows could be materially adversely affected by any of these risks. The market or trading price of our securities could decline due to any of these risks. In addition, please see our note about forward-looking statements included in Part II, Item 7, MD A, of this report. Please note that additional risks not presently known to us or that we currently deem immaterial may also impair our business and operations. We own passive interests in mining properties, and it is difficult or impossible for us to ensure properties are operated in our best interest. Volatility in gold, silver, copper and other metal prices may have an adverse impact on the value of our royalty interests and reduce our royalty revenues. Certain of our royalty contracts have features that may amplify the negative effects of a drop in commodity prices. Our revenues are subject to operational and other risks faced by operators of our mining properties. Acquired royalty interests, particularly on development stage properties, are subject to the risk that they may not produce anticipated royalty revenues. We depend on our operators for the calculation of royalty payments. We may not be able to detect errors amd payment calculations may call for retroactive adjustments. If the current global financial conditions and challenging credit markets are prolonged, it may affect the ability of the operators of the properties on which we have royalties to meet liquidity needs or operate profitably, which in turn could have material adverse effects on the value of and revenue from our royalty interests. In addition, current global financial conditions may adversely affect our ability to obtain financing for additional royalty acquisitions. We received significant revenue from royalties on five properties and adverse developments at those properties, as well as depleting resources, could adversely affect our revenue. Certain of our royalty interests are subject to payment or production caps or rights in favor of the operator or third parties that could reduce the revenues generated from the royalty assets. We may enter into acquisitions or other material royalty transactions at any time. We have incurred indebtedness in connection with our royalty acquisitions and could incur substantial additional indebtedness that could have adverse effects on our business. We may be unable to successfully acquire additional royalty and other similar interests. Estimates of production by the operators of mines in which we have royalty interests are subject to change, and actual production may vary materially from such estimates. Estimates of reserves and mineralization by the operators of mines in which we have royalty interests are subject to significant revision. Our disclosure controls and internal control over our financial reporting are subject to inherent limitations. Royalty interests are subject to title and other defects and contest by operators of mining projects and holders of mining rights, and these risks may be hard to identify in acquisition transactions. Changes in federal and state legislation could decrease our royalty revenues. Foreign operations and operation by foreign operators are subject to many risks. The mining industry is subject to significant environmental risks. Regulations and pending legislation governing issues involving climate change could result in increased operating costs to the operators of the properties on which we have royalties. We depend on the services of our President and Chief Executive Officer and other key employees and on the participation of our Chairman. Our stock price may continue to be volatile and could decline. Additional issuances of equity securities by us would dilute the ownership of our existing stockholders and could reduce some or all of our financial measures on a per share basis, reduce the trading price of our common stock or impede our ability to raise future capital. We may change our practice of paying dividends. Certain anti-takeover provisions could delay or prevent a third party from acquiring us.

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85535--8/26/2010--ROYAL_GOLD_INC