Restatement
As part of the Company's royalty monitoring program, Royal Gold has identified a $3.1 million overpayment of a royalty from Barrick Gold Corporation ("Barrick") with respect to the Company's GSR1 and GSR2 royalties at the Cortez Pipeline Mining Complex ("Cortez"), which the Company received and recognized as royalty revenues. The overpayment of the royalty was the result of Barrick incorrectly including non-Royal Gold royalty production in the Company's quarterly GSR1 and GSR2 royalty payments commencing in January 2007 and continuing through fiscal year 2008.
The error that caused the overpayment of royalty payments was not timely identified by our controls and procedures in-place and $3.1 million was incorrectly recognized as royalty revenue, resulting in a material overstatement of royalty revenue for fiscal year 2008. On November 3, 2008, the Company's Audit Committee of the Board of Directors, in consultation with management, concluded that due to the error in accounting for royalty revenue, our previously issued consolidated financial statements as of and for the fiscal year ended June 30, 2008 and for each of the quarters comprising the fiscal year should no longer be relied upon and should be restated.
On November 6, 2008, the Company filed an amended Annual Report on Form 10-K/A ("Amended 10-K") with the Securities and Exchange Commission restating the Company's annual consolidated financial statements for fiscal year 2008 and for each of the quarters comprising fiscal year 2008. The consolidated financial statements and related disclosures for the quarter ended September 30, 2007 have been restated in this report to reflect the revenue accounting error discussed above and this Management's Discussion and Analysis of Financial Condition and Results of Operations ("MD&A") gives effect to the restatement. General
MD&A is intended to provide information to assist you in better understanding and evaluating our financial condition and results of operations. We recommend that you read this MD&A in conjunction with our consolidated financial statements included in Item 1 of this Quarterly Report on Form 10-Q, as well as the Amended 10-K.
This MD&A contains forward-looking information. You should review our important note about forward-looking statements following this MD&A.
We refer to "GSR," "NSR", and other types of royalty interests throughout this MD&A. These terms are defined in our Amended 10-K. Overview
Royal Gold, together with its subsidiaries, is engaged in the business of acquiring and managing precious metals royalties. Royalties are passive (non-operating) interests in mining projects that provide the right to revenue or production from the project after deducting specified costs, if any. We seek to acquire existing royalties or to finance projects that are in production or near production in exchange for royalty interests. We are engaged in a continual review of opportunities to acquire existing royalties, to create new royalties through the financing of mine development or exploration, or to acquire companies that hold royalties. We currently, and generally at any time, have acquisition opportunities in various stages of active review, including, for example, our engagement of consultants and advisors to analyze particular opportunities, analysis of technical, financial and other confidential information, submission of indications of interest, participation in preliminary discussions and involvement as a bidder

in competitive auctions. We also fund exploration on properties thought to contain precious metals and seek to obtain royalties and other carried ownership interests in such properties through the subsequent transfer of operating interests to other mining companies. Substantially all of our revenues are and will be expected to be derived from royalty interests. We do not conduct mining operations at this time. During the quarter ended September 30, 2008, we focused on the management of our existing royalty interests, the acquisition of royalty interests, and the creation of royalty interests through financing and strategic exploration alliances.
Our financial results are primarily tied to the price of gold and other metals, as well as production from our producing stage royalty interests. The price of gold and other metals have fluctuated widely in recent years. The average price of gold per ounce during the quarter ended September 30, 2008 and 2007 was $872 and $681, respectively. The marketability and the price of gold are influenced by numerous factors beyond the control of the Company and may have a material and adverse effect on the Company's results of operations and financial condition.
The increase in the average gold price, the continued ramp-up of gold production at Leeville, increased production at Robinson, and production from the recently acquired Battle Mountain Gold Exploration ("Battle Mountain") royalties in October 2007, contributed to royalty revenue of $16.1 million during the quarter ended September 30, 2008, compared to royalty revenue of $12.5 million during the quarter ended September 30, 2007. The increase in our royalty revenue during the quarter ended September 30, 2008 was slightly offset due to a decrease in production at Cortez and production stoppage at Taparko.

Our Producing Royalty Interests
Our producing royalty interests are shown in the following table. Please refer
to our Amended 10-K for further discussion on our principal producing royalty
interests.

                                                                                 Royalty
Mine                   Location                  Operator             (Gold unless otherwise stated)
Cortez                 Nevada, USA               Barrick Gold         GSR1: 0.40%-5.0% sliding-
                                                 Corporation               scale GSR
                                                 ("Barrick")          GSR2(1): 0.72%-5.0% sliding-
                                                                      scale GSR
                                                                      GSR3(1): 0.71% GSR
                                                                      NVR1(1): 0.39% NVR

Robinson               Nevada, USA               Quadra Mining        3.0% NSR (copper, gold,
                                                 Ltd. ("Quadra")      silver, molybdenum)

Leeville Mining        Nevada, USA               Newmont Mining       1.8% NSR
Complex (Leeville                                Corporation
North and Leeville                               ("Newmont")
South)

Goldstrike-SJ          Nevada, USA               Barrick              0.9% NSR
Claims

Troy(2)                Montana, USA              Revett Minerals,     7.0% GSR (silver and copper)
                                                 Inc. ("Revett")

Bald Mountain          Nevada, USA               Barrick              1.75%-3.5% sliding-scale NSR

Twin                   Nevada, USA               Newmont              2.0% Gross Proceeds Royalty
Creeks-Getchell(3)                                                    ("GPR")

Wharf(3)               South Dakota, USA         Goldcorp Inc.        0.0%-2.0% sliding-scale NSR
                                                 ("Goldcorp")

Peñasquito             Zacatecas, Mexico         Goldcorp             2.0% NSR (gold and silver)
(oxide)(4)

Mulatos(5)             Sonora, Mexico            Alamos Gold,         1.0%-5.0% sliding-scale NSR
                                                 Inc. ("Alamos")

El Chanate             Sonora, Mexico            Capital Gold,        2.0%-4.0% sliding-scale NSR;
                                                 Inc.                 10.0% NPI

Taparko(6)             Burkina Faso, West        High River Gold      15% GSR (TB-GSR1) and a 0%-10%
                       Africa                    Mines Ltd.           sliding-scale GSR (TB-GSR2)
                                                 ("High River")

Siguiri(3)             Guinea, West Africa       Anglogold            0.0%-1.875% sliding-scale NSR

Martha                 Santa Cruz Province,      Coeur d'Alene        2.0% NSR (silver)
                       Argentina                 Mines
                                                 Corporation

Don Mario-Lower        Chiquitos Province,       Orvana Minerals      3.0% NSR (gold, silver and
Mineralized Zone       Bolivia                   Corp. ("Orvana")     copper)

El Toqui(3)            Region XI, Chile          Breakwater           1.0%-3.0% sliding-scale NSR
                                                 Resources            (gold and zinc)

Williams               Ontario, Canada           Barrick (50%)        0.72% NSR
                                                 and Teck Cominco
                                                 Limited (50%)

Allan(3)               Saskatchewan, Canada      Potash               $0.36-$1.44 per ton sliding
                                                 Corporation of       scale and a $0.25 per ton
                                                 Saskatchewan         (potash)

El Limon               El Limon, Nicaragua       Central Sun          3.0% NSR
                                                 Mining, Inc.
                                                 ("Central Sun")
                                                 (95%) and
                                                 Inversiones
                                                 Mineras S.A.
                                                 (5%)

Balcooma(3)            Queensland, Australia     Kagara Zinc          1.5% NSR (gold and silver)

Koolanooka(3)          Western Australia,        Midwest              A$0.25 per tonne iron ore
                       Australia                 Corporation          fines sold (iron ore)
                                                 Limited

Mt. Goode Cosmos       Western Australia,        Xtrata               1.50% NSR (nickel)
South(3)               Australia

(1) As part of the Barrick transaction, as discussed below within this MD&A, the GSR2 royalty rate was reduced to match the royalty rate of GSR1 and the portion of the GSR3 and NVR1 royalties on the mining claims that comprise the undeveloped Crossroads deposit at Cortez was eliminated. The NVR1 royalty is a 1.25% NVR royalty. The Company owns 31.6% of the 1.25% NVR (or 0.39%), while our consolidated minority interest owns the remaining portion of the 1.25% NVR royalty.

(2) Royalty will extend until either cumulative production of approximately 9.9 million ounces of silver and 84.7 million pounds of copper, or we receive $10.5 million in cumulative payments, whichever occurs first. As of September 30, 2008, we have recognized royalty revenue associated with the GSR royalty totaling $8.9 million, which is attributable to cumulative production of approximately 3.5 million ounces of silver and approximately 30.8 million pounds of copper.

(3) Royalty acquired as part of the Barrick transaction, as discussed below within this MD&A.

(4) The Peñasquito project consists of oxide and sulfide portions. The sulfide portion is classified as development stage as shown below.

(5) As part of the Barrick transaction, as discussed below within this MD&A, the Mulatos sliding-scale royalty rate increased to 1.0%-5.0% from 0.30%-1.5%. The royalty is capped at 2.0 million gold ounces of production. Approximately
289,000
cumulative
ounces of
gold have
been produced
as of
September 30,
2008.

(6) TB-GSR1 will remain in effect until cumulative production of 804,420 ounces of gold is achieved or until cumulative payments of $35 million have been made to Royal Gold, whichever occurs first. TB-GSR2 will remain in effect until the termination of TB-GSR1. As of September 30, 2008, we have recognized approximately $4.7 million in royalty revenue associated with TB-GSR1, which is attributable to cumulative production of 36,195 ounces of gold. Portions of our royalty interests at the Taparko mine are classified as development stage and exploration stage as shown below.

Our Development Stage Royalty Interests
We also own the following royalty interests that are currently in development stage and are not yet in production. Please refer to our Amended 10-K for further discussion on our principal development stage royalty interests.

                                                                          Royalty
Mine                 Location             Operator             (Gold unless otherwise stated)
Peñasquito           Zacatecas,           Goldcorp             2.0% NSR (gold, silver, lead
(sulfide             Mexico                                    and zinc)
circuit)

Dolores              Chihuahua,           Minefinders          1.25% NSR 2.0% NSR (gold and
                     Mexico               Corporation,         silver)
                                          Ltd.
                                          ("Minefinders")

Pascua-Lama          Region III,          Barrick              0.16%-1.08% sliding-scale NSR
                     Chile                                     0.22% fixed rate royalty
                                                               (copper)

Gold Hill            Nevada, USA          Kinross Gold         1.0%-2.0% sliding-scale NSR
                                          Corporation
                                          (50%), Barrick
                                          (50%)

Troy                 Montana, USA         Revett               6.1% GSR 2.0% GSR

Marigold             Nevada, USA          Goldcorp             2.0% NSR

Don Mario-Upper      Chiquitos            Orvana               3.0% NSR
Mineralized Zone     Province,
                     Bolivia

Taparko              Burkina Faso,        High River           2.0% GSR (TB-GSR3)
                     West
                     Africa

Benso                Republic of          Golden Star          1.5% NSR
                     Ghana, West          Resources Ltd.
                     Africa

Relief Canyon        Nevada, USA          Firstgold            4.0% NSR
                                          Incorporated

Meekatharra          Western              Mercator Gold        A$10.00 per gold ounce
(Paddy's             Australia,                                produced
Flat)(1)             Australia

Holt-Holloway(1)     Ontario, Canada      St. Andrews          0.00013 x quarterly average
                                          Goldfields           gold price

(1) Royalty acquired as part of Barrick transaction, as discussed below within this MD&A.

Operators' Production Estimates by Royalty for Calendar 2008 We received production estimates from the operators of our producing mines during the first calendar quarter of 2008. The following table shows such production estimates for calendar 2008 as well as the actual production reported to us by the various operators for the nine months ended September 30, 2008. The estimates and production reports are prepared by the operators of the mining properties. We do not participate in the preparation or calculation of the operators' estimates or production reports and have not independently assessed or verified the accuracy of such information.
Operators' Production Estimate by Royalty for Calendar 2008 and Reported Production For the period January 1, 2008 through September 30, 2008

                                                    Calendar 2008 Operator's Production                                        Reported Production through
                                                                Estimate(1)                                                       September 30, 2008(2)
                                             Gold                      Silver                Copper                   Gold                  Silver               Copper
           Royalty                           (oz.)                     (oz.)                 (lbs.)                  (oz.)                   (oz.)               (lbs.)
Cortez GSR1                                     316,000                          -                    -                168,291                       -                    -
Cortez GSR2(3)                                   51,000                          -                    -                 54,195                       -                    -
Cortez GSR3(3)                                  367,000                          -                    -                222,486                       -                    -
Cortez NVR1(3)                                  242,000                          -                    -                119,972                       -                    -
Robinson(4)                                     115,000                          -        150 million                  105,203                       -        118 million
Leeville                                        415,000                          -                    -                319,507                       -                    -
SJ Claims                                       792,000                          -                    -                543,310                       -                    -
Troy                                                  -                1.4 million        12.5 million                                         704,723        6.8 million
El Chanate(5)                                    50,000                          -                    -                 33,183                       -                    -
Mulatos                                         120,000                          -                    -                109,708                       -                    -
Don Mario(6)                                        N/A                          -                    -                 56,022                       -                    -
Peñasquito(7)                                    67,000                2.3 million                    -                  6,501                 215,861                    -
El Limon                                         43,000                          -                    -                 30,769                       -                    -
Williams                                        126,000                          -                    -                 98,112                       -                    -
Dolores(8)                                       10,000                    350,000                    -                      -                       -                    -
Martha(9)                                             -                3.2 million                    -                      -             2.3 million                    -
Bald Mountain                                    28,000                          -                    -                 24,262                       -                    -
Taparko(10)                                      91,000                          -                    -                 27,397                       -                    -
Benso                                            25,000                          -                    -                      -                       -                    -

(1) There can be no assurance that these production estimates will be achieved. Please refer to our cautionary language regarding forward looking statements following this MD&A, as well as the risk factors identified in

(2) Reported production relates to the amount of metal sales, subject to our royalty interests, for the period January 1, 2008 through September 30, 2008, as reported to us by the operators of the mines.

(3) As part of the royalty acquisition transaction between Royal Gold and Barrick, as discussed below in this MD&A, GSR2 will be reduced to match the royalty rate of GSR1 and the portion of the GSR3 and NVR1 royalties on the mining claims that comprise the undeveloped Crossroads deposit at Cortez will be eliminated. None of the production estimates shown are attributable to the Crossroads deposit.

(4) As a result of strong performance at Robinson through the first six months of calendar 2008, Quadra announced in July 2008 that it increased its 2008 annual metal production guidance from 130 million pounds to 150 million pounds of copper and from 100,000 ounces to 115,000 ounces of gold.

(5) Reported production is for the period from the date of acquisition through September 30, 2008.

(6) The operator at Don Mario did not provide us a production estimate for calendar 2008.

(7) Reported production estimate relates to the oxide circuit. In May 2008, Peñasquito poured the first gold from the oxide circuit and construction at Peñasquito continues to progress. As reported by Goldcorp, production from the oxide circuit is lower than estimates primarily due to a slower than expected ramp-up of gold production, which is common for a low-grade run-of-mine heap leach operation. Goldcorp expects production at Peñasquito from the first sulfide circuit by late calendar 2009 and expects the second sulfide circuit to be operational near the end of calendar 2010.

(8) Minefinders announced in August 2008 that its initial production outlook for 2008 from the Dolores mine has been reduced. Total gold production from the Dolores mine in 2008 is now expected to be in the range of 10,000 to 15,000 ounces, down from the 40,000 ounces previously forecasted. Total silver production from the Dolores mine in 2008 is now expected to be in the range of 350,000 to 375,000 ounces, down from 1.0 million ounces previously forecasted. Further, in
October 2008,
Minefinders
announced that
they
anticipate the
first gold and
silver
production to
occur sometime
in
November 2008.

(9) As discussed in Coeur d'Alene's National Instrument 43-101 report of the Canadian Securities Administration filed as of December 31, 2007, it was estimated that the Martha mine would produce approximately 5.0 million ounces of silver during calendar 2008. During the second calendar quarter of 2008, Coeur d'Alene announced that estimated production at the Martha mine would be approximately 3.2 million ounces of silver for calendar 2008. The Company has revised Martha production herein accordingly.

(10) Reported production through September 30, 2008 at Taparko is below the operator's calendar 2008 production estimate primarily due to continued mill problems which are associated with the grinding mill drive-train. Please refer to "Recent Developments, Taparko Developments" below for further discussion.

Recent Developments
Acquisition of Barrick Royalty Portfolio Effective October 1, 2008, the Company completed its acquisition of royalties from Barrick for net cash of approximately $150 million and a restructuring of the Company's GSR2, GSR3 and NVR1 royalties at Cortez. The transactions were completed pursuant to the Royalty Purchase and Sale Agreement ("the Agreement") dated July 30, 2008. The cash portion of the purchase price for the transaction was paid from the Company's cash on hand.
The royalty portfolio acquired consists of royalties on 72 properties, including eight producing royalties, two development stage properties, 19 evaluation stage properties and 43 exploration stage projects. The restructuring of Royal Gold's royalty positions at Cortez consisted of the following: (1) a reduction of the Company's GSR2 sliding-scale royalty, from a range of 0.72% to 9.0%, to match the current GSR1 sliding-scale royalty rate ranging from 0.40% to 5.0%, and
(2) the elimination of Royal Gold's interest in the 0.71% GSR3 royalty and the 0.39% NVR1 royalty (non-consolidated minority interest portion) on the mining claims that comprise the undeveloped Crossroads deposit. The GSR3 and NVR1 royalties that cover areas outside the Crossroads deposit at Cortez were not affected by this transaction. The Crossroads deposit continues to be subject to the Company's GSR2 royalty at the reduced rate. The royalty portfolio, which was assembled by Barrick and various predecessor companies, including Placer Dome, Homestake, Lac Minerals, AurionGold, Delta Gold and Plutonic generated approximately $10 million in royalty revenue to Barrick for the six months ended June 30, 2008. The Company expects royalty revenues to grow within this portfolio, assuming current commodity prices and as development stage projects commence production. The key assets in the Barrick royalty portfolio include the following properties:
Mulatos-A sliding-scale NSR royalty currently paying 3.5% on Alamos' Mulatos mine. We currently own a 0.30%-1.50% sliding-scale NSR royalty on the property. This acquisition consolidates the Mulatos royalty and increases our current royalty interest from 1.5% to 5.0%, at current commodity prices. The royalty is capped at 2.0 million gold ounces of production and approximately 289,000 gold ounces have been produced through September 30, 2008; Malartic-A 2.0%-3.0% sliding-scale NSR royalty on the Canadian Malartic gold project, owned by Osisko Mining Corporation ("Osisko"). Osisko recently announced an updated estimate of

mineralized material and expects to complete feasibility work in the fourth calendar quarter of 2008. The royalty is subject to a buy down right; Siguiri-A sliding-scale NSR royalty currently paying 1.875% on the Siguiri gold mine in Guinea, West Africa, operated by AngloGold Ashanti. The royalty is capped on a dollar basis and approximately $12 million remains to be paid as of September 30, 2008;
Mt. Goode/Cosmos-A 1.5% NSR royalty covering a portion of Xstrata's Cosmos nickel mine in Australia. A large portion of the royalty interest is located to the south of the Cosmos and Cosmos Deeps ore bodies and includes potential future production from identified mineralization, including Tapinos, Prospero, Anomoly1 and AM2 deposits; and
Allan-A sliding-scale royalty on Potash Corporation of Saskatchewan's potash mine located in Canada. The royalty is currently paying at a rate of $1.44 per ton relative to 40% of production, subject to reductions based on annual production.
The Company is currently evaluating the accounting for the Barrick royalty portfolio transaction and will complete the initial purchase accounting during the second quarter of fiscal 2009.
Proposed Acquisition of Royalties at Limpopo Platinum Project In October 2008, the Company decided not to move forward on the acquisition of two royalty interests from MinEx Projects Pty Ltd on the Limpopo Platinum Project in South Africa.
Taparko Developments . . .