Royal Gold Announces Exercise of Option Related to the Kerr-Sulphurets-Mitchell Project

Royal Gold, Inc. (NASDAQ:RGLD; TSX:RGL), today announced that
pursuant to its June 2011 Option Agreement with Seabridge Gold, Inc.
('Seabridge?), the Company increased the size of the net smelter return
('NSR?) royalty it may acquire on the Kerr-Sulphurets-Mitchell ('KSM?)
project from 1.25% to 2.0% by purchasing 1,004,491 common shares of
Seabridge (the 'Additional Shares?) at a 15% premium to the current
market price, for C$18 million. The Company now holds the right to
purchase either a 1.25% NSR royalty for C$100 million, or a 2.0% NSR
royalty for C$160 million on all of the gold and silver production from
the project, payable in three equal installments over a 540-day period.
Royal Gold sold the Additional Shares in a private transaction to an
unrelated party. The net cost to acquire the right to increase the size
of the NSR royalty was approximately $3.6 million. Royal Gold continues
to hold 1,019,000 shares of Seabridge common stock purchased in June
2011.

Royal Gold does not expect to consider the royalty purchase until the
project achieves certain permitting and financing requirements and a
decision to construct has occurred. The options to purchase the NSR
royalty will remain exercisable for 60 days following Royal Gold′s
satisfaction that the project has received all material approvals and
permits, has sufficient committed funding for construction, and certain
other conditions have been met.

The KSM project has proven and probable reserves of 2.2 billion tonnes
at an average grade of 0.55 grams per tonne of gold (38.2 million
ounces), 0.21% copper (10 billion pounds), and 2.74 grams per tonne
silver (191 million ounces). Based on Seabridge′s Preliminary
Feasibility Study, dated June 22, 2012, precious metal production could
average 508,000 ounces of gold and 2.2 million ounces of silver per
year, over the 55-year mine life, with higher metal production levels
forecast for the first seven years of the project. Seabridge is in the
process of completing its Environmental Assessment Application and
expects to file it with the regulators in January 2013.

Royal Gold is a precious metals royalty company engaged in the
acquisition and management of precious metal royalties and similar
interests. The Company′s portfolio consists of 205 properties on six
continents, including interests on 39 producing mines and 27 development
stage projects. Royal Gold is publicly traded on the NASDAQ Global
Select Market under the symbol 'RGLD,? and on the Toronto Stock Exchange
under the symbol 'RGL.? The Company′s website is located at www.royalgold.com.

Cautionary 'Safe Harbor' Statement Under the Private Securities
Litigation Reform Act of 1995: With the exception of historical
matters, the matters discussed in this press release are forward-looking
statements that involve risks and uncertainties that could cause actual
results to differ materially from projections or estimates contained
herein. Such forward-looking statements include the timing of Royal
Gold′s consideration of the exercise of its royalty options on the KSM
project, Seabridge′s estimated mine life, reserve estimates, production
estimates, and completion of the Environmental Assessment Application
for the KSM project. Factors that could cause actual results to differ
materially from projections include, among others, precious metals
prices, the risks inherent in construction, results of further
exploration efforts, results of feasibility studies, development and
ramp-up of operations of a new mine at the KSM project by an operator
who has not previously operated gold mines, decisions and activities of
the operator, unanticipated grade, geological, metallurgical, processing
or other problems the operator may encounter, changes in project
parameters as plans continue to be refined, economic and market
conditions, as well as other factors described elsewhere in this press
release and in our Annual Report on Form 10-K, Quarterly Report on Form
10-Q, and other filings with the Securities and Exchange Commission. In
addition, acquired royalty interests on certain projects are subject to
risks associated with conducting business in a foreign country,
including application of foreign laws to contract and other disputes,
foreign environmental laws and enforcement and uncertain political and
economic environments. Most of these factors are beyond the Company's
ability to predict or control. The Company disclaims any obligation to
update any forward-looking statement made herein. Readers are cautioned
not to put undue reliance on forward-looking statements.

Royal Gold, Inc.

Karen Gross, 303-575-6504

Vice
President and Corporate Secretary