Category: Franco-Nevada

Visualizing the Value of Precious Metals Royalty Agreements



The following content is sponsored by Vox Royalty

Precious metals royalties

The Value of Precious Metals Royalty Agreements

The mining sector is known for its high potential returns, but it hides a unique investment with long-term revenues and high upside potential: precious metals royalties.

Royalties provide holders with a percentage of a mine’s revenue for the life of the project, while also offering exposure to the mine’s increases in production and resource expansion.

This graphic by Vox Royalty breaks down the catalysts that unlock compounding value for royalty holders, and how precious metals royalties outperform other income investments.

The Anatomy of a Royalty Agreement

Royalties are interest-bearing agreements that were first created between prospectors and mining companies, so prospectors could receive long-term revenue from the development of their discoveries. Over time, royalty agreements became a funding mechanism allowing mining operators to take up-front funding to develop a mine in exchange for 1-3% of the mine’s lifetime revenue.

Once created, royalties can be bought and sold as income assets, enabling royalty companies to purchase and build a diverse portfolio of income-generating royalties.

It’s worth noting that royalties are calculated from the mine’s top line revenue, meaning royalty holders are not impacted by the mine’s operational or administrative expenses.

Along with the interest on a mine’s revenues, royalties also provide holders with upside exposure to further investment and expansion of the mine, resource expansion of the project, along with mine restarts and life extensions.

The Value-Driving Catalysts of Great Royalties

Since royalties give holders all (Read more...)

How Precious Metals Royalty and Streaming Companies Create Value



The following content is sponsored by Empress Royalty.

Gold and Silver Royalty and Streaming Companies

Investing in precious metals often seems like it boils down to either buying the physical gold or silver or investing in shares of specific mining companies, both with their own very distinct advantages and risks.

Rather than having to settle for the simplicity of bullion or extensive research in individual mining companies, precious metals royalty and streaming companies provide investors with exposure to a diversified portfolio of miners’ revenues and produced metals.

These companies are not operators of mines. Instead, they seek to find undiscovered value by financing and working directly with miners to forge agreements that provide their shareholders with steady exposure to precious metals production.

This infographic from Empress Royalty outlines exactly how gold and silver royalty and streaming companies operate, and how they mitigate risk and create value for their shareholders.

What Do Precious Metals Royalty and Streaming Companies Do?

Royalty and streaming companies are an important part of the mining industry’s financial ecosystem, as they provide capital to mine operators and explorers in exchange for a percentage of revenue or metals produced from the mine.

Mining companies receiving this investment are able to further develop or expand projects, providing greater returns for both their shareholders and the companies with royalties and stream agreements on the projects.

These agreements typically last for the life of a mine, providing steady cash flow to royalty and stream holders while cutting out various risks (Read more...)