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Gold Mining Royalty Companies

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Gold Mining Royalty Companies

Gold Royalty Co's / RZZ-1 : vs. US Roy'l Co's (rgld, wpm, fnv.t) ... update : 5yr-wGDXJ / 1yr : 10d :

IQaE9bs.gif

Royalty Co.-: Sym.  : F/X : 04/20 : MktCap : BkVal. : P/BV : P/CF : CaFlow > CF '18 : P/CF
Abitibi Roy'l : RZZ.v: CAD : $10.06 : 114.7M : $2.98 : 3.377 : 52.95 : $0.190 > $0.28 : 35.9
Franco Nev. : FNV.t : CAD : $90.77 : 16.88B :  32.05 : 2.832 : 26.89 : $3.376 :
WheatonPM : WPM : USD : $21.31 : $9.60B : 11.06 : 1.926 : 17.50 : $1.218 :
Royal Gold-  : RGLD : USD : $89.46 : $5.86B : 34.50 : 2.593 : 20.29 : $4.409 :
Osisko Gold- : OR.t : CAD : $12.58 :  $1.97B : 12.13 : 1.037 : 33.04 : $0.381 :
Sandstorm- : SSL.t : CAD : $05.91 : 1,090M : $4.49 : 1.316 : 18.21 : $0.325 :
Altius Min'l  : ALS.t : CAD : $14.19 : 613.2M : $7.98 : 1.779 : 37.46 : $0.379 :

===========

Average Price-to-Cash Flow for 6 co's (not RZZ): 25.56X

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> Apr'18 RZZ Presentation : http://abitibiroyalties.com/investors/presentations/rzz-presentation-april2018-web.pdf

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CHARTS, Royalty Co's

RZZ-etc1 : vs. US Roy'l Co's (rgld, wpm) ... update : w/FNV.t : 5yr-wGDXJ / 1yr : 10d :

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RZZ-etc2 : vs. CA Roy'l Co's ... update: 5yr-wGDXJ / 1yr : 10d :

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Abitibi Roy'l: RZZ.v: CAD : $10.06 : 114.7M : 10yr : 5yr : 2yr : 6mo : 10d :
Franco Nev. : FNV.t : CAD : $90.77 : 16.88B :  10yr : 5yr : 2yr : 6mo : 10d :
WheatonPM : WPM : USD : $21.31 : $9.60B : 10yr : 5yr : 2yr : 6mo : 10d :
Royal Gold-  : RGLD : USD : $89.46 : $5.86B : 10yr : 5yr : 2yr : 6mo : 10d :
Osisko Gold- : OR.t : CAD : $12.58 :  $1.97B : 10yr : 5yr : 2yr : 6mo : 10d :
Sandstorm- : SSL.t : CAD : $05.91 : 1,090M : 10yr : 5yr : 2yr : 6mo : 10d :
Altius Min'l  : ALS.t : CAD : $14.19 : 613.2M : 10yr : 5yr : 2yr : 6mo : 10d :

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Royalty Co's, Thesis & Links:

When you purchase a company in the precious metals streaming subsector, which I will present and analyze today, you also buy a team that concentrates on handling the risks associated with that commodity as extra insurance. That’s important to note, and a primary perk of purchasing a streaming company in the first place.

Generally, investors enjoy streamers for their relatively predictable cash flows, minimal cash costs, low numbers of employees and low risk profiles. Furthermore, miners are attracted to streaming deals because they are not apparently dilutive like equity transactions, and they are also not damaging to their balance sheet.

Thus, one of the best and safest ways to invest in gold (or other precious metals or even oil) is investing in royalty and streaming companies.

Chart

FNV data by YCharts

In this study, I will analyze five different streaming companies:

  1. Franco-Nevada (FNV)
  2. Osisko Gold Royalties (OR)
  3. Royal Gold (RGLD)
  4. Sandstorm Gold (SAND)
  5. Wheaton Precious Metals (WPM)

> https://seekingalpha.com/article/4131522-five-gold-royalty-streaming-companies-microscope

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Osisko Gold Royalties Sees Rapid Growth As It Catches Up With Leaders

| Adrian Day

Osisko Gold Royalties (NYSE:OR) was the third of the large gold royalty companies. Wheaton Precious Metals, which recently changed its name—and its focus—from Silver Wheaton, was not included in the earlier article since at that time it was not gold focused.

Rapid Growth

Osisko came into being as a royalty company after the Canadian Malartic mine it had found and developed was sold. Following a hostile takeover bid, Osisko found a white knight who agreed to give the company a very attractive 5% net smelter return royalty. Shortly after, Osisko acquired Virginia Gold and its royalty on the Eleonore deposit which Virginia had found and sold, retaining a royalty, on a sliding scale up to 3.5%, again a very attractive royalty. Eleonore’s buyer, Goldcorp, put the mine into production in 2015. Though there have been geological difficulties encountered, with the ramp-up taking longer than expected, the mine is still attractive with up 20 years ahead of it.

With these two assets, Osisko has significant royalties on two long-life mines based in Quebec, one of the safest mining jurisdictions in the world. Since then, the companies has grown by acquiring various royalties, capping its acquisition run last August with the $1.1 billion purchase of a package of royalties and royalty-type assets (streams and an offtake agreement) from a private venture capital company, Orion Resource Partners. The package includes an attractive royalty on a new diamond mine in Canada, again a long-life asset. Some of these newly acquired royalties have buyback rights, most notably a royalty on Pretium’s new Brucejack mine. That mine’s start-up has been successful, there is little doubt now that Pretium will exercise its right. Although one cannot include the upside from these royalties in Osisko’s revenue forecasts, payments made to buy them back will in effect reduce the purchase price.

> https://seekingalpha.com/article/4136922-osisko-gold-royalties-sees-rapid-growth-catches-leaders

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JUNIOR ROYALTY CO'S

Royalty Co.-: Sym.    : F/X :  04/20 : MktCap : BkVal. : P/BV : P/CF : CaFlow > CF '18: P/CF
Abitibi Roy'l : RZZ.v   : CAD : $10.06 : 114.7M : $2.98 : 3.377 : 52.95 : $0.190 > $0.28 : 35.9
MaverixMet : MMX.v: CAD : $1.650 : 253.4M : 0.875 : 1.885 : 55.16 : $ 2.99 :
MetallaRoyl : MTA.v  : CAD : $0.870 : $64.5M : 0.215 : 4.051 : 47.09 : $0.018 :
AuRicoMetl : AMI.t   : CAD : $1.795 : 291.0M : 00.00 : -n/a-  
ElyGoldRoyl : ELY.v   : CAD : $0.125 : $9.51M : 0.062 : 2.026 : -n/a- :

==========

there are just four junior streaming & royalty companies publicly listed and available to investors.

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Maverix Metals is a relatively new company, formed in April 2016 by acquiring a package of 13 royalties and precious metal streams from Pan American Silver. This was followed up by acquiring 11 royalties from Gold Fields in December 2016. There is no doubt Maverix is in the streaming & royalty game to become a major player. However, it is majority owned by both Pan American Silver (40%) and Gold Fields (32%) and according to our analysis, overvalued. This may scare off potential suitors, but also benefits Maverix when it makes acquisitions using shares.

AuRico Metals is collecting royalties from four mines, including a 1.5% NSR on Alamos Gold’s Young-Davidson mine. AuRico has dedicated the lion share of its effort in developing its Kemess Underground Project, which boasts an after-tax NPV5 of C$289 million and IRR of 12.6%. The initial capex for Kemess is projected at C$450 million, and we would not be surprised if AuRico monetizes its royalties to cover a chunk of the financing.

Abitibi Royalties flagship royalties was acquired when it sold its 30% interest in the Malartic CHL project to Yamana Gold and Agnico Eagle Mines. The company now owns 3.5 million shares of Yamana and 4.4 million shares of Agnico Eagle for a total value of C$42.9 million. The majority of Abitibi’s value is derived from these shares, but it has been innovative in its search for royalties. Preaching a mandate of ‘closeology’, Abitibi announced a contest where it would pay for claim fees in exchange for a royalty, especially for acreage near an operating mine. This was able to yield some NSRs that may be come valuable in the future. For now, Abitibi Royalties is generating value by buying back shares, which is often an indication of no deals in the pipeline.

Metalla Royalty and Streaming is the newest royalty company, recently completing its first cash flowing stream. The company’s flagship NSR is the 2% NSR on Goldcorp’s Hoyle Pond Extension. Hoyle Pond currently produces over 160,000 ounces per year and been in operation since 1985. The Extension has been subject to major investment by Goldcorp, and we estimate will provide MTA with over C$5.2 million per year for at least 10-15 years. Metalla also has royalties on properties owned by Glencore PLC, Osisko Mining, Detour Gold, Tahoe Resources, and more. Metalla has passed our due diligence, and is currently the only streaming and royalty company in our portfolio.

===== =====

Metalla Royalty and Streaming (CNSX:MTA, FRA:X9CP, OTCMKTS:EXCFF) – Undervalued & Top Acquisition Target

CA:MTA / Metalla Royalty & Streaming Ltd. (CVE) ... update
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Metalla Royalty and Streaming is by far the most undervalued junior streamer, and not surprisingly, also the newest, being formed earlier this year. Nonetheless, it is already on the radar of the majors.

President, Brett Heath, has been methodical in structuring this company. With a good vehicle and even better relationships, he has already secured an enviable royalty portfolio that would have taken others many years of dilutive financings to achieve.

Current Price: C$0.48

Shares Outstanding: 54.9 million

Market Capitalization: C$26.4 million

52-Week Range: C$0.105-C$0.88

Cash: ~C$1.6 million

The company’s flagship royalty is the 2% NSR on Goldcorp’s Hoyle Pond Extension, in Timmins, Ontario. Hoyle Pond has been in operation since 1985 and has been producing over 160,000 oz of gold annually. The Extension has been subject to major investment by Goldcorp, including a shaft and 80,000m of drilling. Metalla expects cash flow in 2020-2021, and according to our analysis, the Hoyle Pond Extension yields an NAV of C$540M.

Metalla’s 1.5% NSR on the West Timmins Extension is also of value. West Timmins is operated by Tahoe Resources, and currently produces 50,000 oz. per year. Cash flow should kick in sometime 2018-2020, from 500-600 net ounces over 10 years. The NSR is subject to a buyback of 0.75% for C$750,000, which Tahoe will certainly exercise come time. While not as blistering as Hoyle Pond, the West Timmins Extension still bolsters value with an NAV of C$5.3M.

Metalla’s most recent deal is also very accretive. The company recently closed a stream with Silverback, a PE firm based in London, to acquire 15.1% of a silver stream for US$2M, plus the option to acquire 16.7% of a gold stream also for US$2M. The silver stream covers 100% of the silver produced from the operation, and is purchased at 10% of spot through to 2026. In 2015, the mine produced 121,682 oz. of silver and 81,873 oz. of gold.

> https://palisade-research.com/the-newest-most-coveted-royalty-streaming-company/

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Ely Gold Royalties Sells County Line Project to Gold Resource ...

Mar 12, 2018 - Ely Gold Royalties Inc. (TSXV: ELY) (OTC Pink: ELYGF) ("Ely Gold" or the "Company") through its wholly owned subsidiary, Nevada Select Royalty, Inc ("Nevada Select") is pleased to announce that it has entered into a definitive purchase agreement with Gold Resource Corporation (NYSE MKT: GORO) ...

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Resource World Magazine Osisko Gold Royalties shares sink on Q4 ...

Feb 20, 2018 - Osisko Gold Royalties Ltd. [OR-TSX, NYSE] shares tumbled Tuesday February 20 after the company released year-end results that featured a sizeable fourth quarter loss. The stock was down 9.65% or $1.29 to $12.09 at noon on Tuesday. The shares trade in a 52-week range of $17.58 and $12. Goldcorp's ...

/ 2 /

Yahoo Finance, 4/16/2018
About Osisko Gold Royalties Ltd Osisko Gold Royalties Ltd is an intermediate precious metal royalty company focused on the Americas that commenced activities in June 2014. Osisko holds a…
/ 3 /
Osisko wades into iron ore amid 'perfect' market for royalty companies Osisko Gold Royalties Ltd. said Friday it has confidence in its recent acquisition of a stake in Labrador Iron Ore…

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Ely Gold's New Option/Royalty Model Provides Opportunities

Ely Gold Royalties Inc. (ELY:TSX.V; ELYGF:OTCQB) has turned the parameters and expectations of a typical project generator around by substituting the traditional joint venture business model with its Option/Royalty Model.

ELY ... all-data : Last: $0.17

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Trey Wasser, Ely Gold's President and CEO, told Streetwise Reports, "In just three years, Ely Gold, armed with a large database of Western U.S. properties and a growing reputation for generating new underexplored projects, has built a top-quality portfolio of royalties and option properties."

The company's partners include majors, mid-tier producers and junior exploration companies. Under Ely Gold's Option/Royalty Model, the company sells 100% of its projects in an outright sale or a four-year option contract. On every property, Ely Gold retains a royalty on future production.

. . .

Ely Gold's Option/Royalty Model is such a success," Wasser explained, "because in a traditional joint venture model (JV), the 'earn-in' partner will have significant work and financial commitments while on its way to earning only a percentage of the project. The minority partner receives little or no revenue from the transaction yet will still have significant management responsibilities within the JV. In the current market environment where larger companies are cutting budgets and juniors are having difficulty raising capital, the large work commitments for the JV earn-ins are problematic. When the 'earn-in' partner walks away due to participation expenses or lack of market support, the minority partner is returned a partial minority ownership or a perceived 'difficult' project. Even in a successful JV, after earn-in, the junior partner is required to start contributing their share of costs in the JV or be reduced to a net smelter royalty."

With Ely Gold's Option/Royalty Model, the option payments are escalating annual payments with a final balloon payment. Should the project partner make the last payment, it earns 100% of the property, and Ely Gold retains a royalty on any future production. If the partner doesn't make the last payment, Wasser explained, "The property is returned to us 100%, thereby allowing us to evaluate the work completed and return the project to our property portfolio."

Wasser went on to say, "There are no work commitments. This allows our partners to control their exploration expense according to budget requirements and market conditions. They can maintain the project by simply making the option payments. Our model is much more scalable than the traditional JV model, as we have no property/exploration management responsibilities. This allows us to build a much larger portfolio that is constantly generating new royalties. It also allows us to keep our overhead very low and operate just like a royalty company. This keeps the company's cash flow positive. We, in turn, then can actively seek and purchase additional existing third-party royalties. This is how Ely Gold is transitioning into North America's newest gold royalty company."
 
. . . Wasser also discussed another aspect of Ely Gold's projects. "Besides the favorable structure and data, another important reason for the rapid success of our Option/Royalty Model is the quality of our projects. Our core strength lies in being able to consolidate underexplored land packages for our partners. Some of the best undeveloped properties in Nevada and the Western U.S. have 'conflicting' claims problems that may have existed for years or even decades. We have the ability and patience to get the claim issues resolved and fully consolidate a property package."

Wasser went on to explain, "Majors and mid-tier producers won't tackle these title issues. It's simply a level of risk they are not willing to accept these days. We have a distinct advantage because our database includes all the title and ownership history of the properties. In addition, Jerry and Bill have a deep knowledge of the surrounding claim packages and have relationships with the Nevada landowners. Jerry and Bill are two of the most well-known Nevada prospectors and have each been operating in Nevada for over 30 years."

"The success of Ely Gold's Option/Royalty Model is evidenced by not only the quality of our partners but by the fact that several partners have purchased multiple projects," Wasser told Streetwise Reports.

Using cash flow from its Option/Royalty portfolio, in October 2018, Ely Gold purchased a third-party royalty on Wallbridge Mining Company Ltd.'s (WM:TSX; WC7:FSE) Fenelon Project, located in northern Quebec. Wallbridge is currently conducting a large bulk sample program. "Wallbridge is producing excellent exploration results and has produced over 13,000 ounces of gold from a bulk sample program," Wasser noted.


Read more at https://stockhouse.com/opinion/independent-reports/2019/03/01/ely-gold-s-new-option-royalty-model-provides-opportunities#KSzYHfeHAvA5BAV2.99

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Gold Royalty Co's / RZZ-1 : vs. US Roy'l Co's (rgld, wpm, fnv.t) ... update : 5yr-wGDXJ / 1yr : 10d :

IQaE9bs.gif

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