Proven business model
The highly scalable royalty model provide investors upstream commodity exposure without the direct operating and capital cost risks associated with a mining
operation, of particular benefit during inflationary periods.
Royalty
Primary and secondary
- Primary royalties are a direct investment in the mine and require the royalty company to negotiate the royalty agreement with the mine operator
- A secondary royalty is an existing royalty that the royalty company acquires from the holder of the royalty rights
Benefits of royalty investments
To the mine operator
- Non-dilutive
Compared to equity, it doesn’t dilute existing shareholders - Asset specific
A royalty sits on one asset, not on the balance sheet - No fixed payments
Compared to debt, royalties have longer terms and no fixed payments - Keep full autonomy
The miner retains full control over the end product
To the royalty company
- Inflation protection
Royalty payments are calculated based on revenue without direct exposure to development, operating
and capital costs of the operation. - Diversification
Portfolio diversification, across commodities, operations and projects, and jurisdictions lowers earnings volatility. - Upside potential
Royalty company benefits from production upside (life of mine extensions/exploration activities) and commodity price out‑performance
Inputs
Internal
Capital
The Group utilises capital from a variety of sources, mainly cash flow from existing royalties, debt and equity, to invest in royalties and streams.
Expertise
The team has vast experience in structuring royalty agreements, understanding the commodity markets and completing technical due diligence, all of which inform our capital deployment decisions.
External
Mine performance
The ability of the operator to safely execute the mine plan, meeting or beating expectations with regard to annual production volumes or advancing development projects is a key input to the success of the business model.
Commodity price
Commodity prices will be driven by macro-economic factors and can have a material impact on the outcome of the investment decisions taken.
Value creation
Counterparties
Through collaborating with partners on charitable initiatives that positively impact communities and funding the production of commodities essential to the energy transition we are playing a small role in enabling the world to lower its carbon footprint.
Shareholders
Return capital to shareholders through a dividend of between 25 and 30% of free cash flow. Share buy backs will be considered when the Group’s stock price is trading at a significant discount to NAV.
Employees
Provide a positive working environment with opportunities for professional development and an incentive scheme that ensures employees share in the success of the Company.
Society
Through funding the production of commodities essential to the energy transition we are playing a small role in enabling the world to lower its carbon footprint.