Our principal activity is the acquisition and management of precious metal stream and royalty interests. By partnering with capable operators, we focus on building and managing a diversified, cash-flowing portfolio of precious metal assets, while also accumulating a pipeline of earlier stage assets that are not yet cash-flowing, but have the potential to do so in the future.
Streams and royalties can be acquired outright from either a resource company or a private party. In the case of new streams or royalties that are sold to raise financing, the capital provided by Royal Gold is typically directed by our partner companies towards three broad uses:
Investing directly in mining assets (for example, for mine development and construction, mine expansion, or funding exploration work)
Providing liquidity to strengthen balance sheets
Funding merger and acquisition activity
Royal Gold is an attractive financing option for mine operators because we understand their underlying business (both from a technical and financial perspective) and can provide a form of non-dilutive capital with no associated debt obligations.
Streams and Royalties – What’s the difference?
Streams – A metal stream is a purchase agreement that provides, in exchange for an upfront deposit payment, the right to purchase all or a portion of one or more metals produced from a mine, at a price determined for the life of the transaction by the purchase agreement.
Royalties – A royalty is a non-operating interest in a mining project that provides the right to a percentage of revenue or metal produced from the project after deducting specified costs, if any.
Key Benefits of Our Business Model
We enjoy unique attributes in the precious metals business compared to mining operators, including:
Upside Optionality – Our transactions are structured to give us exposure to potential higher metal prices, future production expansion and resource conversion.
Limited Downside – Our investments are less exposed to operating and capital cost risks.
Efficiency – Our business model is scalable and allows us to operate effectively with only a fraction of the employees of a producing mining company.
Versatility – The royalty and streaming business can perform throughout the commodity cycle, and allows us to invest counter-cyclically in attractive acquisition opportunities during downturns, while enjoying leverage to higher commodity prices during upturns.
To learn more about the benefits of our business model click here: Why Royal Gold?