I'm not a gold bug by any stretch, but I do like the basic business model pursued by precious metal royalty companies like Franco-Nevada (NYSE:FNV), Royal Gold (NASDAQ:RGLD), and Silver Wheaton (NYSE:SLW). By providing financing to mining companies and getting a low-cost cut of their metal production in exchange, these companies offer leverage to precious metal prices and better diversification of operating risks. They're also something of a "heads I win, tails I don't really lose" proposition, as periods of weaker metal prices limit miners' financing options and allow royalty companies to set up new agreements on better terms.
The long and short of it is that I believe Franco-Nevada offers a pretty efficient...
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