Entering text into the input field will update the search result below

Precious Metals Royalty And Streaming Companies: The February Report


  • The Precious Metals R&S Index declined by 10.02% in February.
  • The Precious Metals R&S Equally Weighted Index decreased by 7.32%.
  • The best performance was recorded by Vox Royalty; its share price remained flat.
  • The biggest decline was experienced by Metalla Royalty & Streaming; its share price declined by 19.16%.

Precious metals royalty and streaming companies represent a very interesting sub-industry of the precious metals mining industry. They provide some leverage to the growing metals prices, similar to the typical mining companies; however, they are less risky in comparison to them. Their incomes are derived from royalty and streaming agreements. Under a metal streaming agreement, the streaming company provides an upfront payment to acquire the right to future deliveries of a predefined percentage of metal production of a mining operation.

The streaming company also pays some ongoing payments that are usually well below the market price of the metal. They can be set as a fixed sum (e.g., $300/toz gold) or as a percentage (e.g., 20% of the prevailing gold price), or a combination of both (e.g., the lower of a) $300/toz gold and b) 20% of the prevailing gold price). The royalties usually apply to a small fraction of the mining project production (usually 1-3%), and they are not connected with ongoing payments. They can have various forms, but the most common is a small percentage of the net smelter return ("NSR"). The NSR is calculated as revenues from the sale of the mined products minus transportation and refining costs.

To better track the overall performance of the whole sub-industry, I created a capitalization-weighted index (the Precious Metals Royalty and Streaming Index) consisting of 11 companies (in June 2020, expanded to 15, by adding Nomad Royalty (OTCQX:NSRXF), Vox Royalty (OTC:VOXCF), Elemental Royalties (OTCQX:ELEMF), and Orogen Royalties (OTCPK:EMRRF)). Later, based on the inquiries of readers, I also introduced an equal-weighted version of the index. Both indices include the same companies and are calculated back to January 2019.

The previous editions of the monthly report can be found here: May 2019, June 2019, July 2019, August 2019,

This article was written by

Peter Arendas profile picture

Peter Arendas is an associate professor at the University of Economics in Bratislava. He has over 15 years of investing experience. Peter specializes in covering small and mid-cap companies in the resource sector with an in-depth insight into the precious and industrial metals royalty & streaming industry.

Peter is the leader of the investing group Royalty & Streaming Corner where he offers in-depth analysis of long-only investment ideas, actionable research, model portfolios, discussions of the latest news, and direct access for questions in chat. Learn More.

Analyst’s Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

Recommended For You

Comments (31)

Thanks for the article @Peter Arendas. Can you estimate how high (percentage wise, of NSR) tend smelting and transportation costs be?
Peter Arendas profile picture
@Stratocaster17 I'm not sure whether I understand your question correctly. Could you elaborate?
@Peter Arendas NSRs are defined as net revenue that the owner of a royalty receives from the sale of the mine's metal/non metal products less transportation and refining costs. I was wondering how high these transportation and refining costs tend to be. E.g. when the price of gold is $1,700/oz and your royalty share is 1 oz, whether you receive $1,700 from the mining company, or less, and if so, how much approximately. Btw. I'm also from Bratislava, good to see some Slovak people providing quality content here. :)
Peter Arendas profile picture
@Stratocaster17 Unfortunately, I don't have specific numbers, as the charges are dependent on various variables and on contractual terms with individual customers. But in general, it should be low single-digit %. So relatively negligible.
Sorgenfrei profile picture
Thanks for your good work and keep it up @Peter Arendas !
Since SA changed the terms and conditions, this forum has lost a lot of level, at least that's my impression. It would be very sad if you stop your report, so an important anchor would be gone.
I agree with @Goldjunge , you should include Empress Royalty $EMPYF and Star Royalties in the report. They are already undervalued compared to Orogen and next year at the latest they will be competing with Vox and Sailfish.
Did you see Maverix $MMX is about to be included in the $GDXJ ?
Best regards to all!
@Sorgenfrei Very nice to see a new comment from you, Sorgenfrei. It has been a long time. I thought maybe you were too busy running FNV to post! LOL. All best wishes.
Sorgenfrei profile picture
@brucemurison Thanks!
Yes I am very busy to buy all the cheap R/S companies, it`s unbelieveable. LOL
Historically, the gold miners have led the bullion market in price direction, and right now, the equities are suggesting a rebound in price is underway, said Pierre Lassonde, chairman emeritus of Franco-Nevada
All the best!
Peter Arendas profile picture
@Sorgenfrei Yes, and after seeing what the inclusion did with Metalla's share price, I'm curious what it's gonna do with Maverix. But it should be less significant, as Maverix is much bigger than Metalla before the inclusion.
Jalapenohiway336 profile picture
Thank you for this information my friend. It's put together very well & much appreciated!
Goldjunge profile picture
Thank you for your monthly work, Peter!
I would like to add Empress Royalty Corp. and Star Royalties Ltd.
Is there a possibility of this?
Peter Arendas profile picture
@Goldjunge I will consider it but I don't promise anything. Actually, I'm not sure about the future of the whole monthly report, as under the new Seeking Alpha contributor compensation scheme, writing this type of article is hardly worth the time.
@Peter Arendas
I have wondered about that--these internet platforms once they get a critical mass can change the rules and reduce payments or even eliminate them. I wonder about all the people whose full time job are on "you tube," how long that will last until the platform reduces payment.
Peter Arendas profile picture
@TagHoyer It depends on how long they will be able to earn money from selling commercials. But given the number of commercial videos on Youtube, I guess that they are doing well. For Seeking Alpha the commercials were probably less lucrative. You can hardly ignore a commercial video on Youtube when you are technically forced to watch it when you want to continue watching the content you want to watch. But here on Seeking Alpha, it is relatively easy to ignore the commercial banners.
Waited already for the update and tried to not use my 5 credits to read news here. As S.A becomes difficult do you publish a newsletter or somewhere else?
Peter Arendas profile picture
@nurso2011 Yes, Seeking Alpha prepared some major changes not only for the readers but also for the contributors. Unfortunately, not all of the changes are positive.
No, I publish only here on Seeking Alpha.
@Peter Arendas I am sorry, but not surprised, that you are reconsidering the monthly report. Gold Panda published a very interesting Best Drill Intercepts report that he stopped because of SA's changes.

Any more developments about you starting an R&S service?
Peter Arendas profile picture
@brucemurison Yes, Gold Panda's "best drill" articles were great. No, there are no new developments about the R&S service. I believe that the project could be successful, but I still haven't decided whether to go into it or not. Especially the preparation phase and the start-up phase will be very time-consuming, but unfortunately, I have been pretty busy lately.
bd4uandu profile picture
Yes, I too would be interested in your thoughts on GROY.
I have held Goldmining since it was known as Brazil Resources.
@Peter Arendas
Any thoughts on this company?
bd4uandu profile picture
@TagHoyer GROY is off to the races after it's IPO yesterday up a buck 28%. Bought a couple hundred to keep my interest up. Starting to get interesting.
Peter Arendas profile picture
@TagHoyer GoldMining gave Gold Royalty a nice royalty portfolio. But following the IPO, the company is valued at $190 million, with an enterprise value of $100 million, which is a lot for a company with no producing assets. On the other hand, for $90 million, some cash-flow generating streams or royalties may be acquired relatively quickly.
bd4uandu profile picture
@Peter Arendas Any thoughts on the management team and directors?
@Peter Arendas
Does the equally weighted index overstate its performance? The bid ask on the smaller companies are probably wider so in practice, buy/sell orders might be less profitable than the equally weighted index suggest?
Peter Arendas profile picture
@TagHoyer Of course, at the small companies, this problem may arise, but its extent is hard to measure. However, the indices serve for informational purposes only, so I don't see it as a major problem.
Disagree with this article? Submit your own. To report a factual error in this article, . Your feedback matters to us!

Related Stocks

SymbolLast Price% Chg
Agnico Eagle Mines Limited
First Majestic Silver Corp.
Abitibi Royalties Inc.
Pan American Silver Corp.
Entrée Resources Ltd.

Related Analysis

To ensure this doesn’t happen in the future, please enable Javascript and cookies in your browser.
Is this happening to you frequently? Please report it on our feedback forum.
If you have an ad-blocker enabled you may be blocked from proceeding. Please disable your ad-blocker and refresh.