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Gold Royalty: Valuation Beginning To Improve

Aug. 03, 2022 9:45 AM ETGold Royalty Corp. (GROY)GROY.WS1 Comment
Taylor Dart profile picture
Taylor Dart


  • Gold Royalty Corporation ("GRC") is down 50% from its all-time highs and is one of the worst-performing names in the precious metals royalty/streaming space.
  • This poor performance is not surprising given that GRC was hyped up last year and, as a result, entered the year trading at a massive overvaluation relative to peers.
  • With the market cap now dipping below $500 million, GRC is becoming more reasonably valued, and we've seen some positive developments in the portfolio.
  • That said, I still see far more relative value elsewhere in the royalty/streaming space, especially with much larger players trading at similar P/NAV valuations and much more attractive revenue multiples.

Open pit mine on a desert mountain in Nevada

raclro/iStock via Getty Images

Just over ten months ago, I wrote on Gold Royalty Corporation (NYSE:GROY) ("GRC"), noting that while its portfolio had grown considerably on the back of three acquisitions, this was an opportunity to book profits with

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Taylor Dart profile picture
"A bull market is when you check your stocks every day to see how much they went up. A bear market is when you don't bother to look anymore."- John Hammerslough You can access more in-depth research, my current portfolios, my top-12 miner rankings, GDX buy/sell signals, new positions I am entering/exiting, plus proprietary sentiment indicators updated weekly for gold miners in my newsletter below. Returns Link: https://imgur.com/a/sreY6SzSubscription LinksMonthly: https://buy.stripe.com/7sI14d4b92vFdUc15cAnnual: https://buy.stripe.com/4gw28h0YXeen7vObJP - Disclosure: I am not a financial advisor. All articles are my opinion - they are not suggestions to buy or sell any securities. Perform your own due diligence and consult a financial professional before trading or investing.

Analyst’s Disclosure: I/we have a beneficial long position in the shares of OR either through stock ownership, options, or other derivatives. 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.

Disclaimer: Taylor Dart is not a Registered Investment Advisor or Financial Planner. This writing is for informational purposes only. It does not constitute an offer to sell, a solicitation to buy, or a recommendation regarding any securities transaction. The information contained in this writing should not be construed as financial or investment advice on any subject matter. Taylor Dart expressly disclaims all liability in respect to actions taken based on any or all of the information on this writing. Given the volatility in the precious metals sector, position sizing is critical, so when buying small-cap precious metals stocks, position sizes should be limited to 5% or less of one's portfolio.

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.

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Comments (1)

Sorgenfrei profile picture
@Taylor Dart
Thank you for your consistently excellent, thorough analyses.



VANCOUVER, BC, Sept. 1, 2022 /CNW/ - Gold Royalty Corp. ("Gold Royalty" or the "Company") (NYSE American: GROY) is pleased to announce that it has entered into an agreement (the "Agreement") with Nevada Gold Mines LLC ("NGM"), a joint venture between Barrick Gold Corporation (61.5%) and Newmont Corporation (38.5%), to acquire the following royalties on properties located in Nevada for total share consideration of US$27,500,000, which will be satisfied through the issuance of 9,393,681 common shares of the Company to NGM on closing:
a 10% Net Profits Interest royalty ("NPI") on the high-grade, producing Granite Creek Mine ("Granite Creek") operated by i-80 Gold Corp. ("i-80"), payable after 120,000 oz of gold or equivalent is cumulatively produced from the project;
a 2.00% Net Smelter Return royalty ("NSR") on the Bald Mountain Mine ("Bald Mountain") operated by Kinross Gold Corporation ("Kinross"), payable after 10 million ounces of gold have been produced from the properties; and
a 1.25% NSR on the Bald Mountain Joint Venture Zone ("JV Zone") also operated by Kinross.

This brings further optionality to the portfolio in a safe jurisdiction. Unfortunately, there is no timely cash flow and there are too many hurdles built in for me. At least it brings with NGM (a joint venture between Barrick Gold Corporation (61.5%) and Newmont Corporation (38.5%) a significant Gold Royalty $GROY shareholder.
Best regards
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