Precious Metals Royalty And Streaming Companies: The March Report

2025-04-16 20:16:51 ET

Summary

• The Precious Metals R&S Index grew by 11.93% in March.
• The Precious Metals R&S Equally Weighted Index grew by 9.1%.
• The best performance was recorded by Sandstorm Gold; its share price grew by 23.16%.
• The biggest decline was experienced by Silver Crown Royalties; its share price declined by 5.91%.

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....

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