Precious metal streaming and royalty companies are the envy of the industry. The relative share price performance over a 10-year period of the largest gold streaming and royalty companies vs the top gold miners is eye-popping (and for those who picked the wrong crowd a decade ago probably eye-watering).
Investors love streamers for their (more) predictable cash flows, minimal GSA overheads, revenues per employee more associated with companies making iPhone apps and low risk profiles. Miners are attracted to streaming deals because it’s not dilutive like equity transaction and easy on balance sheets.
Clearly the kinds of returns shown on the graph will attract competitors and the field has become much more crowded – from micro and small caps like Metalla and Maverix to companies like Sandstorm bent on a billion dollar evaluation. Even the likes of Glencore is toying with the idea of spinning off a streaming company.
Centerra’s cash purchase of Aurico Metals at a healthy premium just this week shows a sprinkling of royalties may be the sugar on top juniors need to attract big players.
Franco Nevada’s 2007 debut still ranks as North America’s largest mining IPO ever. Royalty companies have also been involved in some of the biggest mining transaction of the past decade.
For the rest of this article: http://www.mining.com/osiskos-hybrid-model-future-gold-streaming/