Welcome back to another update exploring opportunities in the mid-tier and junior royalty companies. We’ll be assessing the large sell-down across this whole subsector of the resource investing universe, and get some key news updates and share a few exclusive interviews with the management teams from a couple of the royalty companies that we’ve covered in prior article in this series.
So, let’s get into it…
Thus far, in this series, we have highlighted 12 mid-tier and junior royalty and streaming companies {and some have since been merged together or acquired outright}:
Sandstorm Gold (SSL.TO) (NYSE: SAND) {has now been acquired by TFPM}
Metalla Royalty & Streaming (TSX.V:MTA – NYSE:MTA)
Elemental Altus Royalties (TSXV: ELE) (OTCQX: ELEMF) {now merged with EMX}
Vox Royalty Corp (TSX:VOXR) (NASDAQ: VOXR)
Trident Royalties (AIM:TRR – OTC:TDTRF) {has now been acquired}
Triple Flag Precious Metals (TSX: TFPM) (NYSE: TFPM)
EMX Royalty Corp (TSX.V: EMX) (NSYE: EMX) {now merged with Elemental Altus}
Ecora Resources (TSX: ECOR) (LSE:ECOR) (OTCQX:ECRAF)
Empress Royalty (TSX.V:EMPR – OTCQX:EMPYF)
Elemental Royalty Corp (TSX.V: ELE) (Nasdaq: ELE) {merger is now complete}
Versamet Royalties (TSX.V: VMET) (OTC: VRMTF)
Summit Royalties Ltd. (TSX.V: SUM) (OTCQB: SUMMF) {just acquired Star}
In recent articles in this series, we’ve been discussing how the small to mid-tier gold and silver producers don’t get even a fraction of the coverage that the Majors elicit, in both the resource specific or broader financial media. It is a very similar situation with regards to visibility for the small junior to mid-tier royalty companies, compared to the senior companies in this subsector.
The larger senior companies like Franco-Nevada, Royal Gold, or Wheaton Precious Metals get mentioned from conference stages, on podcasts, in articles, or in media coverage of the sector all the time. There is also the occasional hat tip to the very large mid-tiers like OR Royalties (formerly Osisko Gold Royalties) or Triple Flag Precious Metals.
There has been a steady churn of roughly a dozen smaller to mid-tier royalty and streaming stocks that launch, get cannibalized a few years later; and then more new names get launched filling in their place. This group historically garnered very little coverage at conferences, on podcasts, in articles, or in media coverage; however, that has actually started to change a lot over the last 2-3 years, and investors have finally been waking up to the potential opportunities in this particular snack bracket.
Market participants witnessed the compelling premiums paid in a string of M&A transactions to acquire prior junior and mid-tier companies (like Maverix, Nomad, Basecore, Ely Gold, Golden Valley, Abitibi Royalties, Nova Royalty, Altus Strategies, Trident Royalties, Sandstorm Gold, etc…).
We can just look to the list of companies that we’ve been covering in this series over the last couple years and note that about 1/3 of them have been involved in transformational M&A transactions, being acquired or doing the acquiring.
(not to mention, that all of these companies have also been involved in one-off acquisitions of royalty or streaming assets – feeding into this overall theme of M&A.)
Despite all the ‘dream-casting’ from sector pundits about which one of their pet gold, silver, or copper explorer or developer picks may be the next takeover candidates, the junior and mid-tier royalty and streaming companies have routinely delivered compelling M&A news to the sector, and far more regularly than the larger crop of resource juniors, on per capita basis.
For many years, we’ve invited junior and mid-tier royalty companies onto the KE Report, being long-term fans of this sub-sector of the extractive resource sector.
When I’d go do some background research to get a sense of how investors were discussing a given company to prepare for the interviews, I’d notice that there was barely a mention of most companies in the larger resource investing zeitgeist, and it was mostly relegated to online chat forums or sector specific blogs.
Over the last few years, we would be chatting with generalists and sector pundits on the mining stocks, and they’d often bemoan the lack of mergers and acquisitions happing in the resource sector.
Occasionally, I’d push back on that notion and proceed to list off a number of the recent M&A deals over the last few years in the junior royalty space, all occurring within a fairly small ecosystem of potential candidates.
There would then be a ‘deer-in-the-headlights’ moment from many of them.
It became quite clear that even folks focused on investing in the resource sector weren’t really following the action in those juniors and mid-tiers within this subsector, and broadly were much less exposed to these types of companies = unseen opportunity.
In speaking with dozens of fund managers, key individuals that invest for their family offices, newsletter writers, or high-net-worth investors, I’m always amazed that a lot of them don’t hold ANY of the higher-torque mid-tier or junior royalty & streaming companies in their portfolios. (What? Why the heck not?)
Sure, a few folks mentioned holding positions in the 2 largest seniors; Franco-Nevada or Wheaton Precious Metals, or occasionally the other larger companies like Royal Gold, OR Royalties, and Triple Flag PMs; but then that was about it for their royalty & streaming exposure.
It is still totally amazing to me that more generalists and specialists, across the broader spectrum of resource investors, don’t want to have more exposure to the best business model in the entire metals sector. (it’s the exact same thing in the oil sector for that matter – there are some fantastic choices in the US and Canada energy royalties and minerals plays, and yet many oil investors don’t hold ANY of them… (?)
The juniors and mid-tiers are still diversified and less risky compared to individual mining companies, but they offer more torque than the seniors, and have Price/Net Asset Value (P/NAV) metrics only a fraction of the majors.
There are some notable exceptions though with regards to sector pundits that have really stayed on top of this royalty and streaming sector:
Rick Rule, Adrian Day, Matt Geiger, John Rubino, John Feneck, Jeff Phillips, Nick Hodge, Sean Brodrick, Steve Penny, and Jordan Rusche.
Those guys do a great job of keeping their subscriber and/or clients up to date on this segment of the metals sector, and are a huge credit to this sector.
With all of that said… The royalty and streaming stocks have been left for dead in 2026, ever since peaking in February; and since then they have been taken out to the woodshed and beaten down in price.
The quality royalty and streaming companies have been chopped down in value by 30%-50% over the last 5 months, ever since peaking out in February.
During this time these companies have seen the largest revenues and fattest margins in their history; and yet nobody seems to care. These record-revenue generating juggernauts also got thrown out like garbage with the rest of the PM sector.
Pundits and analysts have been harping on the cost increases during Q2 in the gold, silver, and copper producers, due to rising oil/diesel prices and labor costs, but keep in mind that royalty companies are largely unaffected by these cost inputs.
Royalty & Streaming companies are not doing the actual mining, and thus, are not directly affected by increasing fuel costs.
Royalty & Streaming companies have very tiny staffs relative to their revenues, and are not seeing huge increases to their labor costs like producers are.
These companies are simply cashing a quarterly check based on all the production from their operating partners, where they hold royalties or streaming contracts. It’s a fantastic diversified and resilient business model.
So why in the world are these royalty and streaming companies all down by 1/3 -1/2 in market cap in the last 5 months, while they are literally printing record amounts of money in Gold Equivalent Ounces?
We hear ad nauseum that “the market is always right,” but it sure can be inefficient.
The financials from Q4 2025 (being reported in Jan/Feb 2026) led to solid valuations.
Then their financials got to record levels through Q1 (and were reported in Apr/May), to muted responses after having already sold off very hard during March, when they were still doing great fundamentally, wrapping up that quarter.
Q2 earnings will get reported over the next few weeks (here in late July/Aug)… and will likely still be quite elevated on a historical basis.
It may not be quite as great as Q1, but Q2 will likely still be their second best quarter ever, and these companies are continuing to crash and burn into that backdrop.
OK, so was the market right in February (before they even completed Q1 yet and were still reporting on Q4), or is the market right here at the end of July (after these royalty companies have now totally knocked it out of the park financially in Q1 and Q2 and yet simultaneously been crushed down in their valuations over the same period)?
I realize some people may leap to point out that evergreen trite comment that “the markets are forward-looking.” My response would be, well then why in the world didn’t we see new all-time highs in the royalty and streaming companies in April/May when they were reporting their record Q1 numbers?
Why aren’t we seeing near record highs now in their share prices and market caps in anticipation of their 2nd best financial quarters being reported? (Hint: It sure isn’t due to surging oil prices or labor costs.)
I realize some people may counter all this by trying to point to this subsector’s bugaboo – stagnant or falling production of Gold Equivalent Ounces (GEOs).
That is a fair critique, and something that a few of the largest companies really do need to address. A great solution would be more M&A in this sector.
However, there are companies that actually DID grow their GEOs quarter-over-quarter and yet they also got smashed down in kind… so that growth critique still doesn’t really explain away the severe underperformance of this sector.
It is really the investor sentiment plunging, and the ETFs that many royalty companies are held within selling off that is also force-selling the components; along with the tide going back out in volume and participation here during the summer doldrums. THAT is what has been tanking these share prices.
That data then feeds on itself picked up by the algo-driven machine selling and institutional selling, (that doesn’t really care about the company fundamentals or their balance sheets improving), and merely tracks underlying metals price direction, quantitative sentiment data, trading volumes, and share price momentum.
So all things considered, this sets up a fantastic bifurcated situation in the royalty and streaming stocks, where the company fundamentals have gotten so much better throughout 2026 at the exact same time that their share prices and valuations have gone way lower. It’s really a dual-pronged value enhancement.
If investors loved piling into royalty and streaming companies in December, or January, or February, at much higher valuations and lower corresponding revenues, then they absolutely should be ecstatic to now be able to pile into them here at these depressed valuations in late July.
We’ll keep tabs on how this trend develops in the months to come here on this channel, and if we finally see resource investors snap out of it and come to their senses.
For now this is a very compelling accumulation point in this small corner of the resource investing universe.
On July 16th, over at the KE Report, Dave Cole, CEO, and Fred Bell, President and COO, of Elemental Royalty Corporation (TSX: ELE) (Nasdaq: ELE), both joined me for a visual tour through their key producing and development royalty and streaming assets. We talk future growth, risk management, and ETF inclusion.
We start off reviewing the key cornerstone gold and copper assets within their royalty portfolio of 18 cash-flowing royalties, 28 advanced development assets, and ~250 total mineral royalties globally; diversified across multiple jurisdictions and across precious metals, critical minerals, and battery metals.
In the process of going over key assets we touched upon the key news out on July 15th, regarding their strategic US$25 million investment package with Quilla Resources Inc. and its subsidiary Minera Pampa de Cobre S.A.C. (“MPC”) to expand Elemental’s royalty exposure to the producing Chapi Copper Project in Peru and support Quilla’s next phase of growth. Elemental acquired an additional perpetual, uncapped 1.0% NSR royalty over Quilla’s Pampa Negra and Candelaria concessions, increasing Elemental’s royalty interest to a total of 3.0% NSR.
We also unpack the rationale and risk/reward proposition from their news out on May 14th announcing the definitive agreement to acquire all of the issued and outstanding common shares of Vizsla Royalties Corp. (TSX-V: VROY; OTCQX: VROY) by way of a court-approved plan of arrangement.
The new dividend was highlighted, which provides investors the option of being paid in either cash or Tether Gold tokens, (which are backed by physical gold, and importantly - can be redeemed for physical gold). We also reviewed the corresponding value of having Tether Investments S.A. de C.V as their key strategic stakeholder.
Their board of directors believes that Elemental Royalty Corp is currently positioned on the cutting edge of marrying the value of hard assets anchored in commodities and royalty instruments, with the interest from investors in the utility of digital assets.
https://www.elementalroyalty.com/news/elemental-royalty-declares-quarterly-dividend/
The Company had mentioned in their press releases a couple of months back and in our last podcast together posted in part 12 of this series, that they believed massing up in size, and keeping a certain percentage of exposure to precious metals would allow them to be included in more passive funds and ETFs. While they are still waiting on some of the larger PM ETFs, they did just recently announce inclusion of (ELE) into a few key generalist indexes; and should have more announcements like this in the future.
https://www.elementalroyalty.com/news/elemental-royalty-announces-index-inclusion/
On July 6th over at the KE Report, Drew Clark, President and CEO of Summit Royalties Ltd. (TSX.V: SUM) (OTCQX: SUMMF), joined me to outline the transformational acquisition of Star Royalties Ltd. (TSXV: STRR, OTCQX: STRFF), which closed on July 3rd, 2026. The Arrangement materially expands Summit’s portfolio with the addition of Star’s royalty and streaming interests, including a 4% gold stream on Mining Americas Inc.’s (TSX: MAI) (OTCQX: MAIFF) (formerly Minera Alamos Inc.) Copperstone Gold Project in Arizona.
The Copperstone gold stream provides Summit Royalties with exposure to a fully permitted Arizona gold development project where Mining Americas recently announced a positive Pre-Feasibility Study (“PFS”) and a formal construction decision. Based on the PFS results and current estimates, project construction is expected to take approximately one year, with initial production of 46,000 oz of gold per year anticipated by mid-2027.
Drew highlighted the upside potential to continue to grow the underground resources of the Copperstone Mine, considering Mining Americas having just announced a planned increase in the mill throughput from 600tpd to 1000tpd. It’s unlikely they would have announced that if they can’t also expand the known resources.
Additionally, Mining Americas just announced there is a portion of resources outside of the PFS that exist in near-surface areas in proximity to the historic open pit excavations, and the Company believes there is potential for gold mineralization to be extracted via open pit mining methods. This open pit was not even factored in the initial valuation process, and Drew mentioned it was now like getting a gold stream on 2 mines for the price of 1.
May 27, 2026
Together with their existing portfolio, including a royalty on Jaguar Mining’s near-term producing Pitangui Project, where development is expected to commence in 2026 with first gold production targeted in 2027, this acquisition transaction of the gold stream on Copperstone strengthens and compliments the Company’s future revenue and cash flow growth.
Summit Royalties has continued to demonstrate its ability to identify and execute accretive transactions, and intends to build on that momentum with discipline, to become the next mid-tier streaming and royalty company. Drew outlines that they are reviewing a few key term-sheets to keep making future actionable and accretive acquisitions to increase production and cash flow growth.
Improved capital markets presence and trading liquidity, with supportive shareholder base.
Pro forma Summit valued at a significant discount to peers on Price/NAV and Price/2027E cash flow per share (“CFPS”) basis.
The Corporation currently has no debt and sufficient cash on-hand for use in future acquisitions, as well as being in dialogue with financial institutions for adding a potential revolving credit facility.
Thanks for reading and may you have prosperity in your trading and in life!
Shad
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