The Northern Miner presents the top 10 Canadian-headquartered royalty and streaming companies by market capitalization, as of early July 2018.
1. FRANCO-NEVADA
Market cap: $17.7 billion
Franco-Nevada’s (TSX: FNV; NYSE: FNV) staggering $17-billion market capitalization is nearly $5 billion higher than the next leading Canada-based royalty company. The company set a new record in 2018 for first-quarter revenue, raking in US$173.1 million — a US$400,000 increase over the previous year.
In March the company completed another precious metals stream on First Quantum Minerals (TSX: FM; US-OTC: FQVLF) and Korea Resource’s 90-10, joint-ventured Cobre Panama copper-gold project in Panama, increasing its coverage to full ownership of the project. Franco-Nevada paid US$356 million for the stream.
Franco-Nevada also saw first-quarter revenue from oil and gas assets jump from US$10.9 million to US$19 million compared to the previous year. In February the company finalized its purchase of a Delaware royalty portfolio for US$101.3 million.
2. WHEATON PRECIOUS METALS
Maret cap: $12.8 billion
Storage and port facilities at Vale’s Voisey’s Bay nickel-copper-cobalt mine on the coast of Labrador. Credit: Vale.
Wheaton Precious Metals (TSX: WPM; NYSE: WPM) closed one of the biggest deals so far in 2018 when it bought a US$390-million stream on Vale’s (NYSE: VALE) Voisey’s Bay nickel-copper-cobalt mine in Labrador, part of a US$690-million streaming and financing deal with Cobalt 27 Capital (TSXV: KBLT; US-OTC: CBLLF).
The deal entitles Wheaton to 42.4% of Voisey’s Bay cobalt production up to 31 million lb. cobalt and 21.2% of cobalt production for the life-of-mine.
Wheaton’s first-quarter revenue rose 0.7% to US$199 million over the year-ago period. Its silver production rose 11.7% to 7,428 oz., largely due to the San Dimas mine in Mexico, while gold production fell 4.9% to 79,657 ounces. The company sold 69,673 oz. gold in the quarter — 20.8% less than over the same period a year ago.
3. OSISKO GOLD ROYALTIES
Market cap: $1.9 billion
The main camp and associated infrastructure at Victoria Gold’s Eagle gold mine now under construction in the Yukon. Photo Credit: Victoria Gold.
There is a precipitous drop in market cap between Wheaton and Osisko Gold Royalties (TSX: OR; NYSE: OR), but the company still boasts an impressive, nearly $2-billion market capitalization.
Osisko recently bought a silver stream worth 90% of the future refined silver from Falco Resources’ (TSXV: FPC; US-OTC: FPRGF) Horne 5 project in Rouyn-Noranda, Quebec. Osisko will make staged payments up to $180 million to Falco. It may buy the final 10% for another $40 million after completing the initial payments.
The company also acquired a 5% net smelter return royalty on Victoria Gold’s (TSXV: VIT; US-OTC: VITFF) Eagle Gold project in Yukon for $98 million earlier this year.
Osisko holds 20 producing assets, including the net smelter return royalty (NSR) on the Canadian Malartic gold mine and the Éléonore gold mine, both in Quebec.
4. LABRADOR IRON ORE ROYALTY
Market cap: $1.5 billion
A blast at Iron Ore Co. of Canada’s flagship iron ore mine in Labrador. Credit: Rio Tinto.
Labrador Iron Ore Royalty (TSX: LIF; US-OTC: LBRMF) uniquely derives all its revenue from Rio Tinto’s Iron Ore Co. of Canada (IOC) and related operations. Labrador Iron holds 182 sq. km of mining leases near Labrador City. IOC leases some of this land, and pays Labrador Iron a 7% gross overriding royalty on sales of its iron ore products.
In 2017, IOC paid Labrador Iron a $125.1-million royalty. For the five years before 2017, IOC paid an average royalty of $94.2 million per year.
Labour disputes at IOC in Sept-Îles, Que., ran through much of the first half of the year, but were resolved at the end of May. Labrador Iron’s first-quarter revenue suffered as a result, falling by $9.1 million to $34.3 million compared to the previous year.
5. SANDSTORM GOLD
Market cap: $1.1 billion
Mariana Resources’ Hot Maden gold-copper project in Artvin Province, Turkey. Sandstorm president and CEO Nolan Watson says that no one outbid the company for Mariana’s 30% stake in the Hot Maden property. Credit: Mariana Resources.
Sandstorm Gold Royalties (TSX: SSL; NYSE: SAND) recently tabled a prefeasibility study for its 30% owned Hod Maden gold-copper project in Turkey. The project has a US$1.1-billion net present value at a 5% discount rate and a 50% internal rate of return.
The company predicts it will sell as much as 60,000 equivalent oz. gold in 2018 and 140,000 equivalent oz. gold in 2023, when Hod Maden is in its second year of production.
The company confused some investors last year when it bid US$175 million for explorer Mariana Resources and its 30% stake in the Hod Maden. However, according to the original terms of Mariana’s deal, the project’s operator, Turkish company Lidya Madencilik, will make annual payments to Sandstorm that equal 30% of the gold and copper sold, less the cost of operations.
6. ALTIUS MINERALS
Market cap: $571 million
Workers in an underground storage area at Potash Corp. of Saskatchewan’s Allan potash mine, 50 km southwest of Saskatoon, where Altius Minerals holds a royalty. Credit: Potash Corp. of Saskatchewan.
Altius Minerals (TSX: ALS; US-OTC: ATUSF) splits its focus between streams and royalties and generating exploration projects to sell or joint-venture to other companies for royalties and minority interests — an aspect it has grown in the past year. As of the end of June, the value of its junior equities portfolio was more than $60 million, compared to $48.8 million at the end of March last year.
The company increased its 2018 first-quarter revenue 18% to $15.8 million compared to the same period last year. It attributed the growth to improved base metal prices, as well as increased production from the Yamana Gold (TSX: YRI; NYSE: AUY) operated Chapada copper mine in Brazil and its potash royalty portfolio.
7. COBALT 27 CAPITAL
Market cap: $490 million
The Basamuk processing plant, part of Metallurgical Corp. of China’s majority-owned Ramu nickel-nobalt mine in Papua New Guinea, where Cobalt 27 holds a cobalt stream on the project. Credit: Highlands Pacific.
finished cobalt production beginning Jan. 1, 2021. Cobalt 27 will also pay Vale 18% of the cobalt spot price per pound of cobalt it receives until it has recovered its US$300 million. It will then pay 22% of the spot cobalt price per pound of cobalt.
Earlier this year, the company acquired a US$113-million, cobalt-nickel stream on the producing Ramu cobalt-nickel mine near Madang, on the north coast of Papua New Guinea.
The company will stream 55% of Ramu’s cobalt production and 27.5% of its nickel production for an estimated 450,000 lb. cobalt and 2.25 million lb. nickel per year.
8. MAVERIX METALS
Market cap: $441 million
Processing equipment at Pan American Silver’s La Colorada silver mine in Mexico’s Zacatecas state. Credit: Pan American Silver.
Maverix Metals (TSXV: MMX; US-OTC; MACIF) changed its name from MacMillan Minerals when it acquired a 13-asset royalty and stream portfolio from Pan American Silver (TSX: PAAS) in mid-2016.
By year-end it had acquired another 11-asset portfolio from Gold Fields (NYSE: GFI), and its share price had risen above $1.50 after hovering below 50¢ for much of the preceding two years.
Maverix recently acquired a 50-royalty portfolio from Newmont Mining (NYSE: NEM). Maverix expects the mostly gold portfolio to produce as much as $8 million in cash flow in 2019. The acquisition doubles Maverix’s resources by adding 340,000 measured and indicated gold ounces.
The company reported $6.8 million in first-quarter revenue and a $1.2-million net income.
9. ABITIBI ROYALTIES
Market cap: $112 million
Agnico Eagle Mines and Yamana Gold’s Canadian Malartic gold mine in Malartic, Quebec. Photo by John Cumming.
Despite its name, Abitibi Royalties (TSXV: RZZ; US-OTC: ATBYF) does not exclusively own royalties in the Abitibi. The company’s flagship asset is the Canadian Malartic gold mine, where it holds three NSRs across several zones.
It has other assets in Canada and one in Turkey — a 3% NSR on the Menderes gold project, operated by Frontline Gold.
The company recently acquired a 1.5% NSR on the Midway gold project, owned by the Malartic mine and located just southeast. The royalty covers Shaft 1 of the historic Malartic Goldfields mine, which operated from 1939 to 1965, producing a total 1.7 million oz. gold.
10. EMX ROYALTY
Market cap: $109 million
Historic iron mine on the Riddarhyttan project, now flooded. Credit: EMX Royalty.
EMX Royalty (TSXV: EMX; NYSE: EMX) recently acquired another 4% equity stake in Boreal Energy Metals, bringing its total interest in the company to 9.9%. EMX acquired its additional Boreal shares by selling the company the Njuggtraskliden and Mjovattnet nickel-copper-cobalt projects in Sweden, and was granted a 3% NSR on each of the projects.
The company has been active in Sweden this year, where it also optioned its Riddarhyttan copper-gold project to South32. If South32 completes its earn in — spending US$5 million on exploration over five years and making several cash payments — EMX would retain a 3% NSR.
The market cap listed for Maverix Metals is wrong… it should be C$472 M at today’s share price of C$2.20. They closed on an acquisition and now have 214.4 million shares outstanding….