With royalties typically being linked to revenue, they provide direct participation in commodity prices whilst avoiding exposure to capital and operating costs inflation.
Royalties are typically senior in the capital structure especially when the royalty is registered as an interest in real property, thereby conferring a perpetual right to the underlying land.
Royalties are not diluted by an operator's capital raisings or financing structures, thereby providing full and consistent exposure to the mine’s production and reserve growth.
A portfolio of royalties with assets across the globe provides lower volatility, higher quality earnings across the commodity cycle.
As additional resources are defined, resulting in a longer mine life or increased production rate, the royalty holder typically benefits from this for “free” with no further capital contribution required.
