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Elemental Royalties Participates In Mines & Money Alternative Finance Panel

November 27, 2018

Elemental Royalties Participates In Mines & Money Alternative Finance Panel

The first day of this year’s Mines and Money conference in London included a discussion on streaming, royalties and crowd funding. Elemental Royalties’ MD Fred Bell was invited to participate alongside Haytham Hodaly of Wheaton Precious Metals, Shaun Usmar of Triple Flag Mining Finance and Julian Treger of Anglo Pacific.

The write-up below is courtesy of Chris Hinde, Chief Commentator at Mining Beacon.

Mines & Money 2018: Day One – Alternative Money

Mines & Money 2018 Alternative Finance panelists.

The four-day Mines and Money (M&M) London conference started on Monday, November 26, with a keynote address from the executive chairman of Yamana Gold, Peter Marrone before separating into separate sessions. One of these break-out sessions was on private equity and alternative finance.

The afternoon panel session was chaired by Mike Amm of Torys, who commented that streaming finance had evolved from gold loans and was no-longer obscure, being effectively now part of the mainstream financing package (the amount of current streaming commitments varied from US$20-30 billion, although this is still less than 2% of the industry’s total financing requirement).

Mr Treger explained that Anglo Pacific focused on non-gold streaming because of its limited access to capital, and only invests in safe jurisdictions (the company has 15 royalty and streaming investments at the moment). Its largest investments are in coal and vanadium (the latter being the largest in the world), with a focus on high-grade deposits.

Mr Usmar (a former CFO of Barrick Gold) admitted that not all streaming deals were advantageous for mining companies, but Triple Flag endeavoured to reach an agreement that was fair for both sides. The company has US$800 million of committed funds in 30 investments at the moment, mainly in precious metals (preferably produced as a biproduct). Triple Flag, he said, does not try to run the mining business and sees itself as a long-term investor (certainly “seeing out cycles”).

The largest company in this space is Wheaton Precious Metals, which was formed in 2004 (effectively inventing the streaming concept) and now has an annual cash flow of some US$550 million. The company has completed 30 transactions on 19 mines and 10 development projects. Mr Hodaly emphasised that he looks at geology, the economics of the project and the mine plan, and adjusts for country risk. He also, however, puts a value on exploration potential.

At the small-end of the spectrum, Mr Bell founded Elemental Royalties after taking an earlier exploration company to an IPO in 2014, and typically only invests US$5-20 million in each opportunity. The private company is “agnostic” on commodities and was one of the first to stream mineral sands. Elemental Royalties has completed five transactions so far.

Mr Treger commented that the advantage of streaming finance is that it is cheaper than PE and offers a longer-life investment than most alternatives. My Hodaly added that streaming is also very flexible, with various products being available.

Chris Hinde
Chief Commentator, Mining Beacon

About Elemental Royalties Limited

Elemental is a private company providing investors with exposure to a dividend-paying royalty company building a diverse portfolio of mining royalties, benefiting from ongoing royalty revenue, future exploration upside and low operating costs.

Since early 2017 Elemental has assembled a portfolio of five royalties over seven commodities in four countries, four of which cover producing mines. Immediate cash-flow has enabled the Company to limit dilutive fund-raisings to facilitate royalty acquisitions, and to pay a dividend from inception.

Elemental’s focus remains on securing royalties over advanced assets with established operators and credible counter-parties from a robust pipeline of potential royalty acquisitions across commodities and geographies.

For further information you are invited to visit the Company’s website or contact:

Elemental Royalties Limited
T: +44 (0)203 983 7040

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