Are precious metal royalties the best way for investors to get gold and silver exposure

[Music] foreign [Music] about the royalty sectors is that edge capitalization of about 8 billion that's equivalent to just on four percent of the world's mining companies but there's something very different about the royalties the royalty sector does not have the project risk that developing companies have got and it's also got a diversification of risk inherent in the portfolios that the companies have put together and uh I think that what we shall do for this panel and we didn't rehearse it but we all know each other is that each of the companies should give a value proposition of what they stand for and then we'd have a discussion and we have only one choice is where to start it's with David hark will lose the chairman of Franco Nevada which is a 38 billion Canadian capitalized company with an enormous role here portfolio and sustained cash flow and a dividend distribution policy dividends increased every year for 15 years fantastic David can you tell us just in about five minutes about Franco and how you put it all together all right thank you very much and to The Mining Journal I I grew up reading the Mining Journal and gave me the global perspective on the mining industry from from my Canadian roots and Rod's of course been a big follower of the royalty sector I think we've created the enthusiasm he's had for the other royalty companies as well uh you know Franco Nevada we really see ourselves as what we call the gold investment that works we used to be Equity investors in in Gold companies we always got frustrated because we would get diluted out of the great deposits of the world and we thought you know a great business a better business model was to buy a royalty on projects where you could never get diluted so you get the full upside the other benefit we found in this business model is that it's the perfect uh uh portfolio investment asset you can get your per you never have a capital call you don't have any management time spent on it you're protected from inflationary Capital risks and operating risks and but you get the upside of great geology and one of the things is my background is geology our focus is in terms of exposing ourselves to Great geological upside on properties and we found royalties it was a great business to do that but we also wanted to be an Institutional type investment for for the marketplace and for us we felt that all institutions should own some gold in their portfolio but that gold is their risk off component of their portfolio that what we want to do is keep our company as low risk as possible and that means never having debt in the company never having to go to the market for more Capital um we try to raise Capital ahead of when we actually need it for doing Acquisitions uh and trying to have as Diversified a portfolio as possible so that we could have there would be no surprises and now we have over a hundred different cash flowing royalties and assets in the company and the nice thing about it is they all tend to balance themselves off the good versus the bad we make guidance or exceed guidance 70 of the time and we can do this Progressive dividend that Rod talked about we've done it for 15 years we're playing close to 300 million U.S a year now in dividends and we've paid one almost two billion dollars in dividends to the year since our Inception so it's been a very successful business model and we present ourselves to the institutional investors if you own one Gold stock or Franco Nevada is better than operating companies because there's a lot of risk and there's very project lots of project concentration where where better than ETF because they never find another bar of gold and that uh Vault they're keeping the ETF and they're charging you 40 basis points every year and what we can do is we're we've we are trading for less than the measurable goal that's in our assets right now that we know or is going to come out on a discounted basis our overheads our taxes are paid by our Diversified assets and oil and gas in other sectors and yet they keep finding more gold in our properties which is why we have this Progressive dividend so we like to call ourselves the gold investment that works because we're delivering for investors or we're essentially the easy way when we're in New York we just say we're a gold ETF on steroids and so that's really sums up our story right now more diversification but the key thing really to me I think Franklin Nevada has got the greatest return of any listed company you've got 36 employees and capitalization of 38 billion okay so DNA isn't exactly a problem well g e has been absolutely flat for the 15 years and that's the nice thing about this business is absolutely scalable and so you can keep adding more assets once they're bought there's not a lot of Maintenance you focus your your time going forward it was a great experience because I I we for a while between the original Franco and the new one I worked at Newmont Mining and so what would happen is I was head of Business Development and expiration for a while at Newmont and you're looking at new Investments and deals but there's a crisis every day you know we have riots in in in at Peru we've got you know a government trying to steal our assets in Uzbekistan we've got Executives in jail in Indonesia we have a pit wall failure in uh in North Nevada and so the whole board and management team is so caught up in managing that crisis and here I am saying if there's deals to be done there's crate Investments here's our opportunity well no we have to fix our existing problems first before we can go allocate new capital and take on new challenges and that's the big mistake and I think the advantage when you're in the royalty business is that once you bought it if there's a problem with the mind no one calls the royalty holder you know that's that's their problem we can spend our board and our management team we're spending a hundred percent of our time what are we going to do next we're going to allocate capital and I think that's the power of this business I very well remember when you're at Newmont and you inherited a magnesium project and uh you can you came up to me shaking his head and saying I I can't understand how anybody acquired this project and I said well nor can I but I don't know how you're going to get rid of it so he left Newmont and founded Franco Nevada and actually also I did get rid of it yes eventually but got them very much um I think we've got other pandas chair I see and uh I'd like to say that the model that Franco set up with Pierre Le song who must be given significant credit along with David ha well is being like it's the Paradigm it's it's the model for the other members of the royalty sector and Brad Hayes is the next one to make his value case uh he he was so scrupulous in the attention that he paid to the geology and the jurisdictions that he hasn't made a mistake so tell us about matala well Metallica I would say is is probably a bit more similar to to Franco Nevada 1.0 than 2.0 I mean the the core part of this business uh as the royalty and streaming business is actually a capital provider to mining companies but that's not what we do at all uh and because we're a smaller company you know we we found our way into some really incredible assets again just echoing a lot or pretty much everything that that David mentioned um and the key is to be patient the key is really to be patient now that is so incredibly difficult for investors today I feel like investors attention spanned over the last decade is just you know if they can't get their thousand percent return in three weeks then it's just it's too too long can't wait that long uh but the right geology with patients and a little a little bit of luck obviously doesn't hurt as well um can truly deliver incredible returns with this structure it's just such an incredible structure and so that's what we've done at Metallica you know really focusing on picking up you know these potential Cornerstone assets positioning our shareholders in front of very significant catalysts you know across 85 royalties now over the last six and a half years we've Acquired and um and seeing all these Advance again focusing on the the big operators you know you you need to have exposure to the good operators smaller developers in a bear Market they may lose a decade there goes your returns can't raise capital the big guys they're mining millions of ounces a year and they have to replace those ounces they've got pipelines of their projects and they got to move those and Advance them they're spending in good markets and fair markets they'll spend you know 10 15 20 30 million dollars a year on these assets so it's it's really about positioning having exposure to again these these incredible assets and having the patients uh to really watch them develop and that's that's where I believe we we're at with matala as a company um you know over the last six and a half years focusing on the high quality growth writing that very significant value curve for when these assets kind of move closer to production within the major mining companies portfolios and then you know really being at the cusp where you know now we'll probably see a different royalty come online every single year for the next decade and uh it's not often that big Minds come online in the gold business there's not there's not a lot these days especially it's becoming more difficult to build a mine um so being able to find these things being able to to be able to pick the right ones again focusing on kind of those characteristics that um that have historically delivered that the tier one generational type of assets and it doesn't take a lot of those to make the share price go way out what what are things really important here is the project Pipeline and the difficulty for most investors is when a company's got so many assets they really can't get past the first page and they want an easy answer but the reality on what Nutella has done is it has nailed projects with Majors who are The Operators and that's taken six and a half years the next six and a half years are going to see goodness about 12 of these projects come into production which is going to make the company very cash flow positive and I think what's also important is not being obliged to Banks or private Equity financiers to actually be able to control your own capital and what I've found interesting about matala is so many of the shareholders are the families that sold the royalties to Metallica in the first place so that is one hell of a vote of confidence yes great great shareholders great platform again the I mean I believe the reason why they're willing to take uh or not willing but wanting to take the equity back in the companies is again the quality if we didn't focus on the quality they they wouldn't want that uh they wouldn't want to dilute their asset um that they're you know they want the exposure they like the liquidity they like the diversification they like the upside you know you hold one royalty on one mind even if it's in the best jurisdiction it's the best operator there's still a lot of risk even with the best assets so when you spread that across all these different assets then it it's it's uh can be you know very significant risk-adjusted proposition for investors but there were not enough investors that have got expertise on the royalty sector apart from David uh but for example Adrian day hold shares and each company on this panel and yet he spends his time talking about Metallica as being sorry apologies Franco as the number one he he profiles Franco but he doesn't profile Nova or Elemental or metallic so maybe he's waiting for them to get to a billion dollars so that we're all safe but I think we should move on to Fred because Fred um really uh came into the royalties business when he was quite young and he's been astonishingly successful for a young chap uh yet he doesn't have a high profile and I think this is a time to give you a value proposition and boost your profile now well thank you rod for the introduction um I think as a quick introduction for Elemental Altus look a lot of what Brett said would be similar um focusing on on the quality of asset and being patient I think the real key differentiator that in the approach that Elemental Altus has taken is we have focused from day one as a private company through to listing and then beyond on producing assets and cash flow and the thesis was if we can be cash flow positive from day one and we have been throughout the history of the company then it enables us as we grow to lower our cost of capital to de-risk our revenue and the key word there is de-risk we know we're going to get upside in the portfolio and we know that as we mature our cost of capital comes down and in December we refinance the credit facility with National Bank and CIBC in Canada so two of the larger Banks so we're now the only sub billion dollar royalty company with credit facilities from the big Banks we have the I think the lowest cost capital from our payers from the big Banks we have the highest revenue and the most Diversified now with 11 producing Assets in that sub billion dollar space and then what that enables us to do and we've just started doing it this year is to start redeploying some of that Capital into non-producing assets for the first time and if we can deploy that Capital at um you know attractive return rates um into earlier stage and development assets we can really start to build out the pipeline but we did it from a base that was Diversified de-risked and lowered our cost Capital as we went and that's the approach we went I think it's a reason that um you know we we management shareholders still have about 14 of the company we have a shareholder base that is about 70 institutional um and and now I think if you'd spoken to us 18 months ago we would have probably had 11 royalties in the portfolio and I think sort of eight of those were producing we now have 90 royalties in the portfolio and 11 of those are producing but we've been able to do that in a very disciplined Manner and it is I think that's where um I'm sort of seen from the same hem sheet as as Brett and and obviously David and Franco have been doing this for a very long time but it is it's about um I think at some points doing a lot of transactions in a short space of time and at other points and I think in the last two and a half years we have done very few transactions and we were fortunate in that we have some growth in the portfolio but there are a lot of opportunities we looked at an awful lot of opportunities we looked at and we didn't do and the hardest thing sometimes is is not doing anything and it's sort of the pressure you get from investors and and people saying just do a transaction do something actually sitting on your hands and looking at it and sticking to the price and and and if that doesn't happen it doesn't happen um I think is is a really good thing and we're starting to see opportunities end of last year beginning of this year um that I don't think we've seen in a particularly in the precious metal space um for sort of the last two years in terms of value and and quality of assets so from from our perspective uh We've announced two transactions this year I think it's going to be a really really busy year for us going forwards on some of the opportunities we're seeing and that should start to feed through into sort of growth in the portfolio but there's a differentiator with elemental Altus compared to normal royalty companies is that through the Altus acquisition you inherited a project generation portfolio now nobody gives any value for that in royalties because that's not what they're Investing For so are you able to address these projects and move them on and attach a royalty and significantly increase your critical mass the short answer is yes and um the long answer is that guidance that's yeah and the long answer is um Altus we merged with in August last year and um they had uh probably track record as one of the best royalty generators in Africa um and so we now have a portfolio of royalties in uh Morocco in in Mali um we we have some projects directly in um in uh Ethiopia and Cameroon in Egypt as well and I think a lot of what we have been on what Altus historically have done is spending as little money as possible on those advancing those JV jving them to a partner recouping the cost and attaching a royalty to it and if you could do that in a very cost effective manner you can get exposure to assets that probably no one gives you value for and there was a reason that I didn't focus on it is because probably no one gives you value for long dated royalties but what we all know is that at some point over the next five to ten years if we get enough of those good quality projects with good quality partners we put ourselves in the best position to get optionality and success across those and so I think as well as doing Acquisitions directly on more advanced royalties on this first half of the year as well we're going to be demonstrating some of the latent value in that royalty generation side of the portfolio that probably investors give us almost no credit for and I think being able to demonstrate some of that value once you can do that it's easier then to sort of look at the rest of your portfolio and say that there is some latent value in there even if we can't easily demonstrate it today well I think there's another advantage that Elemental has got uh is the backing of La Mantra uh which was backing both Altus and Elemental and helped to merge the two companies but that's giving you an African contact Network on top of your existing contact Network and when you've got billionaires that are key shareholders that want you to expand in Africa you've got little choice but to do it and deliver I think the the match are a great shareholder um and they're they're uh the major shareholder in Devil mining top 10 Gold Miner folks in West Africa they were a major shareholder in Endeavor uh sorry evolution in Australia building out to top five ASX company and they you know it is fantastic being able to leverage off their Network and their technical team and one of the principles we had when we started Elemental um and brought it to where it is today um is is really if you work with good quality people they tend to introduce other good quality people and so we've tried to throw out stick to good quality assets good quality investors shareholders and with that often comes corollary benefits and um La Mancha I think we'll we'll demonstrate that and they certainly keep us on our toes in terms of work um which is always a good thing yes but they're invested for royalties they've got projects through Endeavor so it makes sense that that should be built up into an africa-centric royalty company I would and so on we're certainly seeing uh African opportunities through them but Africa has more mineral potential and growth than most other continents over the next do you think so Dave in the next 10 years now we're more based in Latin America but the upsides in terms of resources are in Africa yeah but if you're into jurisdiction risk uh Africa depending upon which jurisdiction causes you to take a lot longer to make an investment decision um so what we've had now is we've had the leader in the royalty sector setting out the way we've got Brett following the Franco example with some slot variations in that uh he has been buying the royalties through the families of the third parties the royalty owners not the companies Fred has grown by a couple of quite astounding uh transactions relative to capitalization so you know your 250 the 38 million year their yes 250 to 320 million here and now we've got a one-off we've got Alex ceccanic and his model is different to the others because he said why can't we have a royalty company for copper and nickel these are different to Gold and Silver and these are in the opinion of a number of people which you'll hear on the battery Metals panel these are the real growth industries for the next 10 years and more yeah and when we when we started about about five years ago the thesis was very simple we wanted to have exposure to the Keystone mineral assets of the energy transition so when you when you look at sort of which Commodities really drive that it's first and foremost the story of copper so every every key industry from solar to wind to electric vehicles are going to be it's going to be copper driven and there really wasn't anyone focused on the on the on Copper from a royalty perspective although of course Franco has a very good portfolio as well so when we were starting from scratch really as the first mover in that um we saw great opportunity to put together something really generational so when you when you look at the major copper assets it's a very different Universe from gold in the sense that there's very few going into production so the industry as large as it is but there's less than one major asset going into production per year um at the same time you know if you look at the forecast you're going to need something between three and four per year to 2040 to meet the demand we didn't want to get too aggressive in the forecast so would you be focus on the very top tier so if you look at no one today we have royalties on five the top 10 company development projects in the Americas including the most advanced and so what you want to focus on in Copper because you're developing time timetables are so long you want to buy the most high quality Advanced assets you possibly can so now three of those assets are slated for construction decisions for the next two years and that's takataka Kappa world and Jose Maria and what you want to do is we we have the foundation for really multi-generational company because the copper assets once they're producing they'll be going for 50 70 or 100 years the stock compromise producing from 19th century the key is to build a sustainable Foundation because you are looking at long long lead development Cycles so we have an excellent Foundation of advanced assets already and in terms of future transactions when other royalty owners and assets we actually want look at the portfolio it's a great diversification tool for them to take one royalty which may be very high quality but it still won the royalty with all the risks as Brett said and then diverse Diversified that into what is already a blue chip portfolio in terms of other comparable assets that are clearly advancing in the hands of major operators so if you look at Nova's portfolio today we only have two assets which are not yet owned by Major operators but even those in biscuit cheetahs and Dumont are clearly on track to do so so we're we're at an earlier stage then the other companies on this list of course but when you look at the asset quality and the size I mean it is clearly a major realty company embedded already in the asset portfolio and those assets are advancing so that that's attack that we took um there's fewer producing royalties in Copper because the asset universe is smaller but they're also much larger and once they are producing they they cash flow and cash flow and they get bigger and cash flow more as your other commodity Cycles so we're very excited about where we are at that stage and just keep going yeah but what's interesting it's well the original valuation today which is what 120 million and then there's your valuation as these projects come through into production and the such an extreme differential because the quality of the assets you've got they're big assets they are definitely going to come into production for copper and in my lifetime I hope that Dumont will also come into production for nickel because that's big and it's North America so essentially in in the world that we're going to be looking at copper in the Americas is going to be serving America around to a certain extent China where under some of the off-take agreements but it's the nickel and there is such a shortage of nickel where the nickel has traditionally been coming from places like Russia or Indonesia um you've got sulfide Nickel in there but you don't talk about it it's not in the valuation equation yet I I think geography is going to be a much bigger driver of of asset success and I think invested interests going forward as well because the world is clearly changing geopolitically and you're not able to do things before where you could have assets anywhere in geology drove everything I think asset location your additional quality support for mining from the government level to the social will be critical so when we look at due diligence and if you look at the asset portfolio which is really all America is focused um that that is beyond critical and nickel wrote pointed out correctly you know copper can be challenged and with nickel there's a lot fewer viable assets and nickel than copper and I think what happens is they assets that are viable are going to become that much more important and that much more valuable I think that's going to be a macro theme in mining is that fewer and fewer assets will be viable and those assets will become that much more valuable so we try to get the royalties really and that's all that group and stick to our knitting in that sense because we think that strategy and the patients will be very well rewarded over time but in five years time where do you think these big projects will be they'll certainly have lives of 50 or 100 years but when does The Life Begin the life the life from most of our current portfolio begins really in the later end of this decade so 2028 onward um but really I think it's it's a it's a it really begins I think in terms of kind of how you see it is once people see the clear path you know once construction decisions are are actually taken and the assets are advancing then the major companies that are building them are already pregnant with the success of the project so at that point the life really begins once the capital allocation decision is made and at that point you will most likely have overruns you will have challenges you'll have all kinds of things but once a major company commits things do get done the key from the relative perspective is make sure you have royalties on assets that will have that kind of support and not other assets which simply just don't pass the test to make it there David something that's quite interesting for all of these panelists is jurisdictional risk um nobody on this panel has high risk project geopolitically nobody's gone to exciting places like Mongolia or DRC or where the metals and minerals are do you think that the royalty sector is perhaps a bit too conservative you know again because we're running large portfolios with no tens or hundreds of the different assets you want to have make sure you have good title on a project so you need to have the property rights so commonwealth countries the U.S they're ideal because you can write your interest on title to the property and you're going to be there forever and so and often even companies can go bankrupt and you still have your interest in that particular property so that's powerful so it's hard to go to countries that don't have property rights but we have had some workarounds like we're in a place like on tazis for instance important royalty and Mauritania and you actually can't physically write a royalty in Mauritania because anything that has the word royalty belongs to the government you know that they don't believe in private royalties but because Ken Ross has invested seven billion dollars to acquire that property we have a contract an Ontario court of law that Kinross as long as they have that property still has to pay us and so we've never had a challenge in any of these things so most of our rights as long as our rights are in a western court of law uh and that the operator is taking the jurisdictional risk we can live with that but and all only assessment we have to make is the government likely to come in and expropriate entirely that project that's the only time we lose what our experience is for instance with Colbert Panama just in the last few weeks is the government's on mining licenses will extract more resource rent and tax and put new taxes but it doesn't change our deal as long as they continue to produce we'll get paid so we have a model right right now where we've not been exposed to this resource nationalism uh in the business because we've we've designed our deals to be basically uh uh a financial interest in these particular properties and not exposed to Resource rent extortion so we're in a much better position and so we can go into jurisdictions but it has to be where we're not taking the risk maybe someone else has got to take more risk than us than those well that's a very good agreement if you can go into a jurisdiction and somebody else takes the risk composure of the royalty that's the I that's why we pay so much for the royalty because we do see the risk reward is totally different from say a joint venture interest or an equity interest in a project another interesting point for the panelists to look at the royalty sectors grown from three companies in the 1990s to over 40 today and it's now enough of a capitalization to attract investors around 80 billion but the royalties should be more than four percent of the mining sector I mean I would have thought priority should be about eight or ten percent I mean in my family money we're 40 royalties because we've lost so much money back in individual projects and dangerous jurisdictions when no one else took the risk but with the right my sorority is growing do you think the David first and then I think the other panelists do you think we're getting short of the projects to get royalties on because there's so many more royalty companies or is there enough projects to sustain the growth up towards 10 of the whole mining sector uh the royalty sector is really becoming the financing arm of the mining industry so the day you tell me the mining industry has too much capital is when we're out of business and so I think of anything there's even bigger Capital demands the banks are tightening up on credit the equity markets are a lot tougher the private Equity their cost of capital is just skyrocketed and so what I we're kind of there we can be a One-Stop shop so our recent projects we're not only doing royalties and streams we also provide debt and equity for the projects as well and so we do a blended type formula when we Finance these and so I think we are the best financiers left in the business and so I think your point earlier we're probably likely to get a bigger percentage share of the market cap of the resource industry going forward I think this is the best of times no I think it's absolutely appropriate because the bank sorry the banks from the Brokers are basically filed to provide the the capital for the development but you can say that because you've got two billion available when you've got the research team that is able to identify the projects friends in the good position and he's he's got three projects uh he's got the the backing and the money to to build them up but basically to sell them on see David's the Jeff's thing that there could be a new phase coming where of course he is about three laps ahead of the field but when it comes to financing and bringing in these projects I would rather have a strong operator for a project than to look to put any more money into it but sometimes you have to that Fred the confidence of developing these projects do you have to spend much money to advance a project you have to spend a lot of money if you're going to develop it but to advance uh so on the royalty generation side um we haven't um I mean we're not drilling as a company so I mean I'll give you an example in Egypt and this is partly through a larger shareholder um who is Egyptian linked but we are the fourth largest license holder now in Egypt after Barrack V2 and sentiment um and and really what our aim there is to advance the projects as quickly as possible um and and sort of add as much value as possible and then either it's a question of spinning off the the projects into a new company and we have some accuracy in a royalty or looking at um uh sort of the multitude of different JV and options on it but you are right in that it's there is probably a better home for advancing that Suite of projects either independently or with another company than inside a royalty company like Elemental outputs but for the future that's what David's point is very interesting from the future because you can see uh Franco and you can see Wheaton as being a suppliers of capital to advance projects provided the projects make the geological and jurisdiction criteria that's a change coming up in the industry um Brett you you have not taken jurisdiction risk yet well it's it's uh jurisdiction risk is a big can be a tough one sometimes because there's certain times where jurisdictions are very favorable and then they become unfavorable and then they become favorable and typically in South America you see these cycles that are usually politically driven in the royalty business uh you you have that time Horizon when you're when you're getting exposure to the right assets where you have the ability to go in and pick these things up when things are unfavorable when no one doesn't want them uh when you can get title to the land so uh there there is that that benefit but yeah I I would generally uh maintaining in this environment going forward um the jurisdiction risk is much much more significant than what it used to be and so having the bulk of the value of your business in uh the you know the tier one jurisdictions where you know there are property rights and and there's lots of Precedence for those property rights is is absolutely critical uh going forward yeah another thing that's rather interesting is political risk which is different to jurisdictionless when you're talking about the US of a and Canada and uh Alex has got projects there uh which uh really should benefit from a change in the Biden Administration or from the Biden administration because it's ridiculous in my mind that very large projects uh for copper and nickel are not being developed in the US and Canada it's uh whereas it's quite plainly obvious that supply of the metals these Metals is needed or we're not going to get the clean energy Revolution dude that could be an unexpected win for uh Nova well I think perimeting a major project it's become not every jurisdiction is prepared for it especially at the federal level so in terms of how we've looked at the whole portfolio and where we invest is you need to be in places where you clearly want it and I think you got to measure that at every level so for instance you look at say Argentina now salt and San Juan have probably emerged as the friendliest places for major project development in the Americas so you see in first Quantum London BHP Costco Rio all invest in these places last couple years because you see clear interest for for those places to really Drive project development which is why we own probably too much Advanced projects in the country and takataka and Jose Maria and on the copper side you know you look at Arizona you know you got private land permitting works you know there's a state process there's a clear clear timeline and methodology Federal permanent has been much much housed so I think you've gotta you've got to see where people want to see things happen and where it's going to be difficult um in terms of the Biden Administration you haven't yet seen any major breakthrough in terms of federal permitting in the U.S for projects I think there's I think there's definitely visibility to it happening but it's been very slow because the same people who say they want to see the electric Revolution also don't want to see mining projects so at some at some point that's going to come to a head and I think movement will happen in terms of permeating things but again we're in the sector where relatively relatively few projects will succeed and they will succeed well beyond people respect and I think the key is just to position yourself really in those places where success can occur and then be patient because everything takes time yes I'm bringing wife that it's time to be pleased audience before you run out of time there's some interaction but we hear sometimes interchangeably streaming and royalty companies what's the difference for the investor and pros and cons um and and just a quick view on that give it to David actually I think Brett means he's because he wants your royalty and streaming so you've got to oh sure okay I'll I'll take that question I mean streaming is a a newer I mean I say newer but over the last 15 years you know it was originally developed by uh Wheaton precious and then quickly adopted by the rest of the sector and uh it was a way to pull precious metals at a much much higher scale out of big base metal mines that that was kind of the core part of part of it um and it really did allow companies to scale I mean we saw uh we saw Franco and Wheaton and um make some just incredible investments in the mid to or 2013 14 15. uh when the mining sector when their balance sheets were in complete distress and uh as David mentioned you know where the royalty companies have become and played a larger role in the business uh but with with the streaming structure you can pull you can pull 10 you can pull 25 percent of the precious out where royalty a big royalty is is three percent I mean a five percent royalty sometimes can kill a whole project so um it does provide flexibility it provides a lot of scale to quickly grow um and so the royalty business is just very simple it's just one or two or typically three percent is what you find there's different modified structures of royalties but uh but basically it's very very simple and I believe it's a little bit safer streaming is typically uh more structured as a finance instrument uh they're you know they they usually have life of mine but there's drop downs and usually it's secured and it acts a bit more um like a like a financial instrument than just like a royalty does and so I'd say those are the two big uh differences there what I think just to conclude what are things really important is that when you're looking at royalties you're not looking at risk and uh if you are avoiding risk you buy physical gold and then you buy Franco and then you look at buying the rest I think that's how it works but can we have a benediction do we face the future with confidence you know in terms of everything you've heard today is that this is a good ERA to be in hard assets and I think we're but we don't know if we're going to have inflation or deflation or financial Armageddon um I think the royalty business nice thing about it we don't have big carrying costs we have a long data portfolio in hard assets if it's inflation or deflation I think we're going to come out of this just great so I'm happier to be in this business than any other no matter what happens royalties win yes okay I think that's it

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Length: 43min 17sec (2597 seconds)

Published: Wed Apr 19 2023