Elemental Royalty Corp – Value Proposition Of This Pro-Forma Intermediate Royalty Company And The Significance Of Tether Holdings As Their Key Strategic Stakeholder
Dave Cole, CEO of Elemental Royalty Corporation (TSXV: ELE) (Nasdaq: ELE) joins me to outline the value proposition of the proforma combination of Elemental Altus Royalties with EMX Royalty Corporation, to form an emerging intermediate royalty company. In addition to circling the globe to highlight various partner projects and operators inside their portfolio of royalties, we also discuss the value of having Tether Investments S.A. de C.V as a key stakeholder.
We start reminding investors of the big-picture rationale for this merger; creating a larger royalty company of scale, graduating up to the intermediate category. The new combined Company will have more analyst coverage and liquidity, a better cost of capital, the financial strength from the backing of the key strategic shareholder Tether Investments; and the potential to rerate in the future to a better price to net asset value multiple more in alignment with larger royalty peers.
Dave then takes us through a global tour of their diversified portfolio of royalties across precious metals, critical minerals, and battery metals. He touched upon their key cornerstone royalty partner projects like Caserones, Timok, Karlawinda, and Laverton, as well as a number of other solid producing royalties on Leeville, Gediktepe, Balya, and the suite of West African royalites (Korali-Sud, Wahgnion, and Bonikro). Additionally, Dave also flagged a few key large development projects with compelling royalty upside as those projects move towards development, like the Cacus and Peak projects in Arizona, Diablillos in Argentina, Vittangi in Sweden, and Laverton in Australia.
In addition to growing royalties year over year, there are also a number of one-off incoming payments on pre-production royalties that are still generating revenues via lease-option payments, stage-gate payments to advance properties, advanced minimum royalty payments, and that come in by way of cash and often times shares in partner companies.
Dave points to the organic development growth still on tap in their portfolio of royalties, the future upside of their continued royalty generation strategy, the potential for larger future royalty acquisitions and royalty financings to create new royalties, and that further down the road they’ll keep their eyes out for accretive M&A opportunities.
Wrapping up Dave highlights the importance of having Tether Investments as their key strategic shareholder, and they financially backstop the kinds of accretive acquisitions that they can now go after. He also explains a bit more background on the use case for Tether stablecoins, how their company generates revenues holding treasuries, and why they are storing so much of their profits in gold, farmland, and royalty company equities.
If you have any follow up questions for Dave or the team ate Elemental Royalty Corp, then please email them to me at Shad@kereport.com.
- In full disclosure, Shad is a shareholder of both Elemental Royalty Corp at the time of this recording, and may choose to buy or sell shares at any time.
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