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Royalty Round up, July 2021: Gains and falls but majors rise higher

A month of swings & roundabouts, with several large share price gains were cancelled out by some substantial share price falls.

Franco-Nevada Corporation -

July saw the average share price of the mining royalty and streaming sector down 0.2% during the month as several large share price gains were cancelled out by some substantial share price falls.

Over 63% of the sector experienced positive share price movements this month with the Majors being the best performing subset, up an average of 7.0% on the month. The Large-Tiers were next, up an average of 1.4%, with the juniors down an average of 0.4% and the Mid-Tiers down an average of 6.4%.

Majors

Franco-Nevada Corporation (TSX:FNV) (TSE:FNV) was once again the best-performing major, up an impressive 10.8% on the month (↑13.0% 3-months) on no news flow. Franco will be publishing its Q221 results on the 11th of August and investors will be focused on seeing if the early operational momentum gained in Q121 continues into the second quarter.

Wheaton Precious Metals Corp (LSE:WPM, TSX:WPM, NYSE:WPM) (TSE:WPM)(LON:WPM), was the worst-performing Major for the second month in a row, up 4.6% (↑7.4% 3-months), on the back of no news flow. Wheaton is due to publish its Q221 results on the 12th of August.

Large-Tiers

Labrador Iron Ore Royalty Corp (TSX:LIF) (LIORC) was the best performing Large-Tier in July, up 4.4%, (↑16.0% 3-months), after Rio Tinto PLC (LSE:RIO) (LON:RIO) released its operations review for Q221, which included Iron Ore Company of Canada (IOC) production and sales information.

IOC had total saleable iron ore production of 4.63 million tonnes with total iron ore sales of 4.01 million tonnes. LIORC holds a 15.10% equity interest in IOC directly and through its wholly-owned subsidiary, Hollinger-Hanna Limited, and receives a 7% gross overriding royalty and a 10 cent per tonne commission on all iron ore products produced, sold and shipped by IOC.

Osisko Gold Royalties (TSX:OR) (TSE:OR) was the worst-performing Large-Tier this month, down 0.7% (↑7.5% 3-months), despite some positive Q221 preliminary results being published. Osisko earned approximately 20,178 attributable gold equivalent ounces (GEOs) in the second quarter of 2021, excluding GEOs earned from the Renard diamond stream.

Osisko achieved revenues of C$57.2 million and preliminary cost of sales of C$10.1 million, resulting in a record operating cash margin of approximately C$47.1 million. Excluding offtakes, Osisko’s operating cash margin for royalties and streams was approximately 94% during the second quarter of 2021 (97% excluding the Renard diamond stream), an impressive metric for investors to admire.

Also, during the month Osisko entered into a royalty transfer agreement with Sailfish Royalty Corp (CVE:FISH) to purchase an up to 2.75% net smelter return (NSR) royalty on the 2.63 Moz Tocantinzinho Gold Project, operated by Eldorado Gold Corporation (ASX: EAU) for US$10 million.

Mid-Tiers

Altius Minerals Corporation (TSX:ALS) (TSE:ALS) was the best performing Mid-Tier again this month, up 0.2% (↓0.4% 3-months) following the publication of its Q221 preliminary results. Revenue for the quarter totalled $21.8 million ($0.53 per share) for the second quarter compared to $17.8 million ($0.43 per share) in Q121.

Nomad Royalty (TSX:NSR) Company Ltd (TSE:NSR) was the worst-performing Mid-Tier for the second month in a row, down 11.9% (↓22.9% 3-months), on the back of the publication of its Q221 results. Revenue for the period totalled $4.6 million following the delivery of 2,577 GEOs. Gross profit totalled $1.3 million, with a cash operating margin of $4.0 million. Nomad has $25.4 million of cash at the end of the period and declared a quarterly dividend of C$0.05 per share or C$2.3 million in total.

Juniors

This month, Nova Royalty (CVE: NOVR) was the best performing mining royalty and streaming company, up 28.8% (↓3.6% 3-months) on the back on no news flow. Nova had previously fallen 21.8% last month despite the company completing a very attractive royalty purchase agreement on Anglo American PLC (LSE:AAL)’s (LON: AAL) and Glencore PLC (LSE:GLEN)’s (LON: GLEN) West Wall Copper-Gold-Molybdenum Project for US$4.2 million. This month’s large rise appears to be at least partially the result of a correction of last month’s fall.

Vox Royalty (TSX-V:VOX) (CVE:VOX) also had an excellent month, up 18.0% (↑10.3% 3-months) as the Company achieved record preliminary quarterly royalty revenue of C$1,628,600 (US$1,314,000) during Q221. Revenue was up 143% on the previous quarter, as a result of increased royalty-linked production by Mineral Resources Limited (ASX:MIN) (ASX: MIN) at Koolyanobbing, increased production by Karora Resources Inc. (TSX:KRR) (TSX: KRR) from the Hidden Secret deposit covered by the Dry Creek royalty, increased production by the operator of the Brauna royalty and inaugural royalty revenues earned from the Janet Ivy royalty. Vox now expects to double 2021 royalty revenues to between C$4,000,000 and C$5,000,000.

Uranium Royalty Corp (CVE:URC) was the worst-performing junior this month down 10.3% (↓24.7% 3-months) despite no news flow.

Empress Royalty Corp. (TSX-V:EMPR, OTCQB:EMPYF) (CVE: EMPR) was down 3.7% this month (↓14.0% 3-months) despite closing the acquisition of US$5 million silver stream on Altaley Mining Corp’s (CVE:ATLY) Tahuehueto Polymetallic Project located in Mexico. Construction of the mine at Tahuehueto is now around 60% complete and initial production is forecast for late-2021 with a full-scale production forecast for early-2022. Based on the PFS completed in 2017, the project had a 21-year life-of-mine at a production rate of 550 tonnes per day, however, Altaley has elected to build a 1,000 tonnes per day mining operation to achieve improved economics. This is an exciting milestone for Empress and the Tahuehueto silver stream is expected to be generating revenue for the company by the end of this year.

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