Uncovering Hidden Treasure: The Lucrative World of Royalty Mining Stocks
Ladies and gentlemen, gather round, because I’ve got a topic that can make you bread with little downside: royalty mineral mining stocks.
Now, I know what you’re thinking: “Mike, what the hell are you talking about? Mineral mining? That sounds about as exciting as watching paint dry.” But trust me, my friends, there’s more to this topic than meets the eye.
So let me break it down for you. Royalty mineral mining companies are those that invest in natural resource projects, and earn a percentage of the revenue generated from those projects. Think of them as investment bankers for the precious metals and commodities space. This could be anything from precious metals like gold and silver, to industrial metals like copper and zinc. And let me tell you, these companies are raking in some serious dough.
But why should you care about investing in these types of stocks? Well, for starters, royalty mineral mining companies tend to have a lower risk profile than traditional mining companies. That’s because they don’t actually operate the mines themselves, which means they don’t have to deal with the same risks and liabilities. Instead, they’re more like landlords, collecting rent from the companies that do the mining. Another business model is called “streaming”. I don’t mean what you do on lonely Friday nights binging Netflix and diving into a pint of Ben and Jerries, but a future option on buying the mined minerals at a discounted rate at any time for big profits.
Let’s talk about the potential for growth here. We all know that natural resources are finite, and as demand for these resources increases, so does their value. Plus, the world is constantly evolving, and new technologies are being developed all the time that require these resources. For example, electric cars rely heavily on metals like lithium and cobalt. And as we move towards a more sustainable future, the demand for these resources is only going to increase.
Green Transition Stats (majorly effects silver (solar panels) and copper (evs) demand)
Projections for Increased Electric Vehicle Demand per https://www.copper.org/publications/pub_list/pdf/A6191-ElectricVehicles-Factsheet.pdf
1 million + vehicles — the number of annual sales of PEVs by 2023.
This will reach more than 7 percent of annual vehicle sales by 2025.
7 million — the number of vehicles projected to be on U.S. roads by 2025, up from 567,000 today. This makes up 3 percent of the 258 million vehicles, including cars and light trucks, expected to be registered in the U.S. in 2025.
Required Investment in Charging Infrastructure 5 million — the number of charging ports required to support 7 million PEVs in 2025. This will require a significant investment in PEV charging infrastructure.
There currently are between 50,000 and 70,000 Level 2 ports in work or public locations in the U.S.; and that number needs to be increased to between 2,230,000 and 2,240,000 by 2025.
Copper is Essential to Electric Vehicle Technology Copper is used throughout electric vehicles, charging stations and supporting infrastructure because of the metal’s durability, high conductivity and efficiency.
While conventional cars have 18–49 pounds of copper, hybrid electric vehicles (HEV) contain approximately 85 pounds, plug-in hybrid electric vehicles (PHEV) use 132 pounds, battery electric vehicles (BEVs) contain 183 pounds, a hybrid electric bus contains 196 pounds, and a battery electric bus contains 814 pounds, most of which is used in the battery.
In 2016, the total estimated amount of copper used in all electric vehicles manufactured by BYD, the world’s largest electric vehicle maker, was nearly 26 million pounds.
BYD’s total sale of chargers in 2016 used more than 295,419 pounds of copper. *Sources: IDTechEx 2017, the Edison Electric Institute and the Institute for Electric Innovation
The demand for copper due to electric vehicles is expected to increase by 1,700 kilotons by 2027.
As the world continues to move toward a sustainable and energy efficient future, copper has a major role to play. The metal is used to increase the efficiency of numerous electrical technology, from motors and transformers to solar and wind energy systems.
But let’s get real for a second. Investing in anything comes with risks, and royalty mineral mining stocks are no exception. There are a lot of factors that can impact the profitability of these companies, from changes in commodity prices to regulatory changes. That’s why it’s important to do your research and understand the risks before you invest your hard-earned cash.
Lucky for you, I have compiled some ways to get in on these companies instead of the more slow profit/large overhead major mining stocks and the super risky junior miners, but with more consistency and leverage than a metal spot price etf. Miners can experience political risks, go through dry spells, and with inflation have their profits eaten away. They haven’t done great this year while gold and silver have rocketed. I still recommend owning physical gold, silver and platinum as insurance against a dark future, but these companies are solid ones to add to your watch list and begin dollar cost averaging into;
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Now these companies are like the pirates of the natural resources world, collecting a share of the bounty without actually having to do any of the dirty work. And let me tell you, there are some seriously lucrative opportunities out there.
First up, we’ve got Franco-Nevada Corporation.
These guys are the OG’s of royalty mining, having been around since 1983. They’ve got a diversified portfolio of assets, including gold, silver, platinum, and more. One of the things I love about Franco-Nevada is their focus on sustainability. They have a strong track record of working with mining companies to promote environmentally responsible practices, which is a big plus in my book.
Next on the list is Wheaton Precious Metals.
These guys are focused on precious metals, like gold and silver, and they’ve got some serious street cred in the industry. In fact, they were the first company to focus solely on precious metals streaming, which is like the VIP section of the mining world. Wheaton Precious Metals has a strong balance sheet and a long-term growth strategy, which makes them a solid choice for investors.
Another player in the royalty mining game is Royal Gold.
These guys have been around for over 30 years, and they’ve got a portfolio of assets that includes gold, silver, copper, and more. What I like about Royal Gold is their commitment to finding unique opportunities. They’re not afraid to take risks and invest in projects that other companies might overlook. Plus, they’ve got a strong track record of returning value to shareholders.
Last but not least, we’ve got Sandstorm Gold.
These guys are a relatively new player in the royalty mining space, but they’re making waves with their innovative business model. Instead of just investing in existing projects, Sandstorm Gold is focused on providing upfront financing to mining companies in exchange for a share of the future production. This allows them to get in on the ground floor of new projects, which could pay off big time in the long run.
So there you have it, folks. These are just a few of the royalty mining companies out there, but they’re definitely worth paying attention to. Investing in these types of stocks can be a smart move for your portfolio, but as with any investment, it’s important to do your research and understand the risks involved. Stay nimble, my friends!
