Royalty companies and gold in the projects - a good mix
The gold price is currently just rising again. The US dollar is weakening, and US bond yields have gone down. Gold ETFs are seeing inflows, outflows have become much less. This indicates a growing interest in the precious metal. Investors can't really avoid gold stocks, as the metal has proven itself as an investment vehicle. If investors are looking for diversification in their portfolio, royalty companies could be the right choice. This is because they usually have a wide range of royalty and precious metal streams.
There are various forms of royalties. Mostly, a certain percentage of the mining revenue is negotiated for the royalty company. Streaming companies finance mining companies and then also receive a certain percentage. Most of the time, they also receive a certain amount of physical metal as cash payments. Streaming agreements are mostly for gold and silver, and they invest in projects from the exploration phase through development and production.
With both royalty and streaming companies, the mining risk lies with the mining companies, which is an advantage for the former. One royalty company that enjoyed cash flows and record revenues in 2020 is Osisko Gold Royalties - https://www.youtube.com/watch?v=VOZAwoLV71s. With around 140 projects, there is a broad diversification.
GoldMining is also interesting in this subject area. Firstly, because many promising gold and gold-copper projects are in the company's portfolio. And secondly, because GoldMining has established a subsidiary, Gold Royalty Corp.
Current corporate information and press releases from Osisko Gold Royalties (https://www.resource-capital.ch/en/companies/osisko-gold-royalties-ltd/) and GoldMining (https://www.resource-capital.ch/en/companies/goldmining-inc/).
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