NAI Interactive is proud to present the Global Resource Investment Guide 2017. Since 2012, the global mining industry entered the cyclical adjustment period due to the gloomy global economy. Almost every major commodity in the world has been in severe bear market. However, the downturn of the commodities market sparked innovation as mining companies became much more efficient in their operations.
NAI has put together the Global Resource Investment Guide to help readers understand and recognize the investment opportunities in the current mining and resources market. The resource guide highlights topics such as the rebirth of the resources sector, investment strategies for mining and energy, top resource projects and materials around the globe, and more. Throughout the next couple of weeks, we will be publishing excerpts to introduce you to the contents of the Global Resource Investment Guide 2017.
Taken from the article: “Investing in precious metal royalty and streaming companies – gaining exposure in commodities while benefiting from attractive yields”
One of the main attractions to investors in royalty and streaming companies is that, after the initial cash payment, there is normally no additional responsibility for contributing funds to a project for any future purpose, whether they be for financing operating and capital expenses. As a result, the royalty or streaming contract essentially represents a fully carried asset with zero future cost.
On the other hand, these contracts do not shelter the royalty or streaming company from the risk of temporary or permanent shutdown of mining operations (i.e., production risk) and do not provide any recourse against the bankruptcy of the mining company. Royalty and streaming companies also have face opportunity costs – if a miner delays a project, capital would be tied up for a period, thereby generating no real return for investors. Furthermore, investors face commodity price risks if the precious metals decrease in price; however, this risk is relatively low as most streams are bought at levels far below the current market prices…
* At a value of CAD$50, the guide will be available for free download for a limited time. The offer ends after September 8th, 2017.
