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”
As royalty and streaming companies do not operate mines or engage in metal exploration, their value-add comes from the ability to choose the right projects and the optimal size of commitment to a project. First of all, picking the right assets that can produce sizeable revenue streams as well as identifying management teams with superior decision-making abilities are crucial. Secondly, selecting the correct size for the deal (e.g., deciding on the royalty rate) is important so as to ensure that the mining operator do not lose the incentive to produce. Therefore, the ability of these companies to invest capital in a prudent fashion can give investors an investment portfolio with more stable cash flows as compared to other types of mining companies.
It is presently the prime time for these specialized financiers to provide money to cash-strapped miners given the significant financial pressure faced by many miners as a result of the plummeting commodity prices since 2011. According to data from Financial Post, a total of US$4.2 billion was raised by miners from 11 stream sales in 2015, which was nearly double the amount raised in 2013 of US$2.2 billion. The year 2015 was considered one of the worst years for large mining companies as many suffered as a result of low commodity prices and high leverage. Industry leaders, including Barrick Gold Corp., Glencore Plc, Teck Resources Ltd. and Vale SA, all sold streams in 2015…
* 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.
