Best Gold Royalty and Streaming Stocks To Consider When Gold Is Poised to Rise

Published on: Mar 1, 2024
Author: Caroline Kong

Precious metals investors must be familiar with royalty and streaming companies. Gold royalty companies are entities that finance gold mines around the world. Such companies provide miners with the upfront capital to develop a gold mine, in exchange for a percentage of the mine’s revenues throughout the life of the mine, or for purchasing a certain amount of gold each year at a set (and very low) price, which can then be re-sold at market prices.

It is worth pointing out that royalty companies are experts in financing gold mining projects, with experienced full-time geologists and significant industry experience. In a rising gold price environment, royalty companies are even better investments than gold.

The largest royalty and streaming companies in the gold mining space have long histories and have built reputations on strong investments, providing investors with a means to reduce the risk of entering the gold mining industry by distancing themselves from it. The following gold royalty and streaming companies are leaders in this space.

Franco-Nevada (TSX:FNV,NYSE:FNV)

Market cap: $27.83 billion

As a pioneer in the gold royalty business, Franco-Nevada has set a high standard in the sector. The company was spun off from Newmont’s largest initial public offering in 2007. Today, Franco-Nevada has more than 400 mining assets around the world and invests in precious metals, base metals and oil and gas businesses, generating $1.2 billion annually for shareholders.

Wheaton Precious Metals (TSX:WPM,NYSE:WPM)

Market capitalisation: C$24.91 billion

Founded in 2004 as Silver Wheaton, Wheaton was primarily engaged in the silver streaming business and gradually began to diversify into other precious metals. In 2009, the company acquired rival Silverstone Resources for C$190 million. Silver Wheaton changed its name in 2017 to Wheaton Precious Metals and has since become one of the largest players in the royalty and metals streaming space, investing in 18 operating mines and 26 development-stage projects on four continents.

Osisko Gold Royalties (TSX:OR,NYSE:OR)

Market capitalisation: C$3.45 billion

Osisko Gold Royalties was formed in 2014 as a spin-off deal between Osisko Mining, Yamana Gold and Agnico Eagle Mines to prevent a hostile takeover of Osisko Mining and its Malartic gold mine by Goldcorp. In the deal, Osisko Gold Royalties received a 5 per cent royalty from the Malartic mine, which remains the cornerstone of its operations today. Since then, the company has acquired more than 180 assets on six continents, most of which are located in North America.

All in all, a precious metals royalty company can provide a stable addition to a portfolio by bringing in an investment window in gold and silver without the risks associated with investing in mining or exploration activities. However, for investors to know, their earnings can still be affected by political and mining disruptions in the locations where the mines are located.

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