AXMIN Inc (TSXV: AXM)
AXMIN Inc. (TSXV:AXM) is a Canadian-based exploration and development company with a strong focus on central and West Africa.
Mining royalty stocks offer a unique and attractive investment opportunity, especially for those looking to invest in the resource sector without directly engaging in mining operations. Through royalty companies, investors can access potential gains from commodities and mining production with lower risks and capital requirements compared to owning or operating a mine. For example, companies like Labrador Iron Ore Royalty Corporation (TSX: LIF) are excellent choices in this field, particularly for Canadian investors.
LIF provides royalties on all iron ore produced and sold by the Iron Ore Company of Canada (IOC) and also holds a 15.1% equity stake in the company. This structure allows LIF to benefit from both royalty income and IOC’s earnings without bearing the operational burdens of mining. This dual income model is particularly appealing for income-focused investors, as LIF continues to generate cash flow even amid fluctuations in iron ore prices or production.
In terms of performance, LIF has historically delivered robust returns, with dividends playing a significant role. According to the latest reports, LIF’s historical dividend yield has reached as high as 9.3%, making it a favorable option for income investors. The stock has a payout ratio of approximately 88.8%.
In the latest Q3 2024 earnings report, LIF reported royalty revenue of $41.5 million. However, due to a decline in iron ore prices and a decrease in sales tonnage, the net income per share decreased by 32% compared to the same period in 2023. This decline reflects the challenges faced by the industry due to global market conditions. Nevertheless, LIF’s resilient business structure and royalty model mitigated the impact, allowing the company to maintain its dividends for investors despite these adverse factors.
Overall, LIF combines the advantages of generating income through royalties while achieving capital appreciation through its equity stake in IOC. Looking ahead, while challenges such as fluctuations in global iron ore prices persist, LIF’s dividend model, high dividend yield, and strong market position make it an attractive choice for investors seeking stable income from the mining sector.
