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Royalty Round up, April 2021: the sector is flying

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April 2021 has been a huge month for the mining royalty and streaming sector with the average share price up a massive 9.5%. An incredible 78% of mining royalty and streaming companies saw positive share price movement this month, as the market rallied behind the sector.

Large-tiers were the best performing subset of the market, up an average of 13.2%. Osisko Gold Royalties (TSE:OR) (↑14.8% 1-month & ↑12.9% 3-months) and Sandstorm Gold Ltd (TSE:SVC) (↑14.7% 1-month & ↑20.7% 3-months) were the best performing large-tier companies.

Osisko’s preliminary first quarter of 2021 (Q121) results were strong, with 19,960 attributable gold equivalent ounces produced during the first quarter. The company generated revenues of C$66.9mln (US$54.3mln) during the first quarter with a cash operating margin of around C$46.5mln (US$37.8mln). The company also acquired six royalties for US$26mln, four of the royalties are on claims over the 4-million-ounce Spring Valley Gold Project, located in Nevada. Spring Valley is 100%-owned by mining-focused private equity firm, Waterton Global Resource Management.

Sandstorm also published its preliminary Q121 results, which reached record levels with 17,444 attributable gold equivalent ounces produced during the first quarter. The company generated revenues of US$31.0mln during the first quarter with a cash operating margin of around US$25.6mln.

The mid-tiers were the second-best performing subset of the market, up an average of 12.1%. Nomad Royalty Company Ltd (TSE:NSR) went from being the worst-performing mid-tier last month to the best performer this month, up 14.7% (↑1.9% 3-months). Production of 5,575 attributable gold equivalent ounces during the first quarter resulted in revenues of US$9.7mln, with a cash operating margin of roughly US$7.9mln.

Altius Minerals Corporation (TSE:ALS) also had a good month up 14.1% (↑16.0% 3-months), following the publication of its prelims for the first quarter of the year, posting revenues of C$17.7mln (US$14.4 mln) during the first quarter, up 8.5% from C$16.3mln during the same period last year.

The majors were up an average of 11.5%, with Franco-Nevada Corporation (TSE:FNV) being the best performing major for a second week in a row, up 13.9% on the month (↑19.6% 3-months). This strong performance was on the back of the US$538mln acquisition of 14.7% of Vale SA’s (ADR) (NYSE:VALE) outstanding royalty debentures from the Brazilian Development Bank and the Government of Brazil. These royalty debentures provide Franco-Nevada with a life of mine net sales royalties on Vale’s Northern and Southeastern Iron Ore Systems and certain copper and gold operations.

Wheaton Precious Metals Corp (TSE:WPM, LON:WPM) also performed strongly, up 12.8% on the month (↑4.9% 3-months) despite no news flow.

The junior end of the mining royalty and streaming market was up the lowest of all the sub-sets but with an average increase in share prices of 7.5%, it’s still been an impressive month for royalty juniors.

Ely Gold Royalties (CVE:ELY) was the best performing junior up 33.8% on the month (↑21.2% 3-months) following the publication of its full-year results for 2020 (FY20). Ely’s revenue for the period increased by 60.8% to C$3.3mln, compared to revenue of C$2.1mln in FY19, resulting in a gross profit of C$1.2mln down 30.5% from C$1.7mln in FY19.

Electric Royalties Ltd (CVE:ELEC) also had a strong month, up 31.8% (↑50.0% 3-months) after it entered into a letter of intent with Sprott Resource Streaming and Royalty to help fund the acquisition of the Middle Tennessee Mine royalty.

Trident Royalties PLC (LON:TRR) was one of only a handful of mining royalty and streaming companies with negative share prices this month, down 10.2% (↓11.9% 3-months) despite a significant increase in indicated mineral resources at Apollo Consolidated Ltd’s (ASX:AOP) Lake Rebecca Gold Project, located in Western Australia, where Trident holds a 1.5% net smelter royalty (NSR). This was alongside a positive Q121 update on developments at the company’s other interests and a 55% increase in royalty payments for the quarter, totalling US$0.45mln.

Gold Royalty Corp (NYSEAMERICAN:GROY) booked its first full month of trading, finishing the month up 5.8%. Gold Royalty Corp is a precious metals-focused royalty and streaming company with a portfolio of 18 net smelter return (NSR) royalties ranging from 0.5% to 2.0% covering 12 projects located in the Americas.

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