Mining Royalty Sector Explodes with Massive Consolidation & Fresh Capital

Jul 19, 2025

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Interview with Brendan Yurik, CEO of Electric Royalties Ltd.

Our previous interview: https://www.cruxinvestor.com/posts/electric-royalties-tsx-v-elec-35-assets-approaching-revenue-potential-in-2025-6322

Recording date: 11th July 2025

The mining royalty sector is undergoing unprecedented transformation, driven by significant consolidation activity and the entrance of non-traditional capital sources that signal a potential turning point for the long-undervalued industry.

The sector's landscape shifted dramatically with Royal Gold's $3.5 billion acquisition of Sandstorm Gold, bringing over 200 royalties under one umbrella and representing a 17 times cash flow multiple. This mega-deal exemplifies the current consolidation wave, with companies seeking diversification benefits through scale rather than single-asset exposure. The transaction contrasts sharply with Franco Nevada's $1 billion investment in the single Cobre Panama asset, highlighting different strategic approaches to risk management.

Perhaps more intriguing is the emergence of alternative capital sources in mining investments. Tether, the digital asset company generating $45 billion in annual revenues, has made strategic investments in Elemental Altus, marking a significant departure from traditional mining finance. Similarly, the Pentagon's $400 million investment in Mountain Pass Rare Earths, providing a 10-year offtake agreement at a 70% premium, represents the first concrete sign of U.S. government action to secure critical mineral supply chains.

These developments come amid a striking valuation disconnect in the mining sector. Despite metal prices doubling in many cases over recent years, mining valuations remain depressed while broader markets hit new highs. This gap is particularly pronounced among smaller royalty companies, where multiples of 8-12 times contrast with the 15-20 times commanded by larger players.

The clean energy metals subsector presents particular opportunity, with companies like Electric Royalties positioning themselves as specialists in battery metals and critical minerals. With minimal competition compared to the crowded precious metals space, these companies benefit from supply scarcity and growing electrification demands.

As governments and corporations increasingly recognize the strategic importance of domestic mineral supply chains, the royalty sector appears poised for significant revaluation, particularly for companies with exposure to critical metals essential for the energy transition.

View Electric Royalties' company profile: https://www.cruxinvestor.com/companies/electric-royalties