Once you start seeing royalties, it’s like seeing dead people or going to a strip club on a Tuesday afternoon. You can’t just unsee that.
Ecora Resources
Ecora is a mess but it receives toll revenue from Denison’s stake in the McClean Lake Mill, so this is good news: Orano Canada and Denison Mines started mining of the McClean North deposit last month. Approximately 250 tonnes of high-grade ore (+10% U3O8) is estimated to have been recovered from the first mining cavity.
I couldn’t determine how much this will increase throughput at the mill. As you can infer from the chart, with Ecora every dollar counts. It’s one of the worst capital allocators in the royalty space. Your best-case scenario if you own ECOR involves outside help, either an activist or Altius Minerals putting this management team out of its misery.
Gold Royalty Corp.
Don’t look now, but these Gold Royalty warrants are in the money.
The expiry date is June 2027 with a strike price of $2.25. GROY closed Friday at $2.37. With almost two years until expiry, Cote is producing, Odyssey is producing, and at least two other key assets will ramp up production this year.
Val-d’Or Mining
Gold Royalty also sold down its stake in Val-d’Or Mining for $600,000 in cash, 12-million shares at five cents, reducing its 27% position to 15.9%. The buyer is Jimmy Lee, who also has an option to purchase another 12-million shares from GROY at seven cents. Lee is the founder and former CEO of forestry firm Mercer International.
Backstory: When GROY purchased Golden Valley Mines in 2021, it found itself as the owner of a prospect generation business it didn’t want. It quickly sold the land claims back to former Golden Valley CEO Glenn Mullan via Val-D’or Mining for shares and a 1.5% NSR royalty on all the properties.
That deal could work out very well for GROY if Kirkland Lake Discoveries or Eldorado Gold drill out anything substantial on the land they’ve optioned from Val-d’Or.
Morien Resources
Morien owns a sliding-scale royalty on the Donkin coal mine in Nova Scotia. They announced the owner of Donkin is looking to sell. Donkin has experienced 32 roof falls of more than three tonnes since Kameron Collieries started production in 2017. The mine is currently on care and maintenance. Morien’s share price fluctuates with its ability to dividend out cash from that Donkin royalty, its only source of significant cash flow.
Kameron Collieries is owned by the Cline Group, which also owns 12% of MOX. I asked CEO Dawson Briscoe if Cline will be looking to sell its MOX stake but haven’t heard back yet.
Morien is pivoting to generating aggregate royalties with an unnamed partner funding the legwork.
The collaboration has already yielded promising results. One aggregate (granite) project in Nova Scotia has advanced to formal technical and stakeholder engagement with environmental and permitting groundwork now underway. A second aggregate (limestone) project in Newfoundland is currently progressing through due-diligence, including early-stage technical and commercial assessment.
Under the terms of the strategic partnership agreement, Morien will receive a milestone payment upon the successful permitting of certain designated projects and is entitled to an industry competitive production royalty on future sales over the life of the operation. Morien’s time and expenses associated with each project are reimbursed by its partner.
Morien already owns a royalty on an undeveloped aggregate deposit in Nova Scotia owned by Vulcan Materials. Morien receives $25,000/quarter advance payments from Vulcan, but the royalty terms for Black Point aren’t disclosed which makes it impossible to value. The bigger problem is that lack of disclosure seems to be the industry standard.
Vox Royalty Corp.
Someone did the legwork to connect large-scale insider selling to a lawsuit involving VOXR’s flagship royalty.
Other selling
The selling at Vox isn’t a good sign. The mass selling at Northern Dynasty Mineralsis just greasy. The Koala puts the pieces together after the latest EPA setback as to who sold what, and when.
Newmont sold its entire stake in Discovery Silver.
