High gold price also good for royalty companies
Mining companies receive capital from royalty companies. In return, they receive license fees or a certain share of the production. The mining risk, i.e. the development of the mine, lies largely with the mining companies. The price of gold has jumped again. This means that gold is more expensive than it has been since last May. On the one hand, this is due to lower yields on government bonds, on the other hand, economic fears are becoming increasingly widespread. And in the eurozone, the German economy appears to be becoming more and more of a problem child. Investors are therefore increasingly focusing on gold. The precious metal's record high price of USD 2,075 per ounce in summer 2020 is therefore approaching, as investors are looking for security. Precious metal investments offer this. Investors, gold mining companies and, of course, royalty companies that rely on gold and benefit greatly from a rising gold price are delighted.
The advantage of royalty companies lies in their low fixed costs. This is because rising energy costs, wages or prices for mining equipment primarily affect the mine operators. A rising gold price, low interest rates and a weak US dollar ensure lucrative profits for the royalty companies. Investors can therefore bet not only on mine operators, but also on the royalty companies that provide the money, such as Osisko Gold Royalties or Gold Royalty.
Gold Royalty - https://www.commodity-tv.com/ondemand/companies/profil/gold-royalty-corp/ - had a very successful third quarter in 2023. Total revenue has increased, and operating costs have fallen.
Osisko Gold Royalties - https://www.commodity-tv.com/ondemand/companies/profil/osisko-gold-royalties-ltd/ - owns over 20 producers in its very large portfolio and also owns a five percent NSR royalty on one of Canada's largest gold mines.
Current corporate information and press releases from Osisko Gold Royalties (- https://www.resource-capital.ch/en/companies/osisko-gold-royalties-ltd/ -) and Gold Royalty (- https://www.resource-capital.ch/en/companies/gold-royalty-corp/ -).
In accordance with §34 WpHG I would like to point out that partners, authors and employees may hold shares in the respective companies addressed and thus a possible conflict of interest exists. No guarantee for the translation into English. Only the German version of this news is valid.
Disclaimer: The information provided does not represent any form of recommendation or advice. Express reference is made to the risks in securities trading. No liability can be accepted for any damage arising from the use of this blog. I would like to point out that shares and especially warrant investments are always associated with risk. The total loss of the invested capital cannot be excluded. All information and sources are carefully researched. However, no guarantee is given for the correctness of all contents. Despite the greatest care, I expressly reserve the right to make errors, especially with regard to figures and prices. The information contained herein is taken from sources believed to be reliable, but in no way claims to be accurate or complete. Due to court decisions, the contents of linked external sites are also co-responsible (e.g. Landgericht Hamburg, in the decision of 12.05.1998 - 312 O 85/98), as long as there is no explicit dissociation from them. Despite careful control of the content, I do not assume liability for the content of linked external pages. The respective operators are exclusively responsible for their content. The disclaimer of Swiss Resource Capital AG also applies: https://www.resource-capital.ch/en/disclaimer/