It appears a very good example of how miners and royalty companies, both, are now benefiting from, or at least escaping the control of, the ongoing suppression of miners direct access to development capital, by restructuring the internally attributable values of discoveries made...
All Wheaton gets is the right to buy the stated percentages of gold and platinum producted at a discount to the market... GENM gets the rest of that, plus all the copper and palladium...
And, in that arrangement, alone... there's enough attribtable value in the accounting for it to justify the payments required to build the mine and make it happen ? But, "the market" was somehow unable to see and properly value the same potential... in a financing done based on debt or equity ?
"That's odd"... seems a correct first answer... But, for the existing shareholders... the ability to avoid additional exposure to the "oddity" in the equity markets... while also avoiding the risks typically inherent in the dollar denominated debt markets ? I'd perhaps generalize that to note that the arrangments made directly between miners and royalty cos... are based on an expectation of and requirement for good faith and shared interest... that simply no longer exists in the markets where bankers interpose additional layers of risks intent on subverting that expectation that good faith and shared interest are features the market enables and respects... more than articifical volatility and far too real misdirection enabled in the trade...
For investors in the extractive industries... it means that "smart management" will be seen as intent on avoiding exposing themselves, and those whose interest they honestly represent as fiduciaries... to those linkages in the risks markets generate... where good faith and shared interest are too easily subverted.
So, lists of the portfolio holdings of the royalty companies... generate excellent "shopping lists" for investors investing in the equities of miners... who gain the multiple advantage of having professionals vetting the projects and betting their own money on them... of having the projects funded at a level sufficient to enable success, while intending to enable it, all paired with oversight to ensure it "gets there"... while reducing the risks of "stupid banker tricks" operating scams against them in the less narrowly defined markets where "contracts" don't actually impose meaningful performance obligations or limits.
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