Guten morgen wer hat den jetzt seine Aktien vorher verkauft von Ely bzw. wer hat in die o.g. getauscht?
Ich habe getauscht und es hat soweit geklappt. Aus 10000 Aktien wurden 2450 Aktien + 0,01 Cent Baurauszahlung.
Leider ist der Plan vorher mit einem weiter ansteigenden Ely Kurs auf das Untauschverhältnis nicht aufgegangen.
Trotzdem hat man bisher mit einem Tausch mehr Geld als wenn man eine Barauszahlung bekommen hätte. Desweiteren ist das Paket jetzt auch mehr Wert als vorher Ely alleine.
Das Paket ist jetzt bei mir immerhin ca 10800 Euro schwer und wer vorher verkauft hat, hat leider weniger bekommen wie von mir schon damals beschrieben bzw erwähnt.
Jetzt ist der Kurs bei ca5,30 US Dollar und Taylor Dart hat eine neue Analyse gemacht. Sieht den Wert als zu teuer an und die 5,30 US Dollar aktuell als das Maximum an.
Ich stelle mal die Analyse hier rein. Auf jedenfall fehlen mir immer noch ca. 5000 Euro im Gegensatz zum damaligen Höchstkurs. Nach so langer Zeit ist es schlecht.
Wie seht Ihr das und wie habt Igr diesbezüglich gehandelt?
Summary
Gold Royalty Corporation announced the acquisition of two smaller royalty players this week, intending to acquire Abitibi Royalties and Golden Valley Mines.
This deal, combined with the recent acquisition of Ely, has given Gold Royalty Corp a massive royalty portfolio, with 191 assets, with 6 currently generating revenue.
While this is a major upgrade, Gold Royalty now trades at more than 50x forward revenue, a significant premium to the sector average even after factoring in its growth.
In summary, I see no reason to chase the stock here at US$5.30 at a pro-forma market cap above $650 million, and I see this rally as an opportunity to book some profits.
Fine gold casting
CinemaHopeDesign/iStock via Getty Images
It's been a busy year for M&A in the gold sector yet again, but the busier side of the sector has been the royalty/streaming companies, where we've seen two major acquisitions in the past six months. The most recent deal by Gold Royalty Corporation (NYSE:GROY) has significantly boosted its royalty portfolio, with the company now having 191 assets across the Americas, with 6 of these royalties on revenue-generating assets. While this is a major upgrade from GROY's undesirable royalty portfolio at its IPO debut, the price paid to make these acquisitions has pushed Gold Royalty Corporation's market cap to more than $650 million. At this valuation of more than 50x forward revenue, I see no way to justify chasing the stock here at US$5.30. In fact, I would view this as an opportunity to book some profits.
Gold Royalty
(Source: Company Presentation)
Gold Royalty Corporation ("GRC") announced the acquisition of Abitibi Royalties (OTCPK:ATBYF) and Golden Valley Mines (OTCQX:GLVMF) last week, giving the company a much larger foothold in Quebec, with a massive royalty on one of Canada's largest gold mines, Canadian Malartic. As shown above, the company now has 71 royalties in Quebec, which includes a royalty on the high-grade Fenelon Project that's gearing up for its maiden resource estimate later this year. This gives GRC an attractive jurisdictional profile relative to the peer average, with 148/191 royalties (77%) based out of two very well endowed Tier-1 jurisdictions (Quebec/Nevada). Notably, this deal has also pushed GRC's royalty-generating assets up to six, with 7 royalties on assets that are currently in development. This will provide a major boost to annual revenue, especially compared to GRC's IPO debut this spring, when it had zero revenue-generating assets. Let's take a closer look at the company below:
Gold Royalty Portfolio
(Source: Company Presentation)
If we take a closer look at GRC's portfolio, the most impressive asset is Canadian Malartic, which was scooped up in last week's acquisition. Canadian Malartic is a mammoth-sized gold mine in Quebec that has just begun construction on the Odyssey Underground Project. This is expected to extend the mine life by more than 20 years after more than a decade of open-pit mining at grades of ~1.0 grams per tonne gold. The goal is to replace low-grade ore at the mill with higher-grade underground ore beginning in 2026, which will maintain a ~500,000-ounce production profile despite a material dip in tonnes mined/processed. Underground production will focus on four deposits: Odyssey South, East Malartic, East Gouldie, and Odyssey North. As shown below, East Gouldie will be the breadwinner of the four, with the majority of mined material between 2027-2039 (blue bars) coming out of East Gouldie. This is no surprise at all, given that East Gouldie is the highest grade, and grades are key to maintaining a meaningful production profile if tonnes processed is set to decline by more than 60% (20,000 tonnes per day vs. ~55,000 tonnes per day).
Gold Royalty East Gouldie
(Source: Agnico Eagle Filings)
Given that Odyssey Underground is the future of Canadian Malartic [CM], this is a major deal for GRC, which just scooped up Abitibi Royalties, the owner of a 3% net smelter return [NSR] on Jeffrey/Barnat, a 2% NSR on Gouldie & Charlie, and a 3% NSR on Odyssey and East Malartic. However, as noted above, East Gouldie is the workhorse and is responsible for the bulk of mined material to feed the CM plant. Meanwhile, East Malartic (orange bars) is expected to contribute less than 90,000 ounces of gold per annum once it comes into production between 2028-2039. So, with a 3% NSR, this translates to less than 3,000 gold ounces per annum from East Malartic. This makes the Odyssey Underground Mine a solid contributor, but not a game-changer for GRC. Instead, the real beneficiary of Odyssey will be Osisko Gold Royalties (NYSE:OR), holding a 5% NSR on CM's open-pit ounces, East Gouldie, Odyssey South, and the western half of East Malartic.
Gold Royalty Canadian Malartic
(Source: Company Presentation)
With Agnico recently making new discoveries to the east of East Gouldie, and East Gouldie being much higher grade than the other underground deposits, the clear focus for the Canadian Malartic partnership will be East Gouldie. This is because East Gouldie ore is significantly higher grade, allowing the CM partnership to get nearly 60% more gold out of each tonne of ore mined, thanks to East Gouldie's average grade of 3.17 grams per tonne gold. This compares favorably to East Malartic at ~1.95 grams per tonne gold and Odyssey at 2.0 grams per tonne gold. This means that even looking past 2039, the priority will always be East Gouldie, as long as grades at this deposit continue to trump grades at Odyssey and East Malartic. This favors Osisko Gold Royalties, not GRC, since Osisko Gold Royalties is the fortunate owner of a 60% higher royalty (5% NSR vs. 3% NSR) on the CM Partnership's most valuable deposit.
Gold Royalty Mineral Resources
(Source: Agnico Eagle Reserves & Resources)
Regarding the royalties held on Barnat and Jeffrey, Barnat doesn't move the needle much for GRC, given that estimated production (shown below) is ~14,600 ounces in 2022 and ~34,000 ounces in 2023. With a 2% NSR, this is still a nice contribution, but as noted, the real focus is on the underground at the CM Mine. It's important to note that GRC holds considerable ground surrounding the Canadian Malartic Mine, and this is a huge asset for GRC following its acquisition of Abitibi Royalties. However, it's a huge asset on a relative basis to its previous attributable production profile of sub ~5,000 GEOs per annum. On a stand-alone basis compared to other royalties in the sector, it's unlikely to contribute more than 5,000 ounces of gold in any given year or roughly $8.2 million in annual revenue at a conservative gold price of $1,650/oz. In comparison, Osisko Gold Royalties is getting 8,000 plus ounces per quarter out of CM based on its royalties.
Gold Royalty - Gold and Silver Production
(Source: Abitibi Royalties Company News Release)
The other major development asset that's a game-changer for GRC is Fenelon, and a maiden resource estimate is due out before year-end on the Quebec project. I would not be surprised to see Wallbridge Mining (OTCPK:WLBMF) announce a resource of 3.2-3.6 million ounces at this project in its maiden estimate, and potentially more, depending on what gold price it uses to calculate its resources. This should support an operation producing over 190,000 ounces of gold per annum once it heads into production, translating to 3,800 ounces of gold per annum based on GRC's 2% NSR. However, if we follow a conservative development schedule, Fenelon won't produce a Feasibility Study until Q2 2023 and will be lucky to get full permits by Q4 2023. Assuming a 20-month production schedule and a 4-month ramp-up, this means that Fenelon will not be in commercial production until Q4 2025. So, while Fenelon is an incredible asset to have a royalty on, investors won't see the fruits of this 2.0% NSR for years.
Gold Royalty North Carlin trend
(Source: Nevada Gold Mines Investor Day Presentation)
Elsewhere in the portfolio, Barrick Gold's (NYSE:GOLD) Ren is a significant asset, and GRC now holds a 1.5% NSR and 3.5% net profit interest after acquiring Ely Gold Royalties. Like Fenelon, though, Ren is not yet in production, and while it will be a pillar for growth at the Carlin Complex, it isn't benefiting GRC yet from a revenue standpoint. As we can see above, Ren is relatively small compared to Barrick's other exploration targets at Carlin, including Leeville, Rita K, and South Arturo, which Barrick just consolidated to gain 100% ownership.
Barrick Gold Ren
(Source: Isabella Pearl Technical Report)
Finally, if we look at the smaller producing assets in GRC's portfolio, we've got an extremely high-cost asset in Jeritt Canyon (until it can fill the plant), a small 0.75% NSR at Marigold, and a 0.75% NSR at Isabella Pearl, which is currently adding meaningful ounces, but has a relatively short mine life, as I've shared in a recent article on Fortitude Gold (OTCQB:FTCO). In fact, 2022 and 2023 will likely be the best years for Isabella Pearl because while further reserve growth is possible, it's highly unlikely new reserves will come in at similar grades to the ~4.0 gram per tonne material currently being mined. As shown below, GRC's revenue will remain below $12 million on a Pro-forma basis in 2022 and 2023 and could increase to $20 million by 2025. However, as I shared above, based on what I believe is a more realistic development timeline for Fenelon, I would be shocked if it contributed more than one quarter's worth of production (~1,000 ounces) in 2025, and I wouldn't expect a full year of production until 2026. Let's look at the valuation:
Gold Royalty Pro Forma Forecasted Revenue
(Source: Company Presentation)
As of Gold Royalty's September 7th presentation, the company shared that it was valued at ~$540 million on a Pro-forma basis (based on just Abitibi Royalties and Gold Royalty's market caps), but this was at a share price below US$4.75. After a nearly 20% rally last week to US$5.30, the stock's market cap is now well above $650 million when including Golden Valley, which is a higher market cap than Nomad Royalties (NYSE:NSR), and a similar market cap to Maverix Metals (NYSE:MMX). The difference is that Gold Royalty will generate less than $12 million in revenue in FY2022 unless we see gold prices hit new all-time highs.
In comparison, Nomad and Maverix will generate ~$40 million and ~$60 million in revenue in FY2022. This leaves Nomad trading at a high single-digit revenue multiple, while Maverix trades at a low single-digit revenue multiple. In Gold Royalty's case, the stock will trade at more than 50x FY2022 and FY2023 revenue estimates at its current fully-diluted market cap of more than $650 million. If one is interested in paying a high double-digit revenue multiple for a royalty company, they'd be better off going with the industry leader, Franco Nevada (NYSE:FNV), at ~22x forward revenue.
GROY stock
(Source: TC2000.com)
Gold Royalty Post IPO
(Source: Company Presentation)
If we look at the royalty/streaming sector on a P/NAV basis, which is arguably more relevant than today's revenue since it looks at the future potential of the royalty basket, we can see that Gold Royalty Corp was trading at below 1.0x P/NAV as of September 7th. However, after a more than 20% rise last week, the stock is now trading closer to 1.2x P/NAV, which is in line with Osisko Gold Royalties, a much larger producer with a more attractive royalty portfolio. Relative to Maverix Metals, the stock trades at a slight discount.
This discounted valuation relative to Maverix makes sense given that Maverix is generating much more revenue and cash flow that allows it to make new acquisitions and keep share dilution to a minimum. It also is trading at this discount pre-Beta Hunt (OTCQX:KRRGF) ramp-up, and its NPV (5%) should increase meaningfully as reserves are added at Beta Hunt to prepare for a 100% increase in production looking out to FY2025. Beta Hunt's current resources stand at 1.59 million ounces of gold, and it looks they will grow to more than 2.6 million ounces of gold by 2023. The other major asset to boost Maverix's NAV will be Hope Bay, which Agnico Eagle (NYSE:AEM) hopes to transform into a 275,000-ounce plus mine long-term. In summary, Nomad and Maverix look like much more attractive bets in the royalty/streaming space from a valuation standpoint.
Gold Royalty vs peers market cap
(Source: Company Presentation)
On the surface, Gold Royalty has seen a massive increase in its market cap since its IPO debut, but this has been accomplished by paying what I would argue to be above fair value for the most recent two acquisitions and a slight premium for Ely Gold Royalties (OTCQX:ELYGF). It makes some sense that Gold Royalty would overpay to improve its royalty portfolio because, at its debut, it had a small portfolio of relatively undesirable assets held by the same explorer that's made little progress on the properties over the past five years. This is evidenced by barely $17 million spent across more than 10 projects in the past decade, equaling out to barely $1.5 million per project, or $150,000 per year. Therefore, these acquisitions have added some cash flow and revenue generation to another otherwise dismal portfolio. So, while GROY's less desirable royalty portfolio is now diluted among a stronger portfolio, the price one has to pay to invest in it doesn't offer much of a margin of safety.
Gold Royalty Expenses
(Source: GoldMining Inc. Financial Results)
With barely $5 million in annual revenue currently and growth to $20+ million in revenue by FY2025, Gold Royalty boasts one of the sector's highest growth rates, which typically commands a premium. However, at a valuation that's approaching 1.2x P/NAV and a forward revenue multiple above 50, investors are paying a steep price for this growth. This doesn't mean that the stock can't go higher short-term from its current price of US$5.30 since stocks often levitate much higher than they should. However, from an investment standpoint, I don't see any way to invest with a margin of safety at current levels. For this reason, I continue to believe there are much better ways to play the royalty/streaming sector, with Nomad and Maverix being preferred choices. This is because they trade at similar or better P/NAV multiples but significantly lower revenue multiples, also offering strong attributable GEO sales growth over the next three years.
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