While precious metals royalties dominate today, copper and nickel will deserve a growing share of the portfolio moving forward, according to David Cole, CEO of EMX Royalty.
Cole sat down with Kitco Mining at The Mining Investment Event of the North in Quebec City on June 20. He said while other royalty companies are jumping on the battery metals bandwagon, EMX has always taken a diversified approach.
“Most of my career, royalty companies were focused on precious metals,” Cole said. “Now it’s in vogue to be diversified. We’ve always believed the diversification was prudent.”
Cole said the company applies their expertise to a wide range of projects across the globe, and limiting themselves to precious metals wouldn’t make sense. “We’re doing royalty generation work in mineral belts around the world, and we’re not going to dismiss an opportunity because it’s not gold,” he said, “so we naturally became a diversified holder of royalties, and particularly with respect to our royalty generation work.”
Cole acknowledged that the lion’s share of their royalty generation projects are concentrated in the very stable jurisdictions of the Americas and northern Europe, but said that jurisdictional and geopolitical risk calculations will always take a backseat to geology.
“Geopolitical risk with the mining industry is quite a bit different than if you’re selling cell phones for example, and there’s a lot of risks that people don’t fully ascertain, which would include social license risk, environmental risk, that can be larger in some of the developed countries actually. It’s difficult to get permits etc, so it’s a dynamic equation,” he said.
“Generally speaking, we’re driven by prospective geology, because when you look across the board, the largest risks that we face are the technical risks.”
He said that EMX puts its focus on prospective geology, “put smart geologists in those terrains, see what kind of assets we come up with,” he said. “We’ve done a great job over 20 years.”
Cole said that while the EMX portfolio is seeing a lot of income from gold and other precious metals at the moment, he sees their proportion of critical metals increasing in the coming years.
“The long-term potential within the portfolio is weighted towards copper,” he said. “Of all the critical-slash-battery metals, copper we believe is most important, followed by nickel of course, great assets to be exposed to. We’ve been aggressive at acquiring all the nickel assets that we can.”
0:00 – EMX is ‘metal agnostic’
1:07 – Royalty generation and purchases
2:10 – Geopolitics vs. geology
3:08 – Precious vs. battery metals
3:50 – Newmont-Newcrest and M&A
Coverage sponsored by EMX Royalty
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