Gold does exceedingly well in a load real interest rate environment
that we're currently experiencing.
So don't be fooled by the fact that the central banks are increasing
the nominal rates.
Well if you believe in gold as an asset class, I can't think of a
better way in this type of inflation or environment to play Gold.
Well, we've initiated that that consolidation cycle that you alluded
to.
We, I peeled back in March, it 2021 initially with 14, royalties on a
number of development stages in the Americas, and having this had a
successful IPO, raise 90 million dollars.
U.s.
on NYC American, we went about using that currency that regard in our
IPO, to start to consolidate some of our peer companies, namely really
gold, and then Golden Valley and abitibi royalties.
And in the process of doing that week,
We are royalty portfolio from 14 royalties to 195 royalties.
So we're approaching 200 royalties a very Diversified portfolio.
Entirely focused on the Americas and particular focus on the battle.
Ontario Quebec, three of the best mining jurisdictions in the world
from the perspective of geological potential, low political risk and
low regulatory risk and as a result of doing that consolidation, we've
achieved critical mass we now have eight cash flowing royalties.
We have another 20
That are in various stages of construction and development.
So as a result of that consolidation, we now have pure leading growth
in our Revenue.
We expect to have compounded.
Average growth rate, annual growth rates in a revenue of over sixty
percent.
Over the next five to ten years.
As a result of all that development that's currently underway fully
capitalized.
With very strong.
Operating partners with great balance sheets, compounded basis over
the next five to ten years and the big drivers of that are Canadian
milord
Which is undergoing a 1.6 billion dollar underground expansion
financed by Niko ego and your Mana the operating Partners on that
project.
We have about 50% coverage on your underground resource with our
royalty, so that's going to lead to pronounce Revenue growth from
something.
That's already generating royalty revenue from the open pick for us.
We asked what I have a royalty on the high screen portion of the coat.
8 open-pit, I am Gold's newest Gold.
Mine which will be operational by the end of next year.
That's going to represent.
A significant leg of production, growth this month bowl for is coming
into production.
We Finance the restart of our operation by Monarch resources.
So that's up and running.
And we also announced that we now have a cash flowing, royalty
onboarding, new mans all, electrified underground, mine in the Timmins
area, in Northern Ontario.
So we have quite a diverse portfolio of cash flowing royalties.
But again with another 20 in the construction and development stage,
we have meaning
Revenue growth for the foreseeable future.
From this royalty portfolio of nearly 200 royalties what must be
terribly.
Frustrating for investors.
I think many investors were anticipating at least the smarter
investors are there were anticipating a correction of the general
Equity markets given how overextended valuations were and we thought
that would lead to a flow of capital into the more defensive names.
In other words, precious metal companies in particular and gold as an
asset class and what we've seen Instead at least in the short term is
the baby being thrown out with the bath water.
Everything's getting sold out, sold off including
The gold equities, including gold.
And I think that's largely being led by the fact that there's probably
margin calls in the general Equity markets that are leading to
wholesale liquidation of all equities and give it a gold, as retain
value better than most asset classes.
That's getting sold off with everything else and the gold equities in
particular, That's Not Unusual at the onset of a bear Market.
As we're experiencing the general Equity markets currently everything
gets sold off, but as capital gets redeployed Discerning, investors
are looking for.
Two names in gold does exceedingly well in a row real interest rate
environment that we're currently experiencing.
So don't be fooled by the fact that the central banks are increasing
the nominal rates.
The reality is the genie has been let out of the bottle and the
inflation side and inflation continues to accelerate.
That means that real interest rates continue to go deeper and deeper
into negative territory even as nominal rates go up, which is exactly
what happened in the late 70s.
During that last big inflation cycle, is Paul volcker certitude.
Jack up, interest rates real interest rates continue to go downwards.
It took him the better part of a decade team inflation because it took
him that long to get real rates up and that's not going to happen for
the foreseeable future given that inflation will continue to go up and
up in the first suitable.
Future given the amount of quantitative easing we've seen over the
last decade or so, it's unprecedented.
So I think that gold will start to respond to that.
I do believe that gold goes to, at least three thousand dollars in the
cycle, which is the all-time Peak we saw in the
1980s inflation, adjusted the 20 22 dollars.
And I think it goes beyond that because I think the amount of
quantitative easing far exceeds what we saw back in the 1970s.
And in fact, this scope for the Federal Reserve and other central
banks to raise interest rates is going to be severely limited by the
reality, that debt to GDP levels are three times.
What they were back in the 70s, the economy can ill afford a
significant jacking up of nominal and real interest rates without
Bankrupting corporations individuals and governments for that matter.
So I do think that the Federal Reserve, I think central banks
generally will have to Pivot that Midstream and start to talk about
lowering interest rates quantitative easing again and I think that
puts gold into hyperdrive at that point but inflation will continue to
accelerate.
That's why I think the world key model worked so well in that type of
environment because it provides you that insulation.
Cost inflation in the supply chain in the mining industry.
Well look I think the beauty of the royalty model in addition to its
scalability.
I talked about a little earlier on and leverage provides of a gold
price and to expiration success is we provide diversification which
even in Good Times no mine operating the most senior can provide you
know, even the biggest senior gold companies might own a dozen 215
operations.
We have 195 royalties our portfolio that's Optimum diversification.
So
in addition to providing that insulation inflation we're not tied to
any one asks that we provide that diversity.
So if something goes wrong or one of those operations and it's not
cash flowing as we had expected, we have 194 other assets to fall back
on and you can't hope to get that kind of diversification an operating
company.
Well if you believe in gold is an asset class, I can't think of a
better way in this type of inflationary environment to play Gold.
It provides you Optimum leverage to the gold price but completely
insulating you from inflation.
Input costs, which is a going concern for the mining industry.
We see headline inflation, approaching double digits in the general
economy.
And that's going to be further Amplified by the fact that the industry
is under invest in expiration of Mine Development, over the last
decade.
And as they put their minds to actually replacing reserves, they're
going to be driving up input costs as they compete for scarce Human,
Resources, Drilling and other input costs.
So I think we're entering into
A very significant inflation environment for mining operators and
royalty companies, provide you that leverage that exposure to the gold
price at the Top Line at the revenue line learning exposure to Auburn
your Capital cost inflation.
So it provides you that upside to the gold price while insulating you
from inflation but also providing you expiration upside.
So as our operating Partners drill to replace the reserves, we get
that upside in a royalty portfolio as well.
For example, in
So go wealthy are operating Partners this year are driving over seven
hundred thousand meters on their various properties.
That's the equivalent of two hundred million dollars of expiration
expenditures.
We get full exposure to that through our wealthy portfolio but we paid
nothing for it.