Maximizing returns and minimizing risk investing in Gold Royalties
- Monday June 29th, 1pm-2pm PT
As markets search for stability and aim to get back on track, there is still a lot of fear and a sense of an inevitable crisis following the current pandemic. On our first webinar we discussed the key role gold plays in an investment portfolio as a market hedge. On our next webinar we will discuss a business model within the gold space that may not be known by many investors; Gold Royalties and Streams.
For the last seven years, royalty companies have vastly outperformed the rest of the gold sector:
1. Market capitalization-weighted Index year over year increase. Index includes Franco -Nevada, Wheaton Precious Metals, Royal Gold, Sandstorm Gold, Osisko Gold Royalties, Abitibi Royalties, EMX Royalties, Ely Gold Royalties, Maverix Metals, Metalla
Royalty and streaming companies have become an increasingly popular investment for those looking to gain exposure to the mining sector without the risks associated with directly taking a position in mining companies, as they do not fund ongoing operations, nor are they exposed to pre-production or sustaining capital expenditures.
On June 29th, we invited two expert investors from different sides of the business; Frank Holmes, the head of U.S. Global Investors and Joe Mazumdar, a precious metals analyst and editor of Exploration Insights. Frank shared why he invests in Gold Royalties rather than other models in the gold sector. Joe pointed out the key things he takes into account when evaluating new gold royalty companies to add to his portfolio. Paddy Nicol, President & CEO of Evrim discussed the merger of Evrim and Renaissance Gold and explained what it means to become an organic royalty generator, as well as the potential upside investors can look out for.
The drivers for gold demand; Fear drivers vs. Love drivers
Case study 1 showed the relationship between the current U.S. debt and the Fed’s balance sheet and the comparison to the 2008 Financial Crisis
Case study 2 tracked the gold price since the current pandemic outbreak
Case study 3 showed the shrinking supply of gold worldwide and a comparison to Palladium’s skyrocketing price following a supply deficit since 2014
Frank broke down the royalty model, its attractiveness, a comparison of their performance among gold spot price, NYSE Arca Gold Miner Index and the GDXJ ETF
How U.S. Global’s GOAUX index uses quantitative analysis to pick stocks
The effect of millennials using Robinhood for investing during the pandemic
About our speakers:
Frank Holmes is chief executive and chief investment officer at U.S. Global Investors, which specializes in natural resources and emerging markets investing.
He is a regular commentator on the business television channels CNBC, Bloomberg Television, Fox Business Channel and CNN's Your Money, and he has been profiled by Barron's, Fortune and other publications. As chief investment officer at U.S. Global, Holmes oversees an investment team whose mutual funds have won more than two dozen Lipper Fund Awards and certificates since 2000.
Joe Mazumdar is the editor and analyst of Exploration Insights.
Before becoming a mining market analyst, Joe worked for over a decade as an exploration geologist in different capacities for IAMGOLD, North Minerals, and RTZ in South America, MIM Exploration in Queensland, Australia, and Noranda and others in Western Canada and the Northwest Territories.
CEO & CIO, U.S. Global Investors
Editor & Analyst, Exploration Insights