Mining · Royalty & Streaming
Royalty & Streaming Sector Primer
A primer plus an Excel valuation model covering portfolio NAV, GEO mechanics, stream margin economics, and royalty deal evaluation.
2026 Edition · data as of June 2026
- pages
- 38
- sections
- 15
- model sheets
- 10
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PDF only
The full primer
£25 / ~$32
- 38 pages, 15 sections
- Worked examples and applied cases
- 2026 Edition, data as of June 2026
Excel model
Valuation template
£45 / ~$58
- 10 sheets (.xlsx)
- Runs the primer's worked valuations live
PDF + Excel model Best value
Both files together
£59 / ~$76
- The 38-page primer
- The 10-sheet Excel model
- £70 bought separately · £11 less
Complete Mining Library
All three Mining industries: three primers, three Excel models (Mining, Royalty & Streaming, and Steel & Bulk).
Inside the primer
The 15-section contents, a worked valuation page, and the Excel dashboard.
Contents
- 01 How Royalty & Streaming Companies Make Money
- 02 Listed Company Types
- 03 The Asset Lifecycle and Stage Ladder
- 04 Segments and Sub-Markets
- 05 Revenue Drivers: Step-by-Step Build
- 06 Cost Structure: Margins and Overhead
- 07 Valuation Frameworks
- 08 Worked Example: RoyaltyCo Portfolio NAV
- 09 Worked Example: StreamCo Portfolio NAV
- 10 Deal Analysis: Evaluating New Agreements
- 11 Key Financial Metrics & Screening
- 12 Risk Factors & Red Flags
- 13 Real-World Data & Benchmarks
- 14 Comparative Case Study: Franco-Nevada vs Wheaton
- 15 Operating Miners, Glossary and Cheat Sheet
Worked examples and applied cases · 38 pages · 15 sections · 2 worked NAVs
The Excel model
Educational material. This primer and its model are not investment advice or a recommendation to buy or sell any security, and they are not personalised. Worked valuations use illustrative calibrations, not fair-value estimates for any company.
Royalty and streaming companies buy contractual cash flows, a share of mine revenue or metal at a fixed delivery price, rather than operating mines. Mine-level tools such as AISC and a single-asset DCF miss the point: equity value sits in margin per gold-equivalent ounce after corporate overhead, in portfolio concentration, and in whether management can redeploy capital into accretive deals. The method that fits is a sum-of-parts portfolio NAV: value each royalty and stream, capitalise G&A against the total, and treat any premium the market pays above NAV as optionality on the next agreement.
Royalty and streaming valuation benchmarks by company size
Scale earns a higher multiple of NAV and of cash flow, while juniors look expensive per ounce because growth optionality sits on a thin production base. These are the reading bands the primer uses.
| Company size | P/NAV | P/CF | EV per GEO (trailing) | FCF yield |
|---|---|---|---|---|
| Senior | 1.0-1.5x | 20-30x | ~$75-80k | 2-4% |
| Mid-tier | 0.8-1.2x | 15-22x | ~$50-90k | 3-6% |
| Junior | 0.5-1.0x | 10-18x | ~$130-190k on a thin GEO base | 4-10% |
The NAV behind each P/NAV band discounts every asset at a rate for its jurisdiction and stage: about 4-7% real for a producing Tier-1 royalty, 5-7% for a Tier-1 stream, 7-10% for producing assets in Tier 2 and 3, and 8-12% before production. Above 1.5x P/NAV the market is paying for deals not yet signed; above 1.8x it is fully priced for growth. Overhead is the internal threat. G&A above about $120 per GEO erodes the margin edge, and a top-three asset share above 60% of revenue turns a portfolio into a bet on a few mines.
Worked example: a royalty and streaming NAV valuation
Take RoyaltyCo, the primer's hypothetical royalty company: five producing net smelter return (NSR) royalties, thirty exploration royalties, $300 million of cash and no debt. The largest, a 3% NSR on a Tier-1 mine producing 1.0 Moz a year, gets a full schedule over its 18-year life. The other four use a declining-annuity shortcut at their tier rates. At $3,500/oz gold the bridge runs as follows.
| Step | Amount |
|---|---|
| Largest royalty (3% NSR, 18-year schedule at 5.5%) | $831M |
| Four other royalties (declining annuity at 5.5-8.0%) | $872M |
| Exploration royalties (nominal value) | $200M |
| Less PV of corporate G&A ($30M/yr after 15% tax, perpetuity at 5.5%) | -$464M |
| Plus cash (no debt) | +$300M |
| Equity NAV | $1,739M |
| NAV per share (100M shares) | $17.39 |
| P/NAV at an illustrative $24.00 share price | 1.38x |
Year 1 on the largest royalty is 1.0 Moz × $3,500 × 3% × 95% after the smelter deduction, or $99.75 million, and $84.79 million after tax; production then declines 2% a year. At 1.38x the shares sit inside the senior band, and the premium over NAV is what the market pays for future deals. Gold moves this NAV in a straight line because a royalty carries no cost offset: at $3,000 gold NAV per share falls to $14.96, and at $4,000 it rises to $19.82.
The primer adds the full 18-year schedule, a stream portfolio built on margin per GEO with a gold-price and delivery grid, and implied-return tests on new deals. The Excel model runs the same bridge on your own portfolio.
Which royalty and streaming valuation method fits which company
| Company type | Primary method | Check with | Why |
|---|---|---|---|
| Senior royalty-led portfolio | Asset-by-asset NAV, then P/NAV | Top-three revenue share | Breadth and low overhead are the edge; concentration is the risk |
| Senior streamer | NAV with delivery-price sensitivity | EV/GEO accretion test on new deals | The delivery price caps margin and moves with spot |
| Mid-cap hybrid or acquirer | G&A per GEO, then NAV | EV/GEO against peers | Overhead creep erodes the model at smaller scale |
| Junior royalty company | EV/GEO against its own multiple | Balance-sheet capacity | Growth optionality dominates a thin GEO base |
| A new stream or royalty deal | Implied IRR on the upfront payment | Price per GEO against the buyer's own EV/GEO | The entry price encodes stage and jurisdiction risk |
What the full primer adds
The primer builds that framework from the ground up. After the company-type and stage-ladder setup, it converts revenue and cost lines into GEOs and cash margins, then walks two full worked NAVs (a royalty portfolio and a stream portfolio). Deal analysis turns the same machinery on new agreements via implied IRR and $/GEO. Screening metrics, risk flags, peer benchmarks, and a Franco-Nevada versus Wheaton case study close the loop, leaving you able to rank names without mixing operator and royalty screens.
The companion Excel model mirrors the primer across ten sheets, from the royalty and stream books through to a deal evaluator, so you can run the same NAV and deal logic on any name in the sector. Free guides on the site cover what a gold-equivalent ounce is, NSR vs NPI royalties, sliding-scale royalties, how to value a metal stream, streaming company tax rates, EV/GEO valuation, and Cobre Panama concentration risk. To see the framework applied to real companies, read the research profiles on Franco-Nevada, Wheaton Precious Metals, Royal Gold, OR Royalties, and Triple Flag.
Sheets: Quick Start, Instructions, Assumptions, Royalties, Streams, Detailed Model, NAV Bridge, Deal Evaluator, Sensitivity, Dashboard.
Royalty and streaming valuation: free guides
- Royalty vs Streaming Companies: Key Differences
- What Is a GEO? Gold-Equivalent Ounces Explained
- NSR vs NPI vs GOR Royalties: Which to Model
- Royalty Rate Benchmarks: Typical Rates by Commodity
- How Sliding-Scale Royalties Change the Model
- How to Value a Metal Stream: Margin per Ounce
- The Streaming Tax Trap: Offshore Rates and NAV
- EV/GEO and $/GEO: Judging Royalty Deal Value
- Cobre Panama and Royalty Concentration Risk
Royalty and streaming valuation FAQ
- How do you value a royalty or streaming company?
- Build a sum-of-parts net asset value (NAV). Value each producing royalty or stream from its contract terms and production at a discount rate set by jurisdiction; risk development assets at 0.3-0.7x of their NAV depending on stage; carry exploration royalties at a nominal value. Then deduct capitalised corporate G&A, add cash and deduct debt. P/CF and EV per gold-equivalent ounce (GEO) are cross-checks on that build.
- What is a normal P/NAV for a royalty company?
- Senior royalty and streaming companies usually read at 1.0-1.5x P/NAV, mid-tier names at 0.8-1.2x and juniors at 0.5-1.0x. Above 1.5x the market is paying for a deal pipeline beyond the booked portfolio, and above 1.8x it is pricing growth that may never arrive. Below 0.8x it doubts the portfolio or the commodity outlook.
- Why do royalty companies trade at a premium to NAV?
- Their cash flows are more predictable than a miner's, the cost base is little more than corporate overhead, and management can put spare cash into new agreements that add value per share. The premium above 1.0x prices that deal optionality. Concentration and overhead erode it: the primer flags G&A above about $120 per GEO and a top-three asset share above 60% of revenue.
- What discount rate is used for a royalty or stream NAV?
- Rates are real and follow jurisdiction and stage. A producing royalty in a Tier-1 jurisdiction such as Canada or Australia is discounted at about 4-7%, a Tier-1 stream at 5-7%, producing assets in Tier 2 (Chile, Peru, Brazil) and Tier 3 at 7-10%, and development-stage assets at 8-12%. Use one primary rate per asset; stacking a high stage discount on a high jurisdiction rate double-counts the risk.
- How is EV per GEO used?
- Enterprise value per annual gold-equivalent ounce is an accretion test. A new deal struck below the buyer's own trailing EV/GEO adds value per share; one struck above it dilutes. Seniors read at about $75-80k per trailing GEO, while juniors can screen well above $130k because growth optionality sits on a thin production base.
See this methodology applied to a real company:
Franco-Nevada (FNV) →