Royalty Management Holding Corp (NASDAQ:RMCO) is taking a broader view of the royalty business. While many peers concentrate on a single commodity, the Indiana-based firm is building a portfolio that spans critical minerals, sustainable land use, advanced manufacturing and even Bitcoin. The strategy centers on securing royalties tied to top-line revenue and backing technologies that boost efficiency and sustainability — from constructing a US-based rare earth supply chain to developing fertilizer recycling systems.
In this interview with Proactive, CEO Thomas Sauve discusses how the company’s diversified approach is designed to balance risk and reward, the challenges of rebuilding domestic rare earth production, and where he sees the most promising opportunities ahead.
Proactive: The company’s model is so diverse, spanning critical minerals, sustainable land use, digital assets, and even Bitcoin. What’s the unifying vision behind this strategy?
Thomas Sauve: Unlike traditional royalty companies that focus on a single commodity, we intentionally diversify our investment thesis to capture opportunities across evolving markets. Since commodities don’t all move together, this broad approach helps balance risk and reward.
Our core strategy is investing in projects that generate royalties based on top-line revenue, like a per-gallon royalty from a rainwater company or a percentage of commodity sales in mining. This ties our returns to production and prices, reducing operational risk and allowing us to capture commodity price expansion.
We’re flexible. If we can’t secure royalties, we may take equity or debt to participate.
Royalty companies tend to be very commodity-focused or commodity-specific. You mentioned taking a much broader view, which really differentiates you in the market. How do you think that gives the company an edge, and how does it benefit investors?
We don’t just focus on traditional commodities like platinum, gold, silver, or copper, we broaden our scope to include technologies that help companies better monetize revenues and improve operations.
For example, we invest in intellectual property alongside partners to develop technologies that enhance resource extraction or processing, giving companies a competitive edge. We then work with our other portfolio companies and prospective investments to provide these technologies to improve their own business models, thereby increasing the value across multiple holdings.
One key investment is in a rare US-based permanent magnet manufacturer, advancing magnet technology typically dominated overseas. We support their research and earn a 1.5% royalty on magnet sales.
Another example is our partnership with Texas Tech University’s Center for Agricultural Sustainable Fertilizer (CASFER), which develops technology to capture and recycle fertilizer runoff, reducing environmental impact. We sponsor research and plan to monetize this innovation.
So, beyond extractive operations, we also invest in technologies that make resource use more efficient and sustainable.
It sounds like you often take a very active role in your investments, is that right?
Yes, we like to find ways to create synergy among our investments.
Take the rare earth space, for instance. It’s an industry gaining a lot of attention now, but we were interested in it even before it became a government priority. We’re building a complete supply chain through our investments.
For example, we have stakes in several mines extracting rare earth minerals. Then, we work with another company that refines those minerals — separating and concentrating key elements to usable forms. Finally, that ties directly into our investment in the magnet manufacturer I mentioned earlier, which takes those refined elements to produce magnets.
We’re actively looking for more investments along this supply chain. This thematic approach allows our investments to work together, benefiting the group as a whole and driving growth and profitability.
With several of your early investments now moving into production, how is that shaping your revenue growth and margins going forward?
A lot of our earlier investments are now coming into production or sales and starting to deliver returns to our company. In some cases, we’ve had resource operations that were idled by the operator, but we expect those to come back online. Certain technologies we’ve backed are also beginning to generate revenue.
Our goal is to keep growing that number over time. On the cost side, we’re very disciplined. As revenue expands, we don’t expect expenses to grow at anywhere near the same pace. At the end of the day, we’re an investment company, and our core assets are the royalty agreements we have with our partners. We’re not the ones doing the extraction or operations, so when a partner starts operating, we don’t need to hire crews or run the operation ourselves.
Our role is to ensure agreements are honored and to monitor performance. That means we can scale revenues without proportionally scaling costs. We might add another person to oversee investments, but overall, we fully expect margins to expand as our royalty income expands.
You’re building a rare earth supply chain from mine to magnet here in the US. What are some of the biggest challenges and opportunities you see in this effort—not only from a royalty management perspective but also for US domestic supply?
The opportunity here is massive. The rare earth industry is making a comeback in the US because for a long time, we’ve depended heavily on foreign nations — especially China, which has been the dominant player, the “800-pound gorilla” in control of much of this market.
The US has realized it can’t rely on foreign sources for these critical materials that are essential to everyday life — from cell phones and computers to magnets used in cars and drones, and especially for defense applications. The US defense industry can’t function without these rare earth minerals. Because of that, the domestic industry is rapidly ramping up, with strong support from the government to help rebuild supply chains here.
That said, there are challenges. From an industry perspective, it’s almost like the Wild West. People often take magnets for granted, but these are high-performance magnets containing rare elements. For decades, the knowledge and intellectual property around making these magnets effectively were lost to China, which became the dominant player. Now, the US is trying to rebuild that expertise and industry from scratch.
From an investor standpoint, it’s crucial to partner with companies that have the capability and expertise to navigate these challenges. Many companies in the rare earth space are still figuring out the technical and operational components—like what exactly goes into making a magnet and how to manufacture it at scale.
Thankfully, our partnerships are with companies that have the right knowledge and experience. For example, we work with Advanced Magnet Lab in Florida, a magnet manufacturer pushing the technology forward. We also have relationships with companies like Ferrox Holdings in South Africa and ReElement Technologies here in the United States.
Given the recent spotlight on rare earths, do you see your company doubling down on these types of investments?
We’ll continue doing what we’ve been doing, which is being very selective and strategic rather than just throwing money at high-profile names. We focus on identifying true bottlenecks—points in the supply chain where there’s a real need the industry must address.
From our perspective, the real opportunity is finding the companies that can do that next critical step: taking the material from concentrate to finished magnet and helping them grow. That might mean investing directly, supplying equipment in exchange for a royalty, or structuring another type of partnership that benefits both companies.
That’s why we’re so proud of our investment in Advanced Magnet Lab. They’re likely the first US company in more than three decades to actually create a magnet domestically, not just a better magnet, but any magnet at all.
You’ve said recently that some of your investments are being overlooked from a valuation perspective. Why do you think that is?
I don’t think it’s much different from general investing in the market. There are a lot of companies out there making big claims, and as an investor, you need to step back and challenge those claims.
Our approach is to look under the hood, talk to people who truly understand the industry, and figure out who’s actually doing the work and creating successes. Often, the best companies aren’t the ones making headlines, they’re the ones quietly putting pencil to paper and executing.
If you can find a company like that in an exciting space, it will eventually get the recognition it deserves. In the meantime, it’s just focused on growing its business — and that’s where we want to be involved.
You recently added a Bitcoin Treasury strategy. How do you see digital assets fitting into your long-term capital plan?
We’re still finalizing the treasury management strategy, but overall, we like the theme of Bitcoin, cryptocurrency, and data centers as a growing sector. We view Bitcoin and crypto as commodities, no different than any other commodity. If it’s a good investment, it deserves our consideration.
Currently, we’re exploring a couple of ways to participate. One is through the treasury strategy, potentially allocating a small portion, say around 5% of our cash flow, into a basket of cryptocurrencies like Bitcoin to capture potential price appreciation.
We also control some brownfield sites with existing electrical infrastructure and favorable power company relationships. These sites are ideal for hosting data centers or cryptocurrency mining operations. Our plan is to package these assets, leasing the infrastructure and space to Bitcoin or crypto companies. This can generate rental income or possibly royalties tied to the cryptocurrency produced there.
Finally, where do you see the company in five years?
I think we’ll continue to grow our current slate of investments while expanding into new opportunities. That means supporting our existing holdings as they scale, diversifying our portfolio, and steadily increasing revenues while keeping costs tightly controlled so that healthy margins directly benefit our shareholders.
Right now, we’re paying a dividend because we have excess cash and want to return value to shareholders. Over time, as the company expands, I see that dividend growing alongside our business.