As we guided to last month, the downtrend in the mining royalty and streaming sector continued in June, with the average share price down 6.8% and 92% of mining royalty and streaming companies experiencing negative share price movements.
June was the third consecutive month of declining share prices and the average share price is now down by over 20% over this three-month period, which means the royalty sector is officially in bear market territory.
A lack of news flow across the board in the mining royalty and streaming sector exacerbated the problems seen by the wider markets with, the S&P 500 down nearly 20%, the Dow Jones Industrial Average down 14% and the Nasdaq down 30%. A whole cast of factors, led by inflation, have added up to give markets the worst first-half since 1970.
Investor’s now have to face the prospect of a global economic downturn and potential recession, and as a result we would not expect to see a turnaround in the mining royalty sector during July.
Majors
Royal Gold, Inc. (TSX:RGL) was the best performing major during June, after being the worst performer for the two previous months, down 5.5% on the month (↓24.4% 3-months). During the month there was no key developments in the business but it did let investors know that it was commencing a non-deal roadshow.
Wheaton Precious Metals Corp (LSE:WPM, TSX:WPM, NYSE:WPM) was the worst performer in June, down 13.1% (↓24.3% 3-months) despite being named to the Corporate Knights' 2022 list of the Best 50 Corporate Citizens in Canada. Corporate Knights has been producing global corporate and fund rankings for 20 years.
The best 50 were selected from a pool of 332 Canadian companies, including all those with revenues over C$1bn. Each company was evaluated on a set of 24 environmental, social and governance indicators, relative to their industry peers and using publicly available information.
Within the overall Asset Management peer group, Wheaton ranked third among 207 global companies and within the GICS Industry of Metals and Mining, Wheaton finished ninth among 304 global companies.
Large-Tiers
Deterra Royalties Limited was the best performing large-tier royalty company in June, down 4.9% (↓11.0% 3-months), despite no news flow.
Labrador Iron Ore Royalty Income Fund (TSX:LIF) was the worst performing large-tier during June, down 13.2% (↓32.5% 3-months), despite an 80% increase to the dividend to $0.90 per share, compared to $0.50 in the previous quarter.
Mid-Tiers
Maverix Metals Inc (TSX:MMX) was the best performing mid-tier, up 1.2% during June (↓9.4% 3-months), despite no news flow.
Nomad Royalty (TSX:NSR) was the worst performing mid-tier, down 10.7% on the month (↓1.0% 3-months), also despite no news flow.
Anglo Pacific Group PLC's (LSE:APF, TSX:APY, OTC:AGPIF) was down 7.0% during June (↓16.9% 3-months), even with the commencement of production from the small-scale plant at the Piauí Nickel Project in Brazil, where Anglo Pacific has 1.25% royalty on the project. The small-scale plant will feed into the bankable feasibility study currently being completed for a full-scale project.
Anglo has the option to acquire an incremental 3% royalty, for an additional US$70 million. Once at full production, Brazilian Nickel PLC, the operator, expects annual production of up to 24 Kt of nickel and 1 Kt of cobalt, potentially contributing annual royalty income ranging between US$12.5-17.5 million to Anglo at current long-term broker consensus forecasts.
Juniors
Morien Resources (TSX-V:MOX) was the best performing Junior and the best performing mining royalty company overall in June, up a staggering 93.0% on the month (↓23.9% 3-months), following media speculation regarding the re-opening of the Donkin Coal Mine, located in Cape Breton, Nova Scotia, over which Morien has a variable royalty.
Gold Royalty Corp (NYSE-A:GROY) was the worst performing Junior for the month of June, down 23.7% (↓45.4% 3-months) on the back of no news flow.
Orogen Royalties Inc. (TSX-V:OGN) share price was also substantially down during June, 18.6% (↓20.0% 3-months) despite reaching an agreement with Advance Lithium Corp. to purchase 3% net smelter royalties on three prospective mineral licenses in the Lake Victoria Gold Fields in western Kenya.
Under the Agreement, Orogen will pay Advance Lithium US$120,000 for the Royalties and transfer its interest in the Sarape Gold Project to Advance Lithium. Orogen will continue to retain a 1.5% net smelter return royalty on the Sarape Project.