September continued to pile the pressure on investors in the mining royalty and streaming sector with the average share price for the space continuing to trend downward by 2.2%. Since the start of the year the average share price for the sector, is now down 19.2%, removing one outlier from the data.
During the month, 63% of companies in the mining royalty space experienced negative share price movements. The Majors were the best performing subset of the sector, up 2.5%, after being the worst performers last month. The Large Tiers were down 1.4%, while the Mid Tiers were up marginally, 0.3%. The Juniors were the worst performing subset of the sector, down 3.9%.
September is typically a lacklustre month for markets, and this September has been particularly bad across the board. The Dow Jones Industrial Average experienced its worst September in 20 years, down 9.2%, while the S&P 500 was down 10% on the month.
Major markets have taken a battering this year, with the Dow, S&P and Nasdaq down 21%, 25% and 33%, respectively. The increasing alarm amongst investors that the US Federal Reserve will continue to raise interest rates for longer than was previously anticipated, in order to combat inflation, is likely to continue to drive markets lower in the coming months.
Majors
Wheaton Precious Metals Corp (LSE:WPM, TSX:WPM, NYSE:WPM) was the best performing major for the second month in a row, up 6.1% (↓10.2% 3-months) despite no news flow.
Wheaton’s guidance for the year is between 640,000 to 680,000 gold equivalent ounces (GEOs), which is down from 750,000 GEOs in 2021, but the long-term guidance is strong at 800,000 GEOs for the 5-year average and 850,000 GEOs for the 10-year average.
The company has generated over US$8.8 billion in cash flow since it began trading in 2004 and has declared US$1.7 billion in dividends over the same period, returning real value to its shareholders.
Franco-Nevada Corporation (TSX:FNV) was the worst performing major this month, down 0.6% (↓9.2% 3-months) also despite no news flow.
In August, Franco posted on Q2 2022 results with showed production for the first half of the year at 369,666 GEOs, which is level with the same period last year. Revenue was up 5% to US$691.1mln, with net income up 9% to US$378.5mln.
During 2021, the company produced 728,237 GEOs and has given guidance of between 680,000 to 740,000 GEOs for 2022, increasing to 765,000 to 825,000 GEOs for 2026.
Large-Tiers
Osisko Gold Royalties (TSX:OR) was the best performing large-tier this month after being the worst performer the previous month, up 5.2% (↑0.8% 3-months).
During the month the company announced the acquisition of a 1.0% net smelter return (NSR) royalty over the currently defined mineralisation and prospective exploration areas, which form the Marimaca copper project located in Antofagasta, Chile.
Osisko is acquiring the NSR for total consideration of US$15.5mln from Marimaca Copper Corp (TSX:MARI). The project has a I 43-101 compliant mineral resource estimate of 70.4 million tonnes (Mt) at a grade of 0.60% total copper (CuT) in the Measured and Indicated categories and 43 Mt at a grade of 0.52% CuT in the Inferred resource category.
In addition, the project has an exploration target of 30-50 Mt of 0.4-0.5% copper for the MAMIX zone. Marimaca is planning 41,572 meters of drilling in 2022, which is expected to expand mineral resources to support a definitive feasibility study due to commence later this year.
Sandstorm Gold Ltd (TSX:SAND) was the worst performing large-tier during September, down 8.7% (↓13.1% 3-months), after completing a US$80mln bought deal at a price of US$5.10 per share two days before declaring the company’s fourth quarterly cash dividend for 2022, of C$0.02 per common share
Sandstorm plans to use the net proceeds of the offering for future acquisitions of streams and royalties, the repayment of amounts drawn under the company’s revolving credit facility, and other general working capital purposes.
Mid-Tiers
Altius Minerals Corporation (TSX:ALS) was the best performing mid-tier last month up 5.7% (↑6.7% 3-months), despite no news flow during September. In August, Altius reported H1 2022 attributable royalty revenue of C$54.1mln, 36% higher when compared to C$39.7mlnfor the six months ended June 30, 2021.
Adjusted EBITDA for the first half of the year totalled C$48.0 million, up 49% from C$32.3 million the previous year. Altius also declared an increased quarterly dividend of C$0.08 per share, which represents a 14% increase over recent quarterly levels.
Anglo Pacific Group PLC (LSE:APF, TSX:APY, OTC:AGPIF) was the worst performing mid-tier last month, after being the best performer for the proceeding two weeks, down 5.4% (↑5.3% 3-months), despite on market share purchases from two directors demonstrating their commitment to the business.
Spruce Bluff Resources Limited, a company closely associated with Robert Stan, non-executive director of Anglo Pacific, acquired 25,100 shares at price of 164p per share, increasing his holding to 403,981 shares, representing 0.16% of the issued share capital of the company.
Marc Bishop Lafleche, chief executive officer of Anglo Pacific, acquired 40,000 ordinary shares at an average price of 150.16p per share, taking his holding to 274,978 shares, representing 0.11% of the issued ordinary share capital of the company.
Anglo Pacific also noted that OZ Minerals has made a final investment decision on the West Musgrave copper-nickel project, located in Australia, where Anglo Pacific has a 2.0% net smelter royalty interest over the project.
Juniors
Trident Royalties PLC (AIM:TRR) is the best performing mining royalty Junior and overall company this month up 11.2% (↑17.6% 3-months), but the accolades don’t stop there, while the average share price in the sector is down 19.2%, Trident has outperformed all its peers and is up an impressive 39.3% since the start of 2022.
During the month, Trident published its interim results for H1 2022, with the company generating revenue of US$3.1mln, up nearly 4,000% from the negligible revenue the previous period. The company also generated positive operating cash flow of US$0.8mln for the first time in its history.
During the course of the year, the company has invested US$74.0mln in acquisitions, which has transformed the business and Trident is now well positioned to continue its strong growth profile and has a strong balance sheet to support additional acquisitions.
Trident has also seen strong management support this month with two directors buying shares on market. Richard Hughes, chief financial officer and executive director, purchased 175,000 shares at an average price of 49.93p per share, taking his holding to 300,000 shares representing 0.1% of the company. David Reading, non-executive director, purchased 175,000 shares at an average price of 51.16p per share, giving him a 0.06% interest in the company.
Uranium Royalty Corp was the worst performing junior this month down 24.8% (↑7.9% 3-months) after it announced it has renewed its at-the-market equity programme that allows the company to distribute up to US$40mln of common shares of the company to the public from time to time.
The company intends to use the net proceeds of any such sales under the ATM Program to finance the acquisition of additional royalties, streams, physical uranium and similar interests and for working capital.
During the month, Uranium Royalty Corp also published its interim results for the three months ended July 31, 2022. While no revenue was generated during the period, as the company is currently in a growth phase, it had approximately C$133mln in cash, marketable securities and physical uranium holdings.