Royalty

Royalty mining refers to a type of financing arrangement where an investor provides money to a mining project in exchange for a percentage of the revenue generated from the sale of minerals. The investor, known as the royalty holder, does not take an ownership stake in the mining property but instead receives a portion of the production profits. Royalty mining can be an attractive financing option for mining companies as they do not have to give up equity in the company or take on debt. It also allows the company to access capital without incurring additional interest payments or principal repayments.

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The royalty holder benefits from this arrangement as they do not have to take on any of the operational risks associated with owning a mining property. They only have to bear the cost of their investment and receive a regular stream of revenue without having to participate in the day-to-day operations of mining. A royalty interest can also be a hedge against inflation and can provide exposure to commodity prices without owning a physical asset. Overall, royalty mining can be a mutually beneficial financing arrangement for both the mining company and the royalty holder, allowing each party to mitigate their risks and enjoy the potential rewards.