Empress Royalty - A Unique Gold and Silver Royalty Company Worth a Look

• Empress Royalty provides a strategic method for investing in gold and silver through royalties and streams.
• Since its inception 2.5 years ago, Empress has invested $19.5 million, currently with a net asset value of $47 million and forecasting $50 million in revenue based on initial investments.
• Empress offers both Royalties & Streams. Royalties provide a percentage of revenue from production, while Streams allow purchasing gold or silver at a discount.
• They have an experienced team, a strong financial position, and significant growth potential, with near-term catalysts and a promising pipeline of new investments.

Empress Royalty Corp. (TSXV: EMPR) is a publicly traded precious metals royalty and streaming company offering investors exposure to gold and silver production around the world. With a current market cap of just C$35 million and forecasted revenue of $50 million over the next 5 years, Empress presents an intriguing investment opportunity.

Empress Royalty was founded in 2018 by mining finance expert Alexandra Woodyer Sherron, who serves as CEO and President. Sherron has over 20 years of experience in mining finance, having directed over $1.5 billion in mining transactions at Endeavor Financial. The company is focused on acquiring gold and silver royalties and streams on operating mines in stable mining jurisdictions. Empress has assembled an impressive management team and board with decades of mining finance, engineering and geology experience.

Why Royalties and Streams?

Royalties and streams provide exposure to commodity production without many risks associated with operating mines. Royalties involve acquiring the right to receive a percentage of mineral production revenue, while streams allow the purchase of gold/silver at a discounted price.

Royalty and streaming companies have significantly outperformed both gold and gold miners over the past decade. They offer high returns, inflation protection, and portfolio diversification.

Empress Royalty's Strategy

Empress focuses on creating and acquiring royalties and streams on operating mines in the small to mid-cap range (investments up to $20 million), unlike larger royalty companies that target larger investments. This allows Empress to generate strong returns from quality mining assets.

To date, Empress has deployed $19.5 million into four royalties and streams on projects located in Peru, Mozambique, and Mexico. These assets have a combined NAV of $47 million and are forecasted to generate $50 million in revenue over the next five years. Empress is targeting an internal rate of return of 30% on its portfolio.

Near-Term Growth Catalysts

Empress' existing royalty and stream investments are forecasted to significantly ramp up production over the next 12-18 months, acting as potential share price catalysts:

• Sierra Antapite gold royalty (Peru): Production increasing in 2023
• Manica gold royalty (Mozambique): Ramping up to nameplate capacity
• Tahuehueto silver stream (Mexico): Recently doubled capacity to 1,000 tpd, forecast to reach 2,000 tpd by year-end

The company is also evaluating two potential new royalties currently under exclusivity. Additional royalty and stream acquisitions would further boost revenue and cash flow.

Financial Position

With a modest market cap of $35 million, Empress is poised for growth. The company has over $1 million in cash and an undrawn $10 million credit facility to fund new acquisitions.

Insider ownership is strong at 25% and institutional investors like Sprott hold over 35% of the shares. Empress receives investment management services from industry leader Endeavour Financial.

The Investment Thesis for Express Royalty

For investors seeking gold and silver exposure along with significant growth potential, Empress Royalty deserves consideration. The company offers a unique approach to precious metals royalties, targeting near-term producing assets capable of generating robust returns.

With its current portfolio of quality royalty and stream assets advancing rapidly, additional acquisitions in the pipeline, a strong balance sheet and an experienced management team, Empress Royalty is keen to deliver outsized growth in the years ahead. The company's modest valuation relative to its large revenue growth potential provides an attractive entry point for investors.

Leveraged Exposure to Precious Metals Prices

Royalties and streams provide leveraged exposure to underlying commodity prices compared to miners. If gold and silver prices rise, Empress' revenue and cash flow will increase at a higher rate than mining companies. This provides investors with upside potential.

High-Growth Potential

Empress Royalty is forecasting 5-year revenue of $50 million from its initial $19.5 million invested. With a number of assets ramping up production in the near term, Empress is poised for significant growth. Its current $35 million market cap does not reflect this potential.

Strong Portfolio Returns

The company is targeting a portfolio internal rate of return of 30%, much higher than average mining equity returns. Empress focuses on quality assets capable of generating robust cash flow, prioritizing return on investment.

Experienced Management

CEO Alexandra Woodyer Sherron and the Empress management team have decades of mining finance and technical expertise. Their deal evaluation, structuring and execution skills lower investment risk.

Portfolio Diversification

Empress holds royalties on mines located across three continents - Peru, Mozambique and Mexico. This diversification lowers operational risks and provides exposure to multiple mining jurisdictions.

Strong Financial Position

With over $1 million in cash, an undrawn $10 million credit facility and forecasted near-term cash flow, Empress is well-funded to acquire additional royalties/streams. The company has minimal long-term debt.

Empress Royalty offers investors upside leverage to gold/silver prices, near-term growth potential, strong returns, experienced management and global diversification. For these reasons, it may warrant consideration as a precious metals investment.