EMX Royalty's Diverse Portfolio Delivers Growing Cash Flow

• EMX Royalty generates royalties and makes strategic investments in mineral properties globally. They have a portfolio of nearly 5 million acres.
• They acquire mineral rights, add value through additional data collection, then sell the assets for cash, shares, and royalties.
• EMX has sold 92 projects since 2018 to large mining companies and helped launch new companies.
• Their cash flows are increasing with $3M per year in pre-production payments and over $1M per year in share payments.
• Key royalties include the Caserones mine (copper/moly) in Chile paying ~$10M/year and the Timok project (copper/gold) in Serbia with significant upside.

EMX Royalty (NYSE American: EMX; TSX Venture: EMX) has spent over 20 years building a global royalty and investment portfolio focused on battery and precious metals. With a collection of nearly 200 royalties and strategic investments spanning 5 million acres across 13 countries, EMX offers investors broad exposure to mineral discoveries and commodity price appreciation.

"Our business model is extraordinarily powerful and it's been functioning nicely for 20 years," said CEO David Cole at the 2022 Gold Forum Americas mining conference. The Vancouver-based company generates royalties through early-stage royalty creation as well as royalty acquisition. EMX's exploration expertise and deal-making generate new royalties, while strategic investments and royalty purchases expand the company's asset base.

Leveraging Talent and Relationships

EMX relies on the expertise of its geological team to identify promising mineral properties worldwide. "We actually acquire the underlying mineral rights by staking mining claims or acquiring exploration licenses," explained Cole. After consolidating land positions, EMX enhances the value of projects by compiling historical data, collecting new geochemical or geophysical survey data, and in some cases conducting preliminary drilling.

The company then markets these "de-risked" exploration packages to potential partners. Since 2018 alone, EMX has sold 92 projects to major miners like Rio Tinto as well as junior explorers. Partners commit to annual exploration expenditures, milestone payments to EMX during development, and crucially - royalties on future production.

"We sell that onto an industry hungry for discovery opportunity for a combination of cash payments, share payments, annual work commitments that are in ground, and always a production royalty at the end of the day," says Cole

EMX also cultivates relationships across the mining industry to identify off-market royalty acquisition opportunities. As Franco-Nevada founder David Harker noted after taking a stake in EMX, "We want exposure to their royalty generation." The company has selectively acquired royalties directly from property vendors as well as major royalty holders.

Positioned for Copper and Gold

Two of EMX's largest royalty assets highlight the company's strategic exposure to copper and gold. The Caserones copper-molybdenum mine in northern Chile is EMX's cornerstone royalty asset. London-listed Lundin Mining acquired the mine in late 2021, assuming the site's royalty obligations to EMX. Caserones is expected to produce around 104,000 tonnes of copper annually over a decades-long mine life, yielding over $10 million in annual royalty payments to EMX at today's copper prices.

In Serbia, EMX holds an uncapped 0.5% net smelter return royalty on the Timok copper-gold project operated by China's Zijin Mining. "This royalty I believe is worth a dollar U.S. per share in our stock price," commented Cole. "It will pay hundreds of millions of dollars over the mine life." The lower zone of the Timok deposit contains an estimated 1.7 billion tonnes of ore grading 0.86% copper and 0.18 g/t gold. EMX is in ongoing discussions with Zijin to potentially expand the royalty's coverage at Timok.

Portfolio Diversification Mitigates Risk

Beyond Caserones and Timok, EMX holds royalties on producing mines in Turkey (Balya lead-zinc-silver) and Nevada (Leeville gold). The portfolio also contains royalties on earlier stage exploration projects and strategic equity positions. "We're the largest single mineral rights holder in all of Fennoscandia," said Cole of the company's foothold in Scandinavia. Highlight projects include the Viscaria copper development project in Sweden and the Diablillos silver project in Argentina operated by AbraSilver.

EMX actively manages its portfolio to maintain commodity, geographic, and project diversity. The company's varied focus mitigates risk while increasing the odds of royalty revenue from new discoveries. "The bigger the portfolio, the greater the probability of that huge discovery being made on our property," explained Cole. EMX's comingled royalty generation and acquisition drives growth across market cycles.

Revenue Growth Supports Further Royalty Acquisitions

Royalty companies are valued based on the quality and optionality of their mineral property interests rather than short-term revenue. However, EMX's cash flow growth demonstrates the increasing value of its portfolio. The company has received over $90 million in royalty payments to date.

"Our cash flows are burgeoning. We've been building this company for 20 years and now the fruits of that labor are coming in," said Cole. EMX recorded $5.7 million in adjusted royalty income in 2021, up over 15% from the previous year. With a roster of partners advancing assets and continued discoveries, EMX expects royalty revenue to continue growing. The company plans to recycle cash flows into additional royalty acquisitions as well as share buybacks.

EMX Royalty represents a unique publicly traded vehicle offering leverage to exploration discoveries and exposure to in-demand metals like copper, zinc, nickel, cobalt, and gold. CEO David Cole concluded, "My goal is to get that long-term compounded annual share growth in our stock price to be closer to 17-18%...and I'm confident we can do that with this business model.

The investment thesis for EMX Royalty

• cash-flowingDiverse portfolio of nearly 200 royalties and strategic investments provides commodity, geography and project stage diversification.
• Leverages exploration expertise to generate new royalties at a low upfront cost.
• Existing portfolio includes cash flowing royalties on copper and gold mines.
• Key royalty assets have significant resource expansion and cash flow growth potential.
• Revenue model aligned with partners focused on exploration and development.
• 20-year track record building portfolio demonstrates royalty acquisition capabilities.
• Trading at a discount to royalty company averages based on portfolio assets.
• Revenue growth supports additional royalty acquisitions and share buybacks.