Revenue Surge to $8M Marks Cash Flow Positive Status, $16M Projected in 2025

• Empress Royalty is now cash flow positive with $8 million in revenue for 2024, up from $3.5 million in 2023, coming from their four key assets in Mexico, Peru, Mozambique, and South Africa.
• The company expects to double revenue in 2025 to $15-16 million based on existing investments without requiring additional capital raises.
• Their business model focuses on providing streaming and royalty financing solutions to junior mining companies that are either entering production or expanding operations.
• Empress has a diverse portfolio of both silver and gold assets and is in advanced discussions regarding a potential new investment in the United States.
• The company has paid back significant portions of their initial investments in several projects and still has $20 million in funding available from Nebari for future investments.

Empress Royalty Corp. has reached a significant milestone in its growth trajectory, achieving positive cash flow and $8 million in revenue for 2024. In a recent interview, David Rhodes, Executive Chairman, and Alexandra Woodyer Sherron, President & CEO of Empress Royalty outlined the company's strategic positioning in the precious metals streaming and royalty space, highlighting significant progress since the company's inception and outlining plans for continued growth.

Revenue Growth and Portfolio Performance

Empress Royalty reported $8 million in revenue for 2024, more than doubling the $3.5 million generated in 2023. This revenue is derived from four key assets in their portfolio: a silver stream in Mexico, a gold stream in Peru, a gold royalty in Mozambique, and a gold royalty in South Africa. The company is forecasting continued strong growth, with projections to double revenue again to $15-16 million in 2025 based on the existing portfolio alone.

"We just put the numbers out last week, very excited we did 3.5 million in 2023, we were forecasting $6 million, and we've actually delivered $8 million in revenue." 

The portfolio is showing strong performance across multiple jurisdictions. The silver stream in Mexico from Tahuehueto (operated by Luca Mining) represents approximately 35% of their revenue and is now fully ramped up in production. Importantly, Empress has already recovered close to 90% of their initial $5 million investment in this project.

Similarly, their investment in Peru's Sierra stream has returned about half of their $10 million investment, while their Manica gold royalty in Mozambique has already exceeded their initial $3 million investment, returning $4.2 million to date. Their fourth asset, a royalty with Galaxy at Golconda in South Africa secured in March 2024, is in the early stages with equipment being installed and operations commencing.

Business Model and Strategic Approach

Empress Royalty differentiates itself in the royalty and streaming sector by providing structured financing solutions specifically targeting junior mining companies that are either entering production or expanding operations. They typically focus on investments in the $5-10 million range, bridging a financing gap for companies that struggle to access traditional debt or equity markets.

The company maintains a disciplined investment approach, having evaluated over 10 potential deals in the past year but advancing none of them due to technical or other concerns. This selective approach has ensured that their existing investments perform well while maintaining capital for strategic opportunities.

"Our business motto is doubling every year our cash flow and our revenue. That takes wise stewardship and that's a little different. We're not just all about making the market happy; we're about building a business."

A key distinction in Empress Royalty's approach is their active investment style. Unlike competitors who may passively acquire existing third-party royalties or focus on early-stage exploration projects, Empress directly invests in mining companies and maintains close operational relationships with them. The company receives regular reporting from its portfolio companies and conducts site visits to monitor progress.

Financial Position and Growth Capacity

Having achieved positive cash flow, Empress Royalty is now in a position to reinvest incoming revenue into new opportunities without diluting existing shareholders. They also maintain access to $20 million in funding from financial partner Nebari, providing additional capacity for growth.

This financial stability marks a crucial inflection point for the company. As David noted:

"We're now $8 million of revenue, we're cash flow positive, our treasury is building up, we have now got a stable base from which we can now launch into that development phase."

The company has maintained tight control of general and administrative expenses, which have remained flat at approximately $2 million annually despite the significant revenue growth. This disciplined approach to overhead costs enhances their ability to generate free cash flow as revenue increases.

Interview with David Rhodes & Alexandra Woodyer Sherron

Market Dynamics and Growth Opportunities

The current market environment presents favorable conditions for Empress Royalty's business model. Rising precious metals prices enhance revenue from existing investments, while challenging equity markets make their non-dilutive financing solutions increasingly attractive to mining companies.

Many mining companies are shifting toward smaller-scale, quicker-to-revenue projects rather than building large operations that require substantial upfront capital. This trend aligns well with Empress Royalty's focus on helping companies achieve production or expand existing operations. Sherron noted:

"People are taking a different approach developing these mines. They're starting on a smaller scale to get into production, to get some cash flow coming in, so there's a lot of opportunity."

The company is currently in advanced discussions regarding a potential new investment in the United States, which would expand their geographical diversification if completed. They are also evaluating opportunities in Africa and South America, consistent with their existing portfolio's global reach.

Jurisdictional Strategy and Risk Management

Unlike some competitors who focus exclusively on "safer" mining jurisdictions like North America and Australia, Empress Royalty maintains a more flexible approach to geographical risk. The company leverages management's extensive international experience to evaluate and structure investments in diverse locations.

Their investment in Mozambique exemplifies this approach. As Rhodes explained: 

"We invested in the first modern gold mine there. They've paid us back already. We've got our investment back, we're now all in the profit zone. Why? Because we knew the operators behind it, we knew the country, we knew how to structure the transaction to make sure we're safely investing in that country."

The company mitigates jurisdictional risk through careful deal structuring and security arrangements. As a streaming and royalty company, they receive payment directly from revenue, placing them in a senior position relative to other stakeholders. Additionally, they secure their investments with claims on the underlying assets, providing protection in case of operational challenges.

The Investment Thesis for Empress Royalty

• Proven Business Model: Successfully demonstrated capability to deploy capital and generate returns with $8 million in 2024 revenue, expected to double to $15-16 million in 2025
• Portfolio Validation: Initial investments already returning capital - close to 90% returned from Tahuehueto (Mexico), about 50% from Sierra (Peru), and exceeding initial investment in Manica (Mozambique)
• Cash Flow Positive: Now able to fund growth through internal cash generation without shareholder dilution
• Expansion Capacity: $20 million available from Nebari to fund additional investments while maintaining tight G&A expenses ($2 million annually)
• Pure Precious Metals Exposure: 100% focus on gold and silver provides direct leverage to rising precious metals prices
• Disciplined Capital Allocation: Rigorous evaluation process ensures only high-quality assets enter the portfolio
• Active Management Approach: Direct investment with regular reporting and site visits enhances ability to identify and address operational challenges
• Structural Protection: Revenue-based payment structure and asset security provides downside protection compared to equity investments

Macro Thematic Analysis: 

The current macroeconomic landscape presents a particularly favorable environment for precious metals streaming and royalty companies like Empress Royalty. As central banks globally maintain significant holdings in gold as a hedge against currency devaluation, and industrial demand for silver continues to grow through green energy applications, the fundamental outlook for both metals appears strong.

The financing landscape for junior mining companies has fundamentally shifted over the past several years. Traditional equity markets have become increasingly challenging for resource companies to access, with diminished retail participation and institutional investors focusing primarily on larger, established producers. Simultaneously, debt financing remains difficult to secure, particularly for smaller operations requiring modest capital injections in the $5-10 million range that Empress targets.

This financing gap creates a strategic opportunity for streaming and royalty companies that can provide non-dilutive capital while benefiting from direct exposure to metal production. Empress Royalty's model is particularly well-positioned as mining companies increasingly pursue smaller-scale, faster-to-production projects to generate earlier cash flows.

As Executive Chairman David Rhodes noted: 

"We set this company up to be precious metals, we believe in gold, we believe it's going to $3,000, we believe in silver, we believe that's going to $40." 

This outlook would dramatically enhance returns from their existing portfolio while creating opportunities to secure new deals as mining companies seek capital to capture the benefits of higher metal prices.