Elk Gold Royalty Fuels Silver Surge Amid Bullish Market Trends
Silver Crown Royalties Inc. (SCRI:CBOE; SLCRF:OTCQX) has announced the receiving of a CA$124,299.49 royalty payment from Gold Mountain, Elk Gold Mine. Read why the company is excited for the future of this project.
Silver Crown Royalties Inc. (SCRI:CBOE; SLCRF:OTCQX) has announced the receiving of a CA$124,299.49 royalty payment from Gold Mountain, Elk Gold Mine. This payment is from the terms of their May 2023 Royalty Agreement and brings the total royalties received by Silver Crown under this agreement to CA$216,296.01.
Peter Bures, CEO of Silver Crown, expressed optimism about the future of the Elk Gold Mine, highlighting the positive relationship between Silver Crown and Gold Mountain.
Bures stated in the news release, "We look forward to Gold Mountain's continued success at the Elk Gold Mine, which is anticipated to generate substantial benefits and significantly enhance value for Gold Mountain and Silver Crown shareholders."
Silver Linings
As Kitco reported on September 27, "Silver, which served as both a safe-haven investment and a key material in industrial applications, rallied more than 36% so far this year to outpace the 30% gain in gold." Silver's growing industrial demand, particularly in photovoltaic products for solar panels, doubled over the prior year, with global demand reaching nearly 1.2 billion ounces in 2024, according to The Silver Institute.
"Silver quietly surged from just under US$20 an ounce last October to a 12-year high of over US$32 an ounce this week," Kitco highlighted. Adding to this, UBS analysts noted in a report quoted by FXStreet on September 24 that "silver will likely outperform gold over the next 12 months" due to its relative undervaluation compared to gold. UBS emphasized the potential for silver to benefit from the current gold price environment, particularly as the Federal Reserve continues to ease its policies.
Geopolitical factors have also played a role in silver's recent performance. According to Peter McGuire in the Economic Times on September 26, "Central bank demand globally has been extraordinary" over the past decade, providing a solid foundation for silver prices to rise alongside gold. McGuire added, "It seems to be onward and upward at the moment."
The Jerusalem Post further noted on September 24 that "silver, long overshadowed by its golden cousin, is poised for a historic surge" due to technical factors such as a massive cup and handle pattern spanning 44 years. This formation signals a potential breakout, with financial experts predicting a meteoric rise in silver prices.
Silver Crown's Playbook
According to Silver Crown's investor presentation, the company's strategic royalty agreements are designed to provide consistent revenue through silver-only royalty streams. Silver Crown has focused on targeting producing or near-producing assets in Tier 1 jurisdictions. This allows the the company to maintain a diverse portfolio and mitigate risks.
One of the key catalysts for Silver Crown is the royalty agreement with Gold Mountain, which includes a minimum annual delivery of 6,000 ounces of silver. The agreement's flexibility allows for bonus payments, such as CA$500,000 for every additional 2,000 annual ounces delivered, according to the company's Q3 2024 presentation.
Third-Party Expert Analysis
Silver Crown Royalties has received positive attention from analysts, with Couloir Capital initiating coverage with a Buy rating and a CA$31.20 per share fair value target.
According to Couloir Capital's analyst Tim Wright on September 5th, "Based on the large opportunity set of silver royalties available and Silver Crown's first mover advantage, we believe the company is well-positioned to grow rapidly and become a household name in the silver royalty space." Wright noted the company's strong growth strategy and highlighted the potential return for investors at 285%. He based this on Silver Crown's current portfolio and upcoming deals.
Streetwise Ownership Overview*
Silver Crown Royalties Inc. (SCRI:CBOE)
*Share Structureas of 8/15/2024Source: Silver Crown Royalties Inc.Wright further discussed Silver Crown's "clear strategy for expanding its royalty portfolio" by targeting smaller silver contributions in mining projects. This approach allows operators to benefit from byproduct metals without significant royalty cuts. He also commented on the company's ability to consistently add new royalties to its portfolio. Wright mentioned that "while the track record is short, it shows that the company can source and add new royalties to its portfolio with some consistency."
Ownership and Share Structure
As for ownership of Silver Crown, insiders and management hold a total of 21%, institutions own 16% and private corporations have 6%, noted Wright.
"Insider ownership by management aligns management's interests with those of shareholders, which is a desirable attribute," he added.
Regarding share structure, the royalty company has 2.3 million (2.3M) outstanding shares, 474.9K in CA$8 warrants, 757.1K in CA$16 warrants and 66.3K in restricted stock units, for a total of 3.7M fully diluted shares.
Silver Crown's market cap is CA$18.7M.
| Want to be the first to know about interestingSilver investment ideas?Sign up to receive the FREE Streetwise Reports' newsletter. | Subscribe |
Important Disclosures:
Silver Crown Royalties Inc. has a consulting relationship with Street Smart an affiliate of Streetwise Reports. Street Smart Clients pay a monthly consulting fee between US$8,000 and US$20,000.As of the date of this article, officers and/or employees of Streetwise Reports LLC (including members of their household) own securities of Silver Crown Royalties Inc.James Guttman wrote this article for Streetwise Reports LLC and provides services to Streetwise Reports as an independent contractor. This article does not constitute investment advice and is not a solicitation for any investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Each reader is encouraged to consult with his or her personal financial adviser and perform their own comprehensive investment research. By opening this page, each reader accepts and agrees to Streetwise Reports' terms of use and full legal disclaimer. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company.For additional disclosures, please click here.