Elemental Royalty Corporation

Thank you for joining us. My name is Tina and I will be your conference operator today. At this time, I would like to welcome everyone to the Elemental Royalty Corporation conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, press star 1 again. For those of you viewing online, you can submit questions at any time using the component on the webcast console. Thank you. I would now like to turn the call over to David Cole, CEO of Elemental Royalty Corporation. Please go ahead.

Thank you very much. And thanks, everybody, for joining today and your interest in Elemental. I must say it's my immense pleasure to have the opportunity to be the CEO of this merged company and very pleased with the cultural results and financial results and portfolio combination that has occurred through the joining of Elemental, Altus Royalties Corporation, and EMX Royalty. And And key to that team of which I'm humbled by and pleasured to work with would be the president who's joining us today, Frederick Bell. And also, it's been a great pleasure over the last couple of years, a newer member of the team, but a key member is our CFO, Stefan Wenger. And the three of us will be here today to go through this presentation and to answer all of your questions. First of all, I'd like to say that, and if you've heard me speak before, you know I'm an aficionado of the royalty business model and all of the immense aspects of optionality within that. Key to that is that fundamentally, We believe that the value of mineral rights augments over time. No better example of that than the price of gold moving from $35 an ounce when I was 10 years old to $4,500 an ounce today. The price of copper also having had a nice move within my lifetime. And that is illustrative of the fact that minerals in the ground continue to augment in value. And the best way, in my opinion, to be exposed to the portfolio of mineral rights, which behooves us all, is through royalty ownership. And we have captured and built this royalty portfolio over the long course of the last two decades by implementing multiple aspects of how to accumulate royalties, royalty generation, purchase of existing royalties, doing royalty financings, and as a good example, corporate action as well, such as the merger between Elemental and EMX. This has resulted in a portfolio that is officially gold focused, as we do have approximately 60 or more percent of our current income coming from gold. And that is important because that aids the likelihood of us being included in various index funds. But from my perspective, the most important thing is to be exposed to prospective mineral rights within this portfolio. Of course, we love gold. And so that we can capture that aspect of discovery optionality, engineering advancement optionality, metallurgical optionality, which I've seen throughout my career, pay off handsomely to royalty holders. So currently today, we have a globally diversified portfolio with a number of operators of whom I have great respect operating around the world in 20 plus countries. And of course, within that portfolio, there's producing assets at the top and a plethora of 200, over 200 early stage assets. that all have that potential to be advanced and are advancing with resources and reserves moving forward, creating a whole host of near term catalysts with new mines coming into production, which we can go into in a little bit more detail as we go through the presentation. I'm particularly pleased to have the financial backing of Tether and Tether Investments, the largest stablecoin company in the world, one of the most profitable private enterprises in the world, and their vision that they have for the use of stablecoin, particularly XAUT, which is tied to physical metal stored in vaults in Switzerland as a mechanism to disrupt old school banking systems and move towards something much more efficient. It's a fascinating idea and we're delighted to have them as shareholders. And of course, it is because of their involvement that we are the first company to offer a dividend payable in XAUT, which is fully convertible to physical metal on demand. We'll go into more aspects as to how that is actuated. And there's already some pre-webinar questions coming in as to exactly how that will happen. And the guys will explain that. and come back to the team again. Oh, let's move on to the portfolio. So over 200, I believe it's actually almost 300, minimal property assets that we have in the world. 28 are advanced, 18 are currently cash flowing from production. There's a lot of pre-production cash flow as well. As many of the deals that we've written over time have pre-production payments built into them. That's been an important aspect of the model. Leeville is performing very nicely. That's a gold asset in Nevada, and it's a key example. Moving to South America, Casarone is one of our largest cash flowing operations in the world today. It is moving on very nicely with Lundin as the new operator there. They're putting 44 kilometers of drill holes into the Casarone system to further advance discovery on that property. That's great news for us. in addition to incrementally increasing production towards nameplate capacity of that operation. One very near and dear to my heart is TMUC, and Zijun is getting metal out of the ground at a breakneck pace and continuing to advance the discovery of four ore deposits that are within our footprint there. And that represents one of the largest, according to the analysts, net asset value assets within our portfolio. West Africa continues to produce nicely, and there's nicely enhancing production from Karlawinda, the gold asset in Western Australia. And long-term, we see Laverton as a cornerstone asset as they move within, move production within that district towards ground that are within our royalty footprint.

So we've been very busy.

right leading up to the merger and through the merger. And I'm pleased to see the strong market support and the kudos that we've been given for bringing these two companies together, including, of course, the $100 million placement by Tether into the merged company, in addition to the shares that they already owned, putting them at 32%. And it's been my pleasure to work with the passionate and enthusiastic Kwan Sartori, our chairman. And in addition to that, we've augmented our Laverton project royalty footprint, as I mentioned previously. Also, just recently purchased the Dugbee royalty, which has had some new news come out with respect to counterparty change and advancement of that asset. We're delighted to see that all of these things are aspects of this concept of optionality that comes from a royalty portfolio. Since we've listed on NASDAQ, which has been a real eye-opening experience for me, it was delightful to open the exchange with the team two weeks ago. And since then, we've seen a 5x increase in liquidity. Many times in my career, I've spoken to investors and they say, gosh, we'd love to own stock, but you just don't trade enough. Well, now we're trading $5 million or more a day in securities. This makes us a very likely candidate to be included in various index funds. And the bankers tell us that this could be a salient amount of stock, which will be absorbed by indexes probably within the forthcoming year.

Next slide, please, Stefan. I hope I'm not jammed up here.

So with that, I'll hand things over to Stefan Wenger, our CFO, and my pleasure.

Thank you, Dave, and good morning, everyone. I'm really pleased to be part of the Elemental team. This is my first earnings call with Elemental. It's great to be part of such a dynamic team. Post-merger, we've been working very hard to bring the teams together, to bring the companies together, and I'm really excited to share these first set of financial results with you all. We had a record year as Elemental, and I think it's really remarkable to be having a record year with the combined company, but one thing I want to highlight with you is that the results from EMX are only in these results for 45 days roughly in this year. So it makes these results even more remarkable. But we had a record year in revenue, GEOs, and also adjusted EBITDA and operating cash flow all up significantly. And if we were to take and combine the companies as if we had merged on January 1st last year, Instead of a top line adjusted revenue of $49.2 million, we would have reported $87.2 million. This gives you an idea of the strength and the leverage of cash flow from the combined company. From a GEO perspective, we did 14,285 GEOs, again, with only a small contribution from the EMX assets during the year. This compares to just about 9,000 GEOs in the prior year. Adjusted EBITDA was $35 million and operating cash flow was $34 million. So you can see this is going to generate a lot of cash flow going forward when we get that full year of GEOs rolling through this vehicle next year. And furthermore, we completed the merger and with a fantastic balance sheet. We currently have at the end of the year about $53 million in cash, $80 million in working capital. And then subsequent to year end, we announced that we upsized our credit facility to $150 million. with three banks with national bank with CIBC and with Scotia we appreciate our partners on that but we're very pleased to have this liquidity and availability as we pursue new and additional royalty interests in addition to that because of our strong balance sheet we were able to announce our first inaugural dividend and we're really proud of the fact that we're going to start a dividend this year it's 12 cents a share annually three cents a share quarterly And our goal is to maintain that dividend as we go forward. And we think our balance sheet and our upcoming cash flow provide ample opportunity to not only maintain, but to increase that dividend year over year. In addition to announcement of the dividend, we announced that there's an opportunity to take that dividend in XAUT tokens. And we'll cover that a little bit more as well. But our Scum and Balance sheet is giving this company fantastic opportunity as we move ahead. So after that overview, let me get a little bit into the details. I've spoken to some of these key numbers, but it's worth speaking to a couple of the other details. I've already talked about the growth in revenue, and I'll talk a little bit more about how we're treating Casarones going forward, but I have some great news there. But before I get there, let me just speak to our G&A. Last year, G&A was about $16.5 million for the full year, and 9.8 of that came in the fourth quarter. We had a tremendously busy year with M&A activity and with other corporate activities that led to unusually high G&A. And again, this only includes 45 days of the EMX merger. As we look ahead next year, I would actually see a slightly lower G&A run rate than this on a full year basis for the combined company. So we'll come in somewhere in that 15 to 17 million dollars on G&A. You'll also see that we had a million dollars of royalty generation expense in the fourth quarter. For the full year, we see the royalty generation business having between five and six million dollars of net expense on the income statement. And as we look ahead, we've, we exceeded our guidance range from the upper end last year and had revenue of 85 million right at the midpoint of the, of the guidance last year. Q4 was a solid quarter for Elemental, $17.2 million in revenue adjusted for our share of Casarones. It's an increase of 152%. We had 4,100 GEOs and and a really strong quarter. One thing I look at when I look at our income statement is what's our percentage adjusted EBITDA as a percentage of revenue. And last year as a whole, that was about 70%. For 2026, I see us moving closer to 75% or above adjusted revenue, adjusted EBITDA as a percentage of revenue, just to give a little bit of guidance there. Just a few comments on the sources and uses of cash during Q4. You'll see very busy quarter, closing the merger. We started the quarter with $14.5 million in cash, generated $11 million of free cash flow during the quarter. But the sizable events were the private placement by Tether that Dave Cole spoke of, repayment of the EMX debt upon the merger, and then also closing of the Laberton and Jasper Hills royalty acquisitions that Fred will talk about in more detail. So a really solid quarter of cash flow. And as you look at the full year, just a couple other events. We also closed Dugbee late in the third quarter and a few other smaller transactions during the quarter or during the full year. But as we end the year with $53.1 million in cash, we are extremely well-placed to move forward with our royalty acquisition business. We're also extremely well-placed to streamline the business. We've only been merged for 45 days as of these results. So as you can expect, during this next year, we will be driving synergies, tax structuring, efficiencies, and other efficiencies through the business. I mentioned this earlier. You'll see in our results that for 2025, we're still reporting revenue as adjusted to include our share of Casarones. The reason we had to make that adjustment in the past was because we were required prior to our merger to treat Casarones as an equity investment. Effective with the merger, we now own 67% of a subsidiary that holds that royalty called SLM California. And because of our change in interest and because of an amendment that we made with the other shareholders, we're now able to recognize Casarones as a joint operation accounting instead of equity accounting. And if I get straight to the punchline, what this means is that we're able to account for Casseronis just like we do for all of our other royalty interests. It'll be on the top line and will be treated as an asset on our books. So this is great news for us. It's going to save a lot of brain damage as we go into the future. And I hope this will help you all as you consider how to evaluate Elemental in the future as well. So with that, I'd like to turn it over to Fred to talk about the portfolio.

Thank you Stefan and thank you everyone for joining us here. I think this is the first time we have done a growth outlook looking out to 2030 and really covering the five years ahead. And the key takeaways here, as you can see in that graph, we have consistently grown the company year on year, not just in terms of overall royalties and mineral exposure, but in terms of the revenue and cash flow as well. And if you look at it out to 2028, It's a high level, roughly 25% growth in geos. And if you look to 2030, it's about a 50% growth rate from organic. assets already in the portfolio and baked in from where we are. And when we look at some of those underlying assets, there's a few of the key ones in there that an investor shareholders may be familiar with. And that is that's the Timok lower zone as it advances through development. And Dave referenced it earlier. It is Laverton again, a mine that is already in production. where our royalty area we expect is going to be fed into the mine increasingly going forwards. It's the car window expansion project that is already the majority of the way through that construction and expected to be commissioning in Q3 this year. So a large amount of that growth already on producing mines and really de-risked. And then we've got a few other key assets that we think will contribute, including Dugbe, Diavolos, Viscaria and Mactan. And for those four assets, it's going to be made in production from those. But I think it puts us in a really nice position in terms of our growth going forward before we add new assets. And one last comment I'll make on this slide is there has never been a year where we haven't added to the portfolio, where we haven't grown what we already have. So I think this is very much base case and look forward to going to it, adding to it further going forwards. If we just look at the next slide here, maybe this is an asset that's somewhat overlooked. And we added this to the portfolio to our existing interest on Laverton in last year, in September, and it closed shortly after the merger with AMX. This is a 2% to 4% royalty on Genesis's Focus Laverton grant. So this is adjacent to their existing mine at Laverton. Some of the key deposits are about 30 kilometres away by road, granted mining licences, and overall represents the third largest undeveloped gold project in Australia. And so for us, I think we see the higher grade Beazley Creek part coming into the mine plan, Relatively quickly, Genesis have publicly spoken to the fact that they are looking to expand the 3 million tonne per annum Laverton mill that they currently operate from. And then there are a number of material larger opportunities such as a Burtville Caradale and then longer term even looking at Things like the Lancefield mine, which was in the 1990s, one of the top 10 underground gold mines in Australia and has had no work done on it since 1998. So we see this as really, really valuable land from an exploration perspective, but also in terms of short near term growth coming into that mine plan. And then the mill expansion that Genesis are publicly talking to at Laverton. second acquisition that we made uh simultaneously really that we announced was on the dubai royalty and this is a this is a lesser-known one but i think what's happened here over the last three months has been really exciting the majority shareholder in the operator has announced they are acquiring the company consolidating the ownership so they used to own 52 they will own 100 that is a private gold operator in west africa they already operate the carusa mine which is approximately 100,000 ounces a year. We understand that they have been building out their management team, operating team, technical team, as well as investors behind it. And they have publicly said that the updated feasibility study coming out later this year will tie in with a financing decision and construction decision on this project. And this is a permitted project. It had a previous feasibility study. They're updating on it. And we acquired this project for $16.5 million upfront. And we think this royalty on the mine plan they're putting in will be paying us comfortably in excess of $10 million a year in royalty revenue going forwards. And it is a very large royalty area. So it's approximately 1,250 area of interest and about 850 square kilometers over the existing licenses. So this is a nearly 4 million ounce deposit, including measure indicated and inferred. And we have a 2% to 2.5% royalty. So this has potential to be a really meaningful asset. And seeing the announcements in February, around the consolidation of the ownership and fast tracking it to production. I think this has potential to be a really key royalty for us moving forwards. Just to talk then a little bit to one or two of the key producing assets and give an overview here, Casarones, and Dave touched on this as well, but it had the best quarter of production since Lundin took it over in Lundin Mining in Q4 this year, last year, sorry. We have a 1.3% royalty on this. So to remind everyone, we co-own this royalty on Casarones alongside Franco Nevada and Royal Gold. And I think we have seen incremental year-on-year improvements in production since Lundin Mining became the majority shareholder, and they announced post quarter end that they actually increased their ownership position in the mine. So I think for us, very encouraged to see the progress they've made operationally. There is also a 40,000 meter drill program ongoing this year, building on the previous approximately 16,000 meters of drilling. So cornerstone asset, we expect it to be a cornerstone asset continuing into the future for many years. and look forward to the exploration results coming out there, which is really the first exploration that has been done at Casarones in about 13 years since the mine was built. The second asset here, Carla Winder, and I touched on it briefly, but it was having record quarters at the end of last year, even prior to the expansion. Carla Winder expansion plan, which is coming on stream, should be completed around the middle of the year and commissioning in Q3 this year. And that will be approximately 50% increase in throughput and translating to about 30% increase in gold equivalent ounces for us. And so that's a great example of a mine expansion where it came on stream, commissioned on time, on budget, despite COVID. It has a bigger reserve than it did at the time we acquired it, despite having produced approximately 400,000 ounces. And they are now the majority of the way through an expansion plan. that will bring forward production and revenue attributable to us by about 30% year on year while we have the optionality and exposure to the gold price. So again, really high quality asset that we see a lot of potential in going forwards and look forward to expansion completing later this year. In terms of some of our other royalties, we touched on Bonacro here. That is a 4.5% NSR on that. So in exposure to every ounce, that's been a more meaningful royalty for us. And we note the announcement that Zijin are acquiring allied gold. um just just recently and when you look at that asset there um it has been a material contributor to us over the last 15 months and we expect that to continue going forwards as they go into higher grade areas both this year and going into 2027. Timok, it's a cornerstone asset for us. Fantastic to see the exploration success they've had over the last two years here and the recent expansion in the upper zone where they took the production rate from 13,000 tonnes to 15,000 tonnes at the end of last year, ahead of schedule, while simultaneously developing the lower zone and adding to the new discovery in the MG zone, seven kilometers to the southeast of the Jumaane-Jakari battery deposit. So this will be an asset that continues to increase in value every year at the same time as they are ramping up into production from the lower zone, which should be orders of magnitude more revenue for us, while simultaneously continuing to produce from the upper zone. And then lastly here, the one I'll touch on is Levo, where we're very lucky to have an update from the operator just recently on plans going forward. We have a 1% royalty on this, and we co-own this royalty with a very similar royalty with Royal Gold. And again, you can see in terms of materiality and revenue, constant increase for us here. And this has been owned by the company and EMX going back Over a decade now, consistent producer for us and at the current production rate, we see decades of mine life ahead of it without further exploration success. When we look at our pipeline here, I think it is really worth emphasizing that on top of the producing royalties, which are the focus in this presentation today, we have approximately 200 royalties in that portfolio. And so in terms of development, short-term development, we have four feasibility studies coming out this year, and we have one feasibility study expected in 2027. So there is an awful lot of work going on on some of the more advanced assets. And we had, as well as Allied Gold being acquired by Zijin, and as well as Pasafino being acquired by Mansa Gold, we also had the announcement that Arizona and Sonoran is being acquired by Hudbay. um on the cactus project where we have we have royalty exposure across the majority of the ground there through royalties we had uh diablios we have a feasibility study expected later this year and the company have spoken to a construction decision following that at matt ton where we have seen a very material run-up in the tungsten price We have a feasibility study expected for next year, alongside continuing to progress the project. Doug Bay I've spoken to already, and Viscaria first production targeted next year. And then lastly, Chappie, where we actually had the company had made in production just earlier this year. So I think a really strong advanced development pipeline here that will continue to add value to the company going forwards. And over the course of the rest of 2026, I expect we'll have some material updates from some of the underlying operators on these assets as they hit those catalysts on the project. So with that, I will hand back over to Dave Cole to run through some of the generation assets and finish up.

And Dave, you might just be muted there.

I didn't mute myself. Did they mute me? I think you are good now. Okay. Yeah, that wasn't on my end, but that's all right. Thank you very much for that, Fred. And I just wanted to point out that a key component to the early stages of building this portfolio came from the royalty generation business model, which allocates fairly small amount of money over time, but accumulates long-term significant discovery optionality. And it's a key component to how EMX was built. It's also a key component to the Altus side of Elemental Altus, and it remains a part of our business. However, it's an increasingly small percentage of the business because we've been successful generating royalties, also buying royalties, and increasing our cash flow, giving us more arrows in the quiver to be able to hunt larger game. But the royalty generation business is still an important part of what we do. And the last four deals that we've done are illustrative of the power of this model, where we are continuing to acquire prospective mineral rights, utilizing our geologic engineering talents. adding value through the coalition of databases, illustrating prospectiveness and selling those assets on to some of the largest mining companies in the world and some of the most dynamic mining companies in the world where they can invest in those properties and in many cases pay us incrementally annual payments, pre-production payments, stage gate payments, in addition to at the end of the day. And it's our pleasure. We've done over a half a dozen deals with Rio Tinto, the largest mining house in the world over the course of the last half a decade and happy to have repeat business with them. venues around the world. Ivanhoe Electric, a very dynamic company and happy to have sold them assets recently in Arizona to see their strong geophysical techniques employed on our property. The first quantum deal in New Mexico is a good example in working with BHP in Serbia. It's astonishing that we were able to acquire, at almost no cost, additional exploration licenses in Serbia. And that actually was able to come to fruition because of our strong working relationship with the Serbian government, having been the first company to come in after the Balkan wars, advised the Serbian government with respect to their mining law and their concession legislation, and we became the first company to acquire exploration permits there. We sold those off and now we're seeing the results of those royalties and other royalties that we purchased within the Teemook magmatic complex, Europe's largest copper and gold producing region and the site of one of the most significant copper gold development stories in the world today. And the fact that we were able to come in subsequent to that major success and find additional land to be granted and for the government to work with us to do that speaks volumes to this business model and to our relationship with the Serbian government and their desire to see foreign investment within the mineral sector. And we were delighted to sell those assets on to BHP, subject to our royalties, of course.

So this story is coming together very nicely.

I'm a big believer in following distinctly per share measurements. And the combination of being gold-focused, the strong globally diversified portfolio, the catalyst that Fred articulated here a minute ago, the contribution from the wind in our sails that comes from Fonse Artoria and Tether is significant. my absolute pleasure to work with this team. And all of this has developed a situation where, according to the analysts, if you look backwards on a pro forma basis and looking forward, our per share net asset value, driven by increased cash flow, production optionality, increased discovery, copious discovery across our portfolio, has resulted in the analysts continuing to note an increase per share net asset value for the company. When you combine that with an increased PNAF that the bankers suggest that we should have and is illustrated by an analysis of the sector where the larger royalty companies trade at higher PNAFs, this increasing NAV per share and increasing PNAF are multiplicative. It puts us in a situation where I believe our shares are a very good investment as illustrated by the performance of the portfolio.

So with that, we'll go to Q&A, I believe.

Operator, would you please open up the line for any questions over the phone?

Yes, as a reminder, to ask a question, Press star 1 on your telephone keypad. And our first question comes from the line of Mike Kozak with Cantor Fitzgerald. Please go ahead.

Yeah, good morning or good afternoon, guys. Thanks for hosting the call. Just a couple of questions from me, if I can. First, going forward with the consolidated company now, and, Stephanie, you provided good color on what you expect corporate G&A to be. But my question, my first one was, what do you expect kind of run rate, normalized depreciation, depletion expense, and taxation rate for the combined company now?

So let me start with the taxation rate. And I should preface it by saying, as you can imagine, just finished the merger. And in 2026 here, we're taking on quite a few projects to streamline the corporate structure and to really – gain efficiencies from the merger in our tax rates. But as I see 2026, I see an effective tax rate of about 20% with cash rate tax rates probably lower than that. And as I said, we're still working on a lot of efficiencies there in the tax structure. As you can imagine, we have a pretty complex entity structure that because of the merger, we can now make some moves to really simplify that and streamline our tax. On the DD&A, on the depreciation rates, we just completed purchase price accounting for the merger. And as you know, with the purchase price accounting, we step up all of the assets. I'll give better guidance at the end of Q1 on DD&A, but right now I expect our DD&A rates to be around $1,500 an ounce. We're slightly higher than that. And we'll update that as the year progresses, particularly in Q1. I could comment a little further on G&A. Similarly with taxes, just completing the merger at the end of the year, when I gave guidance on G&A sort of slightly less than what we experienced, what Elemental experienced for the full year, that's without really driving any synergies. And I also expect to be working on driving synergies through this business from the merger as we go forward. So Mike, hopefully that's responsive to your question.

Yeah, that's very helpful. I appreciate that. And then the second one, if I may, If I look at the revenue number you reported, if you assume the merger had concluded at the outset of last year, so Jan 1, 2025, I think the number you gave was $87.5 million. That kind of back calculates to sales volumes of around 25,000 GEOs for last year. So I was a bit surprised to see your 2026 guide of 17,000 to 21,000 GEOs. I know some of that is corally sued, which we already knew about, but I'm wondering if there's something else going on there or if maybe your 2026 guidance, you're just really skewing on the conservative side out of the gate here. Any additional colour there would be helpful.

There's a couple of things, Mike. Number one, we do tend to be conservative. We're not trying to skew it, but we're trying to make realistic assumptions. But there's a couple other assets, you know, the Corelli Sue, but also Getatepe was very heavy last year on the oxide for the EMX assets. And that's transitioning to the sulfide this year at a lower rate. So that's also a big piece of that. And then perhaps, Fred, you can talk to Corelli Sue a little bit. But those are the two that stick out that are perhaps coming off a little bit this year. And then... This year is sort of a transitional year as we'll continue to see more development at TMOC and others. Fred, anything to add to that?

Look, I think that probably covers the main point. It's a combination of the partial coverage, Sadiola mine with the Kerali CID license, and then also Gedictepe stepping down from the oxides and moving on to the sulfides at a lower rate going forward. So I think some of that built in and some of that is a function of the mine plans coming in and out of royalty areas.

Okay. Thanks. That's very helpful. I'll jump back in the queue. Thank you.

Operator, are there any other questions on the phone?

We have no further questions on the phone at this time.

So I have the distinct privilege of going through the web questions, so I'll go ahead and read those out so that everybody can hear the questions, and then Dave and Fred ask you to help me with this. One from Heiko at HC William Wright. Hi, Heiko. Heiko's question says, glad to be covering the firm now. Just wanted to see what you were seeing with discount rates and competing interest for newfound assets given geopolitical risk factors that appear to be offset by extremely strong commodity pricing. Fred, do you want to take that? Or Dave, perhaps? Fred, why don't you go?

I'll pick first.

I'll go with that one. Yes, thank you, Heiko.

You're welcome. And I appreciate the questions coming in. Look, I think as a general comment, I would say that the royalty space we have found is always competitive throughout the market cycles from being small royalty companies to being larger royalty companies. So I think that it's often the quality of the underlying asset and the management team. that drives some of the discussion of valuation. I mean, look, what we have tried to do as a company historically is we have tried to source our own deals and not just compete through processes. And when you look at the two assets that we spoke to a bit earlier in terms of some of our near-term growth, you know, with that Doug Bay royalty that we acquired, we acquired it on a basis of probably one year, 18 months of cash flow. And now it is an asset that is going into a financing decision now and an updated feasibility alongside construction. Sorry, later this year. So and if you look at the Lableton royalty, I think we regard that as one of the really high quality assets adding to our existing exposure in the company. And again, we did that outside. people who wanted a royalty for a number of years privately. And so I think that a lot of it is a function of where we source a deal flow and how we deal with it. In terms of commodity pricing, yes, that volatility has impacted some of the discussions that we've had. And I think there's a challenge between operators or vendors looking at the pricing today versus gap to consensus, which has been the highest, certainly in my career, but I suspect in everyone in the school's career over the last year or so. And so I think that has translated to, that's probably translated through onto the BD side.

Why don't I take the next question? there's a two-part question from adrian day and maybe dave cole you can take these how do you view acquisition of individual royalties royalty portfolios and corporate transactions would you go hostile to acquire a company

So, Adrian, thank you for attending and thank you for your long-term support of the corporations and great to have you on today. We believe in casting a broad net and growing our portfolio through royalty generation, acquisition of existing royalties through acquisition of portfolio of royalties. also royalty financings. And I believe that is specifically one area where we will likely augment our business. Now that we have more money in the bank and more credit available to us, we are a strong candidate to be able to work with astute mine builders to help build mines and provide royalty financings. The Kia example, which is now just coming into production, is a good recent example. I think that side of our business will continue to augment. And then with respect to M&A, we are certainly open to the concept and have ongoing discussions with many of the royalty peers that we have and have good relationships with across the sector, as we have done for many years now. And this is all part of a dynamic, accretive, dilutive modeling process that we're updating and thinking about what makes the most sense from our shareholders' perspective. And to specifically address one aspect of your question, and that is whether we would go hostile. That's not in my DNA. I want to work with people to create value, not work against people. And I'm of the opinion that we've got a very sharp team that gets along well with our competitors in many circumstances. And when the time is right and the accretive dilutive model and our analysis of each other works, then we're happy to consider M&A in the future. But that's not at the loss of the other aspects of our business and casting opportunities.

Operator, there's a couple other phone questions I understand. Can you cue those?

Yes. We have a question from Mike Cosette with Cantor Fitzgerald. Please go ahead.

Oh, sorry, guys. Yeah, you already took my questions. Thank you.

I guess, is there a question? No more questions.

Okay, there's one more question on the web chat. There's a question I'll take. It's, will you do an investor day in 2026 to help us better understand the assets of the combined company? And the answer is yes, we're working out scheduling and working towards an investor day sometime this spring. So stay tuned for that. We do see the opportunity to really tell the story in a more detailed way. So we're working towards an investor day. and then um i think we've covered most of the questions there's one that wasn't wasn't asked here but that was asked in a previous question i think it's worth talking about is the dividend i'd like to highlight again uh that we we have announced our maiden dividend the record date will be march 31st there is an opportunity For our investors, well, first of all, I should say the dividend will be paid in cash unless there's an election made to pay that in Tether XAUT tokens. At this time, because it's the first time and there's a lot of regulatory stuff we're working through to get this worked out. At this time, it's only available for that XAUT delivery to registered holders on computer share and also institutional investors. Thirdly, you must have a digital wallet that's based on Ethereum to be able to receive the XAUT. The way you go ahead and elect to take this if you meet those qualifications is that there is a election form on our website under dividends. So I encourage institutional investors who hold registered shares to look there. I will say that as we move forward into Q2, we are looking to expand the availability of that in-kind dividend to more investors. But as you can imagine, it's a bit novel. We're very proud to be doing it. But that also comes with a few wrinkles. So we're just working through that and hope to expand it in future periods. Anything Fred or Dave to add before we wrap it up?

Well, just thanks to all the supporters that we have in the corporation and reiterate that we're always here to answer your questions. So feel free to reach out.

And look, I might just, Stefan, I think there was one other question that came in that was related, which was, and probably one for Dave, but it was on the royalty generation business and the history of that within both companies and the view on that going forwards from Adrian Day and a related question from Heiko on, Dave, are we seeing any changes on the terms of the earning agreements versus where they are 12 months ago and on activity levels on that front?

Heiko, thank you for your question. Answer your question first. And we always negotiate the best we can on each transaction. And each one's a little bit unique. But it is nice when we're doing repeat business as we have a boilerplate template that we can work from to reduce the frictional costs associated with it. or Rio Tinto or whomever we're working with. So it's not uncommon for people to say to me, well, what do you want for Project X? And we say, well, all of our deals that we've done are public information. You can read them. So you understand the structure that we feel works for the project. And then there's a little bit of tweaking here and there. And if someone really wants an asset, we can get a little more. But for the most part, over the last 20 years, you've seen the structure that we do. It usually has a component of pre-production payments, work commitments, and always a production royalty at the end of the day. Sometimes that is viable down from, say, 3% and 3.5% to 2% or 2.5%, but always there's a portion, dominantly 2% or more, which is uncapped and unviable, creating that long-term optionality for our shareholders. I believe that that structure has worked well and will continue to be the way that we will structure these deals into the future. As per the recent deal flow, there's robust interest in acquiring prospective mineral rights right now, given commodity prices today. So that side of our business is working exceptionally well. But that's a good segue into helping to answer Adrian's question. And that is that what's the viewpoint of that into the future? And I've been of the opinion where the generative side of the business works best when it's lean and mean. If the guys think that they don't quite have enough money, it means it's working about right. And so the amount of money that we invest in that has been fairly constant now for over a decade. It ebbs and flows a little bit depending upon availability of prospective bearer rights to acquire. But as a percentage, so the absolute number is remaining fairly constant. I believe that Stefan said it's approximately $5 million of expenditure. I'll point out that the expenses that go into royalty generation are expensed each quarter, not capitalized. And it's important when you look at our financials, you fully understand that. As opposed to when we buy royalties, the bulk of that expenditure is capitalized, just as a quick reminder. So, Adrian, coming back to your question, as a percent of our overall business, the royalty generation is decreasing because the overall business is growing and the amount of money that we're investing in royalty generation is constant.

So I think that wraps us up. Appreciate all of the investors and friends who joined the call today. And operator, I'll leave it to you to wrap it up.

Thank you again for joining the call today. This does conclude today's presentation. You may now disconnect.