Royalty Knockout #7

Ecora vs Summit

Summit Royalties acquired STAR Royalties, with the deal completed this month. the combined entity has a market capitalization of around $100 million.

Summit is the cheaper of the two firms, but that’s a consequence of a smaller firm with earlier stage assets and less income.

Nearly 70 percent of current income comes from the Bomboré silver stream. It goes above 90 percent when adding in a 1-percent gold NSR on Madsen. Next year, there are two assets potentially coming online in Copperstone and Pitangui, gold and silver respectively. Down the road, AurMac is a key asset, but very early stage. Banyan still hasn’t done a PEA yet, but there are 3.6 million ounces of gold indicated. Saddle North is a copper asset owned by Newmont. Could be important far down the road, but perhaps pulled into the present in a mania.

Silver is the key asset right now. Gold becomes the main asset next year and for the foreseeable future. Copper far down the road.

Overall, Summit is a smaller firm with a few key assets along with a grab bag of lottery tickets. It’s not overpriced. There’s no crown jewel asset that argues for significant rerating higher. It will move with the metals until such time as they add a superior asset or something in the portfolio surprises. Here’s Summit charted along with the gold price. If you’re bullish gold, this has behaved like leveraged gold.

Ecora is the more complex stock wit ha stronger chart.

Here’s the main listing on the LSE.