Royalty Round up, May 2021: Dividend hikes drive share prices higher

May 2021 continued the positive trend for mining royalty and streaming businesses for the third month in a row, with the average share price up 1.9% this month, with 63% of companies in the sector experiencing positive share price movements.

This month the majors were the best performing subset of the sector, up an average of 7.5%. Large-tiers were just behind up an average of 7.4%, with mid-tiers up an average of 1.3%, while juniors were down an average of 0.3%.

Majors

Wheaton Precious Metals Corp (TSE:WPM, LON:WPM), was the best-performing major, up 11.4% this month (↑40.4% 3-months) following the publication of its first-quarter 2021 (Q121) results. Wheaton reported record revenue of US$324mln with over US$230mln in operating cash flow generated during Q121, leading the company to increase its quarterly dividend to US$0.14 per share. This represents the third quarterly increase in dividends in a row and is a massive 40% increase on the Q120 dividend.

Royal Gold, Inc. (TSE:RGL) also performed well up 6.6% (↑19.4% 3-months) following its Q121 results. Royal Gold achieved revenue of US$142.6mln with over US$92.2mln in operating cash flow during Q121, leading the company to increase its quarterly dividend by 7% to US$0.30 per share.

Large-Tiers

Osisko Gold Royalties (TSE:OR) was the best performing large-tier this month up 13.0% (↑44.9% 3-months) also following the publication of its Q121 results. Osisko generated record revenue of US$49.0mln with operating cashflows of US$36.7mln, with a quarterly dividend of $0.05 per share declared.

Deterra Royalties Limited (ASX:DRR) was the worst-performing large-tier, down 2.7% on the month (↓5.1% 3-months) despite what appears to be a positive quarterly revenue update, with revenue up 48.1% quarter-on-quarter, totalling A$36.4mln.

Mid-Tiers

Anglo Pacific Group PLC’s (LON:APF, TSE:APY) was this month’s best performing mid-tier royalty and streaming company, up 5.3% (↑7.4% 3-months) following its Q121 trading update. Revenue for the first quarter of the year totalled £6.4mln, down 37.9% compared to Q120; however, these numbers shouldn’t be taken at face value as they reflect the impact of the previously announced disposal of ~75% of its holding in LIORC to partially finance the transformational U$205mln acquisition of a cobalt stream from the Voisey’s Bay Mine, which is expected to be a much more valuable asset for the company.

Maverix Metals Inc (CVE:MMX) was the worst-performing stock within the mid-tier subset, down 2.0% (↑17.8% 3-months) despite increasing its Q121 revenue by 41%, to US$13.1mln, compared to Q120. Operating cash flow for Q121 was also up on last year at US$9.0mln, compared to US$5.7mln in Q120. Maverix also increased its quarterly dividend to $0.0125 per share, a 25% increase from the previous dividend.

Juniors

Trident Royalties PLC (LON:TRR) was this month’s best performing junior, and overall mining royalty and streaming company, up an impressive 22.3% (↑9.1% 3-months). Trident was up following some on market buying from its CEO, Adam Davidson, who purchased 20,294 ordinary shares at 34.2 pence per share. The company also reported positive operational updates at four projects over which the company has royalty interests.

Gold Royalty Corp’s (NYSEAMERICAN:GROY) continued to trade up in its second full month of trading (↑4.6% 1-months) despite no news flow.

Uranium Royalty Corp (CVE:URC) was the worst-performing junior and overall mining royalty and streaming company, down 23.2% (↑23.2% 3-months) despite closing a C$37mln financing package that comprised a C$25mln bought deal offering and previously announced C$12mln margin loan facility. With C$70mln in cash, equity and inventory holdings and C$6mln available for drawdown under its margin loan facility, the company has a strong balance sheet with which to make additional acquisitions. In May Uranium Royalty Corp also closed this acquisition of royalty interests on the McArthur River and Cigar Lake Mines in Saskatchewan, Canada, and acquired an option to acquire a royalty on the Dawn Lake Project, located in Saskatchewan, Canada.

Story by ProactiveInvestors