RE:Royalty companiesHermes, if your curiosity is aroused then you are already further than many others. There are only a limited number of (17) royalty and streaming companies that I know and are publicly listed. And only 3 large (FNV, WPM, RGLD), and 2 medium-sized (SSL and OR) companies. SSL, Sandstorm Gold is a good company to learn more about this industry, why you should ask?, because their website contains a lot of info about their contracts. There are also several interviews (youtube) with Nolan Watson. Some advantages of R&S compared to the normal mining companies:
Very few staff, on average 25 people.
Investments are spread over various mines (diversification = less risk)
Usually a deal is made and paid for, and that is it for the R&S, others dig up the land, buy machinery, pay all kinds of costs, wages, costs for energy, tires and diesel and the best of all, R&S paid for what on that moment is known for a specific area. Many mines are estimated at 10 years of life, preceded by a 2% royalty. But a mine costs millions to build, and you don't move in one two three.
What do you do as a mining company? Drilling for new veins, and deeper than before, which also counts 2% on all new excavations, the mine does not stop mining and continues for another 10 years (optionality for the R&S) and all for what the R&S 10 years previously paid. And if nothing can be found anymore and the mine closes, the mining company has to repair the terrain and of course pay for it. Also nice is the royalty continues to exist even with a bankruptcy or a takeover.
Study the material and you will see that there are (small) differences in the R&S companies. good luck