Will a New Gold & Silver Royalty Company Work in This Market? | Summit Royalties CEO Interview

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[snorts] Today on the CEO barbecue, we're talking about precious metals royalties together with Summit royalties. For a bulletpoint summary of this and all other CEO interviews, please go to resourcealks.com and subscribe to our free weekly newsletter. The company you're about to hear from has not paid us for the production of this interview, but this interview is still intended only for experienced speculators because this is venture capital and mining is a very risky industry where failure is the norm. All conversations are general and impersonal in nature and they contain forwardlooking statements. I'm not a licensed financial adviser and my business sells content producing services which also makes me biased. So before continuing on, please talk to an independent investment adviser with a good long-term track record because your capital is at risk and also visit setterplus.ca where you'll find the company's official filings. If you're not 100% sure you understand all the biases and the disclaimers that I just showed you, please go to the last section of this video and do not consume this content unless you fully understand and agree with everything said herein. That all said, Summit only just listed about two weeks ago now. Uh it came together through the RTO of Ego royalties in early November. It's a brand new company just just founded in uh 2025 with the focus on building a portfolio of cash flowing royalties and again focused on precious metals. So specifically gold and silver to to be more specific here. That portfolio currently has more than 40 royalties and streams combined. But of course not all of it is cash flowing right now. And the cornerstone assets here are um just a few four or five that we'll talk about. One of them is a 50% stream on Orzone's producing Bomborei gold mine and Bkina Faso. Another one is the 1% NSR they have on West Red Lake Madson gold mine in Ontario which is expected to be in commercial production next year. That'll be a big part of the conversation later on. Third one that'll be more important next year and is expected to account for about 19% of the revenue is a half half a percent NSR on Zancudo in uh in Colombia that's operated by Daenerius and that's already mining and shipping ore. So some of it should translate into revenue for summit next year. Yet another one of their big four if you want to call them although this one becomes more important than paying in 2027 is actually a stage royalty on the pitangi gold project in Brazil. It was acquired as part of a larger portfolio acquisition from IM Gold that costed summit $17.5 million. There are several others but uh early stage royalties again in Canada and and the US and South America as well. some of which we'll we'll touch upon later on as well. Can they really get the company cash flowing soon enough and you know protect shareholders from dilution and can they get the needed deal flow as a small player in a not so empty corner of the mining market to actually grow that NA nav is um those are all going to be part of the interrogation later on as well. Summit royalties is listed as some so that's SUM on the TSXV where the average 10day volume is about 200,000 shares since listing earlier this month. The stock has been as high as a $150 and as low as a$19 with a market cap of just over 91 million Canadian dollars and just over 71 million shares outstanding today. This is a$128 cent stock. Now, if you look at the pie chart breaking down the ownership, you're going to recognize two names here. One of it is IM Gold at 17% ownership and an Eagle which again the company that that's the company that Summit RTO into and their shareholding is now at 16% of the new co management at 15 and institutional investors at 30% leaves an estimated 22% in the hands of retail. What's the relationship with those ego shareholders? How much did insiders pay pay for the shares? And what's the rest of the share structure is something I'll be asking about later on in the conversation as well. And this is where I normally um dive into the the company's financials, but given that again Summit just RTO this vehicle, those numbers won't be representative. So instead, I'll be asking Drew about all things money later on in the conversation as well. Now, for this to actually become a conversation, I'm going to have to shut up already. And Drew, I'll give you the word here. But first of all, thank you for sitting down with me today. >> Appreciate the time. Uh good good intro there and and look forward to sort of unraveling uh what we've built here in basically the last 6 months. >> Pleasure is mine and and I am looking forward to it um as well. I don't often get to talk to companies that are that are that early on in in in their startup journey. Definitely not in in the royalty space. And since this is your first time on the barbecue, we'll still have to go through the smell test first which again tends to understand more about what the incentives and the track record of management are. Well, maybe just before that, setting the stage here a little bit, given the state of the market, the royalty market and the number of players in it, why start a royalty company now? >> Well, the short answer is um we saw a lot of opportunity to to to build a business here um and the best way to get exposure to precious metals is through the royalty model. Um there's no shortage of opportunities despite the competitive dynamics that I think you alluded to early on and and and we'll certainly discuss in more detail. Um but we started out with with with a with a management team and a goal um right after I left my previous employer and and we went after, you know, cash flow out of the gate and we wanted to build a portfolio of assets uh as quickly as we could and we've been quite successful at it. Um there's no magic sauce here that we're doing that's much different than other. just embracing the the the the royalty model that's really had a storied um measure of return for investors on a riskadjusted basis. There's no better way to get exposure and and and we love being a new incumbent in the space. >> That's an interesting point where you say that that you actually enjoy being, you know, you enjoy competition. Um and that's something we'll definitely talk about later on as well. It opens the door nicely to a couple of more things that I want to ask, but again, I'll be starting off with yourself and your track record. Talk to me about that. Who are you and have you made more money for shareholders than what you've spent during your career so far? >> Uh, short answer is yes. And, um, I won't go too far back, but I started my career as a sellside analyst at CIBC. I became a published analyst at the age of 26. Um, I've done a brief stint in investment banking, but I left the sell side more or less um about halfway through my 20-y year career. I've been on the issuer side more or less since. I think it more suits my entrepreneurial sort of uh gearing. Um, the first in company I went and worked for was a company called Premier Royalty. That's where I got the real royalty bug. That was sold to Sandstorm. I've also worked at uh a company called Carile Goldfields that was taken out by Alamos. Uh, again, a good exit for investors. And the most recently and probably most relevant to the career and the discussion we're going to have today. I was the first employee hired by Brett Heath at Mattala where I led the corporate development initiatives there. We did, you know, the history of the company. They did 32 transactions. I I was in the seat for 27 of them. Uh and that's where I really got uh the institutional following and and the knowledge in the space to sort of build what we've built today. Um so my career has, you know, had a couple different seats. I sit on a couple boards. I um in in the past and I've done some advisory work for royalty companies or people selling royalties. So I'm either in a royalty chair uh actively, you know, looking for deals and promoting or or I'm I'm helping people sell them. Um I love the space. I'm a self-proclaimed royalty nerd and uh you know that kind of gives me the credibility and the credentials uh I think to to to run a company for the first time. M outside of what you just said, Drew, do you do you any other companies, any board or exe executive positions that you have right now? >> No, I sit on the board of a small uh company called Visionary um that has a exciting sort of nickel discovery in in Wyoming. Um but it's sort of a sub$10 million market cap company and and and I'm I'm there more for capital markets advisory than than obviously uh I don't have a technical background, but no, that is my this is my dayto-day. I I work tirelessly at this at this every day. >> What is your day-to-day? So, what does a royalty co really do all day? I mean, it's um you know, it's easy to envision it, at least for me, with exploration guys who might be Goss what they do, but what's a day day in the life for you look like? >> Um, honestly, it's been a whirlwind of activity. So, and I know we'll talk about the history of the company, but it's everything from getting an OTCV uh QV listing we've got right now. Uh we've just sent an LOI this morning. Um we're amalgamating the company we just did an RTO with. There is a ton of different things I'm doing every single day. Uh I'd say the part that people focus on and probably seem more uh outward facing in terms of news releases and my presence in the space is uh looking for royalties and looking for new investors. marketing the company not just from uh the perspective of we want you know more people to buy the stock and become owners alongside with us is also looking for deals. So, um, outside of me and my my right-hand man, Connor, I mean, we we we wear a lot of hats. Um, and you know, we just started this company, so everything from we need to update our presentation right now. The website just got uploaded. There's a couple things we got to do on it. I probably have a to-do list that I I try to make get shorter every day, but it grows uh immens uh all the time. I was out here in my office until 10:30 last night. I was up early with the dog on a call. So, it's it's 247. I'd suggest uh 2025 has probably been the hardest I've ever worked in my career and and it's been really rewarding. >> What kind of dog are we talking about here? >> He's uh he's a golden retriever mixed with an Aussie Shepherd named Bernie. Um he may actually speak up at some point. He's quite vocal, but uh he's uh he's my shadow, so he's he's he's always with me. >> Golden Aussie. That's uh does sound like a bit of a a ball of energy, if you will. >> Correct. Drew, insider ownership is noted as 15%. How much of that is you personally? What's the average cost that you've paid for those shares? >> Uh, so as a founder of the company, uh, we I wrote a check in for close to 20 grand to start the business. Um, I forgo a salary of about a year. So my average cost would probably be, you know, closer to a penny than than than most of our shareholders. I've also written checks when I've been able to um uh we wrote money in at 90 cents, my family and I. Um but majority of my ownership comes from being a founder in the business along with some of the directors have some shares as well. Um every director on my board has written a check at 90 cents along with all of our our new shareholders as well including myself. So we're we're very well aligned on that side. >> Do you plan to be in the open market supporting the stock on the bid as well as as providing money in financings or how does that work for you? I mean and again with with your personal financial situation. I suppose >> if I had more money, I would certainly be buying more and and I do plan on buying some in the open market in the near future. But, uh, you know, as a as a as a guy early in his career that hasn't had that huge windfall, I I don't have the means that that other CEOs have. Um, but from a foregoing revenue, from a salary perspective, from a putting everything on the line from this, I am 100% all in align. All I care about is making the share price go higher. Um, that's very important to me. And it's very important also to sort of the um my career trajectory. I think I got to do right and make and continue to make people money on this stock. >> And that's really what I'm trying to understand here is is how important is the financial commitment? Uh and I understand there's other stuff there is there's there's career risk and image risk and everything else you're taking and you're putting on the line here. But financially, how important is is the investment to you? If you can talk to me in percentages due and um but yeah, just that's what I'm trying to understand here. Oh, my stake and summit represents well over 90% of my net worth. Um, I own a house. I own, you know, I have a personal a PA that I invest in other mining stocks in. But this is I'm all in on this. Um, and from a personal network standpoint, I I don't have a trust fund. I I I have a I have a real mortgage and and I don't drive a a fancy car. So, this is this is 100% what I care about. Um, and it's important to me and my my family, my wife, and kids. What kind of car are we talking about here? >> I drive a Volkswagen. My wife drives a Mazda. Um, but if I'm going to brag, it is the most expensive Mazda they make. So, you know, I don't want to show off too much. But >> I thought uh that 90% of your net worth would be the health care they have to pay for your dog given that you're in Canada. Um, but now that I'm thinking about it, I don't even know if you do have private health care for pets. uh when he gets hurt, we we we we we go to the vet and it's never a fun uh conversation. It's actually not the dog that's the issue. It's the cat that's getting hurt more than the dog. So, >> cat and a dog, a fun time >> and and a hamster if we're going to go down the the the furry uh friends that we have in the family here. So, >> well, now I understand why you want to stay in the office till 10:30. I probably would as well. Uh >> yeah, >> talking about alignment, I also want to know what drives uh Summit as a team operationally, Drew. So, uh, talk to me about the KPIs here or targets that determine insider compensation. It'll be a cash or options and shares or whatever else you might have. >> Well, so the formal contracts actually aren't in place till next year, and that's actually something we're working on. Um, the first employee we hired was on June 1st. That's that's Connor. Uh, we have a part team CFO. So, we are um we have great governance. We have a really good team and I'm sure we'll talk about that in some respects, but we are um building kind of on the fly here a little bit. Um we are um like the website was up and running on the Thursday, we ratified the board on the Friday, we started trading on the Monday. I mean just to this has been a sprint. Um everything's been done extremely well. I've been very proud of of what we've accomplished. But in terms of the KPIs, I mean we are all well motivated by the stock. So I guess and I'm reading into your question here. We don't pay uh board fees to our directors. They have all written checks into the deal. Um all of them are fully motivated by the share price going higher, including myself and including others. The alignment is fantastic. Uh our chairman has written well over a million US into the deal himself uh along with some of the other directors. So um we we are all very excited to to to get this thing out and get a proper multiple. Yeah, that's essentially that's what I'm what I am asking about is is how do you measure success? What is is success NAV per share? Is success cash flow per share or is it just share price? Um what would you what would you base that on? >> I guess ultimately share price is the is the right answer. Um but I would suggest you know my my my tenure in the royalty space has been pretty long. There are times when you're out of favor and you can what you can't control is the sentiment in the market. You can't control what the gold price is doing, but you can control that you're doing a creative deals. So, um I would argue doing the creative transactions should translate to share price performance, but as sentiment and changes in the market changes that that you can't control that. Um, and just speaking to the portfolio that we've built oursel, it has performed very well. And I think that speaks to the quality of the management and our execution so far. But ultimately, share price is all that matters to to me. It's all that matters to our shareholders. Um, they're here to make money. But in terms of running the business, um, we want to make sure that we have good compent people in the seats. We have excellent governance already, and we're going to continue to roll that out as well. And we also want to manage um how much of our portfolio is operating, how much of it is on to come, uh jurisdictional risk, stuff of that nature. There's so many things to consider that that we talk about internally. But I think you know ultimately people buy shares to make money, not to feel good that um you know they're they're things are being run on a sort of straight and narrow. I mean, they they clearly are, but anyway, rambling on here a little. >> With within junior mining, I'm sure there's at least a percentage of people who buy stock just to kind of scratch that gambling edge. Um, which fair game there, too. But this might be a good segue actually to move on and talk business strategy here, Drew, and and essentially ask you about how do you plan on increasing that share price there? Um, what do you want to build? Do you want to build a a cash flow generator? Are you looking to build something that is going to be a takeover target? What are you really working for? >> So, both. Short answer, we have built a cash flow generator. Um, and this is a takeover target. Um, quite bluntly, the machinations of the consolidation and the royalty space are just rampant right now. Um, it's never been more interesting time to be in the royalty space. It's been very boring. It's been very, you know, yawn inducing at times. Um, we're cash flow positive today. Our GNA is extremely low. Um, can't stress that enough. We have, uh, cash flow coming in from Madson. We have cash flow coming in from Bombi. We're about to get our first check out of Zancudo. And what's really important here is all the assets were cash flow positive. These assets are going into throughput expansion. They're drilling actively. um we plan on keeping that cash flow positivity going forward and I think it's an important sort of philosophy of the company and when we founded this one of the reasons we immediately targeted cash flow was we shouldn't have to this should be a self-sufficient business in the royalty space we like to pride ourselves on uh it being a superior business model which it objectively is but you need to be able to not be diluting shareholders to pay for you know trips to Europe to go to conference or for bonuses or for listing costs we need to do that on our When you say you're getting when you say cash flow, you're talking about, you know, covering your GNA and everything with the money that you have coming in right now or >> correct. >> Okay. Um, interesting. And we will get to that. Um, specifically talking about some of the assets that you have. Um, and again, I don't get to grill royalty companies as much as as I do explor. So, what do you think is the biggest challenge for you as a royalty startup uh trying to go to that point uh where where you're growing cash flow more and more? >> And this sounds very arrogant, but I believe it. Getting started is the hardest part. Getting started, getting um a couple cash flowing royalties, getting a group to um back you and believe in you as a private company was was more challenging um than most people appreciate. And now that we have the listing and we've got the cash flow coming in the door, it's it's certainly it's certainly been easier for us to to raise capital and get that critical mass. Um there's a lot of growth left in this business. We are actively trying to to to grow the portfolio every day. But the hardest part is getting started. Um I'll tell you that because this has been a very long and rewarding yet challenging year for me. Um, and then doing things on an accreative basis or doing things on a strategic basis um, to grow the business in a in a in a meaningful way that'll actually create shareholder value is probably the next challenge if you really think about it that way. >> I do want to touch upon some of some of the other kind of main things like your financing challenges and whatnot, but this also might be a good point to talk to me a little bit about that year of yours that you've had here. Um, starting at let's start at Matala. Why did you Yeah. What did you leave in the first place? What happened there and what happened after that? >> Look, I um remain a shareholder, Matella. Um remain friends with everyone there. Um I was pretty ambitious and wanted to keep keep growing the company and growing my my profile within it. And quite frankly, I I I don't think that door was uh going to open for me. And uh I left uh at the end of end of March and immediately started this company. Um, I still remain friends with the company and like I said, I'm still a shareholder. I'm very proud of what I did there. Um, but I think it's the best thing that's ever happened to me from a career perspective. It's it's time for you to go out on your own and do your own thing was was more or less the conversation with the CEO and um, you know, 3 weeks after my departure, we we went fishing together. So, there's there's no bad blood there. Um, you know, it's it's time to you know, time to get traded, I guess, or you know, go to free agency, I guess, is probably another way to to use a sports analogy. not calling myself Mitch Martner or LeBron James or anything along those lines, but um it certainly, you know, there was there was there wasn't a spot for me there from from a growth perspective. And um I've really embraced this challenge and I love it. And look, I've already made guys money and I plan on making them more. M well talk to me then about the the the history since then and how you started building this company because sort of the a question that I have with Explore Coast when I hear about a new project that they're you know always very excited about and whatnot. My my first thought is like if it's as good as you believe it is, why was it on the market in the first place? Why were you able to get your hands on it? So I suppose same question for you and your your I am Gold deal and and and the other deals that you've done since. >> Okay, let's let's let's get into it. So, we started this company um April of 2024. Um but there was absolutely no deals in it. We we we I wrote a majority of the check. We we we seated the company. I bought the computer I'm using today and and we went out and we started looking for a deal. Um immediately we created a website. Sorry, we created a business and and with my lawyers and we had originally actually had a deal that that fell through on legal due diligence and a small operating one. And the goal always was to have that operating asset as a means to go and scale into a portfolio. We had our eye on the IM Gold portfolio. So that kind of came to a fruition in in November of of last year basically uh a year ago today that we signed the LOI with them and and that's an important sort of timeline that we'll explore a little bit later on. The reason why IM Gold was available and this is my belief and I've talked to other royalty companies. I think the number one reason that the iron goal portfolio was available to us was the original portfolio we bid on had 15 assets in it. We ended up closing on nine. A lot of the assets within that portfolio had a right of first refusal. When you think about the bandwidth of a I'm just going to name a random company. I don't know like a Royal Gold or a triple flag or any of these guys. They want certainty that they can acquire it and to and to and and to go through all the technical due diligence and work with the company and then have those assets disappear kind of made it less transactable. This is my belief. Certainly I don't know this for a fact. So I think that's probably the first impact was we were willing to work with IM Gold and work with the right of first refusals and work through them. Uh cuz we thought the resulting even the stuff that couldn't be roered out was uh did have real economic merit. The other side of it was um and I can't speak for Renault and the team and I gold and I didn't deal directly with him on most of this was we came to them with a proposition that was yes we'll give you cash but we're going to raise stock at a discount not at one times nav that everyone marks the royalties at we're going to raise stock at a discount it was around 6 time and that's going to enable us to fund the business fund the cash payment to you but also give you a lift and give you that sort of value that you know that number they had in their head which we we were a little later on. I'm happy to s I'm happy to report we've we've now through their shareholdings and everything um probably delivered um more than than they expect already and I think there's more to come. So I think that's how we got the iron gold deal done. um by an extension of uh the Madsen transaction um through our investment bankers, we we got word that there was uh a process potentially starting or a teaser going out from the spot company. And you know, based on my track record and relationship there, I I called them up and said, "What are you guys looking for on this?" And we we preempted that process uh and did another bilateral deal with them. And we're glad we did because before closing on the Madson portfolio, um we were going to be break even on a cash flow basis. Now we're cash flow positive. And I think that's a really important thing to come out of the gate with and say, "Look, we've got revenue. We got revenue growth and we're a self-sustaining business right off the hop." Just as an extension of this, the third deal we did of of of consequence and certainly very consequential was the Eagle Eagle royalties deal. We were in discussion with Tim for a while. um he certainly had other people calling him, but he and I really get along well from an ethical standpoint, from our the way we view the business, and we put a premium and a plan in front of them. Um that was quite enticing, I believe, and they're still shareholders in the business. So, how we got these done, I mean, there's a different story every time, but it's grit, hard work, networking, and and I guess listening to what guys, you know, really care about at the end of the day, and that's going to help us, you know, compete going forward. Well, you're mentioning a couple of times here that you're you're trading on um on a discount to NAV relative to your peers. How come? What is the um what's the market not seeing or appreciating and how do you fix it? >> Well, we've been trading for uh two weeks. So, um I'm I'm I'm asking investors to be patient. We are up uh 40 cents. So, call that close to 50% since um since we started trading. So, I'm not suggesting we shouldn't be we're not patting ourselves on the back, but I don't think that's a bad starting point. Um, but there's three things that have happened. Uh, the first is, uh, all of our peers have doubled since we had that initial conversation with gold a year ago. Gold's up 60%, silver's up 70 plus%. So, there's a bit of a catch-up trade there that we have to roll out. Um, for sure. And we've also got to educate the market. A lot of people haven't heard about Summit. And that's why I'm doing, you know, interviews with guys like you to to get the word out. Um cuz we will bridge that gap. And royalty companies typically don't trade at a discount for a long time. Um so I'm really pounding the table there and and getting out there wherever I can. >> Is it only marketing though that is going to be your solution uh to the valuation problem or is that only part of the solution? >> I think it's part of the problem. Sorry, part of the part of the solution for sure. uh if I knew if I knew exactly how to close the gap, um it would have happened already. Uh I think awareness marketing is is key. Um just as a starting point, we've also had um a smaller a small amount of selling and again I'm speculating, but you know, I believe it to be true. We did have some of the selling out of out of the royalty vehicle that that did create a bit of churn. Um, I'm happy to to sort of report that we took though took that selling in stride and I was able to get a lot of our institutions to buy into the market. Um, but yeah, I mean it's it's a combination of all those things and and it's not just me marketing the company. We've got um Connor who's done some marketing on his own as well. So we we've got to get out there and and the solution isn't just a market way to hire multiple. We also need to demonstrate and communicate that effectively. uh whenever we get an opportunity to >> what about the Eagle shareholders there you're noting them at 16% you believe that's still the case and and what I'm really asking for here is that typically when you do an RTO deal you know that the shareholders from before that they they they bought they bought a different company right that they end up owning so they don't necessarily want to own what you have to offer unless you actually convince them to so what's the case for you uh what's the relationship with those legacy shareholders. >> So, the best thing and the worst thing about Eagle is it has 3,000 retail shareholders in it. Not one of them owned sort of more than half a percent uh except for some of the guys who locked up like Eagle Planes. Um the good part about that is we do get that churn and I actually really embrace it although it's you know caused a little bit of of stomach ache in the beginning. Um because I think if you look at a lot of the royalty businesses that have started and I and I'll name names but you know this is these are all friends of mine. Triple Flag Mavericks um you know even Elemental in the early days the liquidity wasn't there because they were able to uh create the business by issuing shares to large companies for portfolios or get institutions that typically don't trade a lot. So we want that turn we want that liquidity right away. Um the one thing I will add though is yes it's a different business and yes they got a 50% premium. So just to take a step back they were trading at 12 cents. They we let the Eagle Vehicle buy us at 18 cents. So there's a premium right there. Um to put it in today's terms of of our share price because there was a roll back. They were trading at 60 cents and we let them issue US paper at 90. Um so that premium was right there. The liquidity in the Eagle vehicle was also fairly light. So I would also imagine some of these guys are going, I've held this for a while. The liquidity is here. It may dry up. Now's the time to get out. I I don't know for a fact uh what's driving some of the selling, but um from a business standpoint, we still have their portfolio of royalties. We are still a royalty company and we've introduced um I'd say much more experienced management team particularly in the capital markets and the royalty side. We've also introduced uh a portfolio of cash flow and royalties that that you know have a lot of uh accretion ahead of them. So, I I can tell I can tell you why I think they should hold, but I I also can't, you know, tell you why people are selling and and my job straight up. Um there's CEOs that get very fixated on selling. Um I want people to make money. People have divorces, uh roofs collapse, pets get sick. Um your job is just to find more buyers. Uh at the end of the day, you can't focus on why people are are selling. um you know maybe if it's if it's one of our strategics in there I I might take it to heart and want want to listen a little bit but at the end of the day it's all about um you know just maintaining the the foot on the gas >> is the warrants and um option situation for you and yeah what part of that is legacy what does that look like >> so we have issued zero warrants as uh as a management team there are about a million warrants from the eagle side that are at 250 so that's roughly a double from here they expire on May 18th next year. >> Okay. >> Uh we issued roughly uh just over 3 million options at a premium to um what we are coming out at 90 cents at a dollar to uh existing boards and uh board members and some of the management team. Um and then there are some options from the Eagle side uh that are roughly at a $150. Those are all held by insiders. Those those expire in May as well. Uh so from a dilutive security standpoint, the short answer is there's really nothing of consequence here. Um I know some explore codes have to issue warrants. It's it's part of the capital structure. I am a firm believer that I will never issue a warrant. Uh or I'd like to never issue a warrant. I never say never. Um but I think the quality of investor when you don't give a free trading share and give a warrant uh it really sort of filters things through a little bit more clean cleanly. It's worth pointing out actually um everyone's shares are free trading except for um my shares which are in a two-year lockup and then the management directors that are also in a two-year lockup voluntarily uh locked up for two years. But everyone that wrote me a check in the Iron Gold transaction amount is free trading. So there are no real restrictions. There's not a wave of shares coming, you know, in 6 months or four months that you typically see with these things. I'm not suggesting don't do your investigation, but there's not a lot of uh there's not a lot of things you can dig into here uh from from a capital structure perspective. We've really designed this um cleanly and and with purpose. >> Yeah. Yeah. Well, the the only thing that I could find there is is those founders shares, which in your case, they're actually founders shares. So, it's not like someone founded the Shell and got a bunch of, you know, millionth of a penny shares. And and yes, your shares are cheap. We did talk about that. Um, but then you also mentioned all the rest. So, so that's a good point that you're making there. Um, also where I was going with the warrants question and and by the way, yeah, good good that you don't want to issue warrants. I hope that's true. We've got it on video now. So, so no, you're extra motivated if you >> if you do issue I'll be like, Drew, what the heck? What happened? >> Yeah. >> Um, but no, I was thinking about um raising capital. I mean, I was going to ask you, is raising capital going to be a challenge? You said no warrants, which makes me think that you're confident in the in your abilities to raise capital. >> Yeah. Well, look, maybe someone's watching this uh when it comes out and they're thinking this guy's arrogant that he thinks we're going to raise money. We think we can raise money. In fact, um since we closed the Iron Gold transaction at the end of May, um we've bid uh close to 200, no, a little over 200 million US on transactions. Some of them have gone to some of our competitors. Um, we've done that with a combination of debt and quite frankly our confidence and our ability to go raise money. Um, if you look at our institutions, they're quite strong. If you look at our chairman, specifically our chairman, Gerald Annette, he ran uh, Scotia mining sales for almost a decade. He then went and worked with Richard War, sold one of their businesses and took Capstone from 60 cents to $10. His institutional rolodex is incredible. And then other members of the board and myself, we've got a really good rolodex. And I'm not suggesting it's it's a slam dunk. We can get guys to write checks, but um we don't. One of the things that we struggle with a little bit is people look at us think, "Ah, you're just under $100 million market cap. I like that it's capital. I like that it's a little story about how you going to compete." We we can compete and we can raise capital. >> Yeah. That being able to raise capital and trusting your abilities to do so I think is important as well. Um, would you only raise capital though to like for deals or would you sometimes just raise capital so that you have money ready when a deal comes along as in would you only raise it when you know you have a deal or would you also raise kind of you know beforehand? >> So speculation here I I I don't want to suggest we won't raise money if there's not a deal. Um the one thing that and I I think I'm going back to my corporate development days. There's say you have two hands. One hand you got a harpoon and you're going after the big the big whales like we've bid more than our market cap three times. That's the harpoon. And then there's the BB gun where you know it's a $2 to5 million deal. I would hate to have to go to the market for a bunch of smaller deals. So I think it's good to have um a smaller um a smaller sort of balance of of capital available to you for some of the smaller transactions. Um but right now we're sitting well over 3 million US. We've got a receivable for over 3 million US. Um, and we're cash flow positive. It will not enable us to to to take a big swing. Um, but we also don't want to have to go to the market every time we got a we want to, you know, hit a single. So, I don't know if I'm answering your question directly, but um, I think what you know, you can take solace in is that we can't do anything big without going to market clearly based on our capabilities, but we would like to to make sure we have a healthy enough balance sheet that we can also execute on things quickly. Um, one of the conversations we've had with some of the larger transactions we've looked at is how much capital do you have available and how much do you need to go raise in the market. Having a a debt facility in place can certainly say we can we can get that capital quickly. But I think if we have let's just pick a number 10 million, you know, to 15 million on our balance sheet and say we have to do 25 million, it's a much easier conversation when we're competing with other people to have that on the balance sheet. So, it's not just, you know, nice to have, it's also an aspect of um you're competing against much bigger, deeper pocketed in investors. Um some of the larger royalty companies, I'm not suggesting they're in every conversation where they're cash flowing a billion bucks a year. Um so, their their money is real good. Um and then there's a bit of a question mark, you know, can you go and raise that money? We've demonstrated that we can, but uh until we actually go out and do a big public financing for, you know, 2550 million bucks, people will still there's some some deal uncertainty in there. >> Do you think there's other ways like an ATM or something that you could put in place or would you be against that? >> I'm not I'm not a huge ATM fan. Um uh would probably be my my my gut feel on on that. The the one part of the ATM that I don't think is celebrated and we had this at my previous employer is the ATM is a very good mechanism for when you meet an investor that quite frankly doesn't trade in the open market. Um they they like to buy deals and you're like there's no deals coming but I want to give you $5 million. The ATM is a very good mechanism for that. Um but I think whenever there's strength in the stock um you don't want to think that we're selling into it. whenever there's um strength in in the same sort of light, you know, they act like a warrant, you know, a cliff of warrants. This thing goes to, you know, this thing goes up 80%, they're just going to sell into the ATM. Um, but I also think it's a good idea to have one in place is it's really depends on how much you use it. Um, and we've had some discussions like should we do a short form shelf or or something to that effect and just put all those in place. You don't have to use them. um they do cost money to set up but um the ATM is not a financing mechanism um that that that I would like to implement and if I do it would be very sparingly. >> Well um would you how many deals would you target a year? Is that a thing to even think about where you're like oh we want to do at least two deals a year or something like that or is it more bottom up and and see as you go type of thing? Really what I'm trying to get at here with all these questions, by the way, Drew, is when are you gonna have to raise capital again? >> Um, I wouldn't be I would be shocked if we don't do something in 2026. How's that? Just to give you a sense of where we're at. Um, the one thing that that and this kind of will will leak into the conversation about how you're going to compete though is with this uh slightly lower not slightly quite quite a bit lower valuation than our peers. um people are quite uh interested in taking shares back as consideration for the royalties. Um so there is an opportunity to to stack on some growth without um actively going to the market. And when you go to the market, look, dilution is dilution at the end of the day. If you're issuing it for royalties or you're issuing it for cash, the paper royalties, it's it's functionally a similar exercise. There are costs, you know, legal and banking costs that come with it. Um but there is an opportunity for us to scale up without actually going to the market right away. Um, and we're happy to think strategically with with this discounted share share valuation because it's not going to last forever. >> What what what are those opportunities to because essentially everybody's always looking for non-dilutive growth, right? So, what are those opportunities like for you? >> Well, non-dilutive growth implies [clears throat] um issuing debt, which we have the capacity to do. Um, the opportunities I think we're referring to, let's let's go back. Let's let's just say we find another iron gold portfolio. It's actually easier if I if I talk about that hypothetically because it's gone. If we find another Iron Gold portfolio with a company that's, you know, got a strong balance sheet. It's more um a bit of an afterthought like the the royalty portfolio and I am gold. No, no one knows they have it. It's it's well, I mean, us royalty nerds do, but for the most part, no one knows they have it. Thinking about a way to scale up the business through issuing capital is well documented. And the easiest example I can give that is Mavericks. Maverick started out um in 2016. They did one treasury offering at the start. They then proceeded to do a deal with Pneumont Gold Fields, two with Pneumont actually for two different portfolios. One came from Gold Corp and uh Kin Ross. And as they expanded the the cash flow generation in their portfolio, as they increase the scale as a market cap, it's in every single royalty company's decks. As you get bigger, your multiple goes up. So that that facilitation of multiple expansion is afforded to anyone that would do a deal with Summit. Um, and based on our size, based on our clean capital structure, and based on our valuation, we think we're the best home for it. And this isn't just a a thesis so far as that we're hoping to implement down the road. Some of these guys have actually called us like like billion billion dollar companies are actually calling us and talking to us about this. So, um, that's a that's a big sort of competitive advantage I think we have right now. We're small and we're cheap. >> I also wonder how much of that is needed, uh, to make that business strategy work. And so maybe we can talk about um, whether you want to grow kind of very selectively and and slow and steady or would you be kind of looking at growth at all cost? Like what would you see yourself doing 10 deals within a year or would you think it's more like one to three type of deals? I don't have an ideal number and um let's go with one to three and it is not growth at all costs. We we we we look at things on a per share metric. Um we also um there's two schools of thought. There's scale up immediately because size matters which I think is is is well documented in some of the affformentioned sort of >> curve of of size and and multiple that I discussed. Um, but there's also an element of our portfolio. A lot of our assets are early stage. A lot of them have throughput expansion. And look, a lot of these companies that you're going to talk to are say there's lots of resource upside. There's tremendous on these. When you buy royalties in the first or second inning like we have the ability for them to expand the mine is very high. Uh, we also have a growth asset in um in relation to Banyan, which I believe you went visited that we're extremely excited about. Um, and we think that value will will appreciate in time. So there is a conversation you have to have as as a management team is is what happens if we do nothing and we keep our continue to keep our GNA low and just wait for these things to turn online. Um there is a scenario where nothing happens and this is a better business in a year than it is than it is right now. And I think you have to acknowledge that. But our gearing, our personalities, our um our our our mandate is to grow this business and that's what we're actually trying to do. And look what we did in 6 months. We went from 0 to 47 royalties. We went from an idea to cash flow positive. That's I can't guarantee we're going to do that in the next 6 months, but um that's sort of the cadence that that we operate at. >> That's the size does matter for sure. And I generally under operate under the framework that nothing ever happens. Um but jokes aside, size does matter in this space. That's why I ask you is it growth at all cost? like do do you see it as part of your business model that you have to grow as fast as possible so that you can become more relevant in terms of competition? This is where we can talk about competition. Um how is the competition in this range of the market and and how do you compete as a newcomer? >> So it's always been competitive. Um at Premier Royalty you can't compete. We we scaled up the business and ended up going to Sandstorm at Mattala. How you going to compete? We did that as well. Um, I think there's with with the the pricing and the gold price and, you know, the opening of of equity markets and the balance sheets of a lot of of of producers, there's this common belief that there's no product out there and it's going to be very expensive. It is very expensive. It always will be. Um, so how we're going to compete is, and I know the corny answer is we're going to outwork everyone, but I do believe we can. But our network is fantastic. Each one of my directors is like a mini corp dev guy. they're shareholders in the business and they're showing us deals. We've already uh done deals on a bilateral basis. So, uh I will not sit here and suggest it's easy, but I will suggest that we're very good at it. So, um again coming off as a little arrogant, but I think you have to be to to try and compete with with with a lot of the royalty companies. Going to your second question, how um how competitive is the dynamic? How are things changing? Um there's always the way I look at the royalty space is there there was always been the big three. So you got Franco, um, Royal Gold, and Wheat and Precious. And then you've got sort of the middle three, or I guess now the middle two because we lost one with Sandstorm. And then there's everything under, uh, a billion dollars that we occupy. And there's a lot of noise around Tether and some of the other M&A that's happened in there. Um, we think we have the ability to really pick off sort of stuff in the 5 to 50 range. Um because the scale matters narrative is not something that I believe in solely. It's it's also held by other management teams and they're trying to scale up at the same time. Um we think there's an opportunity for us to pick off some of these smaller royalties um one one off where we can and then really swing for the fences and go after these big ones. Um but from a competitive standpoint um cost of capital we're going to lose that battle every time. If someone's trying to sell something for cash, um, call Franco, call Weeden. Um, it it's it's that cost a capital game. We can't play it. We can get creative in structure. We can get creative in terms of, um, presenting people with a real tried and tested method of of this reate that has been well documented through my previous employer through um, through Mavericks, which obviously got taken up by Triple It's been documented through Elemental with with they did a deal with South 32 early in their days and did really well by it. So, it's not it's not a it's not a thesis that that's grasping the straws. It's one that's that that's worked in the past and and gets a lot of traction. >> Is cost of capital the the main the main thing for royalties though that that determines the fate of a royalty or what do you think that the fate of a royalty company really depends on the most? That's a really big question. Um, costic. So, let's just uh pick a random example and and again, I don't have any speculation on this, but the Cani deal that was done by Royal Gold. Uh, they got a billion dollars from Royal Gold. Those kind of transactions, um, I think cost of capital drives the participation and who's in and who's out more than anything. You're also talking about a billion dollars. and then the the nuances around what kind of structure you put in place. You're seeing people get more creative with the structure. But I think on the larger side, we're talking about a billion dollars of capital for a gold stream. Um cost of capital really drives the bus. And then there's um the smaller acquisition financing. There's u things that are come out of out of M&A that are generated. What is the owner of that looking for? Are they looking for uh they want it off their books? they want they want to put it in a team to to take custody of it and and hopefully grow that and diversify it. There's a lot of different sort of mechanisms as to what people want when they do these deals. Um but cost of capital on the large side is 100% the the end of the game. Um I would suggest >> we're not we're not writing streams for build in in on first quantum mines anytime soon. And it's also like some well some a lot of the projects out there that that would be looking to sell royalties wouldn't fit into a Franco, right? They might be too small. And I'd have a question for Franco as well. How do you how do you keep growing from there on out like the situation that they're in? That that's also a challenge, right? What kind of projects would you be looking for? Well, look, we we and I know it's a terrible answer, but we look at everything within sort of a suite of metals and risk profile. Ideally, we have a producing or soon to be producing mine. And and the way I look at the growth side of things are there's the longdated options where uh the management team put out a PA, they need to raise 20 times the market cap to build it. There's no start date, there's no permits. that that optionality has a place in your portfolio, but that's not being valued at the the rate that that it used to, at least in my career. And then there's the more certain um development timelines. I'll pick one from our portfolio, for example. Jaguar has been operating in Brazil for 20 years. They have the cash flow. They have a mill that's nearby. They've openly said, "We are starting development next year." That's the kind of development that that we'd love to get into. We'd love to find another pitting. We'd love to find another silver stream on a on a major uh gold project as well. Um if we could if we could find twins of stuff in our portfolio that'd be fantastic but um ideally we're looking for gold and silver exposure uh at a good price and we're not the only ones. >> What about um because you said risk profile I suppose jurisdiction is part of that or are you more agnostic to what jurisdiction? >> We will look at pretty much any jurisdiction. I mean, there's some that are just no-goos and and I don't want to name any sort of nations that that but I think you could probably come up with a short answer to this where I've struggled in my career and and I think um my management my my board and and Connor agrees with this is we're finding the prices for less favorable jurisdictions uh don't have the discount that we would sort of perceive. Um you're looking at something in a part of the world that is a tier 2 jurisdiction. Let's leave it at that. and they're asking for one times their net asset value. They're asking for singledigit IRRs. So, I haven't um I haven't really done much in and let's call them tier 2 jurisdictions um as a result of that. I love the idea of of you know, we just bought a royalty at a discount that's a high-grade gold mine in Ontario. Um, so why would I go to a far-flung region where our institutional and and legal and quite frankly transactional knowledge isn't there? So I'm not saying, you know, we'll never do a deal in in a different jurisdiction, but it's certainly one that um, you know, the money has to be there. If you see me stepping out into a jurisdiction that's not wellknown, or if you see me stepping into a metal that doesn't seem to be a key focus, it's probably a very good deal. And quite frankly, when guys come up to me and like, "This isn't our core focus." um the rate of return has to be pretty aggressive and they go okay great don't bid so >> well Bkina Faso is pretty far farong and I I do want to talk about that so we'll hopefully get to it here in a couple of minutes uh I know you don't have all day by the way but would you prefer buying royalties one by one or or would you be looking for a portfolio as a whole again similarly to what you did with IM Gold or was that kind of just to kick off the company >> we'd love to buy another portfolio we're not afraid to buy oneoff royalties like we do with Matt Matson. Um, but let's unpack. You talked you talked about Bertina Faso earlier. Um, for what we paid for that royalty, I would do that day do that deal every day of the week and twice on Sunday. Uh, I'd also like to sort of highlight the fact that, uh, it's not near the Sahel where a lot of the regions are. Don't pretend to be an expert on Bkina Faso, but they've got a long history with no security concerns there. Um, and they've executed flawlessly as as an entity there. Um, but a development asset in Molly would probably be one where it would be 10 cents on the dollar. And I think that kind of plays into um sort of the way we view things. And quite frankly, um, I've never done a deal in Molly and I I I I said earlier I don't want to pick out a certain nation, but it's in the news right now and Bareric just settled and there's been some ruminations of of of um tougher as a tougher jurisdiction to operate in. Let's just leave it at that. This isn't my personal opinion, but it's certainly one that at least the the general public shares. >> Mhm. Yeah. Um I I do want to talk about the the assets maybe sort of one by one. I did want to start with um Matson though, which is pretty much half the company at this point as far as far as I understand it. You 50% of your >> half the revenue. >> What's that? >> Half the revenue. Um worth pointing out and and we haven't talked about royalties specifically. There isn't an asset here that makes up more than 20% of our net asset value. So, it's already fairly diversified, particularly for something at this stage. But half of our revenue next year um will probably come more or less from Madson. Um but, you know, it's it's an important part of our portfolio for sure. I'm not trying to tie behind that. >> I find NAV a tough concept in early stage royalties. That's why I try to to to flock to cash flow and and and revenue and look at those two things. One and a half thousand ounces of gold equivalent. That's what you're expecting for 2026 as far as I understand it though. >> Let's call it one to one and a half. We haven't put out formal guidance. That's um certainly certainly we we we will be cash flow positive on the back of it. Um but I I do want to quickly sort of touch on that NAV conversation because our shares our our shares our shares were so attractively valued. We've more or less in all of our NAV estimates just run the reserve or mine plan that's been publicly disclosed by the operator times the consensus gold price times our economic interest under contract. I'm not here to flog the rest of the royalty industry, but as these things trade at a premium, you see a little bit of a stretch. They start converting M&I, they start converting inferred resources, they start having some very rosy start dates. So, I'm very comfortable with our our NAV uh profile. um especially some of the you know when we before we went public under NDA with some of the institutions that have invested in this um I think it's worth pointing out that the quality of that nav is high based on the inputs into our model but more specifically and this is something that I think is an important focus point of focal point of us is a lot of our NAV is either in operation or it's committed timelines to production and that is easy to understand you know West red lake says they're going to do about this many ounces next here times 1% times pick your gold price. Like it's very easy for people to follow along. Um and we like that it's simple and easy to understand. So our NAV is um higher quality. I can completely appreciate um your hesitance on NAV. I think as mining investors, you should be skeptical, particularly when it's an operating mine. Um a guy like me that's analyzed a lot of them will will pick apart, you know, operating cost per ton and underground mining methods and and recoveries. It's a little bit cleaner in the royalty space, but uh it it is a it can be gained. I I suppose is probably the fairest way to put it. I I'm not surprised to see you have that viewpoint at all. >> Yeah. And then there's jurisdiction and everything else. In the meantime, team and everything else that's just impossible to account for in fixed metrics like NAV, but it is it it's it's close to the best we have. I suppose >> Batson though you say it's easy to understand how it works for you. advance is not an easy project in and of itself though if we are to judge it based on its previous operators with pure gold and whatever happened there and uh West Red Lake is is targeting commercial production in what they they call early 2026 with ramp up throughout the year. What gives you the confidence that this sign will be different? >> Uh the short answer is um the amount of definition drilling they're doing and the and the different approach they had on the mining method. Um, but I love this question because I actually went through a similar experience when when this was first brought to our attention. Um, look, this thing went this thing was had a very sto a very large uh blow up in the past. Um, the biggest thing that gave us comfort was they went out and did uh a bulk sample in all the zones based on their definition drilling and it came back you know plus - 5%. um the area uh of the old operation and this is my personal opinion this isn't u I want to preface this this is I'm not speaking for West Lake was the McVey zone where they had some variability before they're basically focusing very strongly on the Austin and South Austin zone where they've had a lot of high-grade gold it is not an easy or body uh I I'm sure you know Gwen Preston or any of the other people that you you speak to from the company will tell you that but at the same time the grade is there it's in Ontario it's got an operating mill uh it's worth the effort. Uh I think is one of the lines they use there. And we we're very confident as a royalty holder they're already making money. Um we're very confident as a royalty holder that that that we'll get a very much an economic return on that on that asset. Um and yeah, I don't know if I've answered your question, but I think I think it's a properly capitalized. It's um it's a different mining method. They've done a lot of definition drilling. They went from 20 m to 7 m centers, which is much more common in Red Lake. And let's be honest, gold's at almost 6,000 Canadian. Um, I'm not suggesting you should you should make an investment based on the fact that prices are high and and everything works. Um, but prices are high and more things will work in this environment. Um, and I think that gives them more wiggle room out of the gate. >> Ideally, you want them to work in more conservative environments as well. So, that's really where I'm coming from and and maybe we can talk about that. What are the assumptions uh with the production profile and recoveries that you're assuming for MATS? in order for it to get you that, you know, 500 to what, 750 ounces? >> Well, the recovery rate's simple. This thing's been producing before and the recovery rates have been right around 95%. I'm not going to suggest that can't go up or down, but 95 historical production, um, the metal has never been an issue. Um, if you look at how we structured the deal when we bought it, uh, we put a contingent payment on 60,000 ounces on an annualized basis for three consecutive quarters or 150,000 ounces. We were taking the view that uh, the mine plan that called for 65,000 ounces may not get hit right away and and we uh, we structured that accordingly. I think this thing will comfortably do 45 50,000 ounces next year. This is again this is our view. This is not guidance. We do not have any insider knowledge from them. Um, but what gets us excited about this asset and I guess by extension other assets within the portfolio is they're currently operating around 650 tons per day. The mills rated for 800 with the permit they can go at, 1100. The the all of the the milling equipment is is suited for that. And we've actually seen technical reports in the past or stretch technical reports in the past calling for, you know, 1,500 tons per day. We think once they stabilize operations, once they get the shaft going as they continue to execute the way they have, there's a chance for this to go from 50 to 80,000 ounces. We're not paying for that today in our model. There's also a satellite deposit called Rowan that's not part of our royalty, but it's part of a larger complex where they're openly talking about going to 100,000 ounces. Um, I think there's upside in Madson specifically with the drill bit, but they've hit some spectacular drill holes um, as of late and uh, you know, we're really confident in this team and their ability to execute. >> Something else that I've been wondering and and it it is to the point that you're making here, but something else that I've been wondering about royalties in in a very bullish price environment is could it be too bullish? Could it could it push the operators to try and buy back their royalty uh or or cut some kind of a deal that you know takes away that cash flowing asset for you? What's the contract there? What is the royalty viable? What does that look like? >> So, we're always competing with operators when we buy royalties on a third party basis. Um we were very careful not to talk to Westwood Lake and let them know that we were buying it back. Um, but once a royalty and this is jurisdictionally, I don't want to get too too nerdy on the legal side here. Every jurisdiction is different. [snorts] Uh, but once but for the most part, once a royalty is in place, it's a fix to the property. It's there forever. Um, you may find an environment where people try to buy it back. And look, we would evaluate that all at once uh if it came to us. But in some situations and and there is examples of in the past where a royalty burden is quite high and an operator will come to you and be like, "Look man, we're we're struggling. Uh you're five or 10% royalties killing us." And you might work out a deal in that sense, but um operators typically will try and buy back royalties that they don't own, but once it's in a royalty company's hands, it's pretty hard to get it back. We we love our royalties. We're not in the business of selling them back to operators very much. >> So, so the sometimes it is it is buyable. So, sometimes it's in the contract, right, where they can buy like half of it. >> They can buy it down. Yeah. Yeah. For sure. Um and and look, there's there's instances where we've given buyback rights in some of my previous iterations, not nothing to do with Summit, where I'm like, man, if they buy this thing back, we made a good investment. Um or buy back half of it or typically typically you don't see an entire buyback on these things. But the one thing that you know creates some confusion or or some creativity with the royalty market is uh all these contracts are different and they can be tailored in very unique and different ways. So it's uh it's like a snowflake to to be corny. Every snowflake is different. >> What So what is it for you uh with Madson? How much money would they have to pay you? What can they buy back? >> They can't buy back anything. >> Nothing. Um, but no, no, they don't they they have no rights. But look, if if if Shane and the team called me up and said, "You bought this for 8 million and do you want, you know, 50 for it?" I'm just throwing at a silly number. Uh, I think we'd be open to listening to that. But uh um everything's for sale. Everything's got a price. I mean, the the the companies, the shares, everything. Um we're we I'm not inviting West Red Lake to try and bid me for the royalty, but uh it's uh um there's there's an opportunity there. And look and sometimes things need to be restructured. Um you saw it famously with uh Alex Co with um right >> when they sold to Heckler they they re they renegotiated wheat and precious. We don't have anything that's a a a truly significant economic burden on any of these mines. I don't suspect that this conversation will happen but you never know. >> Bombore in Bkina Faso is also a big part of the story for you at least for now. I believe it's about a third of the expected revenue next year. And it's um of course the first thing that comes to mind there is is um your your potential political risk or nationalization or whatever else is going on in those parts of West Africa. How do you see that risk >> uh on a risk adjusted basis? Fantastic. Um and I I'll explain to you why. the largest shareholder um of War Zone is I'm going to blank on the name um is a private equity firm. The chairman of that uh runs the bank that's lent them a lot of the money. So there's very good economic and political alignment at at that asset. Um Cupris is the name of the bank that's lent them the money to do all this expansion. Um the other side of it is it's south of Wagadoo. It's not had a lot of security issues in the past and it's been operating quite well. Um there are stories and there are machinations of much tougher parts of of West Africa in general to operate in. Again, I don't pretend to be um you know a guy from Canada here pretending to be experts on it, but from a risk adjusted standpoint for if you look at the return we're generating and what we paid for it, it's it's a slam dunk. Um we're quite comfortable there. Um they've they've I think they're putting close to 200 million bucks in the next year and a half into this asset. Um, so management is obviously quite comfortable as well. >> So what does the production profile there have to look like? And and again realize metals prices and whatnot for you um for for you to to get the the money that you're you're hoping you're going to get because again it's it's a silver stream that we're talking about here. So it's not an NSR, right? It's a 50% silver stream. So a bit different than a than an NSR. Uh what has to go right in order for you to get that payout? Oh. Um, well, quite frankly, and and we'll talk about in a second, the the the silver receivable pays us back. Um, they're going from 120 to 250,000 ounces by the end of 2027 on a run rate. Um, this was an oxide deposit. They're now building a hard rock deposit for the sulfides. Um, they're commissioning it next month. They're going from 120 last year to 170,000 run rate next year. >> Mhm. Then they're doing a second expansion to go to 5 and a half million tons by the end of 2027. At which case their their guidance again this is and this goes back to my my conversation earlier but this is all based on what what guidance and the operators are saying it's going to be 230 to 250,000 ounces. Our thesis is very simple. More gold equals more silver. This is verified by our technical due diligence. It's based on the relationship we've recognized within the or body the whole way through. And that that relationship is let's just use simple numbers for every ounce of gold there's uh 0.25 ounces of silver and that will continue for a long time. There's also minimums in there and that's where silver receivable comes from. >> Mhm. >> Orzone does have the right to buy back half of that silver stream if I'm not mistaken though. >> Correct. So, if they execute and build this plant by the end of 2027, which uh they are threatening to do, I I certainly they haven't announced a formal second uh expansion, they can buy back half of our stream. So, we'll be left with a 25% silver stream for 7.15 million US. Um that's multiples of what our carrying value is on it. We actually don't put that in our models because it it's uh sub it seems subjective and it also seems like you're you're making it too good to be true. Um but yeah, they do have a buyback right uh by and they have to execute it by 2027. That's 5 years after the creation of the stream. Um that's actually, you know, we talked about buybacks earlier. That's the only one that that really of consequence economically within our portfolio. But if they're buying that back, I'm taking that check with a smile on my face. >> So essentially, they can buy back half of the half for um half of half of your stream. But so that's half of the half of the silver that comes from there for 7 million. What would you replace it or is that enough money to replace that 25% with? >> Uh well I imagine if they're buying it back it's worth more than the 7 million. So I would imagine not um you know just being assuming you're dealing with a rational actor here. If they're buying it back for seven they think it's worth 10 or they think it's worth more than seven. >> Um the but that number I mean the original contract put in place was 7.15 million for that 50%. So that's all of the money coming back uh along with 70,000 silver ounces at no cost to us. Um along with you know that would be 20 to 25,000 ounces of silver a year versus 40 to 50. Um we still have a viable economic interest there. Maybe that maybe that's a scenario where silver is at $150 or something wild like that and and they just have to >> Is this something you've talked to them about? Uh and that Yeah. Yeah. Have you talked to them about this? they're acutely aware of it. I don't like to remind them that they can cut us in half. So um and I think that's a conversation that may come up um later on down the road. Also in the in the instance, it's not triggered by time. Uh it's triggered by time and executing a 5.5 million ton per day plant ton peranom plant. Um and if they don't hit that number, they can't exercise it anyway. Mhm. >> It's a stretch goal for them, but you know, you're you're rightfully highlighting something that that 100% exists uh as a contract between us and Orzone. >> How often do you get to talk to them or any of the other operators on your royalties? Like, is there an obligation for them to give you quarterly updates or monthly or do you just, you know, pick up the phone on a Sunday at 6 a.m.? How do you talk to them? [snorts] >> So, specifically, we do have information rights with some of our royalties and some we don't. Um, but let me just talk philosophically cuz I actually had a call today I'll chair. It was with Daenerius. Um, because we are out actively marketing. Um, they see this as an extension of of of their sort of messaging. Um, we do try to make sure that we're on the same side and the same messaging with all of our operators. Um, so we speak to them quite often. Uh, some of them are reluctantly, oh man, you got that royalty. We're hoping to buy it back. but then they realize that there is a benefit to partnering with a group like ours that is out marketing and telling the story probably to investors that they don't talk to. Um, so we talk to them quite often. We try to have that communication as open as possible and this has been consistent with every royalty business I've ever been involved in. It's better to have a healthy happy dialogue when you can't. Um, not every operator is going to love you. I've worked with majors that uh give you as little information as they as they legally can and then I get other ones that invite you to site. It really depends on on you know just like people companies can be uh adversarial or or friendly. >> Let's do talk about Colombia. You mentioning Daenerys there Zancudo uh half a percent NSR in Colombia operated by Daenerius and it's actually already in production. They're mining and shipping or their own guidance points towards um ramping up to what a thousand TPD in 2026. Um yeah similar question. what are the assumptions that you're making there as to how much of that will will hit your treasury? >> So, um this one we can't do formal guidance on. Well, we don't do formal guidance on any of this. Um we're very confident where Daenerys will be in 2027. Um the ramp up and the timing of things uh has been a bit of a question mark and there's been some delays related to permits and and other aspects of it. They have the installation license for a thousand ton per day plant. It's on site. They've got to put it in place. Um they're doing a lot of development work at the mine. I think they're doing a kilometer ramp at the Independencia mine. I should have checked my notes before this question, but bear with me. Um but the technical report calls for 60 to 80,000 ounces for 10 years uh gold equivalent. And that, you know, using today's prices translates to about a million bucks. We think in 2027 they'll they'll hit it. In fact, I would suggest if you annualize the third or fourth quarter of 26, we're probably going to be hitting close to that number. Um, so we're very confident in their ability to get this up and running. The timing is a bit of a question mark. That timing is getting a little tighter as they get their permits and and and raise a little bit more capital. Um, you know, quick reminder on this one. Uh, these are the same guys that built and operate Siggoia. It's the largest gold mine in Colombia. It's the exact same team. It's the same CFO. It's the same uh CEO running it. So, uh, we have high confidence in the team and operating in Colombia, uh, is something Sarapino and his team have done in the past. They've got the permits in place now. So, we're that that's coming with time. >> How do you see their community risk, uh, in in Colombia and and just jurisdictional risk in general? >> I would suggest the perception is a tighten. These guys are uh, operating within a local community and a and in a place where they have operated in the past. Saraphino is extremely connected down in Colombia. I'm not suggesting he's got an upper hand, but um if I were to bet on a team in Colombia, it would be them or Aerys Mining or some of the guys that are actively operating there. Um as a reminder, you know, this is the team that that created the company that most of the assets that are in Aerys today uh were put in put in production or put in place by Saraphino and his guys. So they they've operated there for well over a decade and know what they're doing. Um the political risk um I'd say because it's closer to a community is probably a little bit less from the nefarious sort of far conversation but uh we're quite confident there that they can get it done and again um in the context of what we paid for this asset or bombia or any of these this matter on a risk adjusted basis we're very comfortable >> permits and everything else is is in check though for them u politically they're they're happy and and community everybody there happy and healthy essentially They can they can actually um mine and deliver or do they still? >> They're mining right now. >> They're mining right now. Yeah. >> Um I haven't been to any I haven't been there personally. Um but you know there's a nearby town um that where a lot of the local workforce comes from. >> Right. I know you almost have to run here Drew. So I work toward wrapping up again. This is kind of an introduction conversation. I'm sure I'm I'm forgetting a bunch of stuff to ask you here in the meantime and I'm sure people listening and watching they'll remind me of it and and hopefully I can get you back on um in the future and talk about that. You said GNA wasn't all that much, but if you're looking to grow a company, you might be looking to grow a team or not. Uh so yeah, talk to me about GNA. How much are you budgeting for GNA this year or next year? >> Um I mean the salaries between Connor and myself is less than half a million Canadian. Uh and we're we're definitely working for every penny we get. Uh from a team perspective, we've got a part-time CFO. Um we potentially might be bringing a consultant to help on the IR side, but uh I I'd prefer to keep it lean and tight where we can. Um have a very small team of very competent people that are paid properly than than have a bloated team that and this isn't a shot at anyone else, but that's the philosophy of the business right now. Um and as an extension of that, I'd also add, I don't want to hire people because I think I'm going to be busy. I don't want to hire people because I think we're going to have a problem. When I'm inundated or I'm spending too much time on certain parts of the business where my time is better served for investors to be in one aspect or another, um, we will bring in people to help out along the way. Um, but the a tight gna and a cash flow business is what we got to deliver. >> So, what what does a tight gna look like? How much is that for you? >> Uh, well, let's see. Between Connor and I, like I said, it's under half a million Canadian currently. There will be some new contracts in the new year. they're not going to be egregious or they'll be below market rate. Uh but that remains to be seen and I think we touched on earlier what the KPIs are. Um we're sort of formalizing all of that as it is. Mike, I have I was more or less a founder and consultant and put a contract in when when we first got the Iron Gold stuff done and Connor didn't join until June. So, uh my CFO came on in August. I mean to say this team I can't sort of stress what a nent stage this company is at right now. >> Yeah. What are you going to do for marketing? How much money are you looking to spend on marketing? because you said that part of you know solving that valuation gap there will be marketing. How much do you want to spend on doing that? >> Uh again we don't have a firm number on that um at all. In fact that's one of the things that we're we're currently working through. It won't be you know over a million dollars or a wild amount. We we we want to um market in a sustainable way and that you know includes sort of shying away from some of the frothier I don't want to say pump and dump but things that that that really throw oxygen into a stock and then when when they come off they they collapse. Uh we want to do this in a sustainable ethical and transparent way. So um that's unfortunately not something I have a quick answer for. >> But so what what are you thinking in that case? Is it is it like mostly conferences? Are you going to doing are you going to be doing digital? anything special you planning there yet? What do you want to >> We've got a digital we we've did uh we did some digital marketing uh actually we did a corporate video that we're uploading right now um with the team at market one that have been fantastic. Um we've signed up for a couple conferences with the CM guys. I think we're going to go um you know I always go to VR I don't go as an attendee. I go there because there's a lot of people in the conference. So conferences are are are part of the budget. um digital marketing as part of the budget, but um we're really focusing on the the retail the marginal retail buyer and and the institutions are are coming through sort of our investment banking relationships on the street. Um the strategy uh it needs to be firmed up. The the attitude and the philosophy is we need to market and and do it often but not you know go to every single conference and sign up every single newsletter writer and stuff of that nature. [snorts] >> Yeah. Um I I agree. makes me laugh when you say because because a lot of companies still do that kind of thing. Um what's the what's the most fair criticism of Summit that you've heard so far? K. >> Uh what do people hate about you? Um too small uh probably be part of be one of the things I I think there's perceptions of the company that I can dispel pretty quickly. So the the the too small comment we're too small, watch us keep growing. Um, liquidity was a concern from a lot of our shareholders. The the the volumes are quite heavy for a very new company that has done literally next to no marketing. Um, so I can be proud of sort of where we're blocking. Um, and I'd say one of the common questions is, aren't you just going to get acquired? You know, are you not going to get to keep it? Um, and then I kind of look back at them and go, is that a bad thing if we get taken out at a premium? Is that not a liquidity event for for everyone? Anyway, I'm not suggesting we're we're we we're not selling the company anytime soon or trying to sell the company anytime soon, but that that's part of it as well. Um and then I guess the last one would be how you going to compete and you know, watch us compete. Uh we've done already and we'll keep doing it. [clears throat] >> What's your most favorite criticism of me? What do you wish I would have u asked or or brought up that I've failed to bring up? Um, I expect, well, you're doing a great job, Antonio. Let me just tell you that. Um, I would I would have expected more conversations around where you see the royalty market in relation to buying a producer, buying the GLD, uh, buying the GDX, stuff like that. Um, but I think that's probably pretty well documented. Um, and I guess, you know, maybe we didn't talk about the team enough, but you know, that that that remains uh something we can we can visit next time I come back. >> Yeah, maybe next time you come back, you come back with someone else and uh we do talk about the team. We get to meet a couple of the guys and gals uh running the show behind the screens. Um but no, it's been a pleasure. I am looking forward to our future conversation again. If people watching or listening think um or or have interesting questions for next conversation, please let me know what what it is and then I'll make sure to ask them next time. But yeah, Drew, I appreciate your time. Thank you so much for doing this. >> Real pleasure. Thanks a lot for uh for you and your listeners. >> And as always, thanks to everyone for watching Resource Talks. I have a couple of more things to say though. The fact that this company was interviewed here today does not mean that they're necessarily a good or a bad company. I'm not here to endorse nor attack anyone. I am simply here to ask some questions. If you find that I have failed in asking a question that you would have liked to hear an answer to, which will happen as I'm not an experienced interviewer, please let me know and I will try to correct that mistake in a future interview. As mentioned at the beginning, please understand that mineral exploration and development is an extremely risky business. Losing money is the norm and should be the expectation. 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