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Brett Heath: Mining Companies to Profit Handsomely at $2,000 Gold

Tom welcomes Brett Heath, President, and CEO of Metalla Royalty & Streaming, back to the show.

Brett discusses what led him to enter the metals and mining industry and what attracted him to the streaming and royalty business. He says, “When you pull several royalties together, it can provide an enormous about of optionality in a rising price environment.”

Metalla’s business model is in buying existing royalties, and there are times when it’s easier for companies to give up some of their production in exchange for equity. Brett discusses some of the tier one royalties they have acquired this year.

We went through a time when investors struggled with the major producers because they were creating massive capital destruction. This is why most generalist investors have moved to the royalty and streaming sector to offset these risks. The royalty sector has grown significantly and is now an excellent way for investors to get exposure to the metals.

Most silver mine production comes as a byproduct of other metals, and few produce mostly silver. Metalla has acquired two silver streams that are based strictly on silver.

He believes we are just now entering the second phase of this bull market in metals. Gold and silver are still hated, but we see equity returning to the majors and even down to the juniors. The second phase is when big institutions and the public begin to get involved and is usually a longer and stronger period for the market. The third phase and final phase is usually marked by irrational exuberance.

Time Stamp References:
0:00 – Introduction
0:32 – Brett’s Background
2:00 – Royalty Business Model
5:40 – Royalties Vs. Streaming
7:56 – Why Miners use Royalties
11:09 – Good Jurisdictions
13:10 – Stages and Metrics
13:58 – Royalty Sector Trends
15:50 – Silver Royalties?
17:26 – Contract Agreements
19:50 – Forward Market Factors
23:26 – Irrational Exuberance

Talking Points From This Week’s Episode

  • Brett’s Background
  • Metalla’s Business Model
  • Advantages of Royalties
  • Entering Second Phase of this Bull Run

Guest Links:

Mr. Heath is President and CEO and Director of Metalla Royalty & Streaming. He has an extensive career in the structured finance, corporate finance, and investment management industry. He was previously the Chairman and CEO of High Stream Corporation before Metalla acquired it in August 2016. High Stream was a specialty streaming and royalty consulting company where he worked with First Mining Finance, and several other private equity funds, advising and brokering metal streaming transactions. Before that, he was the President of a private streaming company where he deployed $11 million in 4 producing streaming transactions in 3 separate jurisdictions. Before that, he was a founding principal of KSIR Capital Management a hedge fund focused on small and micro-cap mining companies. He also advised several mining companies with KSIR Capital, the corporate finance division of KSIR.

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