What Are Mining Royalties?

Posted 24th April 19

Mining royalties can be a complex area of mining finance, and differ from mining streaming opportunities in a number of ways.

A royalty is a right to receive payment based on a percentage of the minerals or other products produced at a mine or of the revenues or profits generated from the sale of those minerals or other products at a mine. Like mining streaming, royalties offer a payment to the investor based on the production of the mine though entirely around the sale of the product rather than ownership of a percentage.

In the context of alternative finance, a royalty typically involves a one-off up-front payment from the royalty holder in return for which it receives a contractual undertaking from the mining company to pay a specified percentage of future revenue. Mining companies can use the up-front payment for a variety of purposes; funding capital expenditure, general working capital, making acquisitions and even (as is the case for the recent Anglo Pacific/Denison Mines transaction) funding exploration of other unconnected assets.

Royalties can be granted at various stages of a mining company’s lifecycle, and for a variety of purposes. For example, they have been used as a substitute for seed-equity in order to fund feasibility studies and have been provided as a substitute to debt in order to fund the development or construction of assets.

Royalty financing arrangements offer a number of advantages to small businesses. Compared to equity financing, royalty financing enables entrepreneurs to obtain capital without giving up a significant ownership position in the company to outside investors. Royalty financing also increases a company’s ability to structure deals with individual investors, who might be attracted to the idea of receiving a monthly or quarterly yield over the life of their investment. In contrast, equity financing arrangements often show no yield until the stock is sold.


By investing as little as £2,000 in the Raptor Bond you will also be joining a community of like minded investors who ultimately want to invest in precious metals. To get started just follow these simple steps:

  1. Read all of our information on this website, we’ve tried to make it as simple as possible.
  2. Submit an enquiry to our team to show your interest in the Bond and ISA.
  3. Our team will be in touch for further information.



Your Capital is At Risk. No FSCS cover.


YOUR CAPITAL IS AT RISK. Investment not covered by the Financial Services Compensation Scheme (FSCS), the investment may be difficult to transfer and your investment can go down as well as up. You must read our risk page in full before proceeding – click here.

YOUR CAPITAL IS AT RISK. Investment not covered by FSCS and may be difficult to transfer. Investment can go down as well as up. Read our risk page before proceeding – click here.