Discovery

When gold is discovered on a property, there are a number of stages that it must go through before it can become a cash-flowing mine. The process is often time-intensive and requires a lot of upfront capital.

1

Exploration

Mining companies use various exploration techniques like rock sampling, geological mapping, and drilling on the property. Technical studies are completed to determine if the gold deposit could be a viable mine.

2

Development

If the exploration studies indicate the potential for an economical mine, the project moves into development. Construction requires lots of capital, which can be partially funded through a royalty or stream financing.

3

Production

Once construction is complete, the project moves into production to begin producing gold. If the mining company used a royalty to fund development, they begin making payments to the royalty owner.

4

Payment

A royalty owner receives payment as a percentage of the revenue from the mine. A stream agreement holder receives a percentage of gold production at a pre-determined discount, then sells the gold at market price.

5