Cantor Fitzgerald have now published a research note on Elemental Royalty Corp. (ELE-TSXv/NASDAQ) saying it is well-positioned for a strong re-rating as a newly minted mid-tier precious metals royalty company. Analyst Mike Kozak has initiated coverage with a Buy rating and a price target of $27.50 (C$38.00), implying a compelling 78% upside from current levels.
Elemental Royalty, following its transformative merger with EMX Royalty, now holds over 200 royalties, including 16 producing assets and a development pipeline that will significantly enhance future cash flows. As Kozak notes, “Elemental Royalty is a newly formed (via its recent merger with EMX Royalty) mid-tier gold-focused royalty company rapidly accelerating up the ‘sweet spot’ of the production growth curve where value creation and share price appreciation typically occur the quickest under the well-established precious metals royalty model”.
The appeal of Elemental’s business model lies in its minimal operational risk. As a royalty holder, it benefits from increasing precious metals prices and mine expansions, while remaining insulated from day-to-day operational challenges. This structure provides high-margin exposure to the gold, silver, and copper markets with little overhead. Kozak highlights this advantage clearly: “Elemental will generate similar revenue to Buckreef this year ($75 MM, Cantor estimate) but at +85% gross margins and with only 35 employees”.
Financially, the company stands on solid ground with $42 million in cash and no debt. A $50 million undrawn credit facility further supports future growth. Elemental’s production is forecast to grow from ~24 kGEO (gold equivalent ounces) in 2025 to ~30 kGEO by decade-end, driven by organic portfolio expansion and new royalty acquisitions.
Cantor’s valuation of Elemental blends a 20.0x 2026E CFPS multiple and a 2.0x NAVPS (5.0% discount), both below the multiples currently enjoyed by large-tier peers such as Franco-Nevada and Wheaton Precious Metals. Kozak explains, “In our view, as Elemental Royalty continues to grow via the accretive acquisition of new streams and royalties, its valuation multiple should re-rate materially higher”.
Key Highlights from Cantor’s Coverage:
- Production Outlook: Forecast production of 23.6k oz AuEq in 2025, growing to 30k oz by 2030.
- Top Assets: Timok (Serbia), Caserones (Chile), Karlawinda (Australia), Bonikro (Cote d’Ivoire), and Gediktepe (Turkey) are significant contributors to revenue.
- Cash Flow Strength: 2026E free CFPS forecast at $0.99.
- Strong Margins: Over 85% gross margins thanks to the royalty model.
- Geographic Diversification: Portfolio spans North & Central America (19%), Europe (37%), Australia (21%), and more.
On a Final Note
Elemental Royalty represents a unique opportunity within the mid-tier royalty segment. With backing from cornerstone investor Tether, no debt, a lean operating structure, and a high-quality diversified royalty portfolio, the company is well positioned for growth. As Kozak succinctly states, “Elemental has comparatively less competition and greater access to lower cost capital, both of which will give the Company an advantage to acquire new royalties on an accretive basis”.
