European Listing Boosts Growth Potential for Silver-Focused Royalties

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Silver Crown Royalties Inc. (SCRI:CBOE;  SLCRF:OTCQX;  QS0:FSE) made the announcement that its shares began trading on the Frankfurt Stock Exchange (FSE). As of October 7, the company will be listed under the ticker "QS0."

This places Silver Crown in one of the world's largest organized securities trading markets, opening doors for increased European investor engagement and heightened liquidity.

Peter Bures, Chairman and CEO, commented on the move, stating in the press release, "We look forward to enhancing our exposure to European investors, which should help improve liquidity. Additionally, being listed on the FSE enhances the company's visibility in Europe, which is home to significant mining investors, especially in countries like Germany and Switzerland."

The Frankfurt Stock Exchange is known for its robust infrastructure, high liquidity, and transparent regulations, offering companies like Silver Crown a broader reach into European and global capital markets. This development aligns with Silver Crown's growth strategy, aimed at building stronger ties with European investors and diversifying its shareholder base.

Rising Demand and Strategic Positioning Fuel SIlver Outlook

Largely driven by increased industrial demand and global economic factors, the silver market has displayed a strong performance in 2024. Kitco reported on September 27 that silver, "which served as both a safe-haven investment and a key material in industrial applications, rallied more than 36% so far this year, outpacing the 30% gain in gold." This rise reflects silver's growing role in the photovoltaic sector, with demand for silver in solar panels nearly doubling over the prior year and global demand expected to reach nearly 1.2 billion ounces in 2024, according to The Silver Institute.

Silver's recent price increases highlight its resilience. "Silver surged from just under US$20 an ounce last October to a 12-year high of over US$32 an ounce this week," Kitco noted, underscoring its momentum as it approached highs not seen in over a decade. FXStreet, reporting on September 24, quoted UBS analysts who observed that "silver will likely outperform gold over the next 12 months," suggesting that silver's pricing is historically low relative to gold. UBS also cited silver's potential to benefit from a rising gold price environment, influenced by Federal Reserve easing and ongoing deficits in silver supply.

Geopolitical factors have further bolstered the sector. As Peter McGuire stated in the Economic Times on September 26, "Central bank demand globally has been extraordinary over the last four or five years," creating a sustained upward trajectory for precious metals, including silver. Additionally, The Jerusalem Post on September 24, referencing a decades-long technical formation, indicated that silver "is poised for a historic surge," with predictions of a significant price increase due to patterns like a 44-year cup and handle, which often signal long-term price gains.

Silver Crown's Catalysts

According to Silver Crown's Q3 2024 investor presentation, the recent FSE listing marks a critical expansion of its market access and shareholder diversity, particularly for European investors in countries with a strong interest in the mining sector. This listing joins a series of strategic moves by the company, including recent expansions of its royalty portfolio and operational milestones.

Silver Crown's catalyst strategy focuses on its silver-only royalty model, with investments targeting both producing and near-producing assets. According to the recent presentation, the company has achieved several significant milestones. It created two silver-only royalties, marking an industry first in active mining operations. In 2023 and 2024, Silver Crown successfully closed multiple financing rounds, collectively raising over CA$5 million. The company has also expanded its royalty agreements, notably securing a 90% silver NSR royalty at the PGDM Complex and the Elk Gold Mine, ensuring a steady stream of silver from byproduct credits. With these developments, Silver Crown has reached an annualized revenue run rate exceeding CA$300,000 based on minimum silver deliveries, establishing itself as one of the fastest-growing royalty companies within the silver mining sector. Silver Crown's FSE listing underscore its potential to attract a broader base of international investors.

Analysts Analyze Silver Crown

Silver Crown Royalties received positive analysis from Couloir Capital on September 5, which gave the company a Buy rating and a target price of CA$31.20 per share, reflecting an impressive 285% upside from the initial price of around CA$8.10. According to analyst Tim Wright in the report, Silver Crown's positioning as the only publicly listed royalty company focused exclusively on silver provided it with first-mover advantages. Wright observed, "Based on the large opportunity set of silver royalties available and Silver Crown's first mover advantage, we believe the company was well-positioned to grow rapidly and become a household name in the silver royalty space."

Wright further highlighted Silver Crown's growth strategy, describing it as clear and effective in targeting royalty deals for projects where silver revenue played a secondary but valuable role. He explained, "This allows operators to derive value for a byproduct or co-product of an asset without having a hefty royalty or streaming agreement reducing the profits from the main economic driver of a mine." Silver Crown's structured approach, with tranches tied to milestone achievements, was noted as a means of creating reliable income while ensuring favorable terms for both parties.

The analysis also pointed to Silver Crown's early operational success, with three active royalties and a pending agreement with PPX Mining. Wright commented that although Silver Crown's track record was short, it demonstrated a consistent ability to source new royalties.

With agreements like the 90% net smelter return (NSR) royalty at the Elk Gold Mine in British Columbia and a similar 90% royalty arrangement with Pilar Gold's PGDM complex in Brazil, Silver Crown's agreements were designed to provide a steady cash flow. Wright emphasized that "Silver Crown is likely to start generating significant cash flows in the coming years and having free cash flow available for reinvestment," positioning it for further expansion.

Ownership and Share Structure

As for ownership of Silver Crown, insiders and management hold a total of 21%, institutions own 16% and private corporations have 6%, noted Wright.

"Insider ownership by management aligns management's interests with those of shareholders, which is a desirable attribute," he added.

Regarding share structure, the royalty company has 2.3 million (2.3M) outstanding shares, 474.9K in CA$8 warrants, 757.1K in CA$16 warrants and 66.3K in restricted stock units, for a total of 3.7M fully diluted shares.

Silver Crown's market cap is CA$18.7M.