Silver Crown Royalties Inc. (SCRI:CBOE; SLCRF:OTCQX; QS0:FSE) achieved eight consecutive quarters of "staggering" 30%-plus quarter-over-quarter revenue growth since Q2/23, reported Couloir Capital Analyst Tim Wright in a July 16 research note.
"We expect the firm's revenues to continue increasing at a rapid pace, as they have done so far, while overheads and costs are expected to remain relatively steady, implying a rapidly growing net profit margin in the years to come."
539% Return Implied
Silver Crown's share price at the time of Wright's report was about CA$7.15, the analyst noted. The company was trading at a discount to peers, at an enterprise value:equity raised ratio of 1.23 versus the peer average of 7.15.
As such, Couloir assigned the royalty firm a 24-month fair value target price of CA$45.67, representing 539% upside from the CA$7.15 price.
Silver Crown Royalties remains a Buy. Its shares outstanding total 3 million (3M). Its market cap is CA$21.5 billion.
What to Know
Wright made three key points about Silver Crown. It is the only publicly traded, pure-play silver royalty company and as such, offers investors a unique, diversified entry point into the silver market.
The company's growth has been impressive, a trend that is expected to continue.
Silver Crown continues to add to its portfolio of royalty assets, making bigger and bigger deals as it does. It has three producing royalties, one in development and one in the closing phase. Already the company is generating cash flow.
"With the deals already agreed and currently in the pipeline, we can expect the revenue figures to rise substantially in the quarters ahead, which will support the share price," the analyst wrote.
Silver Crown's approach to selecting and acquiring royalties is proven by its track record. The company's strategy includes securing royalties from projects where silver is produced as a byproduct and contributes less than 2% to revenue. Wright pointed out that even if the company captured only 10% of this market, it would equate to US$100 million-plus (US$100M-plus) in revenue. Another of Silver Crown's strategies is to acquire royalties in tranches tied to project milestones, to mitigate risk.
"We can expect dealmaking to continue and the royalty portfolio to grow," Wright wrote.
Accomplishments in H1/25
Wright reported Silver Crown's major achievements since Couloir Capital's last report on the company, in January 2025.
Tranche Closed: The company closed the first tranche of the royalty on PPX Mining Corp.'s (PPX:TSX.V; PPX:BVL) Igor project in Peru, of US$1M, for which it received a 6% cash equivalent of silver production. Silver Crown is to pay another US$1.5M within six months of the first tranche's closing to obtain the full royalty value of 15%. PPX is to deliver a minimum of 14,062.5 ounces of silver to Silver Crown each quarter for a total of up to 225,000 ounces (225 Koz). PPX made its first payment to Silver Crown in March of US$41,000.
LOI Signed: Silver Crown signed a letter of intent with Kuya Silver Corp. (KUYA:CSE; KUYAF:OTCQB) in June for a 4.5% royalty on silver produced from its Bethania mine in central Peru for a proposed US$3M in cash plus US$2M in shares sold at a specific price. According to the proposed deal, Kuya would deliver 4.5 Koz of silver in the first four quarters, 9 Koz in quarters five to eight and 12,375 ounces in quarters nine to 40. Once Kuya delivered 475 Koz, the royalty would drop to 1% of silver produced.
This royalty deal would add near-term revenue to Silver Crown's portfolio and could take the amount of silver the company has contracted under royalty agreements to 100 Koz per year by 2026.
"That amount of silver ounces would provide Silver Crown with significant funds to deploy into new deals, enabling it to grow organically and reduce its reliance on equity financings to fund growth," Wright wrote.
Capital Attracted: Silver Crown raised $3M in five tranches. It will apply most of the proceeds to the PPX royalty acquisition and with the rest, cover general and administrative costs.
"In an environment where many smaller firms in the sector struggle to attract capital, SCRI continues to raise the fresh capital needed to pursue its accretive growth strategy," noted Wright.
Silver Purchased: With part of its working capital, Silver Crown bought 1 Koz of physical silver at US$30.15 per ounce (US$30.15/oz) because, it said, investors in the company want to invest in silver not fiat currency. After the purchase, the silver price rose and surpassed US$38/oz, thereby increasing the value of Silver Crown's acquired silver.
Structure Maintained: Silver Crown maintained a "very tight" share structure, noted Wright, with only 3M shares outstanding, and a favorable ownership breakdown. Management owns 21%. Institutions and corporations, including Euro Pacific Asset Management, U.S. Global Investors and Investor Stratum Resources, hold 22%. Retail investors own 47%.
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