Royalty Company Generates Exceptional Quarter-Over-Quarter Returns

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Silver Crown Royalties Inc. (SCRI:CBOE; SLCRF:OTCQX; QS0:FSE) released its interim financial statements and management's discussion and analysis for the quarter ended March 31, reporting its eighth consecutive quarter of revenue growth.

The company said it recorded revenue of CA$304,408 in the quarter based on 6,703 ounces of silver, compared to CA$234,702 and 5,350 ounces in the last quarter of 2024 and CA$74,425 and 2,350 ounces in Q1 2024.

"We continue to be pleased with our revenue growth trajectory and believe this to be sustainable into 2026 with our robust pipeline," Silver Crown Founder, Chairman and Chief Executive Officer Peter Bures said.

The company has structured its royalty model to emphasize investor protections and staged capital deployment, according to its investor presentation. Its portfolio currently includes royalties on three producing or near-producing assets: Gold Mountain's Elk Gold Mine, Pilar Gold's PGDM Complex, BacTech's bioleaching facility, and PPX Mining Corp.'s Mina Callanquitas in Peru. Silver Crown's model features minimum delivery obligations on silver ounces, which are intended to secure a baseline cash flow independent of variable production factors.

Silver Crown's management team, led by Bures, emphasizes strategic investments across diversified assets with a goal of maintaining an internal rate of return (IRR) greater than 15% on individual projects. With additional royalty agreements under discussion and ongoing cash flow from existing deals, Silver Crown has outlined a path toward further scaling its portfolio while maintaining a disciplined investment approach.

Unique Approach Reduces Over-Exposure

According to its public filings on SEDAR+, Silver Crown's total revenues for the first quarter of the year increased by CA$229, 983 over Q1 2024. Its operating expenses were CA$656,453, leaving a net loss of CA$353,235 after other income is added.

"Royalty income has consistently increased, quarter over quarter, since the company acquired its first revenue-generating asset in May 2023," the company noted in its management's discussion and analysis of the quarter posted on SEDAR+. "Since then, revenue increase has been attributed to new assets acquired and significant average silver price increases during the last two years. The company earned its first royalty income in Q2 2023 for an amount of CA$29,169."

Silver Crown said it focuses on originating royalties and streams with the intent of minimizing the impact to counterparty economics, allowing Silver Crown to achieve returns in excess of its cost of capital.

"The company’s unique approach of sequential capital deployment further reduces risk of over-exposure to any given project," the company said in the MD&A. "SCRi is focused on cash-generating assets. Once free cash flow positive, SCRi will target 50% exposure to immediately cash-generating projects, 30% to development (near-term) assets, and 20% to exploration targets."

Silver Crown said when it acquires royalties and streams, it considers technical and economic merit, jurisdiction risk, upside from exploration and expansion, and operator quality.

"The company’s focus on minimum cash-equivalent deliveries opens the playing field to projects otherwise inaccessible to competitors — specifically projects, assets, or infrastructure that don’t report silver production," the company said.

'Only Pure Silver Royalty Play on the Market'

Couloir Capital analyst Tim Wright maintained a Buy rating on Silver Crown Royalties Inc. in a research note, describing the company as "the only pure silver royalty play on the market."

Wright observed that Silver Crown's Enterprise Value-to-Equity Ratio stood at 1.0, compared to a peer group average of 5.7, indicating what he called significant relative value.

The report outlined several developments that supported the company's long-term growth prospects, including its July 2024 public listing and a 286% increase in revenue from the third quarter of 2023 to the fourth quarter of 2024. Wright also pointed to the acquisition of the BacTech royalty, which secured minimum annual deliveries of 35,000 ounces of silver over a 10-year period. He noted that Silver Crown's agreement with PPX Mining could generate over US$1 million in revenue in 2025, based on expected deliveries of 36,063 ounces of silver.

The Catalyst: Silver Helping Spark the Energy Transition

Silver prices retreated on Friday with sellers pressing the metal below key technical levels as broader market sentiment favored risk assets, according to James Hyerczyk writing for FX Empire.

"After struggling to hold gains earlier in the week, silver’s failure to recover above its 50-day moving average at US$32.82 is weighing on the outlook," he wrote.

"Broader market forces are adding weight to silver’s downside risk," Hyerczyk said. "A stronger U.S. dollar, poised for a fourth straight weekly gain, is curbing appetite for dollar-denominated metals. Meanwhile, improving sentiment tied to the U.S.-China trade truce is steering investors away from traditional safe-haven assets like silver and gold."

The tone heading into Friday's close remains "critical" for the metal, he said.

"If traders fail to reclaim the 50-day average at US$32.82, it may confirm a near-term top and reinforce the bearish setup," Hyerczyk wrote. "Conversely, a late-session recovery could soften downside pressure, though broader technical and macro signals currently favor sellers."

Silver's industrial utility means there will still be a deficit for the metal, which is the best conductor of electricity among the metals.

"Underpinning silver's fundamentals is robust demand from industrial applications," The Silver Institute said in its World Silver Survey 2024 report. "These continued to push higher last year, reaching a new all-time record, fueled by the remarkable rise in solar demand and in spite of stagnation in some other sectors. Sluggish silver supply, owing to the slight decline in global mine production, was another factor contributing to silver's deficit conditions last year."

Mordor Intelligence noted that silver is expected to register a compound annual growth rate (CAGR) of more than 5% between 2024 and 2029.

Ownership and Share Structure

Insiders and management, including their friends and family, hold a total of 29% of the company. Institutions own 15%, and private corporations have 9%, the company said in its investor presentation.

As for share structure, Silver Crown has 2.76 million outstanding shares and 2.11 million free float traded shares. Its market cap is US$16.84 million. Its 52-week trading range is CA$5.35–9.85 per share.