Silver Royalty Firm Just Locked In a Massive New Payoff in Nova Scotia

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Silver Crown Royalties Inc. (SCRI:CBOE; SLCRF:OTCQX; QS0:FSE) confirmed it has closed the acquisition of a silver royalty agreement with EDM Resources Inc. (TSX-V: EDM; FSE: P3Z) tied to the Scotia Mine in Nova Scotia. The deal entitles Silver Crown to receive 90% of the cash equivalent of silver produced quarterly from the project, with a minimum of 7,000 ounces per year for a 10-year period, commencing upon commercial production.

The royalty was acquired for an upfront payment of CA$250,000 and 60,000 units of Silver Crown, each comprising one common share and one warrant exercisable at CA$13.00 for three years. A deferred CA$250,000 cash payment is also due to EDM Resources at a later date, as mentioned in the announcement.

The Scotia Mine is a past-producing operation owned entirely by EDM Resources, located near Halifax. In addition to the Scotia Mine, EDM holds exploration licenses in surrounding regions of Nova Scotia. This latest acquisition adds to Silver Crown's expanding portfolio of silver royalty interests, which currently includes royalties on assets that are near production such as the Elk Gold Mine and the PGDM complex.

Industrial Silver Demand Remains Central to Sector Outlook

Silver's industrial role has become increasingly prominent as demand continues to exceed supply. The imbalance has contributed to sustained interest in silver from both industrial users and investors. On August 8, Reuters reported that HSBC raised its average silver price forecast for 2025 to US$35.14 per ounce, citing "strong support from high gold prices and safe-haven demand in the face of geopolitical and economic uncertainty." HSBC projected a market deficit of 206 million ounces in 2025, widening from 167 million ounces in 2024. The bank also forecasted a partial recovery in industrial demand in 2026, driven by sectors like photovoltaics and electronics. While HSBC noted that silver prices had surged, it stated that the rally was "due more to silver's relationship with gold than underlying fundamentals."

In an August 11 article, The Globe and Mail highlighted that silver had climbed 35% over the previous 12 months, reaching nearly US$38 per ounce. The article identified solar panels, electric vehicles, artificial intelligence hardware, and defense applications as primary growth drivers. Demand rose from 993 million ounces in 2016 to 1.16 billion in 2024, while supply declined from 1.06 billion to 1.02 billion ounces. The article noted that approximately 70% to 80% of global silver output is produced as a byproduct of other metals, limiting the market's ability to scale supply in response to rising prices.

Wright characterized the results as "staggering" and maintained a Buy rating, increasing the firm's 24-month price target to CA$45.67. 

Katusa Research, also writing on August 11, noted a structural transformation in silver's use. The report stated that silver for solar applications increased from 75 million ounces in 2019 to 198 million ounces in 2024, roughly 20% of global demand.

Newer solar cell technologies, such as TOPCon and HJT, use significantly more silver than standard PERC cells. The research added that if these trends continue, annual solar demand could reach 557 million ounces. Katusa also highlighted silver's role in solid-state EV batteries, AI chips, and smart grid infrastructure. "Silver is . . .  the best electricity conductor in the world, so it's going to play a very important role [in solar] going forward," said Bank of America's Francisco Blanch, as quoted in the report.

On August 13, Ahead of the Herd reported that the silver market had entered its fifth straight year of deficit, with the Silver Institute forecasting a shortfall of 150 million ounces in 2025. This would bring the cumulative deficit since 2021 to nearly 800 million ounces. The report emphasized the critical role of industrial applications, which accounted for around 60% of silver demand. Solar power, electronics, and electric vehicles were among the leading contributors. "The available inventory of freely traded silver has been heavily diminished," said Maria Smirnova of Sprott, who added that "small increases in demand could now lead to disproportionately large increases in price."

Analyst Coverage Underscores Silver Crown's Growth and Capital Discipline

A July 1 research report from Couloir Capital highlighted Silver Crown Royalties Inc.'s efforts to expand its royalty portfolio through a non-brokered private placement of up to CA$2 million. The proceeds were earmarked for cash-flowing silver royalty acquisitions, in addition to general working capital and corporate development initiatives. Analyst Tim Wright described Silver Crown as a company demonstrating "increasing revenues, positive momentum, and strong institutional and corporate support." He assigned a 12-month target price of CA$32.34, citing a valuation he believed did not reflect the company's long-term potential.

Couloir noted that Silver Crown's equity-light royalty acquisition strategy and disciplined capital structure were central to its ability to generate value from silver byproduct royalties. These royalties are registered on title and structured to align investment tranches with operator success. As of April 30, Silver Crown reported 2.8 million basic shares outstanding and 4.44 million fully diluted. The report also stated that the company's existing portfolio had internal rates of return exceeding 20%, supported by minimum delivery requirements that provided downside protection and reduced dilution.

In a July 16 edition of the Silver Stock Investor newsletter, editor Peter Krauth listed Silver Crown among nine portfolio companies demonstrating notable progress in the silver sector. Krauth reported that the company had secured CA$1.5 million through a non-brokered financing, which was used to fund the second tranche of its royalty acquisition on PPX Mining Corp.'s Igor 4 project. He observed that the company was "executing on rapid growth and building on existing assets" and noted a 15% increase in share price over the prior month, which he viewed as market recognition of Silver Crown's value.

Couloir Capital restated its positive view in an August 4 update, highlighting eight consecutive quarters of revenue growth exceeding 30% quarter-over-quarter. Wright characterized the results as "staggering" and maintained a Buy rating, increasing the firm's 24-month price target to CA$45.67. At the time, Silver Crown's share price stood at CA$7.15. Wright also noted that Silver Crown remained the only publicly traded company focused solely on silver royalties, calling its model "a unique, diversified entry point into the silver market."

The August 4 report reviewed recent corporate activity, including a CA$1 million initial investment in a royalty on the PPX Mining Igor project in Peru and a letter of intent for a 4.5% royalty on silver production from the Bethania mine, also in Peru. Couloir stated that upon completion, these agreements would increase Silver Crown's contracted deliveries to 100,000 ounces annually by 2026. Wright added that this production level could generate significant capital for additional royalty acquisitions.

According to the same report, Silver Crown had raised CA$3 million across five financing tranches and purchased 1,000 ounces of physical silver at CA$30.15 per ounce. With silver prices climbing above US$38, the value of that position had appreciated. Wright emphasized the company's capital-raising ability, stating, "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." The report concluded that Silver Crown's consistent revenue growth, efficient acquisition model, and exclusive focus on silver royalties positioned it as a leading player in the royalty segment, with continued portfolio expansion expected.

Building Royalty Momentum in the Silver Sector

According to Silver Crown's investor presentation, the company's strategy is centered around building a portfolio of silver-only royalties with protective features such as minimum delivery obligations and staged capital deployment. These transactions are structured to minimize economic impact on operators while ensuring consistent royalty income. The Scotia Mine royalty follows this model by securing a fixed delivery floor over a 10-year term.

The addition of the Scotia royalty contributes to Silver Crown's total projected silver delivery growth, which the company reported to have increased from 4,341 ounces in 2022 to a projected 78,250 ounces by 2026, assuming full satisfaction of minimum obligations. The Scotia deal raises the minimum royalty portfolio to over 22,000 ounces annually beginning in 2025.

This acquisition also aligns with the company's broader portfolio approach, which emphasizes diversification and structured deployment of capital. Silver Crown's model typically limits individual project exposure to no more than 10% of total capital, with consideration provided in tranches tied to performance milestones and exploration success. The company has used equity as consideration in multiple royalty agreements, including this transaction with EDM Resources. 

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 3.02 million outstanding shares and 2.11 million free float traded shares. Its market cap is CA$22.8 million. Its 52-week trading range is CA$5.35–CA$8.30 per share.