Paul Carmel President and CEO SIDEX
How would you describe the current investment environment?
Sidex has been in operation for 24 years, focused on supporting companies involved in early-stage exploration. Over this time, we have seen many market cycles, including the most recent one in lithium. Normally, a positive gold price trend in 2024 would have led to strong financing deal flow, but this did not transpire to the level we were expecting.
There still seems to be a broad sense of investor apathy in the mining sector, causing many junior companies to see their share prices trade at unusually low levels. This creates a difficult cycle: limited capital hinders exploration, and without exploration, attracting investors becomes harder. This is impacting several companies in our fund, but we continue to support the sector as we always have throughout our history. We understand it is a cyclical business. What is causing that investor disinterest?
Mining has become an increasingly challenging business due to lengthy permitting processes, rising costs, skilled labour shortages, and growing community opposition – even in traditionally pro-mining regions like Québec.
In the conventional commodity space – gold, copper, nickel – Québec has not seen many major discoveries recently. Without these discoveries, it is hard to spark the excitement needed to attract investor interest. What other challenges do you see ahead for the sector?
To sustain a healthy junior sector, the industry will soon need to address the challenge of cultivating a new generation of senior leadership. Several current CEOs of junior explorers have been at the helm for many years, and while their experience is invaluable, there is limited evidence of a strong pipeline of successors. Leading a junior company today requires versatility across multiple domains – community engagement, financial strategy, strong technical skills, and knowledge of capital markets – alongside the patience to guide a project through years of development.
David Garofalo CEO GOLD ROYALTY
How does the royalty and streaming model contribute to the financial sustainability of the mining industry?
One of the mining industry’s greatest challenges over the past decade has been the lack of capital available to junior explorers. Since gold reserves peaked in 2012, global reserves have declined by 40%, with juniors unable to access consistent funding needed for exploration. Despite higher gold prices, this junior explorer segment has not benefited, leading the industry to cannibalize existing assets rather than create new value. Royalty and streaming companies have stepped in to fill that funding gap, becoming a critical source of capital. What makes Québec an attractive mining jurisdiction?
Québec combines world-class mineral potential with a government that truly understands the sector’s economic value. The province's bureaucracy “gets it,” making Québec a standout example of how strong geology and pro-mining government can align. With IAMGOLD’s Côté mine entering production, how does this asset enhance Gold Royalty’s portfolio?
Gold Royalty holds a 0.75% NSR on Zones 5 and 7 of IAMGOLD’s Côté mine, with Zone 5 representing the highest-grade portion of the open pit currently being mined. Due to both its high grade and lower royalty burden, Zone 5 will be a key revenue driver in the near term. IAMGOLD plans to increase output beyond the mill’s 36,000 t/d nameplate capacity by debottlenecking– all funded by the operator. This speaks to the attractiveness of our model – with no capital obligations, Gold Royalty benefits from that production growth and exploration upside at no cost. How is Gold Royalty projected to grow in coming years?
With over 240 fully paid royalties and no future capital obligations, Gold Royalty is now positioned to realize the benefits of four years of disciplined growth. A projected 360% increase in gold equivalent ounces over the next five years with flat G&A and no cost-of-sales increases - will translate directly into free cash flow.