Elemental Royalties Corp. CEO Frederick Bell (TSXV: ELE) (OTCQX: ELEMF) – RICH TV LIVE – July 28, 2021 – About Elemental Royalties
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Analysis join our trading club at richpixdaily.com and don’t forget to subscribe and hit the bell for notifications to get alerted when our next co interview is released so you can discover the next 10 bagger hi how’s everybody doing today i’m your host rich here we have a rich tv live and i’m here with our very special guest frederic bell the ceo of elemental
Royalties how you doing today fred very good thank you fantastic excited to have you here and learn more about your company why don’t you start off by telling me a little bit about yourself and how you got started with elemental royalties so elemental was a it was a start-up in in every regard um you know our first deal was a million dollars in 2017. we were
A private company and and you sort of fast forward to today and we listed in in canada on tsxv in 2020 and i think our last acquisition was was 55 million so it’s um it’s been a good growth from from you know sitting at home you know planning a business and and saying you know i’ve got a great idea to actually coming all the way through and and then going
Through the really odd experience of listing during covid um again sitting in your living room when you never thought you’d be doing that um sort of marketing and to people online so it’s been a it’s been a really um good experience and um i think one that’s actually it gets more enjoyable the longer you do it that’s fantastic we’re excited to learn more
And have our community which is all over the world learning more about your early stage company and why don’t you tell me a little bit about what your goals are for the second half the last six months of 2021 so as a gold focus royalty company you know one of our main drivers is acquisitions and and we’ve bought some really good quality royalties that we see
As multi-decade assets you know we don’t it’s a bit like a music royalty we don’t have to do anything and and every time the song plays we get paid and so if that keeps going for 10 years for 20 years for 30 years it’s a really really great business model and so there’s a few acquisitions that um we’re always looking at and um one or two that we’d really like
To do in the second half of this year um and then the other step and it’s one that’s probably underrated but i think it’s a sign of the level of maturity of a company um is is refinancing our credit facility that we have with some of the senior canadian banks and um i think that will be uh that would be a pretty big step for us um because it’s it’s you know
We’re 100 million market cap company now and there is no um you know the next company that’s done it is 500 million market cap so i think for us to be ticking off some of these boxes um it’s something that really differentiates our stance out from the crowd and um you know is a is a level of maturity that you know um is not easy to achieve yeah that brings
Me to my next question can you talk a little bit about your management team it’s important to have a management team that has experience can you talk a little bit about some of their experience especially in the gold sector well funnily enough two of our directors have actually owned royalties personally you must so definitely experienced on that side and um
I think if you look across the board and management team um john robbins who’s part of discovery group in canada very well known i think that they’ve probably sold a dozen companies for more than 200 million over the last um decade um you know one of the most recent great bear um you know probably went from 20 million to 800 million over the past two years
Or so um but you know very good track record and and one thing i’ve learned in my career is if you if you you know work with good people they tend to introduce you to all the good people and um i was really lucky when we started elemental peter and richard who were both australian and careers in the mining industry and um both at western mining that was
One of australia’s biggest mining companies 20 years and 30 years with technical backgrounds and so they’ve had a whole host of companies they’ve worked for um you know similar in many ways to john that have been very successful that they have sold on involved in early days and i think for us you know having that kind of experience on the board is is really
Helpful because you know when you walk into a room you know if people know some of your directors and you know if you look at me today i’m relatively you know mid-30s a ceo relatively young and so you know to be able to in the room and have people on the board who have been doing this for 20 years for 30 years and have a really really good track record of
Success is is so helpful in terms of opening doors and reputations absolutely now fred we know that gold mining has a lot of capital costs involved especially as an expiration company how does elemental royalties look to lower the risk for investors who are interested in gold but are looking for a safer way to get involved i think that’s that’s that’s a
Really good point and and yeah one of the big risks with with exploration and it’s it’s similar to you know pharmaceuticals we saw over the last year the race to develop you know a drug for covid and you know billions and billions being invested and everyone knows about the successful ones but you don’t hear about the ones that didn’t work yes and you know
They spent billions on it and mining similar if you think about it you’ve got dozens of projects out there and you know they will all have tens if not hundreds of millions of capex and exploration which is high risk money going into the ground and you’re not sure in the early days which will be the successful one and which won’t and so if you want exposure
To expiration projects you get the high risk side of it if you want exposure to a less risky one you might go for a gold miner that has a project in mexico and that’s fine but then you need to be a bit of an expert in mexico you need to understand the region the community you know even even the weather which can be a big factor in mining all these different
Factors and and i think you know for a royalty company you know what a royalty company is doing is it’s taking a very small percentage stake in a lot of different projects and so actually your strength is your diversification and so as a generalist more generalist investor looking for exposure to gold with a royalty company you get more leverage than holding
The physical metal but you get the diversification of not needing to be an expert in ecuador or in south africa or in five different countries because you have a you know a small stake of the gross revenue top line in multiple different projects and you can’t get diluted at the asset level and that’s that’s one of the key parts you can’t get diluted so if i
Give you one percent in my mind as a royalty you’ll have one percent whatever happens and and maybe the shareholders in that company get diluted over time but you as a royalty holder don’t and that’s a really important principle um that you know has led to the royalties really outperforming the mining space as a whole over the last 10 or 15 years and it’s
It’s also the reason why the royalty space was go back to 2006 it was a 5 billion dollar industry in mining and it’s now a 50 billion dollar plus industry in mining wow and and that is because it’s it it’s actually you know delivered really superior adjusted risk adjusted returns for investors gold is a very competitive sector obviously there’s everyone
Knows about gold you know it’s not a new sector everyone knows about gold it’s been a very strong sector for the last few years so with that competition what separates you guys from your peers and from your competitors in this really competitive landscape the look the key differentiator for us is that um you know our portfolio is extremely mature so it is
It’s predominantly 80 producing assets so if you go to a junior royalty company you might typically expect a portfolio to be exploration assets development assets like the type we talked about so they might turn into something great but they might not and they might also take five years or ten years to mature and what we’ve managed to do which is sort of the
Hardest thing is we have bought the producing high quality assets at the beginning of the outset and so it gives us a really asymmetrical risk profile we have diversified revenue from day one um but we’ve actually been able to grow that revenue doubling it year on year since we started in 2017. wow and so that is you know you’ve got the lower risk profile of
A major but you’ve got the growth of a smaller royalty company that can be doubling in size year on year and and that is that’s i think the really important sort of distinction when you when you consider elemental that sounds incredible and i know our community and our investors are going to love to hear that and so far i love what i hear and here at rich tv
Live we like to identify undervalued underexposed underappreciated early stage companies and we love to understand the share structure we love to understand the fundamentals of the company can you break down the company share structure and how you intend to attract more institut to institutional and retail investors so in terms of the share structure um it’s
Fairly straightforward we have approximately 69 million shares outstanding um and um there are there are no warrants um and there’s i think in the order of about um four million options at various prices that are outstanding and and of that um the biggest shareholder south 32 so that was spun out from the world’s biggest mining company and um they actually
Took 19 of us uh at the end of um at the end of last year when we announced a transaction with them and um and which closed in q1 2021 and and um they put a director on the board as well um so they’re a 19 shareholder management have about 16 which is really important because skin in the game yes and i wouldn’t be here you know if i didn’t have you know a
Material equity stake in this from the beginning you know because i know that if i make this work you know it’s actually really going to make my career as well so i think really important that management board have a really material stake in this um and i think each of the last fundraisings we’ve done um you know probably contributed a million dollars you
Know between the board and directors in in each one um in terms of other shareholders um we have about uh 30 held by institutional shareholders um so that gets us up to about 66 and then there’s um and then there’s probably about another um five or ten percent that’s held by five or ten individuals so it’s pretty tightly held that you know 70 75 or so um
Where we sort of know know who holds them holds those shares um and then the rest is um the rest is public private investors sounds great we love like the share structure that i look for is a hundred million or less you guys are sitting at 69 million that’s great and is that fully diluted 69 million so it’s about four million options okay that come in um at
Various prices and that’s all to management and and um team so we’ve never issued a warrant in any external financing um great and actually yeah we uh we did it the um i think the opposite way to what a lot of people in in the us and canada do which is we did a um almost uh 10 for one um instead of a consolidation we did the other way we actually increased the
Shareholding you did a forward split so when we were a private company before we listed last year we had four and a half million shares outstanding um we decided that that was that wasn’t we almost needed more so we we sort of did it to try and help on the liquidity front which was the second part of your question which was yeah how do you attract investors
Both institutional and retail and um i think for us um you know kovid’s been both a challenge and an opportunity so we’ve got the team in australia the uk and canada um and actually seem to be listed virtually we haven’t been able to to travel to meet anyone in person and you know in the canadian capital markets you know not being able to meet people and
Tell the story face-to-face is always more challenging the first time but it it also opens the door in terms of i think doing virtual interviews media i mean what we’re doing here today and you know our core management team mid-30s and you know the board some really good experience on there i think actually one of the advantages we’ve got is that we’re all
You know uh we’re sort of of the generation that we’re all plugged in online and and you know it comes it comes to us and uh sometimes you know we have some shareholders who uh you know struggle to sort of get on a zoom call or or sort of log in online and i think that that’s actually one area where we should be able to do we should be able to take advantage
Of modern technology and you know use the the fact that we’re all having to work remotely to our advantage and and make sure that we actually get the story out there in front of people because we haven’t been listed for for even a year as of today um and we’ve probably spent most of that time in our bedroom um sort of working from home so you know i think
It’s really important for us to to make sure we get our story out there and and make sure we tell people you know both what we’ve managed to achieve in terms of growing the company in in size scale and also share price most importantly um and and then what our plans are going forwards because you know when i when i talk to you today we’re we’re a sort of
100 million market company i can tell you it’s it’s very different to where we were four years ago when we’re a million dollar um you know startup and and that was the valuation we first raised money out and um it’s it’s you know i know that having taken it from one to 100 was was the hardest part by a long way i mean taking us from 100 to 500 is is sort of
The next step and actually we’ve got better investors we’ve got the track record um we’ve got a you know bigger team in every regard we’re better positioned to be able to take that next step than we were at the beginning great sounds like you guys are on the right track if there was one thing you would want shareholders to know about elemental royalties today
What would it be i i think the the most important thing to know and i i never knew this enough myself when when i was younger and i was investing a bit at university but um knowing the management team and the people involved and what their motivations are and it’s it’s uh it’s something that i when i was younger i’d look at a company and look at the assets
And sort of form a view on it and i often overlooked who who the people are and what why are they doing this and now i’m doing it myself and i’m in the hot chair the hot seat i sort of i sort of see it the other way around and i think wow the most important thing is who are the people and you know in our case you’ve got a core management team here who are
All we’re all going to be in the mining industry for the rest of our careers and the success that we deliver with elemental will be our cv and you know this couldn’t be more important to us this isn’t the last job we’re going to be doing this is you know the peak of our career you know right in the middle of it we want to do the best possible job we can and
We’ve got people around us you know on the board and management team who have been seriously successful and have proven time and again that actually they don’t just deliver for shareholders but they also deliver i think really importantly the right way ethically and and doing it um you know uh building a company that actually adds value for shareholders and
And not just management and i think that if you know that you’ve got a team that are motivated and you know looking to deliver the right way i think that’s something that everyone should ask themselves about their investment right from the outset for us here we love to identify early stage companies which we talked about that are undervalued under appreciated
Underexposed there’s going to be investors from many different countries that are going to see this interview see this video be interested and then they’re going to want to get in contact with you what’s the best way for them to reach you well we um we always say um you know go on our website and you can email us and um you can call us either in london in
The uk or vancouver um colleague there in canada but um you know actually an email is a great first point because you know we can set up a call if that helps and and follow up that way and um you know actually we i think we often feel we don’t get enough emails from shareholders so so great um if anyone does want to reach out please do perfect well thank
You so much for your time today frederick bell the ceo of elemental royalties and if you guys like the video please smash the like button comment down below share the video everywhere and subscribe remember rich tv live is strictly for information and education purposes please do your due diligence do your research before you invest in anything that we talk
About here on rich tv live in saying that i do believe this company is an early stage company like i’ve said many times that is undervalued underappreciated underexposed put on your watch list put on your radar and thank you for joining us today fred much appreciated it thanks for having us always a pleasure told you guys if you’re not winning you’re not
Watching we bring you the winners and we bring them to you first thank you for watching everybody and have a nice day you
Transcribed from video
Elemental Royalties Corp. CEO Frederick Bell (TSXV: ELE) (OTCQX: ELEMF) By RICH TV LIVE
