In conversation: How bootstrapping built a disciplined royalty company
Greg Owen is not only VP of Operations for Elemental Royalties (TSX.V:ELE), but was the gold growth company’s first official hire. Greg has over 14 years’ experience of both public and private companies within the mining sector, most recently as VP Corporate Development with Altus Strategies Plc from 2011 until 2018. Of note, he was part of the management team responsible for the AIM IPO in August 2017 and the acquisition of TSX-V listed Legend Gold Corp in January 2018. In a wide-ranging interview, we talked with Greg on bootstrapping a gold growth company. Part 2 of 2.
The royalty market has grown exponentially over the last decade or so. How has Elemental Royalties carved out a unique space in this market?
Greg: Around 2006, the market cap of the royalty/streaming space was probably in the ballpark of $5 billion. Today, it’s 10 times that. One thing that sets Elemental apart from most royalty companies is that we have built this company and portfolio from the ground up. We were not a spinout or started with an existing portfolio. We didn’t have the advantage of working for an investment bank with links to large amounts of capital or a larger mining company that had a royalty portfolio you could readily spin out, which is the route for most royalty companies. Elemental started as a small team working in a small office. We built this enterprise as entrepreneurs, piece-by-piece from the ground up, without major company support. To complete our first deal we scraped together capital where we could, from family, friends and associates.
To this day, we remain entrepreneurial, hungry and disciplined. We’re focused on executing a smaller number of deals, nearer production and having cash flow. We take a more cautious and selective approach, preferring to do deals which bring us either immediate or near-term revenue. We’re not focused on exploration-stage assets that may or may not achieve production in 15 years. There are other companies with larger number of royalties in their portfolio. However, we’re focused on quality, not quantity.
From being Executive Hire No. 1 to the company acquiring four gold royalties in 2020 for US67.5M, including the South32 royalty portfolio, Elemental has grown exponentially. Has your approach changed?
Greg: We have not deviated from our disciplined investment model, nor has our mindset that underpins our approach really changed. From the point I joined, we were a team of two in London, Frederick (CEO) and myself, with technical expertise provided by Richard Evans in Australia We were pretty maxed out from the start and that has remained relatively consistent. We have brought on David Baker (VP Business Development) and Meghan Sharp (Business Development Analyst) who share our passion and have allowed us to scale up our efforts. We are as busy now as we have ever been and are energized by that. Nobody has as much passion and drive for a business as the people who start it, the ones who sweat over every detail and risk, who lose sleep over it and who work long hours to build momentum. This entrepreneurial spirit and energy, this connection with our roots, marks our driving force and is a foundational difference from others in the royalty space.