Elemental Royalty's CEO details a 22-country, 300-property royalty platform with Tether as largest shareholder

## A merger-created royalty platform

In a Rule Symposium pre-conference interview, Elemental Royalty CEO David Cole frames the company as the product of consolidation. Elemental Altus — itself formed when two companies, one of them a prospect generator, merged — combined with EMX Royalty Corporation to create what Cole describes as a company with "over $1 billion market cap, over 200 royalties, 22 countries." He adds that analysts expect close to $100 million in royalty revenue this year, and that the combined portfolio spans more than 300 mineral property assets worldwide.

Cole argues scale is self-reinforcing in this sector: "in the royalty space, the market rewards scale." The larger the royalty company, the more each individual royalty is worth, which he attributes to increased liquidity, the portfolio effect, and a greater probability of discovery optionality. That dynamic, in his view, is what motivates royalty companies to merge rather than grow asset by asset.

## The prospect-generation engine

Cole explains the business model he has run for decades: acquire prospective mineral rights, organize existing data and collect more, demonstrate the ground's prospectiveness, then sell — either as a joint venture where the counterparty earns in, or as an outright sale of 100% of the project equity while keeping a royalty. He prefers the second form, because joint ventures become cumbersome once you hold hundreds of projects, and notes the team has prospect-generated "literally hundreds of assets over the years."

He describes the resulting portfolio as a pyramid. Royalty generation builds long-term discovery optionality cheaply at the base, while purchased assets create cash flow at the top; buying as well as generating lets the company be selective and careful with capital. The economics of the base of the pyramid are the appeal: because counterparties fund the work, Elemental is "free carrying as a royalty holder."

The exposure this creates is substantial by Cole's account. Counterparties are spending over $100 million a year on exploratory drilling across the portfolio, on top of what he calls hundreds of millions of dollars in mine development work — sinking shafts, expanding open pits, building new mills. That spending drives production growth on royalty ground without new cost to Elemental.

## Three prongs, plus merchant banking

Cole says the approach runs on three prongs — royalty generation, purchasing existing royalties, and royalty financing — augmented by blended deals that mix in equity placements. He points to EMX's pre-merger record: the company netted over $60 million USD from its equity investments, which he presents as capital the small company did not have to raise by issuing shares. Some of those stakes failed outright, he concedes; the net result was still a large profit.

## Tether as anchor shareholder

The interview's most distinctive thread is ownership. Cole says Tether — the largest stablecoin issuer, which he describes as one of the most profitable private companies in the world, making, as he believes, over $20 billion a year — now owns 32% of Elemental's stock. He explains the connection as a reallocation within hard assets: Tether researches where to deploy its treasury income and has "zeroed in on physical gold metal and on hard asset-related royalties," including gold royalties, with keen interest in copper royalties and farmland as well. Juan Sartori, the Tether executive responsible for special projects, serves as Elemental's chairman of the board.

## What drives value from here

Cole identifies two multiplicative drivers of net asset value per share: continued discovery on royalty ground by counterparties spending their own capital, and rising commodity prices — "more copper and more gold are being found on our assets and the price of copper and gold are going up." In his telling, that combination is what pushes analyst target prices upward. Viewers who want to follow up directly are pointed to Tara Vivian, or to Cole himself at [email protected].

All figures above are the speaker's claims from the interview, including the revenue forecast, which Cole attributes to analysts rather than reporting as a company statement.