April 2017 | Business View Magazine

146 147 gold and copper, by identifying overlooked belts, staking dominant land positions, portioning them off into prop- erties, and optioning out majority shares in exchange for small cash payments and a retained royalty right, and, in some cases, an advance royalty that would kick in before production, to help span the gap between prospecting and shoveling ore. Cole credits a few pioneers in the industry for his com- pany’s inspiration. “I was very enamored with Franco-Ne- vada and Pierre Lassonde’s approach toward royalty acquisitions,” he states. “I was also taken with the Royal Gold story and how well they did at building a royalty portfolio. They were organically grown in that they actu- ally had the exploration property at Pipeline Mining and then sold it off and kept a royalty on the project. And that became one of their first big royalty successes. Another individual that I followed very closely was a gentleman by the name of Lyle Campbell, who acquired prospec- Eurasian Minerals, Inc. tive mineral rights around the state of Nevada, added value, sold them, and kept the royalties under the payments associated with the ad- vancement of those projects over time. He built a portfolio and was very successful.” Cole explains that Eurasian Mineral’s model is actually three-pronged: first, there is the or- ganic growth of the portfolio through, what he calls the “prospect generation” process. “When we acquire prospective mineral rights, typically, those are fairly early-stage, meaning not a lot of work has been done on the project yet, but based on the geological criteria that we see, we believe it’s prospective,” he explains. “And the time lag from early prospecting and explo- ration work can be very long. So, consequently, we tie payments associated with advancement of the projects in addition to royalty production on the back side when a mine comes into pro- duction. It’s a very slow, but accretive, process that occurs over time as the portfolio matures and more and more people spend money on the portfolio or the various projects within the portfolio advance toward production.” Then, there is the augmentation of the portfo- lio with royalties that the company may pur- chase. “The amount of money you’re spending upfront, relative to the amount of money you can get in the end is, success-case, huge multi-