Royal Gold offers superior risk-reward over Newmont
The guest argued that Royal Gold presents a far more attractive risk-reward profile than major producers like Newmont due to its robust margins, cheaper relative valuation, and potential S&P 500 inclusion.
The argument
The guest noted that while a $2,000 drop in gold prices could cause Newmont to lose 75% of its value due to shrinking margins, Royal Gold's 86% gross margins would remain stable. Furthermore, Royal Gold is the only US-domiciled major royalty company, making its eventual inclusion in the S&P 500 highly probable.
The thesis, stress-tested
✓ What validates it
- ✓Royal Gold's market capitalization increases to meet S&P 500 inclusion requirements
- ✓Successful ramp-up of Royal Gold's stream-associated mines in 2026
▸ Risks discussed
- ▸A severe and prolonged decline in the spot price of gold
- ▸Delays in new mine completions that support Royal Gold's built-in growth
Hear it yourself
"bus or or riding around on a small motorcycle that's dangerous. So that's very commodity intensive. It takes a lot of commodities to build that car, and it takes a lot of energy to continue running that car. And, somebody driving a car versus somebody driving a bus consumes way more energy. That's a really interesting point, and that's, of course, also where that selectivity that you outlined earlier comes in. Not all commodities benefit from that trend specifically evenly, I suppose. Yeah. Definitely. I I mean,"
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