Categories: General Market Commentary
Topics: General Market Commentary

Empress Royalty's Tongon Gold Stream: Rick Rule Weighs In

Rick Rule has spent decades investing in precious metals royalty and streaming companies.

His reason is straightforward.

Mining is capital intensive, volatile and risky.

Royalty companies can participate in the upside without assuming many of the costs and operational headaches that come with actually running a mine.

As Rick put it in a new interview with Resource Stock Digest:

“In the royalty business, in effect your gross is your net.”

No sustaining capital expenditures.

No mining fleet.

No operating workforce.

And, when properly structured, exposure to higher metal prices, resource expansion and mine-life extensions without having to fund those improvements yourself.

But Rick is quick to point out that simply calling yourself a royalty company doesn’t make you a good investment.

That’s where Empress Royalty (TSX.V: EMPR)(OTCQX: EMPYF) comes in.

Rick is an Empress shareholder.

And in our latest interview, he explained exactly why.

Rick says smaller royalty companies need a “durable, sustainable competitive advantage.”

In Empress’s case, he believes that advantage comes largely from its relationship with Endeavour Financial.

Empress CEO Alexandra Woodyer Sherron spent years at Endeavour, eventually serving as Director of Structured Finance. She and Endeavour Managing Director David Rhodes later launched Empress together.

That relationship gives Empress access to geologists, mining engineers, investment bankers and financial analysts, while also providing deal flow and industry relationships that would be difficult for a company of Empress’s size to replicate internally.

Rick said that was one of the primary reasons he originally invested:

“I own Empress because Alex has proven — this isn’t an assertion, there’s proof — that she has access to transactions, she has access to people who help her structure the transactions, and she has access to due diligence off balance sheet that her competitors don’t have.”

For Rick, that is the difference between a real competitive advantage and a “me too” royalty company that simply shows up at auctions and tries to outbid everyone else.

And Empress just used that advantage to execute the largest transaction in its history.

A Transformational Gold Stream

Empress has agreed to acquire a gold stream on the Tongon Gold Mine in Côte d’Ivoire for US$62 million.

Tongon is not an exploration project or a mine waiting to be financed.

It has been producing gold since 2010.

It was developed by Randgold, later operated by Barrick Gold, and acquired by Atlantic Group in 2025.

The mine has already produced more than 3 million ounces of gold.

Alexandra visited Tongon as part of Empress’s due diligence and described it as one of the cleanest operations she has seen — an established, major-built operation that Atlantic now has the opportunity to expand and extend.

Under the stream, Empress will initially receive 3.58% of payable gold production.

That steps down to 2.93% and eventually 0.81%, with the final stream extending for approximately 29 years.

Most importantly, Empress pays just 0.5% of the prevailing gold price for ounces delivered under the stream.

In other words, the company gets immediate exposure to gold production at a deeply discounted ongoing purchase price.

Rick liked what he saw.

A lot.

“I think it’s very likely that Alex got more than she paid for.”

His reasoning goes beyond current production.

Rick has known Tongon for years, and he believes large gold deposits have a tendency to grow as additional exploration is completed.

“In my own experience, deposits in excess of a million ounces almost always get bigger.”

That matters enormously to a royalty or streaming company.

If Atlantic spends its own money discovering more ounces, extending the mine life or developing additional production around Tongon, Empress can participate in that upside without writing the exploration checks itself.

Using Debt Without Diluting Shareholders

The transaction also demonstrates the financing side of Empress’s strategy.

Rather than issuing a large block of new equity to finance the US$62 million purchase, Empress secured a US$75 million credit facility from Appian Capital.

It plans to draw US$55 million to fund most of the Tongon acquisition, with the balance coming from existing cash.

That leaves another US$20 million available for future transactions.

Alexandra explained that the structure allows Empress to add an immediately revenue-producing asset without going back to shareholders for a major equity financing.

Rick, who spent much of his career as a lender and credit analyst, specifically addressed the leverage.

His focus is the spread between a company’s cost of capital and the return it can generate from that capital.

And his assessment of the Tongon financing was notable:

“She has managed to use financial leverage in a very, very accretive fashion.”

Rick believes the resulting cash flow can then be redeployed into additional royalty and streaming assets — creating exactly the type of compounding that initially attracted him to Empress.

From Four Producing Assets to Five

Tongon is being added to a business that was already reaching an important inflection point.

Empress entered 2026 with four producing cornerstone assets:

• Tahuehueto silver stream in Mexico
• Sierra Antapite gold stream in Peru
• Manica gold royalty in Mozambique
• Galaxy gold stream in South Africa

Those assets produced record revenue during the first half of 2026.

Empress has also begun adding earlier-stage optionality, including its recently acquired Almadex royalty portfolio, while using technologies such as Geomorphic AI to accelerate project screening and technical due diligence.

Now Tongon becomes the fifth producing asset — and by far the largest transaction Empress has undertaken.

It also may not be the last.

Even before Tongon was announced, Empress had publicly disclosed that it was evaluating roughly US$50 million of additional potential transactions.

With another US$20 million available under the Appian facility, Alexandra says the company is looking at more opportunities than ever.

Rick believes the broader streaming market could provide plenty of them.

While some investors think the huge streaming deals that created companies such as Franco-Nevada and Wheaton Precious Metals are behind us, Rick takes the opposite view.

“I believe they’re ahead of us.”

He believes future transactions could become large enough that even the biggest streaming companies will need partners — potentially creating opportunities for smaller companies with the capital, relationships and reputation to participate.

Rick specifically believes Empress can position itself to become one of those partners.

That makes this interview worth watching.

Rick explains why he believes royalty and streaming companies occupy one of the most attractive positions in mining.

Alexandra explains how Empress built its existing cash-flowing portfolio.

And together we break down the Tongon transaction, the financing behind it, and why Rick believes Empress has the competitive advantages necessary to compound capital as the company grows.

Watch the full interview here.

To your wealth,

Nick Hodge
Publisher, Resource Stock Digest

Click here to see more from Empress Royalty