Alexandra Woodyer Sherron: Thank you for having us.

Rick Rule: Pleasure, sir.

Rick Rule: Well, there’s a whole bunch of reasons. The first is that mining — well, extractive industries generally — are capital intensive, volatile, and risky. The royalty and streaming business, with the exception of management mistakes, which is to say making a lousy investment, obviates most of those risks.

In the royalty business, in effect, your gross is your net. You don’t have upfront capital expenditures. You don’t have sustaining capital expenditures. You don’t have operating costs. Basically, that money which is specified by contract comes to you with no deduction for you to do with as you like.

It is also easier for a mining company not to mine. If all you do is cash a check, it is less incumbent on you to have phalanxes of managers and geologists and engineers. Never mind the fact that your gross is your net. Your G&A has the potential to be much lower.

A stream is a different instrument but it’s still an instrument where, properly constructed, you own all or some of the upside and you share in none of the downside.

I have participated as a lender in capital stacks alongside lots of royalty and streaming companies, but in particular Franco-Nevada and Wheaton Precious Metals, and I noticed often, as the secured lender, I was in first except for that I was pari passu with the royalty company or the streaming company.

Every other creditor in the place was subordinated to me, with the exception of Randy Smallwood or Pierre Lassonde, both of whom enjoyed that role of pari passu security.

A second point, or maybe it’s a third, is the fact that given that the business model is superior to other business models in extractive industries, the executives that find themselves attracted to this business model are usually more sophisticated, which is to say the people whose strategy is “got a hunch, bet a bunch” are more attracted to grassroots exploration.

And the people who are interested in probabilistic compounding over time, which is a much better investment strategy, are more often drawn to royalty and streaming. It’s a much more sophisticated investment that attracts much more sophisticated investors.

Rick Rule: Anybody who doesn’t think that way across the length and breadth of their investment portfolio needs to have their head examined.

If you chase unbridled upside, unless you happen to be very tough, very rich, and work very hard, which is to say unless you’re Eric Sprott, the idea that you don’t juxtapose your downside against your upside is just lousy math. There’s just no particular point in not measuring both metrics.

When people say, “If this goes right, this goes right, this goes right, and this goes right, you could make 10 times on your investment,” you need to assess the probability that all four things go right, which is normally nil.

Alexandra Woodyer Sherron: Yes, absolutely. Royalties started hundreds of years ago with individuals wanting to mine land that the king owned, and he would receive a royal payment or percentage of that production. And that’s where royalties originated from.

It was later more commercialized by Franco-Nevada and other groups, and that is essentially where a company is receiving a percentage for their investment into it. They’re receiving a percentage of revenue from the production of the mine. So, for example, simplifying this very much, a 2% royalty is $2 for every $100 produced.

A stream was something that was created back in 2004 by what was then called Silver Wheaton, now called Wheaton Precious Metals. And the concept there was to be able to get non-dilutive capital or additional access to capital from mining companies, taking advantage of their production.

That’s where a streaming company invests in a company, provides capital, and in return gets a percentage of the metal. In Empress’s case, we’re getting a percentage of the gold or silver, which we’re buying at a deeply discounted price, typically paying 20% of spot. A royalty is more cash. The stream is more metals that you’re receiving.

But in both cases, as Rick mentioned, you don’t have the operating costs or the operational risks of being a mining company, and you’re able to participate in the upside and the further development work that’s done at a mine for no additional cost to us. We hold that percentage coming in.

Alexandra Woodyer Sherron: We focus on both. With our mining finance background and structured finance background, we’re typically more interested in the stream creation side, but we do look at both opportunities.

It really depends on the opportunity in front of us, what countries we’re investing in, how we structure. There are typically more bells and whistles that you can play with in a streaming agreement to adapt to the environment that you’re structuring into, but we do both.

Rick Rule: I think increasingly, we do what serves the customer, which is to say you look at the needs of the issuer. In the old days, we would often buy royalties from prospectors or people involved in the value creation chain.

The industry matured so that companies would sell royalties to raise what they consider to be at least non-equity-diluting interests in the capital stack. Streams were much more directly related to the capital stack, in particular because precious metals revenues are worth more in the market than those revenues would be if they reported as nickel or zinc or copper.

The base metals companies, in particular, have an incentive to sell the byproduct gold and silver revenues to somebody like Alexandra because she can surface the value more efficiently than they can, and she can provide them financing by doing this that has a much less dilutive impact on the equity shareholders.

The idea, Nick, is that you construct a financing package that is in the best interest that you can structure of the person that’s selling you the royalty or the stream.

Rick Rule: Sure. I haven’t been involved in academic exercises for a very long time, Nick. I joke. I’m party to numerous conflicts of interest and I’m actively soliciting more. I met Alexandra, although I’ve known her parent firm, Endeavour, for a long time, and I’ve known her father for probably a longer time.

I met Alexandra, if my memory serves me correctly, in Zurich at Manny Bally’s wonderful conference. I was wandering around listening to stories, and she told me that she had a nascent royalty and streaming company that had access to the deal flow of Endeavour.

That was of interest to me because I know the Endeavour people. And she told me that she was selling at half NAV, and my interest progressed from interest to fascination. She’s also a very tough negotiator. She got me to do one of the few above-market financings that I’ve done during my time on earth. In return, I think I probably extracted a warrant or part of a warrant from her.

In other words, I gave her part of the upside but I got to take part of the upside if she was inordinately successful. And she made a very plausible case that she was selling at a discount to what it was worth.

I like investments that can compound. I like the idea that people can take the cash flow that they generate from the investment and reinvest that same money at high rates of return. And I like durable competitive advantages.



If you look across the royalty and streaming space, there’s a whole bunch of me-too royalty and streaming companies. They raise money because they’re royalty and streaming companies. In the case of Alexandra, she explained to me that in addition to the fact that she was selling at a discount to realizable net asset value, that she had access to the deal flow that came out of Endeavour.

When you’re looking particularly at the third-tier royalty and streaming companies, the little ones, what you need to find is durable, sustainable competitive advantage. In other words, you need to be able to obviate the auction process where all you’re doing is overpaying more aggressively than your peers, and you need to focus on companies that can sidestep the auction process.

And the fact that Endeavour, which Alexandra was part of for a substantial period of time, had completed, to my knowledge, billions of dollars of transactions in the same space seemed to be precisely that durable competitive advantage that would allow me to take advantage of compounding.

Alexandra Woodyer Sherron: Sure. Endeavour Financial is a leading investment banking firm focused on the mining industry. It’s been around for over 30 years, $8 billion in debt financings.



This is a very core team based in London and Vancouver. And with this team, I was there. I started out as an analyst, became director of structured finance over a period in London, did $1.5 billion worth of deals myself.

David Rhodes, who’s the managing director of Endeavour Financial, and I teamed up to launch Empress, and he’s the chairman of the company. And this really gives me access to geologists, mining engineers, investment bankers, financial analysts to, as you mentioned, punch above our weight in terms of the team size, keeping our G&A lower.

But it also gives us access to a whole network, so we’ve got access to multiple opportunities. We’re constantly looking at things, and the recent transaction we just announced was a direct part of that relationship with Endeavour Financial.

They had worked with Appian for many years, since Appian’s inception, as an advisor to it. Also advising their clients and bringing Appian into different deals. Recently, they did a silver stream with Appian being part of that.

They were really able to understand how the Appian team works, how they structure the streams, how they’re put together. And so that really did give us a leading advantage to build the relationship with Appian, as well as understand the Tongon stream.

Alexandra Woodyer Sherron: Yes, when we set Empress up, it was seeing that there was a niche in the market. No one was providing the streaming finance solution to the junior side of the market, and so thus we set up Empress.

And we came in with a very clear direction to invest into producing assets or near-term producing assets so we could generate that revenue, as Rick mentioned, and be able to reinvest it. And we’ve hit that critical point now.

We have the four producing assets. We have the Tahuehueto silver stream in Mexico, we have the Sierra Antapite gold stream in Peru, the Manica one in Mozambique, and then we also have a gold stream in South Africa with Galaxy.



Those produced record revenue for our first half of this year, and we’re able to, now at that point, find additional investments that will bring more revenue in.

Through this financial flexibility that’s happened with Empress over the last couple years, especially in the last six months, we’ve been able to do some critical things. We’ve been able to start bringing in some exploration assets.

We did that by picking up the Almadex package, which has Westhaven and Kodiak and a few other great ones in there that we think have real potential with those particular management teams if they find the discoveries to turn into a mine.



We’ve also started working with groups like Geomorphic AI to bring in faster ability to process information and to be able to really speed up our origination process and the due diligence that goes with it.

We’ve gone from being focused on producing assets to bring revenue in, to now expanding that and further expanding the revenue with Tongon and with the debt facility we’ve put into place, too. We have that capacity to keep doing it. We haven’t raised equity since our last equity was with Rick several years ago, and so we’ve been able to really deploy or get ready to deploy that capital we have now.

Alexandra Woodyer Sherron: This investment brings immediate revenue, so it will increase the revenue that we have in the portfolio. We’ll go from four producing assets to five producing assets.

This is an established mine. It started producing in 2010. It’s produced more than three million gold ounces to date. It was originally developed by Randgold. It was operated by Barrick before Atlantic bought it in 2025. In 2025 alone, it produced 125,000 ounces, so we’ve got the stream on this mine.

When I visited the site a couple months ago and was doing the due diligence with our engineers on this, it was one of the cleanest operations I’ve ever seen. This is a typical major-built, large operation — a Rolls-Royce. And this was an opportunity where Atlantic saw the opportunity to buy this mine. It’s perfect for a mid-size producer who can really put money to work to expand the mine life and production.

When Barrick has anything under half a million ounces, it isn’t going to move the needle for them, so it was a perfect opportunity for Atlantic to pick it up.

Alexandra Woodyer Sherron: We’ve bought a gold stream, as you said, for the upfront initial payment of $62 million. We’re initially going to receive 3.58% of payable production. That does step down to 2.93%, and ultimately just under 1% at 0.81%, which goes then for 29 years.

For us, we’re paying for this transaction. We’re paying 0.5% of the prevailing gold price. As I mentioned earlier when we’re talking about streams, typically you’re paying a 20% spot price.

We’re paying a 0.5% spot price on that, so the cost of the actual gold is very low to us. And it’s been exciting to see what this group wants to do with the project and where they want to take it and seeing some of the work being done on it.

Rick Rule: I guess yes, yes, yes, and yes. Alex had the courage that many of her competitors don’t to go into a country that many of them can’t pronounce. That’s why the transaction took place. In my own life, having that kind of courage has benefited me. I’ve known the asset for a very long time.

And I think it’s true to say that a Barrick or even a mid-tier company will put an asset into production, not when they have totally drilled it off, but rather when they have enough proven reserves to amortize the front-end capital expense.

And in my own experience, deposits in excess of a million ounces almost always get bigger. One great example of that would be Franco-Nevada, where they’ve operated the Northern Nevada royalty since 1982, and they have more ounces on the books today than they either started with or have been produced to date.

Which is to say, big deposits always yield surprises and they’re always pleasant surprises, so I’m attracted to that. I think it’s very likely that Alex got more than she paid for. I think the other side understood that too. If this asset were in Ontario or if this asset was in Nevada, Alex wouldn’t have had access to it. It wouldn’t have happened.

The second thing is the financial terms. If you look at the delta between the cost of capital and the return on capital employed, that’s where the compounding comes from.

She has managed to use financial leverage in a very, very accretive fashion. Her return on equity, assuming nothing goes wrong, her ability to redeploy the capital that she receives in 2027, 2028, 2029 in new assets, separate and apart from what I see as the almost certain increase in reserves and resources at Tongon, is precisely the type of compounding that we spoke about at the beginning of this interview.

Rick Rule: Here’s one thing, Nick, that I’ve learned. If you have to study it too hard, pass. There’s got to be a lot of room. Everything that can go wrong will go wrong. If you have a 9% cost of capital and you’re putting the money out reasonably at a 16% or 17% internal rate of return, in other words, if, with reasonable assumptions, you’re making 700 or 800 basis points, you do that.

If you need to study the thing extensively to work up the courage to make a deal, you pass. You don’t do these deals to do deals. You do these deals when there is a disproportionate return relative to, A, your risk, and B, your cost of capital.

I remember when I had a much more active career as a lender. If I had to work too hard to make something work, I usually had to work even harder to work it out, and I have no interest in this. I did a back-of-the-envelope calculation on this. Now, listen, if you give me a $2,500, $3,000 gold price, I’m going to feel a lot less good about this transaction.

But the harm that a $2,500 or $3,000 gold price did to my portfolio would not be confined to Empress. I hope I was very clear with that. I like good margins and I like to understand why I got the good margin. Sometimes things seem too good to be true. They almost always are.

This is a country that many of Alex’s competitors couldn’t spell, and she got the transaction because Endeavour had a long relationship with the vendor/financier. In other words, I understood why the margin that was built in existed.

Alexandra Woodyer Sherron: Yes, so we paid off our existing facility with Nebari, and now we’ve taken on this new facility. Obviously, Appian’s the one we’re buying the stream from on the Tongon mine and providing the debt for us.

We wanted to have enough of a facility that allowed us to purchase the asset, so we’re using $55 million of the $62 million to purchase it. The rest we’re using our existing cash that we have from the revenue we’ve been producing. And then that gives us another $20 million to spend on new opportunities as we look forward.

We still have that flexibility to grow the portfolio out but we’ve really been able to use the debt to fund this without having to go back and dilute our shareholders and being able to deliver on the revenue-producing assets right away. We’ve got that good partnership now with Appian. We’re very aligned, as well as we’re aligned with Tongon.

Alexandra Woodyer Sherron: I would love to but I can’t. We’re hard at work. We’ve got a business development team in North America. We’ve got a business development team as well in Johannesburg with Brad and with Mark in Toronto. And we are looking at more opportunities than ever, especially with Geomorphic AI being able to really speed up a lot.

What would take a couple of weeks to produce a report can be produced in days, if not less. And we’re really able to use the humans in our business to understand the network and the relationship because everything for us is relationship-driven.

But we’re able to cut through a lot of the technical reviews and the light due diligence side using Geomorphic AI. And then our team can be doing what they do best, which is the people side and the networking.

Alexandra Woodyer Sherron: We will have significantly more revenue coming in. We’ll be holding more metals or hopefully putting them into new assets. We have the financial flexibility to grow this now.

I think we’re demonstrating the type of transactions we want to do and the kind of revenue we want to bring in. And we should be also looking at some more exploration development assets. We’ll be diversifying the portfolio and delivering what we promised: creating real value.

Rick Rule: I guess for the smaller royalty companies, it comes down to two things. Solvency. If you’re a capital provider and you have no capital, what role do you play in the feeding chain? And there are a few of those out there. There are a few capital providers that don’t have any capital, so that’s easy. You throw those away.

But the second thing that you look for is durable competitive advantage. I own, as you know, Nations Royalty. I own it because I think they have a durable competitive advantage structuring transactions within indigenous groups in Canada.

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.

And I’m really all about durable competitive advantage. Compounding is all about putting out money at 18% return on capital employed where your cost of capital is substantially less than that and you have the ability to redeploy the delta. That’s really the game.

One more thing that I think Alex deserves credit for is the fact that she understood that her shareholders believe in precious metals.



And what you’ll see is that in terms of the capital that may not be surplus, but the capital that isn’t allocated at present, rather than holding Canadian dollars or U.S. dollars, she has a substantial component of physical precious metals on the balance sheet.

She will be able, if she needs, to sell those, or more probably, she’ll be able to use those as collateral to secure the financings that she needs to do for further transactions. The beauty of this is that further transactions as she builds up will allow her to access equity, I would suspect, on ever more favorable terms.

Alexandra Woodyer Sherron: I would say the quality of the royalties and streams, because we’re investing in those companies and making sure that the people are right, they can do it, and the assets are right, too. I mean, we kill so much in due diligence, so many that don’t stack up. Rick?

Rick Rule: Well, I would agree with that. The me-too royalty and streaming companies, the guys that just show up at auction and compete by outbidding each other, not that some of those guys aren’t smart. They are.

They’re really, really, really smart… but that isn’t a durable competitive advantage. I happen to be an outlier in the context of the future of the streaming business.

A lot of people say that the huge transactions that built the business are behind us. I believe they’re ahead of us, and I believe the scope of these opportunities is so large that Wheaton and Franco will not be able to take them on balance sheet.

They’re going to have to syndicate them, and they’re going to syndicate them to people who they know and love and trust. And I think there will be ample opportunities, even for the smaller royalty and streaming companies of the Empress size, to participate in these syndicated deals if their reputation on the street and if their ability to access capital make them good syndicate partners.

Rick Rule: A pleasure.

Alexandra Woodyer Sherron: Thank you both so much. It’s always a pleasure speaking with you.