Executive Summary / Key Takeaways

• Transformative Merger: EMX Royalty Corporation is undergoing a significant transformation through its impending merger with Elemental Altus Royalties Corp. , poised to create a new mid-tier gold-focused royalty company, Elemental Royalty Corp. This strategic move aims to enhance scale and focus in a robust precious metals market.
• Robust Financial Momentum: EMX demonstrated strong financial performance in Q1 2025, with adjusted royalty revenue up 40% year-over-year and EBITDA increasing by 120%, indicating effective operational leverage and a healthy balance sheet.
• Strategic Portfolio Optimization: The company has actively streamlined its portfolio through divestments of its Nordic and Moroccan operational platforms, while simultaneously acquiring and advancing high-potential royalty interests in key jurisdictions like Nevada and Argentina.
• Innovative Royalty Generation Model: EMX differentiates itself through a unique, exploration-driven royalty generation model, leveraging geological expertise and strategic partnerships to create new royalty opportunities from early-stage projects, offering significant upside potential.
• Undervalued Growth Potential: Despite its strategic advancements and strong financial performance, EMX is considered undervalued compared to its peers, presenting a compelling opportunity for investors seeking exposure to a growing, focused royalty company in a "supercharged metals bull market."

The Genesis of a Royalty Powerhouse: EMX's Strategic Evolution

EMX Royalty Corporation, formerly known as Eurasian Minerals Inc. until its rebranding in July 2017, has carved a distinctive niche in the basic materials sector. The company's core business revolves around exploring for and generating royalties from a diverse array of metals and minerals properties. This portfolio encompasses a wide spectrum of commodities, including gold, silver, platinum, palladium, copper, lead, zinc, manganese, nickel, cobalt, molybdenum, and iron deposits, as well as various battery, precious, and base metals. EMX's royalty and exploration footprint spans critical mining regions across North America, Türkiye, Europe, Australia, Latin America, and Morocco.

EMX's overarching strategy is built on a "prospect generator" model, which is its fundamental technological differentiator. This innovative approach involves leveraging deep geological expertise and extensive proprietary databases to identify, acquire, and advance prospective mineral properties. Rather than solely acquiring existing royalties, EMX actively participates in the early stages of exploration, adding value to projects before optioning them to partners in exchange for cash payments, equity stakes, and, crucially, retained royalty interests. This model provides EMX with discovery, development, and commodity price optionality, while significantly limiting exposure to the inherent operational risks typically associated with mining companies. The tangible benefits of this approach include a diverse, high-quality asset portfolio and organic royalty generation, which serve as long-term growth drivers and provide operational leverage. This allows EMX to capitalize on a "supercharged metals bull market" and rising gold and copper prices with minimal capital requirements.

The company's history reflects a dynamic journey of expansion and strategic refinement. Its total investments surged from $4.24 million in 2015 to $46.74 million by 2024, demonstrating a consistent focus on portfolio growth. A notable increase in property, plant, and equipment (PPE) from $11.85 million in 2020 to $51.81 million in 2021 further underscored significant asset acquisition or development during that period.

Competitive Landscape and Distinctive Edge

The metals and minerals royalty and streaming sector is characterized by a mix of established giants and agile, growth-oriented players. EMX Royalty Corporation operates within this competitive arena alongside prominent direct competitors such as Franco-Nevada Corporation , Wheaton Precious Metals Corp. (WPM), Royal Gold, Inc. (RGLD), and Osisko Gold Royalties Ltd. (OR). These companies primarily focus on acquiring royalties and streams from producing or near-production assets, often emphasizing stability and established cash flows.

EMX distinguishes itself through its unique, exploration-driven royalty generation model. While competitors like FNV and WPM often focus on larger, more mature assets, EMX's strategy of generating new royalty opportunities through early-stage exploration offers a greater potential for upside in emerging markets. This approach allows EMX to differentiate itself by accessing underrepresented regions and identifying high-potential, riskier ventures that larger, more conservative players might overlook. For instance, EMX's presence in diverse regions like Türkiye and Latin America, coupled with its generative model, provides a unique value proposition compared to FNV's broader, more established portfolio.

However, EMX's smaller scale and reliance on exploration success present certain competitive disadvantages. Its profitability and cash flow generation, while improving, may appear less robust than those of larger, more diversified competitors like FNV and WPM, which benefit from significant scale and more consistent revenue streams from mature assets. For example, EMX's TTM Net Profit Margin of 18.26% and EBITDA Margin of 69.16% are solid, but larger peers often exhibit even stronger margins due to their portfolio maturity and operational efficiencies. Similarly, EMX's P/E Ratio (TTM) of 95.88 and P/S Ratio (TTM) of 17.58 suggest a growth premium, but also highlight the market's expectation for future earnings expansion to justify these valuations, especially when compared to FNV's P/E of 27.09 or WPM's P/E of 19.61.

The impending merger with Elemental Altus Royalties Corp. is a strategic response to this competitive dynamic, aiming to create a new mid-tier gold-focused royalty company. This move is designed to enhance EMX's scale, focus its asset base, and improve its competitive standing, particularly in the gold royalty space, by combining portfolios and potentially achieving greater operational efficiencies and market visibility.

Financial Performance and Operational Momentum

EMX Royalty Corporation has demonstrated a compelling financial trajectory, particularly in the most recent periods, reflecting the effectiveness of its strategic initiatives. In Q1 2025, the company reported robust year-over-year growth, with adjusted royalty revenue increasing by 40% and EBITDA surging by 120%. This strong performance underscores the operational leverage inherent in its royalty model and its ability to capitalize on favorable market conditions.

Looking at the full year 2024, EMX reported revenue of $19.06 million, a slight decrease from $20.02 million in 2023, but a significant increase from $13.34 million in 2022. Gross profit for 2024 stood at $11.43 million, maintaining a healthy gross margin of 60%. While the company recorded a net loss of $2.28 million in 2024, an improvement from a $3.48 million loss in 2023, its EBITDA for 2024 was $7.49 million, up from $5.20 million in 2023. This indicates strong underlying operational profitability before non-cash expenses and interest.

Cash flow generation has also been a highlight. For 2024, net cash flow from operations (NCFO) was $4.73 million, and free cash flow (FCF) was $2.30 million.

The company's liquidity position is further bolstered by a "strong, nearly debt-free balance sheet." As of 2024, cash and equivalents stood at $18.59 million, and the current ratio was a robust 8.85, indicating ample short-term liquidity.

The company's total debt in 2024 was $23.99 million, a reduction from $24.63 million in 2023 and $39.64 million in 2021, reflecting a concerted effort to manage its liabilities. This was notably aided by an early final property payment of US$6.85 million from AbraSilver Resource Corp. in April 2025, which was strategically used to repay $10 million of long-term debt.

Operational advancements continue to add value to EMX's portfolio. At the Diablillos silver-gold royalty property in Argentina, an updated Mineral Resource Estimate (MRE) increased total open pit constrained, oxide mineral resources to 199 million ounces of contained silver (+34%) and 1.72 million ounces of contained gold (+27%) in the measured and indicated categories. AbraSilver Resource Corp. (ABBR) is actively enhancing project economics through ongoing drilling and other initiatives, with an Environmental Impact Assessment (EIA) approval expected in the latter half of 2025 and a definitive feasibility study (DFS) slated for Q1 2026. Furthermore, EMX's 2% Net Smelter Returns (NSR) royalty on the Vittangi graphite project in Sweden has progressed significantly, with the conclusion of an appeals review process for an Exploitation Concession, a critical step in the mine permitting process.

Strategic Initiatives and Future Outlook

EMX Royalty Corporation is at a pivotal juncture, marked by several strategic initiatives designed to reshape its future and capitalize on a favorable metals market. The most impactful development is the definitive arrangement agreement with Elemental Altus Royalties Corp. announced in September 2025. This merger will see Elemental Altus acquire all outstanding common shares of EMX, forming a new entity named Elemental Royalty Corp., which will be a mid-tier gold-focused royalty company. This consolidation is expected to create a more focused and scaled platform, enhancing its competitive position, particularly in the gold sector. Tether Investments S.A. has also made a significant investment of $200 million in Elemental Altus following the merger with EMX, indicating strong institutional backing for the combined entity.

Beyond the merger, EMX has been actively optimizing its portfolio. The company divested its Nordic operational platform to First Nordic Metals Corporation in June 2025, a move that included regional infrastructure, exploration equipment, and employees. This strategic divestment streamlines operations and allows EMX to focus on its core royalty generation model. Similarly, the sale of its Moroccan portfolio and the formation of an exploration alliance with Avesoro Morocco LTD in July 2025 further exemplify this strategic rationalization.

New royalty acquisitions and option agreements continue to bolster EMX's future growth pipeline. In May 2025, EMX secured the opportunity to earn up to a 1% NSR royalty on the Ferber polymetallic project in Nevada, USA, by providing exploration and management services to Galileo Resources (GAL). Later that month, it optioned the Trench Gold Project in Nevada, USA, to Ridgeline Minerals (RDG), securing future cash and share payments, a 3% NSR royalty, and annual advanced royalty payments upon exercise of the option, along with milestone payments. These transactions highlight EMX's ongoing commitment to its generative business model, creating new royalty streams.

The outlook for EMX, particularly as it transitions into Elemental Royalty Corp., appears promising. Analysts view EMX as "poised for significant outperformance as gold and copper prices rise," leveraging its low-risk, high-margin royalty model. The company's diverse, high-quality asset portfolio and organic royalty generation are expected to provide long-term growth drivers and operational leverage. Earnings estimates for EMX's full year have seen an upward revision from $0.02 to $0.03 over the past two months, with similar positive revisions for the next fiscal year, signaling growing confidence in its financial prospects.

Risks and Considerations

While the strategic direction and recent performance of EMX Royalty Corporation are compelling, investors should consider several inherent risks. The company's business model, while asset-light, is fundamentally tied to commodity price volatility. Fluctuations in the prices of gold, silver, copper, and other metals can directly impact royalty revenues and the valuation of its underlying assets. Although EMX benefits from diversification across various metals, a prolonged downturn in the broader metals market could still affect its financial performance.

Furthermore, EMX's generative royalty model, while a key differentiator, carries exploration risk. The success of its royalty portfolio depends on its partners' ability to advance exploration projects to production. Delays in permitting, such as the Environmental Impact Assessment for Diablillos, or unexpected geological challenges can impact the timing and realization of royalty revenues. The company's smaller scale compared to industry giants like Franco-Nevada (FNV) also means it may have less financial flexibility to absorb significant setbacks or to compete for the largest, most established royalty opportunities.

The impending merger with Elemental Altus Royalties Corp. , while strategic, introduces integration risks. Combining two companies involves operational, cultural, and financial challenges that could impact the realization of anticipated synergies. While the merger aims to create a more focused gold royalty company, any unforeseen issues during the integration process could temporarily divert management attention and resources.

Conclusion

EMX Royalty Corporation stands at the precipice of a transformative era, strategically repositioning itself to capitalize on a robust metals market. Its journey from Eurasian Minerals Inc. to a focused royalty generator, culminating in the impending merger with Elemental Altus Royalties Corp. (ELE), underscores a dynamic and adaptive business strategy. The company's unique, exploration-driven royalty generation model, which leverages deep geological expertise to create new royalty streams, provides a distinct competitive advantage, offering significant upside potential in a capital-efficient manner.

The recent financial performance, characterized by strong revenue growth, improving profitability, and robust cash flow generation in Q1 2025, validates EMX's operational effectiveness and prudent financial management. Strategic divestments and new royalty acquisitions further demonstrate a disciplined approach to portfolio optimization. As EMX transitions into Elemental Royalty Corp., the enhanced scale and sharpened focus on gold royalties, supported by significant institutional investment, are expected to unlock greater shareholder value. While commodity price volatility and integration risks warrant careful consideration, EMX's strategic pivot and proven ability to generate high-value royalties position it as a compelling investment opportunity for those seeking exposure to a growing, mid-tier royalty company in the burgeoning metals sector.