The concept of royalty investing is nothing new to metals & mining investors. In fact, according to mining investment guru and CEO of Sprott US Holdings Inc. ... â â â â â â â â â â â â â [Open in your browser]( [Alert] [Logo]
--------------------------------------------------------------- The concept of royalty investing is nothing new to metals & mining investors. In fact, according to mining investment guru and CEO of Sprott US Holdings Inc., Rick Rule, investing in gold and silver royalty companies is something he thinks every investor should do. He says, when it comes to investing in precious metals, the royalty model often offers investors the best returns, especially when investing in the early stages of the creation of a new royalty portfolio. This is because royalty companies generally have very good operating margins...sometimes as high as 90% as there is almost no overhead. And there are little to no operational risks as the strategy is a buy and hold 'portfolio' approach rather than 'business'. Mineral exploration and royalty company Xtierra Inc. (XAG) ([TSX-V: XAG]( [OTC: XRESF]( , [Forum]( has a goal to provide direct exposure to mining revenues from the recent and expected growth in precious metal prices by monetizing its precious and base metal projects in the State of Zacatecas, Mexico, into a cash flowing royalty portfolio. In 2019, Xtierra acquired a 1.5% net smelter royalty on its 100% owned Bilbao project with an estimated 25 million silver equivalent ounces. Xtierra just completed a 5 drill hole campaign on a 500-meter silver vein structure outside the main Bilbao deposit in order to add value and improve the economics in a rising silver price environment. Results are pending on 3 drill holes, expected in the next 2 weeks. A second cash flowing opportunity was created with acquisition of 88% of the shares of Minera Portree de Zacatecas, SA de CV which holds various legal or royalty interests in certain mineral properties in Mexico, including an asserted claim to a 2% net smelter royalty on six mining concessions located adjacent to the Cozamin Mine operated by Capstone Mining Corp., which claim is challenged by Capstone. In the News [On February 4]( the Company announced positive drill results on the first two drill holes of a five-hole program totaling 1800 meters into a previously identified structure (Victor vein) with high-grade silver mineralization located adjacent to and west of the main Bilbao Silver-Lead-Zinc deposit. The objective of the first hole, X4B, located at the southern end of the Victor vein, was to establish continuity of the mineralization with high silver values at different elevations and along strike from two prior drill holes spaced 100 meters apart: between drill hole X96 which intersected 2 meters of 373 g/t Ag and drill hole X84B which intersected 3.25 meters of 412 g/t Ag. Drill hole X4B was 395.1 meters in length with 92% recovery and intersected five different levels of mineralization as follows:
Click Table to View Full Size Company President Tim Gallagher, commented on the "positive drill results": "The drill results on the first two holes are consistent with our expectations and demonstrate both the tenor and the continuity of the mineralization within the Victor vein which should add tonnage and increase the value of the Bilbao deposit, especially with the much-improved outlook for silver prices, approaching the US$30 per ounce level. Three more holes, X6B, X7B and X8B have now been completed for a total of 1,067.75 meters and we expect the final drill results in approximately two weeks." The Bottom Line For metals & mining investors looking to diversify their portfolio, a results-driven gold and silver royalty play like Xtierra Inc., in a historically prolific silver mining region of Mexico, offers real value and opportunity for both shareholders and potential investors.
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