Elemental Royalty: A Second-Half Catalyst Queue That Could Reshape the Portfolio

Record Q2, a pending Panuco close, and a dividend in Tether Gold – what changed for this royalty builder.

ELE.V · Earnings Call · 2026-08-12

From Merger to Momentum

Elemental Royalty's Q2 2026 call landed with a fully transformed company. The post-merger integration with EMX is done, and the numbers show it: “it was the second highest quarter of revenue in the company's history” — Frederick Augustus Ronald Peter Bell, President and COO · 2026-08-12, with gold-equivalent ounces (GEOs) at a record 5,250 sold. CFO Stefan Wenger framed the scale: “we had nearly $24 million in revenue in Q2, a 127% increase over the prior year” — Stefan Wenger, Chief Financial Officer · 2026-08-12 and adjusted EBITDA up nearly 100% to $17.4 million. The balance sheet is fortress-like with $74 million cash and a $150M+ accordion credit facility, which management is using more aggressively. The credit facility itself was upsized, and the cost of capital lowered — a clear sign the company is ready to deploy.

The Vizsla Overhang

The single most weighty catalyst is the Vizsla transaction — an uncapped 2–3.5% NSR on Panuco, the high-grade silver project in Mexico. Management has guided to closing in Q3, awaiting the Mexican Antitrust Commission approval. Fred Bell reiterated: “we have answered everything to date that we need, and we have shareholder approval for that and the court approval as well.” — Frederick Augustus Ronald Peter Bell, President and COO · 2026-08-12 This is a material stepping stone in the Cornerstone assets strategy — the top-6 average value jumped from ~$40M to ~$170M. The market is clearly pricing in a closure, but the regulatory timeline remains the swing factor.

A Strategic Pivot to Equity and Tokenized Gold

Two moves stand out as genuinely new. First, the Chapi investment — the company took both an expanded royalty *and* an equity stake in the operator, a departure from its pure-royalty model. Management argues it's consistent, but it signals a willingness to double down on conviction. Second, the dividend now offers an election to receive payment in Tether Gold — a first for a TSX-listed royalty company. Fred clarified: “every shareholder has the ability to take that in cash as per normal. We have just added a secondary ability to elect to take that Tether Gold.” — Frederick Augustus Ronald Peter Bell, President and COO · 2026-08-12 With Tether holding ~32% of the company, this is a strategic nod to the crypto-gold bridge — and a differentiator few peers can match.

Cost Discipline and the Path to 35k GEOs

The CFO was explicit about the forward cost curve:

I would expect that to be closer to the low $4 million range to $4.5 million range
Stefan Wenger, Chief Financial Officer · 2026-08-12

for quarterly G&A, down from the $5.6M average. That, combined with a clear growth outlook (25k GEOs by 2028, 35k by 2030), supports a long-term margin story. The company also continues its normal course issuer bid, buying back stock while trading below NAV.

What Hasn't Changed

The prior calls show a consistent thread: Fred Bell has long argued for consolidation and the value of scale. In the August 2025 Q&A, he spoke about the gap in the mid-tier space: “there is enormous gap now between where I think most of the junior royalty companies are and where the really 2, what will be remaining mid-tiers in Triple Flag and Osisko sit.” — Frederick Augustus Ronald Peter McMillan Bell, Chief Executive Officer · 2025-08-19 That thesis is now being executed, not just talked about. The company is also staying disciplined on capital allocation, as CFO David Baker noted in 2024: “we are obviously aggressively paying it down. We will continue to do that. Obviously, if we do need it for transactions, we can access that cash incredibly quickly.” — David Baker, CFO · 2024-11-19 That discipline remains intact even as the balance sheet grows.

Bottom Line

Q2 was a proving ground. The record revenue, the pending Panuco close, and the unique Tether Gold dividend option make this a name in motion. The risk is regulatory delay; the reward is a materially larger, higher-margin royalty player. The catalyst queue for H2 is dense — Panuco approval, Karlawinda expansion, Caserones drilling — and each is a potential repricing moment. Investors are watching a company that has shifted from “junior royalty” to “growth compounder” without losing its focus on NAV per share. If the Mexican antitrust approval lands as guided, the next quarter could be the strongest yet.