Government-backed mining expansion is setting the tone for royalties right now.

Canada alone has $632.6bn (USD throughout, unless mentioned otherwise) of natural resource projects planned through 2034, one of the largest pipelines in recent years. This points to a sustained capex cycle rather than a short spike, according to the Government of Canada – Major Projects Inventory.

However, new mines take time to produce, so supply grows slowly, which helps keep prices for gold, silver and copper strong over time. Gold demand remains backed by inflation hedging and macroeconomic uncertainty, while silver gets an extra push from industrial demand. The royalty and streaming model fits perfectly here: low costs, high margin and directly linked to production and commodity prices rather than mine operations.

OR Royalties, a Québec-based company that acquires and manages royalties and streams on precious metals projects, essentially sits on top of this whole system. Its global portfolio spans North America, Latin America, Africa, and Australia, although its core exposure is in Canada, anchored by a strong royalty on the Canadian Malartic gold complex.

Minting doubles

OR Royalties didn’t just grow in Q1 26: it surged at top line. Revenue came in at $102.8m, nearly doubling last year's $54.9m last year, up 87.3% y/y, largely driven by higher gold and silver prices and increased production from its royalty and stream portfolio. That kind of jump isn’t just price; it’s also volume kicking in from new and ramping assets.

Net earnings reached $73.6m this quarter, up from Q1 25’s $25.6m, skyrocketing 187% y/y. That’s a big step up, helped by operating leverage and some noncore gains. But here’s the catch: Cash margins stayed roughly flat at around 97%. This means the upside came more from scale and prices than better efficiency. In simple terms: the business didn’t get sharper; it just got bigger.

What stands out is how aggressively the company is reinvesting. The company deployed funds into new royalties in this quarter alone, including the Namdini deal, a recent gold royalty addition in Ghana and a broader pipeline of portfolio acquisitions. That’s basically recycling cash straight back into growth. The bet is simple: keep stacking assets while prices are strong and let production do the compounding later.

Gilded gains glow

OR Royalties’ stock is up 46.5% over the past year, which sounds great until you notice it’s still sitting at CAD 51.4 ($37.2), well below its 52-week high of CAD 65.5 ($47.4). That gap matters: it tells you the market already cooled off after a sharp rally, likely pricing in some of the metal price volatility.

At the current price, the stock trades at 18.2x forward FY 27 earnings, which is a clear discount to its two-year average of 26.5x. That sounds like a reset but also reflects a market that’s less willing to pay peak multiples for a commodity-linked name.

Analyst sentiment is leaning positive but not unanimous—seven out of 11 analysts rate it a “Buy”, with the average target price clocking at $52.4, implying a 40.7% upside. That’s barely anything, which suggests the stock is already close to where analysts think it should be. In simple terms: not much room left unless something new drives the story.

Risks in the royalty realm

OR Royalties looks like it’s built to win when metals stay strong, but that’s also the risk. If prices cool or production slows at key assets, growth can fade quickly. Add in heavy deal-making and constant reinvestment, and execution starts to matter more than the story. The model is simple, but the cycle isn’t - what works on the way up can turn just as fast on the way down.